10
—Lancaster Farming, Saturday, September 18,1971
Price Freeze-Farmers Exempt?
Since the President’s price freeze about
a month ago, there has been much specula
tion about what it means for farmers. Farm
ers were given special status in the new
economic policy by having raw farm pro
ducts exempted.
One of the first issues to emerge was
the question of what constitues a raw farm
product. The general rule has been that any
basic farm commodity which has not been
further processed for retailing is a raw
farm product. This includes both animals
on the hoof and grain directly out of the
fields.
But the price of the retailer’s product,
including fresh, frozen or processed meat at
the store or feed from the manufacturing
plant, come under the rules and in effect
have a price ceiling based on prevailing
prices before the August 15 announcement.
It is now generally conceeded that the
actual effect of this policy is in fact to im
pose a price ceiling on animals on the hoof
and on grains. This is true because retailers
and feed manufacturers must continue to
maintain reasonable returns; if the price of
raw farm products rises to the point where
these price returns are endangered, the
buyers of these farm products simply quit
bidding on them. This in fact imposes a
ceiling on-the price of raw products, al
though it is somewhat more flexible than on
those items which actually come under the
president’s price freeze.
As H. Lewis Moore, Penn State market
ing specialist explains in a recent livestock
information marketing bulletin, “When live
stock prices move higher, the packer can
not pass the increase on to the retailer (and
then on to the consumer) if his wholesale
price is now at the high point reached dur
ing the 30 days prior to the August 15 freeze.
A Good Livestock Market?
Forecasts continue for an unusually
large grain harvest, particularly a record
corn harvest at 12 per cent over the previous
record in 1967. It will mean a drastically
changed situation for livestock producers
over the next year in relation to the past
year.
During the past year when corn prices
were unusually high, often in the $1.75 per
bushel range or higher, it was often ques
tionable whether a farmer could make more
money by feeding his grain through live
stock or by selling it direct.
This was particularly true in relation to
hogs, which were also very low priced be
cause of an oversupply. Using the old recog
nized ratio of 10 bushels of corn equaling a
hundred pounds of pork, there were times
recently when pork producers could have
made more money by selling their corn
direct and avoiding all the cost and labor of
feeding it.
But with the price of corn suddenly
declining and with a record harvest fore
cast, the profitability of feeding corn may
rise sharply over the next several months.
All farmers should remain aware of this
changing situation and how it effects their
operations.
One situation in particular which farm
ers should anticipate is that if the grain
surplus regions in the west and midwest
come up with a bumper grain harvest as
LANCASTER FARMING
Lancaster County’s Own Farm Weekly
P. 0. Box 266 - Lititz, Pa. 17543
Office: 22 E. Main St., Lititz, Pa. 17543
Phone: Lancaster 394-3047 or Lititz 626-2161
Robert G. Campbell, Advertising Director
Zane Wilson, Managing Editor
Subscription price: $2 per year in Lancaster
County: $3 elsewhere
Established November 4,1955
Published every Saturday by Lancaster
Farming, Lititz, Pa.
Second Class Postage paid at Lititz, Pa
17543.
Member of Newspaper Farm Editors Assn.
Pa. Newspaper Publishers Association, and
National Newspaper Association
If the packer pays more for livestock, he
reduces his own margin. Since raw material
(livestock) makes up 80 to 85 per cent of
their cost, packers may offer considerable
resistance to-paying higher prices for live
stock during the freeze.”
Moore goes on to point out that exempt
ed raw farm products are also continuing to
be governed by the law of supply and de
mand, and that the supply is expected to be
up in the next several months. Wheat pro
duction is estimated at 16 per cent greater
than in 1970, barley up 13 per cent, sorghum
grain up 20 per cent, and corn up 30 per
cent over last year. If these projections con
tinue to hold true, it would indicate falling
grain prices in relation to last year when
prices were artificially up because of the
corn blight scare.
Also, our reports indicate that the grain
harvest in some other nations is up from
last year, indicating a reduced potential for
exporting grain surpluses abroad.
Initially, bountiful grain harvests should
spell much lower feed costs for livestock
and poultry producers, but in the longer
run, in six to 12 months, it should result in
bidding up the price-of feeder stock and
eventually result in more animals at higher
weights, as farmers feed out their low
priced grain supplies. _ x
Thus, it would appear at present that
there is in fact a price ceiling on raw farm
products and that first grain, and eventually
livestock, will be priced below the ceiling
because of increasing-supplies.
This changing situation will affect each
farmer differently, depending on the type
of operation he has. The farmer should con
tinue to watch the situation closely, because
his response could play a large role in the
profitability of his operation in the next
several months.
expected, farmers in these areas likely will
begin acqquiring more livestock for feecf
ing. This is likely to occur particularly in
areas, such as Illinois and Indiana, which
were hard-hit by blight last year. Areas and
farmers with unusually low supplies of corn
and grain last year tended to hold down
numbers of livestock on feed; with a low
priced bumper crop, they can be expected
to begin feeding at previous high levels.
If this occurs, it will almost inevitably
bid up the price of feeder stock in the com
ing months. Local farmers should watch
this situation and if it begins to occur, they
should try to plan their own operations so as
to get ahead of the rush.
Also, if there is a move toward increas
ing the feeder operations, it could tempor
arily reduce the number of livestock actual
ly available for slaughter. This would tend
to keep prices up until the larger .number
of animals begin reaching the market. If
this trend occurs, livestock markets may be
unusually strong in the next several months.
