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:
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:
AA00012195:00006

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
P" D -' "
FOR RELEASE
#7o JAN. 25, P.M.
A 1957


DEMAND and PRICE


SITUATION --,-N
SES,3 15 195 ,
DPS-25 57

AO

Approved by the Outlook and Situation Board, January 18, 1957
SUMMARY
Farm product prices strengthened at the close of 1956 at a level
nearly 7 percent above the low point reached in December 1955. The
1 percent rise from November to December reflected record average
prices for 1956-crop burley tobacco, significantly higher prices for
some commercial vegetables, and a seasonal recovery in hog prices.
For 1956 as a whole, prices received by farmers averaged 236 per-
cent of 1910-14, the same as in 1955, despite record farm output and
large carryovers from previous years. With farm marketing in 1956
estimated at about 2 to 3 percent above 1955, cash receipts are tenta-
tively estimated to be up about the same proportion as marketing.
Consumer purchasing power rose further in the closing months of
1956. During October-December, consumers' after-tax income ap-
parently reached a record rate moderately above that of the third
quarter and possibly 5 to 6 percent above a year earlier. Industrial
output also reached a new peak in December while retail trade (sea-
sonally adjusted) remained unchanged at the record rate set in Novem-
ber, but 4 percent above a year earlier. Nonagricultural employment
rose slightly to a total of 59.4 million in December, up about 2 percent
from a year earlier; unemployment held around 2 million.

(Continued on page 3)


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I -" L
UNITED STATES DEPARTMENT OF AGRICULTURE
*AGRICULTURAL MARKETING SERVICE

S U S OEP'..TCRY






JANUARY 1957


BCOr;OMIC FACTORS AFFECTING AGRICULTURE


: Unit or : 1955 1956
Item base Year Dec. Sept. Oct. Nov. Dec.
-_*: ri *


Industrial production: seasonally adj. 1
Total
All manufactures
Durable goods
Nondurable goods
Minerals

Construction:
Total outlays, seasonally adjusted 2
Private residential
rHousing starts 3/ 4/
Construction contracts awarded _5/

Manufacturers' sales and inventories:
Total sales, seasonally adjusted
Durable goods
Unfilled orders-sales ratio 6
Inventory-sales ratio 7/
Durable goods

Employment and wages:
Total civilian employment
nonagricultural
Unemployment
Workweek in manufacturing
Hourly earnings in manufacturing

Income and spending:
Personal income payments 2/ 3/
Consumer credit outstanding 1/
Automobile

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

Prices:
Wholesale prices, all camnodities k/
Commodities other than farm and food
Farm products
Foods processed

Consumer price index, all items 4/
Food

Prices received by farmers 9/
Crops
Livestock and products
Prices paid, interest, taxes and wage
rates 9/
Family living items
Production items
Parity ratio 2/


:19'7-49=100:
do.
: do.
do.
do.


: 1til. dol.
: Mil. dol.
: Thousands :
: Mil. dol.


:Mil. dol.
: Mil.. dol.












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

: Mil. dol.
: Mil. dol.



:1947-49=100:


: do. 117
: do. : 90
: do. : 102


:1947-49=100:
S do.

:1910-14=100:
do.
S do.

:1910-14=100:
S do.
S do.


139
140
155
126
122


42,991
16,595
1,329
23,745


26,415
13,164
3.60
1.67
1.88


63.2
56.5
2.7
40.7
1.88


306.1
38,648
13,468

15,457
5,582
1.91


111


144
146
161
130
129


3,580
1,322
1,192
1,921


27,289
13,688
3.81
1.68
1.92


64.2
58.3
2.4
41.3
1.93


317.5
38,648
13,468

15,795
5,677
1.98


111
120
83
98


114 115 117
111 110 113

236 222 236
237 226 234
236 219 238


Farm income and marketing: :
Volume of farm marketing :1947-49=100:
Cash receipts from farm marketing : Mil. dol. :
Annual data for most of these items for the years 1929,
April 1956 issue of The Demand and Price Situation.


114
2,458
1932 and


132
2,772
1939-55


144
3,148
appear


177 157
3,927 3,306
on page 39 of the


1/ Federal Reserve Board. Z/ U. S. Department of Commerce. 3/ Seasonally adjusted annual rates.
4 U. S. Department of Labor, Bureau of Labor Statistics. 5/ Data for 37 Eastern States, compiled by the
Department of Commerce from reports of the F. W. Dodge Corporation. 6/ Unfilled orders for durables
divided by monthly deliveries. J/ Inventories, book value, end of month, divided by sales. 8/ Bureau
of the Census. 2/ U. S. Department of Agriculture, Agriculture Marketing Service .


146
147
165
129
130


3,699
1,239
1,060
1,689


28,8o8
14,446
4.09
1.78
2.07


145
147
164
129
128


3,701
1,286
1,008
2,025


27,624
13,692
4.35
1.81
2.10


66.1
58.7
2.0
40.7
2.00


329.5
40,074
14,533

16,018
5,356
1.92


116
123
90
104


1h7
148
166
131
130


3,729
1,239
1,030
1,576


146
147
164
130
129


3,665
1,241
1,050
1,706


28,294
14,199
4.14
1.80
2.07


66.2
59.0
1.9
40.7
2.02


332.5
40,196
14,478

16,050
5,490
1.84


116
124
88
104


65.3
59.1
2.5
40.6
2.03


118
113

234
232
236

287
279
250
82


333.6
40,631
14,449

16,358
5,664
1.84


116
124
88
104

118
113

234
239
230

289
281
252
81


237
240
234

289
282
251
82


J


64.6
59.4
2.5
41.0
2.05






JANUARY 1957


THE DEMAND AND PRICE SITUATI N

Approved by the Outlook and Situation Board, January 18, 1957


CONTENTS


Summary ........................
General Economic Conditions ....
Agricultural Developments in
1956 .........................
Recent Developments Under the
Soil Bank ....................
Our Best Foreign Markets in
1955-56 ......................
Livestock and Meat ............
Dairy Products ..................
Poultry and Eggs ...............


age Page

1 Fats and Oils ................. 17
5 Feed .............. ............. 1 :
Wheat .......................... 19 :
8 Rice .... ............... ....... 20 :
Fruit ...... .................... 20 :
12 Commercial Vegetables .......... 21 :
Potatoes and Sweetpotatoes ..... 22 :
13 Dry Beans and Peas ............. 22
15 Cotton ......................... 23
16 Wool ........................... 24
17 Tobacco ........................ 25


Continued from cover page -

Business spending on new investment, a major contributor to the econ-
omic expansion of the past two years, may tend to level off in 1957. This
prospect results in part from the completion of past programs and the result-
ing growth of productive capacity in many industries. In addition, some
companies are reported to be taking more time to carry out investment programs
than originally planned, because of tight credit and shortages of certain
materials. However, even if investment levels off at current rates, capital
outlays this year would top last year's record and would give strong support
to economic activity in 1957.

