The Demand and price situation

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Material Information

Title:
The Demand and price situation
Abbreviated Title:
Demand price situat.
Physical Description:
v. : ill. ; 27 cm.
Language:
English
Creator:
United States -- Bureau of Agricultural Economics
United States -- Agricultural Marketing Service
United States -- Dept. of Agriculture. -- Economic Research Service
Publisher:
U.S. Dept. of Agriculture, Bureau of Agricultural Economics
Place of Publication:
Washington, D.C
Frequency:
quarterly[1963-1975]
monthly[ former <1940>-1962]

Subjects

Subjects / Keywords:
Agriculture -- Economic aspects -- Periodicals -- United States   ( lcsh )
Economic conditions -- Periodicals -- United States   ( lcsh )
Genre:
serial   ( sobekcm )
statistics   ( marcgt )
federal government publication   ( marcgt )

Notes

Dates or Sequential Designation:
Began in 1937; ceased in 1975.
Numbering Peculiarities:
Began new numbering with DPS-1 (For release Jan. 24, P.M. 1955).
Issuing Body:
Issued by: Bureau of Agricultural Economics, <1940>-1953; by: Agricultural Marketing Service, Nov. 1953-Mar. 1961; by: Economic Research Service, Apr. 1961-<May 1975>
General Note:
Description based on: Apr. 1940; title from caption.
General Note:
Latest issue consulted: DPS-144 (May 1975).

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 004884312
oclc - 01768307
lccn - 63024527
issn - 0501-9133
Classification:
lcc - HD1751 .A91853
ddc - 338
System ID:
AA00012195:00001

Related Items

Preceded by:
Price situation
Succeeded by:
Farm income situation
Succeeded by:
Marketing and transportation situation
Succeeded by:
Agricultural outlook digest
Succeeded by:
Agricultural outlook (Washington, D.C. : 1975)


This item is only available as the following downloads:


Full Text



December 1958
FOR RELEASE
DE C. 2 3, P. M.



DEMAND and PRICE


SITUATION

DP S -48



MWAR 5 1959


Approved by the Outlook and Situation Board, embel, 9
SUMMARY
The flow of income to consumers increased sharply in Novem-
ber to a new high, some 3 percent higher than in November 1957.
The! settlement of the major automobile industrial disputes and a
broadening of the economic recovery have brought some increases
in employment, higher wage rates, and a longer workweek. TIhus,
the consume r demra nd for food continues strong.
Business outlays for new plant and equipment, one of the prin-
cipal sectors of weakness in the economy over the past year, are
now expected to increase in early 1959, according to the recent
survey conducted jointly by the Securities and Exchange Commis-
sion and the U. S. Department of Commnerce. This will likely fur-
ther reinforce gains in employment and incomes in the months
ahead.
Since last summer, the wholesale commodity price level has
remained fairly stable with increases in prices of industrial com-
modities offset by declines in prices of farm products and foods.



(Confinued on page 3)





Published monthly by
.. AGRICULTURAL MARKETING SERVICE
UNITED STATES DEPARTMENT OF AGRICULTURE
U.S. DEPOSITORY












:Unit or : 19Cir : 99
Item : base : Year Nov. Aug. Sept. : Oct. : N0ov.
: period :


308
293
r22
81


159
3r 500


145
3,074


DPS..48


2 -
ECONOMIC FACTORS AFFCING AGRICUII'URE


Indnetrial production: Seasonally adj.
]/
Total
All manufactures
Durable goods
Nondarable goods
Minerals


:
:
:
:

2/ :
:
:
:
:
:


:
:


:

:
:
:
:

2/ :
:
:

:
:
od :


:
:
:
:
:
:


!.947-49=1oo :
do. :
do. :
do. :
do. :


Mil. dol. :
Mil. dol. :
Mil. Bet,
Thousands :

783.. dol. :
Mil. dol. :




Millions :
do. :
do. :
Hours :
Dollars :


Bil. dol. :
Mil. dol. :
Mil. dol. :

Mil. dol. :
Mil. dol. :



1947-49=100 :
do. :
do. :


143
145
160
130
128


48, 492
14,354
17,019
1,042


28,383
14,159
3.40
1.89
2.20


65.0
58.8
2.9
39.8
2.07


347.9
44, 776
15,496

16,668
5r705
l1kT


118
126
91
106


139
141
156

123

4,137
1,220
1,472
1,009


27, 221
13,548
3.65
1.98
2.33


64.9
59.1
3.2
39.3
2.11


350.2
43 r530
15,542

16,562
5,606
1.47

118
126
92
106


136
138
144
133
120


4,707
1,554
1,708
1,228


26,388
12,385
3.55
1.8E7
2.27


65.4
58.7
4.7
39.6
2.13


356.1
43,217
14,625

16,859
5,214
1.42


119
126
93
111


137
139
145
133
122


4,751
1,579
1,732
1,220


26,804
12,723
3.42
1.84
2.20


64.6
58.4
4.1
39.9
2.14


357.8
43,238
14, 444

16,562
5,095
1.43


119
126
93
111


138
140
145
134


4,726
1,553
1,753
1,260


27,276
13,013
3.32
1.81
2.15


65.3
58.9
3.8
39.7
2.14


357.5
43,163(
14, 164

16, 941
5r374
1.39


119
126
92
110


141
143
152
135
123


1,329S
1,709
1,330


Construction:
Total outlays, seasonally
Public construction
"rivait! r-sidentiasl
Housirrng starts


adjusted 2/


Manufacturers' sales and inventories:
Total sales, seasonally adjusted
Durable goods
Unfilled orders-sales ratio ff
Inventory-sales ratio 6/
Durable goods

Employment and wlages: /U
Total civilian employmnent
Nonagriicultural
Unemployment
workvweek in manufacturing
Hourly earnings in manufacturing

Income and spending:
Personal income payments 2/ }/
Commumer credit outstanding 1/
Automobile

Total retail sales, seasonally adj.
Durable goods
Inventory-sales ratio El

Prices :
Wholesale prices, all ccamnodities k/
Canmnodities other than farm and foc
Farm products
Foods processed


64.7
59.0
3.8
39.9
2.1'7


36oo



17, 182
5r578



119
127
92
110


Consumer price index, all items h/
Food

Prices received by farmers 1/
Crops
Livestock and products
Prices paid, interest, taxes and vage
rates 8/
Family living items
Production items
Parity ratio 8/

Farm income and marketing: 8
Volume of farm marketing
Cash receipts fram farm marketings


1947-49=100
do.

1910-14=100
do.
do.

1910-14=100
do.
do.



1947-49=100
Mil. dol.


124 1;24
121 120

251 258
225 232
275 280


124
120

252 251
227 225
275T 274


122
16


223
258

298
289
260
81


S 16
:291757


131 145 178
2,862 3,286 3,9428


the years 1929 and 1939-57 appear on pace 35 of the April 1958


Annual data for mot of these items for
issue of The Denand and Price Situation.


1! Federal Reserve Board. 2/ U. S. Department of Calnmerce. 2f Seasonally adjusted annual rates.
4/ ~U. S. Depr)1tment of Labor, Bureau of Labor Statistics. }5/ Ubrilled ordered for durables divided by
monthly deliveries. 6/ Inventories, book value, end of month, divided by sales. ]/ Bureau of the
Census. 8/ U. S. Department of .griculture, Agriculturail Marketing Service.


DECSBE 1958















Approved by the Dutlook and Situation Board, December 17, 1958


Continued from cover page -

The uptrend in industrial prices has been reflected in higher prices paid by
farmers which in mid-November was at a new record high, 3 percent above a year
earlier. In recent months, prices have increased notably for motor vehicles
and farm machinery. Farm wage rates have risen as well. Prices received by
farmers, although declining in recent months, continue to average above a year
earlier. Nevertheless, with higher cost rates, the parity ratio in mid-Novem-
ber at 81 (1910-14=100) was the same as in November 1957.

