FARM PRODUCTS AND CONSUMERS' PRICES

[THE following passages are from the report of the Secretary of Agriculture (U. S.) for the year 1910, pp. 9–28.]

Production of 1910. Year after year it has been my privilege to record "another most prosperous year in agriculture." Sometimes the increased prosperity has been due to weather unusually favorable to agriculture, sometimes to higher values caused either by a greater yield or demand or by greater money returns due to a scant production; but usually the advance in farmers' prosperity has been in spite of various drawbacks. It would seem that this country is so large in extent and has such varied climate, soil, and crops that no nationwide calamity can befall its farmers. Combined with this strong position in agriculture, the nation may now begin to derive increased confidence in its agriculture because of improvements that are permeating the whole country in consequence of a grand movement sustained by the National Department of Agriculture and the various State agencies.

Value of all products. Nothing short of omniscience can grasp the value of the farm products of this year. At no time in the world's history has a country produced farm products within one year with a value reaching $8,926,000,000, which is the value of the agricultural products of this country for 1910. This amount is larger than that of 1909 by $305,000,000, an amount of increase over the preceding which is small for the more recent years.

The value of farm products from 1899 to the present year has been progressive without interruption. If the value of that census year be regarded as 100, the value of the agricultural products was as follows:

The value in 1910 is almost double the value of the crops of the census year eleven years preceding. During this period of unexampled agricultural production, a period of twelve years during which the farmers of this country have steadily advanced in prosperity, in wealth and in economic independence, in intelligence and a knowledge of agriculture, the total value of farm products is $79,000,000,000.

Rising yields per acre [Page 27]. Dividing the period from 1866 to 1909 into four decades and a succeeding short period of four years, the yield per acre of corn is shown by a study made in the Bureau of Statistics to have declined 2.3 per cent. from the first decade to the second, declined 8.2 per cent. from the second to the third, increased 7.7 per cent. from the third to the fourth, and increased 7.1 per cent. from the fourth decade to the succeeding four-year period.

For wheat an even better showing is made, since the figures show a continuous increase in yield per acre, namely, 3.4 per cent. from first decade to second, 3.3 from second to third, 6.3 from third to fourth, and 9.6 from fourth decade to final four-year period.

For cotton, the first figure, 2.8, is a decline, but the rest are increases, namely, 2.6, 3.8, and 0.3.

For tobacco, the first figure, 3.4, is an increase, the second 2.0, is a decline, the third, 5.2, is an increase, and so also is the last, 9.7.

Similar facts are shown for six other leading crops, namely, oats, barley, rye, buckwheat, hay, and potatoes. Not one of the ten crops named declined in yield per acre from the third decade to the fourth, while oats was the only one to show a decline from the fourth decade to the last period of four years. The evidence is very plain that the yields per acre of our crops are now increasing, and if the facts were assembled in

detail for the States, it would be found that the percentage of increase in yield in many of them is greater than the percentage of normal increase in population; that is, the increase by births over deaths in the old native element. Such is the fact with regard to wheat for the fourth decade, as compared with the preceding one, in twenty-six States, and two of the States are all but ready to join them. In fourteen States corn production per acre has increased faster than the normal increase of population and this is almost true of five more States. The number of States in this list in the case of barley is 21; rye, 30; buckwheat, 19; cotton, 3; potatoes, 24; hay, 35; and more or less States are almost ready to enter this list in the case of all crops.

A demand that is more difficult to fulfil in production per acre is for an increase that equals or exceeds the actual increase of population, including the immigrants and that due to the temporary high birth rate of the foreign born. But, notwithstanding the fact that this difficulty is greater in the United States than it is in all other countries that have practically ceased to take much new land into cultivation, many of the States of this nation are each maintaining an increase of production in the case of one or more prominent crops that is greater than the actual increase of population. Ten States are doing this in the case of corn; for wheat the number is 22; for oats, 16; for cotton and tobacco, 1 each; for rye, 21; for potatoes, 15; and for hay, 25.

We cannot look for any other result than that the yields per acre of all our crops shall increase at an even faster rate in the future, in view of the intense interest with which our people are turning their attention toward agricultural improvement. If there are certain forces at work which, if unchecked and made more prevalent, will in the future compel us to bid against the world for food, the counteracting forces have nevertheless been already set in motion, with the promise of increasing effect.

Farmer's share of consumer's cost [page 19]. High prices

was one of the subjects of my annual report of 1909. It was shown that for many years previous to about 1897, or a little later, the prices of farm products received by farmers were even less than the cost of production, and often little if any above that cost, so that during a long period of years the farmer was not thriving. It was shown also that in the upward movement, which began about 1897, the prices received by the farmer have advanced in greater degree than those received by nearly all other classes of producers. That this should have been so was merely a matter of justice to the farmer to equalize the reward of his efforts with the rewards in other lines of production.

Increase of beef prices. The price received by the farmer is one thing; the price paid by the consumer is far different. The distribution of farm products from the farm to consumers is elaborately organized, considerably involved and complicated, and burdened with costly features. These are exemplified in my report for 1909 by a statement of the results of a special investigation into the increased cost of fresh beef between the slaughterer and the consumer.

It was established that in the North Atlantic States the consumer's price of beef was 31.4 per cent. higher than the wholesale price received by the great slaughtering houses; 38 per cent. higher in the South Atlantic States; and 39.4 per cent. higher in the Western States. The average for the United States was 38 per cent. It was found that the percentage of increase was usually lower in the larger cities than in the smaller ones and higher in the case of beef that is cheap at wholesale than of high-priced beef. It was a safe inference that the poorer people paid nearly twice the gross profit that the more well-to-do people paid.

The farmer and milk prices. Another investigation into the increase of prices in the process of distribution was made in the last week of June, 1910. This time the object was to discover what fraction of the consumer's price was received by the farmer. It was a time of high prices, of high cost of

living, and the aim was to ascertain to what extent the farmer received a return out of the high consumer's cost of farm products.

The investigation covered seventy-eight cities scattered throughout the United States, and the information was contributed by a large number of the Department's crop correspondents and by some of its special agents who made inquiries in all of the seventy-eight cities. The cities were divided into geographical groups for the purpose of computing averages, and these were combined into an average for the United States, all after proper weighting according to importance.

Milk was one of the commodities under investigation-a food product indispensable to a large fraction of the families of the nation, and now a costly one to all consumers. While it is true that the dairyman is receiving considerably more for his milk than he did before the present era of high prices, yet it was discovered in this investigation that throughout the United States he receives a scant 50 per cent., or one-half of the price paid by the consumer. The other half goes to the railway company for carriage, to the wholesale milk dealer, if there is one in the chain of distribution, and to the retailer who delivers at the consumer's door.

Freight charges for carrying milk vary according to distance, but their average may be regarded as approximately about 7 per cent. of the consumer's price. With the farmer receiving about 50 per cent. of that price and the railroads 7 per cent., the remaining 43 per cent. of the consumer's price is received mostly by the retailer.

The milk wagon of the retailer has a long route. It stops at a house or two in one city block, perhaps passes several blocks without stopping, and so proceeds to serve customers thinly distributed along a route of miles. At the same time the milk wagons of other retailers are covering various portions of the same route, and so there is a great waste of effort and of expense in the distribution.

The division of States in which the cost of distributing milk