BUSINESS & INVESTMENTS

CROP STARTS TIME-HONORED PRACTICE OF COUNTING OUR CHICKS ERE THEY'RE HATCHED

J. HERBERT HODGINS August 15 1925
BUSINESS & INVESTMENTS

CROP STARTS TIME-HONORED PRACTICE OF COUNTING OUR CHICKS ERE THEY'RE HATCHED

J. HERBERT HODGINS August 15 1925

CROP STARTS TIME-HONORED PRACTICE OF COUNTING OUR CHICKS ERE THEY'RE HATCHED

BUSINESS & INVESTMENTS

J. HERBERT HODGINS

How much will the farmers of Canada have to spend this year? We have reached the turn of the year when Mr. Business Man watches anxiously from week to week for authoritative crop reports, particularly pertaining to western Canada. Upon the outturn of the prairies and upon international demands for our cereals chiefly depends the outlook for business in Canada for the twelve months to come.

To a measurable extent it is the game of count ing-your-chickens-bef orethey - arehatched, upon a broad, national scale.

It is like forecasting the weather. Professor Robert De C. Ward, of Harvard University, tells the story of three letters which came to his desk during one week of last Autumn. One was from a lumber dealer; another, from a manufacturer of overshoes; the third, from the owner of a woollen mill. Each '.etter contained the same question: “Will the coming winter be mild or severe?” Would logging operations be difficult and expensive? Would there be unusually large sales of rubbers and of arctics? Would people buy heavy woollen clothing? If the question could have been definitely and positively answered, Professor Ward’s three correspondents would doubtless have profited handsomely. Indeed, it is impossible to overestimate He money value that definite, detailed, long-range weather forecasts would have for all classes, in all sorts of occupations.

Man just naturally craves advance knowledge of coming events.

So far as the crop is concerned, on August fifteenth, he must content himself with estimates. Fortunately for the business anticipator crop estimates have been reduced to a science.

So that when the federal government tell us that we may look for a crop of three hundred and sixty-five million bushels of wheat; four hundred and sixty-eight million bushels of oats; eightysix million bushels of barley and ten and a half million bushels of flaxseed we have a more or less definite basis upon which to plan autumn and winter trade.

Our Agricultural Income

CONTINGENT upon the unforeseen, therefore, it seems almost certain that Canada will garner one hundred million bushels more wheat this year than last. This one item will probably give the Canadian farmer an additional $150,000,000 to spend.

With a big crop on our hands, so to speak, what are we likely to get for it?

The total agricultural revenue of the Dominion last year reached $1,453,000,000; two years ago it was $1,350,000,000. It will likely exceed these figures this year.

It is doubtful if we experience the frenzied markets of last season when wheat soared beyond the two-dollar mark. On the other hand, certain reliable institutions whose business it is to assemble world cereal statistics express confidence in the firming trend of grain prices.

The Sears-Roebuck Agricultural Foundation includes a Research Department which explores the wheat probabilities of the world. The director, P. V. Ewing, hazards the prediction that wheat will be two dollars a bushel before the 1925 crop is fully marketed. He is quoted by the Chicago Daily News, which says that his prediction of higher wheat prices is predicated upon reports from three thousand six hundred field observers and a study of available statistical information.

Air. Ewing’s conclusions, indicating ¡ higher wheat prices, are as follows:

“There will be a shortage of nearly two hundred million bushels in the present winter wheat crop, compared j with last year. The world carry-over j shows a decrease of nearly one hundred and fifty million bushels. Spring wheat prospects are favorable, but the crop j probably will decrease in condition as j harvest approaches.

“According to the best estimates of production, the total wheat crop in the j United States will not exceed six hundred and sixty-five million bushels. The average domestic consumption is six hundred and sixty-five million bushels. We cannot help but export some wheat.

In addition, trade-marked flour for which j there is an established demand will have ! to be moved abroad. At least fifty I million and possibly one hundred million bushels of wheat will be exported.

“This will throw us upon an import baçis. Canadian wheat will be called upon to supply the deficiency.”

Canadian Patience Rewarded

THE United States’ increasing dependence upon Canadian wheat is of vital importance; it is a matter of dollars and cents to each individual pocket-book in the Dominion.

This dependence, in the view of the Calgary Herald, “will doubtless reach a point where the American consumer will demand the abolition of prohibitive import duties against Canadian wheat for domestic consumption. The American people cannot be expected to be content to see Canadian wheat allowed free entry to be ground into wheat in bond for export as flour to foreign countries while, they, themselves, need more wheat and flour.”

Or, as the St. John, N.B., TelegraphJournal interprets it: “If the United States will need Canadian wheat this year because of a shortage of its own crop, it will soon need our wheat every year to aid in feeding its rapidly-increasing population. When it does, the duty on Canadian wheat will be abolished or reduced. The Canadian farmer has only to wait patiently for a few years to secure a large and profitable market just over the border.”

International Demand

THE demand extent is growing to which for Canada’s international exportable surplus is impressive.

The world’s acreage under wheat is reported to be about the same as last year. In 1924 this acreage amounted to one hundred and ninety-one million acres, as compared with one hundred and ninety-five million acres in 1923. To meet the available demand, experts contend that the acreage this year should be slightly in excess of that for 1923. Instead it is below that figure!

