THE 



ILLINOIS AGRICULTURAL ASSOCIATION RECORD 



To advance the purpose for which the Farm Bsireau was organized, namely, 

 to promote, protect and represent the business, economic, social and educa- 

 tional interests of the farmers of Illinois and the Nation, and to develop 

 agriculture. 



THE STATC FAIM 

 MMUAU rUtUCATION 



BALLAST OR A MILLSTONE 



vJu f-^reiident C-ltarieA vJ. ^h 



uman 



DO YOU remember the old time balloon ascension that 

 was the high spot of the State Fair? It was a 

 dramatic event, executed with much business of 

 preparation and checking of equipment. Finally, 

 the large gas bag was inflated and die daredevil was 

 off with a roar of applause. I always 

 wondered why a balloon that was in- 

 tended to soar upward should carry 

 such a burden of heavy sandbags fas- 

 tened to the sides of the basket. 



Price cycles are like balloon as- 

 censions. Both need ballast to help 

 regulate their rise and descent. Both 

 could crash disastrously if excess bal- 

 last were not discarded as the infla- 

 tionary gas was allowed to escape. 

 Our present inflated price level is like a high soaring 

 balloon. It has risen fast and high because war conditions 

 prevented the operation of the many checks and balances 

 that ordinarily act as ballast. During recent months sev- 

 eral "sandbags" could have been added to check the rise. 

 Government controls and laws encouraging restricted 

 production in business and labor could have been removed 

 more quickly so as to encourage increased output. Drastic 

 cuts in federal spending would have helped check the in- 

 flationary trend. 



Today, with newspaper headlines screaming about the 

 high cost of food and government agencies issuing state- 

 ments telling about farmers' "extremely high incomes," 

 agriculture is in a vulnerable position. The truth is that 

 farm prices are little if any higher than other prices. 



In fact, due to increasing costs of supplies and labor. 



the parity price ratio for all farm prices has turned down- 

 ward and is now at 117 as compared to the high point of 

 132 in October of 1946. It is high time that farmers ex- 

 amine some of the ballast that could be thrown overboard 

 to ease the decline when it comes. If we are not alert, some 

 of the sandbags attached during recent years may become 

 millstones around our necks, dragging us down to a crash 

 similar to the disaster of 1929-33. 



One of these millstones has been the increasing cost 

 of distribution. During war periods, the margin between 

 the farm price and the price that the consumer pays has 

 tended to widen materially. These margins, including 

 commission, processing, distribution and retail costs, have 

 not been reduced when farm prices collapsed. 



In 1914 the cost of distributing all farm products was 

 4.5 billion dollars. In 1920 it was 10 billion. During 

 the depression years, consumers cut their spending for farm 

 products materially, but the cost of distribution only 

 dropped 10 per cent. We are now at an all-time high 

 point with a cost of distribution of farm products in excess 

 of 12 billion dollars. 



If history repeats itself and the price cycle ballooo 

 begins its descent, this 12 billion margin, unless materially 

 reduced, might prove to be excess ballast and cause another 

 disastrous crash. 



Farmers now demand that the distribution industries 

 use ever)' means to make these margins between producer 

 and consumer more flexible. Changes in consumer demand 

 must be reflected more rapidly and more accurately to the 

 producers. If the industry itself does not take effective 

 action, farmers will be forced to greatly expand their co- 

 operatives so that unnecessary ballast will be discarded. 



OCTOBER, 1947 • VOLUME 25, NUMBER 9 



lUINOIS AGRICULTURAL ASSOCIATION OFFICERS and BOARD OF DIRECTORS (By Congressional Districts) 



Prasidant, Charles B. Shaman. SuUiTon 



^ne»-Pr*sidenl, noyd E. Morris Buffals 



Secretory, Paul E. Mathias _ JKnadale 



Field Sec. Geo. E. Metsger Chicago 



Treasurer, R. A. Cowles Jleomiagtoa 



Comptroller, C. C. Chapelts -...Chicogo 



General Counsel, Donald Eirkpatrick Chicago 



Isl to 1 1th Earl M. Hughes, Woodstock 



12lh C. I. Elliott, SIreator 



13th. _ -Homer Curtiss, Stockton 



14th Otto Steiiey, Strenghurst 



ISlh. .....Edwin Gumm. Galesburg 



16th RusseU V. McKee, Varna 



17th. _ E. T. Culnan, Lincoln 



18th John T. Evans, Hoopeston 



19th. - MUlon W. Warren. Mansfield 



20th.. K. T. Smith, Greenfield 



21st Dan L. Clarke, New Berlin 



22ad. J. King Eaton, EdwardsTille 



23rd. __ - Chester McCord. Newton 



24th Lyman Bunting, EUery 



25th _ _ Albert Webb. Ewing 



Editor, Creston Fester. Ass't. Editor, James C. Thomson. Field Editor, Lewis A. Reitner. 



The Illinois Agricultural Association HECORD is published monthly except August by the Illinois Agricultural Association at ISOl W. Washington Road. 

 Mendota, HI. Editorial Offices. 43 East Ohio St.. Chicago, 111. Entered as second class matter at post office, Mendota. 111., Sept. 11, 1936. Accept- 

 ance for mailing ot special rate of postage provided in Section 412. Act of Feb. 28, 1925, authorized Oct. 27, 1935. Address oil communicotiona for 

 Suhlication to editorial Offices, Illmois Agricultural Association RECORD, 43 East Ohio St., Chicogo. The individual membership fee of the 

 linois Agricultural Association is five dollars o year. The fee includes payment of fifty cents for subscription to the Illinois Agricultural Association 

 RECORD. Postmaster: Send notices on Form 3578. Undeliveroble copies returned under Form 3579 to editorial offices, 43 E. Ohio St., Chicago II, HI. 



OCTOBER, 1947 



