24 —Lancaster Farming, Saturday. Oct. 11, 1975 U.S. wants inti, gram reserve Farmers wising up to speculators; suspicious of government By Dieter Krieg According to a story ap pearing in the Wall Street Journal this week, the United States is pushing for a plan to set up a 4.5 billion dollar international grain reserves system. Making the proposal in London to representatives of the In ternational Wheat Council, U.S. representatives suggested that the cost of the program be shared by producing and consuming nations alike. The idea was brought on by swings m world supplies of wheat which alternated between surplus and shor tage in recent years. U.S. representatives believe that the proposal would be conducive to more regular supplies. Wheat, corn, and rice are to be purchased in times of surplus and held in clusters of newly-built silos around the world. Then, when shortages occur, the com modities are to be released. The goal in ail this is more stability in prices and supplies. The deals currently going on with the Soviet Union are also designed to bring more stability to the grain market. In making the proposal, the United States received opposition from other member nations of the In ternational Wheat Council. Previously it had been agreed that price levels are set to trigger purchases and sales but U.S. represen tatives don’t want new price targets included in the new agreements. The old grain trading arrangement expires on June 30, 1976 and the talks which took place in London are in preparation for a new plan to replace it. According to the Wall Street Journal article, U.S. officials believe their ■ 7',” - -A proposed plan comes at a good time of acceptance because wheat is supposedly in short supply right now and both buyers and producers should have an interest in maintaining price and supply stability. Officials at the grain conference noted that the U.S. proposal received consideration - but more for its possibilities rather than its desirability. The plan calls for the purchase of 917.5 million bushels of wheat and 245 million bushels of nee. A figure for corn was not made available. the controversial proposal received some consideration, the measure was not acted upon. Ad ditional talks are scheduled between now and early December when the Council meets again. The U.S. hopes its proposal will be accepted as is in spite of the opposition it received. Meanwhile, commodity futures continue to reflect the uncertain supply and price situation developing in both hemispheres. European and Russian crops are reportedly deteriorating, while bountiful harvests are piling up in bins here. Opinions reflected in agricultural publications across the country would just as soon have Unde Sam stay out of the market place. The question asked is “How can the government make commitments to other nations to have grain available for them this year or in years to come when it’s farmers, not government, which is producing the grain?” Farmers own the grain and they want the decisions about selling it. They’re suspicious that government deals will have some bad news for them -1. Uncle Sam digging deeper into his pockets, and 2. More than 3,000 bates'of hay, some equipment, and tons of shelled corn and soybean meal were lost in the fire which leveled this barn on the Joseph 801 l farm, Lititz R 2, last Tuesday. The lower part of the barn was relatively undamaged and is being used. Fire engines stationed at the small pond in back of the barn pumped water at a rate of 2,000 gallons per minute. limiting even further the alternatives he has in at tempting to make a profit. Following is a crop report Trends in grain marketing based on releases received by Lancaster Farming during the past week: Soybeans A large soybean crop, estimated at 1,458 million bushels, coupled with a big 186 million bushel carryover of old beans is expected to provide an abundant supply for domestic and export requirements. Domestic use this year was down 25 per cent from the record breaking years of 1973-74, but moderate recovery is expected in 1976. Foreign damand is expected to ac celerate also. Soybean meal may be attractively priced for poultry and dairy operators, but the beef and hog farmers are likely to shy away from large-scale feeding for a while yet, USDA predicts. With large supplies of soybeans, it appears that in 1975-76 protein feeds may again be priced cheaper relative to grain con centrates, they add. Soybean production is up 17 per cent from last year, but seven per cent below the record crop registered in 1973. The carryover is the third largest on record. Wheat Believing they have missed out on top grain prices each year since Russia bought large amounts of U.S. wheat in 1972, American grain far mers are holding their crops this year until terms of U.S.- Soviet deals are definite. Farmers are discovering it is better to sell a part of their grain when the market comes to them, rather than all of it when they go to market. Wheat farmers have sold less than half of the 1.6 billion bushels of wheat they harvested last summer. Grain farmers are wising up to speculators and price fluctuations. Dealers in the Midwest note that farmers come'to the elevators to sell their crops when prices of around four dollars per bushel are posted, but they stay away when the price drops. This novel marketing strategy on the part of farmers may be spreading to other commodities as well. Analysts point out that farmers are still holding 41 per cent of the soybean stocks, for example. It used to be that farmers would sell their crops early in the harvest when supplies were lowest, or late the next season when supplies were short again. But that’s changing, as farmers hold and attempt to keep prices up by curtailing supplies. All this came about, say grain specialists (other than the farmers themselves) because producers received the short end of the deal for three years by selling too soon. And last year they learned what can happen if they wait too long. So they’re attempting to achieve a happy medium by avoiding pitfalls at both ends. Observers say farmers learned well and they’re watching the market like a hawk. Last week, while this reporter was in the Midwest to the Farm Progress Show at Malta, Illinois, several exhibitors at the show used the market tabulations as an added attraction. Up to the minute prices were projected on screens or posted on boards. Crop reports were blurted out over the several broadcast services which were on hand, and farmers listened. Roderick Turnbull, a Kansas City Board of Trade official says: “After selling a part of his crop to catch up with production bills, each farmer watches the market like a hawk with his own target in mind. He’ll change his mind about where the target is at, but he’ll sell when the market hits it, and he’ll close it off like water when the prices drop. Quoting from the Wall Streel Journal, here’s what one Kansas grain buyer had to say: NOW! PREPARE FOR SEEDING CALL US FOR PROMPT SERVICE ON: LIMESTONE - S® FERTILIZER Premium Grades. Containing Magnesium and Suphur for small grain. Available in bags, bulk. » Trailer spreaders or custom truck spreading. fall season discounts NOW IN EFFECT Authorized Dealer HEISEY FARM SERVICE RD2, Mount Joy, PA Phone 653-1568 f| ORGANIC PLANT ,7 [ ANHYDROUS ammomia J PQQP 0Q 2313 Norman Rd., Uncaster, Pa. Ph. 397-5152 “Steady four dollar wheat would probably fill up my elevator, but if prices blow by that in a hurry, like maybe to $4.25, a farmer is going to sit on the whole pile for an even higher price until he figured out what hap pened. On the other hand, we’ve been down to $3.75 so often, he’d just sit there until it bounced back again.” The market should be an interesting one. The western hemisphere had bumper crops for the most while European and Asian production will necessitate bolstering from countries such as the U.S., Canada, Australia, and Argentina. The report from China is that good weather is likely to produce the third straight record grain crop this year, and thus reduce, but not eliminate, the need for imports.
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