The following statistical facts will make it clear that corn and wheat
are in wholly different positions.
The United States raised, in 1905, 693,000,000 bushels of wheat.
The world’s wheat crop in the same year was 3,275,200,000 bushels.
Therefore, we raised approximately 21% of the world’s wheat crop. The
year 1905 is fairly indicative of the proportions for the last ten
years.
The acreage of wheat in the United States in 1896 was 43,618,646; in
1905 it was 47,854,079, an increase of 38%.
The world’s wheat acreage as indicated by production, is increasing at
about the same rate as is the acreage of the United States.
The United States raised, in 1905, 2,708,000,000 bushels of corn. The
world’s corn crop was 3,396,800,000; therefore, we raised 80% of the
world’s corn.
The corn acreage of the United States in 1896 was 81,027,156; in 1905
it was 94,011,369, an increase of 16%. The world’s corn acreage, as
shown by production, did not keep pace with our own ratio of increase,
but remained almost stationary.
These figures show that the world is depending on the United States
for only 21% of its wheat, and that wheat acreage the world over has
increased about 38% in ten years; but the world is depending on the
United States for 80% of its corn, and the world’s corn acreage has
increased less than 16%.
In order to grasp the full significance of these figures, our practical
monopoly of corn production must be appreciated. Even if we admit an
equal ratio of increase in corn acreage the world over, it remains for
the United States to provide 80% of the increase.
_Corn Area Limited._
The probability of any considerable area of new corn land being
exploited, either at home or abroad, is very small. A recent circular
letter by a man prominent in the cash corn trade, states that there is
not an uncultivated acre of available corn land in the United States.
This is a radical statement, and does not allow for the fact that with
a sufficient price stimulus, considerable wheat, or even cotton land,
would be diverted to corn. But whatever allowances are made for an
increased corn production, it must be admitted that the possibilities
are largely confined to the United States.
Wheat acreage is not thus circumscribed; in fact, the case is
practically reversed; almost 80% of the natural increase in wheat
production will come from outside our boundaries. Of the principal
wheat producing countries,--France, Germany, Russia, Poland and
Caucasus, Italy, Hungary, Spain, Roumania and Argentine Republic--the
two first named alone fail to keep pace with the United States in ratio
of increased production, and others have made up the deficit of these
two laggards.
In a nutshell, the difference between the relative positions of wheat
and corn is this: The world’s supply of wheat will be furnished by the
world, while the world’s supply of corn must be furnished by the United
States.
It appears, therefore, that while wheat and corn may both be expected
to gradually seek a higher average price in sympathy with the general
upward trend, corn is affected by a specific influence, the effects of
which must be added to the homogeneous advance.
It is not possible that the supply of corn should increase as rapidly
as the demand, under the circumscribed conditions herein set forth. As
has already been suggested, the price of corn may become attractive
enough to cause the diversion of wheat and cotton lands to corn
growing. The possibilities of such a course, however, are not only
limited by nature, but such action would stop itself at a certain
point by decreasing the supply of wheat or cotton, and again restoring
them to favor with the planter.
The speculator may, therefore, reasonably believe that corn is
destined, eventually, to reach much higher prices. He must, of course,
allow for the temporary influences of large and small crops, and the
numerous other actual and technical conditions which cause intermediate
fluctuations, and must furthermore bear steadily in mind the fact that
there is a limit beyond which the price of corn can never be sustained.
When a given commodity goes beyond a price where it can be replaced by
another commodity, it has gone too far; and when necessities become
luxuries, they take their places as such, and demand slackens.
[Illustration: FLUCTUATIONS OF COTTON PRICES FOR TEN YEARS.
(The rims of the circles touch the average high and low price of cotton
each year for 10 years.)