a.. .: ".:
UNITED STATES DEPARTMENT OF AGRICULTURE
BUREAU OF AGRICULTURAL ECONOMICS
THE FATS AND 0 ILS SI T U I 6"n .
THIS MONTH'S ISSUE IS A RESUME OF THE
REGULAR ANNUAL OUTLOOK REPORTS ON FLAXSEED,
COTTONSEED, SOYBEANS, AND PEANUTS, ISSUED
EACH FALL BY THE BUREAU OF AGRICULTURAL ECO-
:NOMICS. INCLUDED IS A BRIEF REVIEW OF DEVEL-
: OPMENTS DURING THE PAST MONTH. ADDITIONAL
:DATA BRING UP TO DATE THE TABLES REGULARLY
:CONTAINED IN THIS REPORT.
DOMESTIC PRODUCTION OF FOOD FATS FROM THE FARM
( MILLIONS I I
1929 1930 1931 1932 1933 1934 1935 1936
a THE ANIMAL FAT PRODUCTION IS FOR CALENDAR YEAR COMBINED WITH VEGETABLE 01. CRUSHED
DURING SEASON FROM OPOP GROWN IN THE CALENDAR YEAR
*'OTHER'INGLUDES SOYBEAN. PEANUT. AND CORN OILS EDIBLE TALLOW. OLEO OIL AND OLEOSTEARINE
U L DEPARTMENT OF AGRICULTURE
NEG 32B17 BUREAU OF AGRICULTURAl ECONOMICS
- 2 -
Table 1.- Domestic Droduction and price of food
the farm (excluding butterfat), 1929-36
: 1930 : 1931 : 1932 : 1933 1934 : 1935 1936
. : .
392 375 371 330 345 421 590 630
4,009 4,336 4,117 4,088 3,592 3,004 3,655
Price ner ;jound
Corn oil, crude,
Peanut oil, crude:
Oleo oil, No. 1,
,Co.piled from tables nuiblished in
Bulletin Uo. 59, and FOS-7.
U. S. Department of Agriculture Statistical
Price per = o? ud
0-93 3 -
TEE OUTLOOK FOR FATS ATD OILS III 1938
A production of the .major domestic ,.oe.ta'le oils (ccttors-.:.i, soyl;car:,
corn, and peanut) that reasonably may be ex'r.cted to total almost nalf a billion
pounds more than was produced in 1936-37 is in )rospect fro..i tne d.-.mestic crops
of 1937. The larger production is based on a cottonseed sur-,,ly about 47 percent
larger than in 19Z6-27 and prc stoctive soybean oil Trcodustion likely to ex ?cd
production from the 1936 crop by 20 r-rcent or more. The voluriw, of verctable
food oils produced during the 193,-27 crushing season from the croes of 1236
amounted to about 200 million Doundz mjre than production from 1935 crops.
Stocks of cottonseed, corn, soybean, and peanut oils as of Septemiber H0,
1937, total a little over 100 million pounds more than on the corrcTo r.dn.g d)te
Prices of edible vegetable oils in ganerl ire row lvwer t:,-.n In>t E~r
because of the increased production and noavier stock:,. Gctobr 4'rices of cctton-
seed, soybean, corn, and peanut oils are all slightly lower than-r. cheLry w7c in
September and definitely lower than the averl e for tne year ending in Sep-
tember. Prices of cottonseed oil in Aus-st and SeoteL.ber 12377, *were about 26 ocr-
cent below the average for 19,36-27, but 11 oercont above th:e 5-year a'.errge.
Stocks and prospective supplies of lard are still relatively lov, and
production of animal fats for the next few mur.tris is e:DCecte to be son.c'-'hat
below production a year ago.
Wholesale prices of Inrd at Chicago, in AugLant, Septc:-:bcr Ind Octob?r
averaged about the same as during the 12 months cnded July 19,17, -qd .26 percent
higher than the 5-year average.
TOS-9 4 -
Table 2.- Price per pound of selected fets and oils, Sept. Oct., 1936 and 1937
Fat or oil Sept.
Domestic nrires -
Batter, 920, N. Y.
Olccmarg.rine,domestic vegetable, Chic-ao:
Lard, prime steam, Chicago
Lard, refined, Chicago
Lard compounds, Chicago
Coconut oil, edible, N. Y.
Cottonseed oil, crude, f.o.b. S.E. mills
Cottonseed oil, p.s.;'., U. Y.
Soybean oil, refined, N. Y.
Peanut oil, domestic, refined, N. Y.
Rape oil, refined, 1. Y.
Oleo oil, 7No. 1, IT.Y.
Oleostearinc, barrels, I:. Y.
Corn oil, refined, 17. Y.
Olive oil, edible, N. Y.
Smnflower oil, refined, I:. Y.
Teaseed oil, crude, IT. Y.
Coconut oil, crude, Pacific Coast
Tallow, inedible, Chicago
Grease, house, N.Y.
Palm oil, crude, N. Y.
Olive oil foots, barrel:, I1. ".
Palm-kernel oil, denatured, U1. Y.
Babassu oil, tanks, ii. Y. 1/
Sardine oil, t.nr..s, Pacific Coast
Lir.see oil, raw, Minneapolis
Tung oil, drruns, Atlartic Coast
Perilla oil, irums, if. Y.
Soybcn oil, crulc, f.o.b. r.ills
Merhaden ol], cru-e, f.o.b. 7Bnto.
Sern.sed oil, cr'le, N. 1.
