Show foreign markets for U S agricultural goods will be small after war economist predicts our high production costs will work against Us in international competition by JOHN DANA magazine imag allne of wall street writer government economists are pretty gloomy over the outlook for postwar exports of our agricultural products official inside view is that the american farmer stands to lose much of his export markets in the years after the war some perhaps very quickly those who study these problems can see only sharply reduced foreign outlets for our cotton wheat corn and most other farm crops that once were exported on a large scale the belief is that agricultural exports will resume their long term downtrend once the relief period immediately following the war is over and the potentials of even that period may tall fall considerably below earlier estimates thereafter we must reckon with increasingly sharp competition in the world market which because of our high prices and production costs invariably favors the foreign seller this trend it is thought may be affected but hardly reversed by international agreements on world trade in agricultural products which will be sought by our government in an effort to maintain our share in world markets this unpromising outlook appears not confined to farm products alone even textiles especially cotton textiles may conceivably follow much the same course once war created shortages the world over have been made up new competition in the lower priced textiles field by industrializing trial izing nations such as brazil argentina and others must be added added to that traditionally offered in higher grade cotter goods and woolens by such nations as britain cotton loses most in the agricultural field we have priced ourselves out of the export market to a major extent fostering a big rise in foreign production which now looms as a formidable competitive factor in the postwar era in copper low cost foreign producers defied successful competition abroad by our own producers in virtually every field however the prewar trend away from multilateral I 1 trade bore a large share of responsibility for our steadily retrograding position cotton our leading agricultural export crop declined most in relative importance in 1929 cotton exports amounted to per cent of total exports this ratio declined to 77 per cent in 1939 and 54 per cent in 1940 the latter low point alread already Y reflecting in part the war influences and embargo measures impeding the free flow of our exports only slightly less drastic was the decline in shipments abroad of petroleum products in 1929 these came to per cent of total exports with the ration subsequently dropping to per cent in 1939 and 79 per cent in 1940 throughout these years the absolute drop in dollar value was frequently far greater than the percentage decline relative to total export volume largely due to price variations in wheat the long term downtrend was hardly less pronounced noun ced relatively though the ab solute recession in terms of dollar value was less important the showing of copper exports was approximately reversed with the absolute decline far more weighty than the relative decline vis a vis total exports both copper and oil products show how a moderate trend reversal since 1937 38 world trade necessary As the situation is now shaping up expansion of world trade is essential for a prosperous postwar agriculture we shall need expanded foreign outlets as well as retention of war expanded home consumption it if our farmers are to have markets for their productive capacity the difficulty will be to find these markets abroad if we fall short of putting to use all that the farmer can produce the prospects for agriculture and indeed our whole economy are greatly circumscribed there has been much reliance in in the recent past on postwar relief needs abroad to enable us to dispose of our surpluses and maintain at least for some years a high level of agricultural production and exports estimates of such needs however are now being considerably scaled down and in some quarters it is questioned whether relief needs will be ireat great enough to absorb even the food inventories the government expects to have at the end of the war indications are that agriculture in most parts of europe has survived the war in good shape what with the strang impetus that war has given to the trend towards self sufficiency many european countries except those always heavily dependent on imports will soon be able to nil fill their 0 own m food requirements thus it is feared that surpluses will again plague most food exporting exports ng countries country es soon after the war ends two years after cessation of hostilities it is estimated that we in the U S will almost certainly again be faced with the chronic agricultural surpluses of the prewar era realizing this federal agencies are getting ready for a pitched battle against postwar gluts paradoxically federal policy has fathered these prospective surpluses and our declining chances take cotton which is bound to face intensified competition in postwar world markets and additionally must cope increasingly w with ith synthetic fibers prewar exports averaged about five million bales annually principally to britain the european continent and japan wartime exports were reduced to about 15 million bales a year mainly lend lease to britain and export sales to canada today our cotton carryover carry over amounts to some million bales with a new n ew large crop coming up while the wartime loss in exports has been offset by sharply increased home consumption around 11 million bales a year mostly for war purposes there is little prospect of maintaining such a high level after the war the most that is expected of domestic requirements is about seven million bales while exports may account for less than two million bales 1 starting us right off again with sizable annual surpluses topping the heavy carryover carry over our prices too nigh high it is obvious that we shall be unable to compete in world markets at anything like present prices to compete at all will require the aid of heavy subsidies which in turn would draw reprisals from other cotton producing countries and inevitably evit ably lead to more restrictive trade barriers besides this method freely used in prewar years runs counter to our avowed desire for greater freedom of trade on the other hand we are not inclined to give up our parity program and and other price bolstering measures at home in fact judging from latest indications the south appears bent on setting the stage for a repetition of the economic tragedy of the by demanding that the government again intervene to help the cotton planter hold a world market commodity at a price that the world is not willing and not compelled to pay the midwestern mid western wheat farmer finds himself in a similar predicament he faces dwindling export markets and eventual necessity for drastic acreage reduction wheat production this year is expected to exceed one billion bushels compared with average 1935 39 output of million bushels the worlds four major wheat producing countries USA argentina australia and canada at the end of july had a total wheat supply of three billion bushels consisting of a one billion bushels carryover carry over and production of around two billion bushels estimated domestic needs of these four countries are about 14 billion bushels leaving 10 16 billion bushels for export and carryover carry over altogether an exportable surplus of million bushels will remain on hand to supplement 1945 production here again our price support policy will make it difficult to dispose of t the he large surpluses which inevitable will build up once urgent relief needs are met the latter in view of the trend towards self sufficiency in foodstuff production of many nations may be far smaller then generally assumed and competition of low cost producers may further limit our regular export outlets A farm surplus again in short we shall have not long after the war a farm problem rather than a food problem instead of hungry mouths begging bior for food agricultural surpluses will go begging for a market in view of this agricultural economists are greatly concerned about the govern ments pledge to maintain minimum farm prices at 90 per cent of parity for at least two years after the war with its corollary of undiminished high production rather some experts estimate that we could dispense with acres of farm land after the war and still meet all food demands even with full production it means that we could easily shift a million or two of workers from agriculture to manufacturing but actually the postwar trend is likely to be just the other way thereby further aggravating the overall over all problem in wheat too hopes of regaining or maintaining our export markets rest on future cooperation of wheat exporting nations within the framework of an international agreement such an agreement in fact already exists exist s but in the light of present indications its continued functioning is not likely to reverse the long term downtrend down trend of our wheat exports A more likely longer range solution of the wheat farmers dilemma is further crop diversification already under way and modification of our price support policy together with continued cost reduction through mechanization that such a course would entail far reaching economic repercussions goes without saying quite apart from the considerations that stand in the path of early modification of the governments price support policy fortunately at least for some time to come we can count on substantial offsets world demand for our manufactured products both consumers durable goods and producers goods but especially the latter promise to exceed anything so far experienced if present tentative indications hold good while it lasts this should go far towards balancing if not offsetting the economic consequences of our declining position in the export commodity field in point of dollar value it should more than compensate for prospective losses in the latter category at the same time it should give us time for the economic adjustments at home clearly called for to bring about a better economic balance in the light of the foreign trade pattern as it may evolve in the future in this task of course we do not stand alone it is a universal must without which the world can have neither stability nor prosperity for any length of time |