The other outstanding factor, as the Toronto Globe points out, is that two formerly great exporting countries will not figure this autumn in world’s exchanges. Russia, instead of being an exporter of wheat, is likely to continue as an importer. The United States is said to be on a domestic basis this year, which means that the people of the Republic will consume nearly all the wheat grown there. For the period, 1920-24, the United States exported annually on an average two hundred and fifty-six million bushels of wheat or the equivalent of flour. So that nearly two hundred and fifty-six million bushels may be considered as withdrawn from the world’s markets in 1925. There remain the European crops and the competition from Argentina, India and Australia. During 1920-24, the annual average export from these three countries has totalled two hundred and twenty-nine million bushels, as against the Canadian annual average oí two hundred and forty-five million bushels of wheat and its equivalent in flour.

The announcement is made that India’s exportable surplus will be negligible, the average annual export figure for India having been twenty-four million bushels during the last tour years. Against this lessened available export from competition must be set this year’s favorable yields in Europe. One authority recently stated that the peasant owners of land in Europe were themselves consuming more wheat than they formerly did as estate laborers. In fact, Prof. Patton, economist of the University of Alberta, says that the countries of western and central Europe require a larger importation of wheat and flour than they did before the war. Their imports of 1923-24, of some five hundred and fifty million bushels, were about equal to the pre-war average. On the other hand, any forecast cannot ignore the lessened purchasing power of several European countries, owing to depreciated currency, all of which may have a reflection on the actual cash returns to the Canadian farmer.

Then, too, there is the increasing demand for wheat flour in the Orient. It presents untold possibilities. Consider for a moment, rice-eating nations of many millions of people, turned wheat consumers!

Undeniably, there is an across-Canada disposition to be buoyant. “Assuming that the crop, which now seems assured, turns out as well as it promises, the reaction to it upon the prosperity of all Canada will be greater than that of any crop ever harvested in this country,” promises the Calgary Herald.

“Santa Claus might as well begin to accumulate extra stockings,” says the Regina Post, indicating that the “retailers’ day is at hand,” after a discouraging wait of two years. “If prairie farmers do well this year, as seems assured, their prosperity will quicken and strengthen the commercial life of the whole country,” the Kingston, Ont., Whig assures us.

The Toronto Globe joins in the chorus of expectancy “that Canadian prairie farmers will have much more money this year,” and makes a strong point of its belief that “they will be free to put a larger proportion of their income into the regular channels of business,” because of their “materially reduced indebtedness.”

The Calgary Herald agrees that the West’s “spending power will be larger than for many years.” The Portage La Prairie, Man., Graphic looks for Canadian agriculture once more “to prove to be a solid foundation of the country’s wealth,” and the Sarnia, Ont., Observer expects the crop to “do more to rehabilitate prosperity in Canada than anything else that could happen.” The Financial Post admits that “the agricultural factor in the business situation is substantially constructive.”

Concomitant Factors

NTOT only is our economic structure •i strengthened.

“With such resources in their hands, the farmers of Canada must, as a class, feel greatly heartened,” observes the Toronto Mail and Empire. “Their prosperity cannot but change their way of thinking upon public questions, for there is a world of difference between the broodings of producers and citizens whose operations have been rendered unprofitable and the contentment of the same citizens who a year later are enjoying the abundant fruits of their industry. A great change in the material welfare of the fundamental producers of the country is sure to produce a great change in the spirits of those producers and in their tone of mind towards matters pertaining to the commonwealth.”

So much, then, for our major concern. “Other current developments, too, are generally satisfactory for the season,” the Financial Post tells us. Supporting evidence of this is to be found in the

M a c L e a n’s

improving complexion of our foreign trade, which, in turn, is reflected in the above-par position of the Canadian dollar abroad. There is, too, the better outlook for employment with the coming crop absorbing some sixty thousand harvesters, “an exchange of labor and wages mutually beneficial to West and East,” as the Mail and Empire says. Railway earnings are surprisingly well maintained, with, of course, the distinct prospect of heavy haulage throughout the autumn and winter.

Each year now, because of the developing Vancouver port, the grain movement becomes of increasing interest and value, West as well as East. The grain business, in the words of the Vancouver Sun, “has become Vancouver’s gold mine.” Of the 1923-24 crop Vancouver, with one elevator, possessing little better than one million bushels capacity, handled fiftyfour million bushels of grain. This year, Vancouver has five elevators with an aggregate storage capacity of six million five hundred thousand bushels capacity; a loading capacity of five million bushels a day; a cleaning capacity of two million bushels a day. “If,” to quote the Sun, “Vancouver could handle fifty-four million bushels in 1923-24, the equipment she has to-day would enable her to handle two hundred and fifty million bushels.”

Yet, while Vancouver is thus building up its port prestige it is apparently not doing so at the expense of Canada’s other “front door,” the Port of Montreal, which, according to the Harbor Commissioners’ recently released annual report, has advanced another notable record in grain movement—the 1924 achievement of one hundred and sixty five million bushels received and one hundred and fifty-nine million bushels delivered.

When one stops to realize that the combined effort of many hands and many machines finally reaches the magnificent sweep of Canada’s grain epic, one quickly senses that national romance is far from being dead.