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DEMAND and PRICE
AUG. 26, A. M.
Approved by the Outlook and Situation Board, August 20, 1957
Farm product prices have risen gradually since February. In
mid-July the index of prices received by farmers was at a level
1l percent above a year earlier and the highest since August 1954.
But prices paid by farmers have also risen--up 3 percent since
July 1956, and the parity ratio in mid-July this year was 84, down
one point from a year earlier.
Prices of livestock products averaged one-tenth above July 1956.
Substantially higher prices for cattle and hogs reflect reduced mar-
ketings of hogs as well as cattle. Recent broiler prices have come
up to the level of a year earlier and eggs registered more than sea-
sonal gains in recent weeks, though they are still well below a year
earlier. Crop prices have eased in recent months and in July aver-
aged approximately 6 percent below a year earlier. Lower prices
for feed grains and potatoes account for most of the decline from a
year ago. Cotton prices in recent months have risen to levels near
a year earlier.
(Coninued on page 3)
I 2'- L'-.
- -- -----------e--se-SSSSSSBSiiBSS^
Published monthly by
AGRICULTURAL MARKETING SERVICE
UNITED STATES DEPARTMENT OF AGRICULTURE
ECONOMIC FACTORS AFFECTION AGRICUURE
RONMIC FACPORS AFFECTING AORICUIEIURE
Industrial production: Seasonally adj. /
Total outlays, seasonally adjusted 2/
Housing starts / 1/
Construction contracts awarded ./
Manufacturers' sales and inventories: 2/
Total sales, seasonally adjusted
Unfilled orders-sales ratio 6/
Inventory-sales ratio 1/
employment and wages:
Total civilian employment 91
Workweek in manufacturing
Hourly earnings in manufacturing
Income and spending:
Personal income payments 2/ /
Consumer credit outstanding
Total retail sales, seasonally adj. 2/
Wholesale prices, all commodities
Commodities other than farm and food
Consumer price index, all items
Prices received by farmers 1
Livestock and products
Prices paid, interest, taxes and wage
Parity ratio 10/
Farm income and marketing: 10
Volume of farm marketing
Cash receipts from farm marketing
Mil. dol. :
Year July Apr. : May June July
114 114 117 117
122 121 125 125
88 90 91 90
102 102 104 105
116 117 119 120
112 115 114 115
242 243 244
242 244 241
242 241 245
296 296 296
285 286 287
260 259 257
82 82 82
1/ Federal Reserve Board. ?/ U. S. Department of Commerce. / Seasonally adjusted annual rates.
4 U. S. Department of Labor, Bureau of Labor Statistics. 2/ Data published by the Department of
Conmerce in the Survey of Current Business, from reports of the F. W. Dodge Corporation. 6 Unfilled
orders for durables divided by monthly deliveries. / Inventories, book value, end of month, divided by
sales. 8/ Bureau of the Census. 2/ Starting with January 1957, figures are not strictly comparable with
earlier periods because of changes in definitions of employment and unemployment. 10/ U. S. Department
of Agriculture, Agricultural Marketing Service.
Annual data for most of these items for the years 1929, 1932 and 1939-56 appear on page 31 of the
April 1957 issue of The Demand and Price Situation.
THE DEMAND AND PRICE SITUATION
Approved by the Outlook and Situation Board, August 20, 1957
Continued from cover page -
Crop prospects for corn, rice and sugar beets improved during July
and total crop production, based on August 1 conditions, is expected to be
near the average of the past 5 years although below the record last year.
Small declines were indicated for wheat, oats, barley, potatoes and tobacco.
Production of eggs is running slightly above last year and turkey and milk
production are at record levels, However, combined slaughter of cattle and
hogs for this year is expected to total a little less than in 1956. All
livestock and products production as a whole this year probably will be
about the same as 1956. Production of crops and livestock combined may be
down 2 percent.
An expanding export market has been one of the major factors in main-
taining the record high level of economic activity this year. Total United
States exports of 19.2 billion dollars in fiscal 1956-57 (excluding military
aid shipments) were nearly a fourth above a year earlier. Increased farm
exports, up 35 percent from 1955-56 contributed about a third of the gain.
Surplus disposal and special export programs facilitated greatly increased
exports of cotton and wheat.
- 3 -
Summary *.................. @.@
Foreign Demand ................
Surplus Disposal Operations ...
Farm Income o.................
Livestock and Meat ............
Dairy Products ................
Poultry and Eggs ..............
Oilseeds, Fats and Oils .......
1 Feed .........................
5 Rice ......................
10 Fruit ........................
13 Commercial Vegetables ........
15 Potatoes .....................
15 Cotton .......................
16 Wool .........................
17 Tobacco ......................
Economic activity in general in July was at the level of recent months.
Consumer income rose further to a new high. Retail sales increased in June
and July after holding fairly steady for several months. Consumer prices
reached record levels in June. Total employment rose in July due mainly to
seasonal gains in nonagricultural employment and more than seasonal increases
in agriculture. The length of the work week again declined slightly but
average weekly earnings and wage rates rose further. Industrial output was
unchanged from June while construction activity rose less than the usual
Livestock production and slaughter are likely to continue for some time
below the very high level of 1956. The 1957 calf crop is down 2 percent -from
1956, the lamb crop is 3 percent smaller, and the combined spring and fall pig
crops are 1 percent larger. Prices of fed cattle may be more stable this fall
than last but may decline slightly in late summer and early fall when market-
ings will be up substantially from last year. Hog and lamb prices will
decline seasonally. Lambs are likely to remain above a year ago, but hog
prices may drop below late in the the year.
