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Show Rural America's Future Prosperity or Hard Times All Depends on Action of Farmers During Present Period i . 400 Per Cent Increase in Income Over '29 Causes Boom Danger to Arise WILL THIS WAR PRODUCE PRO-DUCE A LAND BOOM ON AMERICAN FARMS? This question concerns not only agricultural economists, but everyone who lives on or near a farm. Its answer will largely determine future prosperity or hard times for rural America. Kvery previous war has brought its own land boom that left a wreckage wreck-age of deflation behind. Under ordinary or-dinary circumstances and with an ordinary war, the current situation would be ripe for history to repeat itself. The elements for a flrsfclass boom are present. But from Pearl Harbor down to the moment, farm real estate values have defied precedent prece-dent by remaining below pre-World War I levels. Meanwhile agricultural Income has loomed to record highs, production pro-duction has reached unheard-of peaks and the 1943 outlook promises prom-ises further expansion. Farm economists are frankly puzzled puz-zled over the trend of land prices but they unanimously hope it continues. con-tinues. They credit the good sense of farmers themselves with the fact that farm real estate prices have risen so slightly thus far. They point out that while the danger of a boom exists, farmers themselves have the power to head it off. Production Picture Brilliant. As the 1942 crop year ends, farm conditions never appeared more promising. More than IS billion dollars dol-lars will flow into farmers' pockets from this year's bumper harvest. The biggest previous figure was 14 Vi billion dollars in 1919. This year's farm total Is nearly four times the low-ebb depression Income of 44 billon bil-lon dollars In 1932. When operating costs, Including taxes, interest, wages for labor, machinery and other oth-er items are deducted this year, farmers should have a spendable income in-come of from four to five billion dollars for living, savings and investment. in-vestment. Farm families 'will have an average of $438 more to spend this year than last The production picture is equally brilliant. For example, the 1942 corn crop Is reckoned at 3,132,000,000 bushels a record exceeded only by 1920 and then by but a slight margin, rhe crop ordinarily runs between 2 and 2V4 billion bushels, but dipped down to IV2 billion in the drouth i i tt vMsvnuOO' . . .vyy, , A. v;, ,,. SMssOTHssassMBBlSslsBNSHHMi More bread for doughboys means a bigger wheat producing Job for American farm land. years of 1934 and 1936. Despite the huge 1942 crop, corn commands a high price. The wheat yield this year will be the largest since the miracle crop of 1915 and the market price is the highest since 1929. Hogs have returned to their traditional role of "mortgage lifter." They are more numerous numer-ous than ever and worth more per pound. The $5 hog of a few years ago has been replaced by the $15 hog. In excess of a 100 million hng crop was figured for this year and even more production produc-tion Is expected for 1943. Beef prices are the highest since 1920. It Is estimated that on January Janu-ary 1, 1943, cattle and calves will number about 77 million head or more than a three million increase for each of the last two years. The 1942 calf crop is probably the highest on record, totaling 32 million head. Sheep and lamb marketings have established records and the average pi-ice is the best in 20 years. Niagara of Milk. A Niagara of milk, exceeding 120 billion pounds, will have cascaded into dairy pails throughout the Unit- jgj C?? More, and Still More Every productive acre of farm land will be called on to yield more food for Uncle Sam's expanding armed forces In 1943 and to meet Lend-Lease demands. As a result the value of farm land as an Investment In-vestment will be enhanced. (Above) U. S. Army Quartermaster Corps receives and allooates food shipments ship-ments for troops. (Right) Rising demand for dairy products spurs activities in creamery and bottling plants and helps boost farm Income to record highs. ed States by the end of this year. More milk cows are graslng America's Amer-ica's pastures than ever before 26,000,000 to be exact. Egg production pro-duction for 1942 is estimated at 50 billion. Poultrymen are receiving top prices for their production. And to mention one or two other items, there Is more hay than ever; and the potato crop of 376,309,000 bushels bush-els beats all previous records. Ordinarily whenever an industry does as well as farming has done, there is a tendency to speculate. Those already in the business seek to expand their operations. Others seek to get in on the bonanza. And soon a spiraling boom is born. A survey of the rural real estate market recently revealed that farms are selling In increasing numbers, num-bers, but no unusual price advances are yet noticeable. The Farm Credit corporation and insurance companies have been leaders in liquidating their farm holdings. It is estimated that the FCA has disposed of more than 25,000'farms since 1938. Some insurance insur-ance companies report they have sold more than 90 per cent of the farms they acquired during the depression. de-pression. In recent months