A picture of the grain industry; crop areas--buying areas--future of the industry

Front matter

BY W. J. SPILLMAN

MARKETING GRAIN LESSON 1

The American Institute of Agriculture

PART I The Seven Crop Production Areas 11

Relative Importance of the Seven Areas 13

Regions of Dense Population 13

Europe, the World's Greatest Buying Area 14

Eastern North America, the World's Greatest

Producing Area 14

How Rainfall Influences Production 15

PART II Wheat, The World's Most Important Bread Crop 16

Western Europe the Biggest Producer, Yet the

Heaviest Buyer 16

India Produces the Third Most Wheat 18

Australia Exports Much Wheat 18

Central North America, the World's Second

Wheat Area 18

Argentina Exports Over 60% of Her Wheat 19

The United States Leads the World in Wheat.. 19 How the World War Affected the Commerce in

Wheat 22

Competition with North American Wheat Will

Decrease 22

Canada Destined to Lead the World in Wheat.... 23 How the United States Has Increased in Wheat

Acreage 24

Why Low Prices May Be Expected for Wheat 25

Where Wheat is Grown in the United States.... 25

The Central States Grow Winter Wheat 26

The Heart of Winter Wheat Production 26

The One Great Spring Wheat Section 28

PART III The United States Leads the World in Corn 28

Most of Our Corn is Fed to Live Stock 29

Eastern Europe is Second in Production 29

Argentina is Our Biggest Competitor in

Exporting Corn 31

STUDY OUTLINE — (Continued)

India a Big Producer, But Not an Exporter 31

Where Corn is Grown in the United States 32

Which Farmers Sell Corn 33

The Fluctuation in the Price of Corn 33

Why Corn Growing is Likely to be More

Profitable 35

PART VIII Flax As a Market Crop 43

Why the Price of Flaxseed Fluctuates Violently 44

Four States Produce Most of our Flaxseed 45

Why Acreage Rises and Falls 46

The United States Imports Flaxseed 46

Where Flax Is Grown for Fibre 47

STUDY OUTLINE™ (Continued) PART IX

Four Sections Grow Rice 47

India Is the Greatest Producer of Rice 48

The United States Is Tenth in Rice Production. 49

Development of the American Rice Industry.... 49 How the United States Changed From an Importing

to an Exporting Nation 50

What Is the Future of Rice Growing in America? 50

Orientals Eat the Most Rice 50

America Not a Big Rice Consumer 51

High Milling Charges Discourage Rice Planting. 51

PART X Development of Methods of Marketing Grain 51

How Transportation Built Up Marketing 52

Handling and Storage Facilities Important.... 53

Present Local Grain Handling Facilities 53

Market Reports a Big Aid 54

When Grading Began 54

What Cooperation Has Done 55

PART XI Per Capita Consumption of Edible Cereals 55

The United States Uses More Corn and Oats

Than Any Other Nation 56

Introduction To Lesson 1

With the background you have secured by mastering Lessons A and B, you are prepared to proceed with the details of handling the marketing of grain.

You learned in Lesson A of the various services that are commonly performed upon farm products as they pass from producer to consumer. In Lesson B you learned of the men who perform those services. And now, in this lesson, you will get a very definite understanding of the present situation in the marketing of grain.

Be sure to keep in mind what you have already learned as you study each page of this lesson.

Crop Areas - Buying Areas - Future of the Industry

By W. J. SPILLMAN

Since grain is an article of world commerce, it is difficult to understand the grain industry of any one country without a general knowledge of the grain industry of the world. This lesson will, therefore, attempt to give a general picture of the world industry, followed by a more detailed presentation for this country,

Part I. The Seven Crop Production Areas

There are seven general regions in the world, four in the Old World, and three in the New, in which the rainfall is sufficient to permit the development of agriculture on an important scale. These are as follows: (Refer to the world may, Fig. 1, in Lesson A. )

1. From the standpoint of world agriculture, by far the most important American rainfall area consists of that portion of the United States and Canada lying east of about the hundredth meridian. At present this area is less important than the one in Europe, but the two areas have about equal possibilities, and it will not be many generations until they will be equally important. The more southern situation of this area as compared with the European, makes it the great corn growing center of the world.

