Economic and Marketing Information for Indiana Farmers (Feb. 28, 1967) |
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Economic and Marketing Information FOR INDIANA FARMERS Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana February 28, 1967 i m r«Tirrrrn rtrrTB Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana The Cost of Reducing Corn Production Under the Feed Grain Program by Richard J. Edwards and ]. Carroll Bottum, Agricultural Economics INDIANA FARMERS It cost a little under a dollar per bushel to take approximately one billion bushels of feed grains per year out of production through the use of the 1961-64 feed grain program. The feed grain program included torn, sorghum and barley. Whether one believes this to be an excessive or reasonable cost lor the maintenance of farm income depends upon the other alternatives one believes acceptable and how these compare with the cost of the feed grain program. Production Decline To determine the cost per bushel of feed grain taken out ol production, it is first necessary to judge what decline in production occurred. This was clone by calculating the effective decrease in the acreages of these crops in each state and multiplying these acreages by the average yields anticipated on diverted land in that state. The acreage leased from farmers and placed in the program for diversion from feed grain production totaled 25 million acres in 1961. This was increased to 32 million acres by 1964. About 70 percent of this was corn acreage with grain sorghum and barley making up the rest. The acreage diverted represents between 20 and 26 percent of the 125 million acre feed grain base. The average of 27.5 million acres shifted out of production for the four-year period in the United States, 1.2 million per year in Indiana, was adjusted for several factors. Because of the voluntary nature of the program, farmers not participating could increase their acreage without publicly imposed limits. They increased their acreage more each succeeding year. By 1964, farmers not in the program planted 9.0 million acres more than their 1959-60 average as indicated by the base acreage. This planting was partly offset by participants cutting back even more than the limit lor which they could receive payment. Much of this under- planting resulted from odd sized fields and the risks attached to exceeding their acreage limit. In 1964. participants planted 5.9 million acres or 14 percent less than they were allowed. Compensations were made for the upward adjustments farmers were allowed in their base acreage and for the land released from the conservation reserve program which was eligible for entry into the feed grain program. After these adjustments were made, it was judged that the effective decline in acreage averaged 23.7 million acres in this four-year period. The effective decline in planted acreage ol each crop of each state was multiplied b\ NO percent of the average yield in that state. Eighty percent was judged as sufficient to compensate for the average land selection. Although independent studies have shown that participating farms have yields ecjual to the average ol the stale, land selection with- in each farm occurs. Yield per planted acre was used to, in part, reflect crop failures and difficulties with harvest. Table I gives a summary of the attempt to estimate the decline in production dining the first four years ol the pro- gram. The decline in production was not evenly distributed throughout the United States. Almost 40 percent ol the total decline occurred in the five Corn Belt Stales. The southeast and plains accounted lor 47 percent while the three Lake states accounted lor almost all the remainder. While this absolute decline is as would be expected, the percentage decline in production of the three crops from the 1959-60 base year production is interestingly different. The Corn Belt with its vast total production ol Iced grain is attributed with a drop ecpial to 14 percent ol its 1959-60 production. The southern areas with their relatively greater acreage diversion are estimated to have cut production 27 percent. Thus, because half of the feed grain production is in the five heartland states, the largest block ol production was removed in this area. But. a smaller percentage ol total Table 1. 1959-60 average production of corn, barley and grain sorghum in corn equivalents compared with the estimated average yearly decrease in production, 1961-64 1959-60 Avg. yearly Decrease average decrease relative to Region production 1961-64 1959-60 avg. mil. bu. mil. bu. percent Northeast 179.7 11.3 6.3 Corn Belt 2,837.1 387.1 13.6 Lake States 666.6 101.9 15.3 Southeast & S. C. 559.9 148.4 26.5 Northern Plains 670.8 130.7 19.5 Southern Plains 664.4 183.0 27.5 Mt. and Pacific 182.0 24.5 13.5 U.S. 5,760.5 986.9 17.1
Object Description
Title | Economic and Marketing Information for Indiana Farmers (Feb. 28, 1967) |
Purdue Identification Number | UA14-13-econ196702 |
Date of Original | 1967 |