For-j.i p'-ics 2/
Cotton oil, c:--ide, nked, Hull
Cjpr3, rr-:ro-1 "hilinoines
Palm-kerr.c oil, "r'le, hull
Whale oil, cruie, No. 1, Rottcrdaio
Ta.ilow, be ., fiir-fine, Lordtn
Linseed oil, nnked, Hull
'2 7 :
VI B-einninr- Febru Lry 17.?, prices are
per uo,'ud at current monthly rates of exchan-e.
Converted to ". S. ce:ts
Preliminary, :rera:e for
70F-9 5 -
Table 3.- Domestic stocks of ford fats from the farm (excluding
butterfat), as of Septe:.:ber 50, 1934-37
Commodity 1934 1935 12i6 1937
M: il. lb. Mruil. lb. Hil. lb. it 1. lb.
Lard, including neutral ..: 1.- 5 102 3
Cottonseed oil, crude 1/ .: 539 -C 39 443
Soybean oil, crude 1/ ..: 15 14 39 36
Corn oil, crude 1,'......: 23 22 23 1
Peanut oil, crude 1 ....: 2 33 17 25
Tallow, edible .........: 5 10 11 7
Oleo oil ...............: 3 5 6 3
Oleostearine ...........: 2 2 5 3
Total "other" ......: 55 7_ 101 92
,Grand total ..............: 742 14 t42 'i8
I/ Stoc.:s of crude oil plus refi:rn:i oil convert'-d to terms, of crude.
Compiled from Animal and Vegetable Fats and Oils, Bureau of the Census, except
lard, which is from reports made by *?cl-stor :e establjshmLnt3 to the Bureau
of Agricultural- EcenoJi-is.
TE :J2TTo: :;SELD i;TL00:: 1:'R l':19
(Ri.vised a0 of t :. ilove:..ber S Croy Renort,
The supr.ly/ of ac-,ttonserc d in tirc Unit'td Stat.s in 12".7-.'9 is now expected
to be about 8,100,CiC. tons, wiiicn is about 47 percent lar-ir than in 17.o-27, 23
percent larger than th.- avcra r fr t;h- 5 ;-ars 'nd-.d 1 32-33, and th- largest in
history. "'ith sto.?;:s of cotttor.s.: d and :-ottons.- C r..iuetr usui.ll;,- small in com-
parison with production, the supn-lies of the var:1oun. cottorin-..ed products .how
about the same comparisons as tnt supplies of c .ttons~ed. On tno whole, t.h- sup-
plies of those fats and oils that are most directly cc'mnrtitiv. with cttonsced
oil apparently will b', Lbout the salic as or sl..ihtly. smaller than for the, sDason
1936-37 and considerably smiialler t an tl:e '-:-ar av.r-.e. On t.: 3th--r `i-hnd, tt-h
supply of feedstuffs wiich n:at.rialily aff''cts the jrij.-,s of cottons 1d hu.ls arid
mual will be much larger than Icst season but s.all.:_r than the 5-y''sr avcraic.
The large increase over 1936-37 in t he sunli,.s of .cttonsr.d and cct'tcnsced
products and in fc,.dstuffs largely accounts for th.- rm'rk,-'d :cl] ne in the rcrices
of cottonseed, cottonseed products anI. T.-mny of the important compr-ti tiv: prod-
ucts during the last f.w months. .Vith curpliic.s of' ottonsecd prodJcts nm-atria.ly
larger than in 1956-37 and with business activity expectrl to be sorin-hat lower,
prices of cottonseed products and cottonsc.:d d.relined gr.,atly during t1l. Iitter
part of 1936-37 and the early part of the current season. In August to Uctober
the prices of rottonseed and most cottonseed pri.zduct av-.racd 30 to 40 percent
lower than the 1936-37 average.
Table 4.- Sunp-l ..r. price of co tonreed Lar. .p.:rified fats -nd oils,
United States, average 192"-29 Ct 1932-33, arnnal 1934-35 to 1937-3S
Cottonseed :Cottoneed oil,: :Corn, soybeen, peanut,
: crude l Lar :Conut. and palm oils
Season ::' iiht- :Prime :Refined:Prode.c-:Stocks,
beginning : :cd av- : :.-mmcr : :Chicago: tion :June 30:
Aug. 1 :Supply : rage :Suppl :r :yello-, :Supply : price :plus :begin- :Avail-
/ : farm : 2 : price : r : r : net nine : able
S : price : er : : 00 : im- of :supply
S :.per ion: : ___ .o0-d_ :roands orts :season :
:M. ton D. Mi. lb. Conts M!il. Dol. Mil. Ib.Mil.lb. Mil.b.
1932-33 : 6.6 21.50 1.973. '.2 1,771.3 10.EO 1,0.4 276.3 1.313.2
1934-75 : 4.5 34.71 1,:.h?.2 9.60 1,070.9 12.53 1,00C5.4 37.o 1,339.0
-13-36 4.8 31.19 1,669.6 9.e2 '90.I 13.5 1,41,6.7 32.4 1,751.1
1936-37 5.5 33.27 1,726.4 10.42 495..5 12.?4 1, 1i.3 3c2.5 1,779.3
1937-38 4: 8.1 21.38 2,341,9 7.37 `457.0 12.6 8q.9
:Percent Pcrcent Percent Perccnt P'r-.- :' Fercent P rcccLt. Percent Percent
of aver,-ge: 122.7 99.4 118.7 .106.5 54.0 125.S 127.9
1j Stocks of crude oil rlus refined reduced to a crude ba:iz.
2/ Stocks on Augvu:st 1 plus domestic production.
SStocks on Auc.~t 1 plus production under Federal inspection.
