HomeMy WebLinkAboutThe Brussels Post, 1977-10-12, Page 7the wedge
Expansion
We will soon be expanding to nexf door • offering you
greater selection, greater value. But first, we have to
reduce our Inventory • including new fall arrivals - so,
Everything in the store is now
The peelett OPporfunity for the early
Christmas shoPpee; everything is of half
Ptici,intiutling all Velour Lburige Govins,
hiauteii stacki, skirttilallsWeatets, dresses,
Wool pantsuits, long drat's; eft,
All sates cash -and final,
King Street, Chilled 482-1135
.600 10 a in p.nt, adept Wednesdays
and sundayt:..
•
OLLAR SENSE AND YOUR FARM
Farmers may lose on corn
even after subsidies
By Don Shaughnessy, CA
Farmers growing corn
this year are facing the,
prospect of receiving 'ex-
fromeiy low prices, and it is
possible. that Government
subsidies will not compen-
sate, them for the cost of
raising their crop.
on e' large buyer an-
ticipates that corn will sell
for $1.40 a bushel in mid-
harvest, compared to a cost
of at least $2 a bushel to .
produce Corn.
Members of the Institute
of Chartered Accountants
of Ontario answer your
questions in Dollar Sense.
Mr. 'Shaughnessy is with
G.11. Ward and Partners,
Cobourg•
The federal government.
attempts to compensate
farmers in such circum-
stances by paying them the
difference between the,
average price all farmers
received for their crop, and
a floor price. •
This year the floor 'price
will be about $2.35 a
bushel. If the average price
for which the entire crop is
sold is about $2 a bushel, ,
the subsidy will be around'
35 cents a bushel.
The farmer who sells at
$1.40 will receive no more
of a subsidy, however, than
one who sells at a higher
price, He will receive the
same 35 cents a bushel
which, while reducing some
of the pain, means he
operated at a loss.
The fanner who is.
fortunate enough ,or. patient
enough to sell for more
than the average price. of $2
a bushel will still receive
the full subsidy.
A farmer with a sound
market awareness will be
able to avoid selling when
the market is glutted and
• the prices depressed.
Under thee circumstances,
it is important ,to avoid
being part of the crowd for
the contrary thinker will
likely do better than the
rest.
It will also be important
to keep meticulous records
of your crop -- what
varieties were grown, what
fields were used, where the
corn was sold and for how
much as support for a
claim to a subsidy. 'Avail-
ability of the subsidy
suggests that people who
sold 1976 corn in the 1977
crop year might try to claim
it unless the government
policed farm records
strictly.
In the case of a farmer
who raises corn in order to
feed it to his cattle, a
curious anomaly will pro-
bably arise, where it will
actually be more profitable
to sell his own corn and
collect the subsidy, and
then buy someone else's
corn to feed his cattle.
This is a technicality
which most farmers would
not 'try to , exploit, and
rests on the fact that no
sub'sidy is paid unless the
grain is sold in an author-
iaed way. ,
Even with the low price
of corn, however, there is •
only a remote possibility
that it would be profitable
to buy cattle and feed them
"cheap" torn as a way of
making more money.
However, cattle prices
have-been rising lately, and
it appears that some
farmers have this prospect
in mind. A similar situation
that occurred in the late
1960s upset the cattle
market for a number of
years with the result that
neither the corn producers
nor the cattle farmers made
money.
C RAWFORD ,-
MOTORS
WINGHAM ,ONTARIO
1975 Dodge Monaco.
4 door
1974 Maverick
4 'dOor Sedan
1974 Grand- Torinov • 2 door hard top.
1974 Dodge MOO*
4 door. sedan
1974 Dodge
1/2 ton pickup
1973 Pontiac Lemons
4 door sedan, V8, Auto,
P.S. P.B. radio
1977 Chrysler
New Yorker
demonstrator._ ,
1977 Plymouth 'Fury
2 door H.T.
1972 Dodge .Monaco
2 door 11.T.
• 1968 Chev;
4 door
Dodge .
