Evening star. [volume] (Washington, D.C.) 1854-1972, 1942-11-12
Freak Flour Famine
Feared as Result
Of Price Squeeze
Business DeodIocked
In Many Sections,
Trade Reports
BY FRANKLIN MULLIN,
Associated Press Market Writer.

:
CHICAGO, Nov. 12.-With flour
business in many sections of the
country near virtual deadlock, a
freak national famine OF breadstun
could develop, milling trade re-
ports indicated today, unless a
unique wheat-fiour price squeeze
growing out Of the anti-inhation
program is relieved soon.
It is inconceivable that a short
age of flour could occur. millers here
said, in view of the record wheat
surplus Cutting storage facilities,
but trle reports showed flour sales
are tagging. and at no time since
establishment of ceilings on october
3 have they been up to the Ma
tion's milling capacity.
Many mills were reported unable
and unwilling to sell flour. some re-
fusing to take orders because, they
said, the relationship between wheat
prices and flour ceilings results in
loss from operations or does not per-
nit sufficient margin. There is no
ceiling on wheat prices, which are
more than 80 cents a bushel below
parity. Wholesale and retail bread
prices have been limited since spring
under the general ceiling order.
Some Relief in Sight.
Some relief is in the offing, mill
ing interests reported. Many mill
ers have protested to Washington
price-control officials, and the trade
was filled with reports that the
Government is getting ready to act,
possibly to bring into operation a
far-reaching plan involving an addi-
tional subsidy to producers of wheat.
They pointed out that the tempo
rary flour ceiling expires early in
December and that some relief may
be afforded by the permanent limit.
Grain men said the squeeze OF
wheat and flour prices is due large
ly to the Government program. They
said the Government is offering
loans to farmers who store wheat
and keep it off the market at rates
even with or actually higher than
prices at which mills claim they
must obtain wheat in order to op-
crate under flour ceilings.
The flour ceiling inaugurated after
passage Of the new anti-innation
law limited prices to top quotations
at which mills made deliveries dur
ing the September 2s-October
period. This Immediately dead
locked the market. but the situation
was cleared up temporarily when
ceilings were adjusted upward on
the basis of actual sales, rather
than deliveries, during the base
period.
Wheat Prices Ease.
Wheat prices reacted about 5 cents
a bushel from peak levels during
the base period, affording some
additional relief but recently have
regained some of the; loss. In GER
tain areas, particularly in markets
south and west of here, millers COM
plain that prices are now back to
or above levels at which they can
afford to sell flour at ceilings.
The Government has formulated 4
plan whereby it would pay a SUBJ
sidy to producers who have wheat
under loan to redeem this grain so
that it could be turned over to mills
at a price that would enable them to
operate. Grain men here said there
Is enough wheat involved in the
Government program alone, either
under loan or owned outright by the
Commodity Credit Corp, to meet
domestic requirements for q full
year. However, the new subsidy pro-
gram has not yet been started.