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I 



the prices of farm products. Although the actual demand during the war would have sup- 

 ported prices of foodstuffs at a higher level than actually existed, now that the war 

 is over and other types of goods will "become available, a large fraction of the buying 

 power will be used to replace worn-out or obsolete consumer goods and homes. The frac- 

 tion of total income available for the purchase of farm products will decline greatly. 

 Sometime exports and domestic demand will decline. 



Individual commodities etffected differently . Already we are beginning to 

 see the transition back toward prewar situations. This transition will take place over 

 a period of years, being delayed in some cases by exceptionally favorable export out- 

 lets for some products. For example, wheat growers of the United States have been 

 given aseui-ance by the Depctt-tment of Agriculture that there would be no need to curtail 

 acreages below the current plantings for the next several years. They say that stocks 

 in this country euid abroad have been reduced to moderate levels and export demand is so 

 high that outlets would continue to absorb wheat in quantities equal to the consuBQJtion 

 figures this year for several xaore seasons. However, it was pointed out that if rela- 

 tively high wheat acreages were maintained for several years this country will again 

 have the problem of disposing of ivery large stocks . particularly under the Interna- 

 tional Wheat Agreement that waj or may not be invoked. An imposition of that agreement 

 would call for pegged prices and restricted export quotas. 



In contrast to the wheat situation, we have some indications that the soybean 

 acreage cannot be maintained at present levels and bring current prices. The Depeurt- 

 ment of Agriculture has indicated that 50 thousand tonp of edible peanuts were turned 

 back recently by the army cmd that they have been crushed for oil; that the armed 

 forces have previously contracted for 52 percent of the current peanut crop; that in 

 the future the needs of the armed forces will not be a consideration, and that a reduc- 

 tion in peanut acreage next year was predicted. This suggests a marked easing in the 

 oil situation and also suggests a reduction of soybean acreage next season. However, 

 before any determination of the soybean program has been decided, the Secretary of Ag- 

 riculture assured growers that the soybean-raising industry would be called in for con- 

 ference. It is expected that flaxseed Incentives will be abandoned next year and that 

 there will probably be a reduction of flaxseed acreage. Other farm products likely to 

 suffer most within two years are cotton, wool and lard. The demand for meat, milk, 

 .cheese, fruits, vegetables and butter is expected to remain strong. 



The farmers' interest in labor strikes . Most feirm people are likely to be- 

 come Incensed at the demands of organized labor for greatly increased hourly wage re- 

 turns and the methods that they use to enforce their demands. Farmers have a vital 

 interest in the size of industrial payrolls. In the absence of subsidies or limita- 

 tions in the form of price supports, benefit payments, direct subsidies and price 

 ceilings, feLTm income is closely correlated with industrial employment and payrolls. 

 If the demands of organized labor cannot be met by the employer and unemployment in- 

 ^ creases rapidly, the demand for farm products is bound to decline-i However, if an in- 

 crease in wage rates will not restrict industrial output and eniployment, farmers are 

 likely to gain as a result of the increase in payrolls. This is not to say that farm- 

 ers wouldn't gain as much or more by a reduction in the prices of manufactured goods. 

 However, high weige rates tend to stimulate inventions that lower costs and otherwise 

 ■^J^ increase efficiency of management so that we may have reduced costs through technolo- 

 ^^gical improvements that help offset high labor costs. At the present time it does not 

 appear that the demEuid for farm products will be greatly curtailed by strikes and 



