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Full text of "Prices of Illinois farm products, 1931-1934"

THE UNIVERSITY 

OF ILLINOIS 

LIBRARY 



cop. 2- 



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UNIVERSITY OF ILLINOIS LIBRARY AT URBANA-CHAMPAIGN 



MB 05m 



L161 O-1096 



Prices of Illinois 
Farm Products 

1931-1934 



By L. J. NORTON and 
T. R. HEDGES 



UNIVERSITY OF ILLINOIS 
AGRICULTURAL EXPERIMENT STATION 

Bulletin 422 



CONTENTS 

FAG 

TRENDS IN PRICES OF ILLINOIS FARM PRODUCTS, 1921 TO 1934 

Price Trends of Farm Products as a Group ' 

Grains 

Livestock li 

Livestock and Poultry Products 1' 

Miscellaneous Products 2( 

Changes in Prices in Different Sections 2- 

COMPARISON OF PRICES OF INDIVIDUAL PRODUCTS, 1931-1933 

AND 1934 2 

Relative Position of Different Products, 1931-1933 28 

Relative Positions in 1934 36 

Range and Variations in September Prices of Individual Products From 

1930 to 1934 38 

PRICES OF FARM PRODUCTS COMPARED WITH PRICES OF 

GOODS BOUGHT BY FARMERS, 1931-1933 AND 1934 44 

CHANGES IN PRODUCTION ON ILLINOIS FARMS 48 

Changes in Crop Production, 1920 to 1934 48 

Changes in Livestock Numbers, 1921-1929 and 1931-1933 51 

CHANGES IN EXPORTS OF IMPORTANT ILLINOIS FARM 

PRODUCTS IN RECENT YEARS 54 

Exports of Lard and Pork 56 

Exports of Wheat and Flour 57 

REASONS FOR THE GENERAL PRICE RISE, 1933-1934 59 

Effects of Monetary Policy on Prices 60 

OUTLOOK FOR PRICES OF FARM PRODUCTS DURING NEXT 

FEW YEARS 63 

Probable Price-Level for Farm Products 63 

Probable Changes in Relative Positions of Prices of Individual Products 64 

SUMMARY 65 

APPENDIX.. 69 



The analyses of prices of Illinois farm products in 1931- 
1934, and the forecasts of probable price trends, presented in 
this bulletin, were made in late 1934 and early 1935. 



Urbana, Illinois December, 1935 

Publications in the Bulletin series report the results of investigations made 
by or sponsored by the Experiment Station 



Prices of Illinois^Farm Products 
From 1931 to 1934 

By L. J. NORTON and T. R. HEDGES* 

OME of the most extreme and rapid price changes ever experi- 
enced by Illinois farmers occurred during the years 1931 to 
1934. While in 1930 prices for Illinois farm products were de- 
clining, they still averaged 25 percent above the prewar level (1910- 
1914). By the first quarter of 1933, when the low point in the 1931- 
1934 period was reached, they had declined to about half the prewar 
level. At the end of 1934, however, only twenty-one months later, in- 
creases had occurred which brought them back to approximately the 
1910-1914 plane, or to 80 percent of the 1930 average. Thus in three 
years prices of Illinois farm products declined more than half, and 
within two years more they had recovered about three- fourths of their 
losses. 

In an earlier bulletin dealing with Illinois farm-product prices 2 
the statement was made that "there are some indications that 1930 
conditions reflect the beginning of a new period during which the 
general level of prices will be lower than for the preceding nine-year 
period." In the same study it was pointed out that "examinations of 
declines during other periods when the price trend was downward 
shows that only a small part of the decline is typically recovered in the 
upward swing of reaction from the decline." The behavior of prices, 
not only of farm products but of commodities in general, during 1931- 
1934 has borne out these statements. 

Two important factors in recent price changes, factors which were 
not taken into consideration when forecasts of price conditions were 
made in 1930, were the change in monetary policy adopted by the 
federal government in 1933 and the severe drouth of 1934. Both 
factors operated to raise prices of farm products in manners de- 
scribed in detail in subsequent parts of this bulletin. Just how much 
effect the monetary change will have on future prices remains a ques- 
tion, altho the level will undoubtedly be substantially higher than it 
would have been had there been no such change. 

'L. J. NORTON, formerly Assistant Chief in Agricultural Economics; and 
T. R. HEDGES, formerly Assistant in Farm Management, Department of Agri- 
cultural Economics. 

'Norton, L. J. Prices of Illinois farm products in 1930. 111. Agr. Exp. Sta. 
Bui. 365, 1931. 

3 



BULLETIN No. 422 



[December, 



TRENDS IN PRICES OF ILLINOIS FARM PRODUCTS, 

1921 TO 1934 

Altho the present study deals primarily with changes in price rela- 
tionships during the period from 1931 to 1934, the graphs herein pre- 
sented on price trends go back as far as 1921 in order that a setting 
or basis of comparison for the later changes may be provided. The 
graphs are not carried back before 1921 because price developments 
since that date stand out more clearly when they are not overshadowed 
by the extraordinary price changes which occurred during the first 
postwar deflation, that of 1920-1921. A period of fourteen years is 
long enough to be interesting in itself, particularly when it includes 
as many unusual price changes as the period from 1921 to 1934. 

All graphs representing price trends show quarterly averages of 
actual prices obtaining in Illinois farming communities on the 15th 
day of each month, as compiled by the U. S. Bureau of Agricultural 
Economics. 

PRICE TRENDS OF FARM PRODUCTS AS A GROUP 

Changes in the general price-level of twenty Illinois farm products 1 
by quarterly intervals from 1921 to 1934 are shown in Fig. 1. 



I I 
ALL FARM PRODUCTS 




1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 

FIG. 1. ILLINOIS FARM PRICE INDEX, QUARTERLY, 1921-1934 



'The price indexes represented in Figs. 1 to 25 were computed by the 
Illinois-U. S. Crop Reporting Service. A. J. Surratt, Agricultural Statistician 
in charge. 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



In general the prices of Illinois farm products during 1921-1929 
held successively to two levels, the first extending from 1921 to the 
middle of 1924 and the other from 1925 to 1929. In the later period 
the price index declined from 1925 to the end of the first quarter of 
1927, and then worked upward until 1929. From late 1929 until the 
first quarter of 1933 the trend was steadily downward, broken only by 
one slight upturn in the third quarter of 1932. At the end of the 
period of decline, prices averaged just about one-third of what they 
had been in 1929. 

The upturn in prices during 1933 and 1934 passed thru two phases, 
an initial rise following the beginning of recovery in 1933, which 
brought the average up to about 70 percent of 1910-1914 levels, and 
a second rise beginning in the third quarter of 1934 as a result of the 
reduction in supplies caused by the drouth. That it required a stimu- 
lant as severe as the drouth of 1934 to bring price averages back to 
prewar levels is indicative of the strength of the forces which must 
be overcome if 1930-1933 price declines are to be regained in full. 

GRAINS 

Corn. Corn prices maintained a high and fairly stable level from 
mid- 1927 to mid- 1929. In 1930, in spite of a short crop, corn prices 
weakened, starting a downward trend (Fig. 2) that continued until the 
first quarter of 1933. As a part of the economic recovery that began 
in 1933, corn prices advanced rapidly. Early in the following winter 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 2. CORN: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 



BULLETIN No. 422 



[Decembi 



the government began to lend 45 cents a bushel on corn stored in seal< 
farm cribs, a policy which operated to maintain prices around th 
level until the drouth of 1934 cut the corn crop and caused furth< 
price rises. 

It should be noted that the price of 40 to 45 cents a bushel, whic 
was established before the drouth, was not much over half the 1921 
1929 average. With the development of higher prices for livestocl 
especially for hogs, which will no doubt take place when employmer 
and general business activity become more nearly normal, corn price 
will probably become established at higher figures than the predrout 
level even tho much more liberal supplies of corn are available thai 
during a drouth year such as 1934. The fact that the high prices pre 
vailing at the end of 1934 accompanied a very short crop should not b< 
lost sight of, however, by anyone who is attempting to forecast th 
normal level of corn prices over the next few years. 

Oats. Oats prices began to display signs of weakness in lat< 
1929 and declined steadily "until the first quarter of 1933. Since 193^ 
the trend has been upward (Fig. 3). Prior to the drouth and th< 
severe chinch bug infestation of 1934, a level of 30 to 35 cents i 
bushel had been reached. 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 3. OATS: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

With the decline in numbers of horses practically checked and 
some increase likely to occur within a few years, oats prices will 
probably be relatively higher than corn prices during the next few 
years compared with 1921-1929 averages. 

Wheat. Despite one definite rise early in 1928 and a few minor 



1935} 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



partial recoveries, the general trend of wheat prices was downward 
from the high point reached in early 1925 to the low of late 1932 
(Fig. 4). Following the general price decline that occurred late in 
1929, wheat prices declined steadily until the middle of 1931 in spite 
of various attempts at stabilization by the Federal Farm Board. For 
about a year, in 1931 and 1932, the price was stable at a very low 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 4. WHEAT: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 



level. In the second quarter of 1933 wheat prices advanced, with the 
other grains, to a level of about 80 cents a bushel, or to about two- 
thirds of the prewar average. Even the very short wheat crop of 1934 
did not cause a substantial rise in the price of wheat. 

On account of difficulties in connection with exportation, the low 
world price-level, and the probable necessity of using a larger portion 
of the domestic wheat crop for feed than formerly, it is likely that 
over the next few years wheat will be cheaper in relation to the other 
cereals when comparisons are made with 1921-1929 prices. The level 
of wheat prices prevailing in other parts of the world acts as a check 
upon wheat-price advances in the United States, because if the do- 
mestic price goes sufficiently high, wheat will be imported over the 
barrier imposed by the duty of 42 cents a bushel. Further advance in 
the level of wheat prices in the United States now depends on further 
rise in the world level of wheat prices. 



8 



BULLETIN No. 422 



[December 



Barley. Prices of barley during the base period (1921-1929) 
were quite erratic, with peaks occurring early in 1925 and the first hall 
of 1928 (Fig. 5). After 1929 the general trend was similar to that 
of other grains downward to 1933 and then upward altho barley 
prices were relatively lower than other grain prices in 1929 and did 
not decline as rapidly as other grains in 1930 on account of a short 
crop. By the middle of 1934 barley prices were above the 1921-1929 
level as a result of increased demand and of reduced production 
caused by the drouth and chinch bugs. 




1921 "22 '23 '24 '25 '26 '27 '20 '29 '30 '31 '32 '33 '34 1935 

FIG. 5. BARLEY: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

Because of the increased demand for barley by the brewing in- 
dustry, barley prices during the next few years will probably average 
higher than prices of other cereals in relation to 1921-1929 prices. 

Rye. Rye prices in general increased slightly from 1922 to 1929 
(Fig. 6). In late 1929 a decline began that continued until the low 
level of 1931-1932 was reached. Early in 1933 rye prices turned up, 
along with other cereals, and have fluctuated between 55 and 70 cents a 
bushel since the third quarter of 1933 in spite of a crop in 1934 so short 
that some rye was imported over a 15 -cent import duty. 

Cowpeas. Prices of cowpeas went thru two cycles from 1921 to 
1929 (Fig. 7). Altho the trend was downward from the first quarter 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



140 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 6. RYE: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

of 1929 until late 1932, the sharpest decline occurred during 1931. In 
the first quarter of 1933 the price turned upward, but the rise was er- 
ratic and by the end of 1934 cowpea prices were only about 50 per- 
cent of the 1921-1929 average. This failure of cowpea prices to rise 
with prices of other grains during 1934 may be accounted for by the 
favorable weather conditions in the cowpea-producing sections and 
the resulting above-average crop in 1934. There is no commercial 



400 



350 




1921 '22 '23 '24 '25 '26 '27 '29 '30 '31 "31 '32 '33 '34 1935 

FIG. 7. COWPEAS: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 



10 



BULLETIN No. 422 



[December, 



market for cowpeas except for seed, and consequently the demand 
for them depends on farm incomes in areas where cowpeas are com- 
monly grown. 

Soybeans. The general trend in soybean prices was downward 
from 1921 to the low levels of 1931-1932, and then upward during 
1933 and 1934 (Fig. 8). A fairly regular seasonal variation in prices is 
evident. The downward trend from 1921 to 1930 reflects the increasing 
production that occurred during those years and the growing tendency 



350 



300 



/ 192 1 -1929 AVERAGE =204.0 




50 



1921 '22 '23 '24 '25 '26 27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 8. SOYBEANS: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

for the demand to come from commercial processors rather than from 
seed purchasers. After the sharp decline from 1929 to 1931, the price- 
level reached was but little more than one-eighth of the 1921-1929 
average. Early in 1932 a rise began, but gains were erratic, and for 
the last quarter of 1934 the average was not quite 50 percent of 1921- 
1929 prices. 

Compared with 1921-1929 averages, prices of soybeans will prob- 
ably continue to average low, because of increased production. In 
comparison with prices of other cereals, however, prices of soybeans 
are likely to hold a reasonably favorable position, especially if present 
reduced cotton acreages, resulting in lower supplies of and supporting 
higher prices for oil and meal, are maintained. 

LIVESTOCK 

Hogs. Hog prices were, in general, fairly high and stable '"rom 
late 1924 to mid-1930, with peaks of $12.53 and $12.66 per hundred- 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



11 



weight in the third quarters ;of 1925 and 1926, respectively, following 
the short corn crop of 1924 (Fig. 9). The downward readjustment 
from these peak prices began in the summer of 1926, just as it is likely 
to begin in 1936 following the short corn crop of 1934 and the short 
hog supplies of 1935. 

The great decline in hog prices began in mid- 1930. This decline 
did not reach a point at which prices could level off until early in 1932. 
The low point ($3.02) came in the fourth quarter of 1932. The long 
continuance of this low level, which lasted with fluctuations to the sum- 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '3O '31 '32 '33 '34 1935 

FIG. 9. HOGS: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

mer of 1934, may be explained partly by the occurrence of an ex- 
tremely low level of consumer incomes at the time that the peak of 
the hog cycle made necessary the liquidation of excess numbers of 
hogs. Moreover the devaluation of the dollar did not act immediately 
to raise the price of hogs as it did of grains, because the market for 
pork is largely domestic and hog prices must be steadily tested against 
consumer incomes, which, in turn, did not rise quickly in response to 
the devaluated dollar. And, furthermore, the immediate effect of the 
processing tax on hogs, levied at the beginning of the marketing season 
of 1933-34 to finance the program of the Agricultural Adjustment 
Administration, was to reduce the market price of hogs. 

Because of drastically reduced hog production, the trend of hog 
prices in 1935 will be upward. After 1935, assuming normal crop con- 
ditions, the hog price-level will depend primarily on the degree of re- 
covery in domestic demand, altho the quantity of supplies, as affected 
by control programs and exports, will be an influencing factor. 



12 



BULLETIN No. 422 



[December, 



Beef Cattle. Prices of beef cattle during the period 1921 to 1933 
went thru a complete cycle from low to low (Fig. 10). After the peak 
prices of about $11 per hundredweight in 1928-1929, the trend was 
steadily downward to the low of $4.25 per hundredweight in 1933, a 
decline reflecting both the downward cyclical movement in cattle prices 
and the general decline in commodity prices after 1929. The cattle 



12 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 



FIG. 10. BEEF CATTLE: QUARTERLY AVERAGE OF ILLINOIS 
FARM PRICE, 1921-1934 

price-cycle was shortened (i.e., the duration of downward movement 
was reduced) by the general upturn in commodity prices and the 
drouth of 1934, which led to a great reduction in numbers of cattle. 1 
The cyclical movement of prices and numbers of beef cattle will 
undoubtedly be repeated. During the next few years the trend should 
be upward, if the liquidation which occurred in 1934 was sufficiently 
complete to make further liquidation unnecessary. 

Milk Cows. Prices of milk cows followed the same great cycle 
as prices of beef cattle, with an upward trend from late 1921 to late 
1929 (Fig. 11), and a steady decline from a level of around $100 a 
head at the peak to an average of about $35 a head in 1933. Stability 
was achieved at the lower level in the first quarter of 1933. With the 
rise in feed prices in 1933, dairying became less profitable, and a period 

'Total government purchases of cattle in the drouth areas up to November 
22, 1934, amounted to 7.3 million head. 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



13 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 "33 '34 1935 

FIG. 11. MILK Cows: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

of liquidation of dairy cows set in. As long as this liquidation con- 
tinues, prices of milk cows will lag, but the rise in basic beef-cattle 
values will tend to support and raise prices of milk cows. 

Veal Calves. Prices of veal calves went thru a cycle similar to 
that of beef cattle and milk cow prices, with a peak of about $14 per 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 



FIG. 12. VEAL CALVES : QUARTERLY AVERAGE OF ILLINOIS 
FARM PRICE, 1921-1934 



14 



BULLETIN No. 422 



[December, 



hundredweight in 1929 (Fig. 12). The low point ($5 per hundred- 
weight) was reached in 1932, but at the end of 1934 no appreciable 
upturn had occurred. This lag reflects the wholly domestic nature of 
the demand for veal, and the effects of continued liquidation in the 
dairy industry. 

The cyclical movement of prices of veal calves may be expected to 
be repeated in conjunction with the next cycle in cattle prices. 

Sheep. Sheep prices moved steadily upward from 1921 to 1924 
and maintained a fairly stable level until 1929, except for a dip in 
1926, at about $6.50 per hundredweight (Fig. 13). A sharp decline 
began in 1929 and carried sheep prices to a low of $1.98 in the fourth 
quarter of 1932. After 1932 a moderate increase in sheep prices oc- 
curred, not all of which was maintained to the end of 1934. 




i 

i 

1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 13. SHEEP: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

With a large decrease in numbers of sheep in 1934, and prices of 
lambs and wool higher than the low levels of 1932, the trend in sheep 
prices should be upward during the next few years. With 1921-1929 
prices as a basis of comparison, however, sheep may be expected to 
be relatively lower in price than other kinds of livestock because from 
1921 to 1929 they were relatively high. 

Lambs. Prices of lambs followed a course similar to that taken 
by sheep prices during the period under discussion upward from 1921 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



15 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 
FIG. 14. LAMBS: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

to 1924, more or less stable at a level of about $12.50 per hundred- 
weight from 1925 to 1929, sharply downward from early 1928 to about 
$4.50 per hundredweight in the last quarter of 1932, and only moder- 
ately upward since then (Fig. 14). 

Because lamb prices also were relatively high during the base 
period, lambs as well as sheep are likely to be relatively lower in price 
than other domestic animals when average prices in 1921-1929 are 
taken as a standard. 

Horses. Prices of horses were at a low but fairly stable level, 
during the base period (Fig. 15). Reflecting the general decline in 
commodity prices, horse prices dropped from about $85 a head in 
the middle of 1930 to an average of $60 at the end of 1932, a decrease 




60 



1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 15. HORSES: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 



16 



BULLETIN No. 422 



[December, 



that was moderate compared with the average of all farm products. 
Upon the general rise in commodity prices in 1933, horse prices turned 
upward, and by the end of 1934 were again at 1921-1929 averages. 

Because of reduced numbers of horses, prices for them will prob- 
ably be high in relation to other farm products for a number of years 
when 1921-1929 averages are taken as a standard. But on a prewar 
(1910-1914) price basis they are likely to be relatively low because of 
a permanent reduction in demand. 

LIVESTOCK AND POULTRY PRODUCTS 

Milk. During the base period the price of milk on Illinois farms 
was quite stable at about $2.36 per hundredweight (Fig. 16). From 



.f 1921-1929 AVERAGE '2.36 




1921 '22 '23 '24 '25 '20 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 16. MILK: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

the last quarter of 1929, however, to the first of 1933 milk prices de- 
clined steadily, with only two very brief seasonal upturns. Moderate 
improvement has occurred since 1933, partly as a result of scarcity of 
feed and reduced production because of the drouth of 1934. 

In keeping with expectation, milk prices have lagged behind prices 
of grain in the rise since 1933 because grain prices were directly 
affected by short crops and the devaluation of the dollar. Milk prices 
must be tested constantly against the ability of consumers to buy ; and 
this ability was increased only indirectly by the devaluation and not 
at all by the drouth. 

Butterfat. From 1922 to early 1929 the trend in butterfat prices 
was steadily upward, tho at a somewhat irregular rate on account of 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



17 



the usual seasonal fluctuations and the minor business depression of 
1924 (Fig. 17). In the general price decline of 1929-1933, the down- 
turn came early in butter fat prices because they are highly sensitive to 
consumer income and form an excellent indicator of business trends. 
The decline was steady, except for a brief seasonal upturn in 1931, 
dropping from 47 cents a pound in early 1929 to one-third of that price 
at the beginning of 1932. Since early 1932, when the low point was 
reached, the trend has been gradually but definitely upward. 