While business investment spending may tend to level off in 1957,
current prospects indicate a sizable increase in Government spending. The
President's Budget, submitted to Congress on January 16, outlines proposed
expenditures of 71.8 billion dollars, compared with 68.9 billion now esti-
mated for the current fiscal year. Nondefense expenditures will show some
gain, reflecting proposed increases for school construction, agriculture and
other domestic programs. However, the bulk of the increase will again come
in national security expenditures, where a rise of 2.3 billion dollars, to
43.6 billion was requested for 1957-58. Spending by State and local govern-
ments in the last few years has been increasing at a rate of almost 9 percent
a year and is likely to continue upward at least as fast in the next year or
two. The new highway program and expanding needs for schools and other
facilities may speed the uptrend.


- 3 -






JANUARY 1957


Commodity Higights

Hog prices rose in December and early January as slaughter decreased
because fewer pigs were farrowed late last spring. Prices of fed steers are
expected to level out following their late fall decline.

Per capital consumption of dairy products increased about 1 percent in
1956; prices averaged 3 percent higher. Little change in consumption per
person is likely in 1957.

g prices in mid-December were near the low for the year, and about a
fifth below a year earlier. Prospective laying flock replacements and the
uptrend in rate of lay indicate continued large output in 1957.

Strong domestic and export demand for soybeans and oil have been
instrumental in raising prices above support; large supplies will tend to
limit further increases.

The seasonal rise in feed grain prices during the next few months will
probably not be as large as the sharp rise that occurred in the first half of
1956.

Winter wheat seedings in the fall of 1956 fell to 36.8 million acres,
the smallest since 1913. With normal growing conditions, this would result in
a 1957 crop some 15 percent smaller than last year.

A sharp increase in rice exports in 1956-57 is expected to reduce the
record carryover of 34.6 million cwt. (rough basis) on last August 1 by about
half.

In early January, grower prices for Florida oranges averaged a little
under a year earlier with supplies somewhat larger. However, supplies of
grapefruit were smaller and prices higher.

Supplies of vegetables for fresh market sale are expected to be about
7 percent smaller this winter than last, but about in line with the 1949-55
average; prices should continue substantially above last year.

With large supplies of old crop potatoes and a prospective 44 percent
increase from last year in production for the relatively small winter harvest,
prices are expected to remain relatively low through the winter.

Cotton exports since last August total 3.1 million bales compared with
2.2 million bales for the entire 1955-56 marketing year. For the entire
1956-57 marketing year exports may total 6- million bales.


-4-






JANUARY 1957


With a strong world demand for wool, Boston quotations for most de-
scriptions early in January reached their highest levels in over two years.

Grower prices for 1956 crop burley tobacco averaged the highest in
history, because of a strong demand for certain grades.

GENERAL ECONOMIC CONDITIONS

Most indicators of economic activity registered further gains in
December from the advanced levels of November. Christmas trade of retail
stores picked up in mid-December after a slow start and bettered the total
for last December by 4 percent. However, sales of certain consumer durable
goods evidently fell short of producers' expectations. Television sets in
particular were weak and smaller output has been scheduled for January.

Total industrial production advanced one point in December to 147 per-
cent of the 1947-49 average, another new record, as the automobile industry
moved into volume production and steel output held near the record rate of the
past several months. Machinery output eased a little, but leather, paper and
chemicals registered gains. Petroleum output also increased in December in
response to expanded European needs, and continued upward to a new high in
early January. December employment totaled 64,550,000, a record for the month
but down seasonally from November mainly because of cutbacks in agriculture
and construction.

Consumer income payments, a good general indicator of domestic demand
for farm products, continued to rise in the closing months of 1956. Before-tax
income, seasonally adjusted, reached a record 334 billion dollars in November.
In December, when employment showed only a seasonal decline, both the average
workweek and hourly earnings in manufacturing increased. Dividend payments in
December, though not up to last year's heavy year-end distribution, were the
second largest on record for the month.

The automobile industry assembled close to 600,000 new cars in
December, a slight rise from the November output of about 580,000. Dealers'
sales showed a moderate increase from the November total of around 485,000.
With sales well below production, dealers' inventories increased substantially,
to about 540,000 units by January 1. Nevertheless, stocks are still 200,000
below the number of unsold cars in dealers' lots at the beginning of 1956.
Although new car sales showed only a small increase in December, industry
reports indicate that passenger car output for all of 1957 will probably total
6.5 million units, compared with 5.8 million last year and 7.9 million in
1955.

In the latter half of December, steel production eased down below
100 percent of capacity for the first time in 4 months. The decline, however,
reflected holiday cutbacks rather than any softening in demand. Steel re-
quirements for new highways and bridges, oil tankers, automobiles, railroad
freight cars, oil wells, pipelines, and industrial and public utility con-
struction should maintain a high rate of activity well into 1957. During


- 5 -






JANUARY 1957


1956, about 5 million additional tons of steel-making capacity came into
operation, as part of a 15 million-ton expansion program started several years
ago. On January 1, the annual capacity of the Nation's steel mills was rated
at 133.5 million tons. Steel output in the opening weeks of 1957 was around
98 percent of this capacity, and the weekly tonnage of raw steel produced was
about the same as in early December.

Business spending for new plant and equipment, a najor factor in the
economic expansion of the past two years, may increase more slowly in 1957
than in 1956. A joint Commerce Department-Securities and Exchange Camission
survey of businessmen' investment intentions, taken early in November,
indicates that spending in the first quarter will reach an annual rate of
38 billion dollars. This would be less than 2 percent cbove the fourth
quarter of 1956, compared with average quarterly increase of more than 5 per-
cent over the past 2 years. A similar survey by the McGraw-Hill Company
points to a rise of 11 percent for 1957 as a whole fran the average for 1956.
With prices higher, only about half the rise will represent an increase in
real investment. As the rate of spending on new plant and equipment in early
1957 is already running some 7 to 9 percent above the 1956 average, little
further increase is implied for the rest of the year. Public utilities,
petroleum refineries, and producers of metals, aircraft, ships and railroad
equipment plan to increase investment spending substantially in 1957, but the
automobile and textile industries plan to spend less than in 1956.

A recent report of the Securities and Exchange Conmission suggests that
tight credit may be limiting the ability of corporate business to carry out
investment programs. The liquidity position of corporations, as measured by
the ratio of cash plus Government securities to current liabilities, has de-
clined steadily since mid-1955. By the end of last September, it was down to
the level of the early 1940's. During this same period, the cost of borrowing
money has risen, in line with the Federal Reserve policy of restricting growth
in the money supply. New issues of corporate securities in early January
carried yields averaging about 1 percent above those on similarly-rated
securities a year earlier. These factors, coupled with rising costs, de-
clining profits (third quarter corporate profits were down 5 percent from a
year earlier), and continued short supplies of materials are causing some
firms to stretch out their investment programs. However, the McGraw-Hill
survey mentioned above reports that few companies are abandoning investment
expansion programs as a result of these problems.


