Parity Regained

Ever since the start of war in Korea, U.S. farmers have had a price advantage over other citizens. The prices they got for their products went up faster than the prices they had to pay for goods they bought. Last week the Agriculture Department reported a marked change. In mid-February, for the first time in nearly two years, the average of all farm prices stood at parity, i.e., agricultural prices were in balance with industrial prices.*

Part of the change was caused by a slight rise in industrial prices. But most of it was due to a 4% drop in agricultural prices in a month. Eggs were off 6-c- a dozen, butter was down 5-c- a lb., cotton and tobacco were lower. In Florida, where orange production has more than doubled in the last ten years, orange prices "on the tree" had finally started to rise from a five-year low of 45-c- for a 90-lb. box v. $2 a year ago.

Most of the wholesale drops have not yet reached the housewife. Oranges, for example, were still retailing last week for as much as 60-c- for 5 Ibs., or 18 times the price on the tree. And though meat prices were moving down in the stockyards (lamb dropped nearly $2 a hundredweight from a month ago), they were still sky-high at the retail counter. Oddest situation of all was in potatoes, which two years ago were rotting on the ground for lack of buyers. Last week there was a thriving potato black market, due to the short potato crop last year. OPS officials found that housewives were forced to pay 2-c- to 3-c- a lb. over ceiling, and sometimes to accept parsley and carrots in tie-in sales with their spuds. From Maine's Aroostook County came reports that potatoes were being shipped across the Canadian border, then shipped back into the U.S. as seed potatoes, on which there is no ceiling.

While the Agriculture Department does not expect the farmer's price position to improve in coming months, it does not see any real relief for the consumer either. Last week, for example, it predicted that the price of beef and pork may show "material gains" by next fall because there is a decline in the number of animals now being fattened up.

* Parity is a formula for adjusting farm support prices according to the prices farmers have to pay for the things they buy (fertilizer, tractors, etc.). The aim is to give the farmers' dollar the same purchasing power it had in 1910-14. No other segment of the U.S. economy has the same Government guarantee. Parity prices are revised monthly by the Department of Agriculture.

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