White Bluffs spokesman. [volume] (White Bluffs, Wash.) 1907-1938, 1934-05-03
Farm Price Rise
Established Fact

BY r. M. Turner,
Extension Economist, State College
of Washington
Farm purchasing is slowly climbing
from a so-called farm dollar" OF o3
cents for the average Of 1882 to o.
cents for February, 1884. While the
prices paid by farmers for gooos
bought increased IL per cent to an
index price of 118, prices of farm pro-
ducts for the United States increased
from an index of 40 to February, 1885,
to 76 in February, 1884, which repre-
sents a SIS per cent increase.
The average farmer is benef1tlng
from the rising price level, Wl1houC
considering benefit or rental payments
from the Agricultural Adjustment Adj
ministration Farmers producing Ger
tain products, such as hogs, butterfat,
or eggs. have not felt any consistent
price Improvement. The monthly IN
come from crops and livestock pro-
ducts in the United States was l3O
millions greater for last October, COM
pared to October year ago. Like
wise, November showed gain OF l2o
/ million dollars over the same month
for the year previous, and January
showed a gain of 80 millions, exclud-
ing allotment payments.
These gains in farmer purchasing
power are giving new hope to farm
people and confidence that the wide
disparity between farm products prices
and the goods farmers buy will be
narrowed, and farmers may again
prove to be a great market for urban
products.
Further evidence of the farmers
,shrunken income is furnished by the
u. S. Department of Agriculture, show
ing that farmers in 1919 received 1875
per cent of the national income. BY
1929, this had dropped to per cent
and estimates by the Department
show that this share of the national
income was only about per cent fo1
the period 193O-1932.
While the farmers as whole were
at a disadvantage for the period l921
i to 1929, the extreme sdrop-i the gen
eral price level caused raw products
including farm products, to drop Il
great extremes This placed all farm
ers owing debts in precarious posi-
ton and caused threats of widespread
foreclosure All efforts to force TIT
price level up to approximately thu
debt level (about so per cent above thu
pre-war average) are of great concern
to both creditors and debtors. Fixet
costs, such as interest charges public
service rates, freight rates, and taxes
adjust upward or downward yer,
slowly. AS prices of farm product
, advance, more normal Relationship
is re-established between farm produc
, prices and these fixed charges becaus
, fixed charges change little or not a
all. AS indicated above, this improve
: ment is developing.
), These disparities between farm pro
S ducts prices and the things farmer
buy may be explained by unsatisfac
: tory bargaining between the group
e offering these products, labor or ser
it vices. Groups having goods farmer
n need are unwilling to sell at low enoug
: prices at which farmers believe the
: can buy, with their low-priced pre-
e ducts to exchange for them. If indus
IL try is unable to sell it's products
e fast as it can produce them, 1t re
% duces it's production and tends to MOI
Us nearly stabilize prices. AS buying pow
e er returns, the wheels of the factorl'
y begin to turn again. Likewise, farme
S. are attempting to adjust their produt
ID ton to changed demand. Such plal
} are designed to bring supply and d
e, mand into more satisfactory balanc
N Just how far have prices to rise b.
~ fore they reach a fair level OF equ
exchange comparable with the l9l
1914 period? The last figure availab
= for this is for February, 1884, whit
IL average wheat in the United Stat
g should sell for 1O4.3 cents per bush
&c to equal pre-war purchaing pow'
# Hay should be $14.O1 per ton, beef ca
mr. tie $615 per hundred pounds, no
~ 1882 per 100, eggs 26.6 cents per dc
en-, butterfat BIO cents per pound, al
veal $796 per 100 pounds to equal pr
war, 19l0-1914, purchasing power MI
ny of the current prices are still consl
erably below these parity prices.