Economic and Marketing Information                                                                                                                                                                                          FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana      
AGklC. ECONOMICS
LIBRARY.
September 30,   1960
Your 1961 Outlook for Indiana Agriculture
In a Nutshell*
Net income for Indiana farmers in
the coming 12 months shoidd be up
about 10% over last year. Net income for all U. S. farmers will average about the same as last year. Indiana farm incomes will be up more
than that of U. S. farmers for two
reasons: (1) Generally excellent crops
in I960 compared to the nation as
a whole. (2) Improvement in the hog
business which makes up a higher percentage of Indiana's farm income.
Some weakness in the nonfarm business sector from current levels is expected to develop in late 1960 or
early 1961. The business adjustment
is expected to be fairly mild, probably
no more severe than the downturn of
1957-58 and will probably be of short
duration. This downturn in the general
economy will likely affect Indiana farm
people in several ways, among them:
1. Off farm employment will be
more difficult to find. This will be especially  true   for  unskilled  or  older
workers.
2. Hired farm help should be a little more plentiful but probably at no
lower wage rates.
3. There should be less pressure
than in recent years for prices of farm
production items to increase.
4. The moderate business downturn
should have little effect on the demand
for farm products. Demand should continue strong and increase about in line
with population growth in the year
ahead.
Modest profits may be expected from
corn storage operations. Corn at harvest should average between 85 and 95
cents per bushel on a No. 2 basis and
gradually rise to about $1.10 next sum-
roer. However, some "high moisture"
concerning  the  annual  Outlook  re-
the   period   October   1   to   September   30.
rases such as "last year," "the coming year,"
ore  in   relation   to   October   1,   1960.
corn appears likely this fall. Large
quantities of "high moisture" corn
would tend to depress prices at harvest time and make storage of good
quality corn more profitable than indicated above. Storage operations will
be considerably more profitable in
corn deficit than in corn surplus areas.
Storage of soybeans would appear
to be profitable if bean prices drop
below $1.90 per bushel at harvest time.
A farmer with empty bins on his farm
may well consider storage even if harvest time prices are as high as $1.95
per bushel.
Hog prices are expected to average $1 to $3 higher in the year ahead
than in the year just past. Looking beyond the next 12 months, no big hog
price decline is seen for late 1961
or early 1962. Average or better hog
producers should generally feel justified in maintaining or increasing hog
numbers in the year ahead. Numbers,
however, should not be greatly increased unless efficiencies can also be
maintained or increased.
It would seem advisable to push
winter pigs for an early market next
summer.
Feeder pig prices should be relatively high in the year ahead.
Cattle prices are expected to average $2 to $3 lower in the year ahead
as compared with the past 12 months
because of 5-10 percent larger marketings. Declines will be greater than
this for the lower grades and a little
less for the better grades.
Even with lower fat cattle prices
in prospect, substantially lower feeder
cattle prices as compared to last fall
and slightly lower feed prices should
enable good feeders to show a modest
profit. Careful buying and selling,
however, will be of extreme importance since both market margins and
feed lot margins will be narrow.
This is probably not the year to pay
for extreme quality in feeder cattle.
Cattle for a short feed or plain cattle marketed  by early  spring appear
to offer modest profit opportunities.
Profits from fat cattle marketed next
summer and fall could be considerably
reduced by unfavorable weather conditions and any liquidation that might
result.
Profits from beef cow herds will decline in the year ahead. The amount
of decline also will depend upon
weather conditions. However, a closer
than usual culling of old or poor producing cows would appear justified.
Profits from the dairy business will
be about the same to slightly higher
next year. This assumes support prices
will be maintained at or slightly above
current levels. However, in order to
meet the competition in the years immediately ahead, dairy farmers will
need to have medium to large size
herds of high producing cows. They
will also need buildings and equipment which will minimize labor requirements as well as meet market
standards.
With lower beef prices in prospect
over the next two to three years, rigid
culling of low producers should be followed.
Egg prices until early spring should
average substantially higher than during the past fall and winter. Culling of
laying flocks should probably be less
rigorous than usual during the next
few months. By spring and early summer production should be up, resulting in prices lower than during the same
period in I960. There appears to be
no price incentive to encourage farmers to buy more than their usual number of chicks for 1961 laying flocks.
Continued biological, mechanical
and organizational improvements in
both the laying flock and broiler enterprises will tend to keep production
high and profit margins narrow. Any
very favorable price situation in either
eggs or broilers is quickly erased by
a rapid increase in production.
Both laying flocks and broilers appear to be rapidly moving to units
large   enough   to   justify    automatic