Wheat situation

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Title:
Wheat situation
Uniform Title:
Wheat situation (Washington, D.C.)
Physical Description:
v. : ; 26 cm.
Language:
English
Creator:
United States -- Dept. of Agriculture. -- Economics, Statistics, and Cooperatives Service
United States -- Dept. of Agriculture. -- Economics and Statistics Service
Publisher:
The Service
Place of Publication:
Washington, D.C.
Frequency:
quarterly
regular

Subjects

Subjects / Keywords:
Wheat trade -- Statistics -- Periodicals   ( lcsh )
Wheat trade -- Statistics -- Periodicals -- United States   ( lcsh )
Genre:
federal government publication   ( marcgt )
statistics   ( marcgt )

Notes

Statement of Responsibility:
Economics, Statistics, and Cooperatives Service, U.S. Department of Agriculture.
Dates or Sequential Designation:
WS-1 (Nov. 1936) - WS-254 (Nov. 1980)
Issuing Body:
Issued, 1936- by the Bureau of Agricultural Economics; <Oct.-Dec. 1953>-Feb. 1961 by the Agricultural Marketing Service; Apr. 1961-Nov. 1977 by the Economic Research Service, U.S. Dept. of Agriculture; Feb. 1978- by the Economics, Statistics and Coopertives Servie, U.S. Dept. of Agriculture; <Nov. 1980-> by the Economics and Statistics Service, U.S. Dept. of Agriculture.
General Note:
Cover title.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 000349017
oclc - 04015593
notis - ABY6688
lccn - 78643652 //r812
issn - 0364-2305
Classification:
lcc - HD9049.W3 U66a
ddc - 338.1/7/3110973
System ID:
AA00012162:00012

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Full Text


1949 OUTLOOK ISSUE

THE FOR RELEASE SEPT. 9, P.M.



SITUATION

BUREAU OF AGRICULTURAL ECONOMICS
UNITED STATES DEPARTMENT OF AGRICULTURE

WS-107 AUGUST 1948


V -------------------------------------------------
In this Issue:
THE AGRICULTURAL ACT OF 1948 RELATIVE TO WHEAT


.t. floo *uED.J ot Cm..c v.t a Ct o om c


Wheat supplies in 1948-49 are estimated at 1,479 million bushels, which has been
exceeded only in 1942-43 and 1943-44. With exports during the coming year expected to
be below those in 1947-48 and little change likely in domestic use, the carry-over July
I, 1949 is.xpected to be larger. While food use will be about the same, the quantity
S fed to livdtock is expected to be the lowest since 1941-42.


DISTRIBUTION OF U.S. WHEAT SUPPLY, 1930-48
BUSHELS
I ltlIo.s I
Stocks June 30'
1,600 Exports -
Used domestically
1.200 -

800

400 -


1930 1933 1936 1939 1942 1945 1948
YEAR BEGINNING JULY
CI1UD am LD i a o i N1r- t i af
I S .Ou iMliD -O..If: C r M IE
flhI~mI~iQ' I~rhIsV


DISTRIBUTION OF WHEAT USED DOMESTICALLY, 1930-48
BUSHELS
MILLIONSS I I 0
500 F

400
Feed a
300 --/-

200 .-- E -,
*, Industral a
100 --
-ie- d- r '-i--[ >--- .
1930 1935 1940 1945 1950
YEAR BEGINNING JULI
OINCLUDEiS S II IIr niAIY IIicr
DAI r 1A947F P9d ANI IIIrM NAer. FOP 194dd PIlAr i Fr1ll4lS5


.L. ..m.. M.l OP AO-ICULY U


anm esoB a nu m OuP anC uusL scmOU


u.. Dca"OFF-IT UP 4e1LULlng









ALL WHEAT AND WINTER WHEAT:
ACREAGE, YIELD, AND PRODUCTION,
UNITED STATES, 1919-48
ACRES I I I i
(MILLIONS) I SEEDED ACREAGE


0
BUSHELS


0
BUSHELS
(MILLIONS)


1,200


800


400


1920 1925 1930 1935 1940 1945 1950


*SEEDED PRECEDING FALL


U. DEPARTMENT OF AGRICULTURE


DATA FOR 1947 AND 1948 ARE PRELIMINARY

NEG. 42a49-X BUREAU OF AGRICULTURAL ECONOMICS


Seedings of all wheat for the 1948 crop at 77.7 million acres were only 4 percent
below the all-time record of 80.8 million acres in 1937 and 17 percent above the 1937-
46 average of 66.3 million acres. Production, indicated as of August lat 1,284 million
bushels, has been exceeded only by the 1,365 million bushels In 1947. Winter wheat
production in 1948 Is also second only to 1947. Large crops in the last 8 years reflect
good yields per acre. The recommended wheat goal for 1949 Is 71.5 million acres, which
is 3.6 million less than the 1948 goal and6.2 million less than the 1948 seeded acreage.





WS-207 -3 -


THE WHEAT SITUAT ION
Including Rye -



Approved by the Outlook and Situation Board, August 30, 1048


lSUIMARY OF TiH OUTLOOK FOR W1EAT AID RYE


Very largo United States wheat supplies again this year and smaller
demand, will add to the building up of stocks which started last year.
The supply of vwhest in the United States will provide about 730 million
bushels of wheat for export and carry-over. The crop is being moved
rapidly into export but the total exports for the year hardly seen likely
to amount to as much as was exported last year. Durin'. the 1,48-49 market-
ing year, the carry-over is likely to be increased fro. 195 million bushels
on hand at the beginning of the season to around 275 m.llocn on July 1,
1949.

In spite of unfavorable drought conditions in the Soutlhwest:
farmers seeded 77,7 million acres of winter and spring wheat for the
1948 crop. If farmers should seed this acreage for the 194J crop and
average yields rwre obtained, a crop or 1,165 million bushels would be
produced. This, added to the increased carry-over, would again provide
a large volume of wheat for export amd carry-over. W'iith continued re-
covery abroad, it is expected that oeports would be s-ibstantially below
those of 1948-49. This would lead co a further increase in stock's,
Under these conditions, prices again would be depressedl to below:- loan
levels in the heav,- marketing season and would average lower relative
to the loan than in 1946-49. Furthermore, the loan level next year at
90 percent of parity is likely to be less than this year, which was
$2.00 at the national farm level. Lower prices for feed grains and feed-
stuffs purchased by farmers may reduce the paric:' index sufficiently to
bring the loan level down 5 to 10 cents per bushel.

Because of marked recovery in world wheat production this year and
the reduced ne.d for supplies from the United States, the Department of
Agriculture has suggested as a preliminary goal t!at farmers reduce wheat
seedings this year by as much as 8 percent and shift rome of the acreage
available for wheat to other crops, including grass.

Rye production in recent years has been very snall, resulting in
record small carry-over stocks. A 14 percent increase over the acreage
harvested in 1948 is recommended for 1949, or a goal of 2.5 million acres.
7:ith average yields on the goal acreage, production next year would be
about 30 million bushels, compared with 26.7 million bushels in 1948.
This would provide for some increase in domestic consumption and still
give us an increase of possibly 3 million bushels in the carry-over on
July 1, 1050.





Aui: r 8 '.:

SUMI'MARY OF THE CURRENT WHEAT SITUATION

9. T i 1948 wheat crop was estimated at 1,284 million bushels as of
August 3, Thich represents an improvement during July of about 40 million
bushels. A crop of this size is second only to the 1,365 million bushels
in 1947. WIith a carry-over July 1, 1948 of 195 million bushels, supplies
of domestic wheat total 1,479 million bushels, which is second only to
the 1,60' million bushels in 1942-43 when carry-over stocks were at a
record h_-h of 631 million bushels.

Domestic disappearance in 1948-49 may total about 750 million
bushois, including 510 million bushels for food, 150 million for feed,
and 90 million for seed and alcohol. This estimate -of domestic disap-
pearance is above the prewar average of 678 million bushels, but is
much loss than that of some recent years when large quantities were fed.
Out of a total supply of 1,470 million bushels, a disappearance of this
size would leave about 730 million bushels for exports and carry-over.
Exports arc expected to be at least 450 million bushels, a third of which
is expected to move in the first 3 months. This would indicate a carry-
over July 1, 194' of about 275 million bushels, which compares with the
1932-41 average of 235 million bushels.

Prices of new crop wheat are still generally below loan rates,
although there has been considerable improvouent compared with the ex-
treme low on August 2, .xhich at Kansas City was about 18 cents under the
loan. VWith prices at loan rates assured either through loans or purchase
agreements, quantities of winter wheat yet to be sold below the loan rate
are likely to be limited to those for which adequate storage is not
available.

The storage situation also is becoming acute in the Spring Wheat
Area, whefo farmers are now experiencing conditions similar to those which
prevailed earlier in the Southwest. Combining has been delayed because of
wet weather, and, in spite of the tosulting delay in movements storage is
inadequate.

Exportable wheat supplies for 1948-49 from the four principal ex-
porting countries--United States, Canada, Australia, and Argentina--are
tentatively estimated at 850 million bushels, 450 million of which would
be from the United States. Othor countries, including the Soviet Union
may possibly export another 50 million, making a total for 1948- 49 of
about 35 million bushols less than the 935 million bushels exported in
1947-48. Roughly, it is expected that about twio-thirds of such a
quantity will go to countries participating in the Luropean Recovery
Program."

Exports of this size to these European countries, in addition to
currently estimated domestic production, would provide a per capital
consumption of wheat approaching prewar levels for the area as a wholo,
if no allovwnce is made for rebuilding stocks to prewar levels. However,
in addition to a substantial increase in population, those countries have
a lov level of reserve stocks of all food products, and thcro is continued
need for using food grains as a substitute for other foods in short supply,
particularly meat and other animal products.


.... .. .. .... ....;,. 1; '







Bread grain production in the Northern Hemisphere may be about
10 percent above the snall 1047 production and at about the 1935-39
level. Total output of broad grains in :orth America is much above
average and in Asia is estimated to be moderately above average, as
well as larger than in 1947. VTheat production in Europe excluding the
USSR is estimated at 1,450 million bushels, which is considerably above
the 1,015 million bushels produced in 1947, but still balow the prewar
average of 1,588 million bushels. European rye production is estimated
at about 635 million bushels, which is sharply above the 495 million in
1947, but below the 733 million in 1935-39. Bread-grain production in
the Soviet Union is forecast to be larger than in 1947, but still well
below average.

In Australia, where the harvest takes place in December, growing
conditions are reported as favorable except for the need of moro rain
in some southern and western areas. Acreage is expected to be 5 percent
or more below the 14.5 million acres seeded last year. Con/litions are
reported generally favorable in Argentina, except in Uorth Santa Fo.
Acreage continues at a very low level.


THE OUTLOOK FIQR TIZ 19403 V'nAT CROP

BACMGROUND.- The 1948 acreage goal of 75.1 million acres
was dhe same as the 1947 actual seeded acreage, exclusive
of volunteer wheat. In 1947, as in other years of large
seedings, good crop rotations, including sumner fallow,
were sacrificed in many areas, and in some instances sod
lands best suited for grass were broken. Under normal
pcacetine conditions, a much smaller acreage of wheat would
have been desirable. However, in visw of the continued
urgent need for exports, it appeared desirable to maintain
a large wheat acreage in 1Y-4 as an emergency measure.

