COMPARISON OF FARM AND URBAN INCOME In terms of income, Mr. Hunter, I will simply say this, that the average per capita income of farm people is about half the average per capita income of nonfarm people-we can give it to you in many ways but that is about what it comes to. When we look at farm operators' incomes, in my opinion, we must realize that they are also businessmen and their returns must cover not only their labor but also their management skills and interest on their investment. Successfully managing commercial farms calls for just as much ingenuity as managing a corporation. We will be glad to prepare a statement covering these points more specifically if you care for it. (The information referred to is as follows:) With the exception of a slight decline for 1950 the assets of agriculture have steadily increased in value since 1940. During the year ended January 1, 1952, total assets increased about 9 percent to a record total of $169 billion. For the entire period 1940 to 1952, assets increased 214 percent. Although the physical quantity of farm assets increased considerably, most of the increase resulted from higher valuations of all farm property. The table below shows the value of physical and financial assets in current dollars and in terms of 1940 dollars. The farm balance sheet, United States, Jan. 1, 1940, 1952, and 1953 2 These deflated data reflect changes in the quantity of the physical assets of agriculture and changes in the quantity of goods and services that farmers could purchase with their financial assets. VARYING WEIGHT YIELD OF MARKETED BEEF Mr. HUNTER. I believe your statistics reflect a larger amount of beef this year than last. I was wondering whether you measure that on the basis of the number of animals or the number of pounds. I have been told now by a number of cattlemen in California that they are slaughtering cattle at lesser weights, from 1,000 to 1,100 pounds, whereas formerly it was from 1,400 to 1,600 pounds. So possibly we do not have as much beef as we think we have, even though we have more animals. Mr. WELLS. The estimates which I think most people are referring to now are numbers of cattle, hogs, and so forth, on hand January 1. The yield or production from those numbers varies from year to year depending upon the market situation, upon feeding rates, and upon whether or not we have drought. However, there is a long-term trend toward producing more meat per breeding animal, but that is a slow and gradual effect, so the actual production does differ from time to time in relation to numbers on hand; that is correct. Mr. HUNTER. If that could be gotten out to the public, it might be valuable. I have a problem something like Mr. Andersen's, where the impression is gained that we are going to move more beef than actually will prove to be the case, and that tends to depress prices. If it could be ascertained that actually in total pounds of beef we may have less than we had in 1952, although the 1952 number of animals may have increased, it would be well to make such information public so as to correct the erroneous impression. Mr. WELLS. We do obtain statistics through the Federal Inspection Service and otherwise on the actual slaughter and production of meat by weeks and months. And I think the major disturbing influence over the last several weeks has been the fact that the market receipts of cattle have been running about 20 percent above a year ago. I am under the impression that the total live weight, or actual beet production, has been running about 20 percent above a year ago. That is an immediate market situation. I think people should also understand, however, in the case of hogs, exactly the reverse is true. Pork production is down substantially, 15 to 20 percent. TOTAL AGRICULTURAL AND RELATED EMPLOYMENT Mr. HUNTER. Mr. Wells stated that the on-the-farm population of the United States comprises only 15 percent of the total population. Do you know roughly the percentage of the population which is engaged in activities related to agriculture in one way or another? Mr. WELLS. Mr. Congressman, I am sure that for every farm person there is another person who is engaged in directly handling, transporting, or selling farm products or whose livelihood otherwise depends on agriculture this includes the bankers so at least a third of the population of the United States has a direct and immediate interest in agriculture and the products thereof. Further, I think the question of the relationship between farm and urban prosperity is actually much wider than that. Mr. ANDERSEN. Are there any other questions, gentlemen? MONDAY, MARCH 2, 1953. Mr. ANDERSEN. Gentlemen, we will proceed. ECONOMIC INVESTIGATIONS RESEARCH TO DETERMINE MOST PROFITABLE USE OF FERTILIZER Mr. Wells, when you finished Friday, we had come down to increases. I note that you are asking for $100,000 additional for the purpose of determining the most profitable use of fertilizer. Mr. WELLS. Yes, sir; we are. Mr. ANDERSEN. Now, in connection with that, will you tell me what BAE can do in adding to the general knowledge in this field beyond the work of the State experiment stations and the Bureau of Plant Industry? Just where do you fit into the picture? Mr. WELLS. May I ask, Mr. Chairman, that Mr. Sherman Johnson explain that? Mr. ANDERSEN. We will be glad to hear from you, Mr. Johnson. Mr. JOHNSON. Mr. Chairman, we would plan to work with the State experiment stations on this problem and also with the Bureau of Plant Industry. There are, of course, two questions involved in every production problem. One of them is the question, Will it work? And the other one is, Will it pay? The Bureau of Plant Industry and agronomists in the State experiment stations have experiments indieating the physical responses to the use of the fertilizers. Very little has been done so far on the question of the most profitable use or will it pay? We need to translate the results from the physical experiments into the amount that would be most profitable for farmers to use under different kinds of economic conditions; that is, with different prices for the product, and different prices of fertilizer. This proposed increase would enable us to set up cooperative work with the State experiment stations in different parts of the country to work with them on that problem. It is especially important at the present time because farmers are spending about a billion dollars a year for commercial fertilizer and lime which is also involved in the problem. There will be more fertilizer available in the years ahead. In the situation that we seem to be confronted with at the present time, with softening of farm prices, there is need for reconsideration of profitable use of fertilizer. Should farmers use more or less fertilizer in the prospective economic situation that we are facing? In a good many areas it looks like using more fertilizer and shifting to more hay and pasture, might be considered something of a balance wheel in adjustment. That is farmers might consider the possibility of shifting to improved hay and pasture, using fertilizer (and lime where it is needed) instead of cash crops, or feed grain crops. This shift might acually reduce costs very considerably. We have done a little work with Michigan State College in the last 2 or 3 years which indicates that dairy farmers can reduce costs as much as 35 percent and increase incomes much more by making that kind of a shift. We feel that by arranging cooperative studies in different sections of the country, we could point out that kind of cost-reducing opportunities. But it would be in cooperation, Mr. Chairman, with the State experiment stations, both with the agricultural economics departments and the agronomy departments in the State experiment stations and with the Bureau of Plant Industry here. |