The Golden Glut

In the great U.S. wheat belt, from the panhandle of Texas to the border of Manitoba, the harvest was moving relentlessly northward. Last week the combines roared out of Nebraska and into the golden, knee-high fields of South Dakota. Although some areas were hurt by drought, the yield was generally good. But every bushel that came tumbling out of a combine's spout added to a critical farm problem. U.S. wheat bins are bursting with the greatest glut in history. When all this year's crop is in, the total supply is expected to be 1.7 billion bushels, more than 50% above normal.

While wheat production has been rising, per capita consumption has been falling --due at least in part to the nation's preoccupation with the bulging waistline (see BUSINESS). In 1910, U.S. citizens used an average of 211 Ibs. of wheat flour apiece. In 1952, they used only 130 Ibs. So far this year, shipments abroad have fallen more than 100 million bushels below the same period of last year. Chief reasons: 1) shortages created by World War II have largely abated; 2) wheat-hungry nations do not have enough dollars to buy American wheat; and 3) the Government-supported price of U.S. wheat is about 40-c- a bushel above the world market price.

Cut the Crop? Next week, for the first time since 1942, U.S. wheat farmers will vote on whether they want marketing quotas imposed on next year's crop. Secretary of Agriculture Ezra Taft Benson is basically against controls, but the 1938 Agricultural Adjustment Act forced him to employ the marketing restriction because of the huge supply. Benson has fixed 62 million acres as the maximum U.S. wheat acreage for 1954, compared to 78 million this year. The Department of Agriculture is setting farm-by-farm acreage allotments. The average cut for wheat farmers: 20%.

More than 800,000 farmers will be eligible to vote. If at least two-thirds of those balloting vote yes, the quotas will be placed in effect, farmers will be allowed to market all the wheat they can grow on their allotted acreage, and the Government will support the price at 90% of parity. If a farmer grows wheat on more than his allotted acreage, he will have to pay the Government a fine of 45% of parity for all he markets or uses from the excess acres. If more than one-third of the farmers vote no, the price support will drop to 50% of parity.

Unhappy Choice. When they go to their polling places next week, farmers thus will be choosing between greater Government control and greater economic risk. No matter which way they vote, the wheat growers will get less return for their crop next year--either the acreage or the price will be cut.

Last week, some Agriculture Department officials and farm leaders were predicting that more than two-thirds of the farmers will vote yes. Said Farmer Lynn Wallen of Nebraska's Red Willow County: "I can't see any reason why wheat farmers should ever vote for $1.20 and against $2.20 a bushel."

One fear haunting the Department of Agriculture is that a 20% acreage cut will not mean anywhere near a 20% cut in production. By using their best land and better farming practices, the farmers may produce much more per acre. There is a saying In Iowa: "Cut corn acreage and you have to build bigger bins."

That fear points up the fact that marketing quotas are not a satisfactory long-term solution to the wheat problem. In the wheat belt last week, farm leaders were thinking seriously about other answers. Among them: more flexible price supports to discourage surplus production, an aid-trade program to help other countries buy U.S. wheat, greatly increased research into new uses of wheat.

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