1921 "22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 17. BUTTERFAT: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

Continued improvement, however, depends on increased consumer 
income in the United States and a higher level of butter prices in 
foreign countries. World economic conditions have stimulated butter 
production and tended to concentrate surplus supplies in a few markets, 
thereby depressing the price in world market centers. Despite a tariff 
of 14 cents a pound on butter, low foreign price-levels will check a rise 
in domestic butter prices even tho consumers' incomes improve suffici- 
ently to justify the higher price. 

Chickens. Two cycles in chicken prices occurred during the 
base period, one in 1921-1926 and the other in 1926-1929 (Fig. 18). 
In 1929, when the decline of the current depression began, the price 
of live chickens was at a rather high level. The decline continued with 
but slight interruptions caused by seasonal changes, until late 1933. 



18 



BULLETIN No. 422 



[December, 



The recovery since 1933 has been quite moderate. Chicken prices 
have been held down by the liquidation that has taken place in poultry 
flocks as a result of the rapid increase in feed prices, a situation that 
is to be expected in the early stages of a period of price recovery. Once 
this period of liquidation is over, somewhat better chicken prices may 




192t -22 



'31 '32 '33 '34 1935 



FIG. 18. LIVE CHICKENS : QUARTERLY AVERAGE OF ILLINOIS 
FARM PRICE, 1921-1934 

be expected, altho advances will be moderate until general consumer 
incomes increase more than they have up to the first of 1935. 

Eggs. Egg prices are marked by wide seasonal fluctuations 
(Fig. 19). Since 1927, however, there has been a marked reduction in 
the price spread between the second and fourth quarters, with the late 
spring prices higher than formerly in relation to early winter prices. 
This narrowing of the price spread probably reflects a change in the 
methods used by poultrymen, many of whom are placing more empha- 
sis than formerly on late fall and winter egg production, with the result 
that available supplies at those seasons are increased. There has been 
a steady decline in seasonal price peaks since 1925. 

The general decline in egg prices began in 1929 and continued 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



19 




1921 '22 '23 '24 '25 '26 '27 '26 '29 '30 '31 '32 '33 '34 1935 

FIG. 19. EGGS: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 



until the second quarter of 1932. Since then the trend has been very 
moderately upward. Altho the temporary influence of shortened pro- 
duction may strengthen egg prices, substantial recovery will not come 
until general economic conditions favor better prices for all of the 
animal foodstuffs, that is, until better employment conditions improve 
consumer incomes. 

Wool. Wool, which represents the industrial raw materials 
better than any other Illinois farm product, recovered in price early in 
the 1921-1923 period and maintained a rather high level at an average 
of about 35 cents a pound from 1923 to 1928 (Fig. 20), but entered 
the great 1929-1932 price decline earlier than most farm products, 
falling precipitously from the high point of 43 cents a pound in the 
third quarter of 1928 to about one- fourth of the peak value in 1932. 
With the upturn in late 1932, wool prices increased sharply, the in- 
crease being about threefold in 1933; but upon the cessation of the 
textile boom of 1933, they began to drop back. It may be asked 
whether stability at about 70 percent of the 1921-1929 average sug- 
gests the level of prices which may be expected during the next period 
of business activity. Upon a basis of the price developments of 1922- 
1923, the best answer would be that the stability reached in 1934 indi- 
cates the lower range of such a level. 



20 



BULLETIN No. 422 



[December 




1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 "33 '34 1935 

FIG. 20. WOOL: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

Because of increased wool production from a larger number of 
sheep in the United States, wool prices during the next few years are 
likely to be relatively lower than prices of the general run of farm 
products if 1921-1929 price averages are taken as standard. 

MISCELLANEOUS PRODUCTS 

Hay. Altho hay prices fluctuated widely from 1921 to 1932, the 
general trend was downward, with the rate of decrease somewhat more 
rapid after 1930 (Fig. 21). Hay prices ranged during this period 
from $18.50 a ton in January, 1921, to $12.40 a ton in the fourth 
quarter of 1930. By the fourth quarter of 1932 the price had dropped 
to $5 a ton. 

The decline during the earlier part of this period reflects decreas- 
ing demand for hay, caused by a decrease in livestock numbers. The 
average acreage of hay harvested in Illinois in 1930-1932 was only 
79 percent of the average for 1920-1928, and average production was 
only 83 percent. A sharp increase in prices beginning in the first 
quarter of 1933, caused by shorter crops and higher feed prices, car- 
ried the price up to $14.50 a ton at the end of 1934. 

In view of the probable upward trend in production of hay within 
the state if AAA programs are continued, the future level of hay 
prices will probably be rather low, even in relation to 1921-1929 
averages. Declines in hay prices, however, are of minor importance 



J9J5] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



21 




1921 '22 '23 '24 '25 '26 '27 '26 '29 "30 '31 '32 '33 '34 1935 

FIG. 21. HAY: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 

to most Illinois farmers, for most of the hay produced is fed on the 
farm where it is grown and feeding value is not affected by price. 

Clover Hay. Prices of clover hay have followed practically the 
same trend as prices of hay in general (Fig. 22). The decline from 




1921 '22 '23 



'31 '32 '33 '34 1935 



FIG. 22. CLOVER HAY: QUARTERLY AVERAGE OF ILLINOIS 
FARM PRICE, 1921-1934 



22 



BULLETIN No. 422 



[December, 



1921 to 1929 was not quite so clearly marked in legume hay prices as 
in the average of prices of all kinds of hay, but the same general 
fluctuations are clearly evident. An important factor in maintaining 
the market value of clover hay in relation to nonlegume hay during 
the base period was the increasing proportion of the hay supply that 
was used for feeding animals other than work animals. 

Red Clover Seed. The price of red clover seed has apparently 
gone thru a long cycle since 1921, during which price changes have 
been quite abrupt (Fig. 23). The trend was upward from 1921 until 




1921 '22 '23 '24 '25 '28 '27 '28 '29 '30 



32 '33 '34 1935 



FIG. 23. CLOVER SEED: QUARTERLY AVERAGE OF ILLINOIS 
FARM PRICE, 1921-1934 

the peak price of nearly $24 a bushel was reached in 1927, and down- 
ward from 1927 to the low of only $4.25 a bushel in late 1932. Be- 
ginning with 1933 a definite rise brought the price up to around $11.50 
a bushel at the end of 1934. 

During the next few years, except upon occasions of very short 
crops, prices of clover seed may be expected to be relatively lower 
than prices of other Illinois farm products when comparisons are 
based on 1921-1929 averages, because of the very high average of 
clover seed prices during the base period. 

Potatoes. Potato prices are very erratic owing to wide varia- 
tions in production coupled with the perishable nature of the crop and 
the fact that the demand for it is rather inflexible because of fixed 
food habits. This characteristic is well illustrated by the extremely 
high prices that obtained in late 1925 and early 1926 following the 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



23 



unusually small crop of 1925 (Fig. 24). After this peak, potato prices 
declined sharply as a result of progressively larger crops stimulated 
by the high prices of 1925-1926 and culminating in the bumper crop of 
1928. A downward trend began in the second quarter of 1930 and 
continued until the end of 1932. The upturn in 1933, following a 
short crop, was very sharp, and prices rose above their 1921-1929 



300 




1921 "22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 24. POTATOES: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 



350 



300 



250H-I-- 



tt 200 
in 




150 



100 



1921 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 1935 

FIG. 25. APPLES: QUARTERLY AVERAGE OF ILLINOIS FARM PRICE, 1921-1934 



24 BULLETIN No. 422 [December, 

average in mid-1933. The 1934 crop was rather large, and at the end 
of 1934 prices were down around 75 cents a bushel. 

Potato prices may be expected to be erratic in the future. Lower 
labor costs may lower the price in relation to other farm products when 
comparisons are based on 1921-1929 averages. 

Apples. The price of apples dropped early in the depression 
from the 1921-1929 average of $1.72 a bushel at the beginning of 1931 
to a low of 60 cents a bushel during the harvest season of the same 
year (Fig. 25). Each season from 1932 to 1934 the farm price rose in 
the second quarter of the year to a peak higher than that of the year 
before. This rise reflects shorter commercial crops each year, as well 
as the general recovery in prices beginning in 1933. 

CHANGES IN PRICES IN DIFFERENT SECTIONS 

The prices and price trends given in the foregoing discussion are 
averages for the state as a whole rather than for any particular lo- 
cality. Variations among prices prevailing in different sections of 
the state might be expected in view of varying local conditions, such 
as differences in distances to market or in local demand. There are 
rather striking indications, however, that declines in prices of the 
various commodities during the past five years (1930-1934) were fairly 
uniform in all sections of the state, and that, where variations in 
amounts of price declines did occur, the larger decreases in price were 
usually in those districts where prices had been relatively high. There 
are also some indications of price adjustments among the districts, as, 
for example, the decline of wheat prices in the western and south- 
western parts of the state, and the rise of hog prices in the eastern part 
of the state. 

Averages of prices prevailing in different districts of the state for 
the five years (1925-1929) before the price decline occurred, and for 
five years (1930-1934) during and after the decline, are shown in 
Table 1. For the period 1925-1929, price variations among the differ- 
ent sections of the state were reported in considerable detail in Bulletin 
363 of this Station. The purpose of including here some of the facts 
presented in the former study is to provide a basis upon which to 
point out variations which have occurred in the extent of change in 
the different districts as a result of the general price decline. 

The counties included in the various districts are shown in Fig. 26. 

Corn. Differences between 1925-1929 averages of corn prices 
and 1930-1934 averages were quite uniform among the various dis- 
tricts, except that they were somewhat smaller in the northeastern dis- 



1935} 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



25 



TABLE 1. AVERAGE FARM PRICES OF SELECTED FARM PRODUCTS IN CROP- 
REPORTING DISTRICTS OF ILLINOIS, 1925-1929 AND 1930-1934, 
AND PRICE DECREASES BETWEEN PERIODS* 



District 


Price 


De- 
crease 


Price 


De- 
crease 


Price 


De- 
crease 


1925- 
1929 


1930- 
1934 


1925- 
1929 


1930- 
1934 


1925- 
1929 


1930- 
1934 


CORN (bushel) 


OATS (bushel) 


WHEAT (bushel) 


1. Northwest 


$ .81 
.80 
.81 
.80 
.78 
.78 
.81 
.83 
.84 


$ .46 
.47 
.46 
.46 
.45 
.44 
.46 
.48 
.49 


$ .35 
.33 
.35 
.34 
.33 
.34 
.35 
.35 
.35 


$ .40 
.44 
.41 
.43 
.40 
.39 
.44 
.49 
.49 


$ .27 
.29 
.27 
.28 
.26 
.26 
.27 
.32 
.31 


$ .13 
.15 
.14 
.15 
.14 
.13 
.17 
.17 
.18 


$1.26 
1.28 
1.32 
1.34 
1.27 
1.25 
1.31 
1.40 
1.38 


$ .66 
.68 
.66 
.66 
.64 
.64 
.65 
.69 
.68 


$ .60 
.60 
.66 
.68 
.63 
.61 
.66 
.71 
.70 


3. Northeast 


4. West 


4a. West-southwest 
5. Central 


6. East 


6a. East-southeast 


7. Southwest 


9 Southeast 






HOGS 
(100 pounds) 


BEEF CATTLE 
(100 pounds) 


VEAL CALVES 
(100 pounds) 


1. Northwest 


$10.40 
10.48 
10.67 
10.64 
10.61 
10.30 
10.39 
10.40 
10.36 


$5.37 
5.36 
5.47 
5.47 
5.42 
5.30 
5.41 
5.37 
5.25 


35.03 
5.12 
5.20 
5.17 
5.19 
5.00 
4.98 
5.03 
5.11 


$9.88 
9.69 
9.88 
9.24 
9.35 
8.85 
8.16 
7.52 
7.81 


$6.50 
6.46 
5.89 
6.07 
6.31 
5.93 
5.73 
5.01 
4.87 


$3.38 
3.23 
3.99 
3.17 
3.04 
2.92 
2.43 
2.51 
2.94 


$12.00 
12.01 
11.44 
11.76 
12.05 
11.76 
11.44 
11.85 
10.76 


$7.18 
7.09 
6.64 
6.84 
7.00 
7.02 
6.64 
6.94 
6.40 


$4.82 
4.92 
4.80 
4.92 
5.05 
4.74 
4.80 
4.91 
4.36 


3. Northeast 


4 West 


4a. West-southwest 
5. Central 


6. East 


6a. East-southeast 


7. Southwest 


9. Southeast 






LAMBS 
(100 pounds) 


MILK COWS 

(head) 


HORSES 

(head) 


1. Northwest 


$12.98. 
13.00 
12.19 
12.71 
12.53 
12.49 
12.07 
11.90 
11.56 


36.59 
6.82 
6.45 
6.73 
6.61 
6.40 
6.40 
6.40 
6.06 


$6.39 
6.18 
5.74 
5.98 
5.92 
6.09 
5.67 
5.50 
5.50 


$ 90 
107 
76 
83 
82 
81 
72 
71 
64 


$52 
65 
43 
47 
47 
45 
43 
42 
37 


$38 
42 
33 
36 
35 
36 
29 
29 
27 


$99 
96 
86 
73 
99 
96 
71 
78 
70 


$81 
89 
73 
63 
81 
79 
70 
73 
62 


$18 
7 
13 
10 
18 
17 
1 
5 
8 


3. Northeast 


4. West 


4a. West-southwest 
5. Central 


6. East 


6a. East-southeast 


7. Southwest 


9. Southeast 






BUTTERFAT 
(pound) 


EGGS 

(dozen) 


CHICKENS 

(pound) 


1. Northwest 


$ .44 
.45 
.42 
.42 
.43 
.43 
.42 
.40 
.40 


$ .25 
.25 
.23 
.23 
.23 
.23 
.22 
.22 
.21 


$ .19 
.20 
.19 
.19 
.20 
.20 
.20 
.18 
.19 


$ .31 
.35 
.30 
.30 
.32 
.32 
.30 
.30 
.30 


$, .18 
.21 
.16 
.16 
.18 
.18 
.17 
.17 
.16 


$ .13 
.14 
.14 
.14 
.14 
.14 
.13 
.13 
.14 


$, .22 
.23 
.20 
.21 
.22 
.22 
.21 
.21 
.21 


$ .13 
.15 
.12 
.12 
.13 
.13 
.12 
.12 
.12 


$ .09 
.08 
.08 
.09 
.09 
.09 
.09 
.09 
.09 


3. Northeast 


4. West 


4a. West-southwest. . . . 
5. Central 


6. East 


6a. East-southeast 


7. Southwest 








HAY, ALL KINDS 
(ton) 


CLOVER HAY 

(ton) 




1. Northwest 


$12.99 
14.86 
12.02 
12.82 
15.53 
15.96 
10.59 
14.62 
11.58 


$ 8.88 
10.94 
7.69 
8.68 
9.76 
10.00 
7.65 
10.00 
8.09 


$ 4.11 
3.92 
4.33 
4.14 
5.77 
5.96 
2.94 
4.62 
3.49 


$13.51 
15.64 
13.62 
14.35 
15.45 
14.59 
13.15 
16.48 
14.90 


$ 9.72 
12.59 
9.22 
10.31 
10.69 
10.20 
9.63 
11.38 
10.07 


$ 3.79 
3.05 
4.40 
4.04 
4.76 
4.39 
3.52 
5.10 
4.83 




3. Northeast 


4. West 


4a. West-southwest 
5. Central 


6. East 


6a. East-southeast 
7. Southwest 


9. Southeast . . 



Averages of unpublished data compiled by the Division of Crop and Livestock Estimates, 
Bureau of Agricultural Economics, U. S. Department of Agriculture. 



26 



BULLETIN No. 422 



[December, 



trict (Chicago dairy area) and in the central district. The price de- 
clines ranged from 33 to 35 cents a bushel, with a decline of 35 cents 
common to five districts. 




FIG. 26. LOCATION OF ILLINOIS CROP REPORTING DISTRICTS 
These are the districts for which prices are shown in Table 1. 

Oats. Declines in oats prices were somewhat larger in the dis- 
tricts where they averaged highest during both periods in the north- 
eastern district and the four southern districts. There was thus a 
tendency toward more nearly uniform oats prices in different parts of 
the state during the period 1930-1934. 

Wheat. Wheat prices likewise were more nearly uniform over 
the state during the later period. Declines were largest in the sections 
where wheat prices were higher in the earlier period, that is, in the 
western and southern sections of the state. The maximum variation 
in wheat prices among the different districts was 5 cents in 1930-1934 
and 15 cents in 1925-1929. This more nearly uniform price over the 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 27 

state reflects the disappearance of or decline in the premiums paid for 
the softer wheats grown in the western and southern counties. 

Hogs. Again there was a tendency toward more nearly uniform 
prices among the various districts. Somewhat .smaller declines in hog 
prices were registered in sections where averages were lower in 1925- 
1929 than in sections where they were higher. Hog prices continued 
to be somewhat higher, however, in the important hog-producing sec- 
tions in western, west-southwestern, and central Illinois, even tho 
prices in the east and east-southeastern districts rose relatively. In 
the latter districts a considerable development of local livestock mar- 
kets moving hogs to various eastern markets may have been a factor 
in raising the price of hogs in relation to prices prevailing in the 
western part of the state. 

Beef Cattle. Declines in prices of beef cattle were larger in the 
northern and western parts of the state, where the average prices of 
beef cattle are higher. The western district dropped from first rank 
(on a basis of average prices paid for beef cattle) to sixth among 
the districts. The variation in amount of change among the different 
districts may perhaps be accounted .for in part by a change in quality 
of animals upon which prices were quoted. One of the reasons for 
differences in average prices for cattle among the districts at any given 
time is the difference in type and quality of cattle in the various 
districts. 

Veal Calves. Decreases in prices of veal calves were quite uni- 
form among the districts. 

Lambs. Decreases in price were somewhat larger in the north- 
ern part of the state where prices of lambs were highest. 

Milk Cows. Decreases in dollars per head for milk cows were 
largest in the two northern districts, but on a percentage basis the 
declines were much the same in the north and south. Average prices 
of milk cows in the different districts maintained the same relative po- 
sitions in the two periods, largely because of differences in quality of 
cows and in proximity to fluid-milk markets. 

Horses. An interesting feature of horse prices in the various 
districts was the small decline in the southern part of the state. The 
small decline there possibly reflects an increased local demand for 
horses as a result of a greater interest in farming in the areas of com- 
paratively low land values. The largest declines occurred in those 
districts in which relatively higher prices for horses prevailed in the 
earlier period in the northwestern, central, and eastern districts. 



28 BULLETIN No. 422 [December, 

Butterfat. Declines in butterfat prices were nearly uniform 
among all districts. 

Eggs. Declines in egg prices also were nearly uniform among 
the districts. 

Chickens. Declines in prices of chickens were quite uniform. 

Hay (All Kinds). The largest declines in hay prices occurred 
in the eastern and central areas where the highest averages prevailed 
in 1925-1929. The smallest declines occurred in the east-southeast, 
where prices averaged lowest in 1925-1929. Possibly the quality and 
kind of hay reported in this district changed between these two periods. 
These price changes brought about greater uniformity in hay prices 
among the different districts. 

Hay (Clover). Decreases in prices of clover hay were largest in 
the two southern, the eastern, central, and western districts. The 
average price was highest in 1930-1934 in the northeastern district (the 
Chicago dairy area) and in the southwestern district, part of which 
lies in the St. Louis dairy area. 

COMPARISON OF PRICES OF INDIVIDUAL PRODUCTS, 
1931-1933 AND 1934 

In the preceding section the general price trends of various Illinois 
farm products, and variations in prices prevailing in different parts of 
the state, were reviewed. All of these products had a tendency to 
decline in price from 1929 thru 1932, and with a few exceptions to 
recover after the early part of 1933. In all cases the decline has been 
checked. 

In this section is presented the relative positions, according to 
prices, of the different Illinois farm products for the period 1931-1933 
(including two years of decline and one of recovery) and for 1934. 
The average price of these products was 86 percent of the 1910-1914 
average in 1931, 58 percent in 1932, and 63 percent in 1933. 

RELATIVE POSITIONS OF DIFFERENT PRODUCTS, 1931-1933 

A general decline in prices of all commodities is evidence of the 
operation of some common force, rather than of particular forces 
affecting various commodities individually. This is particularly true, 
so far as farm products are concerned, when price declines for indi- 
vidual products are fairly uniform in all sections of the state. The 
common force operating during 1931-1932 was primarily the increase 
in the value of gold in relation to commodities. This was caused pri- 



79J5] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 29 

marily by monetary readjustments made by the various countries en- 
deavoring to place their currencies back on the gold standard, which 
they had abandoned during the war of 1914-1918. This monetary insta- 
bility caused a decline in the general price-level in all countries of the 
world which were on the gold standard. The difficulties created by 
the severity of the decline, and the general depression and financial 
panic which ensued, forced prices lower than probably was necessary 
to offset the monetary readjustments. The point is that it was a 
common factor that caused the decline, rather than particular factors 
affecting the supply of and demand for individual products. 