4/ preliminary estimates of supply. Prices are averLr-l:s for Augast, September
Coftt: n-ied Oil
The in-dicated supply of cot-oncsed oil, the principal product of cottonssed
(which on the average represents about 60 percent of the value of cottonseed prod-
ucts) for the season 1937-38 is the largest on record, about 36 percent larger
than in 1936-37, and 19 percent larger than the 5-year average. !ot only was there
a marked increase in the production of cottons:e, oil but stocks on hand at the be-
ginning of the season were larger than a year earlier, and larger than the 5-year
average. Prices of cottonseed 6il in Au'ust, September, and Cctober 1937, were
about 29 percent below the ,vura,.e for 1936-37, but 7 percent abovu the r-y-ar av-
erage. In :en.ral, imports and exports of cottonseed cil h.vz bee-, small in com-
parison with domestic utilization, but in the last two seasons domestic production
of cotton.;. ed oil -vas suppl.:mcntcd by net imports, whereas irn earlier seasons ex-
Iorts were of nor';.idernble volume nnI imports were negligible. It seems probable
that again in 1937-38 -onsiderable quantities of cottorsl-d oil will be exported
despite the larger production of cotton, cottonseed, and cottonseed products in
Cottonseed oil is used principally in the production of vegetable short-
ening and compounds in which its chief competitors are other vegetable oils,
lard, edible tallows, and fish oils. The commercial supply of lard in the
1937-38 season is now tentatively estimated to be slightly smaller than the
comparatively small supply of the previous season and only a little over half
as large as the 5-year (1928-32) average. In vi.ew of the marked reduction in
foreign demand for and exports of lard, the very sm.ll domestic supply does
not mean a proportional decrease in domestic competition of lard with cotton-
seed oil. During the 5 years ended 1932-33, exports of lard averaged about
653,000,000 pounds or 27 percent of th2 domestic supply, whereas in 19 &6-7
they amounted to about 100,000,000 or one-tenth of the supply. Wholesale
prices of lard at Chicago in August, September, and October averaged about
the same as during the 12 months ended July 1937, and 26 percent higher than
the 5-year average.
THE FLAY OuTLOOK FOR 1938
(Released ITovember 4)
Some increase in world flaxseed supplies is probable in 1938-39 over the
short supplies of 1937-38, with an increase in prcducticn partially offset by a
small carry-over of old seed on August 1, 1938. About the same ;orld daercnd
for flaxseed and flaxseed products is in prospect in 1938 as in 1937.
Since the low point of 1932 the utilization of drying oils in the United
States has increased steadily, but up to the end of 1935 the percentage that lin-
seed oil contributed to the total use dropped from 75 to 61 percent. Since the
beginning of 1937 both the percentage and the actual amount of linseed oil con-
sumed has increased rapidly. Changes in price relationships in 1937 btwccen lin-
seed oil and other drying oils will, -while maintained, tend to place linreed oil
in a more favorable position relative to other drying oils.
In the flaxseed-producing areas the outlook is for hi-gher iavr,',.ge gross re-
turns per acre from flaxseed than from wheat if about rv.rage yields ar.c obtained
As indicated in the wheat outlook, w-.orld wheat production in 1938 may be
in excess of prospective norld requirements, if about average yields are obtained
on the present large world wheat acreage, and prices of wheat and returns to wh,:a.
growers in the United States may be expected to be materially lo-er than during
the current marketing season. Returns per acre from flax durinF the current year
have been higher than from wheat, despite relatively high Wheat prices.
Flax acreage might be increased vs much as 30 percent over the 1935 and
1936 seedings without danger of producing more seed than would be ne-ded to supply'
Flaxseod Demand Remains at High Levels
World demand during the first part of the 1937-38 marketing saas,,n has bee-
slightly stro.:ger than during the first months of the 1936-37 season.
There may be some lowering of present levels of demand during the next few
The total vr.lume of b ild.ing activit:- i.l the foLur nrincir'.l lins e--oil
?on.-,uninr cointriern the unitedd St..tes. niited Kin -tio'i, lr'-;M!ny '-.n France -
averar-d .bo..t 2 ner-ent hi-,er in t iE first 7 mon'h of 1 ',-7 tn.:.n in the came
months in 19 b. The volume of co.ost.ructio' i- t.ie United St:-t.. s darinc the first
S monrLLS of 1937 was .bro.it 3 percent over t.h t of .a '.'=r earlier Lut the total
volume of construction n Ir.' is xi* cted to Ie only sl i-:tly gr...-ter than in
1'? 7. In the three Zuror-,.aI countries the :~l: nof b'.:illin 7 :tivit., appears to
have been reached ad a small.:r volume of cr,nstricti,.n i-" in iro.jsice:t in 193S
than iin 1'77. The rediaction in tl'- use of lin.-;,:d oil in. rrore r, .-n result t of
a slac':-riini ir: buildiri.: activity m'ny be T:,-rti.ll," o fs'-t no tcr is irmorts of
flax ,s-..j. are cor.cerr.-d b." a- i.:cr-escd Jr'm.ir., for i'..- d '-.k a-.d rea] ar- re-
sult of smaller f -.d grain surrt ius. Tii_ -crn,, barrl',-,, r...d tsc, r-Ts co-biicd
are about 10 r-rcent sm-ill-r tn~.n last yecr'n, mood.r: t ; r'-,-sts.
