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:
AA00012195:00007

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
9S. 9. 6


FOR RELEASE
e FEB. 25, A.M.
7/m 1957
MAR 11 1957

DEMAND ICE


SITUATION .

DPS-26 6 -


1AMSI -



Approved by the Outlook and Situation Board, February 19, 1957
SUMMARY
Economic activity in January and early February changed little
from the advanced levels of the close of 1956. Consumer demand
for farm products remained high, with incomes at year end at a
new record 5 percent above the fourth quarter of 1955. Consumer
expenditures for food were at an annual rate of more than 71bil-
lion dollars, 4 percent above October-December 1955, and they
continued to absorb almost one-fourth of consumer income. Ex-
ports of farm products are at a record rate and are expected to
remain high in coming months.
Prices of farm food products in the "market basket" averaged
2 percent above a year earlier in the fourth quarter of 1956, while
marketing margins were about the same as a year earlier. As a
result, the farmers' share of the consumer's food dollar rose to
40 cents, 1 cent more than in the closing months of 1955. Prices
re ceived by farmers increased in January for the second consecu-
tive month. The index at 238 percent of the 1910-14 average was
5 percent above a year earlier.


(Continued on page 3)



UNITED STATES DEPARTMENT OF. AGRICULTURE
7 .... AGRICULTURAL MARKETING SERVICE
L, L '.'* *.'f C "'.:' I-7 ,







2-
ECONOMIC FACTORS AFF3CTMI AGRICUIURE


SU Ot or t 1956
Itm base Year Jan Oct. Nov. : Dec. Jan.
,, ,riod : : ,


Industrial production: seasonally adj3. I
Total-
All manufactures
Durable goods
Nondurable goods
Minerals

Construction:
Total outlays, seasonally adjusted 2/
Private residential
Housing starts / 4/
Construction contracts awarded /

Manufacturers' sales and inventories:
Total sales, seasonally adjusted
Durable goods
Unfilled orders-sales ratio 6/
Inventory-sales ratio 1/
Durable goods

EBployment 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 /
Automobile


Total retail sales, seasonally adj. 2;
Durable goods
Inventory-sales ratio J/

Prices:
Wholesale prices, all commodities h/
Commodities other than fanm and food
Farm products
Foods processed

Consumer price index, all items
Food

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

Farm income and marketing: 9/
Volume of farm marketing
Cash receipts from farm marketing
Annual data for most of these items fo:


I
t



|



:


1.947-49-00 :
do,
do.
do.
do.


Mil. dol.
Mil. dol.
Thousands
Mil. dol. :


Mil. dol.
Mil. dol.-





Million
do.
do.
Hours
Dollars


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

Mil. dol.
Mil. dol.



L947-49=00 :
do.
do.
do.

947-49=10 :
do.

L910-14=1o0 :
do.
do.

L910-14100 :
do.
do.



L947-49=100 :
Mil. dol. :


143
144
159
129
129


44,258
15,339
1,121
24,413

27,586
13,720
4.13
1.78
2.06


65.0
58.4
2.6
40.5
1.98


325.2
38,648
13,468

15,947
5,485
1.97


114
122
88
102


143
145
160
129
131


3,625
1,287
1,195
1,858

27,023
13,595
3.92
1.71
1.96


62.9
57.3
2.9
40.7
1.93


316.7
37,848
13,481

15,658
5,456
2.09


112
120
84
98


116 115 118
112 109 113

236 226 234
242 231 232
230 221 236

286 281 287
278 272 279
249 246 250
83 80 82


118
30.000


r the years 1929, 1932 and


April 1956 issue of The Demand and Price Situation.


122
2.530


177
3,927


146
147
164
130
129


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

28,329
14,199
4.14
1.79
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


147
148
166
130
130


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

28,688
14,390
4.11
1.79
2.08


146
147
165
129
129


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


28,707
14,321
4.13
1.79
2.09


65.3
59.1
2.5
40.5
2.03


333.5
40,631
14,449

16,358
5,664
1.84


116
124
88
104

118
113

234
239
230

289
281
252
81


157
3.306


146
147
164
130
130


3,733
1,207
1,010


62.9
57.9
2.9
40.2
2.05


333.5
41,863
14,436

16,491
5,814
1.84


237 238
240 239
234 237

290 292
283 283
252 255
82 82


128
2,768


1939-55 appear on page 39 of the


1/ Federal Reserve Board. 2/ U. S. Department of Commerce. / Seasonally adjusted annual rates.
4 U. S. Department of Labor, Bureau of labor Statistics. 2/ 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, Agricultural Marketing Service.


64.6
59.4
2.5
41.0
2.05


- -


FEBRUARY 1957







FEBRUARY 1957


THE D


DEMAND AND PRICE SITUATION


Approved by the Outlook and Situation Board, February 19, 1957


CONTENTS


Summary ........................
General Economic Conditions ....
Price Supports for 1957 ........
Construction Trends and
Prospects ....................
Foreign Demand .................
Surplus Disposal Developments ..
Farm Income ....................
Livestock and Meat ............
Dairy Products .................


Poultry and Eggs ............
Oilseeds, Fats, and Oils ....
Feeds .... ..................
Wheat .......................
Fruit .......................
Commercial Vegetables .......
Potatoes and Sweetpotatoes ..
Wool ........................
Cotton ......................
Tobacco .....................


Continued from cover page -

Higher farm product prices together with payments under the Soil Bank
Program raised farmers' realized net income in the fourth quarter of 1956
to a rate of 12.4 billion dollars, 11 percent higher than the corresponding
period of 1955. For 1956 as a whole, farmers' realized net income amounted
to 11.8 billion dollars for a gain of 4 percent from 1955.

Changes in business activity in January were mostly seasonal. Retail
sales declined about as usual but were still about 5 percent above January
1955. Industrial production increased less than normal and the Federal
Reserve Board's seasonally adjusted index eased a point from the record
rate In December. January employment was down a little more than seasonally,
with layoffs of a large number of temporary employees in retail trade.
Factory employment, however, increased after seasonal adjustment.


- 3 -






F ERUARY 1957


Commodity
Hig lights

Cattle and calves on farms January 1 were down 2 percent from last
year's record of 96.8 million. However, slaughter during 1957 is likely to be
about as large as in 1956.

Hog prices in mid-February were $5.00 per cwt. above a year before.
They irill be lower in the near future than at their winter high, but a
new seasonal advance is likely by late spring.

Prices received by farmers for dairy products will average about the
same in 1957 as in 1956, as the support levels are unchanged.

Egg prices in mid-January were the lowest in two years. Some increase
in late January followed announcement of resumption of USDA purchases of eggs
for school lunches.

Despite a record 1956 soybean crop, heavy export and crusher demand
were instrumental in maintaining prices in February around the level of a
year earlier and above the support price.

Prices of most feed grains declined in the last half of January and
early February but are still generally higher than a year ago.

With continued large demand for free market supplies of wheat, prices
are expected to continue above the effective loan level.

Grower prices for Florida oranges have been rising since mid-January.
Seasonally heavy demand for processing will probably cause some further
increases this winter.

Commercial vegetables for fresh market supply are likely to average a
little higher in price during the next few weeks than a year earlier.
Record large supplies of processed vegetables, however, point to somewhat
lower retail prices for these items.

Exports of cotton are running ahead of last season's rate but consump-
tion by domestic mills continues to lag somewhat.

Early February quotations for wool were the highest in almost 2 years.

Marketings of the 1956 burley tobacco crop were completed by early
February. Prices averaged the highest on record, with many of the tradition-
ally top cigarette grades about the same as a year earlier, while prices of
heavier-bodied leaf and tip grades were sharply higher.









_j


- 4 -






FEBRUARY 1957


GENERAL ECONOMIC CONDITIONS

Economic activity in January and early February held close to the ad-
vanced levels reached at the end of last year. Industrial output was off one
point, after seasonal adjustment,from the December record of 147 percent of
the 1947-49 average. Employment dipped a little more than usual from Decem-
ber to January, but the rise in unemployment was about normal.

Reduced output of television sets, furniture and other major house-
hold goods were principally responsible for the small January decline in in-
dustrial production. The Federal Reserve Board's seasonally adjusted index
remained 2 percent higher than a year earlier. Output of producers durable
goods generally was maintained at the high rates of December. Steel out-
put was at a record level in January and the first half of February. Declines
in activity, however, occurred during January in iron and steel foundries and
in nonferrous metal fabrication. Production of minerals and nondurable goods
was unchanged.