Egg price prospects indicate a further seasonal price rise with the
expected level later this year above the September-December level last year.
Monthly production before the end of the year will be below 1956; the number
of layers next January may be down by 6 to 8 percent. Turkey supplies are at
Flaxseed output this year, based on reports as of August 1, is expected
to be 15 percent below a year ago but above prospective disappearance in
1957-58. Cottonseed production is about 10 percent less than 1956 due almost
entirely to a decline in cotton acreage, and soybean output will be down 6 per-
cent because of lower yields. Peanut production will be about 1 percent below
Total supply of feed grains for 1957-58 will be at a new high of
179 million tons, 3 percent above last year if production should turn out as
indicated August 1. The corn crop of 3,066 million bushels is down from last
year while sorghum grain is more than double and the oats crop is up one fifth
from a year earlier. Pasture conditions were reported to be the best since
The wheat carryover on July 1, 1957 was 905 million bushels, 128 mil-
lion bushels below the near record a year earlier. The 1957 wheat crop is
now estimated at 915 million bushels, 8 percent below 1956. Although disap-
pearance in 1957-58 also may be down some from a year earlier, a further small
decline in carryover stocks is in prospect.
- 4 -
Early reports point to a substantially smaller production of vege-
tables for commercial processing this year than last. With larger carryover
stocks, total supplies of canned vegetables probably will be only a little
smaller. Supplies of frozen vegetables are likely to be at or near the record
levels of a year earlier.
A 1957 cotton crop of 11.8 million running bales estimated as of
August 1, a carryover of 11.4 million bales and estimated imports of 0.1 mil-
lion bales, indicate a total supply of 23.3 million bales, 4.5 million below
the record of the 1956-57 season. A further reduction in carryover stocks is
expected in the current season.
Domestic production of shorn wool this year is estimated at 226 mil-
lion pounds, grease basis, down 3 percent from last year. World production
during 1956-57 is estimated to be almost 5 percent above last season.
Production of flue-cured tobacco, as indicated on August 1, was
35 percent smaller than last year's crop, But with a large carryover, total
supply will be only about 7 percent lower. The Gerogia-Florida marketing
have finished with the average price of 55.9 cents per pound, 16 percent above
a year ago and volume of over one third less than a year ago.
GENERAL ECONOMIC SITUATION
The general economic situation in July was little change from June.
The mixed trends evident in the past few months have continued into early
August. Consumer incomes and retail sales made further increases. Employment
increased in July mainly due to seasonal expansion in nonagricultural indus-
tries and more than the usual seasonal rise in agriculture. Employer hiring
plans through mid-September indicate primarily seasonal increases in employ-
ment. The effect of some decline in hours worked per week was more than off-
set by increases in wage rates. Average weekly earnings of factory production
workers increased. Production remained at June levels. Declines in output of
automobiles were largely balanced by increases in primary metals and metal
fabricating. Manufacturers' sales and new orders in June declined--particu-
larly for durable goods. Construction continues to show increases, but by
less than the usual seasonal amount apparently due to the effects of the
cement strike. Consumer prices rose in June and the rise apparently continued
into July. Wholesale prices in July had the largest advance of any month
since September 1956.
Consumer income rose further in July to an annual rate of 345.5 bil-
lion dollars, up 700 million dollars from June and 6 percent above a year ago.
Labor income, as in the past three months, accounted for practically all the
rise in income. Higher wage rates during July were sufficient to offset the
effect on income of a leveling in employment and average weekly hours of pro-
duction workers in manufacturing. Among the other sources of consumer income
- 5 -
proprietors', rental, personal interest and dividend income rose while transfer
payments declined because of a smaller number of retroactive social security
payments to new claimants.
Consumer prices in June, the latest month available, rose one-half
percent to 120.2 of the 1947-49 average, 3.4 percent above a year ago. Feed
prices rose 1.4 percent from May to June, due largely to advances in prices
of fresh fruits and pork. The June food index was 116.2, 2.7 percent above a
year ago, but 0.3 percent below the August 1952 peak. More than seasonal
increases in fresh fruits and higher prices for all cuts of meat and frying
chickens were reported, while prices of eggs were down. The cost of housing
increased due to boosts in residential rents, prices of house furnishings and
household operation. Medical care, reading and recreation, personal care and
apparel increased moderately while transportation remained at the May level.
The general level of prices paid by farmers for family living items remained
unchanged for the month ended July 15 at 287 percent of the 1910-14 average
and nearly 2 percent over a year earlier. Prices paid for food and new auto-
mobiles were down a little from June offsetting small increases in household
furnishings and building materials.
Per capital disposable personal income was up 3 percent and expenditures
for food per person up 4 percent in the April-June quarter over the same
quarter a year earlier. But this gain was due largely to a rise in retail
prices of farm produced food products of about 3 percent. A 6 percent increase
in marketing charges accounted for the higher retail prices, as prices received
by farmers averaged about the same in both quarters.
During the second half of 1957 food supplies are expected to total
fairly close to the high level of a year earlier. With consumer demand likely
to be maintained at a high level and marketing charges to continue to advance,
prospects are that retail food prices will remain higher this summer and early
fall than last. For individual foods, variations from current prices will
reflect mainly seasonal changes in supply.