The acreage actually seeded to wheat for the 1948
crop was 77.7 million acres. This was 3-1/2 percent above
the goal, only 4 percent below the all-tine record of
80.8 million acres in 1937, and 17 percent above the 1937-
4G average of 66.3 million acres (figure on page 2, table
on page 20).

Recommended Goal Calls for 611 illion-
Acre Reduction; Foreign Roquiroments
Expected To Be Sa rplyLower

The recommended wheat goal for 1940 is 71.5 million acres, which
is 3.6 million loss than the 1948 goal and 6.2 million less tlan the
1948 seeded acreage. A considerably smaller wheat acreage in 1949 should
meet domestic and foreign reqcliroer:nts in view of the increased carry-
over thIs year, the second largest crop in our history and the marked
improvement in crop prospects in many importing countries. In the announce-
ment of the reconmonded goal, it was pointed out that while it is desirable
to build up resurvcs for any possible future emergency adjustment of our
wheat acreage to the best long-time use of soil resources should be


WS-107


- 5 -







started. Adjustments can be made in areas of low productivity without
materially affecting total production. A better balance between soil-
conserving and soil-depleting crops will actually assure higher pro-
ductivity over a long period of years, Provision should be made for
sufficient summer fallow to continue wheat production on the drier lands
in succeeding years. It was further pointed out that in marginal areas,
farmers should bo encouraged to begin reseoding to grass any land not
suited for crop production over a long period.

The recommeended acreage goal of 71.5 million acres with 1938-47
average yields of 15.0 bushels 1/ would produoo about 1,075 million
bushels or a quantity which wouTd be just sufficient to meet estimated
disappearance of 510 million for food, 90 million for seed and in-
dustrial use, 150 million for feed, and exports of about 325 million.

In spite of unfavorable drought conditions in the Southwest,
farmers seeded 77.7 million acres of winter and spring wheat for the
1948 crop. If farmers should seed this acreage for the 1949 crop and
average yields were obtained, a crop of 1,165 million bushels would be
produced. A crop of this size with the same distribution as above,
would increase the carry-over by July 1, 1950 by about 90 million
bushels. Under these conditions, prices again would be depressed to
below loan levels in the heavy marketing season and average lower
relative to the loan than in 1948-49. However, there still would be
no marketing quotas for 1950-51 declared by July 1, 1949 under the
Agricultural Act of 1948 if yields were only about average. On the
other hand, if growing conditions are again favorable enough to result
in yields 2 bushels above the acreage for the 1949 crop, marketing
quotas could be proclaimed even on the goal's acreage.

Estimated United States Exports in
1949-50 Lluch Lower

The tentative range for United States exports in 1949-50 is
300-350 million bushels. Much will depend upon the nay the crops
turn out in both the exporting countries and importing countries. It
is assumed that in 1949-50 there will be further recovery in agria
cultural output in Europe and Asia and more normal production in .
exporting countries, and that about 75 million bushels will be exported
from the U.S.S.R. and Eastern Europe, chiefly to ERP countries. In
addition to crop outturn, the financial and political role played by
the United States in international affairs will continue to be very im-
portant in determining the quantity of Unitod .Sttes exports.



I/ Yields have been increasing in recent years (figure on page 2, table
on pago 20), not only because of favorable growing conditions, but also
as a result of improved varieties, and improved and more timely prac-
tices. The 1937-41 average yiold per seeded acre was 12.5 bushels;
reported condition for these years was about equal to the long-time
(1919-48) average. The yield in 1948 was 16.9 bushels. However, if the
weather conditions in 1948 had only equaled the long-time average,
studios of yield trends indicate that the yield would have been about
15.0 bushels. This would indicate that in 1948 about 2 bushels was
the result of above-average growing conditions.
Q. 4 '












CENTS
PER
BUSHEL


300

275

250

225

200

1 75


NEG 46665 BUREAU OF AGRICULTURAL ECON O


Despite record crops, wheat prices have increased in the past few years be-
cause of the very large export demand, above-normal demand within the United States,
and a rise in the general price level. In 1947-48 wheat prices were strengthened
because corn supplies weretoosmall to provide substantial exports in addition to
feed requirements. Exports of corn and corn products October 1947 to September
1948 totaled only about II million bushels compared with 131 million bushels a
year earlier. Wheat for export has been purchased largely by the Commodity Credit
Corporation, while over half of the flour for export has been purchased by the
commercial trade.
Among the factors contributing to price changes since July I, 1946 (numbers
refer to numbers on chart) are the following:
1946-'I7 Year.- (1) Adjustment of price to 1946 new-crop supplies. (2) Price
effect of record crop offset by large demand; CCC purchases heavy; transportation
Inadequate and supplies In market centers small. (3) Car shortage acute. (4) Coal
cars, made available by coal strike, used to relieve shortage. (5) Terminal sup-
plies small; export demand large; some price bearishness from high winter wheat
forecast; January CCC purchases heavy. (6) Effect of huge export demand on sup-
plies recognized: export program expanded as winter wheat prospects continued ex-
cellent; CCC purchases Insignificant. (7) General reaction to sharp advance: CCC
purchases mostly nominal. (8) Good demand for limited remaining supplies. (9)
Seasonal decline to within 8 cents of loan level on July 7; CCC purchases heavy.
g197-.8 Year.- (10) Increased buying by mills and elevators in face of limi-
ted market supplies, small corn crop reported July 10. (11) Market receipts gen-


rally adequate to take care of demand; CCC purchases heavy. (12) Corn crop pros-
pects continue poor; Canadian crop deteriorated; Conservation Progra. Interpreted
as Indicating urgency of maximum exports; purchases for export Juli-October sea-
sonally heavy. (13) Announcement that CCC purchases exceeded July-December quota
by 67 million bushels; feed estimate for year reduced. (14) Large export needs
reemphasized; low carry-over feared; CCC purchases mostly small. 115) Carry-over
July I, 1948 set by law at a minimum of 150 million bushels; winter wheat report
on December 18 higher than generally expected; with light wheat feeding reported,
exports of 450 million bushels still probable; market weak over holidays. (16)
Wheat prices reflect strengtl in corn; expected increase In marketing beginning
of new tax year did not materialize. (17) Price break of over 55 cents from Feb-
ruary 3 through 13 followed a decline of about 19 cents between January 16 and
February 3. Contributing factors include: (a) Prices had advanced too far in view
of the large supply still realining and the fact that export purchases were large-
ly already made. (b) Feeding of wheat lighter than expected, (c) Market receipts
of corn were much larger and feed prices continued very high Inralation to prices
of livestock and livestock products, (d) Marked improvement In crop prospects was
reported for most Importing countries. (e) Weather through January was favorable
for our winter wheat crop. (18) Conditions unsettled following the sharp price
break; reactions to weather reports. (19) Downward adjustment to new crop condi-
tions: April I forecast 3 percent above December I: CCC purchases which started
In "arch, continue heavy.


WEIGHTED AVERAGE PRICE OF REPORTED CASH SALES OF NO. 2 HARD WINTER WHEAl AT
KANSAS CITY AND REPORTED COMMODITY CRFnIT CORPORATION PURCHASES OF WHEAT
AND FLOUR (GRAIN EQUIVALENT). DAILY. JULY 1946- JUNE 30, 1948

S15 16 BUSHELS
I r-^- ~ -1 (MILLIONS.
13 14 17 o
12 18 1 48
6 7 8 9 10 11
----- ---------40
Price
32

24
_______ 9 |0 || -__ 24

SCCC purchases
16





s1 12 26 9 23 7 21 4 1i 2 16 30 13 27 10 24 10 24 7 21 5 19 2 16 30 14 28 1I 25 8 22 20 3 17 1 15 29 12 21 9 23 22 5 21 3 17 31 14 2,
S :. 5 19 2 16 30 14 28 11 25 9 23 6 20 3 17 3 17 31 14 28 12 26 9 23 7 21 4 18 I 15 29 13 27 10 24 8 22 t 1 2 16 1 IS 29 12 26 10 24 7 21
JUL> AUG. SEPT OCT NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT NOV. DEC JAN. FEB. MAR. APR MAY JUNE
1946 1947 1948
DATA FOR PURCHASES FROM PRODUCTION AND MARKETING ADMINISTRATION


U > OLPARIMENT UO AGRICULTURE






WHEAT: PRICE RECEIVED BY FARMERS AND PARITY
PRICE, UNITED STATES, BY MONTHS, 1909-48


CENTS
PER
BUSHEL
250


200


150


100


50



0


U. S. DEPARTMENT OF AGRICULTURE


NEG. 39712-X BUREAU OF AGRICULTURAL ECONOMICS


Wheat pricm, except for August 1946 and February 1918 were above parity from early May 1946 to May
1918. Sirne M10, prices received by farmers for wheat have risen above parity In 1924-25, 1925-26, and
196-7. In addition to the past 2 years. In 1924, foreign demand for United States wheat increased as a
result o a very small crop In Canada. In 1925, the crop in the United States was small, and in 1936-37
United Stats suppiles were greatly reduced following 4 years of short crops. In World War I, the world
supplyi ms all, compared with demand, and prices in the United States rose considerably above parity.
Since 191, both the supply and demand were very large.


1910 1915 1920 1925 1930 1935 1940 1945
YEAR BEGINNING JULY
*PARITY PRICE NOT AVAILABLE BY MONTHS. 1910-22


':*

'I





. WB-107 -9-

Large scale exports began in late 1944. Until the present year,
the world import needs for wheat have exceeded the supply available for
export in surplus producing countries. This yer, with continued good
crops around the world, supplies may be large enough to about take care
of expected demand at current prices and may thereby mark a turning point
at which supplies will begin to allow for thr, rebuilding of stocks.

Since the end of the war, exports of whea-t and flour from North
America have been very large in relation to exports from Argentina and
Australia. This was made possible by record crops in the Uni.ted States
at a time when production in Argentina and Australia mas below average.
With prewar yields per acre, crops would have been smaller in the United
States and larger in Argentina and Australia, and the proportion of United
States exports sharply smaller.

Wheat Prices in 1949-50 Likely
to Average Close to Loan

With prospects that exports will be much lower than th'.:: havc ben
since 1945 and with a high support level assured for 1949-50 and no acreage
allotments or marketing quotas for the 1949 crop, production next year is
expected to exceed total disappearance and leave the carr'-over July 1,
1950 above average. As a result, prices are expected again to decline
below the loan level following harvest, and average close to the loan
.level for the marketing year as a whole. Prices for 1949 heat would average
higher than the loan level if growing conditions should be much hc.low average,
or if exports should turn out to be materially more tha n expected. As
provided in The Agricultural Act of 1948, loan rates for the 1949 market-
ing year will be 90 percent of parity as calculated in the current parity
formula. The parity index next year is likely to be less than this year.
Lower feed grains and feed stuffs purchased by farmers may reduce the
parity index and reduce the loan level by 5 to 13 cents per bushel.


THE CURREI[T DOMESTIC "'HEAT SITUATION

BACKGROUND: -An abnormal world demand for
bread grains has made it possible to export the
excess over domestic needs from four successive
record wheat crops in the United States. Furthermore,
the carry-over was cut down to very low levels on
July 1, 1946 and 1947 (figure on page 1, table on
page 19).