Commodity Highlights

Pigs from the sharply larger fall crop will soon be coming to market in
volume and slaughter will rise above early 1958 levels. Hog prices will likely
trend downward throughout this period and by spring will be considerably below
a year earlier.


DPS-48


DECEMBER 1958


- 3-


TCHE DEMAND


AND) PRICE


SITUATI 0N


CONTENTS


Wheat .,..........................1:
Rice ..................,..........1:
Fruit ...,................,........ 20 :
Commercial. Vegetables ........... 21 :
Potatoes and Sweetpotatoes ...... 22 :
cotton .......................... 22 :
Wool ............................ 24 :
Tobacco ......................... 21C :


Summary ....................... 1
General Business Conditions ... 4
Farm Income ................... 13
Livestock and Meat ............ 13
Dairy Products ................ 14
Poultry and Eggs .............. 15
Oilseeds, Fats and Oils ....... 16
Feed .......................... 17


Heavy supplies of eggs and broilers in the next 3 months will hold
average prices for these commodities substantially below the 1958 leve~l.
output in the next 2 months may average as much as 5 to 7 percent above a
earlier. Recent hatchery operations indicate that at the end of February
supplies of broilers will be close to 20 percent above a year earlier.


E~g
year


Soybean oil prices during the 1958-59 marketing year will average
moderately lower than a year earlier. Soybean crushings are forecast at
375 million bushels, up about 20 million from last season.

It is estimated that the national average support price for the 1959
corn crop under the new program approved in the November 25 referendum will








D)PS-48


- 4-


DECEMBERt 1958


be around $1.12 to $1.15 per bushel. There will b(e no restrictions on acreage
planted beginning with the 1959 crop.

Supplies of oranges, tangerines and grapefruit available for use after
January 1, 1959 are expected to be somewhat larger than a year earlier, when
production in Florida was cut by freeze damage.

Acreage of 13 winter vegetable crops, which usually make up more than
four fifths of total winter tonnage, was estimated in early December to be
5 percent larger than last year, and yields of a number of crops are expected
to be higher. Prices received by growers for potatoes through this winter
are expected to remain substantially below those of a year earlier. The
Department of Agriculture acreage marketing guides suggest a 3 percent cut
in acreage planted to spring vegetables and a 16 percent cut in acreage of
potatoes for spring harvest.

Commercial demand for all but the lowest grades of this year's cotton
crop has been very limited. Purchases on the 14 spot markets through
December 2 totaled 4.1 million bales, 0.9 million below the comparable period~
of 1957.

By mid-December. the average price of burley tobacco since auction
markets opened November 24 was 66.8 cents per pound. h~e 1958 crop average
will probably top the 1956j record of 63.6 cents.





GENERAL BUSINESS CONDITIONS


The rapid economic recovery since last spring continues. Th gross
national product in the last quarter of 1958 probably exceeded the record
annual rate of 446 billion dollars reached in the third quarter of 1957. con-
sumer incomes, after declining a little in October because of work stoppages,
advanced in November. Retail salezi seasonally adjusted, exceeded the previous
record in the summer of 1957 as sales of new automobiles picked up. Construe-
tion outlays continued to advance in November and a recent survey of the
Departments of Commerce and Labor indicate further gains in 1959. Capital
spending by businessmen in early 1959 is likely to.be up a little from the
final quarter of 1958. Employment improved some in November but it still
continues well below a year earlier, and the seasonally adjusted rate of
unemployment in November at 5.9 percent of the civilian labor force while
below October, was still well above a year. earlier. Industrial production
rose in November spurred by rising automobile production.







DECEMBER 19358


DPs-48


- -


Consumer Incomes
and Retail Sale~s Rise

Consumer incomes in November reached an annual rate of 360 billion
dollars, up 2 billion from Octobe~r. Personal income dropped slightly between
September and October as industrial disputes in manufacturing reduced wage and
salary payments. In the past month work. stoppages have declined and wage and
salary payments at 241.5 billion dollars in Novem'ber recovered 2.5 billion from
October and exceeded Septemiber by 2.1 billion. 'The gain between October and
November reflected both higher average weekly earnings of factory) workers and
some improvement in employment. Unemployment compensation, social security
and other transfer payments in November at 26.7 declined slightly fran October,
reflecting mainly a further small decline in the amount of unemployment benefit
payments. Proprietors' dividends and interest income were unchanged between
October and November.

Retail sales in recent months have advanced along with consumer incomes.
In November retail sales totaled 17.2 billion dollars after seasonal adjust-
ment, up about 1- percent from October, 4 percent above a year earlier, and
about 52 percent above the love for the year in March. Sales of durable-goods
stores in November at 5.6 billion were up 4 percent from October. A large part
of the improvement was in automobile sales as the new models have become
available in increasing volume. In addition, there was some further improve-
ment in furniture and appliance and lumber, building and hardware sales which
in November were up 1 and 4 percent, respectively, from a year earlier. Durable
good sales, were only slightly below the level reached a year earlier.

Nondurable goods sales, seasonally adjusted, declined only a little
during the past year, and in November they totaled 11.6 billion dollars, up
6 percent from both a year earlier and the low in February. In November, based
upon unadjusted data, all the nondurable groups were the same or above a year
ago. Retail sales by service stations which continued to advance during the
last year were 8 percent above Novem'ber 1957. General merchandise store sales
which declined moderately during the recession were up 1 percent above November
1957. sales of the food, drug and apparel groups were about the samne as a
year earlier.

Construction Outlays in 195P
Expected to Reach aI New_ Hig

Outlays for new construction, after seasonal. adjustment, in N~ovemiber
continued the~ uptrend since May and totaled 4,346 million dollars, up 2 percent
from October and 4 percent above a year earlier. The biggest gains in November
were registered for private nonfarm residential dwellings and highways which
were both up about a fifth from the lacws for the year. New private housing
starts on an annual rate basis totaled 1,330,000 in November the highest since
June 1955, compared Kin.11,260,ooo in October and about a million a year earlier.









Construction outlays in 1959 are expected to total 52 billion dollas,
7 percent above the 48.8 billion dollars indicated for 1958, according to
estimates prepared by the Departments of Commrce and Labor. The physical
volume of construction put in place is anticipated to increase 3 percent over
the previous high in 1955. A 14 percent rise in public expenditure is expected
to account for a large part of the increase in total outlays. Private conr-
struction outlays, led by residential building, are expcted to be up 4 percent.



Table 1.--New construction outlays 1957r 1958 and outlook for 1959


: Value (in million of:
dollars Percent change~ren
Type of construction *97 1958 : 1959 :9'-8:985
95 Est. *Est. 975 985

Total new construction. ........,...: 48, 115 8, 800 52,300 1 7

Private construction. .............: 33,988 33,800 35 ,200 -1 4
Residential buildings (n~onfarm): 17,019 17,700 19,500 4 10
Nonresidential building:
(nontar1~m)....................: 91556 8,730 8,500 -9 -3
Industrial.................: 31557 2,460 2,080~ 31 -1
Commercial .....,.....,............: 3, 564 3,550 3,630 1/2
Other nonresidential buildings..: 2, 435 2, 720 2, 790 12 3
Farm construction................: 1,590 1,600 1,600 1 0
Public utilities ..................: 5,624 5,575 5,400 -1 -3
Other private...,.................: 199 195 200- 2 3

Public construction......,.........: 14, 127 15,ooo 1'7,1oo 6 1
Residential buildings..........,...: 506 830 1,125 64 36
Nonresidential buildings.......,... : 4, 503 4, 625 5,075 3 10
Military facilities ...............: 1,322 1, 210 1,400 -816
Highways .........,.................: 4, 971 5 r350 6j,000 8 12
Sever and water systems...........: 1, 344 1,390 1,520 3 9
Public service enterprises...,.....: 393 450 690o 15 53
Conservation and development......: 971 1,000 1,080 3 8
Other public..................~....: 117 145 210 24 45


DPs-48


- -


D]ECEB 1958


1/ Less than one-half of 1 percent.


