Wheat Farming in Wartime
THE SHORTAGE OF STORAGE CAPACITY
By CLAUDE R. WICKARD, Secretary of Agriculture
Delivered before a meeting of farmers at Enid, Oklahoma, April 28, 1942. Broadcast over the Blue Network
Vital Speeches of the Day, Vol. VII, pp. 474-477.
WE are meeting here at a critical point in our worldwide war against dictatorship and aggression. It's our way of life or theirs. We know what their way of life is like for farmers in conquered countries. Look at what is happening in France under Nazi oppression.
Recently, for example, Admiral Darlan told French farmers what the "new order" expected of them. He pointed out that they had to turn over to the government as much of their products as the government demanded. The deliveries had been falling short. The Admiral said this: "If you fail to adapt yourself to that discipline which the government suggests, you will suffer another kind of discipline, which the cruel circumstances of hunger will impose on you."
American farmers aren't used to hearing orders like that and they don't want to hear them. That is one reason why American farmers are going all-out to set new productionrecords. This is their part in the war strategy of the United Nations to overthrow the Axis threat to human freedom.
The United Nations are fighting this war all over the globe. Final victory will come deep in the enemy's territory. In a stream that grows bigger and bigger each day, we are sending to a dozen battle fronts American men, American war materials, and American food.
Yes, victory demands production. The American boys in expeditionary forces in outlying bases must be fed. We can't let them down. Our allies must eat to keep fighting so strongly. Think of the British with their great air offensive and their bold commando raids. Think of the Russians. They are the ones that have stalled Hitler's great war machine. In fact, the Russians are doing more today to defeat the Axis powers than all the rest of the United Nations put together. Every American owes them a debt of gratirude for their great contribution to final victory. We can't let them down, and we won't let them down.
More than that, we won't let our own people down. Farmers will feed the men and women who are turning out war materials, and all of the Nation's families who are carrying the heavy loads of wartime. They will keep on building up food reserves, too, for the conquered nations when they have thrown Hitler out.
The war job of American farmers is to produce more than they ever have produced before. But ft must be more of the things that are needed. Hit-or-miss expansions won't do. There are limits on land, labor and equipment. War requirements are great. Farmers would delay victory by growing things that are not needed.
What are the needed things? It's hardly necessary to name them to a farmer audience. You know that the Nation needs more of the protective foods like vegetables, fruits, meats, eggs and milk to improve the health of soldiers and civilians. You know there is a special need for concentrated foods to be sent to our own soldiers or our allies. They must have high protein foods that pack a lot of food value into a small space—products like meats, cheese, dried milk, dried eggs, dried fruits. Then there is the need for oil crops to make up for loss of imports from the far east. There's no such thing as having too much of many of these products.
On the other hand, we already have large supplies of wheat, cotton, corn, and tobacco. The huge stocks of many of these products, particularly wheat, raise some difficult problems. Of course, we're glad we have enough. It's better to have too much too soon, than too little too late. But now we have put in reserve enough of the basic farm commodities. From here on out, we must use every acre of land, ton of fertilizer and hour of labor for producing the things of which we don't have enough.
To let farmers "got it blind" in producing things we don't need instead of things we do need would be like permitting automobile manufacturers to keep on making passenger cars at the expense of planes and tanks.
We've heard a lot about how industry is converting to war production. Well, agriculture is doing just as big a conversion job, even though there are not many headlines about it.
But a number of people—I don't believe many farmers are among them—still have not grasped the main idea of the farmer's drive to produce for victory. Some even believe that the Government is paying farmers to cut down on the very products it is asking them to grow more of. As you know, the facts are just the other way. The only payments that are being made for holding down acreage this year are in connection with wheat, cotton, tobacco and corn. The main idea of the payments on every one of these four crops is to help farmers use more of their land, labor and equipment on production of things which we and our allies simply must have in order to win the war.
Then, there's another question being asked—and it shows a state of mind that is a threat to the whole drive for wartime conversion. That question is this: If the world needs American farm products so badly, why spend time and money holding down on anything? Why not throw out acreage adjustment and soil conservation and encourage farmers to go ahead and raise more of everything?
That kind of thinking makes sense only to someone who also believes that a shortage of cheese or of soybean oil can be made up by a surplus of wheat or tobacco. That just isn't so, of course. Even if some people don't know it, farmers do, and so their wartime program is based on recognition of this fact. We cannot produce enough of what we need ofsome commodities if we go on producing more than enough of other commodities.
It's hard to change over—to convert. On my own farm there could be quite a temptation to put out more corn and wheat instead of growing more soybeans, more pasture for livestock, and more pigs. But just the same, the changes have to be made, and I'm making them.