Utilization of fl-s-x~'d in EJro, :.' co Lu ri.-s h-c iri t n r.-l;,tiv.ly hi.
level. Imports into the pr-;.iir:"l firit ..r.. of Coonti rt-il E -rop.: cnd into
the 'United Kingdom have been above those o.: l:'t -. on : -;i. trnid. ;dvices i.-di-
cate maintenance of a high re.tc of crusher :'ctiv'.it," cr. t:.;~d" movLmc.-.t of flax-
se-.d rrolucts into crnsunmi.u.-: channels. Di:.r.Pr.. or -:'. ri' o l -.,ni m:".l havr kept
rne Tith incr,.ascd production "ith no appr~cia.bl. nicu. .Il ti.r: i ..t-cks.
World shiipm-nts of fl.x cod, July 19!. ;nhr:..-' J' j-:. 197, tot:led about
5,6498,000 bushJls comprrd. with 69,956,00' b,-lchls durir. t.i -.rc.:odinr scoscn.
ShipmF.its during the first 3 months of the .irUrei'nt sCarC". totnlcd apyrroxinr.tely
17, 00,000 bushels against 19,,C'lb,,,'n, busn.rls in tn.i cr rr. r:veo:-.4iirn: period 1-.st
United Statrs r-un-li-s of flaxseed frr tho 19' ,7-: i"s ri.r n-' placed
at 10,973,000 bushels corTnp:i:'. with 9,239,''C0 la.it '"':. Allo'i:- frr saunl s-d.
requirements, about 9, z79,0') lbusthii-ls would rrn-i i f,-r com-cro-in1 us-, comr.:.rr-d
with 8,469,-' 1' a year earlier. Carry-over -tnckc Jul' '. "*.'.re o ii-' sli.Thtly dif-
ferent from those of a -'er earlier aVr. tct-i..l ,,7., ,2"~' ''.L.i: l-: oa against
3,331,000 for the prec-edAing year.
The crop was :nr-.eratelyr lar:,.:r th-n tn.. -;..... :. .1' r..:: t o a y.rr ge
and mounted to 7,634,000 bushels. This is a -,-c.in .-f -c,.... -. ;r.:.,nt 'ver t
year earlier but is about 48 percent below th 192 -5: n.vcr: e rn.'ouction of
15,996,000 bushels. The relatively small hlr-:-st i- the '..it,.d States was due bot
to gr:-atfl reduced acrer6ge' sown to flax, .--~rci-:,ll i.i Mi nu.Ot, :n.id the ITkhetas,
and to the fact that yields in these major prou '.uini-, Stt-- -~-:r. lo-.'er-d by ex-
treme heat and in..dequate raii..f.ll d-i.uinz A'uiu:t. l:i..c;; c a, n-i'.rm'llv the largest
flax-gro ting State, pro.dlic.d j :r'l about t:so-t'-irl: ,.-, the- ._, ...r ..'- r'.e; North
Dakota pr-du~'-d a little more than one-third, :nni S. uth Lrakc.:: nacrut ni -eighth
of the 5-year ,'vra-.re crop.
Domestic disnppF.ra:ce, of fli:n:r..'. in th : '.r.iicd St:'-.s durin- the 1936-37
season totaled 31,110,000 bushels as 2o-in:t 27,89S,00C' bu:;h,--ls a yerr earlier.
Crishin s incr.-n.-.d to the l-rg-rst quintit;, zci:nc. 19'25-3r -:itn -. t.trl of
30,3l0l,0l'" bushels against 26,.h44,000 a ye;..r urlir an. 22,', .7C ,'cr Lihells the
--y'or aver:ieo for 1930-31 through 1931-35. r,~Lri'.:- r -c 't ,c.nrs annual seed re-
quirements have been Drrouni a million bushels. Durir-.- th 1: t 1C0 ,ears dis-
app- arance r.f flaxseed has vari.:, materially -,it:1 r ra r',iE f fr.o-. 13,60,nno
bushels in 1932-33 to the Tcak of 45,000,000 in 1927-2S. Since 193j the trend
in utulization has been upward i with disappearance duri:-." last season tbnve th..t
of any other recent ycear.
- 3 -
The average acreage seeded to flax for the 5 years 1931-35 was 2,441
thousand acres, which, with an average yield of 5.7 busnels per h:-rvested acre,
produced an average of 10,070 thoasa.id bushels. Average crushings, years be-
ginning July 1931-35, amounted to 22,2o8 thousand bu.sh-ls. The linseed-oil
equivalent of the average domestic production cf flas.seed for th.se 5 years,minus
planting requirements, amounted to almost 41 percent of the linseed oil consumed
in the United States.
In the year 1935, flex seedings amounted to 2,792 thousand acres of which
2,096 thousand cres ;:.rc: h-rvesttd, with Lr. al'erage yiild of 6.9 bi.siicle per
harvested acre. The production of 14-1/2 million bushels -upplird seeding re-
quirements for the following.year and, in terms of oil .cauivalent of the flax-
seed, 52 percent of the domestic linseed-oil rcouirenments for the- year beginning
July 1935. A 30 percent incrensc above the- s-',ded 2crag: of 19'35, -ith the same
p3rcentagc of nnrvestcd acrcagc as in 1935 and with ar. average yield of 9.
bushels "-cr acrc (the highest rec.,rdcd Lve-rrigc- yield since 1920) -would produce
about 26 million bushi.ls or about 5 million bushels less then totnl crushing of
domestic and im-,orted seed for the year aegirning July 1936, pluz seed planted
for the 1937 crop.
United State" Cons.unmjion: of Drinf Oils Shc-'s Srer..d In-rrasi
Linseed-oil production in th.: United St: tes frnmr dira.stic ond imported
seed for the sirson 1936-37 w-': l.:'rcr thr.. f:r any oth-r season since 1929-30.
