The Nonpartisan Leader Newspaper, August 18, 1919, Page 5

L ’ Wheat Growers to Bear Brunt of Price-Fixing for Second Time if Capital Plan Is Adopted—Packers With Big Profits Undisturbed EWS dispatches from Washing- ton state that government offi- cials, working at the high cost of living problem, have decided that the profits made by the wheat farmers of the North- west are at the basis of the en- tire problem. The plan that is now being discussed, it is re- ported, is to buy the entire wheat crop at the guar- anteed price of $2.30, to sell it again to the millers at $1.50, the government pocketing the loss, as is being done in Great Britain, and to expect that reduced bread prices, brought about by this method, will bring down the cost,of living sufficiently to end the problem. If this plan is carried out the wheat growers of the Northwest will have been made to bear the brunt of price-fixing for the second time. In Sep- tember, 1917, when the price was first fixed on wheat at $2.26, wheat was selling in the open market at $3 and in some cases for higher figures. The southern wheat, having been harvested earlier, had sold around the $3 figure, but when the north- western wheat came on the market the government price was established and it ruled as a maximum as well 'as a minimum. Much the same course seems likely to be followed this year. As this is written No. 1 northern is selling in Minneapolis for $2.75.. It appears prob- able that the bulk of the southern crop will change hands at around this price. But if the government plan is followed the northwesternt crop will be bought in at a forced price of $2.30, or 45 cents a bushel below the fair market. Northwestern grain growers did not protest against the lower price fixed in 1917. At their monster convention in St. Paul in September, 1917, they passed resolutions com- mending the plan of price- fixing, to hold down the cost of living and reduce war prof- its. They demanded, in addi- tion, only that prices be fixed on the articles that the farmer buys as well as what he sells. But the farmers have been disappointed in expecting the cost of living to be held down by general governmental pricé-fixing. Today the fixed price for wheat, considering all conditions, averages about the same as two years ago. But mill feeds have gone up 25 per cent as compared with 1917. Bread is higher. Steel has increased in price, carry- ing with it increased prices for every kind .of farm ma- chinery. The farmer’s neces- sary “flivver” automobile is higher, and difficult to get at any price. Rents ‘have in- creased, both on farm and city properties. Meat is enormously higher. PRODUCING COST NOW OVER PRICE Is $2.756 wheat in the Min- neapolis market a figure giv- ing the average farmer a large’ profit? Two years ago a group of representative farmers work- ed out the cost of an acre of wheat in North Dakota at $23.95. Here are their fig- ures: s In planting the 1919 crop, seed wheat possibly was procured at a slightly lower figure, but this saving would be more than counterbalanced by in- creased prices for labor in all items. That the acreage cost cited above is close to correct is shown by the fact that actual costs on the big Cloverlea farm in eastern North Da- kota, which has had an accounting system kept as accurately as a bank’s for a long term of years, were $22.47 per acre, while Commis- sioner of Agriculture Hagan of North Dakota reported $26.56 as the average cost. The average yield in North Dakota, over a long term of years, has becen slightly more than seven bushels to the acre. At seven bush- els to the acre the cost 'per bushel would be $3.82. Taking a yield of 10 bushels per acre, the cost per bushel would be $2.39. This is just about what the average farmer in North Dakota is this year getting for his wheat, after deducting from the Min- neapolis price freight and handling charges and considering the fact that the average North Da- kota wheat will grade between No. 2 and No. 8 rather than No. 1 northern. ; North Dakota’s crop probably will not average above seven bushels to the acre planted. Drouth- stricken’ Montana will not average as much as seven bushels to the planted acre. The average farmer in . both of these states, even under present prices, when all cost elements are taken into consideration, will lose. ‘What will be the probable result of holding wheat down to the minimum? Our wheat farmers will be short of money. They will not be able to buy as they should. Next year they will plant less wheat because of this year’s losses, and fundamental con- ditions will be mare disturbed than now. TIME TO DEHORN HIM We can not afford to decrease farm production. In fact, we have soaring costs of food largely be- cause we have prevented the farmer from producing all that he might. On many commodities the farmer gets about 35 cents of what the consumer pays; on others he gets as high as 50 cents out of the dollar; and in general he would not average 40 cents. The immediate remedy for food prices lies, then, not in attacking the farmer’s 35 cents, or in gov- ernment subsidies, by selling wheat to the millers at less than it cost to produce, but in tackling the other 65 cents which goes to bring farm products from the farm to the people. We must completely reorganize our distribution system so that it will operate efficiently and at cost or near cost. Unless we do this even the raid on the farmer’s 35 cents will do the consumers no good because the middle- man will take it up. FARMERS’ SHARE IN LOAF OF BREAD LESS THAN HALF According to studies made by Doctor E. F. Ladd, the well-known North Dakota expert, a barrel of flour will make 800 loaves of 14-ounce bread. If the farmer received an average of $2 a bushel for his wheat in 1917 and 1918, his share of the pro- ceeds of this 14-ounce loaf was 3 cents. The con- sumer, on the other hand, paid 8 to 10 cents. If the farmer were to get as much as $3 a bushel for his wheat, his share in the cost of the loaf would be less than 4% cents. _ It is thus evident that the proposed reduction in the price for wheat to the farmer of 45 cents a bushel would make little appreciable difference in the cost of a loaf. ; The following figures show the big margin be- tween farmer and consumer even more strikingly: 300 loaves of bread at 10625 0o o s b o $30.00 Mill feeds in four bushels, 80 pounds of wheat.... 1.50 POtal s st dileisidiaisinss $31.50 Four bushels, 30 pounds of wheat at $2.75...... 12.37 MATEIN. oscamneswias oy $19.13 In this margin lies the im- mediate possibility of relief from high cost of wheat prod- ucts and the same holds true of other farm products. We must increase production rather than diminish it and we can do that only by mak- ing production profitable to the producers. The wheat farmers are not profiteers. The real profiteers, who are responsible for the high cost of living in effect today, are companies like these: Armour & Co., average profits before the war, $4,- 746,632; in 1916, $20,100,000; in 1917, $21,295,563; in 1918, $15,247,838. x ~ Standard Oil of Indiana, 687,696; in 1916, $30,043,614; in 1917, $25,408,931; in 1918, $23,263,879. United Fruit company, av- erage pre-war profits, $4,978,- 043; in 1916, $11,226,208; in 1917, $13,037,955; .in 1918, $14,953,074. The Central Leather com- pany made an average of $3,- 472,804 before the war; last year it made $6,476,434. The United States Steel The Farmer and the High Cost of Living average pre-war profits, $14,- - i corporation made before the ~ % 5 s el 1 Seed (114 hushels at §3)..84.50 \'I 7 war an average of $63,585,- /) ‘l,' .. ed 7 /lfll\ N !“ Discing o = ?/%/’,i‘{. = Plowing ..... 777; last year it made $125,- DR 318,368. So-called war profits taxa- i ” - . tion has not prevented these | E‘Qfifik;n%.:::::_:::::::::: 1 ~ . —Drawn expressly for the Leader by W. C. Morris. ¢oncerns frgm pocketing : {'IT,:‘S’ff:m;c; The packers have been having their own way in the food market for so long that they are apt enormous war profits. No | < Fertilizer ... to consider any attempt to limit them as undue interference. However, the Kenyon-Anderson move has yet been made to é licensing bill now before congress has brought the packers to the snubbing post, and the legis- lators are being asked to dehorn the bull. It is likely that the protests against the in- __creased cost of food may have some effect on the decision of congress. PAGE FIVE ; attack these excess earnings, but again the farmer is about to be penalized,