5. Annual estimates of costs and returns are maintained for 20 important types of farms in 10 major farming regions. On most types of commercial familyoperated farms net returns to operators in 1951 ranged from $3,000 to $7,000 per farm. On 16 of the 20 types of farms studied net returns in 1951 were higher than in 1950. They were lower on three types of cotton farms in the South and on winter wheat farms in the Southern Plains, largely because the volume of production on these farms was lower in 1951 than in 1950.

Preliminary estimates for four of these farm types indicate that net farm incomes were higher in 1952 than in 1951 on hog-beef fattening farms and on winter wheat farms, but were lower on Northeast dairy farms and Piedmont cotton farms. The purchasing power of net returns on hog-beef fattening farms has remained about the same since 1942, whereas on Northeast dairy farms the trend has been downward since the peak reached in 1946. A major cause of the relatively higher returns on Corn Belt farms has been the rapid increase in volume of production per farm, which has helped hold down or reduce unit production costs. 6. A number of studies have been made on the economic utilization of farm grown feeds. Prevailing practices for utilization of grass silage in Wisconsin could be modified to reduce costs and give better results in terms of quality of feed produced and milk production. In Colorado different methods of harvesting, storing, and feeding alfalfa showed that in comparison with stacked alfalfa, windrow chopped alfalfa yielded $1.84 higher net returns per hundredweight of gain from fattening steers, windrow baled alfalfa produced $1.05 higher net returns while ensiled alfalfa yielded $0.26 lower net returns.

7. An economic evaluation has been made of improved practices in the management of pasture and hay crops on dairy farms in central Pennsylvania. It was found that on only a few farms in the area is a pasture program planned to provide adequate grazing throughout the season. The income from a suggested system of farming on a typical farm that would not change the number of cows would increase net cash income 11 percent compared with the usual management. But production of roughage would be increased about 15 percent and production of pasture about 65 percent. The additional quantity and better quality of forage crops would provide feed for increasing production per cow from 7,000 pounds to 8,225 pounds of milk per year. If the land now used for wheat were shifted to grasses and legumes and the number of cows increased from 18 to 24 the net cash income of the same typical farm would be raised 25 percent.

8. A study of pasture possibilities in the Piedmont area of South Carolina shows that the development of grazing systems for intensive use requires a large investment of capital in the form of seed, fertilizer, lim, labor, power, and machinery. Preliminary analyses indicate that with present prices, it will cost $60 to $75 per acre (including fencing but excluding value of land) to develop a good permanent pasture. However, a pasture of this kind has a very high carrying capacity. Capital requirements, excluding land but including the cost of pasture development, for a 25-cow grade A dairy in the Piedmont area of South Carolina are about $22,000. A well managed dairy farm, under present price relationships, can return a considerably higher income to the operator than a cotton farm. High carrying capacity pasture makes livestock production economically feasible on a much smaller farm than is the case with unimproved pasture.

9. A cooperative project with the Michigan Agricultural Experiment Station showed that the average Michigan dairy farmer can reduce milk production costs by as much as 35 percent by adoption of improved production practices. The dairyman who has average producing cows and adopts improved production practices without any change in the producing ability of his cows can increase his labor income by 60 percent. If, in addition, he is successful in upbreeding his cows to good producers he can increase his labor income threefold. It appears possible to reduce feed costs in producing 100 pounds of milk by 14 to 16 percent by the feeding of higher quality roughage.

10. An economic appraisal of irrigated pastures in north central Colorado is being made. In response to intense farmer interest three information leaflets have been released on methods and costs of establishing pastures, cost of maintenance, and management and returns. Results on 85 farms in 1950 showed average production of 240 pounds of beef or 150 pounds of butterfat per acre of improved irrigated pasture. The forage value of irrigated pasture was estimated at $52.34 per acre; annual costs were $22.11 and the average net return was $30.23 per acre.

11. Important information is coming from a series of studies on the economics of farm mechanization. For instance, a study in California shows that machine harvesting of cotton in 1949 cost $14.65 per bale for machine picking, $10.32 per bale for grade loss, and $1.20 for field waste-a total of $26.17 per bale compared with $45 per bale for hand-picking costs, or an average saving of $18.33 per bale to farmers for machine picking. Over one-half of the crop was picked by mechanical harvester in California in 1951.

On a typical 750-acre plantation in the Delta area of Mississippi, with present price relationships, the cost of producing cotton with near complete mechanization (tractor power, mechanical cotton picking, flame cultivation, and some hand chopping) is about 8 cents per pound lower than with partial mechanization (tractor power, hand chopping, and hand picking) and about 14 cents per pound lower than with all mule power and cropper labor. Effective chemical weed control would remove the last bottleneck to complete mechanization in this area. Its economic feasibility is being investigated in pilot fields and on plantations. Mechanical cotton harvesting and other aspects of cotton mechanization are also being studied in Texas and the Carolinas.