Stocks of linseed oil June 30, 197 -mounted to 1h2.4 million pound. crmpered with
140.7 million pounds cn the s',j-re date in 1936. These stocks compare with an aver-
age end-of-the-season stocksof 102.9 million pounds for tne crop seonso-i 1930-31
to 1934-35, rlndl 141.2 million r.ou .ds r.vcrc-ee -t the end of the s.:isens 1925-25
Arpprent disaopr-arance cf linseed oil during the- first C months cf 1937
amounted to 33 million pounds compared -'ith 233 nilli.-on rounds during the first
6 months of 193o.
Consumption of oils b:,- thl dry'ing i'ldu'tric. in the United Strte hr's in-
creased steadily' from the 1-T rooi.t 4of 475 million pounds ir the calendar y'epr
1932 to 790 million rounds in 1936, but during this period the .-rccr.t..:goL of lin-
seed oil contributed to the total drop-ed from 75 to 61 percent. The d cr ,se. in
the percentage c.f li-se.-d jil has been br.lan.c.d by in.creases of prilla, fi!i,
and misccllanc-ous minor oils such as heapsoed, cnstor, and oitici z oils. Ch.n.n s,
Januar-y to June 1937, in price r.lationshipF bet7tc. linsesd oil rinl other drying
oils will, :hilc n intained, t-nd on th. "-hol, to placa linseed oil in more
favorable position relative to these other oils.
Roug estimates of utilization of oils in the first half of 137 b-- the
drying industries, indicate a total of about 469 million pounds compared with
about 395 million pounds in the same period in 1936.
- 10 -
THE SOYBFAN OUTLOOK FOR 1938
(Revised as of INve:mbr 10 Crop Report)
Largely because of a 32-percent increase in soybean production and
a marked increase in the production of cottonseed, the Bureau of Agricultural
Econoriics points out in its arnaal outlook that the unusually favorable
market for so:,beans last season is not likely to continue in 19b7-38; and
prices to growers are expecteC to average coi.siderably below the 1936-37
average of $1.27 per bushel. With so:,bein produAction somewhat under the
record production in 19353, however, prices will probably be maintained a
little above those of 19.35-36, when the average was 79 cents per bushel.
The price outlook for soybeans is dependent on the outlook for
coybean oil and meal. Since increased production of these products will be
^acioo-nieid 1y larger supplies of compt.ting products, especially cottonseed
oil enri meal, prices both of oil and meal are expected to be lower tnan last
season. The decline will probably be more marked in the case of soybean meal,
since the continuance of relatively low lIrd supplies is expected to support
prices of edible oils.
T:.c outlook in the last part of 1938 will depend on the production of
soybeans a:d competing products in th-:t year. Insofar as the various
factors can be evaluated at the percent time, it appe-rs probable that the
demand for soybeans late in 1935 will be about tihe same as, or slightly
larger than, demand for tne 1937 crop. Consequently, a production next year
equal to, or only slightly;. larger tran, tne 1937 production would probably
cause little change in the mar.:et sitL-..ation for soybeans. But prospective
demand conditions do not appear to warrant any marked expansion in production.
Acr*g.e and Production
The 6,049,0UO acres of so:,beans grown alone for all purposes in the
United States this year are 7.3 percc.i.t above tihe corresponding acreage last
year, and larger than in ,.:: previous ,year with the excozetion of 1935. With
practically all of this acreage incr-ease occurring. in tnc iorth C-intral States
where commercial production of soyb',ans is most important, and with unusually
high yields ,crpocted, production this year will snow a much larger relative
increase than total acre..ge.
After allowing for seed iequirments, about 30 million bushels will be
available for crushing in 1937-38. T'.-e quantity actually crushed will depend
on too many factors to allow fo1r rai accurate estimate at the present time;
but if exports from the current crop are s.all, at least 25 million bushels
are likely to be crushed, -wich would equal crushings in 1935-36.
Elemie.ts in the Outlook
The outlook for soybeans in coi-rercial chaP.nels, r.owcver, depends
less on the sup;:ly of soybeans available for crashing than on supplies of
coT-retin, -'.roducts, the most important of which are cottonseed, fl-xsced,
and lard. Prices paid to growers of soybeans harvested for crashing depend
largely on the prevailing prices of so,:bean meal rand soybean oil, which in
turn depend on general supply Lnd dc-rr.md conditions in their respective
fields. Consequently the feed outlook rnd the f:.ts and oils outlook are
important elements in the outlook for soybans.
The Yeed jitu tion
Feedstuff prices during 1937-18 :nill be in-.trially lo-:er ti-n last
season, but may aIvrage slightly higher thjn in 19.55-36. Although total
supplies are considerably larger thin 2 years ago, dE:n..nd is str,.ngjr because
of higher prices of livestock and livestoe:k prciucts. In the care :f high-
protein fecCs, ho-.ever, tec sabstrntial in.crene i s-5pl! T,-' result in
price-: no nilher iThan in 1935-36, despite the i.rroveJ dum:,d for both
domestic consumption ..id export. Prices of soyb-nn mea.l, th:refor-2, ".ill
be m..terially bet-.v laK season's prices, .and may not 5reLLtly ex;c-cd. those
of 1935-36 -hen L-e ave.-rage was around $25 p'?r ton.
The Fats and Oils Situ:.tJ.on
Since in 1935 and 1933, food product! accounted for about four-fifths
of the total factor; consum-ption of so.ybe-a. oil, the outlook for sjy.'bern oil
will be siiil,.r to zhe ycncral outlook for edible oils. Soyben-3oil utiliza-
tion in food products nhs been increased in recent yez-rs because of tne
relatively low 1. d sur7,y.lies, with cottonrseed, scybean: arid other edible
oils being used. ii incrc:, .d quantities in tne ororduction of lard substitutes.