Retail sales, seasonally adjusted and based upon advanced reports, were
16.9 billion dollars, up 1 percent from June. Declines of 1 percent occurred
in durable goods sales while nondurables increased 2 percent. Compared with
July 1956 all retail sales were up 9 percent, the food group, automobile group,
gasoline service stations, drug and proprietary stores and the apparel group
were up about 10 percent with the general merchandising group up 8 percent,
furniture and appliance and eating and drinking places up 3 percent and with
the lumber, building,hardware group down a half a percent.
Consumer installment credit outstanding, seasonally adjusted, registered
a smaller increase over the previous month, 161 million dollars, than the
average for the first five months of the year of over 200 million dollars.
The increase in June last year was 43 million dollars.
The Bureau of the Census reported that total employment of 67.2 million
in July up 700 thousand due mainly to a seasonal expansion in nonagricultural
- 6 -
industries and a more than seasonal rise in agriculture. Unemployment on a
seasonally adjusted basis was estimated at 2.9 million, 4.2 percent of the
civilian labor force, compared with 4.5 percent in June. Employees in non-
agricultural establishments as reported by the Bureau of Labor Statistics
remained, on a seasonally adjusted basis, at slightly above the June level
of 52.8 million. Small declines in both durable and nondurable goods manu-
facturing were offset by increases in non-manufacturing--particularly whole-
sale and retail trade, service and government. Employer hiring schedules to
mid-September indicate a rise in employment mainly due to seasonal influences.
Most of the increase will be in non-manufacturing--especially construction
and trade. The increases in manufacturing are expected to be concentrated in
food processing and apparel. Small gains also are expected in aircraft and
electrical machinery, while declines are expected in motor vehicles due to
Average weekly hours of production workers in manufacturing declined
slightly to 39.9, down one tenth of an hour from June. Average hourly earn-
ings rose 1 cent per hour resulting in average weekly earning of $82.99 up
19 cents from June and $4.39 above a year ago.
July production of passenger cars totaled about 496,000 units, the
same as June and 55,000 above a year ago. Dealer sales of new cars were
below production resulting in an increase in inventories. At the end of July
inventories were almost at the April level, the high for the year to date.
For the first seven months of 1957 production of automobiles totaled 3.9 mil-
units, 6 percent more than 1956.
Steel production declined further in July to about 8.9 million tons or
about 79 percent of capacity. Since the steel strike in July last year when
production was 15 percent of capacity, it rose to 101 percent of capacity in
October 1956 and gradually declined to 98 by February 1957. The decline since
then has been fairly rapid to the present level of operations. As the
change-over in new automobile models is made, some increase in steel produc-
tion can be expected; increased output of consumer durable goods also may
require more steel. Demand for steel in construction and in producer durable
goods is expected to continue high.
Industrial production, seasonally adjusted, in July remained at the
May-June level of 14 percent of the 1947-49 average. Manufactures produc-
tion continued at a rate of 146, the same as June. In durable manufacturing,
declines in transportation equipment and clay, glass, and lumber were offset
by metal fabricating and primary metals. Nondurable production continued at
the same level as in May and June with increases in rubber and leather prod-
ucts and paper and printing, declines in chemicals and petroleum products
with the remainder at the same level as in May and June. Output of con-
sumer durables remained at the June level of 129. A cutback in auto produc-
tion was offset by other consumer durables production.
- 7 -
Construction outlays at 4,403 million dollars, rose less than season-
ally in July, apparently due to the effects of the cement strike. For the
first seven months of 1957 construction activity was at an all time high of
25.9 billion, 2 percent above the same period in 1956. Public outlays for
July increased 1 percent over June due mainly to further increases in high-
ways, military facilities and for conservation and development projects.
Private construction was almost 2 percent below a year ago due mainly
to slowness in residential and industrial buildings. Other private construc-
tion rose slightly as a result of increases in public utilities and other
non residential buildings.
Housing starts for July on a seasonally adjusted annual rate basis
were 980,000 units, slightly above June but below 990,000 units started in
May. While housing starts are down substantially from the levels for a year
ago, the vacancy rate for the second quarter remained at the low first
quarter rate of 2.3 percent of all dwellings and below the 2.6 percent level
in 1956. The slowdown in building apparently has also reduced vacancies.
Lower down payments and an increase of 1/4 percent in the maximum interest
rate on mortgages insured by the Federal Housing Administration was announced
early in August. The purpose of this action was to stimulate demand, by
making it easier for moderate income families to purchase new homes.
Construction contract awards as reported by F. W. Dodge Corporation,
for June were 10 percent over a year ago. For the first half year, total
awards were 5 percent over a year ago. The awards figures indicate an
increase in the proportion of public construction, while manufacturing con-
struction declined 6 percent. Heavy engineering work, both public and private,
showed the greatest gains, particularly highways, public utilities, airports
Manufacturers' sales in June were down 1 percent from May after adjust-
ment for seasonal variation. Fabricated metal, transportation equipment,
textiles, and petroleum industries had the largest declines. Inventories
increased fractionally in the nondurable goods industries. New orders
declined 4 percent below May due to a sharp cutback in aircraft, ana declines
in all other major industries except primary metals. Unfilled orders declined
about 2 percent in June, with all the drop centered in the durable goods
industries. New orders for machine tools increased slightly in June; however,
the estimated backlog declined further and is now equal to around 4 months
deliveries compared with 6 months in January this year.