2. The southeastern part of Asia, and the islands adjacent thereto, make up the great rice producing area. This includes most of India, Siam, Cochin China, China, Japan, Sumatra, the Philippines, and numerous smaller islands, Java and Borneo.

Rice is the dominant grain in this region, and takes the place largely of the bread making grains. This is the so-called monsoon area of southeastern Asia, and the heavy rainfall in many localities is due to the general prevalence during the warm half of the year of extensive wind currents from the warm ocean waters to the south and east toward the interior of Asia.

In part of the area, the rainfall is so heavy as to interfere with farming and some crops cannot be grown.

3. The third area, and by far the most important Old World production area from our standpoint, lies in western Europe and includes all of Europe except parts of Russia, Finland, Spain, and Norway. Here the great mass of the bread eating (Caucasian) races is concentrated.

This entire region is so densely populated that its agricultural production is far less than is required to meet its needs. For this reason, by far the greater part of the grains that enter into world commerce are sent to this region from the less populous producing areas,

4. The most extensive region of heavy rainfall, and the region of heaviest rainfall, in the New World, covers all of northern and eastern South America as far south as northeastern Argentina, its center of heaviest rainfall being the Amazon Valley, where occurs the largest region in the world with rainfall of more than 80 inches a year. The southern extension of this region in Argentina is an important grain producing region, and because of its small population, is one of the most important grain exporting regions in the world. A northern extension of this area covers Panama, Central America, and part of Southern Mexico.

5. New Zealand and the eastern and southern coasts of Australia make up the fifth area. Although commerce, especially in dairy products. Taking New Zealand and Australia together, and comparing them with the nations of the world, they stand seventh in butter production, fourth in butter exports, and fifth in exports of cheese (1909-13 figures).

6. The sixth area of sufficient rainfall lies in equatorial Africa, south of the great Sahara Desert. The tropical climate of this region has hitherto prevented the development of an important agriculture here. A part of the area has an over-supply of rain.

7. The seventh rainfall area consists of a narrow strip of land along the western margin of North America from Southern California to Alaska. A very narrow strip occurs also along the southern part of the coast of Chile in South America.

Relative Importance of the Seven Areas

Two of these seven areas (the African and the South American) and part of a third (Asian) lie in the tropics, and in parts of these sections rainfall is .too heavy for the best development of agriculture and the industries. Their possibilities are a matter largely for the future, although enormous amounts of human food and of useful fibres are obtained from them. The grain of these regions is principally rice. The possibilities in the way of the production of sugar, cocoanuts, bananas, and numerous other tropical fruits have hardly been touched.

The three areas lying in the north temperate zone, and part of the southeastern Asian area, have from time immemorial been the home of civilized man. It is here that human population is largely concentrated, and both agriculture and the manufacturing and transportation industries have had their greatest development.

Regions of Dense Population

The human population of the world is largely concentrated in three of the great rainfall areas mentioned above. By far the greatest number of people live in the Asiatic rainfall area, in which there are five more or less distinct centers of population, namely, India, China, Japan, Korea (Chosen), and Java. This is the great rice eating population of the world. No bread is used by most of these people.

Europe, the World's Greatest Buying Area

The second center of world population is the European rainfall area. Caucasian civilization originated along the eastern edge of this area, and has had its most marked development in the western portion of the area. From this center it has radiated to all parts of the world. The population of this area far exceeds its food producing possibilities, and so food and raw materials for the industries are brought hither from all parts of the world. In fact, the greater portion of world commerce consists in transporting food and raw materials to this region and carrying the products of industry from it to other parts of the world.

Eastern North America, the World's Greatest Producing Area

The third great center of population is the rainfall area of eastern North America. This region is not so densely populated as the two mentioned previously, and has for more than two centuries been the principal outlet for emigration from the other two areas of dense population.

The expansion of agriculture in this region during the past century has been one of the most remarkable phenomena in the history of the human race. It has far exceeded the growth in population in that area, for which reason it became the most important center in the world from which human food is exported. Its cotton is also the most important source of fibre in the world. But this agricultural expansion has already reached the point where its rate is very materially checked. At the same time, the population goes on increasing, so that the surplus for shipment to other parts of the world is diminishing, and in time may largely disappear.