'"




e


AUGUST 1948 -10 :

Net exports from the United States have
exceeded 300 million bushels only in 1914-15,
1920-21, and in the 3 years beginning with 1945-46.
Very smill U. S. wheab crops in 1933.-36 together
with drives toward greater self-sufficiency in
importing countries greatly reduced exports in the
30' s, and the war curtailed chipping in the early
40's. In 1921-30 net exports from the United States
averaged 177 million bushels, while in the 35 years
since 1909, leaving out the years of net imports,
net exports averaged 169 million bushcls.

iLheat prices to ,rowers advanced from an
average of 68- cents per oushel in 1940-41 to a record
high of 42.31 in mid-Januar.r 1948, and a record
season average of about+ :2.29 for the 1947 czop
(figure on page 8). Until 1943-44, the loan program
was the most important factor in domestic wheat prices.
Beginning in that year hcavy exports of wheat havu
been the chief price factor 2/. However, domestic
use also has bc,.n above average. The 1947-48 prices
reflected the reduction in supplies of feed grains,
the ad-ditional demoad resulting from the lack of corn
and other grains for exports, and the rise in the
general price level-.

Domestic Whcat Supplics in 19.:S-49
Iear Record; Dor.c-;tic Diisappearance
Still Above Pre-.ar

The 1948 wheat crop was estimated at 1,284 million bushels as of
Auau:s:t i1 A crop of this size is second only to the 1,365 million bushels
in 1947. fiti a carry-over July 1, 1948 of 195 million bushels, supplies
of dor-eti wheat totaled 1,479 ;million bushels, which is second only to
dnnimc.ti. supplies of 1,600 million bushels in 191.2-43 when beginning
stocks ,cerc at a record high of 631 million bushels,

Domestic disappearance in 1948-;19 may total about 750 million
bu.hels, including 510 r.million bushels for food, 150 million for feed,
and 90 million for sued and alcohol. This estimate of domestic disapp.ar-
ance is above the prewar average of oS'3 million bushels, about the same
as in the past 2 years, but much less h :n other recent years when large
quantities were used for feeding livc-.ock. Out of a total supply of
1,479 million bushels a disappearance of this size would leav-' about
730 million bushels for export nnd carry-over.

iMrkc-ting Year Exports lay Total
At Le:.st 450 Million iith 'Carrr-Over
About 275 Million

On the basti of estimated supplies which.may.be available in other
exporting countries and probable takings by importing countries, exports
from the United States nmay total at least 450 million bushels. On Lhe
basis of 450 million bushels, a carry-over July 1, 1949 of about 275 mil-
lion bushels would be indicated as compared with the prcwar 1932-41
avcrare of 235 million bushels.
2/ The figure on page 8 and table on page 14 in The 'Thcat Situation, issue
of May-July 1948 show the price of No. 2 Hard Winter '.Tnhat at Kansas City
and the annual loan rate beginning with July 1937. .







About 147 million oushols of wheat (including flour in terms of
whoat)--about a third of 450 million--have already boon allocated or
committed for export in July-Septerber, rand actual exports are runrdng_ ..
--hoad of their allocations.

The Commodity Credit Corporation's part of the July-Soptembor pro-
gram totals 122 million bushels, consisting of 103 million busho2s of
wheat and 19 million of flour (wheat equivalent). Ccmmurcial allocations
through September, including an estimate of the quantity to nonquota
countries, total 25 million bushels, all but 2-1/2 million is flour
(wheat equivalent). Purchases by the Crnomodity Crodit Corporation, July 1
through August 30, plus stocks on hand July 1 totaled about 158 million
bushels, consisting of 138 million bushels of wheat and 20 million of
flour in what equivalent. This is adoquarc for thu flour cxport program
through Septembor and more than adequate for the wheat program through
October.

As a result of the favorable August crop report, the Donartmon': of
Commerce on August 20 announced that export licernsez- will no; be required
for shipments of wheat and flour to th: Philippines and Lo th- countries
of the leostern Honisphoro after August 27.

Wheat Prices Rave Advanced But
Arc Still Bolow the Loan

Prices of nw, crop wheoat ar still goncrally belov' loan rates 3/,
although thioro has boon coi siderable imnprojveii.-n compared with the oxtr'em
low on August 2, which at lansas City was about 13 cents under tho loan.
On August 30 prices for ordinary protein arc about 3 cents e3low the loau
at Kansas City and innuIcapolis. The improvement in pric-es whichh has occurred
reflects some improvcmunt in the storage situation. Storage is sbtll tight,
but the country movement has slov-ed doi.n, movement to terminals has b.-en...
--sufficient to open many local clrvtors, and trrniiial congestion has Lbee
relieved to some extent by a heavy, mo-.smcent of what inbo export. ";iLh
prices at loan rather assured either through loans or purchase -grsemnits,
farmers in the Scut]iwest are resisting further sales below the loan. IL
the Spriug Theat area farmers arc nov: ox ne'rioncing conditions similar
to those which prevailed earli r in the Southwest. Tfoathcr has been wot,
which has delayed combining, and the storage situation is becoming more
acuto, with demand for space not only for vwheat, but also for oats, rye,
barley, and flax.


THE VORLD l'THiAT SITUATION

BAOKCROUInD.- On July 1, 1043, s:;oco:s in the four principal
exporting countries worc a record of 1,737 million bushels.
By July 1945, however, they vero down to 18 million bushels.
In 1940 they vwre 387 million and in 19-17 w~ro 385 million.
Greatly increased disappearance Las c-used by warcimo do-
plotion of food supplies in importinu countries and by poor
crops in many areas. Stocks on July 1, 1947 wore the smallest
since 1938, about 16 percent loss than the 1935-39 average of
458 million bushels,

Loan rates for 1948 with comparisons are shown in The Theat Situation,
Sssuie of May-ly 1948, table 5, page 14.


- 11 -


WS-107






I.JLU .L c. .. ... '. .

Zxportablo Supplies Smaller Than in 1947-48:
European Ianporit Toods Cont.nuo Largo

Ex:orbablo .:hoat supplies -or 1948-49 fro.a the four principal
exporting corntrios--Unitod States, Canada, Australia.and Argentina--
are tentatively ostimatod at'about 850 million bushels, 450 million of
which rould be fro.i the United Statos. Other countries, including the
Soviet Union ray possibly export another 50 million, mak.ir-ng a total for
1948-49 of about 31 million bushels loss t'an the 935 million bushels
exported in !.'17-48, when o:cporbs from oThor countries totaled about
50 million busihls,

Rour;ly, it is expected that about tw.o-thirds o' such a quantity
will go to .Suropoin countries pr.rticlpatbng in the European Recovery
Progr'.m. Exports of this size to tlehos cour.trios, iii addition to our-
routly cstinm.tod domestic production, would provide a p;r capital con-
sumption of w:he.t approaching prcwrar levels for tho; area as a wholo, if
no allowance is maCl for rebuilding .:tocks to ti.J prcwar level. However,
in addition to a substant5yil incrooas in Fopulntion, those countries
ha7e a lor lovol of rusjrvo stocks of all food products, and thcro is
continued need for using food i-rains as substitute for other foods in
short supply, particularly moat and other animal products.

July 1 Wheat Stocks in 4 Exportbin
Countriesp 150 MVlion Bushcls

'Jh.eat stocks in the 4 principal cxoorting countrios--United States,
Canada, Argentina, and Australtiv--at 535 million bushels, woro 150 mil-
lion bushels or 39 percent above 1947, :rien: stoc':s ;eoro the lowest since
the record of 1,737 million bushels in 1943. WV.hilo stocks this year can-
not bs considered large, they are 17 percent above the 1335-39 average
of 453 million bushels.

.[ith a 111 million-bushel gain in the United States, the net
change in the other tlrec countries amounted to 39 million bushols. The
next lnr".est increase, 65 million bushels, was in Australin, whcre the
stocks of a :car earlier reflected the poor crop of that year. Stocks
in Argcntinc w-ore 5 million larger, '.tilc t!ios in Canada *.cor. 23 mil-
lion sanalcr. Stocks by countries _c" 1L43 with comparisons are shown
in table cn pago 22.

A distinction' bot ,'en July 1 stock's in liurth -America and in
Arsentina and Australia s-ould be noted. That date rar's the appro:imato
beginning of the nar:eting year in North America and the stocks approxi-
mate carry-ovcr stoc.:s for North America. In Southern ilImisphore countries,
howcvor, stocks on that date include su)plies for domestic use and export
up to Locc.nbcr when the new crop year b-igin in those countries.
Broad Grain Production in Northern Homisphore
tisir.ttcd at about Priwar Level

Present prospects indicate that the 1948 broad grain crop in the
NorthJrn Hneisphcro iay be about 10 pcrcont above the siall 1347 production..
and at about the proewar (1935-%9) level. Total output of broad grains in
North America is much above average and in Asia is estimated to be moderatol
above avorago, as T.all as larger than in 1047.' In both Continontal Europo.,
and tho Soviet Union, however, production is still woll below avera.go.th.
substantially above last voar's loT firuroe. .. ..-.:






WS-107


In North America the combined outturn of wheat and rye is ex-
pected to be only about 3 percent bolo-- last year's record crop. The
United States wheat crop of 1,284 million bushels is about 525 million
larger than the prowar average. The preliminary estimate of the Canadian
wheat crop is 372 million bushels, which compares with 341 million in
1947 and the prewar average of 312 million. Cool woathor with general
rains helped fill the grain and offset earlier damago duo to drought.
The rye outturn in the United State. is -bout the same as in 1947 and
much blow avoraGu because acreagEo has boon curtailed sharply in recent
years. The rye crop in Canada is estimated at 26 million bushels, sharply
abovo the 13 million bushels harvested it ycat,

The total outturn of broad grains in Europe is sharply above the
small 1947 harvest, though about 10 percent below the 1935-39 average.
The expected wheat crop of 1,460 million bushels rould be about 445 mi.-
lion bushels or 44 percent larger than the poor 1947 harvest, but 8 per-
cent loss than the prewar average. In addition to a good broad grain crop,
there aro good prospects in Europ. for potttous and other vegetables.

Crops are especially good in vrzstern Europe, The wheat crop in
France, estimated at 275 million bushcls, si.ows an ir.cr.'.se of :.bout 85 par-
cent compared with the 1C'47 harvest, and is only slightly below average.
Above avorago yields on an inc'ro-.-cd acrea;:e accountt for the substantial
incro.so. Good crops, though bolow average, arc expected in Italy -.nd
Spain. Yields arc near avrage in those countries, but acreage is not up
to the prewar level.

Favorable conditions i: the 3-il:Lan countries have resulted in a
crop considerably larger than in 1047, though not up to average. Yields
are near average, but acreage is still bclow prowar. Some cxportablo sur-
plus is reported from this traditionally surplus area, especially in
Rumuania. Prospects in Central Europe are also considerably better than
in 1947.

Unusually favorable conditions were reported from the United
Kingdom during the growing season and yields :cwre forecast to be bettor
than average. Urnavorable wcat. .cr at harvest time, however, in both the
United Kingdom and France was reported to have caused some damage.

