■555.1 ^^^-A.d^.^^^'y'^^ , 



'I I U(c ^ "^^ Cooperative Extension Work in Agriculture and Hcane Econociics 



University of Illinois College of Agriculture, Ur"bana, Illinois, 

 c-^ . -^ and U. S. Department of Agriculture cooperating 



WEEKLY REVIEW AIJD FARM OUTLOOK LETTER 



By G. L. Jordan 

 Professor, Agricultural Economics 



University of Illinois TK£Utt«AKro^ Ittt 



College of Agriculture pro - -s^ ■ - 



(Prepared December 5C) r.^^.rc"--*" r** 



The support for JCO -pound hogs is only tempt^ary. The government has no 

 desire to encourage farmers to feed their hogs to 3OO pounds. We do not have the feed 

 to justify that practice, ' Hogs weighing ahove 275 pounds should "be marketed as 

 promptly as Jiiarketing facilities permit. 



The transportation system is not expected to improve during 19^^. Trucks 

 are wearing out and, in most cases, present trucks probably will be the last obtainable 

 until the end of the war. The trucking industry is faced with other troubles, includ- 

 ing scarcities of tires, gasoline, repair parts, and manpower. 



The outlook for \3k\ may be summarized briefly as follows: (l) Farm 

 incomes will remain at a very high level. (2) Prices of farm products and subsidies 

 to producers in lieu of higher market prices are not likely to change greatly during 

 19^^. (3) There probably will be an acceleration of the movement which is now get- 

 ting under way in industry to change over from the production of war goods to peace 

 goods. (^0 Industrial activity is expected to remain at a level approximately equal 

 to that of 19^3. (5) Rationing will have to continue, as we cannot produce enough 

 food to supply all that civilians are willing and able to buy in addition to the 

 increasing quantities needed for our armed forces and lend-lease. (6) The cost of 

 -living is likely to increase gradually, but indications are that we shall not have a 

 further serious inflation of prices. (7) Farm real estate values are likely to con- 

 tinue upward, in spite of the fact that farmers in general are following the construc- 

 tive and conservative policy of paying their debts and saving the money instead of 

 speculating. Some city people are not so conservative. 



Because of the large backlog of savings, the need to rehabilitate Europe and 

 the deficit of residential buildings, certain types of equipment, automobiles, radios, 

 and many types of consufner goods, the outlook for the two years following the war 

 appears bright. During that two years farmers are also protected by the promise of 

 government loans on most farm products, except cattle and sheep, ranging from 75 per- 

 cent to 90 percent of parity. Parity prices may fall, but the loans will prevent 

 incomes from falling greatly in terms of costs of goods farmers buy, interest and 

 taxes. 



It is doubtful if we can maintain any considerable volume of agricultural 

 exports, but if industrial workers are kept employed at remunerative wages, the 

 domestic demand should absorb about all the foodstuffs that we can economically pro- 

 dv.ce . 



The long-time outlook for agriculture is closely related to the long-time 

 outlook for industry. Agriculture, industry, and labor are mutually dependent. They 

 will all be affected by national policies with respect to public and private finance, 

 foreign trade, monopoly, and whether we earnestly seek an economy of abundance or an 

 economy of scarcity. 



GLJ:rw -0- 



I2/30/I15 