- 6 -






JANUARY 1957


The Federal Government is likely to increase its rate of spending in
the next year or two. The President's Budget for fiscal year 1957-58, sub-
mitted to Congress on January 16, recommends an increase in Federal spending
of almost 3 billion dollars, to 71.8 billion. Two billion dollars of the
increase represents additional military expenditures. For agricultural
programs, including drought relief, the President requested an increase of
178 million dollars to 5.3 billion in 1957-58. Proposed aid to school con-
struction, anticipated higher outlays for atomic energy, and additional
foreign aid are among other factors in the increase. Existing tax rates are
expected to produce about 3 billion dollars more revenue in 1957-58, so that
a budget surplus of 1.8 billion dollars is anticipated. This is slightly
greater than the surplus in prospect for the fiscal year ending next June 30.



Table 1.- Federal Budget receipts and expenditures,
fiscal years 1955-56 to 1957-58
.-
Item 1955-56 : 1956-57 : 1957-58
: actual : estimate : estimate

: Billion Billion Billion
s dollars dollars dollars

Budget Receipts:
Individual income taxes : 35.3 38.5 41.0
Corporate income taxes : 21.3 21.4 22.0
All other, net : 11.5 10.7 10.6

Net Budget Receipts : 68.2 70.6 73.6

Budget Expenditures: I
Major national security : 40.8 I1.3 43.6
All other, net : 25.7 27.6 28.2

Net Budget Expenditures : 66.5 68.9 71.8

Budget surplus 1 1.6 1.7 1.8
3


Detail may not add to total due to rounding.


- 7 -






JANUARY 1957 -8 -

The rise in prices continued in December, but increases on the average
were relatively small. Wholesale prices, as measured by the Bureau of Labor
Statistics, moved up a fraction of a point to 116.2 (1947-49-100), mainly
because of seasonally rising hog prices and higher quotations for anthracite
coal and most types of petroleum fuels. The Index of Prices Paid by Farmers
for Family Living as reported by the Agricultural Marketing Service rose 1
point in the month ending in mid-December to 282 percent of the 1910-14
average. In November, the BLS index of urban consumer prices edged up to
117.8 (197-49-100), another record. Upward pressures on prices continue,
and new increases have been announced in several important areas. During
December, freight rates were increased by 5 to 7 percent and petitions to ICC
for an additional 15 percent increase are now pending. A new round of
increases in steel prices began early in January. Prices of crude oil also
were increased in January in response to heavy demand and rising costs of
production.

The seasonal rise in prices of a number of important farm products
continued in the latter half of December and early January. Hogs (barrows
and gilts, at Chicago) moved slightly higher during this period. Potatoes
(Long Island Chippewas) advanced about a tenth. However, central market
prices for eggs in early January averaged below early December. Most grains
moved slightly higher during the period, but corn (No. 3 Yellow, at Chicago)
showed a small decline.


AGRICULTURAL DEVELOPMENTS IN 1956

The year 1956 started with prices of farm products at their lowest
level in about a decade. Carryover stocks of most crops were large as a
result of five years of heavy and steadily increasing production. Farm out-
put increased again in 1956 to a new record despite drought in some areas and
some reduction in acreage of crops as a result of the new Soil Bank program.
Nevertheless, farm prices showed some recovery during the year and since
June they have averaged consistently higher than a year earlier. In addition
to the bolstering effects of an expanding domestic and foreign market, higher
farm product prices reflected the continued operations of price support and
related programs, smaller marketing of hogs, and abnormal growing conditions
for many vegetables. Farmers' realized net incomes also increased in 1956
after four successive years of decline, and continued improvement is likely
for 1957.

Record Crop and Livestock
Output in 19T6

Increased output of livestock products accounted for the gain in farm
output in 1956. Production of all livestock and products reached a record
23 percent above the 1947-49 average. Output of poultry and eggs increased
9 percent in 1956, pressing prices further below the low levels already






JANUARY 1957


prevailing. Output of dairy products also increased, as did production of
meat animals except hogs. Crop output, at 106 percent of the 1947-49 average,
equaled the record of 1955 and 1948, even though acreage harvested was the
smallest in 20 years. Yields per acre averaged 23 percent higher than in
1947-49 and 3 percent better than the previous record set in 1955, despite
large areas of drought in the Southwest and only moderately favorable growing
conditions in some other areas.


Table 2.- Farm production: Index numbers of total output,
livestock and crops 1951-56

(197-49-100)

Item : 1951 : 1952 : 1953 : 1956 : 1955 : 1956 1/


Farm Output: : 103 107 108 108 113 114

All livestock and
products : 111 112 14 117 121 123

All crops : 99 103 103 101 106 106

Y Preliminary.


Record farm output in 1956 in the face of poor growing conditions in
some parts of the country as well as Government programs to curtail production
results from a rising productivity trend in American agriculture. Since 1940
farm output has increased about a third while acreage of cropland harvested
has shown a small decline and the number of farm workers has declined by
about one-fourth. Improved management, increased mechanization, more inten-
sive use of fertilizer, improved seeds, and better breeds of livestock have
contributed to an output per manhour almost double that of 1940.

Demand Conditions
Strong

While farm output and supplies of agricultural products were large in
1956, demand conditions at home and abroad were favorable. Consumer dis-
posable income set a new record in each quarter of 1956 and for the year as
a whole apparently averaged nearly 6 percent higher than in 1955. A similar
increase occurred in consumer spending on food, but much of the gain was
absorbed in higher marketing charges. Among nonfood farm products, consump-
tion of wool increased in 1956 and prices averaged higher, but domestic
consumption of cotton and leaf tobacco were off slightly. Exports of cotton
were large enough to more than offset the reduction in domestic use.


- 9 -






JANUARY 1957


Exports of all farm products, on the basis of data for the first 11
months, seem likely to set a new record in calendar 1956 both in value and in
volume. The increase over 1955 partly reflects more vigorous Government act-
ion to stimulate exports--especially sales for foreign currency under Public
Law 480. Generally prosperous economic conditions abroad and reduced foreign
supplies of certain commodities were also important contributors to the strong
export demand in 1956. A significant development during 1956 was the sharp
recovery of cotton exports after August 1, when the CCC began shipping cotton
sold to foreign purchasers at competitive prices. Important also was the
strong market for rice that resulted from the elimination of surplus stocks
in foreign exporting countries. The CCC was able to obtain commitments for
domestic sale or export of practically all of its large inventory of rice
accumulated over the preceding several years. Foreign demand for food fats
was also strong during 1956 and is likely to continue so in 1957.

Farm Product
Prices in 1956

Prices received by farmers in 1956 averaged 236 .(1910-14=100), the
same as a year earlier, despite record production and large carryover stocks.
Crop prices were about 2 percent higher than in 1955, but livestock products
averaged lower.

Grower prices edged up slowly in the winter and spring months of 1956.
The strengthening was due primarily to seasonally rising prices for meat
animals and to sharply higher prices for fruit, potatoes and several commer-
cial vegetables, the latter affected by poor growing conditions; higher prices
for feed grains and oil-bearing crops reflected operation of price support
programs and a strong export market. Even though prices of poultry and eggs
weakened during the winter and spring under pressure of heavy supplies, the
index of prices received by farmers in mid-1956 was U1 percent above the low
of 222 in December 1955.

