Economic and Marketing Information for Indiana Farmers (May 25, 1956) |
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Economic and Marketing INFORMATION FOR INDIANA FARMERS Prepared by Members of the Agricultural Staff of Purdue University, Lafayette, Indiana, May 25, 1956 This Corn Price Riddle! by N. S. HADLEY and W. S. FARRIS, Agricultural Economics THE PRICE OF CORN during the next several months will be governed by the amount of corn sold by the Commodity Credit Corporation. On April 1st, total corn stocks in the United States amounted to approximately 2.3 billion bushels. Of this amount slightly more than 1.1 billion bushels, or nearly half, will probably be owned or controlled by the Commodity Credit Corporation by May 31. The probable disappearance of corn between now and October 1st is expected to be about 1.1 billion bushels. The minimum end- of-year carry-over of "free" corn necessary to cover feed and commercial operations is about 100 to 150 million bushels, making a total of 1.2 to 1.3 billion bushels needed for the rest of the marketing year. This amount is somewhat in excess of the free corn currently available. Therefore, the price of corn is strictly under the control of the Commodity Credit Corporation. Why Did Price of Corn Go Up? As of April 1st, farmers had placed 116 million bushels of the 1955 crop under loan and purchase agreement. By May 31st, the final date for making corn loans, probably close to 500 million bushels will be sealed. This rapid movement of corn to the loan program has reduced the potential supply of free corn, which in turn has been an important factor in the recent rise in corn prices. How Much Higher Will Corn Prices Go? the average loan rate for most of Indiana is about $1.58. The cost of Slivering corn to the Commodity Credit Corporation is variable, but ranges from about 7 to 12 cents. Therefore, when the price of corn on the farm approaches the $1.50 level, farmers are likely to redeem corn from the loan program and sell it to local feeders. In other words, there is an effective ceiling on the price of corn at about $1.50. In areas where local corn is not available the price can be somewhat higher. price probably will move to near the effective support level. If small quantities are sold (50 million bushels or less), the price of corn will probably stay around the $1.40 level in corn surplus areas. But, if substantial quantities are released (100 million bushels or more), the price could be pushed well below present levels. What will actually be done by C.C.C. will no doubt be largely influenced by the developments of the next several weeks. However, our best guess at the present time is that only enough corn will be released to stabilize prices at near the present level until mid-summer. After midsummer, corn prices will be influenced by prospects for the 1956 crop as well as by C.C.C. action. Corn Balance Sheet What Can C.C.C. Do About Price of Corn? Of the 1.1 billion bushels of corn controlled by the Commodity Credit Corporation, about 400 million bushels are more than two years old. This corn already is out of condition or may soon go out of condition. Out- of-condition corn can be sold at market price by the C.C.C. Therefore, the policy regarding the sale of this corn will have important effects on the market. The amount that is actually sold will pretty well govern the price of corn. If little or no corn is released, the Million Bushels Total U.S. Corn, April 1, 1956 Less Corn Controlled by C.C.C. 2291 - 1094 Approximate Total "Free" Corn 1197 Estimated Consumption of Corn by October 1 Plus Minimum "Free" Carryover 1100 + 100 - 150 Total Corn Needed by October 1 1200 - 1250 Minimum Needed from C.C.C. 0 - 50 1956 Barley, Oat Acreages Down According to the March 1st estimate, the 1956 acreage of oats will be reduced about 4 percent, while barley acreage will be reduced approximately 8 percent. However, large carry-overs in both these grains will keep supplies plentiful and prices low. The supplies of these and other feed grains were taken into account in estimating the price of corn.