The Bureau of the Census reports that in the month ending in early
January, total employment declined 1-2/3 million to the same level as a year
earlier. The drop was caused mainly by seasonal layoffs in agriculture, con-
struction, and retail trade. With a drop in the labor force, unemployment
increased to 2.9 million in January, the same as a year earlier. The in-
crease was the usual one for this time of year. According to the Bureau of
Labor Statistics, seasonally adjusted employment in nonagricultural establish-
ments for the pay period ending nearest January 15 was little above a month
earlier. Apart from seasonal layoffs, employment in most areas is reported
high. The Department of Labor reports that employers plan small additions to
their work forces over the next two months. A large gain is expected with the
usual spring pickup in construction and smaller gains are planned in a wide
range of manufacturing industries.

Consumer income advanced throughout 1956 and in the closing quarter was
running same 5 percent above a year earlier. December wage and salary disburse-
ments were about 8 percent above a year earlier in the commodity producing in-
dustries, 6 percent :'igher in the distributive and service industries, and
4 percent higher in Government. Reflecting the rise in income, retail sales in
January were up about 5 percent from January 1956. The gain was especially
pronounced in sales of nondurable goods. In December, the latest month for
which detailed data are available, apparel sales were 9 percent greater than
they were a year earlier and food store sales were up 7 percent. .Among dur-
able goods stores, a 9 percent rise for household appliance and radio stores
and a 5 percent rise in sales of furniture stores contributed to December
sales about 2- percent greater than in December 1955.


- 5 -






FEBRUARY 1957

Table 1.- Personal income,
1956 and by


-6-

consumption, and saving, 1955 and
quarters for 1956


S :1956
Item :1955 : 1956 : Jan.-: Apr.-: July : Oct.-
: : Mar. June : Sept.: Dec. /

Bil. Bil. Bil. Bil. Bil. Bil.
dol. dol. dol. dol. dol. dol.


Personal income : 306.1 325.2 317.5 322.9 327.0 333.3
Less: Personal taxes :35.5 38.6 37.3 38.1 38.0 40.1


Equals: Disposable personal
income :270.6 286.6 280.2 284.9 288.2 293.2

Less: Consumption expenditures : 254.0 265.8 261.7 263.7 266.8 271.2

Durable goods :35.7 34.0 34.8 33.4 33.0 34.9
Automobiles and parts :17.2 14.6 15.5 13.8 13.7 15.4

Nondurable goods : 126.2 132.9 130.5 132.3 134.0 134.8
Food : 67.0 70.5 69.5 70.1 71.2 71.3
Clothing and shoes :20.6 21.6 20.8 21.5 21.9 22.3

Services 92.1 98.9 96.4 98.0 99.7 101.5

Equals: Personal saving : 16.6 20.8 18.6 21.2 21.4 22.0


1/ Preliminary: Fourth quarter e
2/ Excluding alcoholic beverages.


estimates by Council of Economic Advisers.


Department of Commerce.

Business spending for equipment and new construction continues at a
record rate. Outlays planned for the first quarter of 1957 are up 16 percent
from a year earlier. However, recent trends suggest some leveling in activity
in the machine tool and construction industries. New orders placed with
machine tool producers have declined in the past several months and contract
awards for industrial building and other nonresidential construction are also
down. In total, new orders for durable goods in December dropped 3 1/2 per-
cent from November after seasonal adjustment to a level about 8 percent
below a year earlier. However, unfilled orders for durable goods have
changed little and are still running over 4 times the current monthly de-
livery rates for these items.


7






FEBRUARY 1957


January production of new automobiles for the domestic market, totaled
about 620,000, or about the same daily rate as in the corresponding month of
1956. Dealer sales rose slightly through December and January to a level at
least as high as a year ago, but they continue below output. In January an
estimated 120,000 autos were added to inventories, bringing the total on
February 1 to more than 600,000 cars. These stocks however, are about a
fourth less than the number on hand a year earlier when dealers' inventories
reached burdensome proportions.

The general upward pressure on prices that has been evident for more
than a year brought further advances in January. The Bureau of Labor Sta-
tistics index of wholesale prices rose 1/2 percent to 116.9 (1947-49-100), an
increase of 4 1/2 percent from a year earlier. Several commodity groups that
have led the rise in wholesale prices during the past year now appear to be
gaining more slowly. Metal and metal product prices, though they have risen
about 17 percent in the past two years, have increased more slowly since Oc-
tober. Wholesale prices of machinery also have risen more slowly in recent
months.

The small increase in wholesale prices in January reflected higher
prices for farm products, processed foods, and a wide variety of industrial
products. Prices of fuel, power and lighting materials, up 2-1/2 percent in
December, gained another 1-1/2 percent in January. Important increases
occurred also in wholesale prices of furniture and household durables, pulp
and paper, and nonmetallic minerals. Lumber products increased in price in
January, reversing and 8-month decline.

For some raw materials the pressure of demand has eased and prices
have declined. The Bureau of Labor Statistics index of primary market prices
of 22 sensitive commodities declined about 3 percent from early January to
early February. Foodstuffs averaged about 2 percent lower, and raw industrial
commodities were off about 3 percent. Among the latter, scrap steel prices,
which rose sharply in November as a result of unprecedented mill activity,
dropped in December and January, and by early February were down a fourth
from the peak. Finished steel, meanwhile, averaged slightly higher because of
higher charges for "extras"-- special processing requested by customers.
Copper scrap has also eased in price with losses from January 1 to mid-Feb-
ruary amounting to more than 10 percent.

Farm product prices contributed to the general upward movement of
prices during the month ending January 15. The Index of Prices Received by
Farmers increased slightly from December to 238 percent of its 1910-14
average in January. Prices of meat animals were up seasonally in January as
marketing receded from the late fall peak. Fruit prices averaged moderately
higher than in December. Small gains were registered by nearly all grains.
Dairy product prices declined seasonally in January but averaged 3 percent
higher than a year earlier. A 6 percent drop in the index of poultry and egg
prices was moderately less than the usual seasonal decline.


- 7 -






FEBRUARY 1957


Central market prices of many important farm commodities declined in
late January and early February. Corn (No. 3 Yellow, at Chicago) was down
about 4 percent in mid-February from a month earlier, and oats were off
almost 8 percent. Soybeans also eased in price over this period. Prices of
hogs and slaughter steers declined seasonally but slaughter cows (utility)
were up almost a tenth. Prices of midwestern eggs and North Georgia broilers
rose in late January, but by mid-February had lost much of their gain.
PRICE SUPPORTS FOR 1957
The Department of Agriculture has announced price support levels for
1957 production of a number of farm commodities. The national averaf, support
price for wheat is set at $2.00 per bushel, the same as for the 1956 'rop.
The announced 1957 price support levelsfor milk for manufacturing and for
butterfat are also the same as those for 1956. The minimum support level for
1957-crop upland cotton is a little below the 29.34 cents per pound (Middling
7/8 inch) for the 1956 crop. Announced supports for 1957-crop oilseeds are
slightly below those in effect for the 1956 crop and price supports for feed
grains are also lower. (Table 2)


Table 2.- Announced 1957 support levels, selected
with comparisons


commodities,


: Support level : January 1957

Commodity Unit : : Average
S195 1957 : price
received
: Dollars Dollars Dollars


Cotton upland
Wool
Butterfat
Milk for
manufacturing
Wheat
Rice (rough)
Corn
Oats
Barley
Sor4gum grain
Rye
Soybeans
Flaxseed
Cottonseed


Pound
Pound
Pound

Cwt.
Bu.
Cwt.
Bu.
Bu.
Bu.
Cwt.
Bu.
Bu.
Bu.
Ton


.2934
.62
.586


3.25
2.00
4.57
1.50
.65
1.02
1.97
1.27
2.15
3.09
4/48.00


1/.2815
.62
.586


3.25
2.00
1/4.43
1/1.36
.60
.94
1.83
1.15
2.09
2.92
/46.0oo


.3021
2/.467
3/.591

3.39
2.09
4.57
1.23
.752
1.05
2.13
1.22
2.31
3.04
60.40


1/ Minimum support level will be increased if necessary at the beginning of
the new marketing year. 2/ Average local market price for wool sold; does not
include incentive paymen-t-o-~brinf season average return to 62 cents per
pound. 3/ Actual. Seasonally adjusted price in January was $0.574. 4/ Loan
rate.


