Exports of live stock from the United States.

[Bureau of Foreign and Domestic Commerce, United States Department of Commerce.]

CONFRONTED WITH FALLING MARKET.

After the farmers had completed their planting and harvesting operations, after they had met and solved the problems of production, they found themselves face to face with a falling market. As a result, a situation has been brought about which may have serious consequences, immediate and remote, to our agriculture and to the Nation.

During all the months when the farmers were cultivating their crops, paying for labor and supplies at unusually high rates, the prices of agricultural commodities generally remained high. In midsummer, when the farmers' period of outlay was nearly at an end and their income period was about to begin, a sharp decline occurred in the prices of practically all farm products. Covering nearly everything the farmers had to sell, it did not materially affect the articles they had to buy. For labor and materials used in harvesting they were compelled to pay prices substantially as high as those prevailing during planting and cultivation.

SHRINKAGE OF VALUES.

Live

The year's output, produced at an abnormally high cost, is worth, at current prices, $3,000,000,000 less than the smaller crop of 1919 and $1,000,000,000 less than the still smaller crop of 1918. In other words, it is estimated that the total farm value of all crops produced in 1920 is $13,300,000,000, compared with $16,000,000,000 in 1919, $14,300,000,000 in 1918, and $13,500,000,000 in 1917. stock and its products also declined to such an extent as to cause serious losses to producers. The best estimate that can now be made indicates that the total value of animal products in 1920 is $8,757,000,000, or about $200,000,000 less than in 1919. There is probably no other industry or business that could suffer a similar experience and avoid insolvency.

RELATIVE PRICES OF ALL CROPS.

It is interesting, in this connection, to note the relative prices during the year of all crops grown in the United States. On March 1 they were 22 per cent higher than on the same date last year; on April 1, 23 per cent; on May 1, 23 per cent; on June 1, 24 per cent; on July 1, 21 per cent; on August 1, they were the same as on August 1 a year ago; on September 1, they were 7 per cent lower than a year ago; on October 1, 14 per cent lower; and on November 1, 28 per cent lower. The prices of all crops on November 1 were 33 per cent below those prevailing when the farmer planted and bore the cost of production.

The situation may be presented in another way, using corn, cotton, and wool as examples. The corn crop totals 3,199,000,000 bushels. At November 1 prices the farmers would receive for it approximately $1,500,000,000 less than what it would bring on the basis of prices prevailing in November a year ago. The cotton crop aggregates 12,123,000 bales. At existing prices it would lack more than $1,000,000,000 of bringing as much as it would have brought at 1919 prices. The wool clip, including pulled wool, amounts to 307,366,000 pounds. At prices prevailing in October, 1919, it would have brought $153,683,000, but this year, on the basis of current prices, it would bring $84,525,650, a reduction of about $69,000,000. This means that the farmers of the United States, as a whole, are not receiving adequate returns for their efforts. It means also that the very foundation of our Nation-the stability of our agricultureis threatened, and that everything possible must be done to prevent, at least to lessen the effect of, the recurrence of conditions under which large numbers of farmers conduct their operations at a loss. The farmer must have, under ordinary conditions, a reasonable prospect of a fair return for his labor and the use of his capital. The science, the art, and the business of agriculture can not thrive unless he is suitably and profitably paid for the products of his farm-unless he receives compensation sufficient to enable him to continue to produce and to maintain for himself and his family satisfactory standards of living.

or

NO SINGLE SOLUTION FOR SITUATION.

A sober national thought with regard to the importance, the absolute necessity, of a sustained agriculture in this country is imperative. There is, perhaps, no single solution for the situation. which the farmers are now facing, but there are many steps which can and should be taken to place our agriculture on a more satisfactory basis and to stabilize the business of farming, not in the interest of the farmers alone but in the interest of the Nation as a whole. The

matter is of such tremendous importance to our entire population that it should be recognized everywhere as a national problem and dealt with as such.

We must adopt every feasible means to enable the farmer to adjust himself to changes in economic conditions such as have recently occurred. It ought to be a fact that, when the farms of the country produce abundantly, the consuming public will be liberally supplied with food at reasonable prices, the farmer taking his profit because of large production and the consumer receiving his increment of benefit from having available an adequate supply at a reasonable cost. In general, we should expect it to be true that the farmer's condition is improved in direct proportion to the number of bushels of wheat or corn or the number of bales of cotton he produces. It frequently happens, however, that, when all farmers have extraordinarily good crops during the same year, low prices leave him worse off than he has been in other years with short crops and high prices. One thing that would help to remedy this is some means of carrying over to periods of low production, wherever feasible, the surplus from years of high production. More attention to marketing and the development of the latent consumption demand in years of large supply also would be helpful.

STUDY OF WORLD CONDITIONS.