12. Preliminary analyses of low production farms have provided measures of labor resources and productivity for these farms. For the 1 million farm families operating small-scale farms, having a value of products from $500 to $1,200, gross product per man averaged only about one-fourth the product per man on medium commercial-family farms, or those whose products are valued between $3,000 and $8,000. Small-scale farms are most common in the Appalachian, Southeast, and Delta States where they represent two-fifths of all farms. Troublesome farm-adjustment problems are found also on many of the small commercialfamily farms, whose products are valued between $1,200 and $3,000. Gross product per man on these farms averaged only about one-half that of medium commercial farms.

13. Prices of farm real estate rose an average of 1 percent from March 1 to July 1, 1952, a smaller gain than in any other 4-month period since the beginning of hostilities in Korea in June 1950. Prices rose from 1 to 3 percent in two-thirds of the States, while the other 16 States showed small declines or no change. 213 (1912-14-100), the national index was 5 percent above a year earlier and 24 percent above July 1950.

At

The general over-all stability of prices in recent months is probably the major factor that has slowed the rise in farm land prices. The large amount of capital required to buy and equip a farm is a factor tending to limit sales, especially to tenants and young men starting farming. Financing of farm purchases is somewhat more difficult than last year. More buyers require credit, lenders require larger down payments, and interest rates have risen.

14. Gross rents payable on leased lands are expected to total about $3.4 billion in 1952 if farm production and prices now in prospect materialize. The value of crop-share and cash rents are expected to be around 5 percent larger than in 1951, but rents received from livestock-share rented farms may be slightly lower. Landlords' expenses for taxes and building repairs and maintenance will be higher than in 1951, and most other production costs shared by landlords also will be up slightly. Consequently, net returns from rented land will be about the same as in 1951. The current market valuation of leased lands is now about 9 percent above a year earlier, however, so the rate of return (earnings as a percentage of value) will show a further decline in 1952.

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15. Several studies indicate that inflexible farm leasing arrangements retard needed adjustment in farm practices and restrict agricultural production. the Southern States leases were developed primarily for cash-crop, hand-labor, mule-power systems of farming. Outmoded leases impede shifts to livestock production, mechanization, conservation and needed increases in farm size. Suggested changes include: (1) Securing interest of tenants through longer leases and greater security, (2) developing annual and longer term farm plans which introduce technological improvements and other needed changes in systems of farming, and (3) increasing incentives for use of durable investments by compensating tenants for their share of unexhausted improvements.

Studies in the Midwestern States indicate that changes in cash rent lag behind changes in prices, while proportionate shares remain constant over extended periods. Methods currently employed by landlords and tenants to adjust for these circumstances involve a high degree of tenant moving. Alternative means of achieving modifications and reducing excessive tenant mobility are being worked out and tested.

16. Increasing use of rural zoning is being made by local units of government as a means of guiding rural land use. A study completed the past year indicates that 38 States have passed enabling laws empowering designated classes of counties, towns, or townships, or other local units of government, to adopt rural-zoning ordinances. Such ordinances have been adopted by 173 counties in 23 States. Similar ordinances have been passed by numerous towns and townships.

Rather extensive use of rural zoning has been made in shifting lands considered poor for farming into profitable forest and recreational uses; in protecting the rural community against premature commercial development; and in the urban fringe to guide suburban development and protect the public investment in highways.

Today, new forces are affecting the farming community on the urban fringe. Cities are expanding, and adjoining rural areas for distances of 30 to 50 miles beyond city limits are often characterized by haphazard land use, speculative land values, high taxes, special assessments, much tax-reverted land, embryonic and abandoned residential subdivisions, idle land, and an unstable and declining agriculture. Rural zoning is an important means available to farm people for influencing community growth and for protecting rural values.

17. A study of the obstacles to soil conservation in western Iowa indicates that most farmers were having difficulty in achieving the goals of public conservation programs. These conservation programs usually included contouring, high-forage rotations, grass waterways, use of commercial fertilizers, terraces, contour farming, and contour listing. Farmers were following only 1 or 2 of the recommended practices which would directly help to control erosion.

The most significant obstacles encountered by farmers were: (1) Required change in farm enterprises, (2) rental agreements, (3) mortgage indebtedness, (4) annual cash outlay for operating and living expenses in transition period, and (5) short expectancy of tenure. Succeeding studies will undertake to develop suggestions for overcoming or reducing the obstacles disclosed.

18. The 1950 inventory of major uses of land in the United States shows that one-fourth of the land of the Nation is cropland, one-half pasture and grazing land, and one-sixth forest not pastured. The remainder is in service uses and

waste areas.