The extent of the price decline, however, varied among different 
products. The amount of the price decline of any single commodity 
reflects the collective effect of all influences acting upon that com- 
modity the common force previously mentioned and all of the partic- 
ular forces peculiar to that individual commodity. 

In the following comparisons the price of each commodity is ex- 
pressed as a percentage of the 1921-1929 average price of that com- 
modity. The relative position of any price is always influenced by its 
position during the base period, regardless of what base is selected. 
If the price was relatively high in the base period, the relative price 
for other periods is low, and vice versa. In the 1921-1929 period 
horses, hay, barley, and oats were cheap in relation to prewar (1910- 
1914) averages, and lambs, chickens, potatoes, apples, wool, red 
clover seed, and butter were high. 1 Consequently, when prices during 
subsequent periods are compared with prices during the base period 
1921-1929, commodities in the first group (horses, hay, etc.), which 
were relatively cheap in 1921-1929, are usually found to be relatively 
higher in price than commodities in the second group (lambs, chickens, 
etc.), which were relatively high during 1921-1929. This difficulty 
would occur with any base period which might be chosen. The use 
of a base period nine years long, however, tends to reduce the differ- 
ences, since the longer the period the greater the likelihood that it will 
include periods both of high and of low prices. 

The positions in 1931-1933 and in 1934 of the various farm prod- 
ucts, grouped by classes, are shown in Fig. 27. 

Grains. The grains were relatively cheaper than other commod- 
ities in 1931-1933, the median of the group being 44 percent of 1921- 
1929 prices. The medians for the livestock group were 59 percent, 
for the livestock and poultry products group, 50 percent, and for the 
miscellaneous group, 58 percent. 



'111. Agr. Exp. Sta. Bui. 363, p. 518. 



30 



BULLETIN No. 422 



[December, 



Compared with 1921-1929 prices, prices of feed grains were highest, 
bread grains second, and legumes lowest. 

Barley stood at the top of the grain group during the period from 
1931 to 1933, with an average price that was 59 percent of 1921-1929 



1934 (12 MONTHS) 



D 2O 40 SO 80 



BARLEY 

OATS 

CORN 

RYE 

WHEAT 

COWPEAS 

SOYBEANS 

LIVESTOCK 



HORSES 
BEEF CATTLE 
MILK COWS 
VEAL CALVES 
LAMBS 
HOGS 



ANIMAL 
PRODUCTS 



MILK 

CHICKENS 

EGGS 

BUTTERFAT 

WOOL 



MISCELL- 
ANEOUS 



POTATOES 

APPLES 

HAY 



CLOVER SEED 
23 ILL. FARM 
PRODUCTS 




FIG. 27. COMPARATIVE FARM PRICES RECEIVED FOR DIFFERENT ILLINOIS 

FARM PRODUCTS, 1931-1933 AND 1934 

During the period 1931-1933 the prices of grains, as compared with 1921- 
1929 prices, had declined more than the prices of other groups of farm products. 
In 1934 the decline had been checked, and prices of all the farm products except 
hogs, beef cattle, milk cows, veal calves, and chickens were higher. The different 
products changed their relative price positions considerably in 1934 as compared 
with 1931-1933. Recovery was most marked in crops. Livestock and livestock 
products lagged behind. 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 31 

averages. Oats were second, with a price averaging 50 percent of the 
1921-1929 base. In general these two grains maintained these positions 
thruout the period: barley ranked first in each of the three years, and 
oats second in two. Both were very cheap in the base period, judged 
by prewar standards. 

Corn held third position among the grains over the period of three 
years, with a price averaging 45 percent of 1921-1929 averages, but 
was fifth in both of the last two years. 

Rye and wheat were fourth and fifth for the three-year period, 
averaging respectively 44 and 43 percent of the 1921-1929 base. In the 
last two years rye occupied third position and wheat fourth. 

At the bottom of the list were the two legume crops, cowpeas and 
soybeans, with average prices that were 38 and 30 percent respectively 
of the 1921-1929 averages. Soybeans ranked seventh each year. In 
part, this low relative position of soybeans reflects a relatively high 
position during the base period. Soybeans were then a new crop and, 
especially in the early years of the base period, were marketed largely 
as seed for the increasing acreage of an expanding enterprise. The 
low position in 1931-1933 also reflects the effect of expanding produc- 
tion at a time when marketing outlets were still in the process of 
development. 

Changes in Production of Grains, and Other Factors Related to 
Grain Prices. Under modern marketing conditions prices of the 
principal grains are determined from hour to hour by the interplay of 
supply and demand as expressed thru transactions on the principal 
produce exchanges. These prices are easily obtainable and generally 
known. Consequently, when transportation and communication fa- 
cilities are not disrupted, the price of a given grade of grain in one 
locality seldom varies by more than the transportation and handling 
differential from the price of the corresponding grade of grain in an- 
other locality. 

It is because of this sensitivity of grain prices that it is necessary 
to consider the factors affecting prices of grains in the United States 
as a whole when analyzing the factors responsible for prices of grains 
in Illinois. Production is obviously one of the most important of such 
factors. The average annual production of grains in the United States 
in 1930-1932 and 1920-1928 are shown in Table 2. In general, the 
production of barley, wheat, and soybeans during the later period in- 
creased, whereas oats, corn, and rye production declined. 

The United States barley crop, relatively highest in price among 
the cereals (see page 30), averaged 41 percent larger in 1930-1932 



32 



BULLETIN No. 422 



[December, 



than in 1920-1928. The favorable price position of barley at a time 
when production was relatively high indicates an increased demand for 
it in relation to other cereals, an increase in demand which can be 
largely explained by the increased activity in the brewing industry, 
which uses large quantities of barley. Exports of barley dropped 
from an average of 30 million bushels annually in 1920-1929 to about 
7 million bushels annually in 1930-1932. The demand for barley 
was strong enough to maintain a relatively high price position with- 
out heavy exports. 

TABLE 2. CHANGES IN AVERAGE ANNUAL PRODUCTION OF Six CROPS IN THE 
UNITED STATES, 1920-1928 AND 1930-1932- 



Crop 


Average bushels 
per year 
1920-1928 


Average bushels 
per year 
1930-1932 


Ratio of second 
period to first 


Corn 


millions 
2 321.2 


millions 
2 156.6 


percl. 
92.9 


Oats 


1 250.4 


1 216.5 


97.3 


Wheat 


822.1 


855.3 


104.1 


Barley 


190 


268.1 


141.1 


Rye 


56.4 


39.7 


70.0 


Soybeans 


6.6 b 


13.6 


206.1 











U. S. Dept. Agr. Yearbook. 1934. *>Data f or 1924-1928 only. 

The production of corn and oats, the two major feed grains, aver- 
aged lower in 1930-1932 than in 1920-1928. Corn production declined 
7 percent and oats production 3 percent. In the later period the corn 
crop was very short one year, large another, average the third. The 
three oat crops were about average. Exports of corn in some years 
of the base period were quite large, with the net exports averaging 
52 million bushels (nine-year period July 1, 1920, to June 30, 1929), 
compared with net exports of only about 5 million bushels a year in 
1930-1932. Exports of oats averaged 17 million bushels and 4 million 
bushels respectively in the two periods. In the disposal of the total 
supply of both corn and oats, however, exports are an insignificant 
item. 

Two of the wheat crops during the period from 1930 to 1932 were 
larger than average, and the third was only slightly smaller than 
average. Consequently the average annual production of wheat in the 
United States was 4 percent larger in 1930-1932 than in 1920-1928. 
In relation to the human population of the United States, the domestic 
wheat supply diminished, for the population is estimated to have in- 
creased 10.8 millions, or 9 percent, between the mid-points of 1920- 
1928 and 1930-1932. It is thus obvious that the slight increase in 
domestic wheat production did not cause the relatively low price of 



1935} PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 33 

wheat. The cause was rather the decline in export demand. Average 
net exports of wheat, including the wheat equivalent of exported 
flour, declined from an average of 200 million bushels a year in the 
nine-year period from July 1, 1920, to June 30, 1929, to an average 
of 89 million bushels in the three-year period beginning July 1, 1930 
(see page 58). Inasmuch as wheat production declined only slightly 
in relation to the increase in population, the decline in wheat exports 
caused the accumulation of a carryover which, on June 30, 1933, 
amounted to approximately 400 million bushels. Average annual wheat 
production by all countries (except Russia and China) in the period 
1930-1932 showed an increase of about 430 million bushels, or 13 
percent, over that of the period 1920-1928 an average yearly increase 
of about 2 percent between the midpoints of the two periods. Russia 
exported an average of about 90 million bushels a year during the later 
period, compared with a negligible amount during the years immedi- 
ately after the war. As a result of the changes in world wheat produc- 
tion and consumption, the accumulated world stocks of wheat increased 
heavily, and the largest concentration was in the United States. The 
peak of this accumulation occurred in 1933. 

The damming back of wheat in the United States was accompanied 
by a decline in the domestic price of wheat relative to the prices of 
other cereals. Wheat dropped to the status of a feed grain in many 
sections of the country. The estimated quantity fed on the farms of 
producers increased from an average of 43 million bushels a year for 
the period 1920-1928 to 150 million bushels in 1933. 

Average annual production of rye in the United States in 1930- 
1932 was only 70 percent as large as in 1920-1928. The relatively low 
price of this grain, therefore, was not caused by high production. 
Exports of rye in 1930-1932 averaged less than half a million bushels 
a year, while they averaged 30 million bushels a year in the earlier 
period. The 16-million-bushel reduction in the average annual pro- 
duction of rye was thus only about half enough to offset the decline in 
exports, and the forcing of the remainder into other uses tended to 
lower the relative price of rye. Because of short crops in 1934, how- 
ever, some rye was imported into the United States. Average annual 
production of rye in all countries (except Russia and China) in 1930- 
1932 showed an increase of 97 million bushels, or about 2 percent a 
year, over that of 1920-1928. 

Estimates of soybean production in the United States go back only 
to the 1924 crop. The average crop from 1930 to 1932 was twice as 
large as from 1924 to 1928. This increase in volume of production, 



34 BULLETIN No. 422 [December, 

changing soybeans from a crop largely disposed of as seed to one 
which went in considerable part to mills for conversion into oil and 
meal, accounts for the lower relative position of soybean prices. This 
adjustment is natural, and is common to all new crops which achieve 
commercial importance. 

Livestock. During the period 1931-1933 average prices of 
horses (80 percent of 1921-1929 prices) were highest of the livestock 
prices as compared with prices during the base period 1921-1929. In 
each of the three years horses ranked either first or second in price. 
The relatively high horse prices in 1931-1933 are explained (1) by 
the relatively low price of horses during the base period as compared 
with prewar prices, and (2) by the increasing scarcity of horses in 
1931-1933 in relation to demand. From a long-time standpoint, de- 
mand for horses is much reduced compared with that which pre- 
vailed in the pre-tractor and pre-automobile era. 

Beef-cattle prices, which during 1931-1933 were 67 percent of 1921- 
1929 prices, held second place among livestock prices. In each of the 
three years beef cattle ranked either first or second. As the beef-cattle 
industry was in the expanding phase of its cycle in this period, there 
was a tendency for prices to be maintained until it became necessary 
for stockmen to increase their marketings, which occurred in 1933. 

Milk cows ranked third in price position, averaging 60 percent of 
1921-1929 prices for the three-year period, and also being in third 
place in each of the three years. In general the trend of prices of milk 
cows tends to follow basic beef-cattle prices. 

Prices of veal calves held fourth position, averaging 59 percent of 
1921-1929 prices for the three-year period, and occupying fourth rank 
in each of the three years. Correlation with cattle prices is obvious. 

Lambs, at prices averaging 50 percent of 1921-1929 prices, ranked 
fifth in the livestock group. That, judged by prewar prices, lambs 
were rather high in the base period, would partially account for their 
relatively low position during 1931-1933. The relatively low position 
may be further explained ( 1 ) by an increased supply during a period 
of liquidation in the sheep-industry cycle ; (2) by the circumstance that 
demand for lamb meat a semi-luxury type of meat was probably 
more adversely affected by the depression than the demand for some 
other classes of meat ; and (3) by low wool prices exerting a depressing 
influence on lamb prices. 

Hogs ranked sixth among the livestock in 1931-1933, their prices 
averaging 48 percent of 1921-1929 prices, and holding sixth place two 
years and fifth one year. The relative price (48 percent) was close 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 35 

to that of Corn (45 percent) during this period. The relatively low 
hog prices in 1931-1933 were largely the result of (1) a steady decline 
in the domestic consumer income the chief factor in the situation, 
and (2) weak export markets for lard. 

Sheep held lowest place among the livestock in 1931-1933, their 
prices averaging only 42 percent of the 1921-1929 base. Low prices 
for lambs, combined with still lower prices for wool, explain the rela- 
tively low prices for sheep. 

Livestock and Poultry Products. The relative positions occu- 
pied by the five livestock and poultry products during the three-year 
period 1931-1933, when 1931-33 prices are expressed as percentages of 
1921-1929 prices, were, from highest to lowest, milk, chickens, eggs, 
butt erf at, and wool. These products were, on the whole, relatively 
cheaper than livestock probably because they were all, compared with 
prewar prices, high during the base period. 

Milk ranked either first or second in price during each year of the 
three-year period and averaged 62 percent of 1921-1929 prices. It was 
relatively higher than any of the grains and was exceeded only by 
horses and beef cattle in the animal group. That milk was consider- 
ably higher in price, relatively, than butterfat may be explained by the 
fact that the method of marketing milk tends to hold up its price and 
there is a more stable demand for milk for such uses as food for 
children. Declining rates of consumption indicate that the price of 
milk was held too high in relation to other foods by means of or- 
ganized marketing methods. 

Chickens in 1931-1933 ranked second among the five livestock 
products, prices for them averaging 57 percent of 1921-1929 prices. 
During the base period the price of chickens was rather high compared 
with prewar standards. In 1933, chickens dropped to fifth place as a 
result of increased marketings caused partly by the rapid rise in grain 
prices. 

Egg prices in 1931-1933 averaged 50 percent of 1921-1929 prices, 
giving eggs third rank among the five products here considered. They 
were relatively about 15 percent higher than the average of corn and 
wheat prices. 

Butterfat prices in 1931-1933 averaged 49 percent of 1921-1929 
prices, giving this commodity fourth place among the five products. 
This relatively low position was largely the result of two factors. 
First, consumer incomes were low. Butterfat prices reflect very closely 
changes in consumer incomes, as the market price of butter is fixed 



36 BULLETIN No. 422 [December, 

daily, and the product may be held in storage for only comparatively 
short periods of time. Second, the butter market, during this period, 
absorbed large surpluses from the fluid-milk industry. Butter is al- 
ways the safety valve of the dairy industry, absorbing surpluses 
which cannot be disposed of as fluid milk or otherwise. In times of 
slack general demand and lagging fluid-milk prices, a relatively large 
part of the total milk supply must be diverted to butter manufacture. 

Wool, at prices averaging 45 percent of 1921-1929 prices in 1931- 
1933, ranked fifth among the five products in 1931 and 1932 and first in 
1933. This low position during the first two years reflects the slack 
demand which might be anticipated in a period of severe business de- 
pression when consumers postpone the purchase of woolen clothes. 
Furthermore supplies of wool were relatively larger during these years 
than in the base period. The jump in the price and rank of wool (a 
staple product with an international market) in 1933 was to be ex- 
pected upon the adoption of governmental policies permitting the dol- 
lar to decline in value. A period of increased activity in the woolen 
industry began in the second quarter of 1933 as the prospects for 
higher prices were more generally recognized. The adoption of a 
system of controlled marketing of wool, the production of which had 
been financed by governmentally capitalized institutions, probably had 
something to do with timing the change in prices of wool, but it was 
not a basic cause of the change. 

Miscellaneous Products. The four items included in this group, 
ranked in the order of their relative prices for the three-year period 
1931-1933, were potatoes, apples, hay, and red clover seed. 

Potatoes were relatively highest in price in 1931 and 1933, and 
were in second place in 1932. Hay shared first place with potatoes 
in 1931, and held third place in 1932 and 1933. Apples, ranking 
fourth in 1931, first in 1932, and second in 1933, showed more varia- 
tion than any of the other miscellaneous products. Clover seed, the 
demand for which arises from the value of clover as a hay crop and 
as a soil builder, held third position in 1931 and fourth in 1932 and 
1933. 

RELATIVE POSITIONS IN 1934 

All Illinois farm products except hogs, beef cattle, milk cows, veal 
calves, and chickens averaged higher in price during 1934 than during 
the three preceding years (1931-1933). The different commodities 
changed their relative price positions considerably in 1934 compared 
with the earlier period, owing to serious drouth, forced liquidation of 
cattle, and completion of the process of monetary devaluation to 59 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 37 

percent of the old parity. Recovery was most marked in crops. Live- 
stock and livestock products lagged behind. 

The price changes discussed in this section will be made clear by 
reference to Fig. 27. The 1934 prices, as well as the 1931-1933 price 
averages, are expressed in percentage of 1921-1929 prices. The differ- 
ences pointed out are thus differences in relationship to the common 
base. Furthermore it should be kept in mind that 1934 prices are 
not compared with prices that occurred in the low point of the de- 
pression, but with the average of the three years that included most of 
the period of rapid price decline as well as the bottom. 

Grains. No change occurred in the relative positions of the 
grains in 1934 compared with 1931-1933. The feed grains retained 
the leading positions, with barley at the top, oats second, and corn 
third. The bread grains were next, and the two legume crops were 
lowest. Price increases for the different grains ranged from 13 to 49 
points. The unweighted average increase was 30 points. 

Livestock. The changes in the relative price positions of the 
different kinds of livestock between 1931-1933 and 1934 were: (1) a 
rise in prices of lambs and sheep in relation to cattle; and (2) a drop 
in the relative price of hogs, which put them in the lowest place. 

The changes in cattle and sheep prices represent cyclical changes. 
The cattle cycle was in the liquidating phase in 1934, and increasing 
marketings lowered cattle prices in relation to other commodities. The 
sheep cycle had, on the other hand, gone thru the liquidating stage, 
and sheep prices were turning upward. The sharp rise in the relative 
price of wool, which was due chiefly to the fact that wool prices are 
rather immediately affected by monetary devaluation, also helped the 
position of lambs and sheep. Hog prices lagged because the large 
supplies caused by the large corn crop of 1932 were being marketed 
until the middle of the year, and because the processing tax tended to 
hold down hog prices in the early part of the year. 

Price changes for the different kinds of livestock ranged from a de- 
cline of 11 points for milk cows to a rise of 20 points for horses. The 
unweighted average increase was 2 points. 

Livestock and Poultry Products. Wool in 1934 occupied, in- 
stead of fifth rank as in 1931-1933, first place among the five products 
here considered. This change, which occurred in 1933, was, as stated 
previously, an illustration of the elevating effect of monetary devalua- 
tion on the price of a staple commodity, the price of which is closely 
linked to foreign markets. 

Another change in the group was in the relative price of chickens, 



38 BULLETIN No. 422 [December, 

which dropped to last place, a change which had already taken place in 
1933, and which reflects the effect of liquidation of breeding stock 
when costs (feed prices) rise sharply as in 1933. Feed prices rose 
largely in response to monetary devaluation, and thus the immediate 
effect of monetary change was to hurt the position of the poultry in- 
dustry. When poultry numbers are reduced in response to the less 
favorable prices, however, a part of this disadvantage will disappear, 
but prices of all the domestically consumed foods will of necessity be 
held down in spite of increased feed costs until internal purchasing 
power (total wages, etc.) rise sufficiently to enable the market to ab- 
sorb the normal supply at an increased price. 

Price changes in this group ranged from a decline of 3 points for 
poultry to a rise of 26 points for wool. The unweighted average 
increase was 7 points. 

Miscellaneous Products. All the miscellaneous products were 
higher in 1934 than in 1931-1933. The unweighted average increase 
was 19 points. Potatoes and hay exchanged relative positions, and the 
new order became hay, apples, potatoes, and red clover seed. 

RANGE AND VARIATIONS IN SEPTEMBER PRICES OF INDI- 
VIDUAL PRODUCTS FROM 1930 TO 1934 

The method used in presenting data on prices of twenty-four Illi- 
nois farm products in the foregoing section served primarily to show 
the average position of individual products in small groups of similar 
products. Only the average relative positions were shown, because 
comparisons were made between averages of prices extending over 
several years. 

In this section are presented data showing the distribution or 
range in prices of tw r enty-one Illinois farm products, and variations of 
prices of individual products from the average, during each year from 
1930 to 1934. As in the preceding section, however, relative prices 
(percentages of average prices during the base period, 1921-1929) are 
used instead of the actual prices in dollars and cents. Furthermore 
the price used as a basis of comparison in each year is not an average 
for the year, but is the price during the month of September. 