,7ithi l.rd ujFppli-r still rel.-.tively low, a fairly good mrnrket for -oy-
been oil in food products will proo'.bly continue .
There is considerable Lircertainty Us to prospective demand for so;'bean
oil in the drying-oil industries. Since scybc:rn oil for use in paints is fre-
quently mi::ed with tung or perilla .il, the po's.ible sLortage of tung oil due
to hostilities in China, and the i.irease-1 cost of perilla oil due to the
excise tax and hi-iier ocean trcn;portatio.n costs may tc-nd to reduce soybean-
oil utilization L.- the Ciryin-oil industries. On the cther han-d, the price
of linseed oil is now bn t-?en 4 ua-i 5 cents per r-ound higher -inn the price
of soybean oil, and a continuance of this >-,rge I-rice spread 7oj.ld te.-d to
encourage tie use of soybean oil as a sub-titute for li seed oil.
In the year beginning October 1935, prices of soybea oil ar'cra ieed
bet-een 7 rnd 8 cents -ir poind, and in 1326-57 they. avera-ed about 3.5 cents
per pound. Although the expected low supplies of l.rd durinC 1957-58 will
probably prevent any very sharp drop in the rice of scyboon oil, s.ome
decline is expected because of the increased production of ccttonsued and
soybeans; and prices of soybern oil may a-.er..ge slightly belo- the 19.55-36
The Foreign Situntion
Exports of soybeans from the United States in past 'years hav-e been
small relative to total production, and have dcoended on sufficicitly large
s.innl ies nnd low prices in this country to enable American exporters to
- 11 -
- 12 -
Imports of soybeans into European countries have declined steadily
since 1933, largely because of drastic curtailments in German imports, and
no marked increase in European purchases is probable in the near future.
On the other hand, soybean production in Manchuria, the most important com-
mercial producing country, has been increasing since 1934; and the latest
information places this year's production at 157 million bushels compared
with 152 million bushels for 1936. Movenent of the Manchurian crop this
year may be retarded some;-hat because of lack of transportation facilities
and higher costs of ocean shipping. In view of increasing production in
Manchuria, however, it is not probable that prices in this country will be
low enough to allow for a very large volume of exports from the 1937 crop
in the United States.
Imports of soybean oil and meal into this country have been rel-tively
small and are not likely to increase significantly.
The Price 2itlook for Soybeans
With prices of soybean meal expected to be much lower, and prices of
soybean oil somewhat loner than during the 1936-37 season, prices to growers
for the 1937 soybean crop are likely to average considerably below the 1936
average of $1.27 per bushel. The fact that this /car's production is
expected to be about 12 percent below the 1935 production, however, will
probably suffice to keep soybean prices a little above the 1935-36 level
when the season average was 79 cents per bushel.
The outlook for the last part of 1938 is less certain, and will
depend on production in that year of cottonseed, flaxseed, lard, and other
products that are competitive with soybeans and soybean products, as well
as on the 1938 production of so:'beans. A marked reduction may occur in the
1938 production of cottonseed; but this is likely to be offset, to some
extent at least, by increasing supplies of lard in the latter half of 1938.
Tne lower prices that growers will receive for the 1937 production of soy-
beans will probably discourage any increase in the acreage of soybeans for
crushing in 1938. If this proves to be the case, and production in 1938
is no larger than in 1937, the m-arket situation will probably be similar
to that for the 1937 crop.
Further expansion of corumerci-l soybean production is feasible ahen-
ever price relationships are favorable. Many Corn Belt farmers with suit-
able land have not as yet introduced soybeans into their cropping systems,
and others are growing so-ybeans only for hay. Present and prospective
demand conditions, however, indicate that a material expansion in produc-
tion in the imr.ediate future would have an unfavorable reaction on price.
- 13 -
Table 5.-Soybeans: Production, exports, zrushings, quantity used for
feed or seed, and ave-rage farm prir.e, 1924-37
: : :Ca ed or e-por..ed : :Average
Year : Produc- :Crushed : Export.ed: :As pe-'x.at:Used for: farm
beginning: tion : / 2/ : Total : of pro- :fecd or :price per
: 7,3 8i
1 uC'0 bu.
1 000 bu. 1, 01- bu.
: sied 3/ : bushel
1, c'00 bu. Cents
I/ Computed from Aiiim.l and Ve.etablc Fats .nd Oils, 2-reau of the Census.
2/ o exports reported prior to October 1951. October 1931-D-center 1936,
reported as inspected for export by Federal licensed inspectors, B.A.E.
Inspection Sarvice; general exports not rcrn-rted for thiL pcrijd.
Beginning Ja .lar 1937, general exports -:s reported by B..rd u of Foreign
ar.d Damestic or rM'rce.
3/ Prod-ction min.us qua:, .tit' crushed nd eq,-orted.
