16 



Acreage Regulates 

 Production In Long Run 



Depar+ment of Agriculture Presents Arguments For 

 Wheat Acreage Reduction Campaign 



IN the long run acreage and not the 

 weather man regulates wheat pro- 

 duction, according to the U. S. De- 

 partment of Agriculture. It is true that 

 the wheat crop will be short this year, 

 the Department says, but a study of pro- 

 duction in the past ten years shows 

 that weather has had much less to do 

 with piling up surpluses than increased 

 acreage. The accompanying chart re- 

 veals how closely production and 

 acreage have gone along since 1866. In 

 the same period it has been shown that 

 the yield has been comparatively 

 stable. 



As a corrective to inferences that 

 may be drawn from the May winter 

 w^heat forecast, which indicated an out- 

 turn nearly 30 percent below that of 

 last year and nearly sixty percent be- 

 low that of 1931, the Department draws 

 attention to the trends of production 

 and acreage during the last 40 years. 

 P r o d u c tion In- 



acreage Jumped from 50,185,000 in 1913 

 to 73,099,000 In 1919, and was 12,000,000 

 acres above pre-war as late as 1929. It 

 totaled 55,177,000 acres last year. With 

 a carryover three (360,000,000 bushels) 

 times the normal and a tremendously 

 reduced foreign demand, this acreage 

 was heavily excessive. Normal produc- 

 tion next year on an acreage as large 

 as that seeded this year would give 

 us more than 800,000,000 bushels, and 

 this, in view of the great decline in ex- 

 ports, would mean a substantial addi- 

 tion to the domestic carryover. 



It would be a dangerous mistake, the 

 Department says, for farmers to con- 

 clude from the immediate crop and 

 price situation that a reduction of 

 acreage is unnecessary. Such a view 

 would virtually ensure heavy over- 

 production next year. Unless steps 

 are taken to prevent it, the winter 

 acreage abandoned this season will be 



creased about 80 

 percent and 

 acreage about 60 

 percent. The dif- 

 ference is attrib- 

 utable to a gain 

 of more than 20 

 percent in yields 

 per acre. But this 

 gain is as much a 

 man-made factor 

 as the acreage. It 

 reflects the Im- ,, 

 provement of va- 

 rieties, of better 

 farm practice, and 

 of pest control. 



The accompany- 

 ing graph shows 

 the trends of pro- 

 duction, acreage, 

 and yields per acre 

 in the United 

 States. Acreage 

 and production 

 from 1890 to 1930 

 moved upward to- 

 gether, with the 

 former increasing 

 its lead as the yield per acre rose. 

 Taking the country as a whole, the 

 production per acre was surprisingly 

 uniform from year to year. From 1905 

 to 1930 the average yield was 14.5 

 bushels. The highest yield was only 17 

 bushels and the lowest 12.2. Seasonal 

 Influences affecting yields had obvious- 

 ly a small influence as compared with 

 the acreage in determining the volume 

 of production. Locally and seasonally 

 the effect of the weather and of in- 

 sects and diseases often seemed pre- 

 ponderant. But these Influences varied 

 in opposite directions from year to year 

 and canceled out, whereas the Influence 

 of a growing acreage remained con- 

 stant. 



Price developments In the present 

 crop season do not necessarily betoken 

 a permanent improvement in our wheat 

 situation, the Department declares. 

 They reflect Inflation buying, as well 

 as heavy winterkilling, an abandon- 

 ment of nearly a third of the acreage, 

 and the probability of the smallest 

 crop in 29 years. This country's wheat 



I. A. A. RECORD— September, 1933 



between production costs and prices. 

 It is necessary when overproduction 

 exists to reduce production by methods 

 that do not increase costs. Depending 

 on the destructiveness of diseases and 

 pests to regulate the output is uncer- 

 tain and inefficient. 



