STi^** Extension Service in Agriculture and Home EconomicB 



"TP/otX**/ University of Illinois College of Agriculture, Urbana 



WEEKLY REVIEW AND FARM OUTLOOK: LETTER 



^ 



t 



By G, L. Jordan 

 Professor, Agricultural Economics 

 (Prepared August 25) li"^ 



The first week of "peace" was characterized "by removal of a large fraction 

 of the wartime controls of production. Industries are encouraged to produce a maximum 

 quantity of consumer goods. Steel, copper and aluminum were made freely available, 

 and construction and lumber controls are expected to be ended by September 50. There 

 is a great demand for all sorts of consumer goods. Except for foods, unusual demands 

 prevail as a result of inability to buy the goods during the past few years. That fact 

 gives businessmen assurance that they will have an outlet for their products and pro- 

 motes a feeling of optimism. Other developments include ' demands for higher hourly wage 

 rates by union labor, the ending of the no-strike pledge, the permission by the govern- 

 ment to increase wages so long as such increases do not cause an increase in prices and 

 the stoppage of lend-lease. 



As far as agricultural products are concerned, the week was characterized by 

 steady prices for grains offered on the cash markets, weakness in grain futures' 

 prices, steady prices for livestock except for a slight weakness in the plainer kinds 

 of cattle, and improved crop prospects. Prices of egg futures declined considerably. 



There is considerable difference of opinion with regard to the attitude ci- 

 vilians will take during the next few months. Their attitudes will largely determine 

 whether we have a recession of several months* duration and the extent of the recovery 

 from such a recession. One group thinks that in spite of lower incomes based on a 

 shorter work week civilians will have more leisure, will save less and will spend a 

 larger fraction of their incomes. This group would expect a brisk trade based on free 

 spending. Important segments of the federal government would seem to favor policies 

 that would lead to free spending accompanied by -what might be termed controlled infla- 

 tion. The other group expects people to be cautious and unwilling to spend their ac- 

 cumulated savings. What will happen probably will be determined by the extent and 

 promptness with which civilian industry absorbs the millions of men being discharged 

 from war industries and the armed services. 



The Committee for Economic Development has issued a report which gives busi- 

 nessmen's estimates of postwar markets for manufactured goods. These estimates are 

 optimistic. The committee' points out that the postwar years can roughly be divided 

 into three periods: First, a short period of reconversion which may last through 19^. 

 During the second period, probably beginning in 19^ or early 19^7* producers will bo 

 filling the demands deferred by the war. This period will last for a year or two, 

 after which the third period will consist of a shift to a self-sustaining or a normal 

 basis. 



Although Secretary Anderson indicated that meat rationing was on the way out, 

 possibly next month, storage stocks are relatively low; and it la expected that the 

 strong demand for meats will be maintained long enough to absorb the rather heavy move- 

 ment of cattle and hogs that is anticipated during the fall and early winter months. 

 Range conditionB have been excellent, and cattle men report that the ranchers arc in 

 a mood to carry larger than noimal supplies of range cattle over winter rather than to 

 sell them at substantial discounts from present prices, 



-0- 

 Cooperatlve Extension Work in Agriculture and Home Economics: University of Illinois 

 College of Agriculture and the United States Department of Agriculture cooperating, 

 H. P, Rusk, Director, Acts approved by Congress May 8 and June 50, 191^. 



