Farm Turnaround

On the farm, the outlook was not so good. The Agriculture Department predicted last week that net farm income in 1959 may drop 5% to 10% below 1958, after a year of the highest farm profits in five years (see chart). Hog and poultry prices are expected to decline, and crop prices will be lower as a result of this year's record crop and surpluses. Next year's crop may be equally large, or larger, partly because the Government will scrap soil-bank payments to farmers for underplanting their acres, thus depriving them of $700 million in payments made this year. On the other hand, the Government will have to pay more in price supports in the months ahead to compensate for the surge in crop production. Yet despite the fact that farmers complain about the prices they get for their crops, reported the Federal Reserve Bank of Chicago last week, the value of the farms they own has soared; in some places it has doubled in value over ten years ago. Not only that, but many farmers are buying more and more land on which to farm. One result: average farm real estate value per acre rose from $100.39 m March to $104.80 on Nov. 1, reflecting the drive by farmers to expand their acreage base in order to take advantage of present prices and farm price supports.

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