Department of Labor and Department of Commrce.







DPs-48 7- DECEME 1958

Outlays for private residential building (nonfa~rm) are expected to rise
about 10 percent, from 17.7 billion dollars in 1958 to 19.5 billion dollars in
1959. The outlook is for approximately 1.2 million new nonfarm dwelling units
in 1959, a little more than in 1958. Also, work: will continue on an unusually
large number of units started in 1958 and sane increase in construction
costs is likely. Mortgage terms will probably be less favorable in 1L959 than
in 1958, as builders use up the relatively large volume of 1958 commitments
for moderate cost houses with. Government backed mortgages.

Other private construction is likely to decline some in 1959, primarily
because of a continued reduction in outlays for industrial construction. Com-
mercial expenditures for office buildings and warehouses will, also decline,
but expenditures for stores, restaurants, and garages will make more than off-
setting gains. The drop in office building construction reflects the comprle-
tion of many projects started during the past few years in New York City.
Expenditures for private schools, churches and related buildings are expected
to rise 3 percent aboveY the 2.7 billion dollar level. of 1958. Public utilities
will probably decrease outlays for the second successive year from 5.6 billion
dollars in 1958 to 5.4 billion dollars in 1959. Both electric power and gas
expenditures will, decline by 7 percent. After declining between 1957 and 1958,
railroad, telephone and telegraph outlayrs will likely rise 8 percent and 6 per-
cent respectively between 1958 and 1959.

Outlays of public construction of highways in 1959 are expected to rise
12 percent to 6 billion dollars. The federally financed interstate highway
system, vbich was begun under the Bigh~way Act of 1956 and accelerated by the
1958 Highway Act will account for all the increase in highway expenditures;
State and local outlays will remain near the 1958 level. spending for
publicly owned housing in 1959 are expected to rise more than a third over
1958. Spending for schools, primarily State and local, are expected to rise
to 3.0 billion, 4 percent above~ 1958. Substantial increases in spending are
expected for hospitals, Government off ice buildings and other administrative
and service buildings. Expenditures for sever and water systems will probably
increase by 13 percent and 4 percent respectively.

Capital Spnding bl:
Business Levels Out

Expenditures for new business plant and equipment in the first quarter
of 1959 are expected to be at an annual rate of 30) billion dollars, up a
little from the 30 billion rate in the final quarter of 1958, according to the
most recent survey of businessmen's intentions made between late Octdber anrd
early December by the Securities and Exchange Commission and the Department of
Commerce and released on December 10, 1958. Capital spending for 1958 is now
estimated to be about 31 billion dollars, down 17 percent from the record
level of 1957. Capital spending declined about a fifth or ~8 billion dollars
between the third quarter of 1957 and the third quarter of 1958.









Capital spending by manufacturing firm in 19r58 were down mor than a
fourt from 1~957. In the first quarter of ;1959 business plans call fo a
slight pietup in durable goods spending fran the second half of 1958, with a
little abange in the nondureab~le goods industries. Thet small increase for
durable goods during the first quarter iLs dne to increased plansR of building
material suppliers, nonpferrous mre~tal sad transportation. equipment producers.
Among nondurable goods prodnterer, the chemical industry has scheduled a higher
rate of spending in early 1959, with eamall offsetting declines for other
groups .

Tabe 2,--Exrpenditures for new plant and equipment by U~nited State~s
business for 1957-59 and by quarters for 1958-59
seasonall adjusted at annual rates

::: 195tr : 1959
Item .1957 '1958 Jan.- APr.- July- Oct.- : Jan.-
Mar. Jutne sept. : Dec. : Mar.j
: Bl. Bil, Bil. Bil. Bil. Bil. Bil.
: dol. dol. dol. dol. 401. dol. Sol.,

Manuflacturing. .......: 15.96 11.50 1L3.20 11. 53 10.86 10,79 11.06
Durable goods :
industries.......: 8.02 5.54 6. 58 5.57 5.16j 5.11 5.35
Nondurable goods:
industries.......: 7.94 5.96 6.6r2 5.96 5.70 5.68 5*71

Mining ...............: 1.24 .92 1.oo .92 .88 .91 .84
aiL/;1C)lroad.............: 1.1Co .76 1.02 .77 .63 .59 .54
Transportation other:
than rai~lr..........: 1.7 1.50 1.69 1.o1.29 1.64 1.72
Public utilities.....: 6.20 6.10 5.87 5.97 6.10 6.32 6.41
Commercial and other.: 1L0.ho 9.74 9.63 9.73 9.85 9.68 9.94

Total..............:= 36.96 30.53 32.41 30.32 29.61 29 .93 30. 51

1) Estimoates.
Note: Detail may not add to totals due to rounding.
Securities and Excchange Camaission and U. S. Department of Carmerce.

Expenditures by nonmnuaturing industries are expected to rise about a half
a billion do~lafrs between, the third quarter of 1958 and the first quarter of
1_959. Increased spending by gas utilities, airlines for Jet aircraft and
retail and construction firms of the conmmercial grounp vere largely responsible
for the pickup in spending plans. Further declines are indicated for thne
mining and railroad group.


DPS-c8


- 8 -


D~ECWBER 1958







DPS-48 9- DECBERsn 1958

A prelimnnary survey conducted by McC~raw-Hill Publishing Company re-
leased N9ovesmber 7, 1958 indicates that outlays on newt plant anld equipment in
1959 vill be approximately the same as in 19~58. These prel-12ininar pans,
based upon experience gained from previous surveys are likely to be revised
upward as final' budgets are completed. Even with the recovery in production
in recent months, anyr-n industries still have suxbstantial, excess capacity which
will tend to hold down new capital spending in 1959. A small drop is now
indicated in manufacturing industries with a counterbalancaing increase in the
nomnanufacturing sector.

A~plopermnt Rises;
Unemlo~yment Dkown
But Still &ov Year g

The rise in* employment ainee last spring has been less t~han the recovery
in3 indusftrial, production, or national output and income. Civilian employment
at (A.7 million in Novemlber declined less thanu the usual seasonal amount from
October, but it was still 220,000 below a year earlier.

Nonagrpicultural emnploymlent, which normally expands between October and
N~overmber, totaled 59 million, up slightly from October and about 100,000 below
November 1957. Manufacturing emlyent, after seasonal adljustment, Pnained
230,000 to 15.6 million, practically all in the durable goods industries, with
large gains in autos as volume production began on the new models, but there
were also gains in primary metals, etlectrical, machinery and related industries.
Changes in empxloyment in nonmanufacturing industries were largely seasonal
between October and Novermiber. hnployment in contract construction declined,
while retail trade picked up as ~workers were added to serve Christmas shoppers.

Employment on farms, which normally d~clinles during the closing months
of the year, in Novemiber totaled 6.8 million according to the Crop Reporting
Board for the week of November 23 29. This was down about a fifth fran
October but up a little from a year earlier. The index of number of family
workers, after seasonal adjustment, declined about 2 percent over the past
year and the rnmber of hired workers was up about 5 percent.

Labor market conditions improved gp~radally during the autumn, according
to the most recent survey of the U. S. Bureau of Eployment Security of the
Department of labor and affiliated State employment security agencies.
Employer hiring plamn indicate a seasonal decline early in 1959, in con-
struction and outdoor work as well as post-Christmas rednections in trade and
poet offices following the modest increase this fall. At the same time, more
than seasonal increases are likely for some important durable goods industries,
including auto, steel and farm machinery firms.