European rye production is tentatively estimated at about 635 mil-
lion bushels, compared with 495 million in 1947 and 763 million in 1035-39.
Larger crops than in 1947 arc general. The bulk of the gain, ho:rwver, is
estim..ted for Poland and Germany, the largest producers of the area.
Yields in both countries arc estimated to be somewhat below average, though
larger than a year ago.

vWeat production in Africa is slightly larger than in 1947 but
still belvo average. Production in Egypt is placed at 40 million bushels,
about the same as in 1947. The crop is slightly smaller in French J7orocco
and Tunisia, bu' thesu reductions are more than balanced by the substantial
increase to 40 million bushels for Algeria, compared with last year's har-
vest of 28 million bushels.




:**.


- 13 -





AUUUIT aLdil


Bread grain production'in the-Soviet Union is forecast to be
larger than'in Ny47, but still well below average. The final outturn
will, however, depend to a great extent oi, weather conditions in Siberia
and other eastern regions-during the harvest. A considerable increase in
the wheat acreage is responsible 'for tbhe labrer outturn, with yields
below those of 1947. The ryeaharve.t is expected to be a little below
the .1947 crop. Conditions have been variable, with drought during the
critical growing period indicated to have reduced the yields of spring
wheat over much of the important Volga area. Good conditions were reported
during" the growing season in the southern winter-wheat area from which
exports normally originate.

Larger than average wheat crops are reported for most of the princi-
pal producing countries of Asia. The crop in China is now estimated to
be 25 percent above average and in Turkey about 20 percent above average.
The outturn is also larger than in 1947 for both countries. India's
crop appears to be slightly below average though 20 percent larger than
in 1947. The crop in Japan is still below average but better than a
year ago. Turkey is the only country in this area reporting rye produc-
tion, which is reported this year to be smaller than in 1947.

In Australia, where the harvest takes place in December, growing
conditions are reported as favorable, except for the need of more rein
in the South. Acreage is expected to be 5 percent or more belowu the
14.5 million acres seeded last year. Conditions are reported as gener-
ally favorable in Argentina, except in north Santa Fe-. The acreage
continues at a very lo-' level.



THE OUTLOOK FOR RYE

Rye Coal Cells for
Increased Prnduction

For the past 6 years rye acreage and production (figure on next
:age, table on pagl37)have been smr.ll. This is largely because of the
competition 'rom other crops for available land. While it is not
practical to attempt to equal the level of production of former years,
.more rye would be used if supplies were Inrger. The carry-over has been
-far below average in recent years and it seens desirable to start
'building up more adequate reserves.

The goal of 2.5 million acres recommended for 1949 is only.2 per-
cent larger than the 1948 goal, but it is about 300 thousand acres or
about 14- percent more than the acreage indicated for harvest in 1948.
With overCnge yields on the goel acreage, production next year would be
-about 30 million bhshals, compared v.ith 26.7 million bushels in 1948.
This would provide for some increase in domestic consumption in 1949-50,
and spill provide.arn increase of possibly 3 million bushels in the
csrry-ovar on July 1, 1950,
*a4


-* J.^ -








RYE: ACREAGE, YIELD, PRODUCTION,
FOREIGN TRADE, AND PRICE,
UNITED STATES, 1900-1948


ACRES
(MILNS)- ACREAGE HARVESTED
(MILLIONS)
6

3 \


BUSHELS
YIELD PER ACRE
16

12 --- --

8
BUSHELS PRODUCTION AND PRICE
(MILIONSRECEIVED BY FARMERS
100 I I-
Price* i Production -
50 -


BUSHELS
(MILLIONS) FOREIGN TRADE
50
Exports Imports
25 -- --
o -"

1900 1910 1920 1930 1940 195
YEAR BEGINNING JULY


*1900-1907, DEC. 1 PRICE


ACRES
(MILLIONS)
6

3

0
BUSHELS

16

12

8
CENTS
PER
BUSHEL

100

0
BUSHELS
(MILLIONS)
50

25

0
0


DATA FOR 1948 ARE PRELIMINARY


U. S. DEPARTMENT OF AGRICULTURE


NEG. 46025-X BUREAU OF AGRICULTURAL ECONOMICS


Rye was harvested in 1948 on a total of 2.19 million acres, which is8 percent above
1947, but 28 percent below the 1937-46 average. Both acreage and production have been
small for the past 6 years. Yield at 12.2 bushels in 1948 was slightly above the 1937-
46 average of 12.1 bushels. In 1947-48 rye prices advanced to the highest level in our
history, reflecting the short supplies of feed grains as well as of rye, and the rise in
the general price level.
Rye acreage has declined sharply since World War I. Rye yields were quite stable
until 1916 but have varied considerably since the expansion in the Great Plains, which
began during World War I. In contrast to 1918-24, when exports were very large, im-
ports have beea larger than exports in 10 or the past 15 years.





AUGUST 1948 -16

Prices for the 1947 rye crop were the highest of record. This
reflects the short supplies of food grains and rye as well as tho rise
in the general price level. Prices received by farmers averaged $2.26 per
bushel compared with $1.92 for the 1946 crop (table on page 18). With
abundant grain supplies in this -country and a greatly improved supply
situation in Europe, prices are now sharply lower than a year ago, and
they are expected to continue below 1C7-48 in the years irmodiatoly ahead.
At Minneapolis the weighted price of ::o. 2 Ryo for July averaged about
75 conts bolow a year earlier (table on page 18).

The national average rye loan to growers for the 1948 crop is
,1.29. Loans are adeo on farm-stored and warohouse-stord rye until
December 31, 1948. Loans mature April 30, 1949, or earlier on domand.
County and terminal rates are established at levels reflecting to pro-
ducers 72 percent of rye parity as of April 15, 1948. Ryo produced in
1948 and grading No. 2 or better, or grading No. 3 solely on the factor
of test weight but otherwise grading No. 2 or bettor, is eligible for
loan.

Current Year's Rye Supplios
Again SmalT

Domestic supplies of rye for 1948-49, indicated at 30 million
bushels, will be the smallest in nearly 50 years, with the exception of
the past 2 soosons. Carry-over stocks of 3.3 million bushels on July 1,
were only about 15 percent of the 10-year average, but woro 1 million
bushels larger than a year earlier. The crop forecast at 26.7 million
bushels is 3 percent larger than last year, but 29 percent bolow the
1937-46 production. It is expected that in 1948-49 food and feed use
may be sonicwhat above 1947--18. With larger supplies of what available
exports of rye undoubtedly will be below the 2.7 million bushels ex-
ported last year.

Disappearance of rye in the 1947-48 year was the second snallost
in 23 years of record and totaled 25 million bushels compared with 20 mil-
lion the year before and the 10-yoar a-orago of 44 million Consumption
of rye for industrial and beverage al..- ol amounted to 6.7 million bushels
compared with 4.2 million in 1946-47 and 8.3 million in 1S45-46. About
5.6 million bushels wore used as food, which was about the same as in
1946-47, but 1.7 million bushels under the 10-year average. Disappearance
for food totaled only about 5 million bushels, the smallest amount sinoo
1934. The rye supply and distribution t..blo beginning with 1934 is shown
on page 17 in The Wheat Situation, issue of May-July 1948.





A discussion of the Agricultural Act of 1948

relative to what begins on page 23.



i"-
- -





S:17- I


1.- Rye: Acreage, yield, production, foreign trade, and price,
United States. 1901-48


Year Acreage
beginning: Acreaste
July :h tested


1901
.1902
1903
1904
1905
.1906
i1907
.1908
.1909
.1910
1911
1912
1913
1914
1915
1i16
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
'1930
.1931
"1932
1933
1934
193.5
1936
1937
1938
'1958
-1939
! 1940
.941
1942
.41943
1944
1945
,1946
i947
tJ948


s1,000 acres
S2,409
2,4-44
2;260
S2,205
: 2297
2,154
S2,073
S 2,130
S 2,212
S 2,262
2: ,452
: 2724
S3,089
S 3,144
S3,417
: 3,528
: 5,053
6,694
S 7,168
: 4,825
:" 4,851
: 6,757
: 4,936
3,941
: 3,800
S 3,419 -
3,458
S3,310
: 3,138.
S3,646
S'3,159
: 3350'
S 2;405
S 1,92-1
S4,066
: 2,694
S 3;825
S4;087
S 3,822
: 3204
S.3573
S 3,792
S2,652
: 2,132
S 1,856
S1,607
S 2,022
2,187


Table


SYield
* per acre
Bushels
12.8
13.9
12.8
12.9
13.6
13,7
13.6
13.55
13.6
12.9
12.8
13.9
13.1
13.4
13.7
12.2
11.9
12.5
11.0
12.8
12.6
14.9
11.3
14.8
11.1
10.2
14.8
11.5
11.3
12.4
10.4
11.7
8.6
8.5
14.0
9.0
12.8
13.7
10.1
12.4
12.3
14.0
10.6
10.6
12.9
11.8
12,8
12.2


30;773
33,862
28;952
28,461
31;173
29,609
28,247
28,650
30,083
29,098
31,396
37,911
40,390
42,120
46,752
43,089
60,321
83,421
78,659
61,915
61,023
100,986
55,961
58,445
42,316
34,860
51,076
37,910
35,411
45,383
32,777
39,099
20;573
16,285
56,938
24,239
48,862
55,984
38,562
39,725
453878
52,929
28,680
22;525
23,952
18,897
25,977
26,664


2,712
5,445
784
30
1,388
770
2,44-
1,296
242
40
31
1,855
2,273
13,027
15,250
13,703
17,186
36,467
41,531
47,337
29,944
51,663
19,902
50,242
12,647
21,698
26,346
9,844
2,600
227
909
311
21

9
248
6,578
784
732
245
23
450
594
3,144
7,196
574
2,655


1
34
21
1
1
2
1
30
227
134
1
57
147
566
428
834
638
1,077
452
700
99
2
1

1
2
1
1
88
1
14
12,019
12,250
2,266
3,943
---
1

1,392
8,758
1,490
8,514
4,149
1,996
1,641
41


|i/ From reports of Department of Com
december 1 price, 1900-1907, 3/]
loan va4*. g/ Preliminary.


merce of the United States. Includes flour
Beginning 1940 includes unredeemed loans at


S: Price
SProduction : Exports / Imports 1/ :received
: :__:farmers 2/
1,000 bushels 1,000 bushels 1,000 bushels Cents perb


55.7
50.8
54.5
68.8
61.1
58.9
2/73.1
:/74.5
74.6
S73.4
-1.0
S68.7
62.9
83.3
85.0
113.0
176.4
152.1
145.9
146.4
84.0
.63.9
59.3
95.2
79.1
83.0
83.5
83.6
85.7
S44.4
: 34.1
28.1
62.8
S72.0
S39.8
81.2
S68.2
33.8
43.9
3/41.9
53.9
59.8
98.1
109.0
.135.0
192.0
229.0


I


; .:;y_ I I mm


- -







. Table 2,- Rye, No. 2: Wlightod avorage price per bushel of reporto...
ctsh sales, Minneapolis, by ,mo-nths, 1940-48 i

Year : : : ::
begin-: .. : t
eni July Aug. Scpt.:Oct. : Nov. Doc. Jan., Fob. Ma:r. Apr.* MmyJuno
ning : .. y uV
July : : : a a : : I *
: Cents Conts Conts Curnts ents Cents Conts Conts ts Cts Cent s Co ents Ca

3940 : 43.9 41.2 43.6 4-7.8 50.2 50.0 52.6 50.2 52.4 56.5 58.1 58.6 5
1941 g 54.9 61.7 67.8 60.0 64.1 67.8 80.3 78.1 75.5 71.8 69,3 60.3 6
1942 : 60.6 55.8 64.6 59.1 59.3 70.3 74.7 79.2 82.9 80,9 87.2 94.1 73
1943 : 101,2 95.4 101.4 108.5 111.0 120.2 127.0 12'2.5 123.5 127.1119 -12.1 10l
1.944 113.0 112.1 103.1 1-1.85 113.1 114.3 122.8 123.5 127.2 133.9139.2 155.3 122
1946 : 152.8 14-.2 151.3 164,3 183.9 175.2 198.4 212.9 235.9 269.5284,2 -- 171
1946 : 209.0 195.2 223.5 239.2 267.6 279.3 285.7 310.8 353.9 310.8319.2 302.9 25$
1947 : 254.1 246.6 231.7 285.3 282.4 276.9 276.3 241.0 256.2 253.0241.2 224.7 264
1948 : 178.3
Compiled from Minneapolis Daily Markot Record, Avorago of daily prices weighted by
..oarlot sales,
/ Data for oarlior years in'Tho Wheat Situation as follows: 1915-32, Juno 1937,
pago 16, 1933-39, Laroh-April IE94', o go 18.