Object Description
Title | Economic and Marketing Information for Indiana Farmers (May 25, 1956) |
Purdue Identification Number | UA14-13-econ195605 |
Date of Original | 1956 |
Publisher | Purdue University. Agricultural Extension Service |
Subjects (LCSH) |
Farm produce--Indiana--Marketing Agriculture--Economic aspects--Indiana |
Genre | Periodical |
Collection Title | Extension Economic & Marketing Information (Purdue University. Agricultural Extension) |
Rights | Copyright Purdue University. All rights reserved. |
Coverage | United States - Indiana |
Type | text |
Format | JP2 |
Language | eng |
Repository | Purdue University Libraries |
Date Digitized | 03/02/2015 |
Digitization Specifications | Original scanned at 400 ppi on a BookEye 3 scanner using Opus software. Display images generated in Contentdm as JP2000s; file format for archival copy is uncompressed TIF format. |
URI | UA14-13-econ195605.tif |
Description
Title | Economic and Marketing Information for Indiana Farmers (May 25, 1956) |
Purdue Identification Number | UA14-13-econ195605 |
Transcript | Economic and Marketing INFORMATION FOR INDIANA FARMERS Prepared by Members of the Agricultural Staff of Purdue University, Lafayette, Indiana, May 25, 1956 This Corn Price Riddle! by N. S. HADLEY and W. S. FARRIS, Agricultural Economics THE PRICE OF CORN during the next several months will be governed by the amount of corn sold by the Commodity Credit Corporation. On April 1st, total corn stocks in the United States amounted to approximately 2.3 billion bushels. Of this amount slightly more than 1.1 billion bushels, or nearly half, will probably be owned or controlled by the Commodity Credit Corporation by May 31. The probable disappearance of corn between now and October 1st is expected to be about 1.1 billion bushels. The minimum end- of-year carry-over of "free" corn necessary to cover feed and commercial operations is about 100 to 150 million bushels, making a total of 1.2 to 1.3 billion bushels needed for the rest of the marketing year. This amount is somewhat in excess of the free corn currently available. Therefore, the price of corn is strictly under the control of the Commodity Credit Corporation. Why Did Price of Corn Go Up? As of April 1st, farmers had placed 116 million bushels of the 1955 crop under loan and purchase agreement. By May 31st, the final date for making corn loans, probably close to 500 million bushels will be sealed. This rapid movement of corn to the loan program has reduced the potential supply of free corn, which in turn has been an important factor in the recent rise in corn prices. How Much Higher Will Corn Prices Go? the average loan rate for most of Indiana is about $1.58. The cost of Slivering corn to the Commodity Credit Corporation is variable, but ranges from about 7 to 12 cents. Therefore, when the price of corn on the farm approaches the $1.50 level, farmers are likely to redeem corn from the loan program and sell it to local feeders. In other words, there is an effective ceiling on the price of corn at about $1.50. In areas where local corn is not available the price can be somewhat higher. price probably will move to near the effective support level. If small quantities are sold (50 million bushels or less), the price of corn will probably stay around the $1.40 level in corn surplus areas. But, if substantial quantities are released (100 million bushels or more), the price could be pushed well below present levels. What will actually be done by C.C.C. will no doubt be largely influenced by the developments of the next several weeks. However, our best guess at the present time is that only enough corn will be released to stabilize prices at near the present level until mid-summer. After midsummer, corn prices will be influenced by prospects for the 1956 crop as well as by C.C.C. action. Corn Balance Sheet What Can C.C.C. Do About Price of Corn? Of the 1.1 billion bushels of corn controlled by the Commodity Credit Corporation, about 400 million bushels are more than two years old. This corn already is out of condition or may soon go out of condition. Out- of-condition corn can be sold at market price by the C.C.C. Therefore, the policy regarding the sale of this corn will have important effects on the market. The amount that is actually sold will pretty well govern the price of corn. If little or no corn is released, the Million Bushels Total U.S. Corn, April 1, 1956 Less Corn Controlled by C.C.C. 2291 - 1094 Approximate Total "Free" Corn 1197 Estimated Consumption of Corn by October 1 Plus Minimum "Free" Carryover 1100 + 100 - 150 Total Corn Needed by October 1 1200 - 1250 Minimum Needed from C.C.C. 0 - 50 1956 Barley, Oat Acreages Down According to the March 1st estimate, the 1956 acreage of oats will be reduced about 4 percent, while barley acreage will be reduced approximately 8 percent. However, large carry-overs in both these grains will keep supplies plentiful and prices low. The supplies of these and other feed grains were taken into account in estimating the price of corn. |
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