How Rainfall Influences Production

The rainfall regions along the western margin of the American continents, particularly North America, are new, and their possibilities as yet are hardly touched.

The southern portion of the rainfall area of eastern South America and all of the Australian and New Zealand rainfall areas are important agricultural regions with relatively small population and hence are important regions for production of human food for export.

It is thus seen that rainfall and other elements of climate, particularly temperature, are at the foundation of agriculture and industry and that the distribution of rainfall and population over the earth are dominant factors in determining the course and character of world commerce.

Table I. Comparative Importance of Various Grains

The world's seven most important grains, in the order of quantity produced, are: (based on 1909-13 figures)

1. Wheat 5. Rye

2. Corn 6. Barley

3. Rice 7. Flax

4. Oats 8. Buckwheat

This order is different, however, for the United States, the order of production being as follows: (based on 1909-13 figures)

1. Corn 5. Rye

2. Wheat 6. Rice

3. Oats 7. Buckwheat

4. Barley 8. Flax

From the standpoint of the amount exported from the United States, the order of amounts is as follows : (based on 1909-13 figures)

1. Wheat 4. Oats

2. Corn 5. Rye

3. Barley 6. Rice

Part II. WHEAT, THE WORLD'S MOST IMPORTANT BREAD CROP

There are three important wheat producing regions in the Old World and three in the New World.

The most important of all, is the region extending from southern Russia westward along the northern border of the Caspian, Black, and Mediterranean Seas to the Atlantic Ocean. It includes a small portion of northern Africa and has an extension of considerable importance eastward into Siberia.

Western Europe the Biggest Producer, Yet the Heaviest Buyer

More wheat is produced in this area than in any of the other areas, but only the eastern half of it produces a surplus, the western half of this area being the most important wheat importing region in the world. It not only buys the wheat from the eastern portion of this area, but it imports most of the surplus from all the other important wheat areas in the world.

The countries in this area that produce a surplus of wheat (or rather did before the World War) are: Russia, Roumania, Bulgaria, and Hungary. Other important European wheat producing nations are: France, Italy, Germany, Spain, and England. But all of these, except Spain, are large importers, and Spain imports a small quantity. Belgium and the Netherlands also import most of the wheat their enormous populations consume. The same is true of Switzerland.

oa si

4->

M

O

U

P.

P,X

* o

,c

C« o r/i rt

T3

0> c o

P

Z v

JS a!

y cd as

India Produces the Third Most Wheat

The next most important Old World wheat producing area is central and northwestern India. India is the third most important wheat producing country in the world. The population lives largely on rice and a considerable proportion of the wheat is exported.

Australia Exports Much Wheat

The third Old World wheat producing area is Australia. Around the southeastern margin of this island continent is a narrow strip of land eminently adapted to wheat production. The population being small, about 60% of the wheat produced is exported, thus making Australia one of the important exporting countries, although its production is only oneeighth that of the United States.

There is a small amount of wheat produced in Japan and Manchuria, but it is consumed locally, and there is no important commerce in wheat between this region and other parts of the world, although some flour and wheat are imported from western North America.

Central North America, the World's Second Wheat Area

In the New World, by far the most important wheat producing area is in central North America along the western margin of the eastern rainfall area of that continent. This area extends northward into Canada, southward into northern Texas, and in middle latitude, eastward to the Atlantic Coast.

Next to the great European wheat area, this is the most important in the world. As already stated, the production is here greater than the needs of the population, and much of the grain is exported, although by far the greater quantity of it is simply moved from the center of the continent to the region immediately eastward.

The Columbia River Basin of the Pacific Northwest is another small but important wheat producing region. Formerly, much wheat was produced in the Willamette Valley of Oregon and in the central basin of California, but the crop is less important there now than it was a quarter of a century ago, largely because of the development of more intensive forms of agriculture.

Argentina Exports Over 60% of Her Wheat

The third of the American wheat producing areas is in Argentina. While the amount of wheat produced here is less than one-fourth of that produced in the United States, the export of wheat is nearly equal to that of the United States, constituting 60.5% of the total production, while our exports (for 1909-13) were only 14.3% of our production.