Table 3.. Ryoe Avorago price cpr bushel received by farmers
United Status. 1930-48 17


.Year :
bogin-:
ning :
July :


July
15


:Conts

1930 : 43.6
1931 : 33,0
1932 : 22.0
1933 78.2
1934 : 61.8
1935 : 36.0
1936 : 61.1
1937 : 81.0
1938 : 41.4
1939 : 34.3
1940 : 38.3
1941 : 4C.4
1942 : 51.3
10-13 : 90.9
1941 :107.0
1945 :122.0
1946 :176.0
1947 :236.0
1948 :172.0
Based on rcti
by' production


S :C : C : : rop.
: Aug. :Spt.: Oct.: jov.: Dco.: Jan.: Feb.: M'r.: Apr.: IMy : Juno:yoar
: 15 : 15 15 : 15 15 15: 15 15 : 15 : 15 : 15 :avoP
: : : a : ___ : _:__-_, _
Cents Conts Ccnts Conts Conts Cents Cnts Conts Ccnts Cents Cents

53.0 53.1 47.6 11.6 .11.1 37.4 3'4.3' 34.3 32.8 33.0 31.4 444
32.5 33.2 33.6 '41.4 336. 33.8 36.3 37.7 36.6 33,4 28,8 34.:
23.3 23.6 22.3 2V.1 21.1 22.7 21.9 22.8 50.1 38.9 43.5 28,
58.8 61,4 52.7 55.4 51.9 53.6 54.2 53,1 52.8 51;9 58.2 624
7379 79.1 75.0 71.9 74.4 73.1 69.3 66.5 66,0 62,0. 53.7 721
35.5 36.5 42.1 40.4 40,0 41.4 I44.4 42.9 -10,8 40.6 43.8. 39'
75.1 70,5 80.4 81.5 90,0 97,9 98,9 95,8 99,9 96;0 8503 81,
70.6 68.1 63.8 60,8 59.2 64.1 63.4" 58.7 52.2 49,8. 46.0 68.4
32,4 32.0 32.9 32.1 32,3 34.7 33.9 32.9 33.0 36,4. 39.1 .3S,
34.2 4.1-0 45.1 44.6 52.3 56.7 55.7 55.6 57.1 52.4. 40.3 434
36.8 38.3 40.5 42.8 41.3 43,6 41.2 43.1 46.5 48.1. 47.11/42'
4C.4 57.3 51.3 54.2 57,8 65.2 66.0 64.3 60.7 50.4: 52.4 54.q
49.2 55,2 52,9 50.4 56.3 61.3 64.1 68.9 69,5 71.9. 79.7 .60.
88.6 4.5 101.0 102.0 107.0 111,0 111.0 111.0 112,0 111.0 105.0 98.
108.0 102.0 108.0 103.0 106,0 109.0 108.0 c9.0 111.0 112.0 121.0 109.,
124,0 131.0 138,0 150.0 113.0 150.0 16-1.0 175.0 195.0 192.0 145.0 1355.
162,0 191.0 199.0 207.0 218.0 218.0 233.0 281.0 247:0 245.0 240.0 192e
211.0 248.0 2.19,0 219.0 ?15,0 247.0 194.0 214.0 217,0 2X2.0 191.0 226
146.0
arns from special prico rcportCr IIonthly. prices, by Statos, vwoig 0
Sto obtain a prico for bhe United Status; average for the year obtain


by wo.ightngrm StateL? pr-CO~iloevrQEGe f-or-th-croDp marIkotGing SOeaven. PIncudoB an
allowranco for unrodoimodl loans .?t averagio loani ylue
3./ Data 1908-1929 in Tho I~h~cat Sitult~ion, Sept.-dot. 1945, pago 14. .


*: ""'4


.'


;1





IWS-107


Table 4.- Wheat:


19 -

Supply and distribution in continental United
States, 1930-48


fData feo figures on cov!_r gc)_ ..
Year : Supply distributionn ____ E:-
begin-: Stocks : : Im- : Domestic di app:,arance sports
ning : July 1 : New :ports : Total : Frc- : : : n- : : in-
July / : crop : 2/ : supply :coszed; : :dustri-: c'ucin
S: for : Feed Seed : al :Total : ship-
S: food : : use : : inntr
__ ____ _- :L_4/
lil. Hil. 'il. iil. Liil. l. 11li l1i 1il. !il.
bu. bu. bu. bu. bu. bu. bu. bu. bu. bu.


1930 : 291,
1931 : 312,
1932 : 375,
1933 : 377,
1934 : 272.
1935 145,
193 : 140,
1937 :/ 83.
1938 : 153.
1939 250.
1940 : 279.
1941 : 384.
1942 : 630,
1943 618,
1944 : 316,
1945 : 279.
1946 100.
194" 6/ 83.
194834 194.


,1
.5
.3
.8
'9
.9
'4
,2
,1
,0
,7
.7
,8
9
,6
,2
.1
.8
,9


886,5
941.5
756.3
552.2
526.1
629.2
629.9
373.9
919.9
741.2
814.6
942.0
969.4
843.8
1,060,1
1,108.2
1,153.0
1,364.9
1,284.3


0.4
IV'
5/
0.1
15.5
34.6
34.5
0.6
0.3
0.3
3.5
3.7
1.0
136.0
42.0
2.0


1,178.0
1,254.0
1,131.6
930.1
814.5
20807
804.8
957.7
1,073.3
991.5
1,097.,8
1,330,4
1,601.2
1,598.7
1,413.7
1,239.4
1,253.1
1,448.7
1,479.2


439.6
492.8
492.4
448.4
4 5c'. 1
472.6
477.9
474.6
431 .4

478.5
487.8
537.0
543.1
537.0
488.5
4Q,4.2
49P.3
510.0


179.5
190.2
142.7
102.3
113.4
101.0
115.8
133.5
158.1
115.1
123.1
116.3
291.0
488.1
287.0
303 9
190.6
180.2
150.0


81.1
P0.1
83.8
78.1
82.7
87. 5
95.9
93.1
74.2
72.9
54.3
02. 5
65.5
77.3
SO.4
82-0
86. 5
901,4
90.0


O- l
5./
5/
0.1

0.1

0.1
0.1
0.1
1,6
54.3
107,5
82.3
21.0
0
0,6
0


750.2
75i?.1
713.9
628.8
655.3
o61,2
63Q.7
7)1.2
713.8
663, 5
676. 0
1668.2


986.7
805.4
771.3
770.5
750.0


115.3
125.6
34.9
28.4
13.3
7.1
12.3
103.4
109.5
48.3
37.1
31.4
34.5
66.1
152.8
393.9
398.0
483.3
454.0


1/ 1930-36, inclusive, some new iwheat included in comLcorciai stocks ar.d nerchant
mills stocks; beginning with 193" only old crop i.h-et is shoi:n in all stocks
positions. The figure for July 1, 1937, including tnc n:;w -'heat is l'2.8 million
bushels, whichh is usud as 5ear-end carry-over in the 1936-37 marketing ytar.
2/ imports cover all wheat and flour, cxc'.pt wheat imported for milling in bond
is excluded.
2/ Includes food for both civilian population and their r.litary forces,
/ Includes flour made only Irom dornestic heatt and shipments to U. S. territories
Bcginnin, .-ith 1940 includes military Lxports for celief .n! iu:ports by the
Department of Agricultiure.
5/ Lss thnn 50,000 buchcls.
/ Preliminary.
2/ Supply preliminary, distribution tentative.






IC


__








Table 5.- Wheat,


srincipal types: Acreage, yield per oare, and production,
1938.48 I


: Al wheat
Tear Acreage : Yield
ef harvest eee : seeNde bW : per seeded : Production
v ena: not harvested : acre


: 1,000 acres


1938.............:
1939 ....... .....:
1940.............:
1941... ..........:
1942............:
19243............:
1944.............
1945.............
1946.............:
1947...............:
1948............. :

1938.............
1939.............:
1940. ............:
19i41...........:
1942 .............:
1943.............
1944 ............. !
1945.............:
19'6 .............:
1947.............:
1948.............

1938 ............:
1939 ............:
1940..............
194.............:
1942 .............:
1943.............:
1944............:
1945............. :
1946 .............
1947..............
1948..............
1938..............:
1943.. ......... .:
1940.............:
1941.............
1940 .............:

1943.............:
1946.............
1943............. :
1946.............:
19 8............... :
198 .............:
1938..............:
1939 .............:
1940 ............. :
1941 ............. :
1942 ............. :

1944 ............. :
194 ............. :
1946............. :
1947 ............ :
1948.............. :


78,981
62,802
61,820
62,707
53,000
55,984
66,190
69,130
71,536
77,947
77.715


46,154
43,536
46,045
38,855
38,515
46,821
50,415
52,195
58,068
58,185


22,517
16,648
18,284
16,662
14,145
17,469
19,369
18,715
19,341
19,879
19,530


1a,724
13,520
14,913
14,064
11,990
15,333
17,270
16,689
16,848
16,927
16.299


3,!93
3,128
3,371
2,598
2,155
2,136
2,099
2,026
2,493
2,952
3,231


00 acres


1,000 acres


E


1,


3,404
2,965
3,029
2,524
2,109
2,078
2,057
2,004
2,453
2,925
3,170


Durum


1;000 bushels


ludhela

11.6
11.8
13.2
15.0
18.3
15.1
16.0
16.0
16.1
17.4
16.5


919,913
741,210
814,646
941,970
969,381
843,813
1,060,111
1,108,224
1,153,046
1,364,919
1,284,323

655,176
565,672
592,809
673,727
702,159
537,476
751,901
817,834
-870,725
1,067,970
981.415


69,197 9,784
52,669 10,133
53,273 8,547
55,935 6,772
49,773 3,227
51,355 4,629
59,749 6,441
65,120 4,010
67,075 4,461
74,186 3,761
71,502 6.213
Winter wheas
49,567 b 6,97
37,681 8,473
36,095 7,441
39,778 6,267
36,020 2,835
34,563 3,952
.41,125 5,696
46,989 3,426
48,350 3,845
54,780 3,288
.52,639 5,546
All sprig wheat
19,630 2,U0 70
*1A,988 1,660
17,178 1,106
16,157 505
13,753 392
16,792 677
18,624 745
18,131 584
18,725 616
19,406 473
18,863 667
Spring wheat other -than urB
16,146 2,570 -
12,023 1,497
14,149 764
13,633 431
11,644 346
14,714 619
16,567 703
16,127 562
16,272 576
16,481 446
15,693 606


10. 4
10.5+
12.1
16.1
18.9
17.5
15.9
15.5
14.6
14.9
15.5


234,735
175,538
221,837
268,243
267,222
306,337
308,210
290,390
282,321
296,949.
302.908


10.64
la.6
12.7
16.2
18.8
17.8
16.1
15.4
14.6
14.9
15.8


s-.3,uiu
143,052
189,543
227,585
225,986
272,832
278,544
257,550
246,485
252,966
256,757


10.5
10.4
9.6
15.6
19.1
15.7
14.1
16.2
14.4
14.9
14.3


39,715
32,486
32,294
40,658
41,236
33,505
29,666
32,840
35,836
43,985
46,151


2I Data far earlier years ea follore: 1919-2 in The Wheat Situation,
The Wheat Situation, Mbroh-April 1943, pagee 10 an 11.