During the last half of 1956 farm product prices trended downward un-
der the impact of seasonally heavy marketing. However, prices of dairy pro-
ducts and some important commercial vegetables, rising seasonally, resulted
in some recovery in the index at year-end. Potato prices rose to a peak in
July, but heavy summer production caused a drop of almost two-thirds by Octo-
ber. Most grain prices were firm during summer and fall; CCC price support
operations and, in the case of wheat, the new policy of filling export needs
largely from free market supplies rather than from CCC stocks were largely
responsible. Meat animal prices, the main cause of the precipitous decline
in average farm product prices late in 1955, showed only a moderate seasonal
decline in the fall of 1956 and by mid-December had regained much of this
loss. Prices of poultry and eggs continued to weaken in the last half and
finished the year a fifth below December 1955.


- 10 -






JANUARY 1957


Table 3.- Indexes of prices received and prices paid by farmers, 1955,
1956, and by quarters for 1956
(1910-14=100)
: : 1956
Item : 1955 : Jan.- : Apr.- : July- : Oct.- : Year
: : March : June : Sept. : Dec. :

Prices received by farmers
All farm products :236 227 241 239 235 236
Crops 237 233 253 243 237 242
Food grains 228 221 224 219 230 224
Feed grains and hay 187 173 190 196 182 185
Feed grains :189 172 195 203 182 188
Cotton : 272 263 273 271 267 268
Tobacco :437 452 453 453 452 453
Oil-bearing crops : 250 240 259 244 258 250
Fruit 212 216 239 223 222 225
Commercial vegetables / : 233 257 281 231 248 254
Potatoes, etc. / : 186 177 285 250 151 216
Livestock and products : 236 221 231 236 233 230
Meat animals 249 214 247 253 238 238
Dairy products :252 256 247 258 275 259
Poultry and eggs 188 193 176 172 165 177
Wool 250 223 229 232 248 233
Prices paid, interest, taxes
and wages 281 281 285 287 288 286
Family living items :273 273 277 281 281 278
Production items 249 246 249 250 251 249

Parity ratio 84 81 85 83 82 83


1/ For fresh market.
/ Includes sweetpotatoes and dry edible beans.


The 7 percent improvement in farm product prices from December 1955 to
the end of 1956 exceeded the 4 percent rise in prices paid by farmers. Nearly
all family living items increased. Feed prices, interest, property taxes,
and wages of hired labor also were higher at the close of the year than at the
start. However, with a more rapid rise in prices received, the ratio of the
index of prices received to prices paid (the parity ratio) increased from its
low of 80 in December 1955 to 82 by December 1956. For the year as a whole
this ratio averaged 83, or 1 point lower than the 1955 average.






JANUARY 1957


Cash Receipts, Net Income
Increase in 1956

With a tentative estimate of 2.7 billion dollars for December, cash
receipts from farm marketing in 1956 are estimated on a preliminary basis at
about 30.0 billion dollars, or 3 percent above 1955. The increase was due to
larger marketing. In addition, farmers received more than I billion dollars
in Government payments, about half under the new Soil Bank program. Farm
production expenses were also up slightly in 1956, but not enough to offset
the rise in cash receipts and Government payments. Consequently, operators'
realized net income from farming increased in 1956 for the first time since
1951. Revised estimates will be published in the March issue of the Farm
Income Situation.

RECENT DEVELOPMENTS UNDER THE SOIL BANK

Considerable acreage of crops was placed in the Acreage Reserve Program
in 1956. This part of the Soil Bank Program, designed to reduce surpluses of
the basis commodities--wheat, corn, cotton, peanuts, rice and tobacco--got off
to a late start in 1956 but larger scale operation is scheduled for 1957. The
following approximate allocation of the 750 million dollars authorized by law
for the Acreage Reserve has been announced for 1957 crops: upland cotton and
corn, each 217- million dollars; wheat, 267 million; tobacco, 34 million;
and rice, 14 million. Accompanying acreage goals are 12 to 15 million acres
for wheat, 3 to 4- million for upland cotton, 42 to 5 million for corn,
and around one-third of a million for rice and tobacco combined. Farmers
have already signed up for more than 10 million acres of winter wheat in the
1957 program. Acreage Reserve agreements can be signed through March 1 for
upland cotton and tobacco and March 8 for corn, spring wheat, and rice. There
will be no Acreage Reserve Program for peanuts and extra long staple cotton
in 1957.

As a result of the December 11 referendum of corn producers in the
commercial area, the corn acreage allotment program and mandatory price sup-
ports remain in effect. Acreage allotments for the 1957 commercial area total
37.3 million compared with 57 to 59 million acres planted in this area in
recent years. Concern has been expressed by the Secretary of Agriculture and
members of Congress regarding the likelihood of excessive corn production, low
prices, undue stimulation of livestock production and inadequate Soil Bank
participation for corn in 1957. legislation to rectify this situation is
being discussed.

A national goal of 20 million acres has been announced for the Con-
servation Reserve Program for 1957. The sign up for the program last year
totaled around 1- million acres. This part of the Soil Bank program was
designed to divert crop land to soil conserving uses.


- 12 -






JANUARY 1957


OUR BEST FOREIGN MARKETS IN 1955-56

Ten countries received nearly 70 percent of total U. S. farm exports
of 3i billion dollars in 1955-56. The five countries that have for several
years topped the list--the United Kingdom, Japan, Western Germany, Canada and
the Netherlands--again provided the largest foreign outlets for the U. S.
farmer. Each of them took over 250 million dollars worth of our farm com-
modities, and together they purchased around 40 percent of our total agricul-
tural exports. Exports valued at 100 million dollars or more went to Belgium,
Spain, Italy, Cuba and Yugoslavia.

Nearly 40 percent of U. S. agricultural exports in 1955-56 represented
non-dollar transactions: donations, sales for foreign currencies and barter.
The remaiining 60 percent were sold for dollars. Of the two dozen countries
towhichwe exported farm commodities valued at 40 million dollars or more,
12 may be regarded as primarily dollar markets, paying dollars for most or
all of their purchases of farm products from the United States. Exports to
these countries totaled more than 2 billion dollars (or 59 percent of total
farm exports) and dollar payment was received for over three-quarters of this
amount. Three of these countries--Canada, Cuba and Venezuela--were 100 per-
cent dollar markets.

The other 12 countries were primarily "program" markets. Each re-
ceived most or all of their purchases under special programs. Aggregate
exports to these countries amounted to 802 million dollars (or 23 percent of
total farm exports); over 85 percent of this amount actually represented sales
for foreign currency, barter, and donations.

Exports to all other countries totaled 619 million dollars or about
18 percent of total exports. While the extent of Government financing for
each of these countries has not been calculated, 70 percent of the aggregate
exports to these countries is estimated to have been for dollars. Included
are certain countries in Latin America and Oceania to which all sales were for
dollars, and others such as Turkey and Vietnam to which all exports were under
programs.


- 13 -






JANUARY 1957 14 -

Table 4.- United States agricultural exports to specified
countries, 1955-56 1/


Country Total exports

Million dollars

12 Leading dollar markets 2/

United Kingdom 305
Japan 372
Western Germany 275
Canada 257
Netherlands 251
Belgium 134
Cuba 113
Venezuela 73
Mexico 64
Philippines 55
Denmark 43
Switzerland 40

Total : 2,072

12 Leading "program" markets 3j

Spain 126
Italy 111
Yugoslavia 100
France 84
Egypt 55
Greece 55
Formosa 52
Korea :49
Pakistan 48
Israel : 41
India 40
Brazil 40

Total 802

All other countries : -619

All countries 3,493


~ Countries to which exports exceed $40 million.
/ At least 65 percent of total exports paid in dollars.
SAt least 72 percent of total under special programs.






