Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana   
September 30,  1969
1970 Outlook
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Net income to Indiana agriculture is likely to be down somewhat for the year beginning October 1, 1969 compared to the past
12 months. However, it should be
recognized that livestock prices
have been particularly favorable
and livestock farmers have enjoyed record or near record incomes during the past year. Net
earnings in the year ahead are expected to be below only the relatively favorable years of 1965 and
1969.
Declining farm numbers means
that income per farm will be down
less than the decline for total Indiana agriculture. On the other
hand, in terms of purchasing power, incomes of all consumers will
continue to be eroded by inflation
in the year ahead.
In brief, the net purchasing
power per Indiana farm is likely
to be about 5 per cent below that
of the past year but well above
the average of recent years.
General Business
The general economy is expected to continue advancing in
the year ahead, but slightly less
briskly that in the year just past.
Inflation will likely average 5
per cent or more for the year
ahead with most of the increase
in late 1969 and early 1970. Real
growth, recently increasing at
about 2 per cent annual rate, is
expected to subside somewhat
further in the year ahead.
For the next few months, high
levels of consumer, business and
government spending will sustain
economic expansion in spite of
high interest rates and reduced
credit. However, by next spring
or summer the various monetary
and fiscal restraints are expected
to slow down expansion and reduce the rate of inflation.
Some slowing in growth of the
general economy but continued
inflationary pressures will reflect
itself to farmers in the following
ways in the year ahead:
1. Consumer spending is expected to increase. Rising consumer income per person,
along with the growing population, will insure a strong and
growing demand for farm
products. However, increase
in demand will be less than
the very sharp rise which occurred during the past year,
particularly for red meats.
2. The composite cost for farm
production items will edge
higher. Such items as interest
rates and fertilizer may average about the same; whereas
real estate taxes, farm wage
rates and fall purchased feeder
cattle are expected to be substantially higher. Slight to
modest increases in costs are
expected for most other production items.
3. As the economy slows, there
likely will be a modest increase in unemployment from
the current very low levels.
However, off farm job opportunities will likely continue to
be plentiful.
Hired farm labor will continue scarce and farm wage
rates will continue the upward
trend.
U. S. employment in agriculture has declined from 5.5
million in 1960 to 3.8 million in
1969 for a decline of 31 per
cent. This trend, accompanied
by farm consolidation, is expected to continue.
4. Interest rates will remain high
and credit will continue tight.
It will be especially important
for farmers to keep good records, meet credit commitments
and do other things necessary
to insure themselves of adequate credit supplies.
Corn
Corn prices (No. 2 basis) will
likely average near the 95-cent
level at harvest. Prices by next
summer are expected to average
$1.15 to $1.20 in surplus areas and
about 15 cents higher in deficit
areas.
With 3 cents penalty for each
percentage of moisture over 15.5,
drying will likely pay good returns in 1969.
Storage is also expected to be
profitable, especially in deficit
areas.
Livestock feeders needing extra
corn will find it profitable to buy
it at harvest, especially in deficit
areas.