The level of unemployment has declined moderately since summer and is
still above year earlier levels. Unemployment' totaled 3.8 million in November,







DPS-48 10 DEDDINBER 1958

about the same as October and 3.2 million in November 1957 when unemployment
began to rise as a result of the recent recession. The seasonally adjusted
rate of unemployment in November declined to 5.9 percent of the civilian labor
force compared with 7.1 in October and the high for the year of 7.6 in August.
A year ago it was 4.9g percent.

Wage and salary payments in November reflected an improvement in average
weekly hours and vage rates of factory workers. Average weekly hours rose in
November to 39.9 largely as the result of the resumption of work at plants
which were strike bound in the previous month. with an increase in average
hourly earnings to $2.17, average weekly eanings of factory workers at
$86.58 were up $1.62 from october and $3.66 from a year earlier.

Mauaturers Sales and NJew Orders If:
Inventories Uncicha~e~In~cSi-igeY;

Manufacturers' sales and new orders contained to rise in October. Manu-
facturers sales totaled 27.3 billion dollars in October, up 9.3 percent from
th'e low of 24.9 billion in April, but sales were about 2.8 percent belov a
year ea~rlier. Motof the rise in sales was due to anm increase in deliveries
of new motor vehicles. lIfei orders also rose in October to 27.9 billion dolr
lara, up 3 percent from September and 16 percent from the February lows. The
rise in new orders during October was centered in durable goods industries,
particularly in the transportation equipment group (including automobiles).
New orders also increased for nonferrous metals and building maBterials but
those of the machinery indnatries decreasled. After. declinirng substantially
over the past year unfilled orders have changed little in recent months.

Inventory I~quidation
Reduced in October

The book value of manufacturing and trade inventories at the end of
October totaled 84.8 billion dollars, seasonally adjusted, down about 6 billion
from a year earlier. With an improvement in sales and some further liquidation
in inventories, the stock-sales ratio was reduced to 1.5 months in October
compared with 1.6 months a year earlier. The decline in inventories during
October was centered in retail trade which at 23.5 billion dollars while down
210 million dollars from September but only 340 million below a year ago.
Sizable declines in stocks of automobile dealers, as well as minor reductions
in most other groups more than offset moderate gains for general merchandise
stores. Most of the reductions in inventories during the past year has
been by firms manufacturing durable goods. Manufacturers' inventory book
values at the end of October totaled 49.3 billion dollars, the same as Septem-
ber and about 5 billion dollars below a year earlier. The small further decline
in durable goods industries was offset by increases in nondurable goods firms.








D)PS-48


DECEMBER 1958


- 11 -


Factory Production_ Climbs

Industrial production has recovered rapidly from the spring lows but
the index at 141l (1947-49=100) in November while u~p 12 percent from April3
was still 3 percent below August 1957. The output of durable goods which
declined the mlost over the past year, was still, below the earlier peak, but
nondlurable goods production was at a new high.

The index of durable goods production in Novemnber at 15~2 (1947-49=100),
was up 5 percent from October but down about 1F percent from a yea~r earlier.
Automobile production in November totaled about 505,000 units, nearly double
the low October output, and the highest of any month this year, but still 14
percent below November 1957. The index of consumer durable output reached
131, up 22 percent fran October, about 2 percent above a year earlier, due
mainly to the pickup in autos. Steel production which advanced from a little
less than half) of capacity in April recovered rapidly to about three quarters
of capacity in October and November. The index of primaryry metals output at
127 was up 3 percent in october, and 5 percent above a year earlier. There
were anrall increases in the output of the machinery, fabricated metal and
clay glass and lumber groups.

Nondurable goods production reached a new record in November up 1
point to 135 (19117-49n100) and 5 percent above a year earlier. Further small.
gains were recorded for the chemical, rubber, textile and petroleum industries,
while output of foods was unchanged.

Prices Stable! This Fall

Most of the general indexes which measure price changes have been
relatively stable in recent months. Prices received by farmers declined a
little between October 15 and November 15. With some increases in the index
in prices paid by farmers, including interest, taxes and farm wage rates, the~
parity ratio reached 81, th~e low-est for 1958, but the same as in Nove~mber of
the 3 preceding ye~ars. Wholesale prices in recent months have shown little
change with declines in farm product and processed food prices about off-
setting small. increases in industrial prices. At retail, prices paid by
farmers for family living items rose slightly frant October 15 to November 15,
while urban consumer prices since August have been steady.

The index of prices received 11 fParmers during the month ending
November 15 declined 1 point to 251 percent of its 1910-14 average. Meat
animal prices declined 4 points to 326, but were 18 percent above November
1-957. Average prices received for hogs, sheep and lambs were lover; cattle
prices were unchanged and calves were up a little. Lower prices for oranges
grapefruit a~nd pears more than offset increases for apples and lemons and the
fruit index declined 7 percent to 227 in November. This compared with 187 a
year earlier. Feed grain prices declined 5 percent to 145, as average prices
for corn were off 10 cents a bushel. Cotton prices averaged about 2.5 percent
lower than in October reflecting a slightly lower grade and shorter staple of
current sales. Potato prices rose 13 cents to $1.15 per owt. in Nov~ember,







DPS -48


- 12 -


DECEMBER 1958


the first increase since July. Vegetable prices climbed seasonally and the
index, at 245, was urp 17 percent from October and 5 percent above a year
earlier.

The index of prices paid for farm production items increased 1 point
to 272 (1910-14c=100) on November 15. Lower prices paid for feed, motor
supplies, and feeder lambs and pigs were more than offset by higher prices for
automobiles and feeder cattle. The mo~tor vehicle index, rose 3 percent during
the month to 434, and reached a new high. Price tags for 1959 models were
generally higher than comparable 1958 models. Prices for feed continued to
decline in November, but the index, at 195, was slighly above N~ovember 1957.
Prices paid by farmers for feeder and replacement livestock rose slightly and
at 396j were 22 percent higher than a year earlier.

Prices paid by farmers for family living items advanced to 293 (1910-
114=100) in the month ended November 15, up from 291 in the previous month as
a resulxt of higher prices for new and used? cars, clothing, food and building
materials. The index was a fraction below the all-tim peak of last May, but
about 1 percent above November 1957. Food prices on Novemiber 15 were slightly
above a month earlier and 3 percent above a year earlier. A general rise in
mo~sr food items more than offset sharply lower prices for citrus fruit anrd
the substantial declines in pork products.

Urban consumer prices in October were unchanged from the August-Septan-
ber level of 123.7 (1947-49=100), as flower food prices offset rises in most
other groups. The index in October was about 2 percent above a year ago. Food
prices, after climbing rapidly during the first 7 months of 1958, have declined
for three successive mirths to 119.7 in October. This was 1.6 percent below
Julyr but 2.8 percent above a year earlier. Mbst of -the decline between Se~ptan-
ber and October was due to lower prices for eggs, pork, poultry, and apples.
Advances in nonfood groups, particularly higher car prices and medical care
costs offset lower food prices.

The index of wholesale prices in. Noved~ber at 119.2 (1947-49=100), was
up fractiona~lly from October and about 1 percent above a yetar earl-ier. Farm
product prices declined a little over the month; the index at 92.1 vas about
the same as in November 1957. Processed food prices also averaged a little
lower in November. Industrial prices rose for the fifth successive moDnth and
the index at 126.8 was up about 1 percent from the summer low. Muachiner1y and
related products increased 1 percent between October and November reflec-ting~
higher prices for passenger cars and trucks of m~ore than 2 percent. MJetal
and hide and leather products also advanced.







DPS-48


DECEMBER 1958


- 13 -


FARM INCOME

Cash receipts from farm marketing in the first 11 months of 1958
totaled approximately 30.1 billion dollars, utp 12 percent from the correspond-
ing months of 1957. Average prices and volume of marketing were both about
6 percent above last; year. Receipts frarn livestock and products of 17.3 bil-
lion dollars were up 10 percent, due mostly to higher prices of cattle, hogs
and eggs. Crop receipts were 12.8 billion dollars, 16 percent more than in
the corresponding period of 1957, chiefly because of larger marketing. There
were noteworthy increases in receipts from wheat, cotton, soybeans, and sorghum
grain .

