BUSINESS & INVESTMENTS

FATE OF YEAR’S BUSINESS IS MATERIALLY DEPENDENT ON SUCCESS OF GRAIN CROP

J. HERBERT HODGINS June 15 1926
BUSINESS & INVESTMENTS

FATE OF YEAR’S BUSINESS IS MATERIALLY DEPENDENT ON SUCCESS OF GRAIN CROP

J. HERBERT HODGINS June 15 1926

FATE OF YEAR’S BUSINESS IS MATERIALLY DEPENDENT ON SUCCESS OF GRAIN CROP

J. HERBERT HODGINS

BUSINESS & INVESTMENTS

STEP off the train into any Western community at this season and I venture to say—if the sun is smiling— that you will first be hailed with that phrase most of all welcome to Western Canadians “Great Day for the Crops!” Yes, they are talking crops “out West” these days. From now until November the crops in one department or another will be the only topic of conversation “out there,” in that country of great open spaces and the finest wheat in the world, All down the line of daily commerce you hear it—from the man on his early rounds, from the bread man, the general merchant, the dentist, the doctor. Truly it is the season for nurturing that crop cheerfulness inherent to Western Canada—that great national spirit of optimism which vibrates in the best of rften out West— that great spirit of optimism predicated upon the annual hope in regard to all harvests, which springs eternal within every agrarian.

“Seeding ten days earlier . . . larger wheat acreage . . . excellent initial growth”—these crystallize the news despatches which have been flashed in the past few weeks by wire, cable, radio, from Western Canada’s two hundred million acre granary, to all parts of the world. “They constitute a major factor in determining flour and bread prices during the coming months,” as the Financial Post points out, “and at home, these and similar despatches are weaving in advance the tale of Canada’s business prosperity in 1926 and 1927.”

In short “the crop” is a subject which comes to every Canadian breakfast table.

June brings the Canadian business man to that period when he begins to watch from week to week for authoritative crop reports, particularly as pertaining to Western Canada. Upon the out-turn of the prairies and upon international demand for our cereals, chiefly depend the outlook for business in Canada for twelve months to come. It is at this time of the year that we Canadians engage again on the great national sport of counting our chickens before they are hatched. It is like forecasting the weather, men just naturally crave advance knowledge of coming events. ,

However, so far as the crop is concerned, we can do little more, definitely, than study the statistics of other years, penetrate the Government figures regarding the spring seeding and then sit back hopefully as regards the brand of treatment which the Dominion is likely to receive from the weatherman.

Fortunately for the business anticipator, crop estimates have been reduced to a science. As a matter of fact, it is entirely in place to remark here that statistics are becoming an increasingly vital element of all departments of business. Perhaps statistics have been developed into something more of a science in the United States than they have so far in Canada but the value of business statistics becomes increasingly clear each year. By the employment of statistical charts many an executive has been able to avoid economic pitfalls in his business, as the master mariner avoids shoals, in the channel he is navigating.

Canada’s basic dependence upon the farm and farm products is made very clear from the government’s annual figures. Last year, for instance, for the first time in five years, the revenue from our field crops exceeded $1,000,000,000. Canada’s gross annual agricultural revenue in 1925 aggregated $1,708,567,000.

Here was a vast, definite spending power.

The following figures give an interesting analysis and comparison of the value of Canada’s annual agricultural out-turn.

(000 omitted) 1020 1024 1025 Field crops $1,455,244 $ 005,236 $1,123,305 Farm animals 143,035 00,657 151,424 Wool 5,200 3,771 3,050 Dairy products 277.50$ 210,430 253,269 Fruits and veg. 60,719 44.04$ 52.667 Psuliry and eggs 45,000 00.03$ 69,675 Fur farming 3,140 3,210 3,600 Maple products 0,100 5.991 5,133 Tobacco 5,893 4,359 7,002 Flax fibre 712 750 Clover & grass seed 7,948 5,300 3,594 $2,010,767 $1,443,077 $1,700,567 Estimating the 1926 Returns Canada's Gross Annual Agricultural Income

LAST year’s crop was gotten from an acreage of 35,000,000. No one knows yet whether this acreage has been increased or decreased for 1926 but many points on the prairies report a greater cultivation. But at this writing and retarded by a backward spring, it was not fully known how much we may count on our Western provinces, for the cereal crops. It will surprise some individuals perhaps, particularly our international friends who count the prairies as our only wheat producer, to know that Ontario is actually the province second in importance in Canada for its grain out-turn. Therefore, Ontario, and, for that matter, all of Eastern Canada’s figures regarding acreage, are important for the final estimate.

The West is reported to have completed ninety-five per cent, of its wheatseeding ten days, at least, earlier than in 1925; sixty per cent, of the new seeding was showing green by Victoria Day. All the early reports indicate ample moisture and an absence of damage of any sort. But that is not to say we shall be free from the crop-killers! Do you recall a single year when the crop-killer did not ply his trade and ply it energetically¿this despite the fact that invariably, from the outset of the season, the main purpose of Canadians is to stimulate crop optimism.

What Are the Market Prospects?

OF COURSE it is one thing for Canada to grow a crop and quite another thing for Canada to market that crop—with profit to our farmers. After all, it is the creation of a new wealth which counts in the ultimate building up of the Dominion. At the commencement of the crop year the situation was bullish, the United States had 200,000,000 bushels less than had been anticipated. There was a partial failure in Argentina, Russia was entirely out of the picture and Canada had bad harvesting weather. Specifically, it was impossible to see how the world would subsist until the 1926 crop was ready. But the world “tightened its belt,” as the Financial Post reminds, “and price levels became higher and the situation altered completely.”

At this writing, statistics show some 550,000,000 bushels of winter wheat in the United States against 398,000,000 a year ago. Spring wheat yield will probably be 250,000,000 bushels— a total of 800,000,000 bushels of wheat or 130,000.000 more bushels than a year ago. Add to this the fact that the new crop is now upon us with the June harvesting of Texas wheat. Canada has some 75,000,000 bushels of exportable wheat, possessing the only important pocket of bread wheat left in the world, so that bearish as the outlook may appear it is an accepted thing that all of Canada’s exportable surplus will be disposed of before September wheat is ready and at a good price. Generally speaking, although the international situation is bearish, there seems no immediate likelihood of prices dropping to extreme levels, until the world is assured that there is an adequate supply definitely to be counted on. Therefore prices should remain attractive to the producer.

This is the important factor so far as Canadian business is concerned. The Toronto Globe reminds us, “much depends now upon the developments in the agricultural situation. Favorable cropgrowing conditions should be attended by a further expansion in business all along the line. Canada now appears to be experiencing the broadening of business which was denied to it during the height of the United States’ boom. In fact the present betterment has none of the characteristics of a boom period, but is a gradual improvement based upon fundamental conditions.”

It is almost impossible to measure the influences of another billion dollar “take” from the farms of Canada in 1926. Thére is no denying that last year’s crop at last year’s prices served to establish an entirely healthy situation in the Canadian West, debts which have been accumulating for several years have been paid up, in the main, and the agrarian situation may be regarded as almost completely re-habilitated. So that there are at this time the soundest possible reasons for encouraging optimism.