Surplus & Scarcity

In Chicago last week, the price of cash corn suddenly tumbled nearly 14-c- a bushel. One reason: private estimates had put the record 1948 crop at 3,540,602,000 bushels, 34 million bushels greater than the Department of Agriculture's latest forecast.

Future prices quoted on the new crop were now some 20-c- below the anticipated Government support level of $1.60 a bushel at Chicago. But farmers could not get loans on their corn from the Government at support levels until they got their crop into storage--and there was not enough room to store it. Traders guessed that as many as 500 million bushels might be dumped on the open market for lack of storage. That would drive prices down still further.

To get the most for their corn, many farmers were planning to increase hog feeding and buy cattle to fatten on corn. But the Bureau of Agricultural Economics did not think this would add to the meat supply--and bring prices down--until late 1949. In fact, said the bureau, meat would be even scarcer this winter, and prices might go even higher.

If anybody thought the meat packers were getting rich on the present market, they had another think coming. Armour & Co. last week said that livestock prices had gone "far beyond levels warranted by the selling price of meats." Armour had tied up so much of its cash in inventory that it could not pay a dividend. Its stock promptly dropped 2 3/8 points to 10 1/4, the low for the year, and touched off selling in other meat-packing stocks.

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