The United States Leads the World in Wheat

Producing and exporting more than any other nation, (now that Russia is producing little) the United States is easily the leader of the world in wheat. It may be surprising to many to know that wheat is not the largest crop in the United States, however. It is exceeded in number of bushels produced by corn.

Practically all of the world's exported wheat is sent to Europe, the largest amount being taken by the United Kingdom. The second largest amount is imported by Germany, the third largest by the Netherlands, and the fourth largest amount is taken by Belgium.

So you see, America's principal export wheat market is represented by the United Kingdom, Germany, the Netherlands, and Belgium. There are some other countries that buy from us, but they also are largely in western Europe.

Our present competition in selling to Europe is mainly from Argentina, Canada, and India.

TS O*

43 ^3

C^

CD J* oq ra o P* rfl g

KITS'*

XI *.b c_| cd a>

^ CD >

LLO

hav

a, ha

Bj Jh to

K es«

§ se k.Ss

P5 C «

On « R

O r 2 -F *

MS

H rt® pQ es

CO CD B

Sf^c fc "eS £

** cl<M

CD pi

%A o.ti

How the World War Affected the Commerce in Wheat

The principal effect of the European War upon the wheat industry was the entire elimination of Russia from world commerce. During the period immediately preceding the war, Russia and Siberia together exported an annual average of 162 million bushels of wheat, 31% of their entire production. There was also a very large decrease in production in Roumania and in France, and a smaller decrease in Hungary, Bulgaria, and Italy. England greatly increased her production of wheat, but is now back practically to normal production.

In time, all these nations, with the possible exception of Russia, should resume their normal relation to the wheat industry. In fact, most of them have already largely done so. The future of the Russian situation is so uncertain that discussion of it would not be fruitful. It is possible that for a generation or more, Russia may remain segregated from the rest of the world's commerce, although there are also possibilities that she may, within that time, resume production and export.

Table II. Rank of Nations in Wheat (Based on 1909-13 figures)

Production Exports Imports

1. United States 1, Russia (pre- 1. United King-

2. Russia (pre- war) dom

war) 2. United States 2. Germany

3. British India 3. Argentina 3. Netherlands

4. France 4. Canada 4. Belgium

5. Austria-Hun- 5. Netherlands

gary 6. Roumania

8 . Canada

7. India

Competition With North American Wheat Will Decrease

Practically all but two of the great wheat producing areas of the world have been developed approximately to the extent of their possibilities. These two are Canada and the United States. (This leaves Russia out of consideration.)

Argentina in 1910-11 grew 14,514,000 acres of wheat. Her crop for 1920-21 was 14,817,000 acres. Her maximum, however, during the World War was 17,875,000 acres. The production of wheat in Argentina will probably not increase materially in the future, but the population there is increasing rapidly, so that the export of wheat from that country will probably decrease rather than increase during the next generation.

The wheat area in Australia in 1910-11 was 7,372,000 acres; in 1919-20, it was 6,396,000* The maximum acreage during the World War was 12,845,00 acres.

There is little possibility of any further great extension of the wheat area in Australia and, as the population there is increasing, the export of wheat from Australia should be a less important factor in world commerce in future than it has been in the past.

Canada Destined to Lead the World in Wheat

The story of Canada is quite different. The average acreage of wheat in Canada in the years 1907-10 was 7,420,000. In 1911-15 it was 11,700,000 and in 1916-20, 16,970,000. It is claimed by some enthusiastic agricultural authorities in Canada that that country has 250 million acres of possible wheat land not yet put into cultivation. This is equal to the present total wheat acreage of the world.

It is very doubtful whether this enthusiastic claim is fully justified, but even if there is onefifth of this area still available, there is little possibility of a shortage in wheat production for one or two generations to come.

How the United States Has Increased in Wheat Acreage

The following table shows the gradual increase in wheat acreage in the United States since 1866. There is only one check in the gradual and rapid increase and that occurred during the period of low prices in the latter part of the eighties.