Farmers received about 3.5 billion dollars from marketing in November,
12 percent more than in November 1957. Prices averaged L percent higher than
a year ago, and mnarketings were up 8 percent. Receipts from livestock and
products of 1.7 billion dollars were about 6 percent above last year, with
cattle and hogs showing the largest gains. Crop receipts of about 1.8 billion
dollars were up 19 percent, mostly because of larger marketings, especially
of cotton.

LIVESTOCK AND NEAT

Livestock slaughter and meat production may average above a year ear-
lier during the next few months. Most of the gain will be in hogs. Slaughter
of fed cattle also may be up a bit, but calf slaughter will continue at a
reduced level. A somewhat larger sheep and lamb slaughter than a year ago
also is probable.

Hog slaughter is likely to be substantially above a year earlier by
spring, and will continue so through the year. Slaughter of cattle, calves,
sheep aund lambs, on the other hand, will not be much larger in 1959 than 1958.
Increases in production, stimulated by good pastures, unple forage supplies
awnd relatively favorable prices in 1958 are now underway for these classes.
However, corresponding gains in slaughter are not expected until same later
year.

Market supplies of fed cattle this winter probably will be a little
larger than last, but grass cattle slaughter will continue relatively snall.
The number of cattle and calves on feed October I in 13 major feeding States
wa~s 12 percent above a year earlier. Marketings and placements since then
indicate the number on feed January 1 will exceed last January. Some seasonal
declines in fed cattle prices appear likely during the period of heavy mnarket-
ings this winter. In recent months slaughter weights have been setting new
highs for this time of year. They may continue higSh this winter, and heavy
animals will continue to be subject to considerable price discounts.

Hog slaughter lagged behind a year earlier in much of November. How-
ever, 5-6 pound heavier average live weights held pork production relatively
close to 1957 output. Pigs from the sharply larger fall crop soon will be
corning to market in volume and slaughter will rise above early 1958 levels.







rPS-48


DECEMBER 1958


Hiog prices will likely trend downward throughout this period and by spring
will be considerably below a year earlier. The Pig Cro~p Report released by
the Departmenlt of Agricult~ure on December r23 reports the official estimate of
the fall pig erop and farrowing intentions for 1959 spring pigs.

The number of sheep and lambs on fe~ed for the winter and early spring
market is expected to exceed that of the last 3 years. As the lamb crop was
up 4 percent, slaughter during the coming months will be upr slightly. In-
creased marketing of lambs plus larger fed cattle supplies may prevent same
of the normal seasonal uptrend in lamb prices this winter.

DAIRY PRODUCTS

Production of milk has turned up seasonally. Wholesale prices for
Ameerican cheese and dry whole milki lost much of the increases of September an
early October, but butter prices have recently turned upward again after de-
clining previously. Prices to farmers currently are lower than a year earlier,
though by less than the reduction in support levels for manufacturing milk and
butterfat.

Prices to 'armers for manufacturing milk and butterfat will show little
change through at least the first quarter of 1959. IThe support level for the
marketing year beginning April 1, 1959 will, be announced sane time before that
date. The support level for this year is 75 percent of parity, the lowest
permitted by present legislation. B~ovever, prices to farmers have been moder-
ately above the announced support levels for both manufacturing m~ilk and
butterfat. The average~ prices received by farmers for all milk from April
through December 1958 was 12 cents per hundreaveight lower than a year earlier.
The average for the year as a whole will be about $4.13 for all milk, ccarpared
with $4.20 per hundredwveight in 1957.

Production of milk rose slightly above a yearl earlier in October and
November, after running lower in the preceding 5 mnonthas. For 1958 as a whle,
production will fall a little short of the record 126.4 billion pounds pro-
duced in 1957. The number of milk cows in 1959 probably will not decline as
sharply as in 1958, anrd the rate per cow probably will increase to a new record
high, giving some increase in total milk output next year.

Th quantity of milk used in factory products decreased slightly this
year. This was due to the fact that total use of fluid milk probably at least
equalled 195T7, while milk production declined slightly. Production of all
factory itensr was down fran 1957 except "other" cheese, ice crearn and nonfat
dry milk. American cheese showed a little greater percentage reduction than
butter, but in terns of milk used, butter accounted for a larger reduction..
Cheese output first dropped under 1957 in late January and butter in early
April. Cheese rose above a year earlier beginning in September, but butter
output continued lower through Novemiber.







DIPs-Lc8


DECEMBER 1958


- 15 -


Cheese consumption from commercial sources increased sharply this year,
and private stocks also rose. VMith cheese production smaller, purchases of
cheese for price support so far in the 1958-59 marketing year are down from
last year. Purchases of butter by the CCC for price support are down by about
the same amount as production. Butter and cheese purchased combined in the
first 8 months of this marketing year were equivalent to 2.3 billion pounds
of milk, fat solids basis, compared with 4.5 billion a year earlier. Purchases
of nonfat dry milk;, on the other hand, are running a little larger this year.

Marketings of milk and butterfat by farmers increased a little in 1958,
despite the downturn in production, as a result of a further decline in use of
milk on farms. But with prices averaging about 2 percent under 1957, eash
receipts from the sale of dairy products for 1958 as a whole will be down
about 1 percent from the record $4.6 billion of 195'7.

Retail prices of the principal dairy items except butter have been
equal to or above a year earlier, but with vider gross farm-to-retail margins
average prices to farmers for milk and butterfat are lower.


POULTRY AND EGGS

Heavy supplies of eggs and broilers in the first quarter of next year
will hold average prices for these two commodities substantially below the
195~8 level. Turkeys also will be more plentiful than in January-March 1958,
and prices are not likely to duplicate the rise of last March.

Egg prices to farmers dropped below last year's level in mid-October.
Since then they have fallen further under 1957. In mid-November, the nation's
farmers received an average of 38.3 cents per dozen, compared to 45.4 cents at
the same time last year. From mid-November to early December, egg prices
paid to lova producers for Grade A large eggs had declined by 8 cents to
30 cents per dozen. This compares with prices in the mid-thirties during the
first part of December 1957.

Egg production in the next 2 months will be boosted by increases in the
number of layers and by a prospective record rate of lay. Output may average
as much as 5 to 7 percent above a year earlier.

Broiler prices have remained bellow 1957 since July. In mid-November
farmers received an average of 15.9 cents per pound, slightly higher than a
month earlier, but I cent less than a year ago. In early December, "mostly"
prices in major broiler areas ranged between 14 and 15 cents per pound.

Recent hatchery operations indicate that at the end of February
supplies of broilers will be close to 20 percent above a year earlier compared
with an increase of almost 15 percent in, late December.







DPS-48


- 16 -


DECElm3BER 1958


Turkey producers received higher prices from Miarch through Octdber,
than in 1957. In mid-Novemiber, prices averaged 23.1 cents per pound, compared
with. 23.5 cents a year earlier. Part of the turkeys produced from the large
late poult hatch in 19583 will be marketed in early 1959 an will hold storage
stocks at near record levels, season of the year considered.

On January 1, 1959 the Poultry Products Inspection Act wc~ill become
fully effective, providing for the mandatory Fede~ral inspection during
processing of practically all poultry sold in interstate commerce.

OILSEEDS, FATS ANJD OILS

Prices received by farmers for 1958-crop so3;beans averaged :11.91 pe~r
bushel in October-Nove~mber, the lovest in 15 years, reflecting output we~ll, in
excess of probable total market outlets. The 1958 season average price is
estimated at $1.97 per bushel, 10 cents below last year and the~ lowest since
1943. Farmers are storing a record volume of soybeans which has prevented
prices from dropping further below the support rate of (12.09 per bushel.