Analysis of the groups into which the September relative prices 
fall indicates that there are definite tendencies for certain classes of 
items to fall or rise together in periods of price decline or recovery 
(Table 3 and Fig. 28). These tendencies are obscured, however, by 
the effects of variations in the size of crops from year to year and 
the influence of production cycles on the price position of certain 



J955] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



39 



TABLE 3. SEPTEMBER PRICE INDEXES OF TWENTY-ONE ILLINOIS FARM 

PRODUCTS, 1930 TO 1934 8 
(Average of September prices in 1921-1929 = 100) 



Products 


1930 


1931 


1932 


1933 


1934 


Apples 


108.9 


44.4 


56.4 


76.6 


89.0 


Barley 


91.7 


58.3 


38.3 


81.7 


121 6 


Beef cattle 


102.2 


74.2 


66.9 


56.0 


72.0 


Butterfat 


94.6 


66.5 


43.5 


46.0 


59.0 


Chickens 


88.3 


76.7 


53.4 


44.2 


62.0 




92 1 


56 8 


38 4 


42 2 


67 


Corn 


109.9 


44.4 


27.2 


50.6 


91.0 


Eggs. . 


77.2 


57.0 


51.7 


45.0 


67.4 


Hay . 


98.5 


63.0 


42.8 


53.3 


111.0 


Hogs 


98.8 


55.9 


38.9 


38.4 


63.0 


Horses 


87.1 


75.3 


75 3 


87.0 


105.0 


Lambs 


71.4 


51.9 


43.6 


55.6 


55.0 


Milk 


99 6 


81 9 


59 7 


59.7 


66.4 


Milk cows 


97.2 


70.4 


53.5 


49.3 


52.0 


Oats 


94.4 


44.4 


30.6 


83.3 


133.0 


Potatoes 


99.2 


63.5 


37.3 


134.9 


79.0 


Rye 


68.2 


37.6 


32.9 


76.5 


95.0 


Sheep 


71.3 


42 4 


35 7 


40.7 


41.0 


Veal calves 


93.7 


71.9 


51.9 


51.9 


58.0 


Wheat 


68.1 


31.9 


35.3 


63.8 


81.8 


Wool 


62.9 


41 9 


26.9 


71.8 


63.0 















Basic data obtained from Illinois U. S. Crop Reporting Service. 

classes of livestock and livestock products. A tendency for grain 
prices to decrease more than livestock (except hog) prices, and for 
milk prices to hold up well thru the period of price decline, may be 
isolated. On the whole, however, divergencies from the general trend, 
either downward or upward, resulting in a grouping of items, reflect 
the combined effect of random or particular influences affecting indi- 
vidual products and separate classes of products, rather than a general 
influence dividing the commodities into two fairly exclusive groups 
which would tend to continue thruout the periods of decline and rise. 
In general it is evident from Fig. 28 that ( 1 ) some force operated 
to depress prices generally from 1930 to 1932; (2) another force 
operated toward a general rise in prices from 1932 to 1934; (3) there 
was a tendency for two distinct groups to form on the decline, possibly 
indicating some force or forces operating to cause a disparity among 
different groups of commodities; and (4) the force causing disparity 
on the decline also operated in the first year of recovery, but tended 
to disappear in the second, altho a wide dispersion of items developed, 
indicating a variety of forces operating. 

Distribution of Prices in 1930. In the distribution of the relative 

i 

prices of the twenty-one Illinois farm products in 1930, there was a 
pronounced concentration of items (nearly half) in a group in which 
prices ranged from 90 to 100 percent of 1921-1929 averages (Fig. 28). 
This concentration might indicate that there was some common force 



40 



BULLETIN No. 422 



[December, 



operating to reduce Illinois farm-product prices about 5 percent below 
the 1921-1929 average. There was, however, in addition to the con- 
centration at 90-100, a tendency toward formation of a second group 
centered at 70 percent of 1921-1929 averages, in which were included 
six items, or nearly one-third of the total. 

The major forces responsible for the division of the relative prices 



FREQUENCIES 



140 



' 20 



wlOO 



60 

a. 



40 
20 

100 

290 


o> 
M 
80 

70 
60 



to* 



gg* 



[nM 



iir M*' 

T 



UK <or M.I M 

* tM i U* 



ftV- 



S 



*'** 



* 



*>l 



1930 



1931 



1932 



1933 



1934 




QUARTERLY AVERAGES FOR 
PRICE RELATIVES 



5 50 

DC 



30 



y^^ //>/ Jt/if ocr 
1930 



1931 



1932 



1933 



1934 



FIG. 28. QUARTERLY AVERAGES OF RELATIVE PRICES OF TWENTY-ONE 
ILLINOIS FARM PRODUCTS, 1930-1934, AND FREQUENCY DISTRI- 
BUTION SHOWING SEPTEMBER POSITIONS OF RELATIVE 

PRICES OF INDIVIDUAL PRODUCTS 

Certain classes of items show definite tendencies to decline together when 
prices are falling, and to rise together when prices are recovering. During the 
period of decline from 1930 to 1932 grain prices declined more than livestock 
(except hog) prices. Milk prices held up well during the period of decline. 
When prices were rising in 1933 and 1934, prices of grains rose higher, rela- 
tively, and more rapidly than prices of livestock. 



J9J5] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 41 

into two groups in September, 1930, were: (1) the dry summer, which 
had shortened supplies and increased prices of spring-sown crops and 
of forage; (2) the natural lag in prices of dairy products; (3) the 
cycles operating in the cattle and sheep industries ; and (4) the weak 
statistical position of the bread grains due to declining exports and 
accumulation of surpluses. The effect of the dry summer would be 
expected to be an entirely temporary factor; and with normal crop 
production in ensuing years, crop prices might be expected to feel 
the full force of the factors making for lower prices in this period. 

The relatively low-price group of products in 1930 included wheat, 
rye, sheep, lambs, wool, and eggs that is, the two bread cereals, sheep 
and sheep products, and eggs. The character of the items in this 
group indicates the operation of several depressing factors rather than 
one. Wheat prices, which toppled to low levels early in the depression, 
had since 1926 followed a general downward trend in the face of de- 
creasing exports and increasing stocks. Rye prices, sympathetic with 
wheat, were forced down by similar conditions. Prices of sheep and 
of lambs and wool were lowered from the comparatively high 1921- 
1929 levels largely because the sheep-production cycle had reached the 
point where marketings were being increased. Egg prices likewise 
were at a low point in their cycle. A variety of influences, therefore, 
operated to determine the composition of this low-price group. 

The relatively high-price group of products in 1930 included ten 
items whose prices ranged from 90 to 100 percent of 1921-1929 aver- 
ages crops (oats, barley, and hay), livestock (hogs, milk cows, and 
veal calves), livestock products (milk and butterfat), and two mis- 
cellaneous products (potatoes and clover seed). Crop prices (except 
prices of wheat and rye) were relatively high in 1930 on account of 
short production during a dry summer. Corn, altho not in this group, 
was higher rather than in the lower group with the bread grains. The 
favorable position of the dairy group reflected a tendency for the 
prices of these products to lag behind the general movement of prices 
in a period of falling incomes and falling prices. Cattle prices were 
relatively high largely because the cattle industry was in the expand- 
ing-number phase of its cycle and marketings were reduced. 

Distribution of Prices in 1931. By September, 1931, prices of all 
twenty-one products showed marked decline, and the tendency to 
divide into two groups was more pronounced than in the preceding 
year (Fig. 28). One group of five items centered at 75 percent of 
1921-1929 averages, 20 points below the point of concentration of 
the high group in the previous year; and the other group, including 



42 BULLETIN No. 422 [December, 

ten items, centered at 45 to 55 percent of the 1921-1929 averages, also 
20 points below the concentration point of the second group a year 
earlier. Some common force was evidently operating to lower all 
prices in 1931, but indications of forces operating to cause different 
amounts of change among specific commodities are to be noted. 

The relatively low-price group of ten products in 1931 included five 
fruit and field crops (apples, clover seed, barley, corn, and oats) and 
five livestock items (hogs, sheep, lambs, wool, and eggs). Wheat 
and rye were even lower. Abundant field crops in 1931 brought the 
full weight of the price-depressing influence on the crops as a class. 

The high group of products in 1931 included five items beef 
cattle, milk cows, veal calves, horses, and chickens. 

The effects of the cattle and sheep cycles are evident in this group- 
ing. The cattle cycle was still in the expanding-number - higher-price 
phase, and the sheep cycle still in the increased-marketings - lower- 
price phase. The tendency for fluid-milk prices to lag in periods of 
price change is also noticeable. Butter fat prices were below the high 
group but higher than the low group. Hog prices, as usual, followed 
the grains, but were not quite as low. Horse prices were moving 
upward in their cycle, the reduction in numbers having caught up with 
the reduced demand. 

The tendency for crops to be cheaper than most of the livestock 
products in the low-price periods was clearly evident after the effect 
of the short 1930 crops in maintaining prices was eliminated. This 
tendency is perhaps the only general influence, among the various 
forces causing division of the products into groups, which can be 
detected by an analysis of the 1931 relative prices. 

Distribution of Prices in 1932. In 1932 the two groups of prod- 
ucts mentioned above came nearer together, with two points of con- 
centration centering at 35 and at 55 percent of 1921-1929 averages, 
and including eight and six items respectively (Fig. 28). While some 
forces were still working toward separation of these products into two 
groups, they apparently were weakening before the common tendency 
toward lower prices as the trough of the low-price movement was 
approached. 

Crop prices in 1932 were still in the low-price group. Abundant 
crops in that year reinforced the tendency toward low prices for crops 
which occurs in periods of falling prices. Hogs and sheep likewise 
were still in the low group. Wool, however, had fallen below this 
group, reflecting both the effect of depression on a raw material and the 
increased-marketing stage of the sheep-production cycle. The higher- 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 43 

price group included milk (which still held up in the face of the gen- 
erally low price-level), two items from the cattle group, and poultry 
and eggs. The latter apparently had moved into a higher cyclical price 
position. The sheep and cattle cycles and the tendency toward cheap 
grain prices continued to be important forces causing division of the 
products into two groups. 

Distribution of Prices in 1933. In 1933 the price trend was re- 
versed, and prices rose. There were again two points of concentration, 
one group of products centering at 45 to 55 and the other at 75 to 85 
percent of 1921-1929 averages (Fig. 28) from 10 to 30 points above 
the points of concentration of the two groups during the previous year. 

The low-priced group included a considerable diversity of products: 
the three items in the cattle group, sheep and lambs, milk and butterfat, 
chickens and eggs, corn and hay. In the formation of this group the 
position of cattle was weakened (as compared with 1932) and that of 
sheep strengthened by cyclical influences. The dry season contributed 
to the strengthening of corn and hay prices. 

The high-price group also included a diverse distribution of com- 
modities oats, barley, rye (wheat was in an intermediate position), 
apples, horses, and wool. The influence of short crops and the effects 
of the monetary policy on prices of staple and export products are 
noticeable in this grouping. The high position of potatoes (135 per- 
cent of 1921-1929) reflects the small crop of 1933. 

Distribution of Prices in 1934. In 1934 the formation of two 
groups of products, noticed in each of the three years after 1930, 
failed to occur, the influences toward dispersion overcoming the ten- 
dencies toward grouping (Fig. 28). One modal group of ten lower- 
price products was formed, however, with prices ranging from 50 to 
70 percent of 1921-1929 averages. Prices of all but three products 
rose (Table 3). Products in the price ranges above the modal group 
extended in a long tail upward to rather high values. The oats price, 
at the top, was 133 percent of the 1921-1929 average. The wide dis- 
persion of prices in 1 934 wider than in any other year indicates 
that the economic situation was very unsettled. The various commodi- 
ties reacted very differently to the extraordinary circumstances which 
prevailed. 

In the formation of the modal group (at 60 to 70 percent of 1921- 
1929 averages) and the next lower group, the livestock products came 
together and held a better balance than had existed among this class of 
prices since before 1930. The two groups included hogs, milk and 
butterfat, lambs and wool, chickens and eggs, and veal calves and milk 



44 BULLETIN No. 422 [December, 

cows. Beef-cattle prices were just above these two groups, and sheep 
prices were just below. The grouping of the livestock prices resulted 
from the combined effects of the upward movement on the general 
level of prices and the cyclical movement of different items within 
the group. 

The prices of the relatively high-price commodities in 1934 ranged 
from 80 to 140 percent of 1921-1929 averages, and included the cereal 
crops, hay, horses, and apples. The effects of short crops and the 
cyclical scarcity of horses are apparent. 



PRICES OF FARM PRODUCTS COMPARED WITH 

PRICES OF GOODS BOUGHT BY FARMERS, 

1931-1933 AND 1934 

The best indexes of prices of goods bought by farmers are those 
calculated and reported quarterly on a 1910-1914 base by the U. S. 
Department of Agriculture from information collected from a large 
number of rural merchants thruout the country. For presentation here 
these indexes have been recalculated on a postwar base of prices pre- 
vailing from 1921 to 1929. 

During this postwar base period, prices of Illinois farm products 
averaged 32 percent above the average prices during the prewar period 
from 1910 to 1914, the cost of goods used in farm operation averaged 
44 percent above, the cost of goods used in the farm home averaged 
60 percent above, and the two groups of purchased goods averaged 
53 percent above the prewar base. 

Thus the purchasing power of farm products was lower during the 
postwar base period than during the prewar period. Given quantities 
of Illinois farm products in 1921-1929 purchased 92 percent as many 
goods used in farm operation as in 1910-1914, and 83 percent as many 
goods used in the farm home. Or, stated in another way, 16 percent 
more farm products were required in 1921-1929 than in 1910-1914 to 
purchase given quantities of goods of both classes used by farmers. 
Consequently, when 1921-1929 prices are used as a basis of compari- 
son for 1931-1934 prices, the ratios between prices of farm products 
and of goods bought by farmers are less unfavorable to farm products 
than they would be if 1910-1914 prices were used as a standard of 
comparison. Prices during 1921-1929 are used as a base, however, 
because by their use a more realistic picture of current changes is 
secured. Price relationships in the immediate future will probably be 
more like those of 1921-1929 than like those of 1910-1914. 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



45 



Changes in Purchasing Power of Farm Products, 1931-1933. 
Indexes of the prices of various kinds of goods purchased for use on 
the farm and in the farm home are given in Fig. 29 for the three-year 
period 1931-1933. These indexes may be compared with the indexes 
of the prices of farm products in the same period, shown in Fig. 27, 
page 30. Reference to these two graphs will show that during 1931- 
1933 prices of Illinois farm products averaged 52 percent of the 1921- 
1929 base; whereas prices of items used in production averaged 78 



ITEM 



ITEMS USED ON FARM 



FARM MACHINERY 

BUILDING MAT. (FARM) 

FERTILIZER 

EQUIPMENT & SUPPLIES 

SEED 

FEED 

AVERAGE 

ITEMS USED IN HOME 
BUILDING MAT.(HOUSE) 
OPERATING EXPENSE 
FURNITURE & FURNISH 
CLOTHING 

FOOD 

AVERAGE 

ILLINOIS FARM 
PRODUCTS SOLD 




FIG. 29. RELATIVE PRICES OF DIFFERENT GROUPS OF ITEMS USED ON 

FARMS AND BY FARM FAMILIES, 1931-1933 AND 1934 

Altho prices of Illinois farm products were higher in the first nine months 
of 1934 than in 1931-1933, only a slightly better adjustment between prices of 
farm products and of goods purchased was attained. 

percent and prices of items used in the home averaged 71 percent of 
the 1921-1929 base. It therefore took 50 percent more farm products 
to buy given quantities of goods used in production, and 37 percent 
more to buy given quantities of goods used in the home, than during 
the base period. Because of such unfavorable ratios, smaller quantities 
of goods were purchased by farmers, and purchases were largely con- 
fined to those classes of goods for which adjustments in price had been 
made. 

Goods of farm origin were the cheapest of the purchased goods 
used by farmers in 1931-1933, and goods of industrial origin were the 



46 BULLETIN No. 422 [December, 

most expensive. Feed averaged 60 percent of the 1921-1929 base; 
seed, 70 percent; food, 65 percent; clothing, 69 percent. All these 
items are closely related to prices of farm products. At the other ex- 
treme were farm machinery, with prices averaging 94 percent of the 
1921-1929 base; building materials for the farm, averaging 82 percent; 
and building materials for the home, averaging 83 percent. If an 
analysis were made of the sales of these higher priced items, it would 
be found that they were quite small to farmers in these years. 

The average cost in 1931-1933 of all purchased goods used on 
the farm was, as stated above, 78 percent, and of all purchased goods 
used in the farm home 71 percent of the 1921-1929 base. Of the 24 
farm products considered in this study, only one (horses) had a high 
enough price (80 percent of 1921-1929 averages) to maintain its buy- 
ing power at parity. In other words, the farm prices of all but one of 
the 24 farm products were relatively cheaper than the goods purchased 
by farmers. 

The relative importance to farmers of the different items purchased 
by them varies according to the type of farming in which they are 
engaged. For example, machinery costs are relatively more important 
to farmers engaged in grain production than to those engaged in dairy- 
ing, and feed costs are of more immediate concern to stockmen than 
to grain farmers. Farm machinery prices averaged 94 percent of 
1921-1929 prices in 1931-1933, whereas corn prices averaged only 
45 percent. Consequently, more than twice as much corn was required 
in the later period than in the earlier to buy the needed farm ma- 
chinery. As a result the farm-machinery industry stagnated for want 
of sales. On the other hand, milk prices in 1931-1933 averaged 62 per- 
cent and feed prices 60 percent of 1921-1929 averages, and it was thus 
possible for dairymen to purchase the usual supplies of feed even 
tho milk prices were reduced. 

Such maladjustments are apparently inevitable in a period of 
severe price decline and, of course, tend to sharpen the difficulties 
then experienced, for they lead to further reduction in sales of the 
higher priced goods ; which in turn leads to increased unemployment, 
reduced demands for farm products, and lower prices. More flexible 
prices for certain classes of manufactured goods at such times would 
operate to maintain sales and check declines in prices of farm products. 

Changes in Purchasing Power of Farm Products in 1934. The 
price of almost every group of farm and home supplies in the first nine 
months of 1934 was higher than the average price in 1931-1933 
(Fig. 29). The prices of farm products also were higher, yet only a 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 47 

slightly better adjustment between prices of farm products and goods 
purchased was attained. Farm products prices averaged 60 percent of 
1921-1929 averages; prices of goods purchased for use on farms 
averaged 85 percent ; and prices of goods purchased for use in farm 
homes averaged 76 percent. For the purchase of given quantities of 
goods used on farms and in farm homes, 42 and 27 percent, respec- 
tively, more farm products were required in 1934 than in 1921-1929; 
whereas 50 and 37 percent, respectively, more products were required 
in 1931-1933 than in 1921-1929. 

The largest increases in prices of goods bought for use on farms 
in 1934 were recorded in the lower-price groups, which were of agri- 
cultural origin. The feed index was 28 percent higher in the first nine 
months of 1934 than in 1931-1933; the seed index, 14 percent higher; 
the food index, 11 percent higher; and the clothing index, 6 percent 
higher. Farm machinery and the home-operating-expenses group (in- 
cluding fuel, cleaning materials, and automobile fuel and supplies) 
were only 1 percent higher. Prices of furniture and furnishings, the 
one group which was lower than in 1931-1933, reflects the behavior 
of a class of goods made largely for the domestic trade, in the early 
stages of a period when incomes are still low and prices of indispen- 
sable items (such as food) are rising. 

Price increases in one group building materials were apparently 
too rapid and too large to be supported by prevailing conditions. Prices 
for building materials for farm houses were 12 percent higher in the 
first nine months of 1934 than in 1931-1933. Compared with 1932, 
the low point, the rise was 16 percent. When farmers had little or no 
surplus income available for buildings, a price-level of 93 percent of 
1921-1929 averages for building materials, with farm products aver- 
aging only 60 percent of 1921-1929 prices, did not tend to expand 
building activity. That a mistake was recognized by the building in- 
dustry is indicated by the decline which took place in the building- 
materal index during 1934. For the first six months prices of building 
material averaged 94 percent of the 1921-1929 base, and for the second 
six months, about 91 percent. 

By December, 1934, prices of Illinois farm products, chiefly because 
of low production, had risen to 80 percent of 1921-1929 averages; 
prices of items used in production, to 91 percent; while prices of 
items used in the home remained at 76 percent. Prices of both groups 
of cost items combined stood at 82 percent. This represents a sub- 
stantial improvement in the relative position of farm-product prices 
compared with prices of products used on the farm. Only 12 per- 



48 



BULLETIN No. 422 



[December, 



cent more farm products than in 1921-1929 were required to purchase 
the same quantities of goods used in production; and the same quan- 
tities of goods used in the home could actually be purchased with 
6 percent less farm products than in 1921-1929. Only 2 percent more 
farm products were required to purchase given quantities of the goods 
of both classes used by farmers. 

CHANGES IN PRODUCTION ON ILLINOIS FARMS 

Changes in the volume in which various crops and kinds of live- 
stock are produced are both a cause for and a result of price changes. 
During the period 1931-1934 several important changes from the 
1920-1928 period occurred in the production of crops and livestock on 
Illinois farms. 



