Let 'em Eat Cake

Another monument to the strange economics of the Government's price-support program (see NATIONAL AFFAIRS) was on view last week. It consisted of 4,000 tons of cottonseed, piled high on the concrete tennis courts of a former naval air station in Oklahoma City. Bought and paid for by the U.S. taxpayer (through the Commodity Credit Corp.), the cottonseed seemed destined for the same fate as the mountains of potatoes, eggs and other commodities which the Government in the past has bought and let rot.

But cottonseed producers were happy. Southern Congressmen had pressured CCC to buy the seed from farmers at a support price of $46.50 a ton, higher than the local open-market price of $45 and under. Producers were, of course, the only ones happy. Processors, who turn the seed into cottonseed cake for cattle feed, com plained that they were unable to compete with the Government's purchases and get the seed they needed. Result: there was a shortage, though possibly temporary, of cottonseed cake and the price jumped from $60 to $68 a ton in six weeks.* This naturally made beef cattle feeders the unhappiest of all.

As usual, the U.S. consumer would probably have to shell out twice. He was already paying for the support price; by next spring he might be paying again in higher prices for steak.

*Processors complained that they could not even buy from CCC's stockpile; the seed had not matured enough in the open air. By the time it does, deterioration from the weather may make it unusable.

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