- 8 -


7






FEBRUARY 1957


CONSTRUCTION TRENDS AID PROSPECTS

In the expanding economy of 1956, residential construction iwas one of
the few sectors in which activity declined. New housing starts trended down-
ward throughout the year and for 1956 as a whole totaled about 1.1 million
units or more than 15 percent fewer than in 1955. Outlays for new homes in
1956 declined only about 8 percent from 1955, because of higher building
costs. Increases in outlays for other forms of construction were more than
enough to offset the drop in homebuilding, so that total outlays for new con-
struction rose 3 percent to a record 44 1/4 billion dollars.

The Departments of Commerce and Labor, in a recent appraisal of the
construction outlook, forecast that outlays in 1957 will rise by 5 percent
from the 1956 total. lew home starts may not quite match the 1956 rate.
Several important categories of nonresidential construction are expected to
increase, but at a rate considerably slower than last year.

New construction, public and private, accounted for more than a tenth
of the total value of goods and services produced in 1956. About 3 million
workers were employed directly in contract construction. In addition, there
were many more in the lumber, paint, steel, cement, clay, and asphalt indus-
tries whose jobs depended indirectly on construction. Any sizable variation
in building activity thus has important effects on a wide range of supplier
industries. Such variations also influence personal incomes and expenditures,
and thus effect the market for farm products and other consumer goods.

Residential Construction

Before the decline in housing starts began in the spring of 1955, the
trend had been steadily upward for 10 years except during the Korean -war. In
the decade from the end of World War II through 1955, almost 11 million new
homes were built. This was nearly as many as were constructed in the pre-
ceding 25 years. A large part of this postwar surge in homebuilding repre-
sented a working off of the backlog of housing requirements that resulted from
the depression and the war. In addition, current demand for housing was
strong because of the increased rate of population growth, rising incomes and
large private holdings of liquid assets, a highly mobile population, and
fairly liberal credit terms.

By early 1955 the postwar backlog of housing demand had largely been
met. Families that had "doubled up" during the depression or the wartime
housing shortage had cgne1rally succeeded in finding separate housing. The
.percentage of married couples not having their own households dropped from an
April 1947 peak of 8.7 percent of the total to 3.5 percent in April 1955.
With a record volume of mortgage lending, there was steady upward pressure on
interest rates throughout 1955 and 1956. Also in mid-1955 the VA and FILA re-
duced the maxiraun term on insured or guaranteed mortgages and raised the
minimum downpayment. Finally, construction costs, after changing little


- 9 -






FEBRUARY 1957 10 -

during 1953 and 1954, started upward again in early 1955. From March 1955 to
the corresponding month of 1956, the Department of Commerce composite index
increased 4j percent, and has continued upward almost without interruption
since then.

After a year and a half of decline, private housing starts in recent
months have held steady around an annual rate of 1 million units. Barring any
new steps by the Federal Government to stimulate homebuilding, no immediate or
sizable pickup is anticipated. The Commerce and Labor Departments, in their
appraisal, anticipated that work would be started on approximately a million
new private nonfarm dwelling units. The supply of funds to finance new home
construction continues tight, despite an increase to 5 percent in the maximum
rate lenders may charge on FHA-insured mortgages. On the other hand, mortgage
terms have been relaxed somewhat. The 30-year term on VA and FIHA loans was
reinstated early in 1956 and later in the year lower downpayments were author-
ized for certain types of housing.

Although housing starts may show no early increase, basic factors in
the demand for new housing argue against further decline. Personal incomes
are currently at record levels. Vacancy rates for the United States in
general continue low. The rate of new household formation, now averaging
around 850,000 per year, is down about half from the postwar peak but still
well above prewar. In addition, a sizable replacement demand results from
obsolescence, abandonment and demolition of existing housing. In the older
parts of many cities, urban redevelopment programs are replacing substandard
housing with modern apartments and office buildings. At the same time,
improved transportation facilities are making possible the development of sub-
urban communities. 'Iew population centers are also growing up, especially in
the West. Each year, one person in five of our population changes his
residence, many to areas where new housing is required. In total, these
factors represent a sizable continuing demand for new housing.

INonresidential Construction

Outlays for private construction other than homebuilding have increased
in every year since the war except 1949. In 1956, the value of private non-
residential building approximated 15.5 billion dollars-a gain of 11 percent
over 1955.

A large part of private nonresidential construction-perhaps a third--
is complementary to home construction. Development of residential areas tends
to create a demand for shopping centers. churches, restaurants, garages, and
social and recreational facilities. Requirements for same of these types of
buildings are reported to be continuing strong. The Commerce-Labor forecast
of construction cites the low vacancy rate in office buildings as indicative
of a continuing strong demand for additional office space. Outlays for
religious, private educational and other community facilities also increased


7






F.BRU. Y 1957


in 1956 and are expected to rise further in 1957. However, the Commerce-Labor
outlook anticipates a decline in the construction of new store buildings
because of the completion of iauny new shopping centers. The volume of con-
tract awards for new stores is also declining.

The upswing in business capital outlays during the past two years has
brought a rising volume of expenditures for new industrial structures. In
1956, spending for industrial building rose by more than a fourth from the
previous year to a new record. But a slower rate of expansion is in prospect
for 1957. There was a substantial decline in contract awards for private
industrial buildings during 1956. By the fourth quarter, the value of con-
tract awards in 37 `astern States was running 30 percent behind the fourth
quarter of 1955. However, the Commerce and Labor Departments have predicted
that industrial construction in 1957 will likely total some 5 percent above
1956, partly because of higher prices. At year end, such outlays were already
at a rate almost 4 percent above that for 1956, so that little or no further
rise is implied.

Public utilities also increased their construction outlays in 1956 with
a record expenditure of 5.1 billion dollars. Although awards of contracts for
new construction in recent months have fallen below a year earlier, prospects
for 1957 indicate a substantial rise--possibly as much as 13 percent according
to the Comerce and Labor projection. The gains are expected chiefly in con-
struction of electric power facilities and of natural gas pipelines.

Government expenditures on new construction have increased each year
since 1946. Last year, a rise of 8 percent in public construction brought
total outlays for the year to 14.4 billion dollars. Of this amount, 5.1 bil-
lion was spent for highways--13 percent more than in 1955. Educational
facilities accounted for a rise of 4 percent from 1955. And outlays for
military facilities increased by 8 percent.

Greater outlays are in prospect for all of these fonas of public con-
struction spending in 1957. The new Federal-States highway program is
expected to boost spending for new roads by about 8 percent from 1956. School
construction, assuming no impact this year from new legislation, is expected
by the Commerce and Labor Departments to rise by more than a tenth. Spending
for military facilities is also likely to increase. New hospitals, water
facilities, sewage disposal and other categories of public expenditures are
all expected to show increases from 1956 to 1957.

FOREIGN DEMAND
The high level of domestic economic activity in 1956 was supported by
an unprecedented volume of non-military exports. U. S. exports (excluding
military aid shipments) in 1956 totaled 17.2 billion dollars, 3 billion or
21 percent over 1955. Farm commodities accounted for approximately one-third
of the increase.


- 11 -






FEBRUARY 1957


U. S. agricultural exports in 1956 broke through the previous high
achieved in 1919 and total 4.2 billion dollars. Compared with 1955, the value
of exports increased 30 percent. Of the major commodity groups, only tobacco
showed a decline from 1955, a year of heavy foreign restocking (table 3).


Table 3.- Calendar year exports, 1956


Item : 1956 : Change from 1955

: Mil. dol. Mil. dol. Percent

Cotton 718 249 53
Grains and feeds : 1,404 397 39
Tobacco, unmanufactured 333 -23 -6
Vegetable oils and oilseeds 442 120 37
Fruits and vegetables 370 84 29
Livestock products 581 84 17
Other, including relief 310 52 20


Total agriculture : 4,158 963 30

Total, domestic exports / : 17,164 3,000 21


2/ Excluding military supplies under grant aid.