FOS-9 11 -
Table 6.-Price of soybeans, soybe.-' cil, and soybean meal, specified
localities, by months, October 19.4 October 1937
,Yc-r So-bcans, per bush,1 I/ Soyboan oil, :Soybean meal, 41%
Uand S :i crude 2/ : Crotein 3/
month :United States : Illinois :i.dwestrrn mills,: Chicago, bagged,
tonkss, per pound : per ton
Cr nts Cents Cnts : Dollars
Oct. : 95 75 6.1 38.50
Tov. .89 80 6.5 38.80
Dec. 111 105 7.3 41.20
Jan. 119 110 7.8 : 40.70
Feb. 1:26 115 : 8.1 : 38.40
Mar. 120 105 9.1 : 37.10
Apr. 119 105 8.4 33.80
May 121 110 9.8 33.20
June 119 110 9.6 31.70
July 90 85 7.8 : 29.10
Aug. 73 0 :7.1 24.00
Sept. 60 :7.7 22.90
Oct. 68 60 9.1 25.60
TNov. : 6 65 : 9.1 : 24.40
Dec. 7: 70 9.1 25.50
Jan. 7.5 7 7.6 25.20
Feb. 7 7 75 7.2 23.90
Mar. 73 75 6.9 22.30
Apr. 79 75 :6.8 : 23.30
a'y : 3 50 :6. 24.80
June :85 80 6.0 26.10
July 105 100 7.9 38.90
Aug. 11 115 .0 : 44.30
S-pt. : 110 105 : .2 : 39.70
Ot. : 1" 105 :.0 : 36.90
ov. : 112 110 :8.0 : 39.20
Lec. 130 123 9.1 43.00
Jan. 112 140 9.8 :4.10
Feb. 150 150 9.9 : 11.50
Mar. : 152 145 : 9.8 : 41.10
Apr. 166 10 9.8 : 47.60
y : 1 74 170 9.0 : 48.30
June 150 140 8.2 39.20
July : 132 120 7.6 37.30
Au : 102 90 :6.5 34.90
Sept. :90 80 6.2 : 34.20
Oct. 86 20 5.? 28.82
1/ Weirht,-i nv,:rig:: price or. l1tn or each month.
/ October 1934-June 1937, from the Oil, Paint, .nd Drup reporter, average of
quotations for Tri days during the month. Beginning July 1927, from
Hation3l Provizioner, averatze of verkl7 quotations.
3/ Published in Trops and .iarkets, average of wFekly prices.
o.-9 15 -
THE PEANUT OUTLOOK FOR 1938
(Revised as of INo"ember 10 Cron PeTiort)
Largely because of the rceanut diver ion program of t --- A.ricultur 1
Adjustment Administr-tion, farmers are rec-iv.ling ri-ptivel:y favorable prices
and returns par acre for the ler!7z. 1937 crop of peanau*s bi;r-.:,Fted for rurs.
These favrrrble returns ma:" result in some incr.?s'? in acr--v--: in l' i3, the
Bureau of Agricultural Economics says in its annual p.nr.ut outlookok report.
TUnless yields pre substantiallv below :vervgt production of pF-nin.ts
will again be large in 193$. The marketing situation in 193 J-? will ar-Iin
depend to an appreciable extent on the demand of p eanu-ts f:.r oil production.
The crushing outlet in the present season is unfr"or'-l'l b:'c..Ice of o1r
prices for competing rils and fats, pnd an em:rgency. measure proviinr fcr
subsidy py:.ments fnr tne diversionr of pTa-nuts to crushers has o.r. ini-~- -rt't:d.
Crusning Outlet is Les'. FEvorable.
Peanut production ii-s begun at ni..n levels during rec-nt ;'-e rs ari will
be large again in 1937, according to IJNov'eber estimates. If it '.-re not for
the crushing cutlet the large crops produced from 1934 to 19537, i'l.-lici'e,
could nnt have been marketed except Pt very low prices. T?,e L317 2ropF wcull
bring relatively lo.i prices out for the diversion pro.r'- ,i of tn Ag!;-ricultur'.l
The diversion progrr enables rover cooper tiv.es t" purcti-.se fo rmers'
stock peanuts of the ;various types iand grades at specified pric-cs -F follows:
I .c, 1 southeastern Runners $-7.C ,i'er ton; ilo. 1 souti- ar t err. Sp-nisi n-d 1 In-
3 or better Class A Virginias $'5.00; and Nio. 1 r ut hwlsr. r' Sp-ni-h 'b .,JO
per ton. The farmer cooperatives maR" sell itw-r to trh -. dihlf tr'i1. or to
crushers. The specified prices o-re m-teriAllv hi-rhr th ir could 0.: p-r:iA by
crushers, and sales to this outlet -'re expected to be s:ictartill--.v Do-l.'.' tin.
purchase price, but the cooperati-ves will be reimbursed for tn, .c los-es.
Before the 19O7-35 season, peanut crasi.in.s wv-r. n-t iri':.rt--!:t fxcZ rt
during the World t-7r period, end consi-.ted lrr'el-r of lo'.--:.- r pe-r ut.. T.ie
relatively small cotton crops of 19?4, 1935,-nd l3 an-d ir drou-ihtt riliich
reduced supplies of feed Tr-.ins -Tid ho,- miart n ings in this. .riod. vr -r. re-
flected in reduced supolies of oils and fats '-nd i.i m-teri-1.:; imr.proved prices
for peanut ril. Thse improved pric-s for oil, togetti r with t- iv-re ion
programs for 193i--35 anld 1935-35 resulted in mat- ri. Ly i'.,r '-~;d crushir.Ls
of peanuts for oil. The lnrg'-: crushincs for oil in 19)-'i7 of ..Cot 29c,0 )"l
pounds were due to high prices for peanut oil and mnel p-r.d t.iao ,np"r.t .i"ely low
quality of the 193n crop of Spanish-t-rpe peanuts.