• II' tort Pickup, VS • 4
• speed ;
VW D'ust.BUOOY
A g.Cons stucki-
THE BRUSW-0 YU' WIWI 1 Z, -Mr I
Buying habits
When the price of beef goes pp,
consumers usually switch some of
their meat buying to pork and
poultry, says Aricult tire Canada.
Similarly, a rise in butter prices
can trigger an increase in
margarine consumption.
However, the relationship
between these products is not as
strong in reverse. An increase in
pork prices leads to only a slight
increase in beef consumption.
And, higher margarine prices
have less impact on butter sales
than butter prices have on
margarine use.
Canadian food consumption is
affected by many factors.
Knowing how the price of one
food item can affect the consump-,
tion of another commodity is just
one aspect of estimating the
, demand- for a certain food.
Agricultural policy makers
need sound estimates of
Canadian consumption patterns
in order to examine national food
requirements and"anticipate what
adjustments are likely to,occur as
—prices, incomes and demographic
characteristics change.
Agriculture Canada economist
Zuhair Hassan has been working
on a series of four major/studies
of food consumption patterns in
Canada in conjunction 'with
S.R.Johnson, a professor of
agricultural economics at the
University of Missouri. The
studies by the two economists are
based on data from Statistics
Canada.
The first study, Consumer
Demand for Major Foods in
Canada, measured consumer
response to changes in food
prices and income. Drs. Hassan
and Johnson found that,
generally speaking ; an increase in
the price of a foy,d" product will
result in a drop/In sales if other
factors are 'unchanged. But
Canadian consumers are more
responsive to price changes on
some foodstuffs than others.
For veal, lamb, turkey' and
frozen foods, the percent age
change in quantity purchased is
greater than the corresponding
change in price. Demand for
beef, pork cheese, butter, fish
and prepared foods is affected by
changes in price, but to a lesser
degree than for veal, lamb, turkey
and frozen foods. On the other
hand, the demand for skim milk
powder, eggs and cereals
changes very little when prices
'fluctuate:
Drs. Hassan and. Johnson also
observed cross-price effects
'among food . groups. They
:estimate that a one per cent
increase in beef prices will reduce
beef consumption_hy, 0.85 per
cent. At the same time, if pork
prices remain unchanged, •pork
consumption will go up by 0.11
per cent. In the reverse situation,
a.-one per cent increase in pork
prices can be expected to reduce
pork consumption by 0.95 per
cent and increase beef
consumption by 0.06 per cent.
For butter, a one per cent price
rise is expected to reduce
consumption by 0.85 per cent.
The butter price change will
increase margarine consumption
by 0.21 per cent. However, a one
per cent increase in margarine
prices can be expected to reduce
margarine consumption by only
0.63 per cent and increase" butter
consumption by only 0.06 per-
cent.
The 'third study, Urban Food
Consumption Patteilns in Canada,
was published earlier this year, It
looks at what foods Canadian
families buy and how these
families respond to changes in
income and family size.
As family income increases, so
does expenditure on food. H
owever, the proportion of income
spent on food decreases as
incomes rise. A lower-incoine
family spends a greater
percentage of its income on food,
than a higher-income family. On
the average a 10 per cent increase
in family ,income will produce a
two per cent increase in food
expenditures. However, most of
this increased spending is for,,
food Consumed outside the home
-- if the family income goes up by
10 per cent, spending on food
away from home rises by eight,
per cent, while grocery spending
rises by less than one per Cent.
"Increased incomes seem to
have little effect on consumption
of staples like eggs and milk,"
says Dr. Hassan.
"However, the family demand
for frozen and prepared foods
increases with income as does the
demand for veal and high quality
cuts of beef. Families consume
more corn oil, and salad dressing
as their incomes rise but less
margarine, lard and shortening.
There also appear to be some
substitutions away from! starchy
foods as incomes rise."
Family size also affects
consumption patterns. As family
size increases, expenditures on
most, food items increases.
Expenditures on milk Sand flour,
however, will increase more than
spending on commodities such as
beef and butter. As family size
increases spending on luxury-ty
pe foods and foods eaten away
from home decreases.
357-3862