For several commodity groups, 1956 was a year of substantial increases
in export volume. Cotton exports rose 55 percent over the low level of 1955
with renewed purchases by foreign countries under CCC's competitive price
program (representing both stock building and a high rate of current use).
Exports of grains and feeds were about 10 percent above the previous high of
1947: the increase reflected heavy movement of feed grains during the first
half of the year, and abnormally large European requirements for wheat and
unprecedented shipments of rice in the second half. Exports of vegetable oils
and oilseeds continued their steady upward surge, with an increase of about
40 percent over the previous year. Exports of fruits and vegetables likewise
exceeded the previous peak set in 1947.

Some of the gains in agricultural exports arose from the prosperous
conditions abroad. Another contributing factor notably for cotton and grains,
was Government export programs which helped overcome problems of pricing and
dollar shortage. In 1956, 41 percent of U. S. farm exports (1.7 billion
dollars) was shipped to foreign countries without an expenditure of dollars
on their part; of the 59 percent that was sold for dollars, about one-fifth
moved at prices below those in the U. S. market.


- 12 -





FEBRUARY 1957


Exports should continue to move out at a high rate during the first
half of 1957. Over 3 million bales of cotton were shipped during July-Dec-
ember 1956, and approximately the same quantity may move during January-
June 1957. Including cotton, about 700 million dollars worth of commodities
are scheduled for export under Title I of Public Law 480 during the next
6 months. About 100 million dollars worth has been authorized for export
during this period under the Mutual Security Act, with an additional
200-300 million dollars worth probably moving under barter, donation and
other government export programs. However, farm exports during the 6 months
ending in June 1957, are not likely to equal the 2.3 billion dollars achieved
during the last half of 1956. The Suez crisis has adversely affected some
foreign economies, and their large requirements for U. S. fuel and other
non-agricultural commodities may cause them to reduce purchases of less
essential farm commodities. Furthermore, farm exports are seasonally lower
during the spring.
Importance of Government
Financing in 1956

Between 1955 and 1956 the increase in Government financed exports is
estimated at about 600 million, compared with an overall gain in farm exports
of 963 million dollars. Four-fifths of the estimated increase in exports
under special Government programs was due to larger shipments under Public
Law 480. Exports under the Mutual Security Act included shipments of cotton
previously authorized but not exported until Commodity Credit Corporation
stocks became available at competitive world prices.

Table 4.- United States agricultural exports by specified
Government export programs, 1955, 1956 1/


Item : 1955 : 1956 : Change

Mil. dol. Mil. dol. Mil. dol.

Exports under Public Law 480
Sales for foreign currency
(Title I) 265 620 355
Famine and other urgent relief
(Title II) 76 102 26
Domations (Title III, Sec. 302) 178 175 -3
Barter (Title III, Sec. 303) 260 369 109
Total 779 1,2W6 -WT

Exports under the Mutual Security
Act 368 450 82
Export-Import Bank loans : 44 77 33
Total, under specified export
programs 1,191 1,793 602
Total, agricultural exports 3,195_ 4,158 963
L/ Data for 1956 partly estimated.


- 13 -






FEBRUARY 1957


- 14 -


SURPLUS DISPOSAL DEVELOPMENTS
Summary of CCC Operations, 1956

On December 31, 1956, the total investment of the Commodity Credit Cor-
poration in price-support commodities aggregated 8,211 million dollars com-
pared with 8.666 million on the same date a year earlier. Of the 1956 total,
2,319 million dollars represented loans outstanding,while price support in-
ventories amounted to 5,392 million dollars at cost value.
The decline of 455 million dollars in the total investment masks the
large volume of transactions which took place during the year. (Table 5.)
Table 5.- CCC Investment in Price Support during calendar year 1956 i/
(all figures in millions of dollars)

: Total : : : Total :Change
Additions.Reductions
:investment: investment: from
Commodity : Dec. 31, : during during : Dec. 31, : Dec. 31,
: 1955 : 1956 / : 1956 3/ : 1956 1955

Cotton, upland : 2,330 969 1,576 1,724 -606
Wheat and wheat flour : 2,854 895 1,056 2,694 -160
Corn : 1,578 745 277 2,046 468
Rice 240 261 327 174 -66
Barley 105 117 124 98 -7
Sorghum grain 153 99 141 110 -43
Oats 65 45 58 51 -14
Nonfat dry milk 28 130 137 21 -7
Butter and butter oil : 121 109 230 1 -120
Cheese 131 82 124 89 -42
Wool 94 2 47 49 -45
Other agricultural 883 463 432 914 31
Exchange commodities 4/ : 83 200 41 242 159

Total : 8,666 4,115 4,570 8,211 -455


/ Includes commodities pledged for loans and in inventories, although
committed to sale or otherwise obligated.
/ Net new loans, acquisition of collateral, purchases, and net carrying
charges, etc.
3/ Loan repayments, transfers to accounts receivable, charge-offs, sales,
donations, and other dispositions (net storage and transit losses).
4/ Acquired through barter for transfer to the strategic and supplemental
stockpile.






FEBRUARY 1957


During 1956 reductions equalled 53 percent of total investment at the begin-
ning of the year. Reductions in upland cotton, for instance, equalled two-
thirds of the investment at the beginning of the year; in the case of rice,
barley, and dairy products, reductions during the 1956 were larger than
investment on December 31, 1955. However, new loans, acquisitions of collat-
eral and purchases during 1956, particularly for corn, wheat and cotton,
nearly offset total reductions. Total additions to investment during the
year amounted to 4,115 million dollars. Total reductions amounted to
4,570 million dollars; this includes surplus disposal operations (sales and
donations) of 3,926 million dollars and 644 million dollars of loan
transactions. The net loss to the Commodity Credit Corporation on price
support operation during 1956 was 1,284 million dollars; almost all of the
loss arose from the difference between CCC cost and the dollar proceeds of
disposals.
CCC Disposition Commitments
The December 31, 1956 investment figures cited above include commodi-
ties committed for sale or otherwise obligated. Data are also available on dis-
position commitments of CCC owned commodities; these represent firm contracts
made by CCC covering commercial sales (including those financed under Govern-
ment export programs), non-commercial sales, transfers, donations, and
exchanges. Domestic sales include commodities which may but are not required
to be exported.
Disposition commitments during 1956 reached the unprecedented level of
2.7 billion dollars, 72 percent aboye the comparable figure for 1955 (valued
for the most part at the dollar return to CCC, unlike the data on CCC invest-
ment given in the preceding section which are entered at CCC cost.) (table 6).


Table 6.- Summary of CCC disposition commitments, 1955 and 1956

Jan. 1-Dec. 28 Jan. 1-Dec. 26
Disposition Valuation 1955 1956

: Mil. dol. Mil. dol.
Domestic
Commercial sales :Dollar return :275 298
Transfers do. 58 176
Donations Dollar value : 145 94
Total : : 567
Foreign
Commercial sales : Dollar return : 521 1,408
Non-commercial sales :do. 6 12
Transfers do. 75 106
Donations :Dollar value :238 259
Barter :Dollar return 268 381
Total 1 2:,16
TOTAL DISPOSITIONS 1/ : : 1,588 2,739
lJ/ Including fire, theft, spoilage, etc.


- 15 -






FEBRUARY 1957


Foreign disposition at 2.2 billion dollars were twice as high as in 1955.
Most of the increase resulted from sales of cotton for export. Sales for ex-
port and barter accounted for the bulk of the grain disposition, while about
90 percent of the total dispositions of dairy products represented domestic
and foreign donations. Nearly all foreign dispositions were at prices below
those prevailing on the U. S. market.

Dispositions during 1956 included 7.3 million bales of upland cotton,
340 million bushels of wheat, 8.7 million tons of feed grains, 36 million
hundredweight of rice (milled basis) and 1.3 billion pounds of dairy products
(table 7.)


Table 7.- CCC disposition commitments for specified commodities
calendar years 1955 and 1956 L/

Domestic Foreign Total
.disposition disposition 2
Commodity Unit : :
:1955 : 1956 : 1955 : 1956 : 1955 : 1956
.

