OCR Interpretation


Montana farmer-stockman. [volume] (Great Falls, Mont.) 1947-1993, July 01, 1951, Image 15

Image and text provided by Montana Historical Society; Helena, MT

Persistent link: https://chroniclingamerica.loc.gov/lccn/sn86075096/1951-07-01/ed-1/seq-15/

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With so many uncertainties before him. what should the grower dot
Here's the way it looks now to this observer:
First, it will be well to be prepared to store. If you do not have your
own storage, you can obtain government credit, if needed, to build
it. If you must use commercial storage, shop for an economical deal,
since you will have to pay the charges.
Clean and disinfect bins to destroy weevil. After bins are filled, treat
for weevil as necessary to prevent damage. «
II prices are a few cents below the loan rate at harvest, store your
wheat.
If there is no important decline in the crop and prices are a few cents
above the loan rate at harvest and you must pay for commercial
storage at substantial rates, better sell a fair share of the crop.
If you store and prices do not rise over the loan rate by Jan. 31. 1952.
apply for a government loan or purchase agreement.
If you store and prices rise 5 to IS cents over the loan rate, with no
great decline in the supply prospect and no great increase in war
tension, do some selling.
Plant a full winter wheat acreage next falL Use best practices to ob
tain a high yield. Prices for the 1952 crop are likely to be good.
year ago when it was about 9
percent below prewar.
If exports should be as large as
in the last season, total utilization
will be about 1,080,000,000 bushels,
which is a little more than the pres
ent estimate of the crop, so that a
small reduction would be made in the
carryover. But, stocks would still be
about 350,000,000 bushels. Any ma
terial change in the crop prospect or
in exports from the figure suggested
would change the carryover accord
ingly.
While the total wheat supply
promises to be liberal, the "free" sup
ply will depend on how much is im
pounded in the support program.
Probably about half of the July 1
carryover, or around 200,000,000
bushels, is owned by the government,
How much of the 1951 crop will be
placed under loan will depend on
how far prices go below the loan
during the crop-moving period and
on whether they stay below until the
end of the period for loan applica
tions on Jan. 31, 1952.
Last season, prices were over
the loan in December and Janu
ary and probably many farmers
who had been waiting did not
apply for loans. Only about
195,000,000 bushels were tied üp
in loans and purchase agree
ments. Lack of a storage allow
ance on farm-stored wheat or a
storage payment on wheat pul
in commercial storage reduces
the incentive to place wheat un
der loan this year.
Speculative and storage demand
for wheat may be somewhat weaker
in the next six or eight months than
a year previous when fear that war
might spread and inflation encour
aged stocking up by mills, bakers
apd flour wholesalers as well as out
right speculative buying. Govern
ments, including our own, sought to
build up reserves. Now, peace talk
abounds, inflation has lost some of
its punch and, instead of stockpil
ing, some of the reserves may be
used if war tensior does not increase
again.
The loan rate for the 1951 crçp
has not been announced, but, if the
parity price on July 1 is the same
as on May 15, the national average
farm loan rate, at 90 percent of par
ity, will be $2.17 a bushel. With the
usual differentials, that would mean
about $2.49 at Chicago, $2.44 at Mis
souri river markets, $2.46 at Minne
apolis and $2.39 at Portland. Prices
right now are 5 to 10 cents below the
probable loan rate.
In 8 of the 13 seasons under
the present loan program, prices
were below the loan value dur
ing the early part of the crop
year. Each time they rose over
the loan later in the season. In
the other five seasons, prices
were over the loan throughout
the crop year. See chart.
In view of all the uncertainties as
to final domestic and world produc
tion, volume of exports, amounts to
be impounded under loans, war and
inflation, any comments as to future
prices must be highly conditional At
present, prices appear likely to re
main somewhat below the loan in
the crop-moving period,
probably will be impounded to pull
prices over the loan later in the sea
son.
However, big exports and holding
by producers on the possibility of
war or inflation may prevent prices
from going much below the loan.
Many producers probably will store
without a loan until late in the ap
plication period, but enough wheat
Rises Could Be Modest
Any rise in prices could be rather
modest, however, unless a marked
increase occurs in war tension, a
serious crop scare arises, or renewal
of inflationary pressure due to de
fense spending pushes up general
commodity prices again. If feed crops
are not extremely good this season,
a moderate shortage in feed supplies
for the amount of livestock to be
fed might give wheat prices a boost.
Upper limits of any advance prob
ably would be, first, the level where
substantial sales would be made from
impounded stocks. More extreme
conditions might push prices high
enough to lead OPS to impose a
ceiling. The lowest point at which
a ceiling could be placed would be
at parity which, currently, is a na
tional average of $2.41 a bushel at
the farm, or about $2.72 at Chicago.
Changes in the relative levels
of prices for the different types
of wheat will depend on the crop
outcome. Compared with 10-year
averages, the crop looks small in
the hard winter wheat region,
normal or a little above in the
red winter wheat states, abund
ant in the hard spring and durum
states and a little above normal
in the Pacific northwest. How
the crop will run in protein also
depends on future weather, but
protein premiums probably will
continue substantial.
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