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 | 05/01/2015 |
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-econ196702.tif |
Description
Title | Economic and Marketing Information for Indiana Farmers (Feb. 28, 1967) |
Purdue Identification Number | UA14-13-econ196702 |
Transcript | Economic and Marketing Information FOR INDIANA FARMERS Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana February 28, 1967 i m r«Tirrrrn rtrrTB Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana The Cost of Reducing Corn Production Under the Feed Grain Program by Richard J. Edwards and ]. Carroll Bottum, Agricultural Economics INDIANA FARMERS It cost a little under a dollar per bushel to take approximately one billion bushels of feed grains per year out of production through the use of the 1961-64 feed grain program. The feed grain program included torn, sorghum and barley. Whether one believes this to be an excessive or reasonable cost lor the maintenance of farm income depends upon the other alternatives one believes acceptable and how these compare with the cost of the feed grain program. Production Decline To determine the cost per bushel of feed grain taken out ol production, it is first necessary to judge what decline in production occurred. This was clone by calculating the effective decrease in the acreages of these crops in each state and multiplying these acreages by the average yields anticipated on diverted land in that state. The acreage leased from farmers and placed in the program for diversion from feed grain production totaled 25 million acres in 1961. This was increased to 32 million acres by 1964. About 70 percent of this was corn acreage with grain sorghum and barley making up the rest. The acreage diverted represents between 20 and 26 percent of the 125 million acre feed grain base. The average of 27.5 million acres shifted out of production for the four-year period in the United States, 1.2 million per year in Indiana, was adjusted for several factors. Because of the voluntary nature of the program, farmers not participating could increase their acreage without publicly imposed limits. They increased their acreage more each succeeding year. By 1964, farmers not in the program planted 9.0 million acres more than their 1959-60 average as indicated by the base acreage. This planting was partly offset by participants cutting back even more than the limit lor which they could receive payment. Much of this under- planting resulted from odd sized fields and the risks attached to exceeding their acreage limit. In 1964. participants planted 5.9 million acres or 14 percent less than they were allowed. Compensations were made for the upward adjustments farmers were allowed in their base acreage and for the land released from the conservation reserve program which was eligible for entry into the feed grain program. After these adjustments were made, it was judged that the effective decline in acreage averaged 23.7 million acres in this four-year period. The effective decline in planted acreage ol each crop of each state was multiplied b\ NO percent of the average yield in that state. Eighty percent was judged as sufficient to compensate for the average land selection. Although independent studies have shown that participating farms have yields ecjual to the average ol the stale, land selection with- in each farm occurs. Yield per planted acre was used to, in part, reflect crop failures and difficulties with harvest. Table I gives a summary of the attempt to estimate the decline in production dining the first four years ol the pro- gram. The decline in production was not evenly distributed throughout the United States. Almost 40 percent ol the total decline occurred in the five Corn Belt Stales. The southeast and plains accounted lor 47 percent while the three Lake states accounted lor almost all the remainder. While this absolute decline is as would be expected, the percentage decline in production of the three crops from the 1959-60 base year production is interestingly different. The Corn Belt with its vast total production ol Iced grain is attributed with a drop ecpial to 14 percent ol its 1959-60 production. The southern areas with their relatively greater acreage diversion are estimated to have cut production 27 percent. Thus, because half of the feed grain production is in the five heartland states, the largest block ol production was removed in this area. But. a smaller percentage ol total Table 1. 1959-60 average production of corn, barley and grain sorghum in corn equivalents compared with the estimated average yearly decrease in production, 1961-64 1959-60 Avg. yearly Decrease average decrease relative to Region production 1961-64 1959-60 avg. mil. bu. mil. bu. percent Northeast 179.7 11.3 6.3 Corn Belt 2,837.1 387.1 13.6 Lake States 666.6 101.9 15.3 Southeast & S. C. 559.9 148.4 26.5 Northern Plains 670.8 130.7 19.5 Southern Plains 664.4 183.0 27.5 Mt. and Pacific 182.0 24.5 13.5 U.S. 5,760.5 986.9 17.1 |
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