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Show May 1970 UTAH FARM BUREAU How The Federal Farm Program Affects The Cattleman, Even Though He Doesnt Participate Page 5 cattleman of the West a rugged individual, inheriting a rocky independence from his pioneer ancestors. He's not interested in the acreage allotments, subsidies, price supports, quotas, loans, parity ratios and other details of the federal farm programs for wheat and feed grains because they don't affect him. OR DO THEY? Let's take a quick look at the feed grain situation. The is As the feed grain acreage is announced, the people on the sides begin to watch very carefully since it's a lot like throwing dice. The boys administering the programs have to Figure as carefully as they can where to set the loan rate and the acreage so as to achieve the target in total production. That's a little like sitting on top of a piano as it is being dropped from a 25 story building and trying to steer it through the air. At any rate, the goals have never been achieved because men Figure that if they're going to be limited on acreage, they'll plant on their best acres and really pour the fertilizer to the crop, since yield is all important when coupled with increased price supports. Increasing the support level is almost sure to result in heavy movements of feed grains into government stocks, and lower market prices. price supports and acreage limits tend to increase production. High feed-grai- n With feed grain stocks overflowing the elevators and grain-erieand market prices low, many farmers see a chance to make some extra money. These marginal operators throughout the Midwest and the South will put extra cattle on feed. Many of these men feed no livestock at all when grain prices are at normal levels. Apparently many of these men estimate that they will discount their labor and minimize other capital expenses such as antibioltics and other animal health needs, and make a dollar or two on the weight gain they can show with cheap feed. s, . ... ' V v 'ft.,-- : ' Cv''-- ' Cheap feed grain prices tend to bring marginal farmers into the cattle feeding business. At times of extremely cheap feed such as the early sixties, the total number of cattle on feed became so high that the market couldn't present a sufficient demand to support reasonable market prices. At the present time, beef consumption has generally kept pace with the increased marketings of cattle, but the delicately balanced supply situation could be easily changed at any time if the officials charged with managing the feed grain program mis- calculate by a few percentage points in their educated guesses as to the way feed grain producers will react to their quotas. Should the present complex feed grain program be discarded by Congress in favor of a proposal to support feed grains at 65 of parity made by the House Committee on Agriculture, in cooperation with the Administration, the chances for a sudden glut of feed grain production would be greatly enhanced. Until grain farmers are producing for a hard market based on feed demands, the size of the feed crop will be subject to guesswork every year. W ' ' : 4 " A V ; C i. ' v,' f 4; v ' f Marginal producers have the potential to substantially increase total numbers of cattle on feed. When the cattle that were finished becuase of the low price of feed, reach the market, prices begin to drop. The cattle produced e cattlemen of the West, along with the regular by the cattle producers and feeders throughout the country, are put into the cycle on the basis of market estimates and predictions. When these cattle are suddenly met at the auctions by more cattle raised by the marginal farmers who put them on feed because of low feed prices, the market suddenly goes soft As in the early sixties, the numbers of livestock on feed by marginal producers, was staggering. It crippled the market prices until supply adjustments could be made by the cattle industry. If the beef consumption patterns in this country begin to slacken because of tight money in a war economy, and feed grain prices drop, the results could be damaging to the beef industry. And all because of a federal farm program that we're told doesn't affect cattle people. full-tim- Marginally produced cattle going to market tend to soften prices for Western cattlemen. Federal farm programs have a sizeable indirect effect on nearly every segment of agriculture. |