Agricultural pricesWallace, Henry A. (Henry Agard)
Science
Agricultural prices
Wallace, Henry A. (Henry Agard)
Agriculture -- Statistics; Farm produce; Prices
Soon after the report of the commission on cost of producing hogs, the
Food Administration announced among other things that it would do its
best to pay hog producers, for a hundred pounds of hog flesh, the
equivalent of thirteen bushels of the corn which went into these hogs,
the ratio system to apply to hogs farrowed in the spring of 1918. It was
expected that there would be an urgent need for hog products during
1919, and it has generally been regarded that this announcement of the
Food Administration was wise. The thirteen-bushel ratio was 13 per cent
over the historic ratio, and encouraged the transforming of a larger
amount of corn into hogs than usual.
When it came to putting the thirteen-bushel ratio into effect, in the
fall and winter of 1918–1919, the Food Administration did all in its
power to squirm out of living up to its guarantee. First, the effort was
made, in the month of September, 1918, to make it appear that the
thirteen-bushel ratio was based on a ratio between farm corn prices and
Chicago hog prices, in spite of the fact that the pamphlets originally
issued by the Food Administration to farmers of the corn belt in
November of 1917 explained the ratio on a basis of Chicago corn prices
and Chicago hog prices. By using farm corn prices, the Food
Administration secured a figure of about $2.50 per hundredweight lower
than if the thirteen-bushel ratio had been applied literally as
described in the original pamphlets. The Food Administration, however,
claimed that it could not live up to its original guarantee, because the
export prices of pork would not justify it. In this respect, it is
interesting to note that in August of 1918, just before the Food
Administration took up this matter of carrying out its thirteen-bushel
guarantee, Great Britain reduced its maximum price on American bacon by
about $12 per hundredweight. It is also interesting to note that the
British Food Administration was making money on its handling of pork
products, altho it was losing money on its wheat. Those American
producers who were most familiar with the situation believed that there
was a concerted effort by the American and British food administrations
to buy the large American hog crop, which had been secured by the
thirteen-bushel guarantee, as cheaply as possible, avoiding its
guarantee with such chicanery and deceit as an experienced business man
knows how to use in case of emergency.
Public-domain text, read in full here on John Shaqi.
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