The only way in which farmers can do their war job is to put themselves on a war basis. Helping farmers do that is the war-time purpose of the national farm programs.
That goes for conservation, as well as for the other programs. Our great problem is to produce what's needed at the least possible cost in soil destruction. Conservation practices increase crop yields in addition to protecting soil from wind and water erosion. Results of farmers' conservation work of the past few years are showing up now. When the need for greater production came, our farm land was in shape to produce abundantly. Conversion and conservation both are needed in raising Food for Freedom.
Now what about wheat growing in wartime? It is no news to you wheat farmers that you face some of the toughest problems in American agriculture.
We already have more wheat than we know what to do with. We have an all-time record carryover—about 630 million bushels. On top of that, we'll have a new crop, from the way things look now, of around 800 million bushels. That will make a supply of not far from 1 1/2 billion bushels. That's enough to meet all our normal needs, including exports, for about two years. As I said earlier, it's comforting to know that there will be no shortage of such an important food. But on the other hand, how are we going to get all that wheat under cover to keep it from rotting?
Storage space already is crowded. We have a year's requirement of wheat on hand to start with. This makes the outlook much more serious than last year, and you remember how tight the situation was then. With the kind of yields now in prospect there will be a tremendous shortage in storage capacity for the country.
Only last week the president of the Kansas City Board of Trade stopped to see me in Washington and told me that in Kansas City elevators already are filled just about up to capacity. This man told me that all the Kansas City elevators could hope for this summer was to have enough space to handle wet wheat which had to be turned. At the very best, they will not be able to handle more than a few million bushels. Other terminals are in much the same condition. We've never had a storage problem even approaching this one. Just to make matters worse, we are short on burlap for flat sack storage, which usually accounts for about 10 per cent of our stored wheat.
And there isn't any chance of using boxcars for storage this year. You know that's the way we squeezed through last year. But this time, the railroads already have told us that they won't even load boxcars in the country until they know that they can be unloaded promptly at the terminals.
Some people may ask why we don't build more terminal elevators, and more boxcars. The reason is that we just haven't the steel and other materials, and the labor that would be needed. More steel for boxcars and elevators would mean less steel for ships, guns, and tanks. We can't slow down our output of munitions, and I know that farmers wouldn't want us to.
Still, what can we do with all of our wheat this year? We must not let it go to waste. There is only one way out—farm storage. The wheat will back up on farms this year. There isn't any way in the world to get around that. I only hope that there will be enough tight storage space for most of it—that no great amounts will have to be piled onthe ground. The only way you farmers can be sure of keeping your wheat off the ground is to start building more farm storage now. This is not the year to hope that somehow some elevator can take your wheat, or to wait until you're sure you have made your crop.
There are enough nails and enough lumber to build all the farm storage that is needed if farmers start right away. But there are no oversupplies, and few local dealers carry large stocks. If any large numbers of farmers wait until the last minute before building their storage bins, there won't be enough nails and lumber in the right place at the right time to do the job. And wheat will be piled on the ground.
It's the patriotic duty of every farmer to store as much of his wheat on his own farm as he possibly can.
This is no time to waste farm products. Nor is it any time to waste labor and materials in transporting and trying to market wheat that can't be used. This is where marketing quotas come in. Quotas this year will help farmers keep excess wheat on their own farms. A 7-cent per bushel storage allowance will be available if the quota-loan system is continued. This allowance will help farmers finance the needed farm storage space.
Quotas are the only way this year to enable each wheat farmer to receive his fair share of the income from wheat. Quotas will make it possible to have loans this year. These loans will be the only way of getting cash out of a great part of the crop. The law is definite: No loans on wheat can be made unless quotas are approved. If quotas are voted down nothing in the world can stop a sudden and staggering drop in wheat price.
With our present record supplies of wheat there is no telling how low the price of wheat would go without the stabilizing effect of the loan. We can get some idea, though, by looking at wheat prices in other parts of the world. In Canada, the Grain Board will take wheat at a price that averages, at the farm, about 65 cents a bushel in our currency. The Canadian Board will take only 280 million bushels at this price. In Argentina the average farm price is about 44 cents a bushel, and in Australia about 52 cents. And even those prices are maintained by some manner of Government price support. Compare that with what the cooperating farmer will get in this country if we vote quotas. Including the loan and payments, it will average well above $1.25 a bushel.
This is the time for all farmers to stand behind the quotas. Quotas safeguard the whole wheat program. Quotas protect farmers and the Nation from catastrophe.
In spite of the dark outlook for exports, and all the problems of wheat storage, some people who look back to the last war don't believe that it's possible to have too much wheat this time. They remember we were then told that wheat would win the war, that we sent a lot of it to Europe, and that it brought $2 and $3 a bushel. From there on, I suppose, they reason this way: This is a bigger war than that one, so sooner or later the demand for our wheat ought to be bigger too.
