Madison County Democrat. (London, Ohio) 19??-1958, 1950-08-15
Tuesday, August Is 1850

the price position of the products
which they produce is less fav-
orable than it was last year.
Growers of potatoes, oranges,
lemons, sweet potatoes, and to-
bacco other than hurley are all
confronted with a similar situat-
ion.
| On the. other hand, the contin-
ued strong demand for meat re-
sulting from higher consumer in
comes and the price support meas
ures applicable to grains have
been important contributing fac
tors in lifting prices of meat an
imals and most grains to levels
well above year ago.
1t is evident from the examples
cited that prices of some farm
products may be sufficiently de-
pressed even in period of relat-
lively high prizes to bring
about significant reductions
in the incomes of the pro-
ducers of those products. A re-
duction in income usually brings
curtailment in expenditures for
goods and services used in farm
ing. However, the willingness on
the part Of the operator to ac-
cept a lower return for labor
and management together with
availability of cash reserves or
credit will determine the extent
to which purchases of goods and
services used in farming are act
ually curtailed.
So much for the effect which
depressed prices of a limited num-
Der of farm products have upon
the farmer and those from whom
he buys. What about the consum-
er? To what extent has the rise
or decline in farm prices been
reflected in an adjustment of
retail prices to the consumer and
vice versa? Studies of price
spreads between farmers and con-
Sumers made by the Department
of Agriculture indicate that a
large part of the decline in farm
value of milk and eggs has been
reflected in a downward adjust
ment in retail prices. However,
fhnCa cf,rIinr ch haf fIfr
does not hold true for chicken, the
farm value of which is reported
to have declined by 20 percent
in recent twelve months, where
as the retail price decline in the
same period was but 3 percent.
Apples and oranges are two other
items on which the reported de-
cline in farm value was consider
ably greater than the downward
adjustment in retail price. Shrink
age due to deterioration of
apples and oranges during the
period of marketing may have
been an important factor in limit
ing the degree to which reduct-
ion in farm value was reflected
in the retail price Greater en-
phasis on "cut up poultry which
is ready to fry in preference to
"oven drawn" has added to the
processing required and is un-
doubtedly factor limiting the
extent to which reductions in the
farm value are reflected in the
retail price of chicken.
The retail price of potatoes has
reflected more than three-fourths
of the drop in farm value. The
farm value, however, has been
supported at a level which has
necessitated rather large pur-
chases on the part of the Govern
ment in order to carry out the
provisions of price support legis-
lation. In recent years production
of potatoes has exceeded demand
at the price at which potatoes
have been supported.
Butter, another item O. which
the price has been stabilized b.:
price support operations, has been
subjected to only minor fluctudt-
ions in price during the past
year. Throughout this period, the
spread between farm value and
retail price has remained a. about
20 cents per pound.
The Department of AGRICULTURE
studies of price spreads Indicate
that decline in farm value are
seldom fully reflected i'm the re-
tail price. A similar situation is
indicated with respec5 to advances
in farm value of meats. While
farm prices of beef cattle, hogs
and sheep are well above year
ago, retail prices of red meats
are only moderately above year.
ago levels. Thus it appears that
professors of meat are currently
having to absorb some of the ad-
vance which has occurred in live
stock prices. However, with heavy
marketings of hogs and cattle in
prospect the seasonal and reta;
prices in more nearly normal
relationship.
Although money incomes and
employment are visibly above
a year ago, per capital consump-
ton of milk, butter, eggs and
fresh fruitc and vegetables semms
liIxnlst 10 fr.1I Al