Cotton, upland : 1,000 bales : 95 113 83 7,190 178 7,313

Wheat : Mil. bu. : 13 18 229 321 243 340

Corn : Mil. bu. : 97 91 76 59 173 150

Rice 3/ Mil. cwt. : 2 8 3 28 5 36

Sorghum grains Mil. cwt. : 11 13 44 25 55 38

Barley : Mil. bu. : 5 5 86 69 91 74

Oats : Mil. bu. : 22 17 33 30 55 48

Wool Mil. lb. : 18 69 --- --- 18 69

Dry milk / Mil. lb. : 104 166 596 578 700 744

Butter 5/ Mil. lb. : 155 129 227 92 382 221

Cheese : Mil. lb. : 94 135 144 167 238 302

I/ January 1-December 28, 1955 and January 1-December 2o, 1956.
2/ Including fire, theft, spoilage, etc. Total of unrounded data.
3 Milled basis.
Nonfat dry milk solids (includes condensed whey).
SIncludes butter oil.


- 16 -





FEBRUARY,1957


- 17 -


FARM INCOME

Farmers' realized net income is now estimated at 11.8 billion dollars
for 1956, up a half billion dollars or 4 percent from 1955. Approximately
300 million dollars of this increase was due to payments under the new Soil
Bank and wool incentive programs. The remaining 200 million dollars reflec-
ted increased cash receipts from farm marketing, only partly offset by
higher production expenses.

Cash receipts from farm marketing in 1956 totaled 30.0 billion dol-
lars as compared with 29.3 billion in 1955. The increase reflected a larger
volume of marketing in 1956, with prices showing little change on the aver-
age. Cash receipts from crops amounted to 13.8 billion dollars, or 3 percent
higher than in 1955. Total cash receipts for livestock and livestock pro-
ducts rose 2 percent to 16.2 billion dollars.

Farmers' cash receipts from marketing in January 1957 are tentatively
estimated at 2.5 billion dollars, down seasonally from December 1956 and
about the same as January a year ago. Prices averaged about 5 percent higher
than a year ago, but the volume of marketing was smaller. Receipts from
livestock and products were around 1.4 billion dollars, up 5 percent from
January 1956, largely because of higher meat animal prices. Crop receipts
were about 1.1 billion dollars, down 8 percent from a year ago, mostly be-
cause of smaller marketing of cotton.

LIVESTOCK AND MEAT

A small reduction in meat production this year is indicated by the
smaller January inventory of meat animals on farms. Cattle and calves on
farms totaled 95.2 million head, down 2 percent from the record 968 million a
year earlier. The number of sheep and lambs, at 30.8 million head, was off
slightly. The number of hogs was reduced 5 percent, as numbers of older hogs
for early 1957 slaughter were down sharply and fall-born pigs slightly.

The cattle inventory at the beginning of the year included 4 percent
fewer steers, 2 percent fewer heifers, 1 percent fewer calves and 2 percent
fewer cows than in January 1956. The number of cattle and calves on feed
January 1 was 4 percent larger than a year ago. The make-up of these in-
ventories indicates that marketingsof fed cattle will continue large and
probably will be distributed more evenly throughout 1957 than in 1956. Un-
less drought conditions are quickly relieved, total cattle slaughter for this
year promises to be about as large as last year. Lighter average dressed
weights per head may hold beef output to slightly less than a year earlier.

If cattle and calf slaughter in 1957 approximates the 40.6 million
head slaughtered in 1956, prices also will probably average not greatly dif-
ferent from last year. Seasonal price movements may conform more closely to
those of an average year than they did in 1956. Fed cattle prices may prove
stable, or strengthen a bit, in months ahead. Prices of stocker cattle
normally are highest in the spring and probably will be so this year also.






FEBRUARY 1957


Smaller hog slaughter seems assured by the fewer pigs saved last fall
and by last December's intentions of hog producers to reduce spring pig farrow-
ings by 2 percent. However, the difference between this year's and last year's
year's slaughter will narrow as the year progresses.
Hog prices in mid-February were $5.00 per 100 pounds above a year
before. Prices will probably stay below their winter high while marketing of
fall crop pigs are largest, but a seasonal advance is likely by late spring.
The number of sheep and lambs on farms at the beginning of this year was
1l percent smaller than a year earlier. Inventories of stock sheep were down
2 percent but the number of feed was 5 percent larger than January 1956.
Slaughter supplies may exceed those of a year earlier for another month or
two. It is less certain that they will do so later. Slaughter this summer
and fall will be affected by the number of sheep and lambs withheld from
slaughter for feeding and breeding. If pastures and other conditions are
favorable, slaughter at this time will likely be less than a year earlier.
Sheep and lamb prices are currently a little above early-1956 prices,
when slaughter of all livestock was relatively large. Prices may continue at
or above year-earlier prices at least until mid-spring.
DAIRY PRODUCTS
Production of milk totaled 9-7 billion pounds in January compared to the
previous record for the month of 9.6 billion pounds in January 1956. The
greater output reflected a continued increase in the rate of production per
cow; the number of milk cows on farms January 1 was about 1 percent smaller
than a year earlier. With abundant feed supplies, and reasonably favorable
milk-feed price relationships in prospect, milk output is likely to continue
at a record level, barring a spread of drought conditions into more important
dairy areas. Revised data indicate that 125.7 billion pounds of milk was
produced in 1956 compared with previous record of 123.1 billion in 1955.
The pattern of milk use in recent months has been about the same as a
year earlier. Use in fluid form has increased a trifle faster than population
the past year, with the help of the Special Milk Program. Output of butter was
a little smaller than a year earlier in the closing months of 1956, while
cheese production was greater. During January, however, production of both
items was slightly above early 1956.
Per capital consumption declined slightly for butter and nonfat dry milk
in 1956 but increased for American cheese, ice cream and fluid whole milk.
Total consumption of all dairy production was equivalent to 699 pounds of milk
compared with 698 pounds in 1955 and the 1947-49 average of 732 pounds. The
1955 and 1956 totals included the equivalent of 28 and 31 pounds of milk per
capital which civilian consumers received from CCC stocks or which were pur-
chased in large part with Government funds (under the Special Milk Program).
Consumer incomes are running larger, and retail prices for fluid milk and same
other items are slightly above last year's levels. Per capital consumption of
the several dairy products probably will show little change in 1957 compared
with 1956.






FEBRUARY 1957


Purchases of cheese and nonfat dry milk for price support were above
a year earlier in January, but purchases of butter were smaller. So far in
the current marketing year, the milk equivalent of purchases has been equal
to a year earlier. Little change is likely in the next year with purchases
probably again taking around 4 percent of milk production.

Prices to farmers in 1957 probably will be about the same as in 1956
since the levels of support for manufacturing milk and butterfat will remain
unchanged. Actual prices in 1956 showed small increases over 1955, reflecting
higher support levels, upward adjustments in fluid milk prices in a number of
markets, and somewhat greater utilization in fluid milk outlets. Cash re-
ceipts from dairy products promise to set a new record high in 1957, compared
with the near-record level of a little over 4.5 billion in 1956. However, a
number of production costs also are higher.
EGGS AND POULTRY

Egg prices rose slightly in late January, following the announcement
on January 25 that the Department of Agriculture would resume the purchase
of eggs for the School Lunch Program. The mid-January farmers' price of
33.2 cents per dozen was 13.4 cents below a year earlier.

Under the renewed egg-buying program, purchases in the first 2 weeks
of February totaled almost 63 thousand cases of large eggs. Purchases in the
second week of the buying program--48,000 cases--were almost up to the average
weekly rate for September 28 to December 7, 1956, when 584,000 cases of medium
eggs were bought. Paying prices for oil-treated large eggs of appropriate
specifications at Midwest locations were 33.95 to 34.90 cents per dozen in the
second week of the current program.

The egg-laying flock now on hand is about the same as a year earlier,
and the February 1 rate of lay was also close to last year. As a result,
production on February 1 was about the same as last year. Total production is
rising seasonally.

Hatchery operations for replacement type chicks were below a year
earlier, by 8 percent in December and 21 percent in January. However, it is
doubtful that the percentage cuts for the important hatching months of March,
April, and May will be as large as in January. Eggs in incubators February 1
were 30 percent fewer than the usually large number a year earlier. Hatchings
in the spring will strongly influence the volume of production for 12 months
beginning about September. Farmers' early February intentions were to raise
9 percent fewer replacement chicks than the 472 million raised in 1956.

