Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana    
IU1
AUGUST 30, 1968
1968 Outlook
Net Income
Net income to Indiana agriculture is likely to be up slightly
jor the year beginning October 1,
1968. The number of farms is expected to continue its downward
trend. Thus net income per farm
may be up 3 to 5 per cent. Rising
consumer prices, however, will
largely offset the slightly higher
jnet income, leaving average per
farm purchasing power about the
same as during the past year.
General Business
Real growth in our economy in
the next year is expected to be up
2 to 3 per cent or about one half
as much as last year. Inflationary
pressures are likely to be almost
as intense as in the year just past.
The 1968 income tax increase
coupled with anticipated restraints in federal spending will
tend to dampen the overall
growth in demand and gradually
slow the pace of economic expansion. The slower rate of gain will
likely be accompanied by some
increase in unemployment, followed by a slower rise in prices.
The slower rate of growth of
the general economy accompanied
by continued inflationary pressures will reflect itself to farmers
in the following ways:
1. Favorable wage and fringe
benefit packages received by
union workers in recent months
will keep pressure on farmers to
increase farm wage rates. No easing of the tight farm labor supply
situation is in sight.
2. The composite cost for farm
production items will likely be
slightly higher. However, such
items as feeder pigs and interest
rates may be slightly lower while
property taxes, farm wage rates
and farm machinery costs will
likely be up substantially. Little
change is anticipated in feed and
fertilizer costs.
3. Off farm employment opportunities may not be quite as
readily available as in the past
year, especially for unskilled and
older workers. However, employment opportunities are likely to
be good enough to permit Indiana
rural people to continue to leave
farms at a rapid rate; hence, farm
enlargement and consolidation
will continue.
Corn
Corn prices (*2 basis) at harvest will likely average in the
80- to 85-cent range. Prices by
next summer may climb slightly
above the $1.05 national average
loan rate in surplus areas and
about 15 cents higher in deficit
areas.
With a 3-cent discount for each
percentage over 15.5 per cent
moisture, and with corn prices at
a low level, drying will pay well.
With low corn prices, it is more
important than usual to avoid
moisture docks and other discounts such as cracked corn, foreign materials and heat damage.
Adequate storage will likely
add several cents net return per
bushel of corn this year. This will
be especially true in corn deficit
areas.
Arranging for the market which
will sell 1968 corn to best advantage is important. This may
mean: (a) being able to quickly
load out large quantities of grain,
(b) making arrangements to sell
grain in deficit areas, (c) producing a quality or differentiated
product for a special market, or
(d) taking advantage of hedging
or other contractual arrangements.
If you will need extra corn for
livestock feeding operations, it
will likely pay to lay in these supplies at harvest. This will be especially true in deficit areas.
Soybeans
Soybean prices in Indiana are
expected to average in the $2.30
to $2.35 range during harvest,
with the probability of even slightly lower prices for a short time
during the peak harvest period.
Seasonal price increases will
likely bring prices back to near
or slightly above the $2.50 national average support rate. Thus
returns to storage operations are
expected to be only modest. However, in the present unsettled
world situation there is at least a
possibility of a sizable seasonal
increase in soybean prices. Any
soybean grower can take advantage of the support price. Thus,
taking a loan on beans insures
against    further    price    decline.