During the World War, under the influence of patriotic propaganda, the wheat acreage in this country rose in 1919 to the unprecedented figure of 75,694,000 acres. This great increase unbalanced the agriculture of the country very seriously and we have now returned approximately to the normal acreage for our present period of development.

Table III. WHEAT ACREAGE IN THE UNITED STATES 5-YEAR ANNUAL AVERAGES

It is not possible to say just what the future wheat acreage of the country may be. The figures in the table, as they stand, do not indicate the near approach of a check in the increase of acreage, yet well informed agriculturists are of the opinion that we are approaching an era when this expansion of acreage can not continue, at least at its present rate.

W hy Low Prices May Be Expected for Wheat

Certain possibilities of acreage expansion for wheat in Canada, and the probable possibility of considerable further expansion in this country, justify the assertion that for a good many years to come, the world's possibilities of wheat production will exceed the world's requirements for this cereal. We may, therefore, expect in the future occasional overproduction and low prices for wheat.

Fluctuation in production of wheat is accentuated by the fact that approximately one-half of the wheat area of the world is grown with less than 30 inches of rainfall. In all regions with rainfall so low as this, periods of exceptionally light rainfall will occasionally reduce production very materially. Therefore, we may expect to fluctuate between over-production and under-production of wheat for many years to come.

Where Wheat Is Grow n in the United States

There is a small area in western New York which has always been an important wheat producing region because the soils of that region are eminently adapted to this crop.

To the south of this in Pennsylvania, New Jersey, Delaware, Maryland, and Virginia, is another region where wheat has always been, and is yet, an important crop. Here, again, we have good wheat soils and very excellent climate for winter wheat, except that the rainfall is rather heavy. In spite of the development of more intensive farming near the great cities of the East , wheat has retained an important place in the agriculture of this region.

The next wheat area westward covers Ohio, Indiana, and Southern Michigan, with outlying districts in Kentucky and Tennessee. The climate is here favorable to winter wheat with the exception of the last two mentioned states where it is rather warm for this crop. The crop fits in well in the rotation practiced and wheat has been an important crop here since transportation facilities first became available.

Fig. 4. THE STATES THAT BUY AND SELL WHEAT

Compare this map with Figure 4, and you will see that although Illinois is second in production of wheat, she does not produce enough to meet her own needs. The same thing is true of Ohio

The Central States Grow Winter Wheat

We find a large acreage of wheat in western Illinois and adjacent parts of other states. If the soils of northern Illinois and Iowa were well adapted to winter wheat, it seems certain that this crop would occupy a much more important place than it does in the local agriculture.

An extension of the Illinois wheat area runs up through the Missouri counties flanking the Missouri River. The loess soils along that river are peculiarly adapted to wheat.

The Heart of Winter Wheat Production

The greatest winter wheat area extends from east central Nebraska southward through central Kansas, western Oklahoma, overlapping to a slight extent

Fig. 5. THE PRINCIPAL WHEAT PRODUCING STATES Each dot represents the production of 200,000 bushels; the numbers in the states indicate the rank of states in order of production. Compare this map with Figure 5 into northern Texas. Wheat is a dominant crop here largely because the rainfall is somewhat light for corn. The relatively large acreage of oats in this section does not represent commercial production. The oats are needed as a supply crop because of the relatively small acreage of corn.

The One Great Spring Wheat Section

Passing now to the spring wheat country, we find the largest and most important spring wheat region in America in south central Minnesota, extending northwestward, taking in eastern South Dakota, western Minnesota, and practically the whole of North Dakota, with its greatest development in the Red River Valley of North Dakota. The climate here is eminently adapted to spring wheat. Oats are at home and are grown extensively as a supply crop, but most of this region is too far from market for oats as a commercial crop. Flax is an important crop here, as are also barley and rye, for reasons that will be mentioned later.

Finally, we have the limited but important wheat growing region of the Upper Columbia Basin in the Pacific Northwest. About two-thirds of the wheat in this area is fall sown; the remainder being sown in the spring.

Part III. THE UNITED STATES LEADS THE WORLD IN CORN

There are four important corn growing regions in the world, and a few other regions where the crop is of some importance. First, and by far the greatest, is the central and eastern portion of the United States. This region produces 70% of the entire corn crop of the world. We export only 1.6% of our corn crop, and that goes chiefly to Europe, as do the corn exports of practically all other countries.