Broiler prices have made considerable recovery from their recent lows,
reaching about 20 and 21 cents per pound. in most producing areas in the first
week of February. Toward mid-month they weakened slightly from earlier in the
month. The mid-January U. S. average was 18.0 cents per pound. Marketings
in February are from placements about 8 percent larger than 12 months earlier.
Placements in recent weeks have been 10 to 15 percent above 1956.


- 19 -





FEBRUARY 1957


- 20 -


All indications point to a larger 1957 turkey crop than the 1956 record
of 76 million birds. Growers' January intentions were to raise 10 percent
more birds this year than last (13 percent more heavy breeds and 3 percent
fewer light breeds). These intentions are supported by the January 1 inven-
tories which showed 14 percent more heavy breeders on hand and 2 percent fewer
light breed birds than a year earlier.

OILSEEDS, FATS AND OILS

Despite a record crop, farm prices for soybeans through January 15
were maintained well above a year earlier and above the present support price
of $2.15 per bushel. The average for January reached $2.31 per bushel--a new
seasonal high for the current marketing year. Heavy export and crusher demand
for soybeans along with the orderly marketing of beans by the farmer were the
important factors. Prices since January have declined somewhat and in mid-
February central market prices were slightly lower than a year earlier.

Soybean exports are running above a year ago and the total for the
1956-57 season may exceed last year's record 67 million bushels by about
10 million bushels. Crushings also are at a new high and are expected to
total about 325 million bushels, 15 percent more than the previous peak. A
substantial part of the heavy crushings is due to a strong export demand for
edible vegetable oils.

Soybean oil prices increased 15 percent from October through January.
Since then soybean oil prices declined slightly but in mid-February were sub-
stantially above a year earlier. The carryover of 1956 crop soybeans on
October 1, 1957 is likely to be at a new high of 25-30 million bushels, a
substantial portion of which is expected to be in CCC hands. However, stocks
of edible food fats are likely to be down considerably.

The Department has urged soybean producers to watch soybean market
prices closely during the next several weeks for possible advantageous re-
demption of price-support loans on 1956-crop soybeans. While the CCC has no
soybeans in its inventory at present, nearly 54 million bushels of 1956-crop
soybeans were under support as of January 15.

Prices received by farmers for 1956 crop cottonseed averaged $53.20 per
ton, well above a year earlier and higher than support. The higher price
reflects increased bidding for a crop sharply reduced by fewer acres and
slightly lower yields. In addition, there has been a strong consumer demand
for cottonseed oil, meal, linters and hulls. Cottonseed oil prices in August
1956-January 1957 averaged about 15 percent higher than the previous year be-
cause of strong domestic and export demand for edible oils.

Flaxseed output during the current marketing year, the second largest
of record, is considerably more than needed for domestic consumption as oil
and for feed and seed. About 17 million bushels are estimated to be available
for export, delivery to CCC, or addition to stocks. Export prospects are not






FEBRUARY 1957


as favorable as last year because of sharply increased exportable supplies in
foreign countries. The season average price received by farmers for 1956
crop flaxseed, tentatively estimated at $3.02 per bushel, 7 cents under the
support level, reflects the surplus situation.

The USDA on February 9 announced that the 1957 crop soybean, flaxseed
and cottonseed crops would be supported at 70, 65, and 65 percent of the Janu-
ary 15, 1957 parity prices, respectively. These percentages represent a
decrease of 5 points from the 1956 levels. The 1957 crop support prices and
comparisons with 1956 levels are as follows: Soybeans, $2.09 per bushel,
down 6 cents; flaxseed, $2.92 per bushel, down 17 cents; and cottonseed,
$46 per ton (loan value), down $2.00.

Supplies of food fats in the marketing year which began on October 1,
1956 including the oil equivalent of oilseeds exported, will total nearly
11.8 billion pounds, approximately the same as the previous year's record peak.
Substantially reduced stocks at the outset are offset by increased output.

Exports of all food fats and oils including the oil equivalent of oil-
seeds but excluding butter are expected to equal last year's record 2.7 bil-
lion pounds. An increase in U. S. exports of soybeans and soybean oil is
likely to offset a decline in lard and cottonseed oil. Per capital consumption
probably will average near 45 pounds (fat content, including butter), up
slightly from a year ago. This rise together with the increase in population
will result in a larger total domestic consumption. Carryover stocks of
butter on October 1, 1957 may be nearly the same as a year earlier, but those
of the vegetable oils and lard will be less.

Large exports and a continued rise in domestic disappearance are ex-
pected to reduce carryover stocks of food fats and oils next September 30 to
the lowest for that date since 1951. But still they will be adequate as a
working inventory. Also year-end stocks of soybeans will be up.

FEED

Prices of most feeds declined in the last half of January and early
February, although they continue generally higher than a year ago. The price
of No. 3 yellow corn atChicago averaged $1.27 per bushel for the week ended
February 8, 8 cents lower than in the middle of January. This was close to
the seasonal low reached last October, and only slightly higher than a year
earlier. Only about 28 percent of the 2,774 million bushels of 1956 corn in
the commercial area was produced by farmers cooperating with the acreage allot-
ment program, compared with about 40 percent in 1955. Corn produced by these
farmers would be eligible for the $1.50 national average support price.
Through January 15, 212 million bushels of 1956 corn had been placed under
price support compared with 200 million for the same period of 1955-56.
Prices of oats, barley and sorghum grains have been above the 1956 supports in
recent months, and much smaller quantities of these grains are going under


- 21 -






FEBRUARY, 1957


price support than in 1955-56. High-protein feed prices have been about the
same as a year earlier, and the index of prices paid for all feeds purchased
by farmers about 5 percent higher.

On February 9 price supports for 1957 crop oats, barley and sorghum
grains were announced at 70 percent of January 15 parity prices. The na-
tional average support price for oats is 60 cents per bushel, 5 cents lower
than in 1956; barley, 94 cents per bushel, 8 cents lower; and sorghum grains
1.83 per 100 pounds, 14 cents lover.

Stocks of feed grains in all positions on January 1 totaled 121 mil-
lion tons, 4 percent larger than the previous record stocks on that date last
year. Utilization of feed grains during October-December was about the same
as in that quarter of 1955, but a little below average. For the entire
1956-57 marketing year, domestic use and exports may be a little less than in
1955-56. The total carryover of feed grains into 1957-58 is expected to be
around 15 percent above the record stocks at the beginning of the 1956-57
season.

WHEAT

Cash wheat prices continue generally above the effective loan level
and are not far below the high for the season to date. The decline in price
of No.2 Soft Red Winter at St.Louis was somewhat more than the small recent
declines in wheats in other markets, but on February 18th the price of No.2
Soft Red at St. Louis was still 7 cents above the effective loan. This was
more than wheat in other markets, except in the Pacific Northwest. Prices
of white wheat in the Pacific Northwest on February 18th were 40 cents above
the effective loan. Some white wheat is being sold from CCC stocks at a
slightly higher rate than the loan rate plus 5 percent plus carrying charges.

The average price received by farmers in mid-January was $2.09, which
was 2 cents above a month earlier and 14 cents above a year ago. Strength in
wheat prices results from heavy exports, operation of the changed export pro-
gram since September 4th, and also from the price support program.

Wheat exports July through January totaled about 297 million bushels
this year, compared with 147 million for the same period a year earlier. For
the July-June marketing year as a whole, exports are now expected to total
about 450 million bushels, compared with 346 million bushels last year. On
the basis of indicated exports and domestic use of about 600 million bushels,
the carryover on July 1,1957 may be reduced by about 50 million bushels below
the 1,034 million a year earlier. This will be the first substantial reduc-
tion since 1952.

Through January 15 farmers had placed 233.3 million bushe..s of 1956-
crop wheat under support and had withdrawn 53.8 million, leaving a net of
179.5 million bushels. About half of these withdrawals took place in the
Pacific Northwest, where prices were strong. On the same date a year earlier,
the quantity of 1955-crop wheat which had been placed under support amounted


- 22 -






FEBRUARY 1957


- 23 -


to 256.5 million bushels, of which 3.9 million had been withdrawn, or a net of
252.6 million bushels. On January 15, farmers also had 13.1 million bushels
of 1955-crop wheat under the reseal program.

