THE WORLD'S WHEAT

Waipa Post, Volume 44, Issue 3195, 25 June 1932, Page 3

THE WORLD'S WHEAT

PRODUCTION ON THE INCREASE.

POSITION SURVEYED.

While population is n'ot expanding rapidly, wheat is being produced more and more cheaply and in ever-increas-ing quantities, says the Imperial Economic Committee in a report surveying the production of wheat all over the world and analysing its

causes. The Committee says that in the years since the close of the war the quantity of wheat grown has greatly increased. Before the war there was, on an average, an annual expansion of 53„ 000,000 bushels, and just before the war the world's annual crop was about 3,000,000,000 bushels, leaving out Russia and China. This production dropped sharply in the war by something over 1 100,000,000! (bushels a year. There was a big drop in European countries;, which had produced before the war nearly half the world's wheat, and which diminished their output by a third. They were producing 400,000,000 bushels less in 1920 than in 1913. On the other hand, Canada, Argentina, the United States,, Australia, and India, under the stimulus of war-time demand, were producing 300,000„000 bushels iriore, so that the net decline was only 100,000,000 bushels. In the years since the war Europe has regained her old output. The five non-European wheat countries have continued to increase, and now produce 2,000,000j;000 bushels where before the war they produced 1,500,000,000 bushels. FALLING PRICES. Production has increased steadily, and prices during the same period have fallen steadily. In an era when there is widespread unemployment and privation theire is a superabundance of the world's primary foodstuff

at prices which, over a vast area of wheat-growing land, do not repay the cost of production. Prices began to fall in 1920, and fell at first more rapidly for wheat than for the run

of other commodities. In 1930 wheat was selling for about two-fifths of what it had fetched in 1920, but the big drop had come between 1920 and

1923, and prices in 1930 were in general about three-quarters of the price in 1923. On the whole> in the last ten years the fall in the price of.wheat has followed the general trend of declining prices so closely that it is plain that general causes rather than causes special to wheat have been at work. That these larger economic and monetary influences rather than excessive production have kept the price of wheat declining is apparent, for, despite all the strides it has made

since the war, wheat production has not yet reached the level, it would have reached if the pre-war rate of increase had been continued. The setback to production between 19141917 was so severe that recovery has necessarily been slow. But special factors told against wheat after 1929. The Federal Farm Board of America held a huge and growing visible surplus stock July, 1931—iwhich it kept off the market in the hope ofi helping the price. The mere existence of this stock had

a depressing effect. Russia reappeared as an exporter of wheat on a large scale. But the main reasons why a smaller crop in 1929 was followed not by a rise but by a continued fall in

price must be sought in the general economic condition of the world. INCREASED CONSUMPTION.

Nevertheless, the stocks have accumulated, and to-day are double what they were ten years ago. They cannot be measured very closely be-

cause so much wheat is in the hands of farmers and millers, but the known existence of huge supplies depresses prices. Consumption is not very easily measured, but some conclusions are established. In the first place, the world demand for wheat is increasing in consequence of the growth of population. The consumption per head is increasing in Russia, the Orient, and tropical countries. There are more people, and each person is eating more wheat. But in most civilised countries less wheat is being eaten for bread, as fruit, vegetables, dairy produce, and sugar have become more important in the daily diet. The American, who used, thirty years ago, to eat 5.4 bushels, now eats only 4.2 bushels; but there has not been any great drop since the war, either in the United -States or elsewhere. The demand for wheat for human food is inelastic in the chief wheat consuming countries, and abundance means a fall in price. But per head consumption includes the wheat a man buys to give his hens or other livestock or to use for industrial purposes. The great importing countries, and especially the free market of Great Britain, acted as shock absorbers, and stabilised prices by accumulating stocks in cheap times, and drawing on them in years of poor harvests. The new policy, both in Great Britain and Germany, of becoming mare self-sufficing will lesson the steadying effect of these buyers, and world prices will probably flue- 1 tuate mjore. An energetic campaign

has been started in the United States to feed livestock with cheap wheat, and this movement may asume large proportions. Taking a long view, wheat, while it has shared the ups and downs of the last 80 years, has lost ground compared to other commodities, and has shown a steady tendency to fall in price. The purchasing power of wheat over other, commodities has declined by about 4 per cent. Yet its cultivation has progressively extended, because the costs of production have fallen as well.

CHEAPER PRODUCTION. Biological and engineering and transport advances —the reaper, the binder, the harvester-thresher, and the tractor—have steadily cheapened production, and the two last have had an enormous effect in the post-war years. Whereas in 1916 there were only 30,000 tractors in the United States, 350,000 were in use by 1928. There were 270 combined harvesterthreshers in the United States in 1914. In 1929 there were 37,000. The American exports of that ma--1 chine rose from 1700 in 1925 to nearly 11,000 in 1929. In Western Canada there were only two in use in 1922, but 7255 in use in 1929. Through mechanised farming remarkable economise accrue to individual farmers, who have often halved the loss per bushel, and who are freed Krom the need to pay high prices for seasonal labour. There is a rise in production per head, and a decline in the volume of agricultural employment. It is the day of the large farm unit. Another important consequence of mechanisation combined with selective breeding of wheat, is greatly to extend the wheat area and to enable wheat to be grown on poor land. The general conclusion follows that, while population is not expanding rapidly, wheat is being produced more and more cheaply in ever greater quantities, and the outlook is one of continuing struggle between farmers, who can adopt the new technique and and those who fail to do so, and of fierce competition involving low prices.