CHANGES IN CROP PRODUCTION, 1920 TO 1934 

Changes in the total acreage and total production of crops on Illi- 
nois farms over the fifteen-year period from 1920 to 1934 are presented 
from two standpoints: first, as differences in average annual acreage 
and average annual production between the earlier and later periods 
in the fifteen years (Table 4) ; and, second, as differences in the actual 
annual production of the various crops (Fig. 30). The first method 
of presentation shows the general trend ; the second shows, in addition 
to the general trend, variations from year to year. In general, total 
acreages of Illinois crops were reduced, during the later period, indi- 
cating a tendency to pasture more land or to allow it to lie idle. 

TABLE 4. AVERAGE ANNUAL ACREAGE AND PRODUCTION OF NINE 
CROPS IN ILLINOIS, 1920-1928 AND 1930-1932* 





Acres of crop 


Total production 


Average 
per year 
1920-1928 


Average 
per year 
1930-1932 


Ratio of sec- 
ond period 
to first 


Average 
bushels 
per year 
1920-1928 


Average 
bushels 
per year 
1930-1932 


Ratio of sec- 
ond period 
to first 


Corn 


thousands 
9 053 
4 355 
3 283 
2 620 
305 
180 
140 
97 
52 
29 


thousands 
9 243 
4 353 
2 376 
1 863 
319 
241 
56 
334 
51 
29 


perct. 
102 
100 
72 
71 
105 
134 
40 
344 
98 
100 


millions 
324.1 
141.3 

(4.1>>) 

42.8 
9.2 

2.2 
1.3 

.4 
(7.1) 


millions 
328.3 
153.2 
(2.8b) 
35.7 
9.3 

".8 
6.1 

.5 
(8.1=) 


perct. 
101 
108 
68 
83 
101 

'36 
469 
125 
114 


Oats 


Hay (tame) . . . 


Wheat 


Barley 


Alfalfa.. . 


Rye 


Soybeans 


Cowpeas 


Broomcorn 





Basic data obtained from Illinois U. S. Crop Reporting Service. b Millions of tons. 
'Thousands of tons. 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



49 



Corn. Corn acreage was fairly stable from 1920 to 1934, differ- 
ences in acre-yields being largely responsible for the variations in 
production from year to year (Fig. 30). Three of the five crops from 
1930 to 1934 were short (1930, 1933, and 1934), and two were bumper 



400 
300 
200 
100 


I 200 

D 
ID 

S 100 

z 



d 50 

2 

25 



.CORN. 



"in 



H 



in iiiiminii 






SOYBEANS. 



-I 



mm 



FIG. 30. PRODUCTION OF LEADING CROPS IN ILLINOIS 

YEARLY FROM 1920 TO 1934 

The particularly noticeable features of this graph are the increase in the 
production of soybeans, the decreases in the production of hay and barley, the 
variation in production from year to year, and the sharp decrease in production 
of most of the crops in 1933 and 1934. The large decrease in these latter years 
was the result of (1) reduction in acreage because of AAA programs and 
drouth, and (2) lower acre-yields because of drouth and chinch bugs. 

crops (1931 and 1932). The large 1931 and 1932 crops, occurring 
during the period of rapidly declining prices, reinforced the tendency 
toward lower corn prices. The short crops of 1933 and 1934 have been 
one of the causes of the higher prices which have prevailed since the 
summer of 1933. The effects of these crops upon corn-price trends, 



50 BULLETIN No. 422 [December, 

however, should not be overestimated, for corn prices began to rise 
before the short crop of 1933 was in evidence ; and, in 1930, corn prices 
declined in spite of the short crop of that year. As an average of the 
two periods, 1920-1928 and 1930-1932, slight increases of 2 percent in 
annual corn acreage and 1 percent in annual corn production occurred 
(Table 4). 

Oats. Production of oats in Illinois has gone thru three cycles 
since 1920, with peak production in 1920, 1924, 1928, and 1932 
(Fig. 30). These cycles represent chiefly variations in yield per acre. 
The oat crops of 1930 to 1932 were average or better than average, 
whereas those of 1933 and 1934 were the shortest of the fifteen-year 
period. The average annual oats acreage during the periods 1920-1928 
and 1930-1932 were the same, but the average annual production of 
oats in the later period increased 8 percent over the earlier period 
(Table 4). 

Wheat. Production of wheat since 1920 has been rather irregu- 
lar, with the general trend about stable since the wartime scale of 
production was reduced in 1923 (Fig. 30). The crop was large in 
1931 as a result of high acre-yields. Acreages were reduced in 1932 
and 1933, and production was smaller. The average annual acreage of 
wheat harvested was 29 percent lower during the period 1930-1932 
than during 1920-1928, tho production was reduced only about 17 
percent, because of the high acre-yields in 1931 (Table 4). The earlier 
period included several of the post-war years, when wheat acreage 
was still influenced by wartime expansion. Illinois has a large acreage 
which can be planted to wheat when wheat prices become attractive. 

Barley. Barley crops increased rapidly from 1921 to 1928, and 
then became stable, at a lower level than that of 1928, until 1932 
(Fig. 30). In 1933 and 1934 the barley crops were very short be- 
cause of drouth and chinch bug damage. The average annual acreage 
of barley during 1930-1932 was about 5 percent larger than during 
1920-1928, but production was only 1 percent larger (Table 4). 

Rye. Average annual acreages and production of rye were about 
60 percent lower during 1930-1932 than during 1920-1928 (Table 4), 
as a result of liquidation of wartime increases. A similar trend in 
spring-wheat production indicates a general reduction in commercial 
grain farming in the livestock areas in the northern part of the state. 

Soybeans. Soybean production expanded steadily from 1920 to 
1931, decreased somewhat in 1932 and 1933, and then increased again, 
reaching a new high of nearly 10 million bushels in 1934 (Fig. 30). 
Relatively low prices were probably a cause of the decreases in 1932 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 51 

and 1933. The expansion in 1934 was the result partly of the AAA 
program and partly of increased planting of soybeans (one of the 
crops immune to chinch bug attack) because of the severity of chinch 
bug damage to cereal crops. Average annual acreage and production 
of soybeans, excluding soybeans for hay, were almost four and five 
times, respectively, as large during 1930-1932 as during 1920-1928 
(Table 4). In 1930-1932 soybeans harvested as seed ranked fifth 
among the grains in total acres utilized. 

Cowpeas and Broomcorn. Average annual acreages both of 
cowpeas and broomcorn w r ere approximately the same during 1920- 
1928 and 1930-1932, but production of both averaged higher because 
of larger acre-yields (Table 4). 

Hay. The trend of hay production was steadily downward from 
1927 to 1930 (Fig. 30), but was fairly stable from 1931 thru 1934. 
In 1933 and 1934 the dry seasons reduced acre-yields. Average an- 
nual production and acreage of hay were about 30 percent less during 
1930-1932 than during 1920-1928 (Table 4) a change brought about 
by reduced acreages of clover, timothy, and such hays as red top, 
for the acreage of alfalfa increased 34 percent, and the acreage of 
annual legume hay (soybeans and cowpeas) increased 73 percent 
between the two periods. Lower hay-acreage totals reflect reduced 
numbers of hay-consuming animals on farms within the state, as well 
as a continual adjustment to the loss of commercial markets for 
hay as a result of declines in numbers of work animals in cities and on 
farms thruout the country. 

CHANGES IN LIVESTOCK NUMBERS, 1921-1929 AND 1931-1933 

In general, there were fewer animals on Illinois farms in 1931-1933 
than in 1921-1928. Numbers of cattle, especially of dairy cows and 
heifers, increased somewhat, but such gains were more than offset 
by declines in the number of work animals (Table 5 and Fig. 31). The 
decrease in number of hay-eating animals, calculated on the basis of 
"animal units" (one "animal unit" may be considered as the equiva- 
lent of the hay-eating capacity of 1 horse or mule, 1 head of cattle, 
or 7 head of sheep), amounted to 6 percent in the later period, a 
decrease which was in part the cause of the downward trend in hay 
prices described above. 

All of the changes in livestock numbers in Illinois closely parallel 
changes occurring thruout the nation. Apparently the forces affecting 
livestock farming in Illinois have been about the same as those affect- 
ing livestock farming over the country as a whole. 



52 



BULLETIN No. 422 



{December, 



Horses and Mules. Numbers of work animals have declined 
steadily since 1920 (Fig. 31), continuing a decline which began in 
1913 and was caused by adjustment to the adoption of mechanical 
power on many farms. There were approximately 75 percent as many 
horses and mules on Illinois farms in 1931-1933 as in 1921-1929 
(Table 5). But the trend in the last few years indicates that the turn- 
ing point in numbers of horses and mules is not far away. The de- 
crease between January 1, 1933, and January 1, 1934, is estimated to 
have been only 17,000 head, whereas the average annual decrease for 

TABLE 5. AVERAGE NUMBER OF DOMESTIC ANIMALS ON ILLINOIS FARMS, 
1921-1929 AND 1931-1933* 



Species 


Number 
1921-1929 
(Jan. 1) 


Number 
1931-1933 
(Jan. 1) 


Ratio of second 
period to first 


Horses 


thousands 
1 037 


thousands 
773 


perct. 
75 


Mules 


162 


129 


80 


Total, horses and mules 


1 199 


902 


75 


All cattle and calves 


2 308 


2 384 


103 


Dairy cows and heifers 


1 017 


1 089 


107 


Sheep and lambs ' 


623 


737 


118 


Swine 


4 960 


4 952 


100 


Units, hay-eating animals'* 


3 596 


3 391 


94 











Basic data obtained from Illinois U. S. Crop Reporting Service. b lt is considered 
that 1 horse, 1 mule, 1 head of cattle, and 7 sheep comprise equivalent units among hay- 
eating animals. 

the previous five years was 32,000 head. In view of an increased in- 
terest in colt production, it is likely that within two or three years 
there will be an increase in total numbers of work animals. Now that 
the adjustment to mechanical power on Illinois farms is apparently 
about completed, we may expect the numbers of work animals to in- 
crease and decrease in long cycles. After the turning point is reached, 
larger numbers of work animals will bring about an increased demand 
for feed crops, both hay and grain, and will draw "some of the available 
feed supplies away from meat and milk production. 

Cattle (All Classes). Cattle numbers went thru a long cycle dur- 
ing the period from 1920 to 1934, decreasing from 1920 to 1928 by 
nearly one- fourth, and increasing from 1928 to 1933 by approximately 
the same amount (Fig. 31). The average number of cattle and calves 
on Illinois farms during 1931-1933 was 3 percent larger than during 
1921-1929 (Table 5). Since the number of cattle in the United States 
reached a peak in 1934, at least for the current cycle, and, conse- 
quently, fewer cattle will be available for feeding during the immedi- 
ate future, it is probable that cattle numbers in Illinois also have 
reached a temporary high point. Should AAA programs result in re- 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



53 



duced grain and larger hay acreages, however, there will likely be 
further increases in breeding-cattle numbers. Probably after a tempo- 
rary period of stability, coinciding with a period of decline in cattle 
numbers in the United States as a whole, cattle numbers will increase 
again in Illinois. These long cycles in numbers may be expected to 
continue in the future. 

Milk Cows and Heifers. Milk cow and heifer numbers remained 
rather stable during the period of declining cattle numbers from 1920 
to 1928, but increased somewhat during the period from 1929 to 1934 



3000 
2500 

2000 
1500 
1000 
500 



Q 

HI 

I 

a 5 000 

O 



^4000 



03000 

I 



2000 

1000 



1000 
500 



CATTLE AND CALVES 
(ALL CLASSES) 



I LI II I LLUJJJ 



I ill 1 iiil I i i ill i 

IKhjvlILK COWS AND HEIFERS" 

|i!i Mil htl hii] !< bui kill Biif ' fiifi 

liiiliiiniiniiliitiiiriiii 




H 
II 
II 



HORSES, MULES AND COLTS 



II Ml 
1 1 1 1 1 1 1 1 1 1 1 1 111 



1920 '21 '22 '23 '24 '25 26 27 '2d '29 30 31 '32 33 34 1935 

FIG. 31. CHANGES IN NUMBERS OF DIFFERENT KINDS 

OF ANIMALS IN ILLINOIS, 1920 TO 1935 

Work animals declined in numbers steadily from 1920 onwards, but the 
trend in the last few years indicates that the turning point is not far away. 
Numbers of hogs and of cattle of all classes passed thru the cycles character- 
istic of those industries. Numbers of milk cows and heifers remained fairly 
stable up to 1930, but increased somewhat from 1930 to 1934. All these changes 
in livestock numbers in Illinois closely parallel changes occurring thruout the 
nation. 



54 BULLETIN No. 422 [December, 

(Fig. 31). There were 7 percent more milk cows and heifers on 
Illinois farms in 1931-1933 than in 1921-1928. (Table 5) an increase 
which largely accounts for the increase of 3 percent in numbers of 
all classes of cattle. After a temporary period of decline caused by 
higher grain prices, the number of milk cows is likely to be stabilized 
or to increase moderately, especially if AAA programs lead to reduced 
grain acreages. 

Hogs. Hog numbers have gone thru the cycles characteristic 
of that industry. Low points came in 1922, 1926, 1930-1931, and will 
come again in all probability in 1935-1936 (Fig. 31). In spite of these 
recurrent cycles, caused basically by fluctuations in the corn crop, the 
number of hogs in the state is indicated to be rather well stabilized. 
Average numbers of hogs on Illinois farms during 1931-1933 were 
approximately the same as during 1921-1929 (Table 5). Unless there 
is a permanent reduction in the corn acreage as a consequence of AAA 
programs, the number of hogs at the end of a given year can be ex- 
pected to be slightly under 5 million head. The number of hogs on 
hand at the beginning of each year during this period does not seem 
to have been affected much by the downward trend in numbers of 
horses, nor by the long cyclical decline and increase in cattle numbers, 
which might be presumed to have altered the supplies of feed available 
for hog production. 

Sheep. Changes in numbers of sheep are not shown in Fig. 31, 
because of their minor importance in Illinois. Sheep numbers declined 
during the years from 1920 to 1923, increased rather sharply between 
1923 and 1927, fell off again in 1928, increased from 1928 to 1932, and 
have since declined. The average number in Illinois during 1931-1933 
was 18 percent larger than during 1921-1929 (Table 5). Aside from 
the decline in 1928, the movements in numbers of sheep in Illinois 
during these years parallel the changes in numbers of sheep in the 
country as a whole and probably reflect variations in supplies of lambs 
available for feeding. 

CHANGES IN EXPORTS OF IMPORTANT ILLINOIS 
FARM PRODUCTS IN RECENT YEARS 

In the analysis of prices of Illinois farm products in foregoing 
portions of this bulletin, consideration of market demand has been 
limited primarily to the domestic market. It is well, however, to con- 
sider also the effects of foreign trade on prices of farm products. 

The United States, because of the extensiveness of the country, the 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 55 

variety of resources and climate, and the vigorous development of 
agricultural and industrial resources, is an important producer both 
of agricultural and of industrial products a fact which creates a 
peculiar situation so far as trade with foreign countries is concerned. 
Surpluses of products, both agricultural and industrial, are accumu- 
lated for export ; or capacity exists to produce such surpluses. 

But if a nation sells, it must also buy. In the long run, foreign 
nations can pay for American goods only with goods or services. Since 
the United States became a creditor nation as the result of huge sales 
at high prices to foreign nations during the war, the problem of dis- 
posing of American surpluses has become more difficult. The United 
States now needs to import goods in order to collect interest on debts 
owed to her. Temporarily the difficulty may be avoided by making 
large loans to foreign countries, as was done during the period from 
1924 to 1928, but permanent adjustment cannot be attained in that 
manner. 

Because of the above conditions it is difficult for the United States 
to export anything except that which is so efficiently produced that its 
purchase is very attractive to foreigners. Such items are cotton, the 
production of which under relatively favorable conditions is so well 
organized in the United States, and automobiles, in the mass manu- 
facture of which America has led the world. Products which can be 
domestically produced by other nations, or for which substitutes can 
be found without too much sacrifice are not imported to any large 
extent by those nations. As a matter of policy rather than from eco- 
nomic necessity, the United States follows the same procedure: by 
levying duties on most products which may be imported, this country 
effectively reduces imports of all goods which can be produced do- 
mestically without too great sacrifice. American imports of agricultural 
products are confined chiefly to such raw materials as rubber, sugar, 
coffee, silk, wool, and hides. 

As a combined result of the conditions just discussed and the 
steady increase in domestic population and little or no expansion of 
agricultural production in the last decade, exports of corn-belt products 
have been materially reduced in volume. The export market conse- 
quently has become progressively less important as a physical outlet 
for American agricultural surpluses, altho world prices are important, 
because they set minimum and maximum levels for domestic prices. 
For example, a ceiling for wheat prices in the United States was fixed 
by the low world wheat price-level plus the import duty in 1933 and 
1934 (pages 32-33). It is likely that in the future the attention given 



56 



BULLETIN No. 422 



[December, 



to foreign markets by corn-belt farmers will be centered in the prevail- 
ing level of foreign prices rather than in the availability of foreign 
markets as actual outlets for corn-belt products, except lard. 

EXPORTS OF LARD AND PORK 

Average annual exports of lard in 1931-1934 declined below the 
average for the postwar years 1921-1924; and exports of bacon, hams, 
and shoulders fell below the average not only of 1921-1924, but of 
1910-1914 as well (Fig. 32). 



AVERAGE ILLINOIS FARM 
PRICE OF HOGS 



AVERAGE U.S. EXPORTS 



LARD 



BACON. HAMS& 
SHOULDERS 



YEARS 



DOLLARS PER CWT. 

024 6 6 10 



MILLIONS OF LBS. 
400 800 



MILLIONS OF LBS. 
400 600 



1910-1914 



1921-1924 



1925-1930 



1931-1934 



7.44 



7.86 



4.44 



474 



10 ' 23 ____ 




550 



349 



636 



300 



100? 



FIG. 32. ILLINOIS FARM PRICE OF HOGS AND UNITED STATES EXPORTS 

OF SWINE PRODUCTS BY PERIODS, 1910 TO 1934 

Low prices for hogs in 1931-1934 were evidently a result of causes other 
than diminishing exports, for exports of swine products decreased not only in 
1931-1934 under the preceding period but in 1925-1930 as well, whereas hog 
prices increased in 1925-1930. According to the trend herein indicated, exports 
of hog products other than lard will probably become an insignificant item in 
American export trade. 



But the low hog prices of 1931-1934 cannot logically be explained 
as a result of diminished exports, for exports of lard and pork products 
also declined in 1925-1930 as compared with the preceding four years, 
while farm prices of hogs in Illinois were one-third higher in 1925- 
1930 than in the previous period. With an inverse relationship be- 
tween exports and prices in one period, and a positive relationship in 
another, it is obviously absurd to conclude that declining exports 
caused the low prices of hogs in 1931-1934. It would be as logical to 
say that the higher hog prices prevailing in 1925-1930 were caused by 
reduced exports, as to say that the lower hog prices of 1931-1934 
were so caused. 

Average annual exports both of lard and of the pork products 



1935] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 57 

during the period from 1921 to 1924 were approximately twice the 
average volume of exports of those products in 1910-1914. This in- 
crease in exports of lard and pork reflects (1) the expansion in hog 
production in the United States following the series of large corn 
crops from 1919 to 1923, and (2) the scarcity of meats and fats 
in European countries during the period just after the war, when 
European agriculture was still disordered. After the short corn crop 
of 1924, hog production was reduced and exports of lard and pork 
products fell off. European agriculture was being restored, but an im- 
portant factor in this decline in exports was a rather stable production 
of hogs, combined with an increasing population in the United States. 
During the five-year period of high hog prices, 1925-1930, average 
exports of lard were approximately 80 percent larger than in 1910- 
1914, while exports of bacon, hams, and shoulders were about 15 
percent below prewar averages. The percentage decreases in exports 
in 1925-1930 from the previous four-year period, were just about 
equal to the percentage increase in population in the United States. 
JPer-capita consumption of lard and pork was practically the same in 
the two periods. 

In the third postwar period, 1931-1934, exports of lard and pork 
products fell off again, exports of lard still remaining about one-sixth 
larger than before the war but exports of the meat products amount- 
ing to less than one third of the prewar average. This shrinkage un- 
doubtedly reflects expansion of foreign sources of supply; but it 
merely continues a trend which has been going on for a long time, 
and which was interrupted by the war. 

In view of these trends, exports of pork products other than lard 
will probably become an insignificant item in American export trade, 
while exports of lard, altho in diminishing volume, will continue to be 
important. Lard is a by-product of the meat industry, and like other 
by-products will continue to be produced and sold for what it will 
bring. Hog prices will probably more and more reflect the ability 
of the home market to buy pork. The level at which hog prices 
will prevail will depend upon the level at which the home market will 
absorb existing supplies. 