August 1942, pegs 11-13; 1929-30 an

*. .i


'"' '
-- --


I


I E i


- -


fw .


- -- --- ---- -- -


-- --- ----- -'- '--'---- -'------;--


12.1
12.3
13.6
14.6
18.1
14.0
16.1
16.2
16.7
18.4
16.Q





-107 21 -

Table 6.- Wheat: Weighted average cash price, specified markets and dates 1947-48

:All classes: No. 2 No. 1 : lo. 2 : 1o. 2 Soft
Month :and grades : Hard : Dark : Hard : Red : White
and : six : Winter /;: N. Spring :Amber Durum: Winter : Portland
Sedate : markets. :Kansas City:Minneapolis':Minneapolis: St. Louis: 2/
:1947 41948 :1947 :1948 :1947 :1948 :1947 :1948 :1947 :1948 :1947 :1948

SMonths:
June :$2.56 $2.56 $2.37 $2.29 $2.72 $2.60 $2.38 $2.84 $2.59 4P.32 $2.28 $2.30
July :2.40 2.51 2.29 2.19 2.94 2.43 2.43 2.49 2.37 2.25 2.16 2.19

Week ended
July 3 : 2.48 2.44 2.15 2.24 2.86 2.53 2.35 2.62 --- 2.28' 2.08 2.27
10 : 2.42 2.34 2.21 2.22 2.90 2.46 2.46 2.55 2.34 2.27 2.15 2.21
17 : 2.41 2.33 2.31 2.21 2.95 2.44 2.47 2.50 2.38 2.23 2.18 2.18
24 : 2.40 2.30 2.32 2.19 3.01 2.41 2.45 2.44 2.38 2.22 2.19 2.17
31 : 2.36 2.25 2.26 2.16 2.98 2.37 2.39 2.42 2.32 2.22 2.16 2.17
Aug. 7 : 2.39 2.18 2.29 2.12 2.90 2.29 2.45 2.36 2.37 2.08 2.20 2.18
14 : 2.43 2.21 2.29 2.16 2.81 2.33 2.48 2.35 2.37 2.13 2.22 2.18
21 : 2.51 2.24 2.34 2.18 2.70 2.33 2.55 2.37 2.44 2.19 2.25 2.18
28 2.56 2.23 2.43 2.19 2.60 2.32 2.61 2.36 2.48 2.25 2.28 2.17

1/ Beginning July 9, 1947 sales of hard and dark hard winter combined.
/ Average of daily cash quotations.


Table 7.- V'heat: Average closing prices of September wheat futures,
specified markets and dates, 1947-1948

: Chicago : Kansas City : Minneapolis
Period
1947 1948 1947 1948 1947 1948


Month:
June : $2.16 $2.31 $2.08 $2.22 $2.14 $2.29
July : 229 2.30 2.20 2.21 2.31 2.27

Week ended
July 3 : 2.17 2.31 2.09 2.23 2.16 2.29
10 : 2.27 2.31 2.18 2.24 2.29 2.29
17 : 2.34 2.30 2.24 2.21 2.35. 2.27
24 : 2.36 2.29 2.26 2.21 2.38 2.27
31 : 2.29 2.28 2.21 2.19 2.32 2.23
Aug. 7 2.35 2.23 2.25 2.16 2.36. 2.18
14 : 2.37 2.23 2.26 2.17 2.37 2.20
21 : 2.44 2.21 2.34 2.16 2.42. 2.18
28 : 2.51 2.23 2.40 2.16 2.47 2.18









i;





AUGUST 1948


- 22 -


Table 8.- Wheat: Prices per bushel in three exporting countries,
Friday nearest mid-month, Jan.-Aug., and weekly, July-Aug. 19i8

: ARD A hARD HAT : HARD WHEAT : SOFT EAT
:United States : Canada :United States: United : Aus-
Date :No. I D. N.Sp.: No. 2 iPnn.:Iio. 1 D.H.W. : States : tralia
(Friday) : 13 pet. pro-'No. at Fort; 3Alveston : No. 1
:tein at Duluth: 'illiam : / :Portland: 1/
_:/_ : : : :
Dollars Dollars Dollars Dollars Dollars
Friday mid-month
Jan. 16 : 3.23 3.34 3.19 2.91 ---
Feb. 13 2.52 2.59 2.345 2.10 ---
Mnr. 12 : 2.62 2.61 2.555 2.25 3.30
Apr. 16 : .79 2.69 2.615 2.40 ---
May 14 : 2.62 2.71 2.525 2.37 ---
June 11 2.57 2.55 2.375 2.30 ---
July 16 2.40 2.17 2.33 2.18 2.89
Aug. 13 : 2.2 2.14 2.38 2.185 2.75
Weekly
July 2 2.465 2.54 2.38 2.25
9 2.43 2.50 2.37 2.21 ---
23 : 2.40 2.42 2.39 2.18
30 : 2.31 2.38 2.30 2.17
Aug. 6 2.23 2.39 P.335 2.18 --
20 : 2.26 2.40 2.355 .15 ---
27 : 2.29 .39 2.37 2.175 ---

j/ F.O.B. spot or to arrive. / Fort William quotation is in store.

Table 9.- Estimated July 1 wheat stocks in four major exporting
countries, average 1935-39 and annual 1940-46

Year United States : anadian Argentina Australia Total
S grain 1/ : grain 2/ : __ _: :
Million Million Million Million Million
bushels bushels bushels bushels bushels
1935 : 146 230 107 68 551
1936 : 141 162 74 53 430
1937 :83 53 61 52 249
1938 : 154 38 99 62 353
1939 : 251 126 264 65 706
1940 280 322 102 135 839
1941 : 385 517 201 75 1,178
1942 : 631 449 238 142 1,460
1943 : 619 630 288 200 1,737
1944 : 319 398 290 159 1,166
1945 : 279 314 175 50 818
1946 : 100 104 115 68 387
1947 3/ : 8 120 125 56 385
1948 1/ 195 100 130 110 535
Data 1922-34 in Wheat Situation, August 1945, page 24.
1,' Includes United states wheat in Canada. Includes small quantities of new
wheat prior to 1937.
2/ Includes Canadian wheat in the United States.
3/ Preliminary.





WS-107


THE. AGRICULTURAL ACT OF 1948 RELATIVE TO JHEAT

Present 90 Percent Support
Extended to 1949 Crop

The recently enacted'Agricultura? Act of 1943 (Public Law C87? of
80th Congress, 2nd Session) provides for th;e continuation of rrice
support at 90 percent of parity for the 1949 wheat crop. Undcr legis-
lation previously in effect support at that level ended with the present
crop. According to the terms of the new lrw, the program would be ava1l-
able if producers did not disapprove marketing quotas. However, as
formally annou.mced on July 15 there will be no wheat marketing quo tas or
acreage allotments for the 1?49-50 w,.ent production and mar!kting year.

The loan rate for the 19L9-crop wheat will be announced about
June 30, 1949, and will be calculated as 90 pr-rcent of parity as of that
time. This yar, the index of prices psid, interest and taxes on
June 15 was 251. Parity was $t2.22, and 90 percent was 52.u0.

Act Sets Up New Pcrnaanent Pronram
Eeginnin, in 1950

The ;Newv Aricultural Act also sets lp a permanent agricultural
program to go into effect in 195'J. The permanent program is now con-
tained in the Agricult:xral Ad.ust,.ent Act of 1938, but the new Act
supplements and modifies that Act in several important respects.

Since wleat is a "basic" coMiodity, it is subject to several
conditions for acreage allotments, quotas, and rice suponrt-. Pro-
visions under vwhch acreage allotments are to be established are not
changed from the 1933 Act.4/ Lhder that Act the national acreage allotiaer.t.
for any crop of wheat is that acreage which with average yields, will
produce a crop, which witn the estimat-d carry-over at the beginning of
the marketing ,-ear, will make availLale a supply equal to a normal year's
domestic consumption and exports plus 30 percent: A noriral year's
domestic consumption (food, feed, secd and industrial) and exports is
thie average of the 10 marl'r-ting years imrirediately preceding the rarket-
ing year in which such conum.ulolon and exports are determined, adjusted
for trends.

For 1950,. if no adjustment is made, this wou]d be about as follows:
1939-40 to 1943-.49 average domestic c- gumptionn of ?39 million bushels
plus domestic exports of 206 million .:aels 'lus 30 pr-rer.nt equals
1,360 million bushels. Assuming a car-y-over July 1, 1950 of 2'/5 million
bushels, this would leave 1,085 million bushels, wi!ch with average
1939-48 yields of 15.5 bushels per acre would indicate an acreae allot-
inent for 1950 of about 70 million acres. A carry-over July 1, 1950 as
low as 275 million bushels assumes average yields in 1949 on the goal
acreage, If the 1949 goal should be exceeded, or if above average yields
were obtained, or if disappearance were smaller the carry-over would be
larger ard the acreage allotment smaller,

4/ Act of 1948 provides for inclusion of imports in determination of total
supply.


- 23 -





AUGUST 1948


- 24 -


Conditions for proclaiming quotas are newly specified in the 1948
Act. I.iorketing quotas for heat will be proclaimed for the following
veer when the total supply for the marketing year.for which the deterrii-
nation is made is estimEted to be more than 20 percent larger than-the
normal supply, or when the 3verge price to growers in three successive
months of the preceding marketing year has been 66 percent of parity
or less, provided the .uoply is not loss than the norna3 supply. These
quotas will take effect unless disapproved by more than one-thirl o' the
rovers voting in *, referendum.