As farmers know from experience, pro
jecting these-trends and trying to profit
from them is an extremely tricky and risky
art. But we think that if ever there was a
time when the future market condition of
the livestock industry could be predicted,
now is it.
During the past year, grain supplies
dropped sharply, feed costs rose sharply,
demand for feeder stock dropped sharply.
Bolstered by high feed costs and restrained
livestock supplies, livestock prices remain
ed good in the face of sluggish consumer
demand.
During the coming year, grain supplies
will rise sharply, feed costs will drop as
Eastern Shore corn is already arriving and
as midwest corn reaches this area in late
October, demand for feeder stock will rise
sharply. As the national economy picks up,
unemployment declines and consumer de
mand rises, livestock producers temporari
ly face the pleasant prospect of rising de
mand and lower costs, a situation which
farmers will quickly try to overcome with
increased production.
” • fwAV.V.V.V
NOW IS
THE TIME..
By N. Alan Bair
Assistant Ag. Agent
To Prepare For Corn Picking
Corn picking time will be here
before we know it and now is the
time to get the corn picker in
good working order, as well as
preparing the available storage.
The harvesting equipment should
be gone over thoroughly to be
sure it is in top working order.
Severly worn or broken parts
should be replaced or repaired.
It would save a lot of valuable
time during the picking season
to purchase “questionable” parts
now so a lot,of time is not lost
during a breakdown. A good
way to systematically inspect the
machine is to thoroughly lubri
cate it.
Storage facilities for the new
crop should also he prepared at
this time. Cribs .and bins should
be cleaned and repaired. Pro
visions should be made so old
dry corn is not “buried” where
it will not be available for use
first before the new grain. Pos
sible sources of rodent damage
should be checked out and cor
rected. Good housekeeping is
one of the best defenses against
rodent damage.
To Have Soil Tested
Farmers who have their soils
tested in the fall will be ahead
of those who wait- until spring.
By testing now you will have the
Winter months to plan next sea
son’s fertilizer program. Having
sufficient time to plan often
TO SEE THE
UNSEEABLE
Lesson for September 19,1971
■aclcgmmal Scripture. John 1:1-11.
Davetienal Reading: Isaiah 40-12-31
A little boy was being reminded
for the umpteenth time not to put
his fingers in his mouth because
his hands were dirty and there
might be germs on them. “Oh
for Pete’s sake,” the little boy
burst forth, “God and germs! God
and germs! That’s
God and germs
■K Sand I’ve never
seen either of
IK We can sympa-
BSt thize with the lit
tie fellow for we
& :P^Hfck csm appreciate
how puzzling it
Rev.' Althouse must be for chil
dren to be asked to believe in
someone whom they cannot see.
Still, on the other hand, we also
ask them to believe in germs, too,
and they can’t see those either.
The Word
From his earliest days man has
believed in things and persons
who were unseen and unseeable.
The reason for this belief has
been God’s tireless efforts to re
veal himself to man. “In the be
ginning was the Word” (John
1:1) —from the very beginning
God has tried to make himself
known to his creatures. He has
“spoken” to men in nature, in
dreams, in mighty deeds, in laws
and literature, and in human
means the difference between a
successful fertilizer program and
a poor one.
Another important advantage
of testing now is that if the soil
test indicates a need for lime,
autumn is the ideal time to apply
it. Lime added in the fall has
plenty of time to begin its re
actions on the soil before spring
planting season. Where soils
need phosphate and jpotash for
better crop yield, fall applica
tions of fertilizer are a good
idea
To Install SMV Emblems
Farmers and other persons op
erating slow moving vehicles are
reminded that it is now a law
that such vehicles must display
the approved slow moving vehi
cle (SMV) emblem.
The emblem is transferrable
from one vehicle to another. It is
relatively inexpensive and may
be purchased at most implement
dealers and farm supply firms.
Be sure to keep all SMV em
blems in good condition. A dirty,
faded and perhaps damaged em
blem is little better than no em
blem at all when -it comes to
warning following drivers., A
damaged emblem should be re
placed or resurfaced with new
material if metal backing is
sound. Replacement emblems or
new center or border materials
are readily available from many
farm supply stores and farm
equipment dealers.
thought. All of these channels of
revelation have revealed glimpses
of the truth to men. They have
convinced men of the existance
of unseen realities.
Yet men are not satisfied usu
ally unless they can see with
their eyes and hear with their
ears. They may be thrilled with
lofty ideas and stories, but still
■'they want something more con
crete, 'more specific. It was to
meet this need of men that God
spoke through that most reveal
ing of all his creations—a man!
“And the Word became flesh and
dwelt among us, full of grace and
truth” (1:14).
To make Him known
Men had gained some under
standing of the nature of God
through the wonders of the na
tural world. They had been led
closer to him by philosophies and
laws and man’s imaginative crea
tions. Yet God was still unseen
and unseeable. It was thus the
purpose of the Incarnation—the
Word became flesh—to help men
to see the unseeable. “No one has
ever seen God; the only Son, who
is in the bosom of the Father, he
has made him .known” (1:18).
This doesn’t mean that Jesus
was the only revelation of God,
but that he is the fullest, reveal
ing to us all that we need to know
and can know of God. Thus: "In
many and various ways God
spoke of old to our fathers by the
prophets; but in these last days
he has spoken to us by a Son
... He reflects the glory of God
and bears the stamp of his na
ture” (Hebrews 1:1-3).
In Jesus Christ man is enabled
to see the unseeable.
... (aas*d on outlines copyrighted by the
Division of Christian Education, National
Council of the Churches of Christ in the U.S.A.
Rilmsm by Community Rrtss Strvict.)