Wholesale prices in July increased 0.6 percent to 118.1 of the 1947-49
average. The advance in farm products was due mainly to higher average prices
of livestock, eggs, fresh fruit, and milk; lower prices were reported for
grains, and fresh and dried vegetables. The increase in prices of processed
foods was due to increases in meats. All commodities other than farm and foods
increased to 125.6 percent of the 1947-49 average, up 0.3 percent over June.
- 8 -
Prices of metals and metal products--particularly steel, cigarettes and smok-
ing tobacco, hides, skins and leather increased with lower prices reported for
cotton products, crude natural rubber, petroleum products and lumber.
The index of prices received by farmers for all farm products in mid-
July rose to 247 percent of the 1910-14 average, the highest since August 1954.
The index was 244 in mid-June and 243 in July of last year. A sharp increase
in livestock product prices was responsible for the increase in the past
month; crop prices in the aggregate were down slightly. Hogs, cattle, dairy
products and poultry and eggs all showed increases though dairy prices were
up less than seasonally. Hog prices were up nearly a dollar from mid-June
and were 4 dollars above July 1956. Prices received for beef cattle were up
less than a dollar from the previous month but more than 3 dollars from a
year earlier. Egg prices rose from an average of 29 cents per dozen in mid-
June to 32.1 cents in mid-July, a greater than seasonal increase. Broilers
also rose but turkeys declined in price over the month.
Among the crops, price declines for feed grains (except corn), hay, and
fruit .offset increases for cotton, tobacco, oil-bearing crops, commercial
vegetables, and potatoes. The changes in vegetable and potato prices were
contraseasonal movements caused by adverse weather conditions in important
The index of prices paid by farmers for commodities, and services,
interest, taxes and wage rates declined a point to 295 (1910-14=100) in July.
The small decline resulted from a drop in the wage rate component after
seasonal adjustment; farm wages failed to show the usual rise for that time
of year. The prices paid index has shown little change since early this
year. An upward push in prices paid for family living, led by advancing food
and automobile prices has been largely offset by a general easing in produc-
tion costs. It is likely that prices paid for some production items will
increase in the next few months.
The upward trend in prices received together with relatively stable
farm costs has resulted in an improvement in the parity ratio from the low of
80 last February. At 84 in mid-July (1910-114=100), this is still one point
below a year earlier.
Prices of farm commodities on major central markets averaged a little
higher in mid-August compared to mid-July. Hog prices at Chicago averaged
4- percent higher. Slaughter steers, also at Chicago, rose 4 percent but
prices of cows (utility) were off 5 percent. Potatoes (California Long Whites)
increased 27 percent over this period. Midwestern egg prices increased more
than 10 percent, while North Georgia broilers declined about 6 percent.
Young tom turkeys in California increased 4 cents per pound in the month end-
ing in mid-August. Grain prices showed mixed trends. Soybeans, No. 1,
Yellow, at Chicago, averaged unchanged.
- 9 -
United States exports during the year ended June 30, 1957 totaled
19.2 billion dollars, excluding military aid shipments. The comparable
figure for last year was 15.6 billion. One third of the increase resulted
from larger farm exports. Spurred by record sales of cotton and wheat U. S.
agricultural exports during 1956-57 reached an all-time high of 4.7 billion
dollars, 1.2 billion or 35 percent above 1955-56.
The overall gain in volume is estimated at 40 percent over a year ago,
but for some major export commodities the gains ranged from 50 to 240 percent.
S. Farm Exports, Year Ending June 30
1955-56, 1956-57 /
Item : Unit : 1955-56 : 1956-57 : Change
Wheat and flour : Mil. bu.: 343 536 56
Barley do. : 98 58 -41
Corn, grain do. : 120 140 17
Sorghum grains do. : 73 29 -60
Rice, milled : Mil.cwt.: 11 24 122
Sales : 2,241 7,615 240
Tobacco, unmfd. : Mil. lb.: 578 499 -14
Soybeans : Mil. bu.: 71 77 8
Soybean oil : Mil. lb.: 371 926 150
Cottonseed oil : Mil. b.: 652 448 -31
shortening do. : 638 558 -13
Tallow do. :1,330 1,359 2
Nonfat dry milk : do. : 238 270 14
exports : Mil.dol.: 3,494 4,724 35
I/ Excludes USDA donations to private and
agencies for foreign relief under Title III
as well as relief shipments by individuals,
are separately reported in Census data.
of P.L. 480
neither of which
- 10 -
Table 2. UNITED STATES AGRICULTURAL EXPORTS 1956-57
Estimated quantity of selected commodities exported under specified government export
SI : II
Public Law 400
: Title III : Total
e : : 0 all
:Donations: Barter Titles
i r :Titles
Total exports 2_
Wheat and flour
Soybean oil and :
cottonseed oil.:Mil. lb.:
Lard, including :
shortening : do. :
Tallow : do.
Nonfat dry milk :
.6 2.0 1.0
1/ Excludes sales for export of CCC held commodities and sales under the International Wheat
falling within the specific export programs noted below. Totals, and percentages calculated or
2/ Data for P.L. 480 basedon reported shipments; for exports under the Mutual Security Act on
tures through March 1957 and on purchase authorizations having terminal delivery dates through
for Export-Import Bank, on disbursements under loans. Thus data on exports under programs are
comparable with official trade statistics. Moreover, total exports include estimated data for
not separately reported in official trade statistics.
4/ Includes 0.4 million bales under Export-Import Bank loans.
June 30, 1957;
... ... ... .. .. .
