f/\ 



R.R.. 



prices of food do not go down when the 

 prices of things farmers sell go down. 

 One of the recent publications from the 

 USDA shows that the farm value of the 

 corn in a box of corn flakes went down 

 47 per cent fjom July 1948 to July 1949. 

 During the same period, the price of 

 corn flakes went up two per cent. 



During that period of time, the price 

 of livestock the farmer sold went down 

 24 per cent while the retail price of 

 meat Mr. U. S. Citizen bought went 

 down only 15 per cent. Such things as 

 these are hard to explain to the con- 

 sumers of this country, whether they be 

 well-paid executives or hard-working 

 laboring men. (See chart.) 



The government publication indicated 

 that the farm value in July 1949 was 

 only 48 per cent of the retail price of 

 the food in what we normally describe 

 as the "market basket." That means 

 that the farmer only gets 48 cents out 

 of each dollar the consumer pays for 

 food. What happens to the other 52 

 cents? It goes to pay the trucking com- 

 pany, the jobber, the railroad, the whole- 

 saler, the retailer, and last, but not 

 least, the tax collector. What basic 

 part of our society gets that 52 cents? 

 It is primarily labor — the truck driver, 

 the section hand, the brakeman, the 

 warehouseman, the grocery clerk. They 

 all get their share. Do their wages go 

 down when prices of farm products 

 go down? Certainly not. In fact, 

 during the past few months, consider- 

 able effort has been made to increase 

 their wages, while farm prices have con- 

 tinued to decline. 



Two prominent executives of large 

 food processing companies recently 

 testified before a Congressional com- 

 mittee that higher labor costs, not prof- 

 its, were largely responsible for the 

 difference between the prices house- 

 wives pay for their food products and 

 what the farmer receives for his pro- 

 duce. Farmers' prices remain flexible - — 

 Labor's prices remain relatively inflexi- 

 ble. 



Inilu 

 300 



lNOE<ffS oF PHlCEi RECeiVEC BY FARMPR. k.- ^.j^q t»KO0UCrj 

 AND AETAIL PfttCE^ ol- FARM FOOD PRSDUCr, 

 IN U^ J9+6 -(fl \_/9i^59- 100 ] 



Retail cost of the "market basket" in 

 July was down 10 per cent from the 

 level reached in July 1948. During that 

 12-month period, the declines in retail 

 prices averaged between 13 and lo per 

 cent in the meats, dairy, and miscel- 

 laneous-products groups. The declines 

 were only between two and three per 

 cent for the bakery and cereal products 

 and all — fruit — and — vegetable 

 products groups. Data are not avail- 

 able on retail prices since July, but 

 weekly price indexes indicate that the 

 downward trend has continued. 



During the period from pre-war 

 (1935-39) to December 1948, when the 

 retail cost of the market basket was 

 rising, the farm value increased nearly 

 twice as fast as did marketing margins. 

 (See table.) In this period, farmers 

 received $202 and marketing agencies 

 $121 of the $323 increase in the retail 

 cost. As a result, the farmer's share 

 of the consumer's dollar increased 11 

 cents — from 40 to 51 cents. 



Marketing charges in July 1949 were 

 about the same as they were in July 



1948. They totaled $332 in July 1949, 

 compared with $333 the year before. 

 These charges for assembling, process- 

 ing, transporting, and distributing farm 

 food products declined three per cent 

 from June to July of this year. In June 



1949, marketing charges were at a rec- 

 ord high of $343. Marketing charges 

 were $22 higher in July 1949 than they 

 were in December 1947. Farm product 

 values were $64 lower in July 1949 than 

 they were in December 1947. This is 

 just another indication of why retail 

 food prices have gone down less than 

 farm prices during the past 18 months. 



Total retail cost of all foods currently 

 consumed by a family of three is rough- 

 ly 50 per cent higher than the retail 

 cost of the market basket. The market 

 basket does not include imported foods, 

 fishery products, or other foods of for- 

 eign or non-farm origin. It does not 

 include the value of food consumed in 

 the households of farms where it was 

 produced. It merely measures the cost 

 at current prices of the average amount 

 of food purchased by a three-person 

 family in the period 1935-39. It does 

 not allow for the fact that per capita 

 food consumption is now about 15 per 

 cent above the 1935-39 level. 



A publication of one of the labor 

 unions came across my desk recently 

 which included several charts and signs. 

 On one of these signs, it said. "Pork 

 up! Hogs down! Why???" There was 

 a chart that indicated farmers' income 

 was going down fast. Still another chart 

 indicated that meat-packing wages were 

 too low. One might wonder if the 

 writer realized what was causing a 

 major part of the increase in pork 

 prices. 



(Continued on page 30) 



WHEN A FARMER 31//S 



HE PAVi A PRICE 

 the othef man sets... 



WHEN A FARMER SELL*, 

 HE GETS A PRICE 



thz other tvan set5 ! 



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