JANUARY 1957


- 15 -


LIVESTOCK AND MEAT

Hog slaughter is decreasing while cattle slaughter stays near a record
high, after a year or more when both were exceptionally large. Hog prices
have improved but cattle prices remain closer to those of a year ago.

At the beginning of 1957, hog slaughter was substantially less than a
year earlier. It will continue smaller this winter than last, because fewer
late pigs last spring reduced the year-end inventory of hogs nearing slaught-
er weight. Moreover, hog slaughter during most or all of 1957 will remain
below 1956, since the 1956 fall pig crop was down 4 percent and producers
planned December 1 to reduce the spring pig crop 2 percent.

Prices of hogs, which had advanced $2.50 per 100 pounds by mid-January
from their mid-November low, may strengthen somewhat further this winter. A
downturn is probable in late winter or early spring when marketing from the
fall pig crop are largest; however, a new seasonal upturn is likely during
the spring. With smaller marketing in prospect, prices of hogs during most
months of 1957 will likely be above 1956.

Cattle slaughter has been extremely large and will probably continue
so. On January 1, 6.1 million cattle were on feed, 4 percent more than a
year earlier and a new high. Cattle feeders in 13 leading States reported
intentions to market 45 percent of this number by April 1. Last year they
planned a 50 percent marketing by that date. These intentions suggest fed
cattle supplies during this period will be sizable, although a little below
the heavy movement of last winter. Prices of fed steers are expected to
level out following their late fall decline, and to stay higher this winter
and spring than their low of last February.

Cow slaughter has been very large since October, partly as a result of
continued drought in the Southwest. The extent and severity of drought will
be a major factor affecting cattle slaughter and prices in 1957. If drought
is not severe over large areas, prices may average as high or slightly higher
than in 1956; severe drought would add to slaughter and prevent improvement
in prices.

Prices of lambs are likely to rise seasonally, and may remain for a
time a little higher than last year. Sheep and lambs on feed January 1 to be
fed for the winter and early spring market total 5 percent above a year ago
but only slightly larger than January 1, 1955.

Meat production in 1957 is expected to be less than the 1956 record.
Production probably will be cut heaviest in the first half year, with most of
the reduction in pork.

Consumers will pay higher prices for pork in 1957 than during 1956,
and possibly a little more for the higher grades of beef.






JANUARY 1957


In late 1956, the Department of Agriculture discontinued its special
meat buying programs, which had been undertaken to provide market assistance
to cattle and hog producers during the fall period of heavy marketing.
About 72.0 million pounds of hamburger, 21.6 million pounds of lard, and
6.6 million pounds of canned pork and pork products were purchased. Approx-
imately 31.4 million dollars of Section 32 funds were expended for these
products, which are beiAg donated to school lunch programs and other eligible
outlets.

DAIRY PRODUCTS

Production of milk continued to set new records through the early weeks
of 1957. The number of milk cows apparently is about the same as a year ear-
lier, but the rate per cow continues to exceed previous high levels. Milk
output closed 1956 by reaching 9.1 billion pounds in December, raising the
preliminary annual total to a record 127.0 billion pounds. Current price
relationships are favorable for large milk production this winter. Although
supplies of feed concentrates are large, quality of hay is not as good as
last year in some Northern sections; however, prospects point to an increase
in the 1957 annual output about 2 billion pounds of milk over 1956.

The pattern of milk use changed little from 1955 to 1956; no major
item changed more than 5 percent between the two years. Most of the apparent
increase in milk output was used for fluid products. Unless price support
levels change significantly, the pattern of milk use probably will not show
much change in 1957 compared with 1956. Preliminary data indicate little
change between 1955 and 1956 in per capital consumption of individual dairy
products. Per person consumption last year of all dairy products combined
apparently increased about 1 percent. Little change is likely in 1957.

The average price received by farmers for milk increased 4 percent in
1956 over 1955--the result of higher prices for both the fluid and manufac-
turing milk components and somewhat larger utilization of milk in fluid milk
outlets, a higher average-price use. Manufacturing milk and butterfat prices
rose primarily because of higher support levels. Generally, prices of manu-
factured dairy products did not rise above the equivalent of CCC purchase
prices except for butter which rose slightly a few weeks toward the close of
the year. As a result of higher prices and record large sales, farmers' re-
ceipts from sale of dairy products almost equaled the record high of 1952.

The milk equivalent of CCC purchases of dairy products in 1956 was a
little above 1955, equaling about 4 percent of farm milk production. Disposi-
tion of stocks continued at a high level; at the beginning of 1957 only CCC
holdings of cheese were significant. By mid-January, purchases of butter were
running in excess of 3 million pounds per week, about the same as a year ear-
lier. Purchases of cheese and nonfat dry milk are continuing at a high level
for this time of year. Surplus of dairy products for 1957 as a whole
probably will be no larger than in 1956, and it may well be a little smaller,
since the prospective increase in milk output is below the actual increase of
the past year.






JANUARY 1957


POULTRY AND EGGS

Production of eggs is likely to continue higher and prices to farmers
lower in the next few months than in the same period a year earlier. In the
last 4 months of 1956, production averaged 4 percent above the same months
of 1955, mainly because of a 3 percent increase in the rate of lay per layer.
The number of layers on hand January 1 was up 11 percent from a year earlier.
Prices to farmers for eggs averaged 37.1 cents per dozen in mid-December,
10 cents below the same time in 1955.

The number of chickens raised for laying flock replacement in 1957
probably will be less than in 1956. However, the cut may not be as great as
might be expected from the reduction in prices. The number of chickens raised
now seems less affected by short-time changes in the profits of egg produc-
tion. Moreover, the trend toward increased production per bird and the tend-
ency of producers to keep layers longer than formerly will tend to maintain
production.

Broiler marketing in January will be from weekly placements averaging
about 4 percent smaller than the placements which provided December market-
ings. The decline in supplies together with a seasonal decline in marketing
of turkeys have already resulted in a slight increase in broiler prices over
the mid-December average of 16.9 cents per pound to farmers. However, pros-
pective supplies of broilers for January continue above a year earlier, and
weekly placements indicate that supplies in February and March will be at a
higher rate than those in January.

Turkey prices rose after Thanksgiving but had lost part of the rise by
the end of 1956. The mid-December price to farmers averaged 27.7 cents per
pound, compared with 30.5 cents a year earlier. In the early months of 1956,
prices for dressed turkeys rose but an increase is not in sight this year--
supplies in storage during the past two months were at record levels, 36 and
50 percent above a year earlier, and the number of turkeys remaining on farms
(i. e., poult hatchings late in 1956) is well above last year. Farmers'
intend to raise 10% more turkeys in 1957 than last year.