Special export programs including CCC sales below markets prices played
a large role in total export movements of farm products. Exports under the
various titles of Public Law 480 alone accounted for an estimated 81 percent,
of rice exports, 69 percent of nonfat dry milk, about 57 percent of wheat
(including wheat equivalent of flour), 51 percent of feed grains 48 percent
of soybean oil and cottonseed oil and 26 percent of cotton. Additional sig-
nificant quantities moved under the Mutual Security program and, in the case
of cotton, under Export-Import Bank loans. These additional programs would
raise the estimated percentages noted above to 68 percent for wheat,63 percent
for feed grains, 59 percent for edible vegetable oils and about 45 percent for
cotton. (Table 2 ) If all CCC sales for export below domestic market prices
were included in these calculations, (e.g. under the cotton and wheat export
programs) the percentages would be considerably higher.
In terms of value, sales for foreign currencies, barter, grants and
donations accounted for some 40 percent of U. S. agricultural exports in
1956-57. These programs enabled foreign countries, notably those temporarily
or chronically short of dollar exchange, to secure agricultural commodities
valued at nearly 2 billion dollars without an actual expenditure of dollars.
Nevertheless, the combined effect of the economic boom, mounting inflationary
pressures, and the Suez crisis have brought to a halt the accumulation of
gold and dollar assets by a number of foreign countries despite sizable
assistance from the International Monetary Fund. During January-Mrch 1957
combined holdings f foreign countries registered the first quarterly decline
since the one occasioned by Korean buying spree in 1952. On March 30, 1957
the gold and short term dollar assets of foreign countries stood at 28 bil-
lion dollars, 300 million below December 1956. These assets were still some
800 million above March 1956 due largely to net disbursements of 700 million
dollars by international institutions. The combined holdings of foreign coun-
tries and international institutions rose by 135 million dollars over the year,
but declined by more than 400 million from December 1956. There was some evi-
dence that the drain was reduced during the quarter ended June 1957, although
such important trading countries as France, Japan and India continued to
experience grave losses. All three of these countries have taken measures to
reduce the pressure on their foreign exchange reserves by reducing imports.
In addition, France announced an effective devaluation, applicable to most
trade, of 20 percent.
The effect of these developments on U. S. farm exports may be mitigated
by foreign aid and special export programs. India may utilize this year,
instead of over the next 2 years all of the approximately 160 million dollars
remaining under its PL 480 agreement. In the case of France, cotton, our
major export to France, will enjoy a preferential exchange rate under the
French system; moreover, increased direct exports to other countries of the
France area (notably in North Africa) and continued high exports to Vietnam,
Laos and Cambodia are being programed. Japan will have available a special
Export-Import Bank loan of 115 million dollars to finance its purchases of
U. S. farm commodities in addition to another 60 million dollar cotton loan
which has been a regular part of their import financing in recent years.
Furthermore, it is expected that Japan's balance of payments difficulties will
have been largely overcome by the end of 1957.
- 12 -
Table 3.--Disposition commitments of CCC commodities acquired under price
support, 1955-56 and 1956-57 1/
Total Total Total
domestic foreign dispositions
Item : Unit : : : :
:bales :190 100 3,500 7,693 3,690 7,793
Cotton linters do. :947 220 --- --- 947 220
Wool Mil. b.: 42 77 --- --- 42 77
Wheat :Mil. bu.: 14 31 303 218 317 249
Coarse grains :Mil.tons: 3 6 7 5 10 11
Rice, milled basis : Mil.cwt.: 3 6 11 21 14 27
Dry beans : do. : 2 1 1 3 3 4
cottonseed oil 2/: Mil. lb.: 121 104 126 --- 246 104
Flaxseed and : :
linseed oil / : do. : 47 2 107 110 143 112
Tung oil do. : 27 3 --- --- 27 3
Dry milk :Mil. lb.: 79 143 573 685 652 828
Butter : do. : 144 79 3/209 14 353 93
Cheese : do. : 65 112 172 141 237 253
Totalincl. other 4/: Mil.dol.: 453 647 1,683 2,204 2,186 2,851
1/ Data for 1956-57 preliminary.
2/ In terms of oil.
/ Includes butter oil.
4/ Value of dispositions calculated at dollar return for commercial sales,
exchange value for bartered commodities, CCC cost for transfers and donations.
Surplus Disposal Operations
Total government disposal operations during fiscal year 1956-57 reached
a record level as shown by reports on disposition commitments of CCC owned
- 13 -
commodities. These commitments represent firm contracts made by CCC, cover-
ing commercial sales (including those financed under government export
programs) non-commercial sales, transfers, exchanges and donations. Overall
disposition commitments in 1956-57 valued at 2,850 million dollars were one-
third above 1955-56. As in the previous year, nearly 80 percent of the total
represented foreign dispositions.
A 200 million dollar rise in domestic dispositions reflected increased
commercial sales of wool, sales and donations of wheat and feed grains, non-
fat dry milk and cheese. These increases more than offset declining disposi-
tions--as CCC holdings declined--of oilseeds and vegetable oils and butter.
Foreign dispositions rose largely as a result of the cotton export
sales program. Commercial sales of cotton for export more than doubled to
7.8 million bales, of which about 3E million was for export after August 15.
Sales of wheat for export were lower than in the previous year and largely
involved payments of subsidy-in-kind under the revised program whereby most
exports are out of commercial stocks. Foreign currency sales caused a
doubling of commitments to export rice. These increases more than offset
lower sales and barter of coarse grains and reduced availability and hence
disposition of vegetable oilseeds and oil and butter.