Table IV. Rank of Nations in Corn (Based on 1909-

13 Figures) Production

2. Austria-Hun-

gary

3. Argentina

4. Mexico

5. Roumania

Export

1. Argentina

3. Roumania

Imports

1. United King-

dom

4. Belgium

Most of Our Corn Is Fed to Live Stock

The great bulk of our corn crop is condensed into animal products on the farms where the corn is grown. About 85% of our crop is used in this manner. Only 18% of the crop ever enters commerce as corn, and of this, a large proportion is consumed by farm animals.

FED TO CATTLE,

ON FARMS

15%

AVERAGE PRODUCTION *

(1912- 1921)

Fig. 6. WHY WE EXPORT LITTLE CORN From this chart, you will see that most of the corn we produce is fed on farms. Our exports amount to ony 1.5%

Ea stern Europe Is Second in Production

The second most important corn region lies to the north and, west of the Black Sea and along the northern border of the Mediterranean Sea. In Europe, Hungary, Italy, Roumania, and Russia are the principal corn producers. Hungary and Italy import corn, but Roumania and Russia export considerable quantities of it. This is mainly because the standard of living of laborers in these countries does not permit them to eat much meat. The other nations of Europe are all importers of corn.

A rgentina Is Our Biggest Competitor in Exporting Corn

The third corn area is Argentina. The production of corn in that country is small, averaging 175 million bushels for the five year period from 1909-13; but the population is small, which permits the exportation of 66% of the total production. Argentina exports more corn than any other nation. This exportation to Europe, and occasionally to the United States, is made possible by cheap water transportation and the fact that the corn in Argentina is grown within a short distance of the point of export.

CORN PRODUCTION AND EXPORTS OF

THE UNITED STATES AND ARGENTINA

YEARLY AVERAGE 1900-1920.

UNITEO STATES

Da

Fig. 8 WHY ARGENTINA OUTSTRIPS US IN CORN EXPORTS Although we produce many times as much corn as Argentina, we use so much more that our exports (the black bag) are much less than those of the South American country

India a Big Producer, But Not an Exporter

Next in order of corn production is India, the average crop for that country for 1909-13 being 87 million bushels. This corn is practically all consumed locally. India has twice as many cattle as the United States, and more than twice as many human beings, so that that country has need for all its corn.

Small quantities of corn are grown in southeastern and eastern Africa, and along the eastern coast of Australia. Small areas in Egypt and along the northern coast of Africa may be considered as outlyers of the southern European corn region. The only semi-permanent effect of the World War on the commercial corn industry was the elimination of Russia as a factor.

DESTINATION OF CORN EXPORTS

Fig. 9. U. S. EXPORTS The proportion of corn exports purchased by various countries is here graphically shown

Where Corn Is Grown in the United States

Corn is limited in its distribution northward by temperature and by length of growing season, the line of 66° mean summer temperature corresponding very closely with the northern edge of the corn growing region.

Westward, the acreage of corn is largely limited by rainfall, there being very little corn west of where the mean summer rainfall is eight inches. Most irrigated lands are at too high an altitude for corn, while in the Southwest, alfalfa is a more efficient producer of forage, and this occupies the major portion of the acreage that might otherwise be devoted to corn.

Throughout the territory to the eastward of the line of eight inches summer rainfall and south of the line of 66° summer temperature, corn is grown almost universally, the heaviest acreage being found in Illinois, Iowa, southeastern South Dakota, eastern Nebraska, central and eastern Kansas, central Oklahoma, western Ohio, and central Indiana.

In other portions of the corn territory, corn frequently occupies a relatively larger proportion of the total crop area than it does in these regions of denser distribution. Throughout this territory corn is mainly a supply crop, being grown for the animals kept on the farm and to supply local markets.

Which Farmers Sell Corn?

The only sections of the country in which any considerable proportion of the crop is marketed is east central Illinois, near the great corn market of Chicago, and in northwestern Iowa and adjoining parts of other states. Sales in other parts of the country are mainly for local markets.