EXPORTS OF WHEAT AND FLOUR 

Recent trends in exports of various grains were mentioned above 
in the section on "Comparison of Prices of Individual Farm Products" 
(pages 32-33), where it was pointed out that average annual exports 
of barley declined from 30 million bushels in 1920-1929 to 7 million 



58 



BULLETIN No. 422 



[December, 



bushels in 1930-1932, exports of corn from 52 million bushels to 5 
million bushels, exports of oats from 17 million bushels to 4 million 
bushels, exports of rye from 30 million bushels to .5 million bushels, 
and exports of wheat from 200 million bushels to 89 million bushels. 

From the standpoint of exportation wheat is the most important 
of the grains, and for that reason is given more detailed consideration 
here. It is the most commonly grown of the grains; the actual volume 
of exports is larger and more consistent than the other grains; and the 
ratio of exports to total production is higher. 

Exports of wheat, including the flour equivalent, were expanded 
during the war, but have declined at a rapid rate since 1924 (Table 6). 

TABLE 6. UNITED STATES EXPORTS OF WHEAT, 1920-1928 AND 1930-1932" 



Year 


Exports, 
thousands of 
bushels 


Year 


Exports, 
thousands of 
bushels 


1920. .. 


312 625 


1930 


112 435 


1921 


265 590 


1931 


123 774 


1922 


205 079 


1932 


32 284 


1923 


131 892 






1924 


254 695 






1925 


92 669 






1926 


205 994 






1927 


190 578 






1928 


142 301 






Total 1920-1928 


1 801 423 


Total 1930-1932 


268 493 


Annual average 


200 158 


Annual average 


89 498 











Basic data obtained from U. S. Department of Agriculture. 



In 1921-1924 they averaged nearly two and a half times as large 
as in 1910-1914 (Fig. 33) an increase reflecting wartime disturbances 
to European wheat production. United States wheat production had 
been expanded to meet this demand. In 1924, however, acreages 
planted to wheat in Illinois were sharply reduced. Exports as well 
as production fell off during the 1924-1930 period, and in general 
the trend was downward. The average volume of wheat exported 
was more than 50 percent larger, however, than during the pre-war 
period. In 1931-1934 the decline in wheat exports continued. The 
average for those years was 70 percent of the prewar average ; but in 
three of the four years (1932, 1933, and 1934), exports were below 
the average of 70 percent. 

The decline in wheat exports from 1924 to 1934 may be explained 
by (1) increased production of wheat in foreign countries; (2) re- 
strictions on imports by a number of foreign countries; and (3) a level 
of wheat prices in the United States above that in the free world 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



59 



markets. The accumulation of wheat as a result of diminished exports 
was an important cause of the low wheat price in relation to other 
commodities in 1931-1933. 



AVERAGE ILLINOIS FARM PRICES OF WHEAT 


AVERAGE U.S. EXPORTS 


YEARS 


CENTS PER BUSHEL 
20 40 60 80 100 120 


MILLIONS OF BUSHELS 
O 40 80 120 16O 20O 24O 


1910-1914 
1921-1924 
1925-1930 
1931-1934 


92 
112 
126 
61 


i | i | i 


' 1 ' 1 ' 




107 

252 
169 
















H 
















i , ...:-,.: I 












1 


\ 












70 


mji 













FIG. 33. AVERAGE ILLINOIS FARM PRICE OF WHEAT AND AVERAGE 
UNITED STATES EXPORTS OF WHEAT AND FLOUR BY 

PERIODS, 1910 TO 1934 

The large expansion of wheat exports in 1921-1924 over 1910-1914 reflected 
wartime disturbance to production of wheat in Europe. The steady decline since 
that period is a result of (1) increased production of wheat in foreign coun- 
tries, (2) restrictions on imports by some foreign .countries, and (3) a level of 
wheat prices in the United States above that in free world markets, even tho 
low in relation to other products and other periods. The low price of wheat in 
the United States in 1931-1934 was in part caused by the accumulation of wheat 
resulting from diminished exports. 



The accumulated supply of wheat in the United States began to 
disappear only when the great drouth of 1933 and 1934 shortened 
wheat crops to quantities below domestic requirements for food and 
seed. In normal growing seasons United States wheat crops are above 
these requirements. If production of wheat is continued at the normal 
level, either exports must expand or heavy feeding of wheat must be 
continued. Under such conditions wheat prices may be expected to 
be low in relation to prices of other farm products. 



REASONS FOR THE GENERAL PRICE RISE, 1933-1934 

The marked advance in prices during 1933 and 1934 was divided, 
so far as the prices of Illinois farm products are concerned, into two 
parts, the first occurring in the second and third quarters of 1933, 
and the second largely in the third and fourth quarters of 1934 
(Fig. 1, page 4). Definite price advances such as this result only 
"rom special causes. The special causes in 1933-1934 were (1) the 



60 BULLETIN No. 422 [December, 

monetary policy pursued by the United States Government, and 
(2) the severe drouth of 1934. 

EFFECTS OF MONETARY POLICY ON PRICES 

The first part of the price rise, that of mid-1933, and particularly 
the rise of grain prices, was unquestionably caused in large measure 
by the monetary policy adopted by the new Administration in the 
spring of 1933. The essential feature of this policy was the deprecia- 
tion of the dollar in relation to gold. When this process was completed 
in January, 1934, the gold content of the dollar had been reduced 
41 percent. Before the depreciation of the dollar, the United States 
Treasury purchased gold at $20.67 an ounce; after the process was 
completed, the price was $35.00 an ounce. 

In the first quarter of 1934, by which time the devaluation had been 
completed, the price of Illinois farm products averaged 47 percent 
higher, and the price of gold 68 percent higher than a year earlier 
(Table 7). Thus the full amount of the depreciation was not reflected 
in the index measuring the prices of Illinois farm products as a group. 
The products whose prices were most directly affected were grains 
and wool. Prices of livestock and livestock products other than wool 
did not rise as much. Corn prices were 178 percent higher than a 
year earlier, wheat 100 percent higher, wool 160 percent higher, butter- 
fat 25 percent higher. The price of beef cattle, on the other hand, was 
only 9 percent higher, prices both of hogs and milk were 20 percent 
higher, and the price of lambs was 52 percent higher. 

Devaluation immediately relieved the position of Illinois grain 
farmers. Prices of grain rose by somewhat greater amounts, however, 
than can be accounted for by the direct effects of devaluation. The 
reasons for the additional rise were: (1) grain prices, in common 
with other staples, before the rise had fallen to unduly low levels be- 
cause of the momentum attained by the general liquidation and con- 
version of assets into currency and gold; and (2) after the rise began, 
speculative influences, as usually happens when a rise of this nature 
occurs, carried prices up too far and made necessary a period of re- 
adjustment. The initial period of speculation in the grain markets 
culminated in July, 1933, and was followed by recessions. Contrary to 
the usual seasonal trend, wheat was cheaper in the last quarter of 
1933 than in the third quarter. Another reason for the appearance of 
larger rises in prices, when measured by percentages of a given base 
price, than can readily be accounted for by devaluation of the dollar, 
arises from the fact that effects of devaluation tend to be measured 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



61 



TABLE 7. CHANGES IN THE PRICE OF GOLD IN THE UNITED STATES AND OF SOME 

IMPORTANT ILLINOIS FARM PRODUCTS, 1933-1934 

(Prices in January- March, 1933 = 100) 



Period 


Price 


Index 


Price 


Index 


Price 


Index 


Price 


Index 


Price 


Index 


GOLD" 

(ounce) 


ILLINOIS^ 
FARM 
PRODUCTS 


CORN 

(bushel) 


WHEAT 
(bushel) 


HOGS 

(100 pounds) 


1933 


{20.67 
23.68 
29.82 
33.05 

34.77 
35.00 
35.00 
35.00 


100.0 
114.6 
144.2 
159.9 

168.2 
169.3 
169.3 
169.3 


(index)* 
(36.9) 
(46.8) 
(54.4) 
(51.8) 

(54.4) 
(57.0) 
(69.6) 
(76.2) 


100.0 
126.8 
147.4 
140.4 

147.4 
154.4 
188.6 
206.5 


$.15 
.32 
.46 
.36 

.42 
.45 
.65 

.78 


100.0 
213.3 
304.7 
238.0 

278.0 
302.0 
435.4 
520.0 


$.39 
.60 
.82 

.74 

.78 
.79 
.90 
.92 


100.0 
153.8 
210.3 
189.7 

200.0 
202.6 
230.8 
235.8 


{3.07 
3.93 
3.98 
3.73 

3.67 
3.48 
5.13 
5.23 


100.0 
128.0 
129.6 
121.5 

119.5 
113.4 
167.1 
170.3 


Apr. -June 


July-Sept 


Oct.-Dec 


1934 

Jan. -Mar 




July-Sept 


Oct.-Dec 






BUTTERFAT 

(pound) 


MILK 
(100 pounds) 


BEEF 
CATTLE 
(100 pounds) 


LAMBS 
(100 pounds) 


WOOL 

(pound) 


1933 


{.16 
.18 
.19 

.18 

.20 
.21 
.23 
.25 


100.0 
112.5 
118.8 
112.5 

125.0 
131.0 
143.8 
156.2 


{1.12 
1.17 
1.35 
1.42 

1.35 
1.35 
1.58 
1.60 


100.0 
104.5 
120.5 
126.8 

120.5 
120.5 
141.1 
142.9 


$4.05 
4.48 
4.60 
4.25 

4.40 
5.13 
5.53 
5.33 


100.0 
110.6 
113.6 
104.9 

108.6 
126.7 
136.5 
131.6 


{4.67 
5.42 
6.03 
5.43 

7.10 
7.53 
6.23 
5.77 


100.0 
116.1 
129.1 
116.3 

152.0 
161.2 
133.4 
123.5 


{.10 
.20 

.24 
.25 

.26 
.25 
.22 
.20 


100 
200 
240 
253 

260 

247 
222 
200 




July-Sept 


Oct.-Dec. 


1934 
Jan. -Mar 


Apr.-June 


July-Sept 


Oct.-Dec 





Prices of gold from January, 1933, to August, 1933, were obtained from "Survey of Current 
Business." Prices from September, 1933, to September, 1934, were obtained from "The Annalist." 
b Based on 1921-1929 prices. 

at market centers, whereas Illinois farm prices are interior prices. 
Suppose a commodity at market centers was worth 30 cents before and 
50 cents after devaluation. The increase would have been 662/3 percent. 
At a country point from which it would cost 10 cents to move the com- 
modity to market, the corresponding prices would have been 20 cents 
and 40 cents, and the rise would have been 100 percent instead of 
662/3 percent. 

The sharp increases in prices of grain and wool upon the devalua- 
tion of the dollar were to be expected. Grain and wool markets are 
international, and because gold is used in the settlement of balances 
between countries, the gold content of the dollar directly affects the 
prices of such products. When the number of dollars which can be 
purchased with a given amount of gold increases, prices of those 
commodities which are traded on international commodity exchanges 
immediately rise by a roughly equivalent amount. 

Prices of such products, on the other hand, as have wholly or 



62 BULLETIN No. 422 [December, 

almost wholly a domestic market (as is true, by and large, of meat and 
milk) are not so directly affected by changes in the price of gold. 
Foreigners cannot invest readily, if at all, in such commodities. More- 
over, as such products must be bought largely in the home market 
by consumers whose incomes change only gradually as a result of 
dollar devaluation, efforts to raise prices meet the stubborn resistance 
of consumer demand. Consequently, prices of such products are af- 
fected, in the short run, very little by the cheaper dollars. 

The immediate effect of dollar devaluation may in fact be to de- 
press instead of to raise the prices of certain classes of commodities, 
the market for which is wholly domestic. Higher grain prices make 
livestock production less profitable and lead to liquidation, which 
further depresses market prices while it is going on. After the process 
is completed, the smaller numbers of livestock bring higher prices. 

Because of these conditions there is no reason to suppose that 
prices of purely domestic products such as milk or beef will rise in 
proportion to the degree of currency devaluation unless the higher 
prices for staple commodities stimulate business activity to such a 
degree that domestic incomes rise in proportion to the degree of de- 
valuation. Should this stimulation of trade and increase in purchasing 
power of domestic incomes occur, a tendency toward higher prices for 
the domestically consumed farm products will follow. In a country 
as large as the United States and with as complicated a price struc- 
ture, such effects must necessarily be slow. The success of the policy 
of dollar devaluation depends, however, on whether it restores a well- 
balanced and substantially higher price-level than that of early 1933. 
Such a balance would require higher prices for such essentially do- 
mestic commodities as hogs and milk than had been achieved at the 
time the revaluation was completed early in 1934. 

Fairly short grain crops in the United States in 1933 tended to 
sustain prices. Drouth conditions, which began to be serious early in 
the crop season of 1934 and became worse as the season advanced, 
created the basis for the second rise in farm prices that in the third 
quarter of 1934. Which commodities were most affected by this rise? 

Between the second and third quarters of 1934 the average price 
of corn rose nearly one-third, and the price of hogs nearly one-half 
(Table 7). Wheat prices, on the other hand, increased less than one- 
sixth, and milk and butterfat prices a little less than one-fifth. 

It is clear, however, that the reduced supply of feedstuff s, par- 
ticularly corn, will, as a result of the drouth, be followed by reduced 
supplies of and higher prices for livestock, particularly hogs. 



J9J5] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 63 

That the reduction programs of the Agricultural Adjustment Ad- 
ministration played a minor part in the price rise of 1934 is evident, 
because: (1) the total reduction in corn acreage in 1934 was only 
about 10 percent below the 1933 figures, whereas the crop was finally 
estimated to be 41 percent smaller; (2) the "contracted acres" were 
released for other uses as the drouth developed and produced con- 
siderable feed; and (3) even tho hogs were materially reduced in 
number by the program, the actual reductions outran the reductions 
required. Some other force (namely, feed shortage) than the AAA 
program was operating to reduce hog numbers. Had hogs been more 
numerous, they could not have been fattened, because there was not 
enough feed available. 

A price rise caused by a drouth obviously is not as permanent as 
a rise caused by revaluation of the dollar. The drouth of 1934 will 
extend its influence for some time, however, for reductions in live- 
stock numbers caused by short feed supplies cannot be replaced over- 
night. This situation will tend to hold up the average level of farm 
prices. It cannot be emphasized too strongly that high prices resulting 
from the drouth are temporary. Livestock numbers will come back 
with great rapidity once feed is available, particularly if livestock 
prices are favorable in relation to feed prices, as is certain to be the 
case under the circumstances. 

The only part of the price rise which can be looked upon as per- 
manent is the rise from about 50 percent of 1910-1914 averages in the 
first quarter of 1933, to a level slightly less than 75 percent of 1910- 
1914 averages which obtained from the third quarter of 1933 to the 
second quarter of 1934. Further permanent recovery above that level 
depends on expansion of consumer incomes in this country thru general 
economic recovery or a rise in the world level of prices, or both. 

OUTLOOK FOR PRICES OF FARM PRODUCTS DURING 
NEXT FEW YEARS 

PROBABLE PRICE-LEVEL FOR FARM PRODUCTS 

In view of the effects on prices of the drouth of 1934, of the 
monetary policy which depreciated the dollar 41 percent by early 1934, 
of the relative positions and the trends in prices of the various farm 
products during the period from 1931 to 1934 what reasonable pre- 
dictions or forecasts can be made regarding prices of Illinois farm 
products during the next few years? In general, during 1934, grains 
have been high and livestock low. Will the higher prices for crops 



64 BULLETIN No. 422 [December, 

pull up the prices of livestock, or will the livestock prices pull the 
crops back down? 

In the short run, that is, during 1935, the scarcity of crops will re- 
duce livestock supplies and cause higher prices both for livestock and 
livestock products. With reduced numbers of livestock and more 
abundant crops, the relatively higher level of crop prices will tend to 
disappear. In the long run, unless the initial influence (monetary 
devaluation) which made for higher crop prices spreads its influence 
so as to increase domestic buying power generally, crop prices must 
fall back into line with the livestock prices. The final solution of this 
problem depends on the level to which the whole price structure will 
tend to adjust itself following the changes in the monetary structure. 

PROBABLE CHANGES IN RELATIVE POSITIONS OF PRICES 
OF INDIVIDUAL PRODUCTS 

Regardless of the average level attained by prices of farm products, 
the question as to the relative position of the different items during 
the next few years is worth considering. 

The relative position of prices of different products may shift in 
response to such temporary and more or less unpredictable occur- 
rences as changes in production or demand. Because of the extremely 
low level to which production fell in 1934, it may be assumed that 
crops, if production is normal, will be cheaper in relation to livestock 
in the latter part of 1935. But this is a short-run influence. In the 
long run the relative positions of prices shift because of: (1) cyclical 
changes which are only semipermanent; (2) permanent changes in 
demand; (3) permanent changes in relative costs, which lead to per- 
manent changes in the relative volumes in which various products are 
produced. 

When all these factors are taken into consideration, the following 
tentative conclusions as to future changes in price positions held by the 
more important Illinois farm products in 1931-1934 may be drawn: 

Barley higher, because of improved demand. 

Oats higher; probable improved demand as a result of probable 
increases in numbers of horses. 

Corn lower, until consumer demand for hogs is restored. 

Wheat and rye lower, because of declines in exports, low world 
price-levels, and the necessity of using domestic surpluses as feed. 

Soybeans lower than in 1921-1929, on account of the high base 
in 1921-1929 but relatively better than in 1931-1933. 



1935} PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 65 

Butterfat lower until consumer demand gets back to normal, then 
about the same. 

Poultry and eggs lower until consumer demand gets back to 
normal, then about the same. 

Horses and mules will remain high in relation to prices of other 
livestock, because of their relative scarcity. Within a few years, how- 
ever, the increased breeding stimulated by these attractive prices will 
oversupply the reduced demand for horses and mules. 

Cattle will tend to be restored to a relatively high price. The 
drouth of 1934 made necessary a huge reduction in cattle numbers, 
which shortened the liquidation stage of the cattle cycle. During 1934 
the estimated number of cattle in the country was reduced 7,623,000 
head, to a total of 60,667,000, which brought the number back to the 
1931 figure. This reduction will tend to restore cattle to a relatively 
high price. Because of slower liquidation, prices of dairy cows will 
be relatively cheaper, but the high level of cattle prices in general will 
pull them up. 

Hogs cannot be predicted. Cycles in hog production and prices 
are so short that no predictions can be made for long periods. In the 
short run, 1935 and 1936 hogs will be relatively high because of ex- 
treme scarcity. After that they will drop to a lower position. Over the 
long run, hogs will occupy about the same relative price position as 
corn. 

Sheep relatively higher. Reduction in numbers of sheep over the 
last two years, and enforced liquidation in 1934 as a result of the 
drouth, has brought the number of sheep in the country, according to 
January 1, 1935, estimates, down to 49,766 million head, or back to 
the 1929 level. This reduction will tend to maintain a relatively higher 
level for sheep and lamb prices, when compared with prices of other 
farm products, than was maintained in 1931-1933. 

SUMMARY 

1. The tendency for prices of all Illinois farm products to decline 
from 1929 to early 1933, and then to rise from mid- 1933 to the end 
of 1934, indicates a common force operating first to depress and then 
to raise all prices. The decline carried the average down to about 50 
percent of 1910-1914 prices for the first quarter of 1933, and the 
ensuing rise brought the average back to approximately the 1910-1914 
level at the end of 1934. The rise was divided into two parts; the 



66 BULLETIN No. 422 [December, 

first part was completed by the end of the third quarter of 1933, and 
brought the average up to about 70-75 percent of 1910-1914; the 
second began in the third quarter of 1934 and brought the average up 
approximately to the prewar average. 

2. The first of the two rises reflected the reaction of markets for 
staple Illinois products to various policies of the new administration, 
particularly the monetary policy which reduced by 41 percent the gold 
content of the dollar. In this rise, prices of animal products lagged, 
for the cheapening of the dollar does not have as direct an effect on 
the prices of such commodities as it does on the prices of grains. The 
full effect of the gold devaluation policy will not be registered in prices 
of animal products unless the rise in the prices of staples stimulates 
business activity and causes consumer income to increase to a degree 
correponding to the currency devaluation. 

3. The second rise in the prices of Illinois farm commodities was 
the result principally of a shortage of supplies, such shortage being 
caused principally by the drouth, the effect of which will of course 
be only temporary. The Agricultural Adjustment Administration's 
reduction programs also had very direct effect. 

4. Analysis of the range of the prices of the various Illinois farm 
products in successive Septembers from 1930-1934 suggests that the 
rather definite division of the prices into relatively high and relatively 
low price groups resulted, not from any common cause, but merely 
from the chance operation of various influences. The tendency for 
the prices of all items to move down and up together is evidence of 
some common cause operating first to depress prices and then to raise 
the level; and the division into groups composed of different items 
from year to year is evidence of particular influences pulling the dif- 
ferent items by varying amounts away from the general average. 