FATS, OILS AND OILSEEDS

The supply of food fats and oils in 1956-57 is expected to equal last
year's record 11.8 billion pounds. Smaller carryover stocks on October 1
will be offset by increased output during the current marketing year. Sup-
plies of butter and lard will be smaller, but those of the vegetable oils
will be larger. Export demand again will be an important factor influencing
domestic prices of food fats and oils, as supply continues in excess of do-
mestic use. Exports, including the oil equivalent of oilseeds but excluding
butter, in the marketing year ending in September 1957 may be as large as
last year's record 2.7 billion pounds, since foreign countries continue to
need substantial quantities of food fats and oils.


- 17 -






JANUARY 1957


Supplies of soybeans for the 1956-57 marketing year are estimated at
460 million bushels, about 75 million bushels more than last year's record.
Crushings, exports and ending stocks are expected to reach new highs. Prices
received by farmers in November-December 1956 averaged $2.27 per bushel,
compared with $2.07 in October. Strong export and domestic demand for beans
and oil, coupled with the tendency of farmers to withhold marketing, have
raised prices above the support rate of $2.15. Large supplies are expected
to limit further rises in soybean prices in late winter or spring, unless for-
eign demand becomes exceptionally great. The manner in which farmers market
their large holdings, naturally, will have a considerable influence on soybean
prices later in the season. Soybean oil prices in October-December 1956
averaged about 20 percent higher than a year earlier.

The supply of peanuts as a whole in 1956-57 will be greater than last
year and substantially larger than required for food and farm uses. Produc-
tion is estimated at 1,567 million pounds, about the same as the previous year,
but beginning stocks were considerably larger than last year. The season
average price received by farmers for 1956 crop peanuts is estimated at 11.1
cents per pound, compared with 11.7 cents last year.

Peanut producers approved marketing quotas for the 1957, 1958, and
1959 crops, in a referendum held December 11, 1956; consequently, the price
of peanuts will be supported within the overall range of 75 to 90 percent of
parity, the exact level to be announced later. Marketing quotas have been in
effect since 1949.

FEED

Feed grain prices have been relatively stable during the past few
weeks, after advancing from the seasonal low points reached in the summer
and early fall of 1956. Seasonal increases in prices of oats, barley, and
sorghum grains resulted in mid-December average prices above the 1956 nation-
al average price supports. Considerably higher prices for these three grains
this winter than last reflect relatively smaller 1956 crops and higher support
prices. Corn prices also are higher than a year earlier, but the mid-December
average price of $1.22 per bushel was 28 cents below the average price support
for cooperating producers in the commercial area. Feed grain prices averaged
9 percent higher in mid-December than a year earlier. The seasonal rise thus
far in 1956-57, however, has not been as great as in the same period of
1955-56, and prices probably will not make the same seasonal gains during the
next few months as the sharp rise in the first half of 1956.

Wholesale prices of high protein feeds averaged about the same in
December as a year earlier. Soybean meal prices continue low in relation to
prices of most other feeds, because of the record crush of soybeans. In
early January, soybean meal prices were somewhat lower than a year earlier,
while prices of a number of the other protein feeds were higher.






JANUARY 1957


A record supply of feed grains and other concentrates, totaling about
200 million tons, is available for the 1956-57 feeding season, 3 million tons
larger than the big supply last year. The 1956 feed grain crop of 130 million
tons is slightly smaller than last year, but the third largest on record.
Carryover stocks set a new record of over 43 million tons. The 1956 production
of feed grains appears more than adequate to meet our total requirements and
carryover into 1957-58 is expected to increase by about 15 percent.

Through December 15, farmers had placed 79 million bushels of corn under
Government price support, about 10 million less than in the same period of
1955. This included 61 million bushels at the full support rate of $1.50 per
bushel and 18 million at the $1.25 rate available to noncompliers. Reductions
in quantities of oats, barley and sorghum grains going under support were rela-
tively greater, reflecting smaller crops and higher prices of these grains.

WHEAT

Cash wheat prices continue above the effective loan level and generally
are just below the high for the season to date. The average price received by
farmers in mid-December was $2.07, which was 2 cents above a month earlier and
12 cents above a year ago. The $2.00 average support rate to growers this year
is 8 cents below a year ago. Strength in wheat prices results from heavy
exports so far this year, operation of the changed export program announced
July 13 and put in operation September 4, and also from the support program.
Through December 15 farmers had placed 225.1 million bushels of 1956 crop
wheat under support and had withdraw 36.2 million, leaving a net of 188.9 mil-
lion bushels. Most of these withdrawals took place in the Pacific Northwest,
where prices were strongest. On the same date a year earlier, the quantity of
the 1955 crop which had been placed under support amounted to 222.9 million,
of which 2.7 million had been withdrawn, leaving a net of 220.2 million
bushels.

Winter wheat seedings for the 1957 crop fell to 36.8 million acres, the
smallest acreage seeded since 1913 and nearly a third less than average. Wheat
farmers signed up 10.7 million acres in the 1957 winter wheat Acreage Reserve
Program of the Soil Bank. If conditions and prices are favorable, not more
than 3 million acres of spring wheat will be taken out of production. With av-
erage yields on the spring crop and a winter crop of 625 million bushels based
on December 1 conditions, a total crop of about 810 million bushels would be
produced. While moisture was plentiful over the soft wheat region and also in
the Pacific Northwest since December 1, dry conditions have persisted in the
Southwest.

Exports in July-December 1956, partly estimated, totaled about 235 mil-
lion bushels, and in the 1956-57 year as a whole they may exceed 1955-56 by
a fourth. In this event, the carryover July 1, 1957 would total about 1 bil-
lion bushels, down moderately from the 1,034 million bushels on July 1, 1956.


- 19 -






JANUARY 1957


Domestic disappearance in 1957-58 is expected to continue at about
600 million bushels. Exports are not expected to be as high as in 1956-57.
If they are assumed at 350 million bushels, which is about the same as in
1955-56, total disappearance would amount to about 950 million bushels. A
crop of 810 million bushels would be substantially below such disappearance,
indicating a substantial reduction in the carryover at the end of the 1957-58
marketing year.

RICE

Prospects are that sharply increased exports during 1956-57 will reduce
the carryover from the record 34.6 million cwt. (rough basis) on hand August 1,
1956 to about 18 million cwt. on August 1, 1957.

Growers approved marketing quotas for the 1957 crop by referendum
December 11, 1956. National acreage allotment is 1,652,596 acres. Assuming
that about 200,000 acres are placed in the Acreage Reserve Program of the Soil
Bank and allowing for underplanting of farm acreage allotments, 1,425,000
acres may be planted in 1957. With yields at about the 1955 level, this would
mean a crop of about 42.8 million cwt., substantially below the 1956 crop of
47.5 million cwt. and the record 1954 crop of 64.2 million.

Less rice will be exported in 1957-58 than in 1956-57, according to
present indications. With the above production and carryover, the supply
would total only 61 million cwt. compared with 82 million in 1956-57. Domestic
disappearance is likely to hold at 25 million cwt. Thus, only about 35 mil-
lion cwt. would be available for export compared with 38 million cwt. expected
to be exported in 1956-57.