Although the total acreages of cropland, pasture, and grazing land have not changed greatly since 1920, there have been significant changes within and among the major use classes. Foremost, among these trends has been a gradual improvement of land for crops and permanent pastures by drainage, flood control, irrigation, and clearing. Substantial shifts also have been made between uses in some regions. For example, cropland is being concentrated more and more on the fertile and level land areas, while hilly and eroded land is being shifted to grass and trees. Shift of crops to the better soil areas has helped to increase average yields per acre.

Significant changes also have taken place in some areas in the acreage and number of farms absorbed by urban, industrial and other developments. Not only has land been shifted to nonfarm uses, but, in addition, fringe areas have been partly abandoned, or lie only partly used because of the availability of more attractive nonfarm employment.

Review of land resources indicates that meeting future land requirements must include the combined effects of continuing land improvement and development in its various forms and improved farming practices that bring higher production per acre and per animal.

19. A cooperative study of land development in the lower Mississippi Delta shows a large increase in new crop and improved pastureland. This land development has been made possible by flood control and drainage projects undertaken over an extended period by both Federal agencies and local groups. Studies of levee building and levee districts in Mississippi, land drainage and land clearing in Arkansas, and swampland drainage in Louisiana show that local groups and private individuals have made large investments in such developments.

Altogether it is estimated that more than 1 million acres of new land have been developed for farming in the lower Mississippi River delta since 1945. Among the factors contributing to successful land development in recent years have been (1) incorporation of larger areas in plans for drainage outlet, channel and levee improvements; (2) adaptation of power machinery to local needs for drainage and clearing; (3) selection of land suitable for the intended uses; and (4) availability of technical information on soils, drainage, and improved farm practices adapted to the needs of the region.

20. Publicly administered Federal, State, Indian, and local government land was about 560 million acres in 1950, or 29 percent of the total land area, about the same as in 1945, according to estimates compiled in a study of the use of public land. Of the total publicly administered area, approximately 70 percent is administered for Federal purposes, 20 percent for State and local government purposes, and 10 percent is Indian land held in trust or otherwise administered for the benefit and use of the Indians. Recent decreases in acreage represented transfers to other uses of land taken over for military purposes during World War II, and sales of State-owned land. There have been offsetting changes, however, by acquisition for public reservoirs, airports, highway rights-of-way, and for forestry purposes.

In 1950, 455 million acres of land in the continental United States were under Federal administration. Major uses of this were grazing, 64 percent; forest and woodland not grazed, 20 percent; and miscellaneous uses including idle and wasteland, 16 percent. Federal lands include Federal grazing areas, national parks, wildlife refuges, and national forests as well as Indian land.

There were 80.3 million acres of rural land in State ownership in 1950. Of this total, 22.4 million acres were held for specified public uses such as parks, State forests, and institutional sites. The remaining 57.9 million acres were State grants from the original public domain, tax forfeited, and other land of which grazing was the primary use on 44.1 million acres. About 2.4 million acres were used for farming. Local government uses comprised about 25 million acres.

21. The cost of pumping water for irrigation was studied in the High Plains of Texas. The relatively high cost of developing and equipping a new irrigation well coupled with the declining groundwater tables in this region necessitate care to insure profitable irrigation farming. Pumping plants must be selected that will fulfill requirements at lowest possible cost. The wide differences revealed in per acre foot operating costs between plants operating under similar lift and yield conditions indicate that proper selection and installation of pumping plants was generally overlooked during the extensive postwar expansion. Approximately 1,860,000 acres of the Texas High Plains were irrigated from about 14,000 wells in 1950. A very large part of this development has occurred since World War II. Drilling wells continued at a rapid rate during 1951.

22. Studies of the economic impacts of reservoir development on farm families and rural communities have been continued by request of various States and local groups as well as by Federal developmental agencies. Some of these studies, principally those in the Missouri Basin, where a large program of reservoir construction is under way, have been concerned with the problems of relieving the impacts of reservoir development on displaced families. Studies in this basin have indicated the need for modification in some of the prevailing compensation and land acquisition practices in order that adverse effects might be alleviated. 23. As shown by The Balance Sheet of Agriculture, agricultural assets increased about $14 billion during 1951 to a total of about $169 billions on January 1, 1952. These valuations are in current dollars. Of this increase, about $8 billions were in the value of farmland and buildings, about $5 billions were in the value of other physical assets, including livestock, motor vehicles, farm machinery, stored crops, and household furnishings and equipment, and about $1 billion was in the value of the financial assets owned by farmers. Although farm debts increased about $1 billion, the equities of farmers and other owners increased more than $13 billion to a total of nearly $155 billions on January 1, 1952.