The Department of Agriculture has been fully alive to the existing situation and has been keeping in close touch with market conditions, ready at all times to render any feasible aid in reducing the losses suffered by farmers on account of the price declines. The drop in the price of wheat was especially sharp and it was charged, in many quarters, that this was due to manipulation, control, or other artificial causes, as well as to the importation of Canadian wheat into this country. You, Mr. President, therefore, asked the Federal Trade Commission immediately to ascertain whether there was any basis for this charge, and I understand that the commission is actively at work on the problem. At the same time, you requested the Department of Agriculture to obtain all available information regarding the world supply of and demand for wheat, including the importation of Canadian wheat and its probable effect on the domestic market, and the department has proceeded vigorously with this task. Recognizing, also, that the depressed market situation was due, in part at least, to conditions following the World War and to the lack of buying power and decreased consumption in European countries, a committee was appointed in the department to canvass the entire agricultural situation with the view of collecting all available data having any bearing upon it. These data will enable us to see more clearly the problems that lie ahead of us. As soon as the material can be brought

together and put in satisfactory shape, it will be published in order that farmers may be in position to determine what the trend in the future is likely to be and what they may do to adjust their operations next spring to world conditions. In this work, the department has had the cooperation of a committee representing the agricultural colleges and experiment stations and also of representatives of farmers' organizations.

MARKETING WORK SHOULD BE EXPANDED.

We must see to it that the road between the producer and the consumer is open and direct and that the farmers have a free and competitive market in which to dispose of their products. We must omit no effort to improve our marketing machinery and practices and to furnish necessary market information to the farmer so that he may take full advantage of modern business methods in the distribution of his commodities. The Bureau of Markets, created in 1913, is devoting its attention to the solution of the many complex problems arising in connection with the marketing of farm products. It is dealing, first of all, with several fundamental steps which are essential to constructive work in this great undeveloped field. These include particularly the accumulation of fundamental data regarding marketing processes and costs; the dissemination of accurate, disinterested market information; the elimination, wherever practicable, of waste and unnecessary marketing expenses; the development of standards for the grading of farm products and the standardization of containers; the promotion of efficiency in the storing, handling, and shipping of farm products; and the regulation of marketing machinery in order to prevent any abuses or sharp practices that may exist. Work along these lines is being prosecuted as vigorously as possible with the available funds and facilities, and provision has been made in the estimates, to be submitted to the Congress at its next session, for its further development during the next fiscal year. If the necessary appropriation is granted, special emphasis will be placed upon studies relating to the costs of marketing and the systematic collection and dissemination of statistics regarding the production and supply of, and demand. for, agricultural products in foreign countries.

COSTS OF MARKETING.

For some time it has been evident that reliable data regarding the costs of marketing should be gathered in order to supplement similar data concerning the costs of production. In fact, such data are essential to the correct understanding of our marketing processes and are fundamental to the development of plans for their improvement and the elimination of lost motion and unnecessary expenses. We should be able to indicate, with a fair degree of accuracy, the proportion of

the consumer's price received by the producer and the proportion received by various marketing agencies. Studies with reference to the cost of marketing live stock, grain, milk, and potatoes are now under way, and it is highly desirable that they be extended, as rapidly as possible, to include other staple agricultural commodities.

COOPERATIVE MARKETING.

The question of cooperation now occupies a prominent place in the public mind. High distributing costs have stimulated and increased the demand for greater efficiency in marketing. Producers everywhere are outspoken in their dissatisfaction with present marketing costs, which appear to exact an unduly large share of the price paid by the consumer. In their effort to reduce marketing expenses, producers are turning in many cases toward cooperative marketing. The distribution of farm products through cooperative organizations undoubtedly affords an opportunity for farmers to make more effective use of market information, to properly grade and market their products in commercial quantities, to find larger outlets, and to reduce costs and increase efficiency by shortening the channel between producers and consumers. In addition to more or less localized efforts, organizations of growers of wheat, cotton, and live stock have recently projected movements for the development of cooperative marketing on a broad scale.

The department recognizes fully the importance of the cooperative movement and its potentialities for good in the general marketing scheme, conducts investigations relating to its status and progress, and gives assistance to specific groups of producers who request help in the organization and operation of cooperative enterprises. This work should be extended and developed.

FOREIGN-MARKET INFORMATION.

Comparatively little systematic attention has been given to the development of foreign markets for farm products, or to obtaining and making available prompt, comprehensive, and dependable information with reference to the production, supply, and prices of, and demand for, agricultural commodities in the different parts of the world. While the Bureau of Markets has developed, to the extent permitted by available funds, a very efficient market-reporting service for the United States, no similar machinery for collecting and disseminating foreign-market information has been provided. The foreign markets division of the bureau is endeavoring to keep in close touch with conditions abroad, but it has neither the personnel nor the facilities for meeting the demands made upon it. It is highly essential that definite provision be made for the building up of this