Minimum national average support for 1957 is $4.43 per cwt., 80 percent
of parity. This compared with $4.57 per cwt. for the 1956 crop which was
82.5 percent of parity.

FRUIT

Among fresh fruits remaining to be marketed after January 1, 1957,
supplies of oranges, lemons, and pears were larger than a year earlier, but
supplies of grapefruit, apples, and grapes were smaller. Consumer demand for
fruit is expected to be at least as high as last winter, and processor demand
for citrus will be seasonally strong this winter and spring.

Mainly because of delayed maturity of the Florida orange and grapefruit
crops, total utilization by January 12, 1957 was 10 and 9 percent smaller,
respectively, than a year earlier. Use of oranges for processing, however,
increased rapidly during December, and output of frozen orange concentrate
from the midseason crop will be heavy this winter. In early January, grower
prices for Florida oranges for fresh market shipment and for frozen concen-
trate processing averaged a little under a year earlier. However, auction
prices averaged a little higher. Grower prices for grapefruit were consider-
ably higher. Auction prices for California oranges were much higher than a
year previously.


- 20 -






JANUARY 1957


Year-end cold storage stocks of apples and grapes were smaller than on
January 1, 1956, and those of pears were larger. Stocks of apples were much
smaller in Washington, New York, and New England, where unfavorable weather
last winter and spring cut production. These reductions were only partially
offset by increases in other States, especially Virginia and Michigan. Nearly
all of the year-end stocks of pears were in the three Pacific Coast States.
Grower prices for apples and pears increased further during December; as of
the middle of that month they averaged considerably above a year earlier.
Prices for apples in early January tended to hold steady.

Stocks of frozen deciduous fruits and berries in cold storage on
January 1, 1957, were about 7 percent larger than a year earlier. Among items
held in largest quantities, stocks of frozen strawberries were up considerably
and of cherries down substantially. Year-end stocks of frozen orange juice
were considerably larger than on January 1, 1956. During the first half of
1957, stocks of frozen deciduous fruits and berries will decline as usual,
and stocks of frozen orange juice will increase as seasonally heavy production
exceeds distribution.


COMMERCIAL VEGETABLES

For Fresh Market

Supplies of vegetables for fresh market sale are expected to be about
7 percent smaller this winter than last, but slightly above the 1949-55
average. Lighter prospective production resulted primarily from a substantial
cut in acreage caused by drought and a shortage of water for irrigation in
South Texas. Low temperatures in Florida damaged tender vegetables and
delayed development of all crops. Among the more important winter vegetables,
prospective production of cabbage is down 24 percent from a year earlier,
carrots down 19 percent, lettuce down 12 percent, and celery down 4 percent.
On the other hand, estimated production of sweet corn is up 77 percent and
record large, tomatoes up 42 percent and a new record, and snap beans up
slightly. Smaller supplies are in prospect for other items, such as lima
beans, beets, broccoli, shallots and spinach; but estimated supplies are
larger for artichokes, Brussels sprouts, cauliflower, cucumbers, eggplant,
escarole, kale and green peppers.

Consumer demand is expected to continue strong. And with smaller
prospective supplies of winter season vegetables, prices received by growers
are likely to continue above year earlier levels.

For Commercial Processing

Supplies of commercially processed vegetables available for distribu-
tion during the remainder of the marketing year are substantially above those
of a year earlier, and probably at a record level. The production of vege-
tables for processing in 1956 was the largest ever. Despite smaller carryover


- 21 -






JANUARY 1957


stocks of canned vegetables and a good rate of movement during the first part
of the season, data for January 1 are expected to show total stocks well above
those of a year earlier, and perhaps the largest of record. A big part of the
increase is due to much heavier supplies of sweet corn and tomato juice. But
most other canned items are also in moderately to substantially larger supply
than a year ago.

Total cold storage holdings of frozen vegetables on January 1, 1957,
amounted to 861 million pounds, 237 million pounds above those of 1956 and
the largest of record. Biggest actual increase was for green peas--218
million pounds compared with 125 million pounds a year earlier. But holdings
of other items were also larger with biggest percentage increases in broccoli,
cauliflower, asparagus, Brussel sprouts and sweet corn.

Consumer demand for processed vegetables is expected to continue
strong. But with substantially larger supplies available, retail prices dur-
ing the next few months probably will average a little lower than in the same
months of 1956.


POTATOES AND SWEETPOTATOE3

Fall potato production, at 166 million hundredweight, was about 12
percent larger than in 1955. Maine growers have suffered some loss of
potatoes because of frost damage, and in Maine and other States considerable
quantities have been diverted to nonfood uses. Through January 12, a total
of 6.U million hundredweight had been moved under the USDA potato diversion
program. Although the crop was later this year and the program got off to a
slow start, this was 0.9 million hundredweight more than was moved through
January 14 last year. In addition, production of potatoes for winter season
harvest (a relatively small proportion of total supplies) is expected to be
44 percent larger than last year. Prices of potatoes during the next two or
three months are expected to remain near current levels.

Demand for sweetpotatoes in the first half of 1957 is expected to be
about the same as in the early part of 1956. Supplies available for distri-
bution this year, however, are substantially smaller than a year ago, and
prices are considerably higher. Prices paid to farmers in mid-December
averaged $4.38 per hundredweight, 68 cents above a month earlier and 76 cents
more than a year earlier. Prices probably will continue to rise seasonally
into the spring and remain well above those of 1956.


DRY BEANS AND PEAS

The quantity of dry edible beans available in the 1956-57 marketing
season are slightly smaller than a year earlier. But overall supplies appear
more than adequate to satisfy anticipated demand. Among the more important
classes, pea and red kidney beans are in larger supply than a year earlier,


- 22 -






JANUARY 1957


and prices of these classes are expected to average lower this season than
last. On the other hand, pintos and large limas are in smaller supply than
a year ago, and prices for the season should average higher. However, with
ample supplies and a national average support rate of $6.31 per hundredweight,
substantially the same as a year ago, overall prices for the current season
are expected to average about the same as last season.

Supplies of dry field peas are much larger than the tight supplies of
last season, about a fifth above the 1945-S5 average and substantially above
normal market requirements. An unusually heavy export demand, as a result
of a poor European crop, has taken much of the pressure of large supplies
off the domestic market. Nevertheless, supplies for domestic outlets will
be large, and prices probably will average significantly below the high
levels of the past three or four seasons.



COTTON


The supply of cotton in the United States during the 1956-57 season
is estimated at a record high of 27.8 million bales. The previous record was
set in 1955-56, when the supply was about 26 million bales. The record
supply resulted largely from a record carryover into the 1956-57 season of
14.5 million bales. The 1956 crop was estimated at about 13.2 million running
bales (about 13.3 bales of 500 pounds each), compared with the 1955 crop of
14.5 million bales. Smaller imports are expected this year, probably less
than 100,000 bales.

Disappearance during the current season is estimated at about 15.5
million bales, including mill consumption of about 9 million and exports of
about 6.5 million bales. Deducting disappearance from the supply leaves a
carryover of about 12.3 million bales--a reduction of about 2.2 million bales
from the record high carryover at the start of the season.