These dispositions were partly offset by new purchases and other
transactions. The net effect was a reduction in the Commodity Credit
Corporation investment in surplus commodities (inventories and commodities
under loan) during fiscal year 1956-57 of about 1 billion dollars to 7.6 bil-
lion. (Data through May 31, 1957). In terms of quantity, the investment in
cotton declined by 4 million bales or 31 percent, wheat 167 million bushels
or 16 percent, rice 11 million cwt. or 58 percent, wool investories were
67 percent lower than a year ago, and those of cotton linters 88 percent.
On the other hand, investment in soybeans, flaxseed and linseed oil was sub-
stantially larger than a year earlier and the quantity of tobacco under loan
increased 10 percent.
Through May 31, 1957, CCC incurred a loss of 1,154 million dollars on
its disposal operations. Of this amount, 350 million dollars derived from
domestic and foreign donations which involve no return to CCC. Other losses
represent the difference between CCC cost and realized return (usually export
market value) of CCC sales to exporters under the Mutual Security Program,
the barter program, and other CCC sales for export, as well as domestic sale
of dairy products for restricted use, sale of out-of-condition commodities,
and losses from storage, fire and theft. No losses are incurred under
Title I (foreign currency sales) and Title II (emergency relief) of Public
Law 480, as the legislation provides for full reimbursal of CCC costs.
Reimbursal is also provided for subsidies (losses incurred) in connection
with sales under the International Wheat Agreement, and for commodities
transferred under Sec. 32.
Farmers received about 15.0 billion dollars from marketing in the
first 7 months, slightly more than the estimate of 14.8 billion dollars a
year ago. Prices averaged nearly 3 percent higher, but marketing were down
a little. Receipts from meat animals of 9.5 billion dollars were up nearly
5 percent. Cattle and hogs made substantial increases because of higher
prices. Receipts from milk rose slightly with larger production. Lower
prices for eggs and chickens held receipts from poultry and eggs below last
year. Crop receipts of 5.5 billion dollars were 3 percent below a year ago
with both prices and marketing down. Receipts from cotton, potatoes and
oranges were smaller than last year.
Total receipts in July were about 2.5 billion dollars, up 6 percent
from a year ago because of higher prices and slightly larger marketing.
Receipts frma livestock and products of 1.4 billion dollars were about 9 per-
cent above a year ago because of higher prices for cattle and hogs, and
slightly larger milk production. Crop receipts of 1.1 billion dollars were
up 2 percent from July 1956 with larger receipts from fruits and tobacco.
LIVESTOCK AND MEAT
The 1957 calf crop is down 2 percent from 1956, the lamb crop is 3 per-
cent smaller, and the combined spring and fall pig crops are only 1 percent
larger. It is likely that livestock production and slaughter will continue
for sane time below their very high level of 1956. While employment and con-
sumer incomes remain high, prices of livestock to producers, although fluctu-
ating seasonally, may be expected to retain this year's gain through at least
the first half of 1958. At the same time, feed probably will cost less in
the coming feeding year than in the past year. All feed crops except corn
are larger than last year.
In mid-August prices of all kinds and classes of meat animals were
above a year before. Increases varied from $1.50 per 100 pounds for lambs to
over $4.00 for hogs. Most of the gain in price resulted from smaller current
supplies for slaughter. However, higher prices for feeder cattle and lambs
reflect also the prospects for a large feed harvest this year and for well-
sustained slaughter prices in 1958. Prices of feeder steers and calves in
mid-August had not declined from their spring advance and were $3.50 to $4.00
above a year before. If prospects for the corn crop should continue favorable
and fed cattle prices are maintained as expected, feeder prices probably would
make little seasonal decline this fall.
Prices of fed cattle this fall may be more stable than last fall.
Although they may decline slightly in late summer and early fall, when market-
ings will substantially exceed the same time last year. A rise is likely
later. Prices of hogs will decline seasonally but give premise of staying
- 15 -
above 1956 prices until the last few weeks of the year. Prices of lambs may
decline a bit seasonally, but are likely to remain above a year ago.
Total costs of feeding cattle this coming season will be higher than
last season. The increase in costs of the feeder stock will substantially
exceed the small reduction in costs of feed. Average profits nevertheless may
be realized on cattle bought in August if cattle slaughter decreases and
prices rise in 1958 as expected. A drop in consumer demand or recurrence of
drought would of course prevent this.
Production of hogs doubtless will increase during 1958. Cattle numbers,
however, will likely be down from a year earlier by January of that year since
slaughter in 1957 is not being reduced enough to prevent further decline.
The cycle of number of cattle on farms seems likely to go through its usual
pattern during the next few years. However, the drop probably will be less
than in previous cycles, and the downswing may be shorter than usual.
Sheep numbers on farms still appear to be almost static. Commercial
slaughter in January-July was down about 3 percent and this year's lamb crop
is 3 percent smaller. Numbers next January may not differ much from last
Prices to farmers will be at least equal to a year earlier during the
second half of 1957. From January through June prices to farmers and retail
prices were slightly above the first half of 1956. Production of milk in the
first seven months of 1957 increased two-thirds of a billion pounds, or
1 percent, above the same period last year.
The small gain in milk flow was mostly channeled to fluid milk outlets.