thousands thou-sands of Midwest farms have changed hands in individual farm auction sales. Analysis of the transactions revealed re-vealed that 60 per cent of the buyers were farmers, half of whom were tenants. Of the tenants, most were former landholders who had lost out during the depression, when 2,100,-000 2,100,-000 farms were foreclosed. With farm income on the rise, these tenants ten-ants are getting back on their feet and able to make down payments on farms of their own. Of the 40 per cent non-farmer buyers, a large group represented represent-ed city dwellers approaching retirement age who have bought farms in order to live reasonably reason-ably on their pensions and Income In-come from savings. How long this paradoxical situation situa-tion of high farm income and low farm real estate values will continue, con-tinue, economists do not care to predict. But they point out three factors which at present make the farm picture of World War II different dif-ferent from that of World War I: A Different Farm Picture. 1. Today's farmers would rather get out of debt than Into 4t. Hence they are not bidding up the farm real estate market by seeking additional land. Instead In-stead they are paying off mortgages mort-gages and Investing their surplus sur-plus funds In War Bonds. They are making needed repairs on buildings and building up their land's productivity by the adequate ade-quate use of fertilisers and by other soil conservation measures. meas-ures. 2. The hangover aftermath of World War I's land speculation spree Is still fresh In the memory mem-ory of most farmers. Farmers are hedging on the future by "plowing back" present earnings earn-ings into their present holdings without attempting any expansion. expan-sion. S. The present farm labor shortage and the rationing of farm machinery are effective deterrents to the urge to acquire ac-quire more land. Left look first at the debt situation. situa-tion. The extent to which farmers are using their expanded income to get out of hock was disclosed by A. G. Black, head of the Farm Credit administration, who recently pointed point-ed out that a large percentage of farm mortgages are now being paid off ahead of schedule. The nation's farm mortgage debt has been reduced re-duced to 6H billion dollars the lowest low-est figure in 25 years. There are fewer foreclosures and other distress dis-tress transfers than at any time in the past 20 years. "Farmers realize more than ever before that a healthy, liquid financial finan-cial condition is the safest goal these days," said a recent statement of the Middle West Soil Improvement Improve-ment committee. "Such a goal means getting debts out of the way. It means building up the blood strains of livestock and -eliminating the non-producers. It means making mak-ing needed repairs on the house and barn. It means paying particular attention to the fertility level of the soil. Long-Run Earning Power. "This last is of particular importance, impor-tance, for the real value of land is dependent on its long-run earning power. Thus any Investment in a soil-building program that will pay dividends In years to come is an Important contribution to a farm's future productivity. "In wartime as in peace, the farmer farm-er can obtain valuable information from his county agent or agronomists agrono-mists at the state agricultural experiment ex-periment station in developing his soil improvement plan. Such a program pro-gram should include the raising of legumes to provide necessary nitrogen, nitro-gen, the commercial supply of which is now largely required by munitions muni-tions factories. It should include regular crop rotation and the use of sufficient quantities of fertilizer containing con-taining phosphorus and potash to encourage plant growth. "It should include pasture improvement. im-provement. By means of such a program, the soil's future fertility level can be assured and its immediate im-mediate output of foods and fibers for war and civilian needs increased." in-creased." Most farmers Instinctively fear a repetition of the World War I land boom. Their hindsight hind-sight has taught them many valuable lessons from the bitter experience of the 1920s and ear- ly 30s. If they profit by that hindsight, they can escape the headache of a land collapse. World War I was a story of agricultural agri-cultural upsurge. Farm income rose from 6 billions in 1914 to 14ft billions bil-lions in 1919. High prices and a ready market for agricultural products, prod-ucts, plus easy credit facilities, encouraged en-couraged farmers to bid up land prices. Farms were bought on speculation spec-ulation with the expectation of a quick sale at a profit. Land values were inflated from an average of $40 per acre in 1914 to $70 in 1920. Within those six years farm real estate rose in total value from 394 billion dollars to 66 billions. The sequel was a crash that still re.crberates. Lijnd prices fell from an average of $70 per acre to $28. More than a third of the nation's six million farms were foreclosed by the end of the depression. All farm land and buildings declined from 66 billions to 31 billions. Even today farm real estate is worth only 36 billion dollars less than it was before World War I. |