Most of the increase in the value of agricultural assets during 1951 resulted from higher prices of real estate and other assets. But the physical inventory of farm assets also increased during 1951. As reflected by valuations based on 1940 prices, the physical inventory of livestock rose 4 percent and that of motor vehicles and machinery 6 percent during the year.

Farmers also increased their liquid financial reserves-currency, bank deposits, and United States savings bonds-about $800 million during 1951. But, because prices of the things that farmers buy went up, the liquid assets that farmers owned on January 1, 1952, had about 1 percent less purchasing power than did the smaller amount that they held a year earlier.

Total assets of American agriculture, valued at current prices and including the financial assets of farmers, are expected to reach $172 billion by January 1, 1953. This would be only 2 percent above the valuation for January 1, 1952, compared with increases of 12 percent in 1950 and 9 percent in 1951. Increases in value over January 1, 1952, are expected for each type of physical farm asset

except livestock. Farm real estate is expected to be up about 2 percent because of higher values per acre; the values of machinery and motor vehicles, crops, and household furnishings and equipment are expected to be higher because of greater quantities on farms. The financial assets of farmers are also expected to be higher on January 1, 1953, than a year earlier. An increase during 1952 of $1 billion (from 20.5 to 21.5 billion) is indicated.

Indicated increases in farm debts for 1952 are $400 million, or 6 percent, for mortgage debt and $1.3 billion, or nearly 17 percent, for non-real-estate debt, including CCC loans. These increases are occurring because of rising expenditures for the operation of farms, farmers' needs for large working balances, and continued investment by farmers in land, livestock, and farm and home improvements. Also, greater production and somewhat lower prices of farm products are increasing the volume of price-support loans.

24. The non-real-estate debt of farmers (excluding Commodity Credit Corporation price-support loans) was at a record high of $8.3 billion on June 30, 1952. This was 12 percent above a year earlier and more than 21⁄2 times the level of June 30, 1945. Increases during the year ended June 30, 1952, occurred in all States; they were largest in the Midwest and West and smallest in the Southwest. For the postwar period as a whole, non-real-estate debt more than trebled in most of the Corn Belt and other important agricultural States such as California, Oregon, Kansas, Kentucky, and Pennsylvania.

Because of the short term and high volume of these debts, which are chiefly production loans, the agricultural credit situation should be watched closely, particularly in areas where farm income has declined. Although loan carryovers are relatively heavy in the drought areas of the Southwest, no widespread difficulties have occurred so far.

25. Farm-mortgage debt on January 1, 1952, stood at nearly $6.3 billion, compared with $5.8 billion on January 1, 1951. This increase of about 8 percent during 1951 compares with annual increases of 8 percent in 1950, 6 percent in 1949, 5 percent in 1948, and 2 percent in 1947 and in 1946.

Mortgage debt has continued to increase during 1952 for the seventh consecutive year. It is tentatively estimated at $6.7 billion on January 1, 1953. This total would be 43.4 percent above the postwar low of $4.7 billion on January 1, 1946.

26. Studies of the operating practices of farmers' mutual insurance companies and ways in which their services might be better adapted to farmers' needs were continued. These companies had about $28 billion of insurance on their books at the end of 1951, and paid out about $41 million for losses in that year. Total farm fire losses, including both insured and uninsured, amounted to about $127 million in 1951.

27. Studies of yield variability and methods by which the uncertainty of farm income might be reduced also were continued. An analysis was made of the use of yield-variability data in estimating land values. Reports were prepared on the variability of county wheat, cotton, and corn yields, to indicate the relative stability of yields of these crops by areas as aids to land appraisal and crop insurance administration. A report on the potential effects on farm costs and income from participation in the Federal crop-insurance program received wide circulation.

28. Farm real-estate taxes levied per acre in 1951 (payable largely in 1952) were about 5 percent higher than in 1950. This is the eighth consecutive year of increase. The average tax per acre for 1951 was at an alltime high. Total farm real-estate taxes were nearly 100 percent higher in 1951 than they were in 1940. Taxes per $100 of real-estate value were 5 percent lower in 1951 than in 1950. This is the seventh year since 1940 in which real-estate values have increased more rapidly than real-estate taxes. Real-estate taxes per $100 of farm real-estate value in 1951 were about 28 percent lower than they were in 1940. Farm personal-property taxes levied in 1951 (payable largely in 1952) were 9 percent higher than in 1950. This year as in each of the past 11 years, personalproperty taxes increased more rapidly than real-estate taxes. In 1951, farmers' personal-property taxes were about four times as large as they were in 1940. Estimated Federal income taxes paid by farmers in 1952 on 1951 income increased after 3 consecutive years of decline. The amount rose from $640 million in 1951 to $750 million in 1952. The peak was reached in 1948 when $960 million in Federal income taxes were paid on the 1947 income of farmers.