But data from Federal order markets indicate that the increase in fluid milk
was little, if any, larger than the increase in population. The effects of
record high consumer income on consumption was about offset by higher retail
milk prices. For 1957 as a whole, consumption of fluid milk and cream per
person will be close to the 355 pounds of last year.
The small increase in volume of milk that went into manufacturing in
the first half of 1957 showed up mostly in increased cheese output, though
production of evaporated milk increased slightly. Production of butter and
ice cream was about equal to a year earlier while output of dry whole milk
was down. Per capital consumption of manufactured dairy products, as a group,
may have been a little smaller than a year earlier so far in 1957.
Price support purchases of butter in the first third of this marketing
year were 6 percent above a year earlier while cheese purchases were up 45 per-
cent. The milk equivalent of the two showed a gain of 16 percent. Purchases
of nonfat dry milk were about the same as a year earlier. USDA stocks of
- 16 -
butter now are above the comparatively low levels of a year earlier, but
holdings of cheese and nonfat are smaller.
The small increase in milk production in the first half of this year
was made possible by a record output per cow. Good pastures for the U. S. as
a whole and continued heavy concentrate feeding contributed to the high rate.
The number of cows in mid-1957 was 1 percent below a year earlier. By regions,
the June numbers as a percentage of a year earlier were as follows: North
Atlantic, 98.1 percent; East North Central, 98.8 percent; West North Central,
98.7 percent; South Atlantic, 100.0 percent; South Central, 97.5 percent; and
West, 100.1 percent.
Favoring increased milk production are record supplies of feed grains
and hay and above average relationships of prices of milk to price of both
concentrates and hay. Tending to limit increases in milk output are the
trends toward fewer cows and the less favorable relationship between milk
prices and meat animal prices. The total milk flow probably will continue a
little above a year earlier in the remainder of 1957, but the years' total
may increase less than the 2 billion pounds that seemed likely earlier in the
year. In 1956, a record 125.7 billion pounds was produced.
POULTRY AND EGGS
Average egg prices received by farmers in mid-July were 32.1 cents per
dozen, the highest since February. For many important grades at terminal
markets, mid-July prices were the highest of the year to date, but a below-
average size and quality during the summer tends to hold down the U. S.
average farm price in relation to wholesale quotations for large high-quality
eggs. The mid-July farmers price in 1957 was 45 cents below last year, com-
pared with 7.4 cents in June, and 8.6 cents in May. In late July, egg prices
weakened by a few cents per dozen, but most of the losses were recovered by
The prospects are for a continuation of the seasonal price rise. The
September-December average is likely to exceed 1956 average farm egg prices,
which were in the 37-38 cent per dozen range for those months. Production
before the end of the year will be below 1956, in view of the prospective cut
in the January 1, 1958 number of layers. A 6 to 8 percent cut in layers on
farms next January 1 is expected because of the 18 percent reduction from
last year in the number of replacement chickens raised.
Broiler prices in mid-July were also the highest in some months. At
21.4 cents per pound, they were the same as, and the highest since the same
date a year earlier. Mid-August marketing were from placements 3 percent
above a year earlier. Recent placements suggest that marketing by mid-
October will exceed 1956 by 8 to 10 percent. By October the warm-weather
demand for frying chickens will have passed and supplies of competing red and
poultry meats will be seasonally higher. As a result broiler prices in fall
are likely to recede from present levels.
- 17 -
Farmers' mid-August prices for turkeys in California, the largest pro-
ducing State, were up from the month before, but continued below 1956. At
about 21 cents per pound for both hens and toms, these prices were respec-
tively 1 and 4 cents above mid-July, but almost 6 cents below a year earlier.
U. S. average prices in mid-July were 6.5 cents below a year earlier.
Turkey supplies for 1957 are record large, with the number of turkeys
being raised and the carry-in storage stocks the largest on record. The
43 percent increase over 1956 in January 1-August 10 slaughter in commercial
plants was due to higher monthly poult hatchings early in the season and a
28 percent increase in the number of breeder hens over a year earlier. For
the remainder of 1957, slaughter will be much closer to 1956, and after
September may even fall below the year-ago level.
OILSEEDS, FATS AND OILS
Supplies of food fats during October 1957 September 1958 probably
will be slightly less than the year before. Most of the decline will reflect
a drop in beginning stocks as output is likely to be about the same as last
year. A drop in edible oil output probably will be nearly offset by a slight
increase in lard production. Little change is expected in butter output. If
per capital disappearance remains about the same as last year and there is no
change in ending stocks, the quantity of these fats, including soybeans,
available for export in 1957-58 will be somewhat less than the record 2.8 bil-
lion pound total estimated for this year.
Based upon reports as of August 1, cottonseed production is placed at
4,896,000 tons, about 10 percent less than in 1956. Practically all of the
decline reflects a reduction in acreage harvested as cotton yield per acre is
up. Soybean output in 1957 is forecast at 428 million bushels, 6 percent
below last year. The drop is due to lower prospective yields as the expected
acreage for harvest is record high.
Flaxseed output this year is forecast at 41.2 million bushels, 15 per-
cent below 1956, but about 10 million bushels above probable domestic use.
CCC probably will acquire most of the excess as was the case last season.
The outlook does not appear bright for commercial exports of U. S.
flaxseed in the 1957-58 marketing year. Heavy supplies are expected in major
exporting countries and world prices probably will be well below the U. S.
support price to farmers for the 1957 crop.