Gener.'l Situ.ntion 1 3i8 SCron
The acreage of peanuts har-ested for nuts in 1937, -c':orlin= to S-ptember
indications, was 4 percent below the record 19536 a're-:e .t it w 's P jout 15
percent above the 1'92-32 average. The estimated y-ield p=r acr, in 1:17 is above
- 16 -
average =:.d the November indicated production of 1,277,130 pounds is onl:
about 3 percent less th-n the re.-ord crop of 1935, .-nd V-. percent above' t::e
aver-ue 192S-32 production.
In Virginia, Nortn Cnrolin--, andt Terness-s, riheru Virinip.-typ.? or large
p-dded nuts are principally rown, pr.-duction in 1937 is estimated at .bout 9
percent above 193h. Carry-over of -id-crop VirT.inia-t- e r'eanuts into the
current season is sm-'l -Ithou.'h som-nu-it l.r.-:-.r t-r. in othr-r re-ant vyers.
wing to the rclativelvy sm.ill oil cont-nt of Vir-inic.-t.yp-: nuts, crusnings
are expected to be small and Iprel:,' confined to the lonwr *-r-de-r.
In tne southeastern States nere bootn Runner an-' Snpnisn-t',)r nuts pre
grown, production in 1'37, according to lio'.emL'er estim-tes. will be about 6
percent belnw tne record 1'93 crnp, but about t percent above the 192.,-32
avera.e. It is er-.peted that a consid-'r.ble quantit:' of p--.nuts, especially
Runners, will be crushed at a result of the diversion pro.vrr7m.
In the southwestern States were Spanish-tyne peanuts are grown, acreF-e
in 1937, according to September estimates, was about 1o p..rcLnt less than in
193 asnd tne smallest sinr- 1931. The indicated 1977 yield is slihtlr i--;iher
than the ir~ 1'3? yield but the indicated produ2ti')an is 'oo.it IL'i r,.rcent blow
that in 1936 and about 11 percent blow ti,-: 192.3-32 e-vtr'..
T-ble 7.- Peanuts: H rvested for nuts, crus.in..rs, n'. ap'er--e nrice
for farmers' stock peanuts, cride p--.nut oil, anl peasnur meal,
aver'?e 19J5-72, annur'l 1932-%7
:Crop year : Yer oeDirnrin_; Dctoter
Peanuts Pe-nuts :Pe-nit oil,:Prqnut meal
Year : han .sted Cru'!.sh--d :F'rm price: crude :45j protein
Sfor nlts : :S percent : per pound: Price per : Price per
S / : Tt-.l l/ :of oroduc- :for fm.r-ens:Fpon1, fnb : ton, ton
t : : .ti- n : stock :S.E. nills :S.E. mills
I:Mil. lb. 'til. lb. Perc'--nt Cents : C 'its : Dollars
1923-32: 946 73 7. : .2 : 6.4 : 29.25
1932 : 1.041 : 55 k.: 1.5 : 4.1 : 19.c
1933 : r : 05 4.7 : ?.3 : 4. 27.92
1934 : 1,123 : 22' 19. : .3 :. 28. .C
1935 1,3 0 : 240 16.5 3.1 : '.C : 2.
936 : 1.01 295 22.7 : 3.2 9.2 3.69
1937 :~/ 1,277 : : 3.2 : .. :W 27.50
1J In-the-shell basis.
2/ Prelimin-r.'-r estimate.
i/ Average price October 15, 1937.
I/ A'er-je price for October 1937.
FS-9 17 -
O01ElOMAPGAR I E
For 15 years coconut oil was the most important single oil entering
into the manufacture of oleomargarine; for 10 yea-rs it contributed more to
the product than all other oils put together, in some :,ears amounting to as
much as 75 percent of the total fats used. But cottonseed oil has suddenly
traded places with coconut oil, ?-nd during the first three-quarters of 1937
contributed 49.9 percent of the fats and oils used in oleomargarine, while
coconut oil contributed 23.8 percent.
Even more striking is the total shift frori foreign vegetable oils to
domestic vegetable oils. In September 1937, domestic vegetable oils accounted
for 61.3 percent of the total use of fats and oils in the industry, compared
with 36.6 percent in September 1936, and an average of ?3.2 percent for the
5 years 1931-35. Use of foreign vegetable oils dropped to 34.1 percent and
animal fats and oils to 4.7 percent in September 1937.
In line with its increased usu in other food
soybean oil in oleomargarine has increased sharply,
pounds in the first 9 months of 1937, compared with
same period of 1936.
products, the use of
amounting to 3.7 million
5.3 million pounds in the
Production of oleomargarine thus far in 1937 is 10 million pounds under
production for the same period in 1936.
Table 8.-Oleomargarine: Production and materials used in manufacture,
United States, August and September, 1936 and 1937
1,000 lb. 1,000 lb.
Total domestic vegetable
Total foreign vegetable
Total fats and oils
Salt and other miscu'llaneous:
1,593 1,43b 754 764
297 312 292 364
S 152 171 102 112
: 144 151 6 94
: 2,1"6 ,06 1 234 1334
C: C,0 9,0 C0 10,0 2 13,282
: 7 "7" 2, 42 .,954
S 322 391 137 215
: 17_ 17 236 142
: 8,976 10,265 "13142 17 493
: 11,749 13,'94 7,714 9,054
: 275 148 986 532
: 1,935 1,167 523 157
: 62 13" 13 -
: 36 -
: 14,075 15,45b 9,236 9,743
25,127 27 89 23 12 28,570
r L r,-I
Production of oluomirgarinc 30,351 35,943 28,679 36,643
Compiled and computed from reports of the Commissioner of Internal Revenue.
0 0 0 0 0
r O 4 o
UNIVERSITY OF FLORIDA
3 1262 08904 2302
I I I I