The 1958-59 supply of soybeans is placed at 596 million bushels, 102
million more than last year's peak. Soybean crushings, based primarily on
projetcted requirements for soybean meal, are forecast at 375 million bushels.
This is about 20 million more than last season, and we~ll within the estimated
425 million bushel capacity of the industry. The level of soybean crush could
be affected by CCC's policy, not yet announced, with respect to the disposition
of any cottonseed oil acquired under the support program. A bean crush of
375 million bushels would produce more oil than needed for domestic use, and
a substantially larger quantity than last year would be available for export1
or carryover stocks.

Present indications are that soybeanl oil prices during the 1958-59
marketing year will average moderately lower than a year earlier. Soybean
meal prices are expected to be relatively more stable in 1958-59 than in 1957T-
58. They probably will average a little higher this fall and winter than
last, but they are not expected to advance as sharply later in the feeding
year as they did in 1957-58.

Soybean exports in 1958-59, are expected to continue the uptrend of
recent years. They are forecast at 90 million bushels, up about 4 million
from last season. If estimated seed and feed requirements are about the same
as last year, carryover stocks of soybeans on Octdber 1, 1959 would be a
record 100 million bushels, compared with 21 million this year. Nexrt summer,
CCC probably will. again be a supplier of beans and will own a subs-tatntial
part of the carryout of old crop beans next Octdber 1.







DECEMBER 1958


DPS-48


- 17 -


Cottonseed production in 1958 is placed at 4,788,000 tons, nearly
4 percent more than a year ago. The 1958 season average price is $44 per ton,
slightly above the support price of $41 per ton (CCC purchase price to pro-
ducers, basis grade, 100) but about $7 below last year. Farm prices in some
areas of the Southwest dropped below support this fall. CCC will acquire
about 183 million pounds of cottonseed oil (crude basis) through arrangements
whereby crushers took the seed at support and delivered oil to CCC on a
competitive bid basis. The volume of oil acquired by CCC under the program
is equal to about 12 percent of the estimated 1958-59 cotton oil output.
Cottonseed oil prices in 1958-59 are expected to average somewhat lower than
last year.

Lard output in 1958-59 is currently forecast at 2,700 million pounds,
up over 250 million pounds from last year. Hog slaughter will rise and a
slightly higher lard yield per hog killed is expected. Lard prices in 1958-59
probably will average a little lower than a year earlier. Exports may rise
slightly from the relatively small outward movement last year.

The 1958 peanut crop is placed at 1,865 million pounds compared with
1,436 million in 1957. The 1958 crop will provide a large surplus of peanuts
above food and farm uses and CCC will acquire the excess under the support
program. The 1958 season average price is estimated at 10.6 cents per pound
compared with 10.4 cents last year. Bigger supplies of peanuts available in
1958-59 along with relatively low prices is encouraging a continuing increase
in consumption for edible' uses. Nevertheless, diversion of CCC peanuts into
crushing and export channels will again be heavy during the 1958-59 marketing
year .

Inedible tallow and grease output in 1958-59 is forecast at 2,825 mil-
lion pounds, about 4 percent above a year earlier. The rise will reflect
mainly a prospective 9 percent increase in hog slaughter, as cattle slaughter
is expected to continue near the 1957-58 rate. Current prospects indicate
inedible tallow prices in.1958-59 may average a little lower than last year.
The strength of export demand will be an important price-making factor as
little change in domestic disappearance is expected.



FEED

Demand for feed has been comparatively strong this year. Even though
supplies are record large, prices of feed grains in early December averaged
close to those of a year ago, while high-protein feeds were about 20 percent
higher. Generally favorable returns from livestock feeding and continued good
demand for commercially prepared feeds have bolstered the demand for feed
ingredients. Also the corn and sorghum grain crops are of much better quality
than last year. This helped maintain prices even though supports are a
little lover.








DPS-48 1L8 DECEMBER 1958

Corn prices at Chicago have advanced in recent weeks as marketing by
farmers have~ been comparatively small. The price of No. 3 Yellow corn averaged
$1.19g per bushel for the week ended December 12, 13 cents higher than the
seasonal low level reached the last week in October. Corn prices at Chicago
are now near last year's level and are expected to continue at least as high
as a year ago during Januaryr and February when corn prices last year were
depressed by heavy marketing of high moisture corn. With another bumper
crop of sorghum grain, prices this fall, again dropped below thie support level
although the mid-November average of $1.63 per loo pounds was 15 percent higher
than a year earlier.

The total supply of feed grains and other concentrates for 1958-59 is
estimated at 246 million tons on the basis of the December crop report, about
12 percent larger than last year and one-third above the 1952-56 average.
Total feed grain production this year, estimated in December at 158 million tons,
exceeds the previous record of last year b~y 15 million tons. The crop is
expected to be much larger than total utilization and the carryover of feed
grains is expected to increase from 59 million tons at the beginning of the
1958-59 marketing year to a little over 75 million tons at the close of the
year. The corn supply for 1958-59 is now estimated at 5,268 million bushels
more than 400 million bushels larger than last year and more than a billion
bushels above the 5 year average. A record carryover of around 1,850 million
bushels is in prospect for next October 1. Carryover stocks of each of the~
other three feed grains also are expected to set new records in 1959.

In the November 25 referendum about 71 percent of the corn producers
in the commercial area voted in favor of the new feed gr~ain program as provided
for in the Agricultural Act of 19583. Under the new program the commercial
corn area will not be established and there will be no acreage allotments in
1959 and later years. Price supports for all producers will be based on
90 percent of the average price received by producers for the 3 preceding
calendar years, but not less than 65 percent of parity. It is estimated that
the national average support for the 1959 crop will be around $1.12 to
$1.15 per bushel.

WHEAT

Cash wheat prices on December 17 were near the high for the season to
date, with prices at Portland and Minneapolis up 9 and 13 cents, respectively,
and those at Kansas City and St. Louis around 24 cents above the lows of the
year .

On December 17, prices of No. 1 Dark Northern Spring wheat ordinary
protein, at Minneapolis, at $2.07 and No. 2 Soft Red Winter at St. Louis, at
$2.01, were about 8 cents below their effective support levels. The price of
No. 2 Hard Winter, ordinary protein, at K~ansas City, at $1.95, was 14 cents
below the effective support. Theeprices of 13 percent protein wheat at K~ansas
City and Minneapolis were about equal to or slightly below the effective
support, while the price of No. 1 Soft White at Portland, at $2.03, was
3 cents above the effective support.







DrPs-48


DECEMBER 1958


- 19 -


Prices to growers advanced each month since August when they averaged
$1.6i4. They were $1.69 in mid-Se~ptem~ber, $1.713 in mid-October and $1.74 in
mid-November. Terminal prices on Dece~iber 17 generally were about unchanged
to slightly lower than in mid-Novedfber.

Through November 30, growers had placed 412,.1 million bushels of 1958-
erop wheat under price support and purchase agreements. Previous to the 1958
erop, the largest quantity of wheat placed under support in any year was from
the 1953 crop, of which 407.7 million bushels hnad been placed under the pro-
grams by November 15, 1953 and 431-.0 million by Decabber 15, 1953.

Supplies of wheat for the marketing year which began July 1, 1958
total a record 2,352 million bushels, over 300 million bushels above the pre-
vious record in 1956-57. Total supplies include the carryover of 880 million
bushels, the crop estimated at 1,462 million.bushels and probable imports
of about 10 million bushels, mostly of feeding quality- and seed wheat.

Domestic disappearance for 1958-59 is estimated at 610 million bushels,
slightly above 1957-58. Exorts are estimated at 430 million bushels, compared
with 402 million a year earlier. The carryover July 1, 1959 is expected to
total about 1,310 million bushels, about 430 million above a year earlier. The
carryover July 1, 1958 of 880 million bushels had been reduced each yrear fran
1,036 million in 1955.