Sales by the CCC for export during the current marketing year totaled
about 6.3 million bales as of January 8, 1957; however, the rate of sales
during December declined sharply from the rate during September, October, and
November. The average biweekly sale in December was about 82,000 bales
compared with approximately 398,000 bales of the three preceding months.
Stocks of CCC owned upland cotton, which were available for sale for export,
were relatively small in December and amounted to a little more than 500,000
bales at the end of the month; however, the CCC took ownership of about
6 million bales of 1955 crop upland cotton on December 31 and as soon as it
is cataloged,about March 1, it will be available for sale for export.

Prices for which CCC sold cotton for export increased slightly during
December, because of the inclusion of reasonable carrying charges in CCC sales
prices. Nevertheless, prices for American upland cotton were still competi-
tive with prices for foreign grown cotton of comparable quality.


- 23 -






JANUARY 1957


The volume of American-Egyptian cotton exported has increased sharply
over a year earlier. From August 1 through November 1956, exports were about
23,400 bales, but for the sane period a year earlier, e:.ports were only about
3,000 bales. Consumption of American-Egyptian cotton was also much larger
than a year earlier, though consumption of all extra-long-staple cotton has
been at about the same level. Increased disappearance of American-Egyptian
cotton has been caused by a restricted supply of Egyptian cotton and prices
which are competitive with Egyptian cotton.

Although the acreage allotment for cotton in the United States for the
1957 season totaled about 17.6 million acres, farmers probably will plant less
than their allotments because of the acreage reserve program for cotton. Each
fanner will receive a payment based on 15 cents a pound times his normal
yield, for participating in the acreage reserve program. The average normal
yield for the U. S. has been set at 361 pounds per acre. The farmer may place
in the acreage program a maximum of 10 acres or 30 percent of his allotment,
whichever is larger. The agreement to participate in the acreage reserve
program must be signed by cotton farmers by March 1, 1957.

Prices for cotton have increased slightly in recent weeks. The average
14 spot market price for Middling 1-inch cotton on January 8, 1957 was
33.32 cents per pound. This compares with an average of 33.15 cents for
December 1956 and the average support rate at these markets of 33.02 cents per
pound. On January 10, 1956, the average 14 spot market price for Middling
1 inch was 34.96 cents per pound.

WOOL

Boston quotations for some domestic and imported wools advanced between
early December and early January. Quotations for most grades and types early
in January were the highest in over two years. Price advances ranging up to
almost 30 percent for some descriptions, since opening of the 1955-56 domestic
marketing season last April, reflect a strengthening of world demand relative
to available supplies; the situation in the Middle-East has been a contributing
factor. The mid-month U. S. average of prices received by domestic growers
for shorn wool advanced from 40.3 cents per pound, grease basis, for
April 1956, the first month of the current season, to 45.6 cents for December.
It was below a year earlier during during the first 6 months of the season,
but above a year earlier during the following 3 months.

During December, Commodity Credit Corporation sold over 3 million
pounds, actual weight, at schedule prices-103 percent of 1954 loan rates
plus selling commission. This was in addition to 6 1/4 million pounds, the
monthly quota, sold under the competitive bid program. As of the end of
December, the CCC inventory amounted to 68.3 million pounds, of which 5.2 mil-
lion were sold during the first 3 weeks of January.


- 24 -






JANUARY 1957


The rate of domestic mill use of apparel wool was above a year ear-
lier, each month from September 1955 through October 1956, but it dropped be-
low a year earlier during November, the latest month for which information is
available. The total for the first 11 months of 1956 was 8 percent above
1955-the second increase since the post World War II low in 1954. Mill use
of carpet wool during January-November was up 12 percent from 1955, the second
successive yearly increase and the highest since 1950.

United States imports of dutiable wool for consumption during June
dropped below a year earlier, and continued below a year earlier through
October, the latest month for which information is available. Lower imports
after May reflected earlier marketing of the domestic clip this year than
last, larger sales of CCC wool acquired under the 1952-54 support programs
than last year, and apparently some reduction in trade stocks. Total imports
of dutiable wool through October were 3 percent below 1955. Imports of wool,
entered duty-free for use in the manufacture of floor coverings and certain
other uses, during the first 10 months of 1956 were 6 percent above 1955.

TOBACCO

Marketings of the 1956 burley crop are about completed. Prices re-
ceived by growers averaged the highest in history. The auction market average
through mid-January was 63.5 cents per pound-8 percent above the last season.
The strong demand for leaf and tip grades raised these prices sharply, but
prices for most lugs and flying grades were close to last season's levels.

Although burley supplies have declined somewhat during the last 2 years
and certain grades have become scarce, the 1956-57 total supply remains
31 times prospective disappearance-well above supply levels for most years
prior to 1953-54. The 1957 burley acreage allotment is about 309,000 acres-
practically the same as last year.

At auctions for dark air-cured types 35 and 36, prices averaged about
35i and 30 cents through mid-January compared with 33 and 30 cents in the
comparable period of last season. The auction average for Virginia sun-cured
(type 37) through mid-January was 36 cents per pound compared with 27 cents a
year ago when storm damage greatly lowered the quality.

Auction prices for Virginia fire-cured (type 21) averaged 40 cents per
pound for sales from late November through mid-January-27 percent above a
year earlier when quality was not as good. The auctions for the Kentucky-
Tennessee fire-cured types opened the second week of January. For sales
during the first week, prices averaged 37 and 33 cents per pound,
respectively, compared with 40 and 32 cents in the corresponding period of
last year.


- 25 -






JAIIUARY 1957


Supplies of dark air-cured and fire-cured tobacco are large in re-
lation to disappearance, and Government loan stocks of these types are
exceedingly heavy. The fire-cured and dark air-cured tobaccos are used
domestically, to a large extent, in snuff and chewing tobacco. The 1956 out-
puts of snuff, and plug, twist, and fine-cut chewing tobacco are estimated at
38 and 41 million pounds, respectively-about 3 and 7 percent less
respectively than in 1955.

The acreage allotments for the 1957 crop of cigar filler and binder
tobaccos are 10 percent lower for Connecticut Valley types and about the same
as in 1956 for the Ohio and Wisconsin types. Growers of these types will
vote on February 13 on whether to continue marketing quotas on their 1957,
1958, and 1959 crops. About 1.6 million pounds of the 1956 crop of
Connecticut Valley cigar binder has been placed under loan through mid-
January. Season receipts of these types are expected to total about 2 million
pounds.

Cigarette output in 1956 is estimated near 425 billion-3 percent more
than in 1955 and second only to the 4351 billion in 1952. Cigar and cigarillo
consumption in 1956 is estimated at about 6- billion-about 3 percent more
than in 1955 and the most since the late 1920's. On the other hand, the out-
put of smoking tobacco for pipes and "roll-your-own" cigarettes dropped to a
new low of about 73 million pounds-9 percent less than in 1955 and the
smallest annual output during this century.

Exports of leaf tobacco during 1956 are estimated at about 555 million
pounds-farm-sales weight. This is 7 percent less than in 1955, but 10 per-
cent above 1954.


- 26 -







UNIVERSITy OF FLORIDA
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U. S. Department of Agriculture Penalty for private use to avoid
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OFFICIAL BUSINESS

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