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Farm Economists 

 Still Optimistic 

 But Cautious 



Government Expert Predicts U. S. Still 

 Has At Least One More Year Of Prosper- 

 ity Even Though We Appear To Be Near 

 The End Of Inflationary Period. 



By CRESTON FOSTER 



Editor, lAA Record 



THliRE probably will be less money 

 in farming this year than last. Farm 

 prices seem to be leading the way 

 downward while the things that 

 farmers buy are staying up. How- 

 ever, a disastrous price decline is not ex- 

 pected in 19-49, even though wc appear 

 near the end of inflation. 



These were some of the opinions voiced 

 at the economic sessions of the -48th 

 annual Farm and Home Week in Feb- 

 ruary on the University of Illinois cam- 

 pus. 



One speaker, V. L. Bassie, director of 

 the Bureau of Economic and Business Re- 

 search, said that the high rate of govern- 

 ment spending plus the current construc- 

 tion boom assure the U.S. of at least one 

 more year of prosperity. 



Another economist, Walter E. Hoad- 

 ley, Jr., Federal Reserve Bank of Chicago, 

 said "there's nothing in the foreseeable 

 future to indicate a panic." 



The economists were cautious in their 

 predictions but generally agreed that a 

 moderate price decline of farm pritts 

 could be expected in 19-19. 



To the farmer eyeing the market 

 breaks in corn and cattle, this forecast 

 by the experts seemed almost optimistic. 



Today's farmer is in a much more seri- 

 ous position when prices drop because he 

 has so much cash expense in his opera- 

 tion, Prof. R. H. Wilcox reported. 



He pointed out that the cash cost of 

 growing corn had doubled in the last 

 3'' years as the farmer shifted from horse 



power to tractors. In the old days the 

 cost of hay and oats for the horses went 

 up and down with farm income. But 

 today changes in the prices of tractors 

 and fuel are not related particularly to 

 the prices of farm products. And a good 

 share of the total cost of growing corn 

 is direct cash expense, much of it for 

 fuel, machinery and labor. 



By substituting tractors for horses and 

 mules, farmers have committed them- 

 selves to a form of farm power that re- 

 quires the expenditure of cash regardless 

 of the price of farm products, Wilcox ex- 

 plained. 



Maybe the horse and buggy days 

 weren't so bad after all. 



Farm l.ind prices came in for some dis- 

 aission at the sessions of Prof. C. L. Stew- 

 art who reported that farm land and 

 buildings in Illinois have been selling 

 recently at prices almost the same as in 

 1920. At that time the state average was 

 $187.59 per acre, an all time high. 



The price of the average farm in some 

 central Illinois counties stands between 

 Sri-s.OOO and $75,000, or about $10,000 

 more than in 1920. 



Present land prices are precariously 

 high in several' ways. Stewart said. High 

 taxes and high production and marketing 

 costs may cut net farm income despite 

 best efforts to get high yields and hold 

 down operating costs. 



High interest rates on farm mortages in 

 the 1950's could halt the rise in price of 



farm lands even if net farm income re- 

 mains high, Stewart said. 



Rounding up the economic picture. 

 Dr. H. C. M. Case, head of the agricul- 

 tural economics department of the uni- 

 versity, said he favored flexible price sup- 

 ports rather than rigid fixed supports for 

 farm commodities. He pointed out that 

 the flexible price support plan allows 

 supply and demand to operate at least 

 three-fourths of the time so market prices 

 guide production. 



President Charles B. Shuman of the 

 Illinois Agricultural Association who ad- 

 dressed tlie closing session of Farm and 

 Home Week also emphasized the sound- 

 ness of the flexible price support program. 



"I am sure that farmers recognize a 

 difference between their desire to have 

 an opportunity to scure a parity price in 

 a free market as contrasted to the sugges- 

 tion that government guarantee a high 

 fixed support price," President Shuman 

 said. 



"Farmers must make a choice between 

 a fixed government price program with 

 a government administered agriculture a? 

 opposed to a flexible price support pro- 

 gram and a greater degree of freedom. 



"I am sure that they will decide to give 

 the law now enacted a chance to prove 

 its value before drastic amendments are 

 made. 



"The program provides for price sup- 

 ports for farm commodities on a variable 

 .schedule depending upon the supply pro- 

 duced. It provides for floors uiider farm 



I. A. A. RECORD 