5. Prices of the grains from 1931 to 1933 were, in relation to 1921- 
1929 prices, the lowest, on the average, of any Illinois farm com- 
modity prices; prices of livestock products were next, and prices of 
livestock were the highest. The average (median) prices of seven 
grains during this period was 44 percent of 1921-1929 prices; five 
livestock and poultry products averaged 50 percent; and seven classes 
of livestock averaged 59 percent. The rank of the various farm com- 
modities from highest to lowest with respect to prices in 1931-1933 
compared with prices in 1921-1929 were as follows: Among the 
grains barley ranked highest, then oats, corn, rye, wheat, cowpeas, and 
soybeans. Among the livestock horses ranked highest, then beef cattle, 
milk cows, veal calves, lambs, hogs, and sheep. Among the animal 



J9J5] PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 67 

products milk ranked highest, then chickens, eggs, butterfat, and wool. 
In spite of the general rise of prices in 1934, the order of the products 
in the groups did not change greatly from that just stated. 

6. All the rise that can be expected in staple products such as the 
grains, as a result of the gold devaluation policy, occurred by early 
1934. The rise in the general price-level, as measured by the index 
of wholesale prices of all commodities, was only 30 percent as great 
as it would have been had it reflected the full degree of gold de- 
valuation. Had devaluation been fully reflected in commodity prices 
it would have raised the average about 70 percent, that is, from 60 
percent of the 1926 level to 102 percent. One of the most important 
questions now facing Illinois farmers is the extent to which prices 
of animal products that have not been directly affected by gold de- 
valuation will be affected as the forces let loose by the upturn in the 
general price-level generates increased business activity, employment, 
etc., and the height to which the general price average will rise. 

7. Irrespective of what the price-level may be during the next few 
years, barley and horses, because of increased demand for them, are 
likely to be higher in relation to 1921-1929 prices than are other Illinois 
farm commodities. Wheat, soybeans, and lambs are likely to be rela- 
tively lower. Until there is a greater increase in consumer income than 
has so far developed, prices of hogs, corn, butterfat, and the poultry 
products are likely to be relatively cheap except in periods of very 
short supply. . 

8. The chief differences in the acreages devoted to the various 
Illinois farm crops in 1930-1932 compared with 1920-1928, that may 
have been made in response to changed price relationships, were re- 
ductions in rye (60 percent), wheat (29 percent), hay (28 percent), 
and increases in barley (5 percent) and soybeans (244 percent). 
Changes in livestock numbers, which were largely in response to price 
relationships, closely paralleled changes in livestock numbers in the 
United States as a whole. On January 1 of the years 1931-1933, as an 
average, there were 25 percent fewer horses and mules, 18 percent 
more sheep and lambs, 3 percent more cattle, and 7 percent more dairy 
cows and heifers than on January 1, 1921-1929. 

9. During the three-year period 1931-1933 prices of Illinois farm 
products averaged 51 percent of prices prevailing in 1921-1929; prices 
of goods bought by farmers for use in farm operation averaged 78 
percent, and prices of goods bought for use in farm homes averaged 
71 percent. It therefore required 50 percent more farm products to 
buy given quantities of goods used in production, and 36 percent more 



68 BULLETIN No. 422 [December, 

to buy given quantities of goods used in the home, than in the base 
period. Supplies which were of farm origin were relatively cheaper 
than those of industrial origin. This gap was partially closed by the 
relatively greater rise in prices of farm products than in prices of 
farm supplies in the latter part of 1933 and in 1934. From the low 
point in 1931-1933 to the end of 1934 prices of farm products had 
increased by about 121 percent and prices of farm supplies by about 
25 percent. There still was required, however, in 1934 about 2 per- 
cent more Illinois farm products to buy a given quantity of farm sup- 
plies than was required in 1921-1929, and 19 percent more than in 
1910-1914. 



.7935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



69 



APPENDIX 

TABLE 8. MONTHLY ILLINOIS PRICES OF SELECTED FARM PRODUCTS, 

1931-1934, AND INDEX NUMBERS OF PRICES 

(1921-1929 = 100) 



Month 



1921- 
1929 
price 



1931 



1932 



1933 



Price 



Index 
No. 



Price 



Index 

No. 



Price 



Index 

No. 



1934 



Price 



Index 
No. 



APPLES (bushel) 



January. . . 
February. . 

March 

April 

May 

June 

July 

August 
September . 

October 

November . 

December. . 

Year. . 



January. . . 
February. . 
March.... , 

April 

May , 

June , 

July 

August 
September. 
October. . . . 
November . 
December. 
Year. . 



January. . . 
February. 

March 

April 

May 

June 

July 

August 
September. 

October 

November . 

December. . 

Year.. 



$1.78 
1.86 
1.94 
2.08 
2.01 
2.31 
1.63 
1.27 
1.24 
1.37 
1.50 
1.66 
1.72 

$ .64 
.65 
.66 
.66 
.67 
.67 
.65 
.62 
.60 
.59 
.59 
.62 
.63 

$7.45 



January. . . 
February. . 

March 

April , 

May , 

June , 

July 

August 
September. 
October. . . , 
November . 
December. 
Year.. 



.33 
.67 
.66 
.90 
.96 
.99 
8.13 
8.22 
8.07 
7.90 
7.88 
7.85 

$ .438 
.418 
.424 
.408 
.373 
.360 
.362 
.370 
.391 
.410 
.428 
.442 
.402 



$1.50 


84.3 $ .65 36.5 


1.55 


83.3 .70 37.6 


1.65 


85.1 .75 38.7 


1.70 


81.7 .95 45.7 


1.85 


92.0 1.05 52.2 


1.75 


75.8 1.05 45.4 


.85 


52.1 .90 55.2 


.65 


51.2 .70 55.1 


.55 


44.4 .70 56.4 


.55 


40.1 .70 51.1 


.50 


33.3 .80 53.3 


.60 


36.1 1.00 60.2 


1.14 


63.3 .83 49.0 




BARLEY (bushel) 


$ .50 


78.1 $ .40 62.5 


.48 


73.8 .41 63.1 


.47 


71.2 .43 65.2 


.46 


69.7 .43 65.2 


.46 


68.7 .38 56.7 


.42 


62.7 .34 50.7 


.39 


60.0 .28 43.1 


.33 


53.2 .25 40.3 


.35 


58.3 .23 38.3 


.37 


62.7 .22 37.3 


.39 


66.1 .24 40.7 


.41 


66.1 .24 38.7 


.419 


65.9 .321 50.2 




BEEF CATTLE (head) 


$7.20 


96.6 $5.40 72.5 


7.00 


95.5 4.80 65.5 


6.90 


90.0 5.00 65.2 


6.80 


88.8 5.10 66.6 


6.40 


81.0 4.60 58.2 


6.10 


76.6 4.70 59.0 


6.10 


76.3 5.70 71.3 


6.20 


76.3 5.50 67.6 


6.10 


74.2 5.50 66.9 


6.10 


75.6 5.10 63.2 


6.10 


77.2 4.90 62.0 


5.50 


69.8 4.30 54.6 


6.38 


81.5 5.05 64.4 




BUTTERFAT (pound) 


$ .25 


57.1 $ .22 50.2 


.23 


55.0 .19 45.5 


.26 


61.3 .19 44.8 


.25 


61.3 .17 41.7 


.19 


50.9 .15 40.2 


.19 


52.8 .14 38.9 


.20 


55.2 .14 38.7 


.23 


62.2 .17 46.0 


.26 


66.5 .17 43.5 


.30 


73.2 .17 41.5 


.28 


65.4 .17 39.7 


.26 


58.8 .20 45.2 


.242 


60.0 .173 43.0 



$1.10 


61.7 


1.15 


61.8 


1.00 


51.5 


1.25 


60.1 


1.20 


59.7 


1.20 


51.9 


.80 


49.1 


.90 


70.9 


.95 


76.6 


.95 


69.3 


1.05 


70.0 


1.15 


69.3 


1.06 


62.7 


$ .23 


35.9 


.23 


35.4 


.23 


34.8 


.30 


45.5 


.41 


61.2 


.39 


58.2 


.55 


84.6 


.44 


71.0 


.49 


81.7 


.46 


78.0 


.47 


79.7 


.44 


71.0 


.387 


61.4 


$3.95 


53.0 


4.05 


55.3 


4.15 


54.1 


4.15 


54.2 


4.65 


58.9 


4.65 


58.4 


4.60 


57.6 


4.60 


56.6 


4.60 


56.0 


4.60 


57.0 


4.30 


54.4 


3.85 


48.8 


4.35 


55.4 


$ .19 


43.4 


.16 


38.3 


.14 


33.0 


.16 


39.2 


.20 


53.6 


.19 


52.8 


.23 


63.5 


.17 


45.9 


.18 


46.0 


.19 


46.3 


.19 


44.4 


.16 


36.2 


.18 


45.2 



CHICKENS (pound) 



$1.30 
1.45 
1.55 
1.70 
1.75 
1.60 
1.20 
.95 
1.10 
1.05 
1.10 
1.25 
1.33 

$ .50 
.53 
.54 
.54 
.53 
.66 
.66 
.73 
.73 
.84 
.85 
.87 



73.0 
78.0 
81.4 
81.7 
87.1 
69.3 
73.6 
74.8 
89.0 
76.6 
73.3 
75.3 
77.8 

78.1 

81.5 

81.8 

81.8 

79.1 

98.5 

101.5 

117.8 

121.6 

142.4 

144.1 

140.3 



.665 105.7 



$4.10 


55.0 


4.50 


61.4 


4.60 


60.0 


4.70 


61.4 


5.30 


67.1 


5.40 


67.8 


5.40 


67.7 


5.30 


65.3 


5.90 


72.0 


5.60 


69.4 


5.20 


65.8 


5.20 


66.0 


5.10 


64.9 


$ .15 


34.2 


.21 


50.2 


.23 


54.2 


.20 


49.0 


.21 


56.3 


.22 


61.1 


.21 


58.0 


.24 


64.9 


.23 


59.0 


.23 


56.1 


.26 


60.7 


.27 


61.1 


.222 


55.4 



January. . . . 


. .. $ .201 


$ .16 


79 


,6 


$ .131 


6S 


.2 


$ .085 


42.3 


$ .089 


44.2 


February. . . 


.206 


.147 


71 


.4 


.127 


61 


.7 


.092 


44.7 


.099 


48.0 


March 


.212 


.158 


74 


.5 


.127 


SQ 


.9 


.085 


40.1 


.106 


49.5 


April 


.220 


.162 


7^ 


.6 


.125 


56 


.8 


.093 


42.3 


.108 


49.1 


May. . 


.218 


.147 


67 


.4 


.115 


53 


.8 


.097 


44.5 


.11 


50.4 


June 


.211 


.154 


7S 





.107 


so 


.7 


.094 


44.5 


.11 


52.1 


July 


.217 


.153 


70 


.5 


.115 


ss 


.0 


.101 


46.5 


.117 


53.9 


August 


.210 


.167 


7') 


.5 


.115 


S4 


.8 


.094 


44.8 


.118 


56.2 


September. . 
October 


.206 
.197 


.158 
.13 


76 
66 


.7 
.0 


.11 
.096 


53 

4S 


.4 
.7 


.091 
.083 


44.2 
42.1 


.131 
.115 


62.0 
58.4 


November. . 
December. . . 


.189 
.187 


.135 
.128 


71 

6S 


.4 
.4 


.092 
.082 


48 
41 


.7 
.9 


.077 
.074 


40.7 
39.6 


.114 
.114 


60.3 
61.0 


Year 


.200 


.15 


72 


,7 


.112 


54 


.1 


.089 


43.0 


.111 


53.7 



70 



BULLETIN No. 422 



[December, 



TABLE 8. MONTHLY ILLINOIS PRICES OF SELECTED FARM PRODUCTS, 
1931-1934, AND INDEX NUMBERS OF PRICES Continued 



Month 


1921- 


1931 


1932 


1933 


1934 


1929 " 
price 


Price 


Index 
No. 


Price IJj^ 


Price ' 


Price I j^ x 



January. . . 
February. . 

March 

April 

May 

June 

July 

August 
September. 

October 

November . 

December. , 

Year.. 



January. . . 
February. . 

March 

April 

May 

June 

July 

August 
September . 
October. . . . 
November . 
December.. 
Year 



January. . . 
February. . 

March 

April 

May 

June 

July 

August 
September . 
October.... 
November . 
December., 
Year. . 



January. . . 
February. . 
March. 

April 

May 

June , 

July 

August 
September . 
October..., 
November . 
December. , 
Year 



January. . . 
February. . 

March 

April 

May 

June 

July 

August 
September . 
October. . . . 
November . 
December. , 
Year. . 



.515.62 

. 15.71 

. 15.48 

. 15.16 

. 15.26 

. 14.54 

. 13.44 

. 12.77 

. 13.32 

. 13.38 

. 13.50 

. 14.29 

. 14.37 

.515.24 

. 15.64 

. 16.32 

. 16.37 

. 16.17 

. 15.47 

. 15.06 

. 13.88 

. 13.03 

. 13.16 

. 13.77 

. 14.46 

. 14.88 

. $ .67 
.69 
.69 
.70 
.74 
.78 
.81 
.83 
.81 
.74 
.67 
.68 
.73 

. $2.16 

. 2.28 

. 2.46 

. 2.49 

. 2.60 

. 2.76 

. 2.68 

. 2.56 

. 2.09 

. 1.90 

. 1.84 

. 1.96 

. 2.31 

. $ .393 
.308 
.226 
.220 
.223 
.218 
.229 
.246 
.298 
.351 
.438 
.471 
.30 



514.60 
13.70 
13.60 
13.10 
13.20 
11.30 
9.30 
9.30 
9.10 
9.00 
9.40 
9.40 
11.25 



CLOVER HAY (ton) 



93.5 
87.2 
87.8 
86.4 
86.5 
77.7 
69.2 
72.8 
68.3 
67.3 
69.6 
65.7 
77.7 



59.70 
8.80 
8.80 
8.40 
8.20 
7.20 
6.30 
6.30 
6.10 
5.70 
6.50 
6.10 
7.34 



62.1 
56.0 
56.8 
55.4 
53.7 
49.5 
46.9 
49.1 
45.8 
42.6 
48.1 
42.7 
50.7 



J12.60 

12.30 

11.70 

11.00 

11.50 

11.80 

11.40 

9.50 

7.40 

6.60 

6.90 

7.60 

10.02 

5 .59 
.56 
.53 
.52 
.51 
.49 
.49 
.46 
.36 
.27 
.30 
.27 
.45 

51.80 

1.80 

1.75 

1.75 

1.90 

1.90 

1.60 

1.50 

1.00 

.70 

.55 

.60 

1.40 

5 .22 
.12 
.17 
.16 
.12 
.13 
.13 
.16 
.17 
.21 
.26 
.24 
.17 



CLOVER SEED (RED) (bushel) 



82.6 


57.50 


49.2 


78.6 


7.60 


48.6 


71.7 


7.90 


48.4 


67.2 


8.00 


48.9 


71.1 


8.10 


50.1 


76.3 


8.10 


52.4 


75.7 


6.10 


40.5 


68.4 


5.40 


38.9 


56.8 


5.00 


38.4 


50.1 


4.30 


32.7 


50.1 


4.40 


32.0 


52.6 


4.40 


30.4 


66.8 


6.40 


42.5 


CORN (bushel) 


88.0 


$ .27 


40.3 


81.2 


.26 


37.7 


76.8 


.25 


36.2 


74.3 


.24 


34.3 


68.9 


.23 


31.1 


62.8 


.22 


28.2 


60.5 


.23 


28.4 


55.4 


.23 


27.7 


44.4 


.22 


27.2 


36.5 


.17 


23.0 


44.8 


.16 


24.0 


39.7 


.14 


20.6 


61.6 


.22 


30.0 



COWPEAS (bushel) 



83 
79 
71 
70 
73 
69 
60 
59 
48 
37 
30 
31 
59 

56.1 
39.0 
74.3 
71.8 
55.2 
59.6 
55.5 
64.6 
57.0 
59.8 
59.4 
51.0 
58.6 



27 
27 
26 
22 
20 
19 
18 
18 
21 
20 
20 
20 
22 



$ .59 

.62 

.65 

.56 

.51 

.53 

.48 

.46 

.43 

.38 

.37 

.39 

.50 
EGGS (dozen) 

$ .15 38.2 

.12 39.0 

.087 

.092 

.099 

.092 

.104 

.133 

.154 

.211 

.258 

.294 

.149 



38.5 
41.8 
44.4 
42.2 
45.4 
55.7 
51.7 
60.1 
58.9 
62.4 
48.2 



70 
20 
80 
00 
50 
10 
60 
10 
50 
00 
00 
00 
21 

50 
60 
70 
10 
20 
30 
00 
90 
50 
20 
60 
90 
29 

.15 
.15 
.15 
.24 
.36 
.36 
.53 
.43 
.41 
.31 
.37 
.39 
.32 

.40 
.41 
.44 
.47 
.86 
.96 
.06 
.06 
.95 
.72 
.72 
.72 
.73 

.199 

.101 

.087 

.092 

.111 

.084 

.109 

.108 

.134 

.186 

.229 

.21 

.137 



36.5 
39.5 
37.5 
39.5 
42.6 
41.9 
49.1 
63.4 
63.8 
67.3 
66.7 
63.0 
50.9 

29.5 
29.4 
28.8 
31.2 
32.2 
34.2 
39.8 
42.5 
42.2 
39.5 
40.7 
40.8 
35.9 



22.4 
21.7 
21.7 
34.3 
48.6 
46.2 
65.4 
51.8 
50.6 
41.9 
55.7 
57.4 
43.1 

19 
18 
18 
19 
33 
35 
40 
41 
45 
38 
39 
37 
32 

50.6 
32.8 
38.5 
41.8 
49.8 
38.5 
47.6 
43.9 
45.0 
53.0 
52.3 
44.6 
44.9 



5 9.10 
10.10 
10.90 
11.40 
11.80 
12.80 
12.40 
14.60 
15.80 
15.70 
16.20 
16.70 
13.12 

56.20 



.00 
.60 
6.70 
6.70 
7.30 
7.40 
8.50 
10.10 
11.05 
11.80 
12.50 
8.57 



I 



41 
42 
.42 
.42 
.43 
.51 
.54 
.68 
.74 
.73 
.74 
.88 
.58 

$ .88 
1.17 
1.20 
1.40 
1.39 
1.40 
1.37 
1.31 
.89 
.96 
1.04 
1.13 
1.18 

5 .19 

.148 

.135 

.13 

.128 

.118 

.118 

.151 

.201 

.207 

.268 

.263 

.171 



58.3 

64.3 

70.4 

75.2 

77.3 

88.0 

92.3 

114.3 

118.6 

117.3 

120.0 

115.9 

92.7 

40.7 
44.8 
46.6 
40.9 
41.4 
47.2 
49.1 
61.3 
67.0 
83.6 
85.7 
86.4 
57.9 

61.2 
60.9 
60.9 
60.0 
58.1 
65.4 
66.7 
81.9 
91.0 
98.6 
110.5 
129.4 
78.7 

41 
51 
49 
56 
53 
51 
51 
51 
43 
50 
56 
58 
51 

48.3 
48.0 
59.7 
59.1 
57.3 
54.1 
51.5 
61.4 
67.4 
59.0 
61.2 
55.8 
56.9 



1935] 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



71 



TABLE 8. MONTHLY ILLINOIS PRICES OF SELECTED FARM PRODUCTS, 
1931-1934, AND INDEX NUMBERS OF PRICES Continued 



Month 


1921- 


1931 


1932 


1933 


1934 


price 


TJ_. Index 
Fnce No. 


Price I NJ ) CX 


Price l ^ 


Price l $g* 



January. . . 
February . . 

March , 

April 

May , 

June 

July 

August 
September . 
October. . . , 
November . 
December. . 
Year. . 



January. . . 
February. . 

March 

April 

May 

June 

July 

August. . . . 
September . 

October 

November . 

December.. 

Year. . 



January. . . 
February. 

March 

April 

May 

June 

July 

August. . . . 
September . 

October 

November . 

December.. 

Year. . 



January. . . 
February. . 

March 

April 

May 

June 

July 

August. . . . 
September . 

October 

November . 

