Economic and Marketing Information                                                                                                                                                                                      FOR INDIANA  FARMERS          
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
September 30,   1959
Your 1960 Outlook (or Indiana Agriculture
In A Nutshell
Farmer Brown Says:
IF the  outlook  predictions  we
hear are right, farming will be
pretty rough for a few years.
After hearing the discussion at
the outlook meeting and talking
about it with some of my neighbors—here is the way it looks to
me.
Business conditions will generally be good for the next year or
so. This means a continuing strong
demand for farm products. So the
price outlook for crops and livestock depends largely on supplies.
Setbacks in business such as occurred last year and in 1954 are
probably in store in the future. I
believe, however, we know more
and are willing to do more about
controlling the big ups and downs
than we did in the depression of
the 1930's.
Returns from farming will be
lower. True, the dairy enterprise
looks relatively profitable, so do
soybeans. In total, though, we
keep producing more than the
market wants. Some folks believe
that population increase will take
care of the surplus in a few years,
but I don't agree. Population has
increased a lot during the past 10
years, yet surpluses have steadily
increased. When I observe crop
yields and see some of the new
livestock setups in our county, I
am afra'd we will be producing
too much for a long time.
Net income per farm is holding
UP reasonably well. This is because we have 15 to 20 percent
A? farms than a decade ago.
And farmers are doing more work
°ff the farm. Despite this, we're
not holding our own, income-wise,
with non-farm groups. We just
haven't been sharing in the general economic prosperity.
Off-farm employment opportunities are good in our community.
We have many part-time farmers.
They don't seem to have much
trouble getting a job. If a man
isn't good with livestock or if he
is short of capital, he can probably
make more by working part-time
off the farm than by trying to expand volume with livestock. Farm
earnings are low on a small unit.
We must keep unit production
costs low if we are to show a profit. Frequently this means stepping
up production rates. I know this
may not be to the best interest of
agriculture, but it is the best way
I know how to compete. It doesn't
cost much more to produce 90
bushels of corn per acre than it
does 60, or 9 pigs per litter instead
of 6. It's the little extras that it
takes to get the job done right that
pay off. This doesn't always mean
that each of us should produce a
lot more. In some cases it may
mean cutting back if that's what it
takes to do the job well.
When profit margins are narrow, as they will be for the next
few years, efficiency must be
stressed. If efficiency is low, profit
margins may be zero or negative
so more volume doesn't help. Still
we need a reasonably large volume of business. It takes a lot
of income just to pay the overhead.
Naturally we must watch the
cost of things we buy. Some farmers don't do enough shopping
around. Others are too easily persuaded by salesmen. Still others
buy things they don't really need.
According to my farm account
book about 75 percent of my gross
income goes out as cash farm expenses. Just a few dollars saved
on a ton of feed or fertilizer could
add considerably to net income.
Here is the way some individual
cost items look to me. Fertilizer
prices will be about the same as
last year. Although grain prices
will probably be a little lower, I
will continue to use a lot of fertilizer.
Farm machinery will be a little
higher next year. I plan to buy
two or three pieces of badly needed machinery, but will repair the
rest and make it do a while longer. Some of the newer models look
real good, but as long as the old
will do the job I am going to keep
it. I don't think this is the time
to get deeply into debt.
Probably I am too conservative,
but I am not going to spend a lot
of money to completely revamp
my hog buildings or grain handling setup. However, since I am
cutting back on hogs, I believe
this is an excellent time to use
surplus labor and make some
building changes which will allow
me to take advantage of most of
the newer technologies.
Modest profits may be expected
from buying corn at harvest time.
I will need more corn than I have
raised. I think my corn will be of
excellent quality. I have just
about enough crib space to store
it for late winter, spring and summer feeding. I will buy corn as
needed for fall and early winter
feeding. My son who is in the
dairy business has some surplus
corn. He is going to store and take
a loan on what he has crib space
for and sell the rest at harvest.
This makes sense to me.
My brother who lives in a corn
deficit area of southern Indiana
will need considerably more corn
than he has raised. He plans to