Crop Production

It seems to be the fate of large agricultural nations that their exports of agricultural products grow smaller as their population increases. It was not so many years ago, it will be remembered, that our export of wheat was depended upon by financiers to establish for us a large credit balance abroad, thus providing gold to import when it was most needed. But for this purpose we can no longer depend upon our wheat. In fact, we raise now only one important staple which we still sell abroad in large quantities - that is our cotton.

James J. Hill hit the nail on the head when he described our decline as a wheat-exporting nation. He said it was to be expected that we should not have much to spare after feeding the mouths of 90,000,000 people. It was not that we grew less wheat but that we were not keeping pace in increasing our acreage. We are a much larger family today than ten years ago and use for our own domestic purposes the bulk of the crop.

Our greatest crop in quantity is corn, but we do not export as much of it as we could spare. Our corn crop has grown steadily until now it causes no surprise when the yield reaches such an enormous total as 3,000,000,000 bushels annually.

If the people of Europe set a higher value on corn, we should have a nucleus for an extremely important export business. But people abroad do not take kindly to corn, still considering it largely a food fit for live stock rather than for human beings.

The annual value of our harvest, including all the live stock and dairy products, as computed by the Statistical Division of the Department of Agriculture, amounts to more than $9,000,000,000. Of this wealth the corn crop alone contributes nearly 20 per cent; wheat comes next; after that the cotton yield. The value of minor crops, such as hay, rye, flaxseed, etc., runs into the hundreds of millions; so also with that once despised growth of uncultivated fields, alfalfa, or long shoot grass. The hen, with whose industry even the busy city housewife is thoroughly acquainted, contributes each year nearly $200,-000,000 to the nation's wealth.

The output of our fields is really the corner stone of our prosperity. As it is all new wealth, reproducing itself every year, it can be readily seen how much every artery of business depends upon our harvest for its life. It is this wealth which supplies the blood that keeps trade going along briskly. While our mining industry comes next in importance, its prosperity largely depends upon the continuation of good harvests.

The smaller the crops we raise, the less is our prosperity. A crop failure would be disastrous. Fortunately, for a good many years we have escaped such a calamity. Our immunity from such a misfortune for nearly twenty years is largely credited to the gradual improvements in our agricultural methods. Whether this is true or not remains to be demonstrated. There are many who doubt that this is a logical explanation, and the consistency of the weather supports at least to some extent their skepticism.

Crops And Speculation

But this is neither here nor there. The point I wish to make is the natural evolution in speculation in these important staples, in which the operators specializing in them are concerned to no greater extent than are the operators in stocks and in cotton. For them all a large crop spells prosperity; a short crop, a period of adversity ; and it is quite natural that all keep a sharp eye on the weather conditions and the preliminary crop estimates which the Government publishes during the growing season.

But the large grain houses do not rely entirely upon the Government's figures. The majority, to supply their clients with intelligent information as to the progress of the different crops, employ men to travel over the crop belts and make their reports. These men, because of their training and keen perception, have acquired the reputation of being crop experts. A number of them from their reports might also be said to have an inclination to regard themselves as naturalists, for in their own vernacular they have added some species to the bugs and insects destructive to farm products. One species in particular is the June bug, which very few people knew until the crop experts discovered it.

When spring bursts upon us, the crop experts are busy, and until the season closes and the several crops are safely in the barns, we may have a half-dozen crop scares caused by the different conditions, such as lack of moisture, bugs, a protracted dry season, or early and severe frosts. Still, were it not for all these elements of uncertainty interspersing themselves in the period between the seeding and the final harvest, there would be little speculation.

It is from these uncertain elements that differences of opinion arise which make bears of some people and bulls of others, while stock-market operators, though only on-lookers, nevertheless form their judgment as to the course of their market from the crop prospects, and strive to anticipate them correctly in their commitments. Furthermore, there are a large number of industrial corporations and railroads, known as the granger roads because they largely depend for their principal traffic on a generous harvest, whose prosperity is vitally wrapped up in our crops. For that reason it is well for every student of finance to know of what importance the crops are to us.

In other directions is the attention of the operator on the grain exchange drawn. He watches the progress of the harvest in Argentine, Russia, and Canada, the three countries which still rank as the large exporting nations, as it is the size of their crops which affects the price of the surplus in our crops that can be exported. A small crop in these countries means higher prices for what portion of our cereals we can sell abroad.