( 84 ) 



Low Frozen Prices Stimulated Consumption of Feed Grains 



The shortage of protein feeds, like the shortage of meat, 

 developed when prices were held artificially low, and con- 

 sumption was stimulated. A 'similar policy has been adopted 

 for feed grains, and it appears to be headed for the same 

 outcome. 



The background of the feed situation is one of six good 

 crop years and increasing numbers of livestock. Since live- 

 stock depends upon feed crops, numbers of livestock move 

 with but lag behind changes in the supply of feed grains. 



From 1937 to 1942 there was a succession of large feed 

 crops. The supplies of grains normally fed to livestock in- 

 creased from 104 to about 142 million tons. 



For the six years ending January 1, 1943 the numbers of 

 cattle increased 20 per cent ; chickens, 39 per cent ; and hogs, 

 65 per cent. On January 1, 1943 the number of cattle on 

 farms was 78 million; hogs, 74 million; and chickens, 540 

 million all the highest in history. The numbers of sheep 

 are the second highest in history. 



During the first part of this six-year period the supply of 

 feed increased more rapidly than the consumption, and the 

 carry-over increased each year. During the second phase of 

 the period, supplies continued to increase, but they increased 

 less rapidly than consumption, and stocks of feed per animal 

 unit decreased twenty-five per cent. The numbers of live- 

 stock were catching up with feed supplies. 



Normally, when there is an abundance of feed relative to 

 livestock, livestock products are high relative to grain prices. 

 Conversely, when grain is scarce, livestock prices are low rela- 

 tive to grain prices. Farmers adjust their production accord- 

 ingly; they expand or contract their production according 

 to these price relationships. 



With livestock gaining on the feed supply, the price of corn 



