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Show fpvestocle Los Angeles, December 3, 1934 Substantial increase in farm buying power in the western states is reported report-ed by the federal reserve bank of San Francisco, this authority citing a gain of 20 per cent in October of this year over the same month a year ago. This increase comes in spite of the decreased marketings as a result of smaller crops in many western localities, lo-calities, the result both of drouth and federal reduction measures. Livestock Live-stock prices are well over the 1933 fall and winter averages. Increase in farm buying power, while important import-ant to farmers and stockmen themselves, them-selves, is equally important to business busi-ness and industry, for the very backbone back-bone of western business conditions depends upon farm buying power. With the exception of lambs, income in-come from livestock is considerably greater than a year ago. Hogs that are now selling on the Los Angeles market up to $6.50 a cwt. or $13.00 for a 200-pound hog, were at $4.25 a cwt. or $8.50 per head a year ago, an increase of $4.50 per head. But the same hogs are actually costing the packer the market price plus the federal processing tax of $2.25 a cwt., making the best butcher hogs cost the packer around $15.25, or $6.75 more than a year ago. It must be considered that this processing tax, which is actually borne by the producer, is returned to the producers who signed corn-hog contracts, through benefit payments. So it will be seen that the income of hog feeders feed-ers is far in excess of a year ago, although al-though this advanced income is partly offset by higher priced feeds where the farmer must buy his feed. We find that the average run of fed steers are now selling on the Los Angeles market at around $5.50 a cwt., or $55.00 for a 1,000 pound fed steer. This compares with an average ave-rage of around $5.00 a cwt. or $50.00 for the same kind of a 1,000 pound steer a year ago. Income of dairymen also shows a marked gain. Butterfat which is quoted at around 34 cents a pound was selling a year ago for about half that sum. The above figures do not by any means indicate that the stockman is again resting easily in his saddle Great sections of the western country are faced with very serious drouth conditions coupled with high pricec feed this winter. But there is roorr for widespread optimism in livestock circles. Improved business conditions are reported on all sides which mean; greater consumer buying power. Th( very seriousness of the drouth has reduced re-duced supplies and will mean re duced supplies for some years tc come. And in parts of the west, particularly par-ticularly in California, heavy rain: have assured satisfactory green feet on pastures and ranges and greatei water supplies for irrigation pur poses. |