Growing Surplus

In Chicago's noisy wheat pit last week, nervous traders began a deluge of selling in wheat futures. As U.S. farmers got ready to vote on wheat marketing quotas, the traders were hedging the possibility that controls would be voted down, thus automatically cutting Government price supports for wheat nearly in half. In the hectic trading, September futures fell to $1.75 a bu., the lowest price in six years and 60-c- below the price a year ago. The fears about the voting were unjustified (see NATIONAL AFFAIRS, and September futures soon rebounded to $1.88 as flour mills made big buys at the bargain prices. But the fact remained that, not only in wheat but in other commodities, the U.S. is fast piling up the biggest agricultural surplus in its history.

This year's total crop production, the Agriculture Department estimated last week, will be second only to 1948's record. And this is being added to growing surpluses piled up from previous years. One reason for the wheat pile-up is the slump in exports, down 94 million bu. (or about 37%) in 1953's first half. Corn, the nation's biggest crop, is also heading for a glut. By October, stocks are expected to reach 4.1 billion bu., largest in U.S. history. Acreage allotments for corn are inescapable.

Of the four other "basic" crops which are supported at 90% of parity, only rice now seems likely to remain free of controls next year. Although the rice-crop estimate of 5 billion Ibs. is more than 40% above the average for 1942-51, demand is expected to be high. In the other basic crops:

P: With a cotton carryover of 4.1 billion bales, the Agriculture Department seems to have no choice but to call a referendum on marketing quotas.

P: Most varieties of tobacco are already under stringent control, and referendums will be conducted on other types this year.

P: Peanuts will continue under acreage allotments and marketing quotas.

For farmers, aristocrats of the postwar boom, higher production has not meant higher earnings, as it has for industry. But neither has the farm recession spelled disaster. The Agriculture Department reports farm income from the first half of 1953 down only 6% from a year ago. Unless the drop is accelerated later in the year, U.S. farm income in 1953 should be the sixth highest of all time.

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