Over 11.3 million acres of wheat covered by 202,452 agreements, were
signed under the 1957 Soil Bank Acreage Reserve as of February 8. The acre-
age includes winter wheat signed last fall, less cancellations, plus spring
wheat signed through February 8. The deadline for producers to enter land in
the 1957 Reserve for spring wheat is March 8.

FRUIT

Prices for Florida oranges at shipping points and at terminal auctions
have increased since mid-January, following a dip in the first half of that
month. In early February, prices both at shipping points and on auction were
a little under a year previously. Prices at processing plants also have in-
creased since mid-January but have continued moderately under a year earlier.
With demand for processing seasonally heavy, some further increases in prices
seem probable this winter. Auction prices for California oranges also de-
clined during the first half of January, then increased. In early February,
they averaged considerably higher than a year earlier. Supplies of all
varieties of oranges in Florida remaining to be marketed after February 9 were
moderately larger than a year previously, but supplies of California Navels
and miscellaneous varieties were moderately smaller.

Supplies of Florida grapefruit remaining to be marketed after Febru-
ary 9 were a little smaller than a year earlier. With the crop smaller than
a year ago, both shipping point and auction-prices have been higher this fall
and winter than in this period of 1955-56. However, prices at shipping points
declined a little more during January and early February than in this period
of 1956. Prices probably will hold steady during late winter.

Utilization of Florida oranges and grapefruit for fresh market use was
somewhat lighter through February 9 of the 1956-57 season than in the same
period of 1955-56. For processing, use of oranges was about as large as a
year earlier, but that of grapefruit was smaller. Production of frozen orange
concentrate by February 2 was over23.7 million gallons, 5 percent under a year
earlier. But with the larger remaining supplies of oranges, output is expect-
ed to overtake that of last season. Packers' stocks on February 2 were
22 percent larger than a year previously. The pack of canned Florida orange
juice by February 2 was 3 percent lighter than a year earlier, and that of
grapefruit juice was down 7 percent. Packers' stocks of all canned Florida
citrus juices were up 5 percent.

Prices received by growers for apples, on a national average basis,
averaged considerably higher in mid-January 1957 than a year earlier. Since
then prices for leading varieties at shipping points generally have held fairly






FEBRUARY 1957


steady, although in Michigan they tended to increase. In Washington, where
stocks are much lower than a year ago, prices were much above those of a year
ago. Total stocks of apples in cold storage on February 1, 1957 were lighter
than a year earlier. In contrast, stocks of pears were larger. Grower prices
for pears averaged lower for January than December, yet considerably higher
than for January 1956. Prices on the Chicago auction in early February held
fairly steady.

The 1957 Florida winter crop of strawberries is estimated to be a
little smaller than the 1956 crop. However, fresh market shipments by early
February were somewhat heavier than a year previously. Preliminary acreage
in the early spring States is a little larger than that harvested in 1956.
Prospective acreage in the mid and late spring States is about 6 percent lar-
ger than that harvested in 1956. Most of the increase is in the late spring
States. On February 1, 1957, cold-storage stocks of frozen strawberries from
the record 1956 pack were considerably larger than a year earlier.

COMMERCIAL VEGETABLES

For Fresh Market

Indications in early February point to substantially smaller supplies
of vegetables for fresh market sale this winter than last. Heavy rains in
some growing sections of Florida caused considerable damage to lima beans,
snap beans, cabbage, sweet corn, escarole, lettuce, green peppers and tomatoes,
causing a downward revision from January to February in estimated production
of these crops. Among major vegetables biggest decreases this winter compared
with a year earlier are in prospect for cabbage, carrots and lettuce, as
acreages in Texas were cut back sharply because of drought and a shortage of
water for irrigation. However, supplies of cabbage will be down much less
than indicated production, because of the much larger stocks of Danish cabbage
from the fall crop. Smaller tonnages are also in prospect for lima beans,
snap beans, beets, broccoli, celery, green peppers, shallots and spinach. On
the other hand, several major vegetables, including cauliflower, sweet corn
and tomatoes, promise to be in significantly larger supply than a year earlier.
Larger supplies are also in prospect for artichokes, Brussels sprouts, cucum-
bers, eggplant and kale.

Imports of fresh vegetables, principally tomatoes, cucumbers and green
peppers, are also running well ahead of the light volume last winter. Dry
onions are in moderately larger supply than a year ago, but supplies of early
spring onions from Texas are expected to be substantially smaller. Demand is
expected to continue strong and average prices received by farmers during the
next few weeks are likely to average at least moderately above those of a
year earlier.

Production estimates are available for three early spring vegetables,
and indicated acreage is available for 4 others. Prospective production of
early spring broccoli is 8 percent less than a year earlier while production


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FEBRUARY 1957


- 25 -


of early spring cauliflower is expected to be about a fourth larger. Produc-
tion of shallots this spring is expected to be almost a fourth smaller than in
the spring of 1956. Acreage of spring cabbage is down about 3 percent from a
year earlier, onions down 27 percent, asparagus up 2 percent, and late spring
watermelons up 8 percent.

The Department of Agriculture acreage marketing guide, released in
February, suggests for 18 spring vegetables a 1957 planted acreage 2 percent
less than in 1956, with the objective of a moderately smaller tonnage this
spring than last.

For processing

Incomplete data on 1956 pack and January 1, 1957 stocks point to record
large supplies of processed vegetables available for distribution during the
remainder of the current marketing season. Among major canned items, corn,
tomatoes, tomato juice, tomato catsup and sauerkraut appear to be in largest
supply compared with a year earlier. But with the exception of asparagus,
snap beans and spinach most other canned items are also in larger supply.
Supplies of frozen vegetables are also substantially larger than a year ago.
Stocks of frozen items on February 1 amounted to 783 million pounds, up about
40 percent from a year earlier. Biggest percentage increases occurred in
holdings of frozen potatoes, mixed carrots and peas, green peas, broccoli,
cauliflower and asparagus. But holdings of all other items were also up
significantly. With substantially larger supplies available, retail prices of
both canned and frozen items are likely to average a little lower during the
next few months than in the same period last year.

POTATOES AND SWEETPOTATOES

Consumer demand for potatoes and sweetpotatoes into the spring is ex-
pected to be about the same as a year earlier. Through February 16,
approximately 8.7 million hundredweight of potatoes had been diverted to
starch and livestock feed under the Section 32 diversion program--about
1.6 million hundredweight more than a year ago. Of this, 5.8 million hundred-
weight, or about two-thirds of the total, qualified for diversion payments.
But stocks of fall crop potatoes on February 1 were larger than a year earlier
and prospects are for larger production of winter and early spring potatoes.

Supplies of sweetpotatoes are substantially smaller than a year earlier
and prices to growers are well above the low levels of a year ago. But de-
mand for sweetpotatoes has declined sharply in recent years. Despite the
small supplies available, prices received by farmers in mid-January were only
9 percent above the 1947-49 average. The acreage marketing guide recommends
for 1957, a 5 percent increase from the 1956 acreage.
WOOL
Prices of wool both here and abroad began to advance at about the time
of the opening of the current domestic marketing season as world demand
strengthened relative to available supplies. Except for temporary interrup-
tions, the rise extended into early February of the year.






FEBRUARY 1957


- 26 -


As of early February, prices of merino wools at the British Dominion
auction centers ranged between 25 and 30 percent above last March. Prices
of most crossbred wools were up between 15 and 25 percent. Net advances
in Boston quotations for some domestic descriptions over the same period
were as much as 27 percent. Quotations for most domestic descriptions were
up between 10 and 25 percent, with advances for fine and half-blood wools
greater than those for the coarser grades. Early February quotations were
at the highest levels in about 2 years.

The general advance in wool prices abroad and at Boston has been
reflected in the mid-month average of prices received by domestic growers
for shorn wool. The average for January was the highest since March 195;.
In the first 7 months of the current season the mid-month averages were below
the 1955 seasonal average of 42.8 cents per pound, grease basis, but there-
after they were above. Government payments to producers after the close of
the season will bring the average return for the season up to 62 cents, the
incentive level under the 1956 program. The incentive level for the 1957 sea-
son also is 62 cents.

Government payments under the 1955 program amounted to about 57 million
dollars, including promotion deductions of about 3 million dollars. The
total consisted of about 50 million dollars for shorn wool and about 7 mil-
lion dollars for lambs (pulled wool compensatory payments).