The normal supply for wheat in a given year is (1) the estimated
domesticc consumption in the preceding ma-ketinc year (food, seed, feed,
and industrial use) plus (2) estimated e::ports for the year fJr which the
normal supply is determined plus (3) an allowance for carry-over (lb per-
cent of consumption and exports). In determinir.g normal supply the
Secretsrv shall make such adjustments for current trer.I in corsur.ption
and for unusual. conditions as he may deem necessary 5/. Total supply
in a riven year is carry-over plus indicated production pius estimated
imports.


ii


In order to have the total su' 1,' in 1949 larger than the normal
supply by the 20 Derc::nt necessary fc .arkletirg quotas in 1950-51
production would have tn continue at ry nign levels. Let us assume a
normal supply of 1,236 million bushels, mrde lup of d:.mestic consumption
in 1948-49 of 750 mil-ion, ex;orts in 1949-50 or 225 million, and a
15 percent allowance for carry-over of 161 .',ilion. To be not more than
2C0 rerc-int largor than this, witn a carry-over on July 1, 1949 of possibly
275 Million bushels, the crop could not exceed about 1,200 million
buhbels .6. VJith an average yield of Ib bushels per seeded acre, it
vzould require about 80 million eares before marketing quotas could be
proclaimed. However, with yields of 17 bushes, marketing, quotas could
be proclaimed if Lhe ecrea-e for the ]',-4 croo tottle- about 71 million
acres. In other words, since the acreoge for the 1:49 crop is expected
to be belo;r P0 million rcres, no nerketing quotas are indicated for
1~,-0-51, provided yields turn out to bu only .bout average. However,.
marketing quotas could be proclaimed if growing conditions are again
favorable enough to result in yields 2 bushels abov..- average for the
1949 crop. It is assumed that the acreee would not ftll to 71 million
acres.

Ncx Farity Formula Changes
Parity Prices of Farm Products

The Agricultural Act of 1948 incl'uds a new formula for computing
parity p..rices of aea4icultural commodities which becomes offPctive after
January 1, 1950. While the ne'' formula is. not desi ncod to change the
,enorea. 1 vel of erity prices, it increases the parity price of some
commoditi s -nd ]Je ers it for o'thrs. The purpose of thu now formula
is to brinr the reletionshipc anonq p rity prices of the various farm
products more nearly in line v.ith th- re'.ation between actual prices of
th3s', products in recent years.

5, In the accompanyin. tables, n: adjustment in normal supply has been
nado for trends or unusual -onditions
6/ This implies that the 1950 or long time provisions of the Act of 1948
apply to the 1950 viheat crop. Because of the facT. that winter v.hoat is .S
seeded the fall of 1949 there may be some doubt as to whether the Act .
applies to the crop hnrv3sted in 1950. .: ;.


p





I
S
I]






WS-107 25 -

Parity prices for wheat and most of the major agricultural commod-
ities as used in all agricultural legislation in the past 15 years have
been'based on the average prices received by farmers in the base period
August 1909-July 1914. The parity price for a particular month has been
computed by multiplying the base price of the commodity by the index of
prices farmers pay for commodities they buy, including interest and taxes,
(1910-14 100) for that month. Calculated in this way, parity prices
of the various farm products change from month to month in line with
changes in the index of prices paid by farmers. The relationship between
the parity prices of the different products, however, does not change,
since it is fixed by the relation between the actual prices received for
the products in the base period August 1909-July 1914.

Over the past 30 years, however, the relationship between actual
prices received for various farm products has changed greatly. The new
formula for computing parity brings more nearly up to date the relation-
ship between prices of various commodities. Under the new formula parity
prices are computed for the individual commodities in such a way that the
relationship between the parity prices of various commodities will be the
same as the relationship between actual prices received for the commodities
in the most recent 10 years.

The method of computing the parity price of wheat using the old
formula and the new formula is illustrated below, using June 15 prices
and indexes. The parity price of wheat on June 15, as figured under the
old formula, is $2.22 per bushel. This is computed by multiplying the
average prices received by farmers for wheat in the period August 1909-
July 1914 (88.4 cents per bushel) by the June 15 index of prices paid by
'farmers, including interest and taxes (251 percent of 1910-14).

Under the new formula, the parity price of wheat for June vould
be computed so as to take into account the relationship between wheat
prices and prices of all farm commodities in the past 10 years. The
average price received by farmers for wheat from 1938 to 1947 (1.22 per
bushel) is divided by the index of prices received by farmers for all
commodities during the same 10 years (168 percent of 1910-14). This
gives an adjusted base price of 72.6 cents per bushel. The adjusted
base price is multiplied by 251, the June 15 index of prices paid, to
obtain a new parity price of $1.82 per bushel.

Illustration of method of calculating parity price of wheat as
of June 15, 1948, under both present and new parity formulas


Present Parity Formula

(1) Average price Aug. 1909-July 1914 (Dol. per bushel) ...... .884
(2) Index of prices paid, interest, and taxes,
June 15, 1948 (1910-14 100) ........................ 251.
(3) Present parity June 15, 1948 (1 X 2) (Dol. per bushel) ... 2.22


__






AUGUST 1948


- 26 -


New Parity Formula

(4) Average price January.1938-December 1947 (Dol. per bushel) 1.22
(5) Index of prices received by farmers, Jan. 1938-Doo. 1947,
(Aug. 1909-July 1914=100) ........................... 168. -
(6) Adjusted base price (4 5) (ol.. per bushel) ,,......,,. .726
(7) Index of prices paid, interest, and taxes, June 15, 1948
(1910-14=100) ...................... ................... 251.
(8) Iow parity June 15, 1948 (6 X 7) (Dol. per bushel) ..... 1.82


In the last 10 years wheat prices have been lower relative to other
farm prices than they wore in the base period August 1909-July 1914, It
is because of this difference that the parity price of wheat is reduced
from `$2.22 under the present formula to 01.82 undor the nre formula.

As further example of this modification of parity prices, the now
formula has been applied to actual price data for various commodities
as of June 15, 1948, (the month in which the wheat loan rate is de-
termined). Table 10 on the next page presents new -formula parity prices
for wheat, feed grains, and livestock products on'that date, and compares
them with parity prices as now calculated, and with prices actually re-
ceived by farmers in that month.

As shon in table 10 parity prices for wheat and other grains are
reduced by the ner formula, while for most livestock and their products
they are raised. Those changes reflect the change that has occurred in
relationships between prices of these commodities since 1910-14, for
prices of livestock generally have been comparatively higher than grains
in recent years.

The figures in table 10 are, however, only illustrative. Parity
prices in the table are based on the 10-year period 1938-47. Now parity
prices, when put into effect in January 195J, will be based on the
10-year period 1940-49, since the now formula is based on the latest
10-year period each year. For this reason, the parity prices computed
by the new formula in 1950 and subsequent years may be changed from the
relationships of June this year.

Provision for Transitional Parity
Avoids Sharp Adjustment

Transitional parity prices are provided for those commoditios for
which the new parity prices arc much below the parity under the present
formula. If in 1950 the parity price for any commodity as computed by
the new formula is moro than 5 percent less than that as computed under
the old formula, the change is to be made in transitional stops. In
this event, the effective parity price will be reduced no more than
5 percent bolow the old parity price in 1950, an additional 5 percent or
10 percent below the old parity as calculated in Juno 1951, and so on
until the old parity price has been reduced to the new parity price.





S 27 -

ysble 10.-Illustrative comparison of parity price under new formula with present
parity and with prices received by farmers as of June 15, 1948,
for selected ccnmDndities i/

i : New :Present :New parity:Prices : Prices received
: :parity :parity :as per- :received : as percentage of
Commodity : Unit :price :price :cent of :by farmers: New : Present
SJune 15,:June 15,:present :June 15, : parity : parity
,. : 1048 1948 :prty_ : 1948 : :
--- : Dol~f lars- Dola-rs Percent Dol-ars Percent Percent

at : Bu. : 1.82 2.22 2/ 82 2.11 116 95
rn : Bu. : 1.42 1.61 / 88 2.16 152 134
tB : .Bu. .821 1.00 3/ 82 1.07 130 107
ley : Bu. : 1.21 1.55 3/ 78 1.68 139 108
irain sorghum : Cwt. : 2.33 3.04 3/ 77 3.i1 146 112

: Cwt, : 18.70 18.20 103 22.90 122 126
B:eef cattle : Cwt. : 16.30 13.60 120 24.80 152 182
Yeal calves : Cwt. : 18.40 16.90 109 26.00 141 154
ISheep : Cwt. : 8.53 11.40 3/ 75 10.20 120 89
Iambs : Cwt. :17.80 14.80 120 25.00 140 169
,Wool Lb. .522 .459 114 .495 95 108

Chickens Lb. .304 .286 106 .305 100 107
rkeys : Lb. .366 .361 101 .376 103 104
SDoz. g/.4 g/.475 3/ 87 .434 106 91
ilk, wholesale : Cwt. : /3.73 23.58 104 4.61 124 129
tterfat : Lb. : / .607 2/ .605 100 .827 136 137

'This is only illustrative, since the.new parity formula will not be effective
til January 1950. However, it is likely that relationships between present and
parity will be roughly similar in 1950 to those of June 15, 1948. g/ Adjusted
Seasonal variation. 3/ In 1950, the new parity would be no lower than 95 per-
u9t of "old" parity; in 1951, 90 percent; and so on until new parity level is

To illustrate the buffer effect of this provision, if it is assumed
that the new Act became effective in 1948, when the parity price under the
; ew formula was $1.82, or 18 percent below the old parity of $2.22, tne
transitional parity price would be $2.11,instead of $1.82.

Price Support Rates A.re Tied to Supply;
.. Rates Higher When' Marketing Quotas
Are in Effect

The Act authorized the Secretary of Agriculture to support wheat prices
Through loans, purchases, payments, or other operations. The Act includes a
n.: schedule of minimum price supports with a moving floor ranging from 60 per-
a' cent of parity when the total supply is more than 130 percent of the normal
i supply up to 90 percent of parity when the total supply is less than 70 per-
l"cent of the normal. For just a "normal" supply the minimum support is
'175 percent of parity. It should be pointed out that the schedule of price
sports is a minimum level, and that the Secretary has authority to support
t rices at as high as 90 percent of parity.






AUGUST 1948


If acreage allotments or marketing quotas are in effect, the
minimum support rates for cooperators are raised by 20 percent within the
limit of 90 percent. A cooperator is defined as a producer who does not
knowingly seed an acreage in excess of his allotment. If marketing
quotas are proclaimed, but disapproved by more than one-third of the
producers voting in a referenduri, the quotas do not go irto effect, and
the support price level becomes. 50 percent of the parity price.

There is one further qualification to the new price support structure.
The Secretary is empowered to set a support higher than 90 percent of parity
for a commodity when he determines, after public hearings, that higher
supports are necessary in order to increase or maintain production in the
interest of national security.

Table 11 on the next page illustrates the calculations of actual
and normal supply and the supply percentage, Table 12 on page 30 gives
the minimum support level percentages of the new parity prices for the
various supply percentages. Table 11 also shows the computed new parities
compared with the old, Table 13 on.page 31 illustrates the application of
supply, parity and support price provisions of the new Act to historical
data. The support-price levels in table 13 are based entirely on the
parity prices as defined by the Act without regard to transitional parity
prices. minimumm support-price levels, without quotas, are given for each
year; minimum support-price levels, with quotas, are given for each year
in which the supply percentages indicate that quotas could be proclaimed.
The minimum support-price level with quotas includes the premium of 20 per-
cent of tne support price.