There's a flaw in that kind of reasoning. This war isn't only bigger than the last one; it's different. During the first World War the United States was the great exporting Nation. Now Canada, Australia, and Argentina all have large surpluses backed up, just waiting for outlets. Enough of these reserves are piled up, including our own, to supply prewar world export markets for three years. And only a fraction of the prewar export market is left. Most of it disappeared when Hitler overran Europe. Britain is the chief wheat importing nation left, and Canada is more than able to supply all of her needs.
Then there is shipping. We and our allies have to send supplies all over the globe, and the plain truth is that as yet we haven't nearly as many ships as we need. Wheat is a bulky cargo. There are not enough ships to send much wheat anywhere, no matter what the requirements might be.
The outlook for wheat exports after the war isn't encouraging either. We've been taking part in international wheat conferences, to plan how to divide up the world market so as to avoid a price collapse if all the world's stored-up wheat comes on the market. It looks as if our share of the wheat trade after the war will be very small and at a much lower price than parity. It would take many years to work off our surplus at the rate of exports in prospect, even if we only grew enough each year for domestic use.
That kind of situation can't go on indefinitely. What can we do about it? Some people might say to cut wheat acreage still farther—down to a point where all of the crop could find a market as flour for use in this country. There are estimates which show that this kind of crop would not require more than 40 million acres, compared with our present national allotment of 55 million acres, and a 1937 planted acreage of over 80 million acres.
But we ought to take a long look before deciding to take wheat acreage down so far. I believe there is a better way than that. There are large areas in this country than can grow wheat more cheaply than any other crop. A great reduction in wheat acreage would mean real hardships in many parts of the country which are dependent on wheat because they can grow it so efficiently. There are large areas, too, which can grow very little but wheat.
From the way things look now, it seems to me that the best course to begin thinking about would be something like this: Maintain parity for every producer's share of the wheat grown on whatever acreage may be needed to supply our full domestic needs for flour—perhaps 40 million acres—and then have the areas that are especially equipped to grow wheat go ahead and raise considerably more than their domestic flour shares, then sell that excess wheat at a lower price for feed and for industrial uses and exports.
As a matter of fact we are following the same kind of plan now for the wheat which the Commodity Credit Corporation owns. We are selling it for export, for feed and for making alcohol at a lower price than for use as flour domestically. This seems the wisest thing to do now and I think it will be just as wise in the future.
There is need for wheat in industry and for feeding. Industrial alcohol, which is used in making smokeless powder and other military and civilian products today is being made largely from our scarce sugar supplies. This alcohol could be made from wheat, in fact small amounts of wheat already are being used for that purpose. Research scientists may find other practical industrial uses for wheat. They are working on those problems all the time. And I know that we can use a lot more wheat for feeding. Everyone knows what a valuable feed wheat is.
But there is no way to move large amounts of wheat into feed and industrial use at the same price we can maintain for wheat milled into flour.
I believe in parity for agriculture. I've fought for it, and I'll fight to keep parity—and keep it on the widest scale possible. We must fight for parity along realistic lines, for we want to win. We just can't keep on getting parity for all the wheat from 55 million acres. One look at our present situation makes that clear.
We need to look squarely at all the facts in making our choice as to the best way to keep parity and to use our national resources to the utmost.
That is looking ahead a little, though the decision is one we must make before very long. The immediate task is to keep this year's wheat crop from wasting, to keep the great wheat-growing industry from being crippled, and to direct the whole country's efforts this summer along lines that will do the most to bring victory. In the quota referendum next Saturday wheat growers will have their say as to how some of our efforts shall be directed. I hope that every eligible farmer will take his part in making that choice.
Already farmers—those who grow wheat and all the rest—have done a magnificent job in producing for victory. You know the needs. Farm production goals this year call for the greatest agricultural production in our history. And farmers are turning out record production. There are a few products for which output still isn't up as high as it ought to be—milk, for instance, and peanuts—but for those products, too, farmers have made great increases and are settingnew production records. Farmers are going past the goals for the other needed products.
They are turning out record production in spite of shortages of materials and equipment, and in some areas, shortages of labor, too. They are working longer hours than ever before to raise Food for Freedom. I want to say this right now to you farmers here, and throughout this country: America can be proud of you and the record you have made. Certainly I'm proud to have a part in the work farmers are doing to win the war.
We are going right ahead. Working together under our national farm programs we will harness the full strength of our farm resources. The outlook for wheat may seem dark now, but we can lick that problem, too. We are going to raise the food that will win the war and write the peace. That means making the best use of our full capacity to produce.