Nogales international., 1934-09-08
Constantly Rising
Grain, Hay Prices
(By ]. A. McNAUGHTON)

LOS ANGELES, Sept. 7.-Con-
stantly rising grain and hay prices
are giving stockmen and dairymen
some cause for concern, even to the
point of attempting to establish in
their own minds, whether or not
feed prices will be as high as to
prohibit opportunity for profit. A
few days ago, a large cattle and
hog feeder was in my office and
asked for some advice. He told me
what he was bid for his hay and
barley and said that he knew he
would make a good profit If he
sold his crops at present prices. He
wondered if he could make a profit
if he continued feeding cattle and
hogs.
It has been the experience Of
mo Stockmen that the real profits
in the livestock business come when
feed prices are hlgh-because live
stock and dairy product prices are
corrospondingly high. It seems to
me that the in-and-outer in the
livestock bu. ineSs does neither him.
self nor the industry and good but
the man who carries on his feeding
operations year in and year out is
the man whose average profit car
ries him through. There is, Of
,ourse. temptation to sell feed,
',ut it is we'll to keep in mind that
II you are going to put yourself
out of the livestock business there
S much to consider and particularly
he fact that livestock Is the one
hing that has at all times been
'eadily convertible into cash; be-
ides it furnishes constant employ
nent.
The very fact that feed prices
re high is proof that supplies Of
lay and gran are rather scarce.
BY the same reasoning, it proves
that less livestock can be fed. The
livestock grower or feeder IS most
interested in the margin between
cost and selling price and it makes
very little difference what the cost
is if the selling price is sufficiently
high to afford a profitable working
margin.
The law of supply and demand is
bound to work for it always has
worked in the past. It is not the
Intention of this writer to give ad-
ice but rather to present facts for
What they are worth Yet so many
caders have asked my opinion on
he outlook for livestock prices that
here seems to be fair cause for me
point out some of the factors in
'olved. From all statistics ava l.
BILE, we have very decided reduc-
rion in the number of hogs in this
country and it is utterly impossible
for suppl:es to reach burdensome
numbers for a matter of several
years. The consensus of opinion
throughout the trade is that we
may expect satisfactory price
cond.tio in favor of the producer
for some time to come.
Government buying Of cattle in
drought areas is continuing at an
enormous rate and probably will
continue for the balance of the
year. Another thing to keep in
mind is the big percentage Of cows
that are being cut out Of the herds
under present conditions. Certain
ly, the greater percentage Of the
millions of cattle being purchased
by the government are of beef type,
largely from range areas. This
must mean that we are going to
have period of years when sup
plies will be much smaller than
| during the past several years. The
consumer wants beef and probably
the price to be paid for beef will
depend largely upon the ability of
consumers to buy. Frankly, there
are many close market observers
who fear that prices will go too
high for the good Of the industry