Miscellaneous Provisions

The Agricultural Adjustment Act of 1933 is revised to make possible
the application of fees or import quctae on any agricultural commodity
if imports jeopardize the effectiveness of price support operations.

The Cormmodity Credit Corporation (with certain sales excepted) is
directed not to sell any farm commodity owned or controlled by it at such
levels as would substantially impair the effectiveness of current price
support operations. This provision becomes effective January 1, 1950.


Beginning with the fiscal year 1950, any. excess of Section 32 funds
over current expenditures from this source may be accumulated up to a
maximum of 3'30 million dollars.

After January 1, 1950, all references in other laws to parity or
parity prices shall be deemed to refer to parity prices as determined in
accordance with the new Act.


- 28 -


' -.




Table 11.- iTheat: Total supply, normal supply, supply percentage, and parity price beginning
of season according to provisions of 1948 Act, United States, 1924-48
:Domestic :Exports :Allowance : Normal : : Parity price
Year : : Imports: con- :& ship- :for carry-:supply Z/ : Supply beginningg of season
begin-: Carry- : Produc-: (flour : Total :zu.-.ption: ments :over (15 : sun of :nercent- : ea :
n; : over : tion : in- : supply : preced-:(flour percentt of:(5), (6),:age C4) t: formula : Present
July 1: July 1 : : eluded): :ing year:incil'ded):(5) + (6) :and (7) : (8) : S. 2318 : formula
: : : 1/ : : : 2/
: (1) : (2) () (4) : (5) : ) : (7) : (8) : (9) : (10) : (11)
:Muil. bu. Mil bu. il. bu. Mil. bu.i. Hil. bu. ?!iT. bu. .111. but. 1.il. bu. Pefoen- 5 Dollars Dollars
1924 : 137 82 41/ 979 620 2-8 -- 1,010 1,7 1.-61 I.-13


1925 : 108 OC9 2 779 i13 97 106 (16 95 1.65 1.51
1926 : 97 832 4/ 909 585 209 110 913 102 1.01 !.49
1927 109 875 84/ 84 611 194 121 020 106 1.58 1.48
1928 : 113 i 1,027 678 114 123 945 109 1.54 1.13
1S29 : 227 824 T, 1,051 356 113 120 019 114 1.47 1.47
1930. : 91 7 / 1,178 C17 115 110 842 140 1.3. 1.42
1951 : 313 942 1/ 1,255 750 126 1 1 1,0 125 1.14 1.26
1032 375 756 1 1,131 733 35 118 806 140 .045 1.03
1933 : 378 552 4 930 719 28 i12 859 108 .872 1.02
1934 : 273 526 16 815 E2) 13 96 733 110 .991 1.13
1035 : 116 628 35 309 635 7 99 731 106 1.02 1.16
1936 : 140 630 34 804 661 12 101- 774 104 .9-c 1.10
1937 : 5 33 874 1 958 690 103 119 912 105 1,01 1.2_
1538 : 153 920 4/ 1,073 701 110 122 933 115 .45 1.12
1939 : 250 741 T/ 991 714 48 114 876 113 .Q4 1.-09
19-10 : 28 315 4 1,C09 663 37 105 705 137 .925 1.30
1941 : 385 942 4 1,331 676 31 106 813 16.4 .965 1.-
1942 : 631 969 1 1,601 668 35 105 808 198 1.14 1.73
1943 : 619 -44 136 1,590 048 66 152 1,166 137 1.22 1.4-3
1944 : 317 1,060 42 1,419 1,216 153 205 1,574 90 1.25 1.49
1945 : 379 1,108 2 1,389 987 34 20,7 1,588 87 1.31 1.52
19.16 : 100 1,153 1/ 1,253 095 398 194 1,487 84 1.35 1.65
lu17 : 84 1,365 --- 1,449 771 483 188 1,442 100 1.65 2.03
19486/: 195 1,284 4,' 1,479 770 45) 383 1,403 105 1.82 2.22
Compiled 'frF5 report' cCf uie. bureau of' AgiricuTltu'a c hcf, i't.', oiot u.iretiT.5 Ad:nini't rating, Bx.r au of
the Censius, & 9urn au of .oreir-n & Dome: ~ Bic Cor,,Vee.
General ',ote: These calculations 'itiiizc '.:- 'sto:-fo.l data on ro:..u=i:n and car.-v-crer. It should be inder-
stood that determinations made prior to the be.iiinning of each :.iar'.:ti-g ear vrould cf :iecessi'. be base on very
preliminary estimates and TIculd pr-obabl. have rc:ltc1 in comrerhat different ,ipply percent:. es.
1/ Imports include fill-duty wheat, heatt iml.ortei for feid, U dutiable flour in terrs of ihosat. Excludes wi-eat
imported for milling in bond & export as flour, also flour in terms orf wheat. (Footnotes continued on page 30.)





- 411 -


Table 12.- Wheat: Minimum price support levels as determined
by supply percentages


With supply percentage
: -. :


More than


: But not.mote than-


Percent Percent
0 70
70 72
72 74
74 76
76 78
78 80
80 82
82 84
84 86
86 88
88 90
90 92
92 94
94 96
96 99
98 102
102 101,
10, 106
106 108
108 110
110 11?
112 11ll
11l 116
116 118
118 120
120 122
122 124
124 126
126 128
128 130
130 ---


The minimum level of
support is not less
than the following per-
centage of the new
parity price
Percent
90
89
88
87
86
85
84
83
82
81
80
79
78
77
76
75
74
73
72
71
70
69
68
67
66
65
64
63
62
61
60


Footnotes for table 11 continued from page 29.
2/ Shipments are to Alascia, Hawaii, Puerto Rico ?rnd Virgin Islands.
Includes military exports for civilian feeding. 3/ Normal supply
does not include any adjustmiit for trends or unusual conditions.
4/ Less than 500,000 bushels. 5/ Some new wheat included, 1930-36.
Beginning 1937, only old crop wheat is shown. 6/ Preliminary.


. 4





*i4' -- 1


ile 13 -Wheat I


Illustration of the application of supply, parity and
support-price provisions of 1948 Act to historical
data,United States, 1924-48


Sfheat Support price level :Weighted
I"19- lt 8 Act. -' -- -ini4r/m : -x Mai 7z--n season
%Supply : parity RA Without mo tae i tth quotas / : average
:ar per- : begin- :As per- : Price As per- : rice : As por-: Price : per
ar entaGe: ning :centage : per : centage : per a centage: per : bushel
/ of : of a bushel : of :bushel: ,f :bushel :
season :parity 2 S// parity : parity
S(1) _(._ L (3L 4) 5 (6) (7) 1. 9)
:ProeentDollars Percent Do3lars Percent Dollars Percent Dollars Dollari


|l924


lS27
192
~929


97
95
102
106
109
114


930-z 140.
t9a1 a 125
232.: 140
,W3 : 108
S3 110
3S35S : 106
36a : 104
1 :a 105
18 : 115
, a *113

ioD .137
1 : 164
J* 198
: 137 ,.
90
87
84
; : 100
0o .'


1.61
e165
1,61
1.58
1,54
1.54
1,4c7.

1436
1.14
0.945
.872
.991
1.02
.940
1.01
.945 .
.904

.925
.965 '

1.22.
1.25

1.35
1.65
. .1,2..


y of wheat as a percentage of normal supply, table 1,col. 9 Normal supply
Si, inqude any adjustmehi for trends or unusual conditions. See general note
tr!of page 29v
.timasupport price percentage based on table 12.
SFaBeage in col'. 3"applied to perities in 1948 Act as of beginning of marketing
: Deep not..take into account transitional parity price .
aJt provides for a minimum premium of 20 percent of the support price when
tasrs tin effeamt.'
. .. c-ptovides that support price shall..not be rer.ter than 90 percent of the
i-eo muas of the beginning of the marketing season except that support prices
level may be undertaken when necessary in the national interest.
*. Ir .ovides for a minimum premium of 20 percent of the support price
i .l %snes are in effect. This is not taken into consideration in the "
i b, oause ireso doing it would necessitate adjustment in supplies ,.
U ." q % :. : ,- .,:. ;,


90
90
90
90
90
90


1.22
1.27
1.21
1.15
1.09
1.01

: 0.816
.718
-.567
.628
.704
.745
.696
.737
.643
.624

.555
.579
.684
.732
1.00
1.06
1.12
1.24
1.33


72
76
72








72
72
72
72


0.979
.866
.680








.666
.695
.821
.878


1.45
1.48
1,48
1.45
1.42
1.39
1.32

1.22
1.03
.850
.786
.892
.918
.846
.909
.850
.814

.832
.868
1.03
1.10..
1.12
1.18
1.2Z
1.48
1.864


1,25.
144
1.22
1.19
0.998
1,04

.671
.390
.382
.744
.848
.831
1.02'
.962
.562
.691

.682
.945
1.10.
1*36
1.41
1.50
1.91-
2.31
---m


90
90
90
90
90
90
90
90
90
90

90
90
90
90
90
90
90
90
90


- 31 -









MS -107-9/48- 4300
PERMIT NO. 1001


r,.


UNIVERSITY OF FLORIDA

3 1262 08862 6246


qw.t KaiIsflLL ,r
U G llImVIA m ..


-- - - -
32 -
Table 14.- Durum Wheat: Supply and distribution, United States,
1941448

Year beginning July
Item 1941 1942 ..1943 .1944 1945 1946 '1947

Mil. N-il. Mil. Mil Mil. Mil. Mil
: bu bu. bu. bu. bu. bu.
-.-._ -- .::/
SUPPLY '
Stocks, July 1
Farm :7.0 14.0 12.0 6.8 5.4 2.2 2,7 .
Interior mills and elevators: 9.3 10.4 6.0 1.1 .1.3 0.3 0.6 '.
Commercial :5.3 5.5 2.5 2.2 0.3 1.6 2.1
Merchant mills : 3.3 4.4 6.4 4.2 1.1 0.8 3
Total stocks, July 1 : 24.9 34.3 26.9 14,3 8.1 4.9 8.9
Crop : 41.4 41.8 34.3 30.3 33.3 -36.3 44A.6
Imports : '1/ / 0.8 3.1 1,2 0.4 i
Total supply :66.3 76.1 62.0 7.7 42.6 41.
DISTRIBUTION :
Food 2/ :18.8 23.0 19.0 24.4 21.1 18.8 21.9 :
Seed : 3.0 3.0 3,0 2.8 3.5 4.1 46.3
Feed, cereal mfg. & other
uses .9.1 22.3 2.3 10.8 11.9 -6.3 .2. 7.
Total domestic : 30.9 48.3 463 38.0 36.5 29.2 89.
Exports of durum 1.0 1/ / 1/ 1 0.9 8.4:'
Exports of products 3/ :0.1 0.9 1.4 1.6 1.2 2.6 26.i
Total exports : 1.1 0.9 1-4 1.6 1.2 3.5 14,&
Stocks, June 30 : 34.3 26 14.3 8.1 .
Total distribution : 66.3 76.1 62.0 47.7 .42.6. 41.6

1 Negligible.
/ Total grind less exports of semolina, macaroni, etc. Includes ailtarmI
but excludes civilian relief feeding by the military which is included. ...i
/ Semolina, macaroni, etc. in terms of durum. :


'..-.-il

: .':.: :':" .=. ... ..


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