Evening star., 1949-02-04
CommodityPriceDrop
May Cause Revision
In Economic Outlook
BY the Assoeiotsd Press

NEW YORK, Feb. 4.-I11creasingly
sharp declines in commodity prices
in recent days are causing economic
prophets to take another look at
their forecasts.
Today is the anniversary of last
years big break in commodity
prices, and although declines this
year have been more gradual, they
appear to be gaining momentum
and are being watched closely by
all business leaders for clues to the
future.
Most economists and business
leaders at the turn Of the year pre-
dicted 1949 would be a year of gen.
eral business activity only slightly
below 194S.
Price Index st 2-Year Low.
However, the commodity price
drops of recent days are causing
some of them to wonder whether a
sharper adjustment may not be at
hand. The evidence Is far from
conclusive as yet, but it is one straw
among several getting close atten-
ton from most business leaders.
The Associated Press commodity
index Of IS weighted wholesale
prices dropped yesterday to 169.4O,
lowest since February II. 1947, rep
resenting a decline Of 313 in one
week and over seven points in a
It compares with 1898, the
starting point of last years break in
commodity prices, and the all-time
high Of 208.14 on January 8, 1948.
The decline from the all-time high
Is just short of IA per cent.
The Dun & Bradstreet wholesale
food price index, representing the
total wholesale cost Of q pound of
each of 81 foods in general use,
dropped this week to $5.88-lowest
since the end of OPA in October,
1916. The index was of one-half Of
l per cent from the previous week,
It's per cent under a year ago and
20.1 per cent under last July's all
time high.
Hog Prices OF.
Top prices for slaughtered hogs on
the Kansas City market dropped to
$20.50 q hundredweight yesterday
lowest since OPA. In Chicago, the
price was $2l.25, down $1.5o in the
last month.
On the Chicago grain market
cash corn dropped to $133h to
Ban q bushel for No. 2 yellow
lowest since January ~, 1947-a
drop from $3.50 bushel in q month
The May delivery Of wheat futures
at Chicago closed at $2.17 q bushel,
down 10 cents from a month ago.
Loose lard declined to $12.62 q
hundred pounds, lowest since 1912
and below the last OPA ceiling Of
$l4.05. That was a drop Of $1.63
from q month ago.
Oil companies made a new re-
duction of 20 cents a barrel in heavy
fuel oils, the latest Of a series OF
price cuts in recent weeks.
Scrap Steel Drops.
Scrap steel, highly important in
new steel production, has dropped
from $43.os a ton to $3.50 in the
last month, rejecting both aug
mented supplies of pig iron-also
used in steel making-and a general
softening Of the gray market in
steel.
The president of the National Re-
tail Grocers' Association, c. c. Pre-
cure, of Briton. Okla. said at Chi
cago this week that food prices
probably would decline within the
next year some 10 to is per cent be-
low l948 prices.
The American Meat Institute said
wholesale prices of quality beef had
dropped to an average Of IS cents
a pound below last summers highs.
Secretary of Agriculture Brannan
said he felt recent food price drops
were only an adjustment and mot
the beginning Of any drastic trend.
Sagging grain prices started spec
ulation as to whether the Govern
ment's price support program could
put the brakes on the slump In farm
products. One dealer expressed the
situation this way: There's big
supply of everything"