RICE

La the referendum held on December 15, producers approved rice quotas
by an 87 percent vote, according to preliminary reports. This is more than
the required two-thirds ~vote of the producers voting, so quotas will be in
effect for the 1959 crop. It is estimated that about 1.60 million acres will
be harvested in 1959. Assuming a yield of 32 cwt. (the 1955-58 average wats
31.8 owt.) on 1.6 million acres, a crop of 51.2 million awt. vould be produced.
A erop of this size added to the estimated August 1, 1959 carryover of 11.8
million ewt. and imports of 0.2 million, would make a total supply of 63.2 mil-
lion cwt.

Domestic disappearance for the 1959-60 marketing year is estimated at
26.7 million est., slightly above that for the current year. This would
require exports of more than 24.7 million evt. to reduce the carryover on
July 31, 1960. Exports of ~around 25 million evt. would be below the 27 million
owt. estimated for 1958-59 but above the 1952-56 average of 23.7 million ewt.

The price support level for 1959-crop rice was set at 75 percent of
parity on November 28. This percent is a continuation of the 75 percent level
in effect for 1958-crop rice, when. the national avieratge support price to
producers was $4.48 per owt.

A payment-in-kind export program similar in principle to ones now in
effect for wheat, feed grains and cotton was extended to rice, effective
December 15, 1958.







DPS-48


DECEMBER 1958


- 20 -


Under the new rice export program, exporters, upon proof of exportation,
will be issued a payment-in-kind certificate. The certificates will be redeem-
able in rough rice or in stocks of five grains--barley, corn~, grpain sorghum,
oats and rye--available in the Commodity Credit Corporation inventory. As in,
the other payment-in-kind programs, the certificates will be expressed in
dollar totals equal to the export payment rate times the quantity of rice
exported. With the new export program in effect for rice, the Department will.
discontinue sales of rice from. CCC stocks for export except under barter, 000
credit programs and emergency conditions.




FRUIT

Indicated production of oranges and grapefruit in 1958-59 is moderately
larger than the crops harvested in 1957-58, but somewhat smaller than the
volume in prospect before the freeze last winter. Both. fresh, market shipments
and movement to processors have been considerably smaller this fall than last,
partly because of delayed maturity of the F'lorida crops. Prices for Florida
oranges and grapefruit at shipping points an~d on the principal auctions have
continued much higher than last fall. Likewise, auction prices for California
oranges have averaged considerably above a year earlier.

Supplies of oranges, tangerines and grapefruit available for use after
January 1, 1959 are expected to be somewhat larger than a year earlier, when
production in Florida was cut by freeze damage. Although demand for both
fresh use and for processing is expected to remain strong, prices are not
likely to average above those of the first half of 1958, when they rose sharply.
Supplies of California lemons for use after January 1 may be much the same as
a year earlier. I~n early December auction prices were a little above a year
earlier.

Utilization of Florida oranges for processing by December 6 of the
1958-59 season was only about half the quantity used to the same time in
1957-58. Use of grapefruit was about two-thirds that of a year earlier. Most
of this early-season use went into the making of canned juice. Output of
canned single-strength citrus juices was less than half that of a year earlier.
With movement about equal to production and carryover stocks held by packers
about 45 percent lighter than last fall, stocks on December 1, 1958 were down
about 52 percent. A light volume of frozen orange concentrate was packed
during the third week of Novemdber to start the 1958-59 season. Stocks on
December I were 42 percent smaller than a year earlier, the lightest for several
years for that date. Output of both canned and frozen citrus juices should
increase rapidly after January 1.








DPS-48


DECEMBER 1958


- 21 -


After declining during summer and early fall to a seasonally low point
in mid-October, prices received by growers for apples, on a national average
basis, increased moderately by mid-November to a level a little above a year
earlier. Prices for most of the principal varieties at important shipping
points tended to increase further during late November, and early Dcember.

Stocks of pears in cold storage on Decedrber 1 were about 3 million
bushels, 4 percent smaller than a year earlier according to the Cold Storage
Report of U. S. D. A. During November, as sales of D'Anjou pears on the prin-
cipal auctions increased, prices declined. In contrast, prices increased for
the Bose variety, of which. the level of sales did not change greatly. Auction
prices for all winter pears combined averaged a little lower for the first two
weeks of D~ecedber than for this period in 1957.

Cold storage stocks of grapes on December 1, 1958 were 9 percent
smaller than a year earlier. This was the result mainly of retarded into-
storage movement of the Emnperor variety during early fall to await improved
coloring and of the abrupt end to this movement in mid-November because of
killing frosts. Prices for this variety at shipping points in California in-
ereased sharply after mid-November, and for the first week of December averaged
moderately higher than a year earlier.

With the bulk of the heavier 1958 crop of cranberries showing large-
sized berries and of good color, prices on the New York and Chicago wholesale
markets in early December were not greatly different from a year earlier.


COMMERCIAL VEGETABLES

For Fresh Muarket

Indications are that vegetables for fresh market will be in somewhat
larger supply this winter than last, when freezes and excessive rains took a
heavy toll of winter crops, particularly in Florida. Acreage estimates are
now available for 13 winter crops which usually make up more than four-fifths
of total winter tonnage. Reported acreage of these crops, in early December,
was 5 percent larger than. last year. Barring severe weather damage, yields of
a number of important vegetables are also expected to be higher than a year
earlier. Ths, total winter production is likely to be substantially larger
than the relatively light production of last winter. Among major itemis,
December I estimates indicate materially larger winter supplies of celery, and
moderately larger supplies of lettuce. But supplies of a number of other items,
including cabbage, sweet corn, cucumbers, green peppers, and tomatoes are also
likely to be substantially larger than the light supplies of a year earlier.
Sane items including artichokes, beets and cauliflower promise to be in smaller
supply. If the larger overall supplies materialize. prices received by farmers
will average much below the very high levels of last winter.








DECEMBER 1958


DPS-48


- 22 -


The Departmen~t of Agriculture acreage marketing guide, released in
December, suggests a 3 percent cut from last year in acreage planted to
vegetables for spring harvest. Should planted acreage be near that recommended,
average yields would result in a production about in line with that of last
spring.

For Processing

Supplies of canned vegetables available for distribution into mid-1S99
appear to be a little larger than last year, and substantially larger than the
1949-56 average. Among major items, supplies of green peas are moderately
larger than a year earlier, and indications are that tomatoes and most tomato
products are in materially heavier supply. Snap beans are probably up
somewhat. On the other hand supplies of canned corn are substantially lighter
than the heavy supplies of a year earlier, and asparagus, beets an lima beans
probably somewhat lighter. Stocks of frozen vegetables, although moderately
smaller than a year ago, are above the 1953-57 average, and for most items
appear ample. With higher processing costs for some items and generally
higher distribution costs, retail prices of most processed items in the first
half of 1959 are expected to average a little higher than a year earlier.



POTATOES AND SWEETPOTATOES

Prospects are for continued heavy supplies of potatoes through the
winter. Although the winter crop, in California and Florida, is expected to
be down 16 percent from last year, heavy supplies are available from the large
fall crop. Prices received by farmers in November averaged $1.15 per hundred-
weight compared with $1.65 in November 1957. Through December 13, about
10.1 million hundredweighlt of potatoes had been diverted to starch, flour or
livestock feed under the USDA potato diversion program. This was about
4.1 million hundredweight more than diverted to the same date last year.
Nevertheless, supplies available for regular market channels remain heavy, and
prices received by growers this winter are expected to remain below those of
a year earlier. Planting intentions reports indicate a 19 percent cut froml
1958, in acreage of early spring potatoes. The intentions report for the
important late spring crop will be released January 9.

Production of sweetpotatoes in 1958 was about the same as in 1957.
However, prices during most of the nearly part of the season have averaged a
little below those for the comparable weeks of 1957. Prices are expected
to advance seasonally this winter, but probably will average below year earlier
levels.

