's to Blame for -Utah 7ooJ^\ 



Many Consumers Have Been Misled Into Believing That Price Supports On 

 Farm Commodities Are Responsible For High Cost of Living 



WE HEAR considerable talk these 

 days about farmers making so 

 much money. It is true to 

 some extent. Most farmers 

 are making more money than 

 they did in 1932 when whole milk sold 

 for less than $1.25 a hundredweight, 

 and hogs were selling at the rate of 

 $3.35. Certainly those times repre- 

 sented anything but a fair relationship 

 between agricultural prices and those 

 of other parts of our economy. 



We see many charts these days in 

 our newspapers and magazines showing 

 the percentage increase in annual earn- 

 ings of farmers compared to other 

 businesses. It seems to me that showing 

 the percentage increase in annual earn- 

 ings of farmers over the last 15 or 20 

 years is quite similar to giving three 

 more pennies to a child who has but one 

 penny, saying that the gift increased 

 his money 300 per cent and then 

 assuming that he has a lot of money. 

 Although some newspapers do, others 

 do not carry the complete story of farm 

 prices and income. If you'll look at 

 the prices-paid-prices-received chart, 

 you will see that the prices paid by 

 farmers, including interest and taxes, 

 were higher than the prices received 

 by farmers from 1920 to 1941. 



Surely that is long enough for the 

 farmer to have to pay higher prices 

 than he receives. The crossing of 



By FRANK ATCHUY 



lAA Raseorch Director 



PnCES RCCEIVEO AHO PRICES MIO 

 •1^ MRMCM IN THE U.« . 1910 - I04T 

 WITH I9I0--I4 A« THE BA<E PERIOD. 



those lines in 1942 was certainly over- 

 due. If we look at the prices-received 

 line for 1939, we see that it is much 

 below the dotted line of prices paid. 

 That means that farmers were several 

 steps behind on the price front during 

 those pre-war years. 



If we'll go clear back to 1910-14, 

 the period commonly used as a base, 

 we'll find that prices received by farmers 

 in this country in 1947 were m«re than 

 175 per cent higher than they were in 

 that base period. On the other hand, 

 if we'll check the average earnings of 

 factory workers using the same base 

 perioci, we'll find that their earnings 



increased nearly 350 per cent over the 

 same period of time. 



True, there were some good and some 

 poor times between 1915 and 1940 

 both for labor and agriculture. In 

 1929, the average income per person 

 on farms from farming was $223 i-s 

 compared to $871 for those persons 

 not on farms. In 1946, income per per- 

 son on farms was $620 compared to 

 $1326 for those persons not on farms. 



Here is another way of figuring in- 

 come. Net farm income in 1947 was 

 estimated to be about $18 billion. A 

 little arithmetic shows us that our 6 

 million farm families would each re- 

 ceive an everage of $3,000 net income 

 or about $58 a week. 



Now just what is this net income? 

 It is the farmer's return for his own 

 work, for the work on the home farm 

 done by members of his own family 

 without pay, and for the return on 

 his investment without any adjustment 

 being made for changes in inventory. 



Just the interest on the farmer's in- 

 vestment would take about $15 a week 

 away from this $58 figure. That would 

 leave $43 a week for the labor, man- 

 agement, and risk of the operator, and 

 for the labor of his family. Let's just 

 compare this figure of $43 a week with 

 the average manufacturing worker who 

 received about $49 a week during 1947. 

 This is for the work of only one person. 

 It doesn't include pay for any other 

 member of the family. 



Expressions involving "price sup- 

 ports," "parity price," and 'high pro- 

 duction" were used during the war to 

 indicate that farmers were doing their 

 part to help win the conflict. They 

 hadn't even been thought of in the 

 villainous role in which they are now 

 pictured by some consumers. 



Price supports then were popular be- 

 cause they stimulated greater food out- 

 put without which wars cannot be won. 

 Many forget that food is now having a 

 great deal to do with our efforts to 

 win the peace. Surely, farmers shouldn't 

 be made the scapegoat for inflation. 



The metropolitan press has carried 

 stories of how farm price supports are 

 the cause of high food prices. They say 



V 

 I 



L A. A. RECORD 



