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sors from having more than thirty days' supply, and raised 

 future prices to release hedged grain. The government is do- 

 ing everything possible to encourage the consumption of 

 grain when the policy should be to encourage farmers to 

 feed less and to hoard grain for future use. 



As long as feed supplies increase, it is not difficult to set 

 prices of feed in favor of livestock expansion. As the feed 

 supply per animal unit decreases, normally the ratio of live- 

 stock prices to feed would narrow by feed prices rising and/or 

 by livestock prices falling. This would automatically ration, 

 with a reasonable degree of equity, the diminishing supplies 

 of feed to the various classes of livestock in the best interests 

 of the nation. Conditions are not normal however. Huge gov- 

 ernment purchases of livestock products for Lend-Lease and 

 the armed forces tend to prevent adjustment by a down- 

 ward revision of prices of livestock. 



An adjustment could be brought about by a sharp rise in 

 feed prices. Such an advance would undoubtedly be inter- 

 preted as inflationary, contrary to the "stabilization" order 

 of the fall of 1942 and the "hold-the-line" order of the 

 following spring. Since the government promised our allies 

 huge amounts of highly prized foods and promised the 

 citizens stable prices, the nation was confronted with a seri- 

 ous dilemma. It was politically inexpedient to attempt either 

 to lower the prices of livestock or to raise the price of corn. 

 This dilemma was well recognized by thoughtful people 

 throughout the nation, by the United States Department of 

 Agriculture, by the Office of Price Administration, and by 

 the Office of Economic Stabilization, but everyone was loath 

 to do anything to correct it. 



As long as no action is taken, the only course the farmer 

 has is to feed up all the grain just as rapidly as possible and 

 then liquidate livestock just as disorderly as possible. The 

 degree of disorder will depend on how much black-market 



