A3o—Lancaster Farming, Saturday, July 3,1982 Economist surveys (Continued from Page Al) On the hog situation, Beales says, “In my opinion, if you want to lock in a profit, sell on the future’s market.” He elaborates this statement by adding, “In my view, hog fanning became more of a big business five years ago. It used to be a way for farmers to get rid of excess corn. But the big producers are not producing like they used to. They’re buttoning the‘hatch and waiting for prices to go up.” Beales spent the majority of his allotted time discussing the Russian wheat situation, however. His observations on the USSR’s wheat crop for last year, which he terms, “an absolute failure,” correspond with reports by the U.S. Department of Agriculture. (See related story, page A ). “Last year, Russia’s grain production was so bad that they McKinnon Securities, Inc. of Philadelphia, and guest speaker at Monday evening's Penn Ag grain meeting, predicted a year of ups and down for U.S. grain, but a devastating year for the Russian wheat market. I'M NOT L10N... The Classified Livestock Section Has Beastly Selections! have never publicly announced how bad it was. We have estimates by the USDA, but their figures are usually on the high side,” he ex plains "The outlook for this year doesn’t look good either. There are some very bad weather conditions stirring over Russia now. They have the worst sugar beet production record in 17 years; their potato production was down 17 percent last year; their storage capacity is inadequate; and they will have to import more this year than ever in history,” he sum marizes. On Russia’s financial situation, Beales says they continue to be a heavy seller of gold to buy grain. “The Soviets have increased prices paid to fanners, but have maintained retail prices. Bread has been the same pnce for 25 years vet Bnwan diets liave not sulce 1963 ‘ He contributed This student of economic theory imnroved since the ’so<? articles on comodity markets to- advises grain producers to “Keep Beales a graduate of the news P a P ers in 1116 Philadelphia costs down and stay close to Wharton’ School of Business h 2 area and may be heard reporting brokers for changing in wnanon ocnooi ot Harness, has commodity markets twice daUy on formation.” been active in commodity trading radiostati onKYW. Soviet mystery number cloaks agricultural shortfalls WASINGTON, D.C. - How poor was the 1981 Soviet grain crop? While it’s no secret that the USSR suffered its third con secutive shortfall, the Soviets refuse to disclose official grain production statistics. In previous years, the Kremlin released harvest figures in its annual state plan fulfillment reports - even in years of far more disastrous shortfalls. But the grain statistics were omitted for 1981, and no reason was given. . That produces a fascinating mystery for Western observers: Why have the Soviets been so reluctant to release 1981 crop figures? Even if numbers are released later, an aura of mystery may linger concerning the delay. In USDA’s Farmline magazine, economist Anton Malish, chief of the Eastern Europe/USSR Branch in USDA’s Economic Research Service, examines the implications of last year’s Soviet harvest and possible motives behind the Kremlin’s reticence. “Because grain production enjoys a special place in the Soviet mystique, the decision not to reveal the 1981 harvest statistics was a carefully calculated one in which both domestic and in ternational arguments come into play,” Malish suggests. “The decision itself,” he adds, “seems to have been made at the highest levels of the Soviet government. It involved the suppression of grain production data not only for the USSR as a whole, but for the major grain production republics as well.” Why the secret? Malisb offers four possible answers: The 1981 grain harvest was exceptionally poor. USDA experts estimate that the Soviets suffered about a 28-percent shortfall from their announced target of 236 million tons. A crop no larger than USDA’s estimate of 175 million tons would represent a serious setback, but it would still far exceed some past harvests which the Soviets did report, such as the 140 million tons gleaned in 1975. This raises a question: Could USDA be greatly overestimating the Soviet grain harvest? Possibly, but the USDA figure would have to be off considerably 20 percent oo high if the actual harvest came out as poor as the 140-million-ton low malic of recent years. Over the past 8 years, the USDA end-of season estimate has been within 9 percent of the Soviets’ announced number. Experts also qay that a crop in the range of 140 to 160 million tons should have triggered herd ad justments or distress slaughtering which would have shown up in monthly livestock statistics. Thus, Malish says, it’s unlikely that crop size, alone, is behind the sup pression of Soviet statistics. The number was withheld because of international im plications. Expectations of large Soviet purchases would drive up world grain prices and might also strengthen toe position of those who have advocated a trade em Another possible domestic in centive, he notes, could be to avoid (Turn to Page A 391 I 1 . TRACTOR, INC. I 1655 Rohrerstown Road I Lancaster, Pa. » Flory Mill exit of Route 2831 Phone: 717-569-7063 | ( Up to $2500.00 cash rebate i 1 reward i | Trade a competitive tractor | I newer than 1970 I I Receive up to $lOOO.OO | bargo to pressure the Soviets. However, Malish suggests, the Impact of the official harvest figure on overall trade flows would probably be minimal: Regardless of whether the Kremlin releases the official number, record Soviet grain im ports had already been anticipated by world traders. Expected levels of grain imports would be about as much as the Soviet transportation system can handle.' Virtually all of these imports 43 of an expected 44 million tons have already been purchased or contracted for. Withholding harvest figures to influence an embargo decision would also seem to offer little advantage. 41The major questions regarding trade sanctions have been openly discussed by U.S. policymakers. Recently, the president-reaffirmed that farm exports would not be used as an instrument of foreign policy except in extreme situations as part of a broader embargo when national security is threatened and when the cooperation of other nations can be secured,” Malish says.- ' " “It’s bard to believe the actual Soviet production number would contribute much to the formulation of UJS. policy in that area,” he adds. The number was withheld for domestic policy reasons. “Grain production is central to Soviet agriculture,” Malish says, “and it plays an important role in the Soviet world view.” The Soviets see grain supplies as a worrisome area of national vulnerability. While holding the statistics back may cause some domestic unease, Malish says policymakers may have found it preferable to the “Bureaucratic nightmare of a debate on how available supplies should be shared between the republics, or between cities and towns.” Tractors Equipment NEW TRACTOR SALES CASH FINANCE APR 9.75% 10.75% 11.75% 12.75% 13.75% Term 12 mo. 24 mo. 36 mo. 48 mo. 60 mo.
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