The 1956-57 world supply of wool is larger than that for 1955-56. An
increase of 4 percent in world production is indicated.

A decline of 2 percent in the number of stock sheep on farms and
ranches in the United States at the beginning of this year from a year earlier
suggests slightly lower shorn wool production this year. Drought in Texas
was an important factor in the reduction in stock sheep numbers.

Indications are that world consumption of wool last year was higher
than in 1955. The increase last year was the second in succession. The
world wool textile industry also consumed more fiber other than wool, but the
increase was a little less than that for wool.

Domestic mills used more of both apparel and carpet wool last year than
in 1955. The increases last year were the second in succession. Use of ap-
parel wool was up 0 percent and of carpet wool up 8 percent.

The increase in the use of carpet wool last year was reflected in
larger imports of duty-free wool for consumption. With imports of dutiable
wool lower than in 1955 and little change in domestic production, the increase
in mill use of apparel wool suggests a reduction in stocks. Commodity Credit
Corporation holdings of wool acquired under the 1952-54 price support programs
were reduced substantially last year.






FEBRUARY 1957


- 27 -


COTTON

Exports of cotton are running far ahead of last season's rate but con-
sumption by domestic mills continues to lag somewhat.

Shipments of cotton abroad from August through December this season
totaled about 3.0 million running bales, 2.3 million more than a year earlier.
They included about 34,000 bales of American-Egyptian cotton compared with
about 3,000 bales a year earlier and the 1955-56 season total of about 20,000.
For the 1956-57 season, exports of all cotton probably will be around 6.5 mil-
lion bales.
As of February 5, CCC had sold about 6.4 million bales of upland cotton
for export between August 1, 1956 and August 15, 1957. Prices for which CCC
has sold cotton have gone up slightly in recent sales because of the addition
of carrying charges to the sales prices. However, CCC sales prices are still
competitive with foreign spot market prices for foreign grown cotton.
Funds authorized by the U. S. Government to finance exports of cotton
in the fiscal year 1957 totaled about 426 million dollars as of February 7.
If completely used, these funds would finance the export of about 2.8 million
bales of cotton. However, some of this money probably will not be used be-
cause the figure includes some agreements under Public Law 480 for which pur-
chase authorizations have not been issued. In 1955-56 about 1.6 million bales
of exports were financed by U. S. Government funds, including Export-Import
bank loans.

Domestic mill consumption from August 1 through December 29 was about
3.8 million bales, or about 4 percent less than in approximately the same
period a year earlier. The ratio of mill stocks of cotton broadwoven goods
to unfilled orders was higher than a year earlier from June to December. This
probably indicates that consumption for the rest of the season will remain
somewhat below a year earlier. The estimated consumption for the 1956-57 mar-
keting year is about 9 million bales compared with 9.2 million last year.
Consumption of American-Egyptian cotton has increased sharply this year
despite the fact that the rate of consumption of all extra-long-staple cotton
is running a little below a year earlier. From August through December con-
sumption of American-Egyptian cotton was about 63 percent of the consumption
of all extra-long-staple cotton compared with about 12 percent in the same
period a year earlier. This increase probably is due to the competitive
pricing of American-Egyptian cotton and the limited supply of Egyptian cotton
available.
The supply of cotton in the U. S. in 1956-57 is a record 27.8 million
bales. With disappearance estimated at about 15.5 million bales the carry-
over at the end of the season will probably be about 2.2 million bales
smaller than the record high of about 14.5 million bales on August 1, 1956.
The objective for the 1957 Soil Bank Acreage Reserve Program for cotton
has been set at 3.5 to 4.5 million acres. As of February 8 about 1.5 million
acres had been placed in the cotton acreage reserve. Farmers participating






FEBRUARY 1957


in the program will receive payments for the land which they place in the
acreage reserve at the rate of 15 cents per pound times the county average
normal yield, adjusted for each farm according to the productivity of the
land for cotton production. The average normal yield for the U. S. has been
set at 361 pounds per acre. The maximum acreage from each farm that may be
placed under acreage reserve is the larger of 10 acres or 30 percent of the
farm acreage allotment.

Spot market prices have increased somewhat in recent weeks. On
February 13, the average 14 spot market price for Middling 1-inch cotton was
33.81 cents per pound. This compares with 33.35 cents about a month earlier
and the loan rate at these markets of about 33.02 cents per pound.

The parity price for upland cotton in mid-January 1957 was 36.56 cents
per pound, 0.75 cents above December. The increase reflects a higher adjusted
base price for cotton in 1957 than in 1956, 12.52 cents per pound compared
with 12.39 cents, and a higher Parity Index. The 1957 adjusted base price
was multiplied by the Parity Index for January of 292 to obtain the January
1957 parity price.

On February 9 the Department of Agriculture announced that the minimum
price support for 1957-crop upland cotton will be 28.15 cents per pound,
basis Middling 7/8 inch at average location. This is equivalent to 77 per-
cent of the mid-January 1957 parity price for upland cotton. The current
support price for Middling 7/8 inch cotton at average location is 29.34 cents
per pound, or 82.5 percent of the parity price for mid-July 1956.

TOBACCO

Marketings of the 1956 burley crop were completed by early February.
Sales revealed that the crop was a little larger than expected earlier. The
1956-57 total supply--carryover plus the 1956 crop--at about 1.8 billion
pounds is only slightly lower than for 1955-56. The season average price re-
ceived by growers for the 1956 crop was a record 63.6 cents per pound--8& per-
cent above a year earlier. Prices for many of the traditionally top cigarette
grades were nearly the same as a year earlier, while prices of the heavier-
bodied leaf and tip grades rose sharply. Receipts of burley for Government
loans amounted to only about 6 million pounds--about 1 percent of the crop.

The total supply of flue-cured tobacco in the current marketing year
at nearly 3.7 billion pounds is about 4 percent above 1955-56 and the largest
on record. Acreage allotments for 1957 have been cut 20 percent. Government
loan stocks are exceedingly large following the 1956 season, when 320 million
pounds were placed under loan. The season average price received by growers
for the 1956 crop was 51.6 cents per pound--about 2 percent lower than for
each of the preceding 3 crops.

Marketings of 1956 Virginia fire-cured (type 21) and sun-cured
(type 37) have been completed. The season average prices at auctions were
39.6 cents for type 21 and 35.6 for type 37. Both were sharply higher than


- 28 -






FEBRUARY 1957


a year earlier when there was much poor quality tobacco. Auction sales of
Kentucky-Tennessee fire-cured are well beyond the halfway mark with prices
for types 22 and 23 averaging 37.0 and 33.2 cents per pound, respectively.
Prices for type 22 have averaged 9 percent below a year earlier, but for
type 23, the average was nearly unchanged from last season. Auction sales of
One Sucker (type 35) and Green River (type 36) are completed. Auction prices
for the season averaged 35.9 and 29.6 cents per pound, respectively. Compared
with the 1955 season, prices for One Sucker were up 9 percent and for Green
River, up 2 percent.

The percentages of the fire-cured and dark air-cured tobacco types
received under Government loan this past season have ranged from 16 to 37 per-
cent. The proportions were particularly heavy for types 23 and 36. Total
supplies of these types are considerably in excess of requirements, and 1957
acreage allotments for fire-cured have been cut 10 percent and for dark air-
cured, 15 percent below their 1956 levels.

The total 1956-57 supply of Maryland tobacco is near 112 million
pounds--slightly above a year earlier, and the second largest on record.
Most acreage allotments for 1957 will be about 10 percent below 1956. The
1956 crop of Maryland tobacco will be auctioned during the coming spring and
summer--the usual auction period for this type.

The output of cigarettes and cigars gained from 1955 to 1956 and some
further increases seem likely this year. Private estimates indicate that
sales of filter tip cigarettes rose further in 1956 and probably accounted
for close to 30 percent of total output compared with about 19 percent in
1955.

Exports of unmanufactured tobacco during calendar 1956 totaled about
510 million pounds (export weight)--5 percent less than the unusually large
1955 quantity. About 82 percent of the total 1956 tobacco exports was flue-
cured. The United Kingdom, the principal foreign outlet, took 15 percent
less in 1956 than in 1955.


- 29 -




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