Hallo well expresses concern
HARRISBURG - State
Agriculture Secretary
Soviet Union. Hallowell said
that initial reactions are
possible negative effects of
President Carter’s decision
to curtail sales of grain to the
Soviet Union. Hallowell said
that initial reactions are
poor and market prices are
down, not only in local
markets, but in the foreign
marketplace as well.
Hallowell urged Penn
sylvania farmers to stay
calm and not panic at gram
prices which have been
depressed since Carter’s
announcement last Friday.
“Pennsylvania buyers and
sellers should take a wait
and-see attitude on sales,
with all markets full of
speculation as to the total
effect of the President’s
decision,” he said.
“Grain markets have
reacted poorly to the
President’s announcement,”
Hallowell said, “but Penn
sylvania farmers have in
creased com production in
recent years, from a deficit
siwskm
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position to a slight surplus,
and shouldn’t be in as bad a
shape as their midwestem
counterparts.”
Pennsylvania annually
produces 119 million bushels
of com (three million metric
tons).
Some effect will be noticed
in southeastern Penn
sylvania markets according
to Hallowell because much
grain and soybeans from the
region is sold for export.
Carter’s decision an
nounced Friday night will
curtail grain sales to the
USSR from 22 million metric
tons to a maximum of eight
million metric tons in 1980.
“That poses the threat of
14 million metric tons of
grain being dumped back on
the open market,” Hallowell
said. “And until we have
some hard figures of market
possibilities, it would be
unwise to try to fix the effect
of any prospective federal
moves.
“The farm community is
concerned, and it well should
be,” he said. “While it ap-
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Conveyors
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pears that the Carter ad
ministration is attempting to
help the situation by
providing support for prices,
farmers are reluctant to see
an artificial support such as
a grain reserve since far
ming has traditionallv been
a iastionof freeenterpinx.
In his Friday night ad
dress the President
suggested the purchase of
tive million metric tons of
com to produce 500 million
gallons of gasohol.
Hallowell said that while
the idea sounded good to
farmers, the nation does not
now have sufficient facilities
to produce the enthanol. The
USDA press office in
Washington confirmed that
fact Monday morning.
Hallowell said he un
derstood that the world grain
markets were “in sheer
confusion.”
European markets which
should have responded
positively to Carter’s an
nouncement have beend
depressed, he said. The
London soybean market
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over Carter grain embargo
closed down $ll on Monday,
a five percent drop m pnces
in just one day.
He noted his concern went
beyond immediate market
prices.
“The United States ex
ports more than $32 billion in
agricultural commodities
every year,” he said, “with a
net agricultural trade
surplus of $lB billion. The
Soviet Union accounted for
15 million metric tons in
1978, more than 11.3 percent
of our total grain exports.”
Hallowell said Conrad
Leslie, perhaps the nation’s
leading gram marketing
expert, has projected the
effect of Carter’s an
nouncement to be a decline
in agricultural exports of
about $2.5 billion this year.
“Coming on the heels of a
fifth consecutive year of
record grain harvests, this
curtailment will have a
ripple effect,” Hallowell
said, “affecting jobs in
export trade, market prices
and farm income. With
decreased farm incomes,
- Little. Dav
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Lancaster Farming, Saturday, January 12,1980—C31
less money will be spent by
farmers and this effect will
carry into the local
economy.
“We have been given
assurances from
Washington that other world
gram marketing nations
have been contacted about
their participation in this
move,” he said, “but we
have not yet seen any
assurances from Canada,
Farmers interested
wonder who profits
CHICAGO, m. A recent
national survey of farmers
indicates an increased in
terest in the farm futures
market, but farmers still
indicate skepticism about
who benefits from the
market.
The futures market allows
farmers to contract for the
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Australia or Argentina to
confirm their support or
outline their intentions.”
Hallowell said initial
reactions point to the
possibility that the negative
domestic effects could be
greater than any impact on
the USSR and that other
nations may come to regard
the United States as an
unreliable source as a result
of this action.
in futures, but
sale of anticipated
production at an agreed
upon price. Eighty percent
of the farmers responding to
a survey by International
Harvester, said they un
derstood how the futures
market operated, but 48
percent said they do not use
the futures market.
The most common reason
given for not using the
market was a belief that
speculators and big grain
companies control the
markets (30 percent). The
majority of farmers
responding to the survey
said the markets do not
serve the interests of the
farmer (52 percent) while 42
percent believed the op
posite was true.
Despite this skepticism, 55
percent of those surveyed
indicated they would use the
market more in the future
and 63 percent said they pay
more attention to the market
now than they did several
years ago.
Of those who regularly
participated in the future
market, most said they did
so to reduce the risk of price
moves.
The average fanner today
is in his late 50’s and for
every four farmers who die
or retire, only one new
person is entering fanning.