COTTON

The supply of cotton in the United States during the 1958-59 season
is estimated at 20.4 million bales. This is the lowest since 1952, and
2.0 million bales below the previous season. The lower total compared with







DECEMBER 1958


D>PS-48


- 23 -


last year results from a decline in the carryover of 2.6 million bales. The
1958 crop is estimated at 11.5 million running bales, .6 million above 1957.
Imports will total around 140,000 bales, about the same as last year.

Disappearance in 1958-59 is expected to total about 12% million bales,
1~ million below 1957-58. This estimate assumes that exports during 1958-59
will total around 4 million bales or 30 percent below last season. Recent
data indicate that a downward revision of this export estimate may be neces-
sary. Some rise in mill consumption--to about 8t million bales--appears likely
in view of the pick-up in general business conditions. Total disappearance is
expected to exceed the 1958 crop, and a further small decline in the carryover
appears likely unless pre-season innings are unusually large.

Innings from the 1958 crop totaled 10.2 million bales through November
30. The proportion of Middling cotton in the innings is the highest since
1948 and the grade of innings highest since 1952-53. commercial demand for
all but the lower grades has been very limited. Purchases on the 14 spot
markets through December 2 totaled 4.1 million bales, .9 million below the
comparable period of 1957. Net loan entries through December 5 totaled 3.8
million bales.

The relatively large loan entries reflected the weakness in market
prices. Prices on the 14 spot markets on December 16; reached the lowest point
of the season and the lowest since mid-November 1957. At 34.35 cents for
Middling 1" they were .40 cent below a month ago and 1.0 cent below the loan
rate at these markets. Prices received by farmers in November declined
seasonally and averaged 32.38 cents. This was .88j cent below the previous
month but 1.25 cents above a year ago.

The daily rate of mill consumption, in October was 33,335 bales. This
was the first month since May 1956 that the daily rate was higher than for
the corresponding month of the previous year. Total consumption for the first
quarter at 2.1 million bales is still slightly below August-October 1957. The
recent increase in consumption was accom-panied by a reduction in mill stocks,
which declined by 260,000 bales between August I and December 1, 1958.

Exports through October totaled 602,000 bales, nearly 48 percent below
a year ago. According to private estimates exports remained well below 1957
through the first week in December. As of December 8 CCC sales for export
during the current season totaled 1.8 million bales, about half the amount
sold by this date last year for export during 1957-58. An additional 204,000
bales were registered under the payment-in-kind export program through Decem-
ber 8. These two programs will account for virtually all cotton exported
during the current year. Such cotton will also receive additional, assistance
in the form of government financing. U. S. Government funds made available
through December 1 would finance the export of about 1.6 million bales.

Cotton growers overwhelmingly approved marketing quotas for the 1959
crops of upland an~d extra-long staple cotton. No later than January 31, the
Secretary of Agriculture will announce final price support levels for upland








DPS-48


- 24 -


DECEMBER 1958


cotton for operators planting withinr their base allotments (Choice A) an for
those choosing to plant up to 40 percent over their base alotments (Choice B).


WOOL

World demand for wool eased a little late in November, and as a result
prices of most wools abroad early in December were slightly lower tha a month
earlier. Boston quotations for most domestic wools were the same as to
slightly higher than a month earlier. Prices received by domestic growers
averaged 36;.1 cents ~per pound, grease basis, in November, 0.2 cents higher than
in October.

~Prices of som types and deniers of Daeron and Orlon were lowered
effective this month. Price reductions for those most competitive with apparel
wool range from 2 to 10 cents per pound. The reductions brought prices for
thse types and deniers to levels ranging from 24 to 38 percent lower than they
we~tre when these fibers were introduced a few years ago.

During th~e third quarter, aggregate mill use of wool (apparel and
carpet) in the 10 countries wfiich report quarterly to the Commonwealth Economic
Commifttee was down 9 percent from a year earlier. This was the sixth quarter
in a row to show a reduction. Consumnption in the Unitecd Sta~t;es was about the
same, but the total for the other 9 countries was down 14 percent. T~he decline
may have bottomed out because the seasonally adjusted rate was up slightly fromn
the second quarter.

Th average weekly rate of domestic mill use of apparel wool during
October was 16 percent above a year earlier, the first increase since December
1956;. However, due to the relatively low rate of consumption early in the
year, the total for the first 10 months was .16 percent or 34 million pounds,
scoured basis, below a year earlier. Use of carpet wool was above a year ear-
lier for the third month ia a row. Nevertheless, as for apparel wool, the
10-month total was considerably lower than last year.

During Janruary-Septemdber imports of dutiable wool for consumption. wTere
down 18 million, pounds, clean content, or 28 percent. Imports of duty-free
wool weredown 23 million pounds or 24 percent. Thse reductions reflect lower
mill use.


TOBACCO

Burley auction marketts opened N~ovemrber 24 and by m~id-D~ecemiber, the
volume marketed was 344 million pounds--averaging 66.8 cents per pound. This
exceeded the price average for the comparable period of last season by more than
4 cents; the 1958 crop average price will probably top the 1956 record of
63.6 cents. The price support level for the 1958 burley crop is 55.4 cents







DPS- 8


- 25 -


DECEMBER 1958


per pound. Deliveries for Government loans amounted to only about 2 percent
of gross sales in the first 3 weeks of the season. Burley supplies are a
little loweJr than last year due mostly to the small drop in carryovetr. TIhis
year's crop is only slightly below the 1-957 production.

The Virginlia fire-cured auction market opened on December I and through
m~id-December, prices averaged 38 cents per pound, compared with 39.2 cents in
the coamparable part of last season. M~arketingE of Ken~tucky-Tennessee fire-cured
tyes begin in January.

The dark air-cured type, Green River, markets opened the first week of
December and through mid-Detcember, the averagSe price received was 36.1 cents
per pound compared with 35.2 cents in the early part of last season. Dark
air-cured One Sucker markets began in the second week of December and early
season prices averaged 37.3 cents per pound, compared with 35.8 cents a year
earlier. The Virginia sun-cured market opened December 9 and the average price
for early season sales was 38.2 cents per pound, compared with 34.3 cents a
year earlier.

The 1958 production of fire-cured tobacco is about 8 percent below last
year's outturn, and carryover is also appreciably lower. Total fire-cured
supplies are 8 percent less than a year ago. The 1958-59 total supply of dark
air and sun-cured tobacco is about 7 percent below 1957-58.

Marketing of the 1958 crop of flu-e-ured is completed, and the overall
season average price at 57.7 cents per pound tops the previous record of 55.4
obtained last season.

The~ 1959 national flue-cured tobacco allotment has been set at practi-
cally the same level as for 1958. Farm a~llotmnents in nearly all instances will
continue the same as in the past year. Grove~rs of flue-cured voted December
15 overwhelmingly in favor of marketing quotas on their 1959, 1960 and 1961
crops.

The~ 1959 marketing quotas and acreage allotments for other kinds of
tobacco will be announced by February 1. Soon after the quota announcements,
growers of burley, Maryland, Virginia sun-cured and Pennsylvania filler will
vote in separate referendums on whether they favor quotas on the next three
crops. At least two-thirds of the grovrers voting must approve if quotas are
to be in effect. Mlark~etingS quotas will be in effect for the 1959 crops of
fire-cured, dark air-cured, Connecticut Valley binder and Ohio filler-Wisconsin
binder since grove~rs approved them in referendums held last February and in
February 1957.

Latest indications are that consumption of cigarettes and cigars
includingi cigarill~os) has continued to trend upward but use of packaged
smoking tobacco has shown signs of leveling off after rising appreciably in
the past year. Exports of unmanufactured tobacco in the first third of the
1958-59 fiscal year were 2 percent below those in the same period of 1957-58.
































The next issue of the Demand and
Price Situation is scheduled for
release on January 23, 1959


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