Dropping the Prop

For the first time since he took office, Agriculture Secretary Ezra Benson last week cut price supports on an important commodity. He lowered the support level for the 1953 cottonseed crop from 90% of parity to 75%. Benson had declined to make a similar cut in butter in March because the dairy industry opposed it. This time he had the approval of the cottonseed industry, which hoped that lower prices might increase cottonseed use, cut down surpluses. The Agriculture Department has already spent $286 million to buy surplus cottonseed--and another big crop will be coming in.

One reason the Government has had to buy so much is that cottonseed prices have not been competitive with other vegetable oils such as soybean, peanut and flaxseed. Soybean oil, at 11-c- a Ib. v. 15-c- for cottonseed oil, has captured most of the market for margarine, salad dressings and shortening. While lower cottonseed prices might slow down soybean sales, the Agriculture Department hopes that demand for both will pick up. Some bullish factors: 1) the prospect of marketing quotas on the 1954 cotton crop,

2) the distribution of Government-held cottonseed to drought-stricken Texas farmers (see NATIONAL AFFAIRS), and

3) forecasts of lower soybean production next year. If prices hold up well enough, the Government might even dispose of some of its cottonseed, which is enough to supply the U.S. with margarine for more than a year.

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