December. , 

Year 



.514.47 

. 14.32 

. 14.35 

. 14.21 

. 14.37 

. 13.92 

. 13.24 

. 12.30 

. 12.39 

. 12.45 

. 12.91 

. 13.12 

. 13.52 

.$ 8.66 

. 9.08 

. 9.71 

. 9.42 

. 9.30 

. 9.02 

. 9.64 

. 10.00 

. 10.02 

. 9.62 

. 8.69 

. 8.34 

. 9.29 

.$83 
. 87 
. 89 
. 89 
. 89 
. 88 
. 88 
. 87 
. 85 
. 84 
. 83 
. 80 
. 86 

.$11.17 

. 11.24 

. 11.57 

. 11.57 

. 11.83 

. 11.90 

. 11.29 

. 10.68 

. 10.79 

. 10.61 

. 10.62 

. 11.03 

. 11.19 



$12.80 

12.00 

11.10 

11.10 

11.50 

10.30 

8.60 

8.20 

7.80 

7.40 

7.90 

7.70 

9.70 



88.5 
83.8 
77.4 
78.1 
80.0 
74.0 
64.9 
66.7 
63.0 
59.4 
61.2 
58.7 
71.3 



HAY (Ion) 

$7.50 51.8 
6.80 



.90 
6.50 
6.20 
5.40 
5.30 
5.30 
5.30 
4.90 
4.95 
5.10 
5.85 



47.5 
48.1 
45.7 
43.1 
38.8 
40.0 
43.1 
42.8 
39.4 
39.5 
38.9 
43.2 



HOGS (100 pounds) 



$7.40 


85.4 


$3.80 


43.9 


7.10 


78.2 


3.60 


39.6 


7.20 


74.2 


4.20 


43.3 


7.10 


75.4 


3.70 


39.3 


6.60 


71.0 


3.00 


32.3 


5.90 


65.4 


3.00 


33.3 


6.60 


68.5 


4.50 


46.7 


6.70 


67.0 


4.30 


43.0 


5.60 


55.9 


3.90 


38.9 


4.90 


50.9 


3.25 


33.8 


4.40 


50.6 


3.10 


35.7 


3.70 


44.4 


2.70 


32.4 


6.10 


65.6 


3.59 


38.5 


HORSES (head) 


$71.00 


85.5 


$66.00 


79.5 


71.00 


81.6 


68.00 


78.2 


75.00 


84.3 


71.00 


79.8 


72.00 


.80.9 


70.00 


78.7 


71.00 


79.8 


65.00 


73.0 


70.00 


79.5 


65.00 


73.9 


66.00 


75.0 


67.00 


75.0 


64.00 


73.6 


66.00 


73.6 


64.00 


75.3 


64.00 


75.3 


63.00 


75.0 


59.00 


70.2 


61.00 


73.5 


62.00 


74.7 


61.00 


76.2 


60.00 


75.0 


67.41 


78.4 


65.25 


75.6 



$7.20 
7.50 


64.4 
66.7 


7.60 


65.7 


7.80 


67.4 


7.60 


64.2 


7.10 


59.7 


6.60 


58.4 


6.10 


57.1 


5.60 


51.9 


5.50 


51.8 


5.10 


48.0 


4.80 


43.5 


6.54 


58.2 



LAMBS (100 pounds) 



$4.80 



20 

60 

70 

20 

00 

20 

4.80 

4.70 

4.55 

4.60 

4.55 

4.99 



43.0 
46.3 
48.4 
49.3 
44.0 
42.0 
46.1 
44.9 
43.6 
42.9 
43.3 
41.2 
44.6 



$5.20 
5.20 
4.80 
4.95 
5.20 
5.40 
5.60 
6.90 
6.60 
6.70 
7.40 
7.50 



5.95 

$2.70 
3.10 
3.40 
3.35 
4.30 
4.15 
4.15 
3.95 
3.85 
4.50 
3.85 
2.85 



3.68 

$65.00 
69.00 
72.00 
76.00 
79.00 
76.00 
81.00 
77.00 
74.00 
72.00 
71.00 
73.00 
73.75 

$4.60 



.70 
.70 
4.95 
5.40 
5.90 
6.10 
6.00 
6.00 
5.50 
5.40 
5.40 
5.39 



35.9 
36.3 
33.4 
34.8 
36.2 
38.8 
42.3 
56.1 
53.3 
53.8 
57.3 
57.2 
44.6 

31.2 
34.1 
35.0 
35.6 
46.2 
46.0 
43.0 
39.5 
38.4 
46.8 
44.3 
34.2 
39.5 

78.3 
79.3 
80.9 
85.4 
88.8 
86.4 
92.0 
88.5 
87.0 
85.7 
85.5 
91.2 
85.8 

41.2 
41.8 
40.6 
42.8 
45.6 
49.6 
54.0 
56.2 
55.6 
51.8 
50.8 
49.0 
48.2 



MILK (100 pounds) 



$7.90 
8.50 
8.90 
9.90 
10.30 
11.20 
12.00 
13.10 
13.80 
13.90 
14.60 
14.80 
11.58 

$3.05 
4.00 
3.95 



3.65 



4.20 
4.90 
6.30 
5.30 
5.10 
5.30 
4.38 

$76.00 
89.00 
90.00 
89.00 
91.00 
86.00 
82.00 
84.00 
89.00 
86.00 
87.00 
87.00 
86.30 

$6.20 



.50 
.60 
.50 
7.81 
7.30 
6.70 
6.10 
5.90 
5.60 
5.70 
6.00 



6.66 



54.6 

59.4 

62.0 

69.7 

71.7 

80.4 

90.6 

106.5 

111.0 

111.6 

113.1 

112.8 

86.95 

35.2 
44.0 
40.7 
38.2 
34.4 
40.5 
43.6 
49.0 
63.0 
55.1 
58.7 
63.5 
47.2 

91.6 

100.4 
101.1 
100.0 
102.2 
97.7 
93.2 
96.6 
105.0 
101.2 
104.8 
108.8 
100.2 

55.5 
66.7 
65.7 
64.8 
66.0 
61.3 
59.3 
57.1 
55.0 
52.8 
53.7 
54.4 
59.4 





$2 


,38 


$1 85 


77.7 


$1 


4S 


60.9 


$1.10 


46.2 


$1.30 


54.6 


February. . . . 


. . 2 


,31 


1.80 


77.9 


1 


4S 


62.8 


1.10 


47.6 


1.30 


56.3 


March 


. . 2, 


,26 


1.80 


79.7 


1 


40 


62.0 


1.10 


48.7 


1.35 


59.7 


April 


. . 2 


.19 


1.75 


79.9 


1 


^S 


61.7 


1.10 


50.3 


1.30 


59.4 


May 


. . 2 


06 


1.65 


80.1 


1 


W 


63.1 


1.15 


55.8 


1.30 


63.1 


June 


. . 2 


.01 


1.65 


82.1 


1 


?S 


62.2 


1.20 


59.7 


1.40 


69.7 


July 


. . 2 


.19 


1.80 


82.2 


1 


W 


59.4 


1.30 


59.4 


1.45 


66.2 


August .... 


. . 2 


,26 


1.80 


79.7 


1 


w 


57.5 


1.30 


57.5 


1.50 


66.4 


September. . . 
October .... 


. . 2 
. . 2 


.26 
,30 


1.85 
1.90 


81.9 
82.6 


1 
1 


.30 
^S 


59.7 
58.7 


1.30 
1.35 


59.7 
58.7 


1.50 
1.55 


66.4 
67.4 


November. . . 
December 


. . 2 
. . 2 


.34 
.34 


1.85 
1.75 


79.1 
74.8 


1 
1 


.35 
1S 


57.7 
49.2 


1.45 
1.40 


62.0 
59.8 


1.55 
1.65 


66.2 
70.5 


Year 


. . 2 


.22 


1.80 


81.1 


1 


.35 


60.8 


1.25 


56.3 


1.45 


65.3 



72 



BULLETIN No. 422 



[December, 



TABLE 8. MONTHLY ILLINOIS PRICES OF SELECTED FARM PRODUCTS, 
1931-1934, AND INDEX NUMBERS OF PRICES Continued 



1921- 


1931 1932 1933 


1934 


Month 1929 
price 


Price ^ Price ^ Price ! jg 


* Price l ^ 



January $70 

February 71 

March 73 

April 71 

May 72 

June 72 

July 72 

August 71 

September 71 

October 72 

November 72 

December 73 

Year 72 

January $ 

February 

March 

April 

May 

June 

July 

August 

September 

October 

November 

December 

Year.. 



.42 
.42 
.42 
.42 
.42 
.42 
.39 
.36 
.36 
.38 
.38 
.40 
.40 



January 


. . $1.30 


February . 


.. 1.32 


March 


.. 1.30 


April . . 


.. 1.35 


May. . 


.. 1.34 


June 


. . 1.46 


July 


.. 1.62 


August 


. 1.36 


September. . . 
October 


.. 1.26 
.. 1.21 


November. . . 
December. . . . 
Year. . 


.. 1.26 
.. 1.30 
1.34 



January $ .92 



February . 

March 

April 

May 

June , 

July 

August 

September 

October 

November 

December , 

Year.. 



.94 
.94 
.92 
.92 
.90 
.88 
.86 
.85 
.86 
.87 
.87 
.89 



$65.00 
61.00 
61.00 
59.00 
59.00 
54.00 
55.00 
52.00 
50.00 
50.00 
50.00 
46.00 
55.17 

$ .29 
.29 
.28 
.28 
.26 
.23 
.20 
.15 
.16 
.16 
.20 
.19 
.22 

$1.20 
.10 
.10 
.25 
.10 
.10 
.95 
.85 
.80 
.70 
.65 
.65 
.95 

$ .49 
.44 
.41 
.37 
.40 
.35 
.30 
.30 
.32 
.32 
.40 
.37 
.37 



MILK COWS (head) 



92.9 
85.9 
83.6 
83.1 
81.9 
75.0 
76.4 
73.2 
70.4 
69.4 
69.4 
63.0 
77.0 

69.0 
69.0 
66.7 
66.7 
61.9 
54.8 
52.6 
41.7 
44.4 
42.1 
52.6 
47.5 
55.8 



$43.00 
42.00 
40.00 
39.00 
40.00 
37.00 
38.00 
37.00 
38.00 
36.00 
36.00 
35.00 
38.42 



61.4 
59.2 
54.8 
54.9 
55.6 
51.4 
52.8 
52.1 
53.5 
50.0 
50.0 
47.9 
53.6 



OATS (bushel) 



$ .19 
.19 

.is 

.IX 
.17 

.16 
.14 
.12 
.11 
.10 
.11 
.11 
.15 



45.2 
45.2 
42.9 
42.9 
40.5 
38.1 
35.9 
33.3 
30.6 
26.3 
28.9 
27.5 
36.4 



POTATOES (bushel) 



92.3 


$ .65 


50.0 


83.3 


.65 


49.2 


84.6 


.65 


50.0 


92.6 


.65 


48.1 


82.1 


.65 


48.5 


75.3 


.75 


51.4 


58.6 


.70 


43.2 


62.1 


.55 


40.4 


63.5 


.47 


37.3 


57.8 


.46 


38.0 


51.6 


.48 


38.1 


50.0 


.50 


38.5 


71.2 


.60 


44.4 


RYE (bushel) 


53.2 


$ .38 


41.3 


46.8 


.37 


39.4 


43.6 


.40 


42.6 


40.2 


.39 


42.4 


43.5 


.31 


33.7 


38.9 


.30 


33.3 


34.1 


.26 


29.5 


34.9 


.28 


32.6 


37.6 


.28 


32.9 


37.2 


.27 


31.4 


46.0 


.27 


31.0 


42.5 


.26 


29.9 


41.5 


.31 


35.0 



534.00 
34.00 
34.00 
35.00 
36.00 
38.00 
40.00 
36.00 
35.00 
35.00 
33.00 
32.00 
35.17 

* .11 

.11 
.11 
.15 
.20 
.22 
.38 
.29 
.30 
.25 
.29 
.30 
.23 

$ .50 

.50 

.55 

.55 

.60 

.75 

1.70 

1.80 

1.70 

1.05 

.90 

.95 

.96 

$ .26 
.26 
.28 
.34 
.43 
.46 
.85 
.61 
.65 
.57 
.57 
.55 
.49 



48.6 
47.9 
46.6 
49.3 
50.0 
52.8 
55.6 
50.7 
49.3 
48.6 
44.8 
43.8 
49.0 

26.2 
26.2 



47.6 



52.4 
97.4 
80.6 
83.3 
65.7 
76.4 
75.0 
57.7 

38.5 

37.9 

42.3 

40.7 

44.8 

51.4 

104.9 

132.4 

134.9 

86.8 

71.4 

73.1 

71.6 

28.3 
27.7 
29.8 
37.0 
46.7 
51.1 
96.6 
70.9 
76.5 
66.3 
65.6 
63.2 
55.0 



SHEEP (100 pounds) 



$33.00 
35.00 
36.00 
35.00 
35.00 
35.00 
35.00 
32.00 
37.00 
36.00 
38.00 
35.00 
35.17 



$.56 
.56 
.56 
.55 
.56 
.60 
.62 
.75 
.81 
.78 
.70 
.73 
.65 



47.1 
49.3 
49.3 
49.3 
48.6 
48.6 
48.6 
45.1 
52.0 
50.0 
52.8 
47.9 
49.05 



.31 


73.8 


.32 


76.2 


.32 


76.2 


.30 


71.4 


.30 


71.4 


.38 


90.5 


.38 


97.4 


.43 


119.4 


.48 


133.0 


.46 


121.1 


.48 


126.3 


.51 


127.5 


.39 


98.7 



1.00 


76.9 


.15 


87.1 


.30 


100.0 


.20 


88.9 


.00 


82.1 


.05 


71.9 


.10 


67.9 


.00 


73.5 


.00 


79.0 


.85 


70.2 


.65 


51.6 


.65 


50.0 


1.00 


74.9 



60.9 
59.6 
59.6 
59.8 
60.9 
66.7 
70.4 
87.2 
95.0 
90.7 
80.5 
83.9 
72.9 



January 


$6 07 


$3 80 


62 6 


$2 60 


42 8 


$1 95 


32 1 


$2 95 


48 6 


February. . . . 


.. 6.26 


3.80 


60.7 


2.60 


41.5 


2 05 


32 7 


3 70 


59 1 


March 


6 54 


4 10 


62 7 


2 80 


42 8 


2 10 


32 1 


3 55 


54 3 


April . . , 


. . 6 . 70 


3.90 


58 1 


3 00 


44 8 


2 10 


31 3 


3 55 


53 


May 


6 38 


3 70 


58 


2 20 


34 5 


2 40 


37 6 


3 25 


50 9 


June. . . . 


. . 5.64 


2.50 


44.3 


2.10 


37 2 


2 25 


39 9 


2 65 


47 


July 


.. 5.62 


2 60 


46 3 


2 30 


40 9 


2 40 


42 8 


2 40 


42 7 


August 


5 58 


2 40 


43 


2 10 


37 6 


2 60 


46 6 


2 40 


43 


September. . . 
October. . 


.. 5.89 
5 69 


2.50 
2 50 


42.4 
43 9 


2.10 
2 10 


35.7 
36 9 


2.40 
2 40 


40.7 
42 2 


2.40 
2 40 


41.0 
41 3 


November. . . 
December 
Year 


.. 5.60 
.. 5.87 
.. 5.98 


2.60 
2.40 
3.07 


37.5 
40.9 
50.0 


1.90 
1.95 
2.31 


33.9 
33.2 
38.5 


2.30 
2.60 
2.30 


41.1 
44.3 
38.6 


2.45 
2.80 
2.88 


43.8 
47.7 

47.7 



19351 



PRICES OF ILLINOIS FARM PRODUCTS, 1931-1934 



73 



TABLE 8. MONTHLY ILLINOIS PRICES OF SELECTED FARM PRODUCTS, 
1931-1932, AND INDEX NUMBERS OF PRICES Concluded 



1921- 
Month 1929 ' 
price 


1931 1932 1933 


1934 


Price X 6 * Price 'NO^ Price 'NO 


Price l $^ 



January $1.93 

February 2.02 



SOYBEANS (bushel) 



March 2 

April 
May 



June. 
July. 



17 

2.16 
2.31 



2.49 



.50 

August 2.12 

September 1 . 76 

October 1.59 

November 1 . 48 

December 1.72 

Year 2.02 

January $10.37 

February 10.73 

March 10.70 

April 9.91 

May 9.79 

June 9 . 90 

July 10.02 

August 10.34 

September 10.99 

October 10.92 

November 10.21 

December 10.06 

Year 10.34 

January $1.32 

February. ..... 1.34 

March 1.32 

April 1 . 26 

May 1.29 

June 1.24 

July 1.17 

August 1.16 

September 1 . 16 

October 1.18 

November 1.18 

December 1.22 

Year 1.24 



$1.25 
1.20 
1.20 
1.10 
1.10 
.95 
.80 
.55 
.40 
.30 
.35 
.35 
.80 


65 

59 
55 
51 
48 
38 
32 
26 
23 
19 
24 
20 
38 


$ .34 
.37 
.40 
.40 
.41 
.41 
.39 
.36 
.39 
.40 
.40 
.38 
.39 


18 
18 
18 
18 
18 
16 
16 
17 
22 
25 
27 
22 
20 


$ .39 
.39 
.41 
.48 
.82 
.90 
.95 
.86 
.78 
.59 
.63 
.66 
.66 


20 
19 
19 
22 
35 
36 
38 
40 
44 
37 
42 
38 
32 


VEAL CALVES 


(100 pounds) 


$9.40 


90.6 


$6.40 


61.7 


$4.45 


42.9 


9.10 


84.8 


6.60 


61.5 


5.40 


50.3 


8.00 


74.8 


6.50 


60.7 


5.40 


50.5 


7.60 


76.7 


5.50 


55.5 


4.50 


45.4 


7.40 


75.6 


4.80 


49.0 


4.95 


50.6 


7.40 


74.7 


4.90 


49.5 


4.90 


49.5 


7.10 


70.8 


5.30 


52.9 


5.10 


50.9 


7.40 


71.6 


5.30 


51.2 


5.40 


52.2 


7.90 


71.9 


5.70 


51.9 


5.70 


51.9 


7.40 


67.8 


5.30 


48.5 


5.40 


49.4 


6.50 


63.6 


5.00 


49.0 


5.40 


52.9 


6.10 


60.6 


4.45 


44.2 


4.45 


44.2 


7.61 


73.6 


5.48 


53.0 


5.09 


49.2 


WHEAT (bushel) 


$ .68 


51.5 


$ .44 


33.3 


$ .38 


28.8 


.67 


50.0 


.44 


32.8 


.38 


28.4 


.66 


50.0 


.45 


34.1 


.40 


30.3 


.67 


53.2 


.46 


36.5 


.49 


38.9 


.66 


51 T2 


.43 


33.3 


.67 


51.9 


.56 


45.2 


.40 


32.3 


.65 


52.4 


.39 


33.3 


.37 


31.6 


.93 


79.5 


.37 


31.9 


.41 


35.3 


.80 


69.0 


.37 


31.9 


.41 


35.3 


.74 


63.8 


.37 


31.3 


.39 


33.0 


.70 


59.3 


.49 


41.5 


.37 


31.4 


.77 


65.3 


.44 


36.1 


.36 


29.5 


.75 


61.5 


.53 


42.3 


.41 


33.2 


.64 


52.4 



WOOL (pound) 



$ .73 

.93 

.98 

1.17 

1.07 

1.33 

1.52 

.88 

.75 

.75 

.80 

1.05 

1.00 



38 
46 

45 

54 

46 

53 

61 

42 

43 

47.2 

54.1 

61 

49.2 



$4.90 47.2 



5.70 


53.1 


5.60 


52.3 


5.40 


54.5 


5.40 


55.2 


5.10 


51.5 


4.95 


49.4 


5.00 


48.4 


6.40 


58.0 


6.10 


54.9 


5.70 


55.8 


5.30 


52.7 


5.46 


52.8 


$ .76 


57.5 


.79 


58.9 


.78 


59.1 


.75 


59.5 


.75 


58.1 


.86 


69.4 


.82 


70.0 


.93 


80.2 


.95 


81.8 


.91 


77.1 


.91 


77.1 


.94 


77.0 


.85 


68.8 





. $ .317 


$ .19 


59.9 


$ .13 


41.0 


$ .10 


31.5 


$ .25 


78.8 


February. . . . 


.320 


.18 


56.2 


.14 


43.8 


.10 


31.2 


.26 


81.2 


March 


.322 


.18 


55.9 


.12 


37.3 


.10 


31.0 


.27 


83.8 


April 


.317 


.16 


50.5 


.11 


34.7 


.10 


31.5 


.27 


85.2 


May 
June 


.321 
.332 


.14 
.13 


43.6 
39.2 


.09 
.08 


28.0 
24.1 


.17 
.23 


53.0 
69.3 


.24 
.23 


74.8 
69.3 


July 


.332 


.13 


39.2 


.08 


24.1 


.23 


69.3 


.23 


69.3 




.327 


.14 


42 8 


09 


27.5 


.24 


73.4 


.22 


67.3 


September. . . . 
October 


.334 
.330 


.14 

14 


41.9 
42 4 


.09 
09 


26.9 
27.3 


.24 

.25 


71.8 
75.8 


.21 
.21 


63.0 
63.6 


November. . . . 
December 
Year 


.343 
.343 
.33 


.14 

.13 

.15 


40.8 
37.9 
45.9 


.09 
.09 
.10 


26.2 
26.2 
30.6 


.26 
.25 
.19 


75.8 
72.8 
57.2 


.20 
.19 

.23 


58.3 
55.4 
70.8 



The figures given in this table are based on data obtained from the Illinois U. S. 
Crop Reporting Service. 



UNIVERSITY OF ILLINOIS-URBANA