"It is apparent that feed grain sup- 

 plies are being used up much more 

 rapidly than they are being produced, 

 and that wheat can replace corn only 

 to a limited extent. Any legislation or 

 administrative rulings which tend to 

 depress the price of corn and other 

 feed grains wjU increase the rate of 

 feed consumption. 



"This will hasten the day when 

 the produrtion of live stock, milk, 

 and eggs must be curtailed on ac- 

 count of a shortage of feed 



"In the interests of the national 

 welfare it appears highly desir- 

 able to prevent too rapid an in- 

 crease in the feeding of corn to 

 live stock, and consequent rapid 

 depletion of feed supplies. To 

 prevent this, the price of corn 

 should be allowed to advance to 

 its normal relationship with the 

 price of live stock and live stock 

 products." 



At the lAA annual meeting held in 

 Chicago in November 1942 it was 

 noted that livestock feeding margins 

 were being maintained on an ab- 

 normally wide basis. Realizing that 

 the inevitable results of this would 

 be an over-supply of livestock, de- 

 pressed livestocK prices and a shortage 

 of feed, the board of delegates adopted 

 a resolution condemning government 

 efforts "To deliberately hold the mar- 

 ket prices of basic farm commodities 

 below parity through the release of 

 government stocks at less than parity 

 prices." 



The Farm Bureau continued to op- 

 pose the cheap feed policy, but the 

 government persisted in its short- 

 sighted program. By April 1943 the 

 feed situation was acute. Writing for 

 the lAA Record L. J. Norton, Pro- 

 fessor of Agricultural Economics at the 

 University of Illinois, summarized the 

 situation as follows: 



"The real cause of the difficulties in 

 connection with protein supplements 

 and of the more basic difficulties we 

 are facing in connection with feed 

 grains is our price policy. By keeping 

 feed prices cheap and by allowing 

 livestock prices to rise to higher levels, 

 we are encouraging a wasteful use of 

 supplements and feed grains. 



"It is an axiom of military opera- 

 tions that adequate reserves are needed 

 for use at critical times. The same is 

 true of long-time economic operations. 

 It is poor generalship to use up re- 

 serves too fast and we are now engaged 

 in rapidly using up our feed reserves 

 with national policies contributing to 



this end " 



Referring to the wheat situation Dr. 

 Norton said, "We have a large reserve 

 supply of wheat although sales at 85 

 per cent of com parity caused a rapid 



JUNE. 1944 



use of the 125 million bushels author- 

 ized by Congress for sale as feed from 

 Commodity Credit Corporation stocks. 

 Moreover, consumption of wheat as 

 flour and in alcohol manufacture is in- 

 creasing and we will need a large sup- 

 ply of wheat to feed Europe, as we 

 open it up to our trade. By aad large 

 the only foodstuffs which can be used 

 for large-scale relief of the focJd situ- 

 ation are bread grains. We have no 

 surplus of other products above our 

 home and lend-lease needs. So far as 

 feeding wheat is concerned, our stock 

 of wheat ought now to be corfsrdered 

 as a reserve for emergencies rather 

 than being forced into use by low prices 

 as has been the case during the last 12 

 months. Therefore, the sales of wheat 

 for feed at 85 per cent of the corn 

 parity should not be resumed 



"The only practical solution of this 

 problem is to cease the present policy 

 of keeping feed prices too low in re- 

 lation to the prices that have developed 

 on livestock and livestock products. 

 This might check some of the marginal 

 expansion in livestock production, but 

 it is better to have somewhat less pro- 

 duction in the near future than to have 

 real shortages at a later date." 



By May 1943 available supplies of 

 corn were so small that the govern- 

 ment was forced to resort to arbitrary 

 orders in an effort to force corn to mar- 

 ket. In an official hearing on one of 

 these orders President Earl C. Smith 

 said, "Any review of the present crisis 

 resulting from limited corn supplies 

 in many areas of the country forces one 

 to the conclusion that the unfair and 

 impractical ceilings placed upon corn 

 some time ago are primarily respon- 

 sible for the present situation." 



President Smith advised the govern- 

 ment officials to revise price ceilings so 

 that corn prices would be placed in 

 their natural relationship to livestock 

 prices. This advice was not accepted. 



Eventually the government was 

 forced to make some modifications in 

 its policy. Each new government reg- 

 ulation created new problems. One 

 order called for another. Washington 

 officials were kept busy devising, issu- 

 ing and attempting to explain the new 

 regulations and their amendments. 



Some of the orders provided tem- 

 porary relief. However, since none of 

 them corrected the basic difficulties, 

 which was too low prices for grain 

 and feed, the situation has grown 

 steadily worse. 



Some of the corn-using industries 

 were forced to close because of a lack 

 of corn. At this writing they have re- 

 sumed operations, but are not assured 

 of being able to continue. Many live 

 stock producers have either gone out 



of the business, or are greatly reducing 

 their operations. 



In the light of the record it is ap- 

 parent Ihat the present shortages of 

 corn, and the acute problems associ- 

 ated with it, are due to (1) the neg- 

 lect on the part of those in resp>on- 

 sible positions to increase corn acreage 

 allotments in 1941 and 1942, (2) the 

 diversion of unexpectedly large quan- 

 tities of corn to non-feed uses, and (3) 

 the maintenance by government action 

 of abnormal price relationships be- 

 tween corn and livestock and live- 

 stock products. 



The most unfortunate thing about 

 all of this is that it could have been 

 avoided if those in positions of re- 

 sponsibility had heeded the advice of 

 Farm Bureau leaders and other prac- 

 tical farmers. 



By O. H. IftiMr 



Ursa Farmers Cooperative Comptny, 



Adams county, was first amon/; the member 

 elevators of Illinois Grain Corporation to 

 si/?n the new membership a>!reement. Ray- 

 mond Leeper is president; R. K. Sickles is 

 mana/;ei. 



George Besore, manager of the Lenzburft 



Farmers Cooperative Grain Company, St. 

 Clair county, was confined to a St. Louis 

 hospital with pneumonia and complications 

 during April and a part of May. He is 

 back on the job now. 



Managers and secretaries of fanners' ele- 

 vators in the cash grain area and in the dis- 

 tricts served by Illinois Grain Corporation's 

 oflFices have shown" intense interest in in- 

 come tax problems, the filing of informa- 

 tional returns and kindred subjects. A num- 

 ber of meetings have been held by this de- 

 partment with C. C. Chapelle, tax consultant 

 of Illinois Agricultural Auditing Associa- 

 tion, in charge. Meetings were held at 

 Tuscola, Pontiac, Bloomington, Monticello, 

 Melvin, Watseka, Peoria, Taylorville, Ed- 

 wardsville, Jacksonville and Mendota. 



On May 29, more than 40 member eleva- 

 tors had signed and returned the new mem- 

 bership agreement. The remaining out- 

 standing agreements will come in during 

 June. New membership work should be in 

 order after that date. 



Interest in cooperative soybean processing 

 has not diminished. Leaders are taking 

 time to study the situation thoroughly so 

 that when we move we will move in the 

 right direction. Morgan county has raised 

 $100,000 and can raise another hundred 

 thousand if it is needed. 



13 



