Democratic Sentinel, Volume 18, Number 9, Rensselaer, Jasper County, 16 March 1894 — WHEAT IS A DRUG NOW. [ARTICLE]

WHEAT IS A DRUG NOW.

Farmers Holding Back with the Hope of Obtaining Higher Rate*. The Chicago Herald publishes, under the caption, “Wheat Is a Drug,” a three-column article, bristling with statistics, tending to show that the present low price of wheat is the natural result of the prevailing financial depression, assisted by overproduction and the holding back of marketable supplies of the farmers. Interviews wit n bankers and merchants are also cited, the trend of their views seeming to indicate that the effect of existing conditions on finance are not great, but are directly attributable to the law of supply and demand. The position taken by the Herald is extremely bearish, as will be seen by the subjoined excerpts: Wheat is prostrate in all the markets of the world. For weeks it has been a drug at prices unprecedented since speculation in farm products began. It has sunk below all low marks, refused to respond to bullish influences, and gone begging at quotati- ns taken to be under the actual cost of production. Theories that crop products, like articles of manufacture, had an intrinsic value under which they could not long be sold, have been exploded, and wheat has continued to fall. How long this condition of depressed prices will last is a question that interests American farmers, who devote 35.0 0,0(X) acres every year to cultivating the cereal to merchant in the land, and, incidentally, to speculate the world over. Alter analyzing all the influences that have contributed, and there are any number of them, it would appear that a new level tumble is about to be established for wheat, beyond which it is not likely to rise except by the boldest manipulation, and then’only for brief periods. Tnere are speculators who believe that those good old days when $1 a bushel was the rule will never come again, and that sev-enty-five cents may be looked to as the future top-notch quotation. These men are by no means bears, for they concede that wheat cannot hover long around the depressing figures of to-day. They have ransacked the statistics of the world, and claim to have discovered that the cheap product of Russia, India and the Southern hemisphere, which has lately turned an almost inex-> haustible supply into the markets of Europe, will finally drive the American crop out. Exposed to that fatal competition, they argue that wheat raising will some day become an American

question, U> be treated without reference to the export market, andon the theory that Europe will be supplied frozp the fields that skirt the Baltic, from the rich plain sos India and from South America. It may be said that this-gloomy view is not shared by the professional bull, who, with ail his buoyancy, offers no promise of an early return to prosperous prices. It is conceded by all speculators, as well as by those whose interests are greater than margin profits or losses, that wheat declined during the panic through sympathy with other stocks and commodities. It would be unreasonable to expect it to stand firm and alone in the general collapse that carried everything else down, but the decline cannot be charged exclusively to the panic, nor is its continued prostration, after other st.cks rallied, explained by those who point to that as the cause of prices prevailing now. The acreage and the yield of wheat in the United States was less in 1893 than for any year since 1860, and yet the farm price, 52 cents, was far below that of previous years. .It is undeniably a iaet that the tremendous overproduction of 1892 and 1891, which left a larger visible supply than the country had ever known, is responsible in a measure for the present low quotati ns. Statistics of visible supplies, acreage, yield and farm prices from 1886 to 1893, inclusive, are then quoted, an analysis of which follows: In 1885 the acreage fell to 34,189,246 and the yield to 357,112,00.) bushels, but the farm prices reached 77.1 cents. From that time back to 1880 the acreage never fell below 36,393,319, and the lowest yield was 380,280,000 bushels. The farm price ranged from 64.5 cents in 1884 to 110.3 in 1881. Only twice since 1880 has the United States crop fallen below the figures of 1893, and that was in 1885, when the farm price was 71.1 cents, and in 1881, when the yield wa580,280,009, and the price at the farm 110.3. In 1887, with a visible supply of 61,885,500, the high and low price record was 74 i, 7 B i, and the Herald reasons that the present phenomenally low prices are not unreasonable in view of the glutted condition of the principal wheat-producing sections, and that the fact of the cereal being worth less than the actual cost of production will but tend to divert the present acreage to the production of some more profitable crop. It is said, as an instance, that of the 23,000.000 bushels raised in Michigan, only 9,00 >.OOO have been brought to market. These figures may not be correct, but the impression is general that farmers are housing a greater reserve now, in anticipation of higher quotations, than they have ever held back. Mysterious arrivals at Duluth, Minneapolis and other heavy trading points to the north, seem to add weight to these suspicions. Board of Trade men, however, are agree! that bettar times are ahead, and that the effect of these low prices is, by no means, as disastrous as might be supposed.