In the case of this season's winter 

 wheat crop, the rise of prices that has 

 taken place already offsets the effect 

 of the reduced yield. The farm price of 

 wheat in April averaged 43.1 cents a 

 bushel, as compared with 31.6 cents In 

 December last. Certain of the effects 

 of reduced yields lower the farmer's 

 expenses. His outlay is less, for exam- 

 ple, for threshing and handling the 

 crop. Present indications are that the 

 winter wheat growers will get as 

 large a gross income from their pro- 

 duction this year as they got for their 

 much greater output last year. On many 

 previous occasions, reduced yields have 

 not been adequately compensated by;', 

 a rise of prices. 



Farmers cannot expect a repetition ', 

 of this conjunction of circumstances 

 favoring a rise in price. On the con- 

 trary they should expect, in the ab- v 

 sence of production control, a distinct- '• 

 ly opposite result. Yield statistics 

 covering the last half century seem to 

 warrant the prediction that the sharp 

 drop in the yield per acre will be com- 

 pensated next season by a sharp rise. ; 

 Acreage statistics warrant the predic- ;- 

 tion that, If nothing is done to restrain /: 

 the tendency, the acreage too will rise. 

 Hence the existing situation tends to 

 throw the balance between the supply 

 and demand elements still further out 

 of adjustment, rather than to put It 

 right. Should things work out that 

 way, only an Inflationary price rise or 



a big increase in 



Wheat: Acreage, Yield, and Production 



PER CENT 

 120 



I860 1870 1880 1890 1900 1910 1920 1930 



the foreign de- 

 mand could pre- 

 vent wheat from 

 becoming still 

 more a drug in the 

 market. 



planted again next fall. Indeed, the 

 acreage will tend to be increased. That 

 is the usual sequence when a partial 

 crop failure boosts prices. But it is 

 not usual for generally low yields to 

 come in succession. Hence on the 

 acreage that the ordinary course of 

 events would bring into production for 

 the crop year 1933-34, a surplus above 

 marketing possibilities would be vir- 

 tually a certainty. 



Relying on nature to correct surplus 

 difficulties has another serious draw- 

 back in that it increases the farmers' 

 unit costs of production. When bad 

 weather, pests, and diseases cut down 

 production, rising costs incurred in an- 

 ticipation of a normal yield frequently 

 more than counterbalance any result- 

 ing rise of prices. This Is particularly 

 true of wheat in the United States 

 when it is on an export basis; for low 

 yields associated with high unit costs 

 in this country may run against high 

 yields and low unit costs In competing 

 countries. Profits in agriculture, as In 

 other industries, depend on the margin 



Less Wheat In 

 Nine Coun- 

 tries 



Wheat produc- 

 tion in nine coun- 

 tries that grow 

 more than 30 per- 

 cent of the world 

 crop outside Rus- 

 sia and China is 

 forecast at 983,- 

 891,000 bushels in 

 1933 against 1,- 

 154,221,000 bushels 

 harvested in 1932, 

 by the Bureau of 

 Agricultural Eco- 

 nomics. These 

 countries produced 

 1,421,961,000 bushels In 1931. Seeding Is 

 almost completed in Australia and Is 

 proceeding under fairly favorable con- 

 ditions in Argentina. 



Of the nine countries — United States, 

 Mexico, Spain, Algeria, Morocco, Tunis, 

 Egypt, India, and Japan — only three 

 countries — Mexico, India, and Japan — 

 expect Increased production this year 

 over last. The crop in India Is forecast 

 at 347,162,000 bushels compared with 

 339,621,000 bushels last year. 



The bureau reports favorable wheat 

 prospects but probable reduced yields 

 In Germany, an early harvest in France, 

 better than average wheat condition In 

 Czechoslovakia, some deterioration of 

 the crop in Poland, and above average 

 condition in Sweden. The 1932-33 crop 

 in Uruguay will be insufficient to meet 

 domestic consumption requirements. 



Secretary Wallace is expected to an- 

 nounce the percentage of wheat acre- 

 age reduction for 1934 on or about Aug. 

 24. To get benefit payments growers 

 must reduce their acreage the specified 

 percentage. 



J. 



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