Peanut production is estimated at 1,590 million pounds, about 1 percent
less than a year earlier. A crop of this size would supply about 20 percent
more peanuts than are expected to be used for food and on the farm. Most of
this excess will be acquired by CCC under the support program.
- 18 -
The price of 1957 crop peanuts is to be supported at a national aver-
age level of 11.1 cents per pound, 0.3 cents lower than in 1956. This level
reflects 81.4 percent of the August 1, 1957 parity price of 13.6 cents per
pound. The average support price by types, per pound of 1957 crop quota pea-
nuts will be: Virginia type, 11.8 cents; Runner type, 10.3 cents;
Southeastern Spanish type, 11.2 cents; and Southwestern Spanish type,
10.9 cents. Loans on 1957 crop peanuts will be available to individual pro-
ducers and to grower associations from the time of harvest through January 31,
1958, and will mature May 31, 1958, or earlier on demand by CCC.
Feed grain tonnage based on August estimates will closely match last
year's total. The 3,066 million bushel corn crop is near average size,
although a tenth less than last year. Sorghum grain is making its new
importance felt in no small way with a prospective harvest of 418 million
bushels. This is more than double last year's crop of 205 million bushels
and 72 percent more than the 1955 record. The oats crop of 1,361 million
bushels is nearly a fifth larger than last year. The barley crop is about a
sixth larger than last year's crop, despite some reduction in estimates dur-
ing the past month.
A little more than 5 million tons are being added during 1956-57 to
year-end carryover stocks of feed grains. If production should turn out as
indicated August 1, the total supply of feed grains for the 1957-58 feeding
year (including estimated imports of slightly more than 1 million tons) would
be up slightly from about 174 million tons to a new high of around 179 million
Supplies of byproduct feeds have been increasing in recent years,
largely as the result of increasing production of soybean meal, and they are
expected to continue large in the 1957-58 feeding season. While soybean
production is down from a year ago, it is still very high compared with aver-
age. The total supply of feed grains and other concentrates may be slightly
larger than the record supply of 200 million tons in 1956-57. The number of
grain-consuming animal units is expected to be about the same as in 1956-57.
Pasture conditions averaged 82 percent of normal as of August 1, the
highest for the date since 1951. Drought in the East, however, had seared
pastures over a widening area. Western range feed is best since 1950.
Grazing is generally good throughout the West with the exception of drought
conditions in some areas.
The total tonnage of hay was lowered slightly during July. But the
118.9 million ton total is the largest on record in volume and in relation to
the number of roughage-consuming animals to be fed; the number to be fed will
be down a little from last year.
Prices of feedstuffs have generally sagged since late spring and are
below a year earlier. Corn was about 25 cents below prices in the like period
- 19 -
of 1956. Oats declined 6 to 10 cents below 1956, and barley dropped sharply
below last year. Prices of most byproduct feeds joined in the decline and
were less than a year previously. Exceptions include dehydrated alfalfa meal,
tankage and meatmeal. Soybean meal, 44 percent protein, bulk at Decatur
reached $52.00 the week of August 13, after a steady increase since late June,
but is down $1.50 compared with the same week in 1956. The price index (1947-
49=100) for 11 high-protein feeds at wholesale stood at 77.0 in July, compared
with 81.1 in January and 83.0 in July last year. Prices of No. 1 Alfalfa Hay
in Kansas City in July averaged $25.50 per ton, compared with $22.50 in June
and $25.00 in July 1956.
Improved weather, better grazing and the outlook for large feed-grain
crops in 1957 contributed to the weakness in feed markets this spring.
Weather and growing conditions for corn and grain sorghums the rest of the
summer will have much influence on trends in feed prices.
The wheat carryover on July 1, 1957 was 905 million bushels, a drop of
128 million bushels from the near record a year earlier. This reduction re-
sulted from record large exports. A large part of the exports, as in other
recent years, were moved under Government export subsidy and foreign aid
programs. The 547 million bushel total was far above last year's 346 million
bushels, and the previous record of 503 million bushels in 1948. A reduction
in production in 1957 and continued large exports are expected to further
reduce stocks in 1957-58.
Total wheat supplies for the marketing year which began July 1, 1957,
include the carryover, the crop estimated at 915 million bushels as of
August 1, and likely imports of about 8 million bushels. The 1,828 million
bushels total for 1957-58 is 211 million bushels lower than the record last
year. It also is below 1955-56 and 1954-55 but above any previous year.
Domestic disappearance for 1957-58 is estimated at about 600 million
bushels, slightly above that in the past year. A domestic disappearance of
this size would leave about 1,230 million bushels for export during the
marketing year and carryover at the end of the year. Assuming exports of
about 400 million bushels, which is very large but sharply below those in
1956-57, the carryover July 1, 1958 would total about 830 million bushels.
This would be 75 million bushels below the 905 million bushels July 1 this
Of the total carryover July 1, 1957, the Commodity Credit Corporation
owned 830 million bushels, a drop of 130 million bushels from a year earlier.
With about 7.2 million bushels of 1956-crop wheat resealed and 12.9 million
bushels still outstanding under the 1956-crop support program, and also 2.1
million bushels of 1955-crop wheat under extended reseal, 52.6 million bushels
of old crop wheat were in "free" supply on July 1. Last year the "free"
supply amounted to about 54 million bushels, and 2 years ago the "free"
supply amounted to about 46 million bushels. Of the 1956 crop, there
- 20 -
were 253 million bushels placed under the price support program, of which
133 million had been delivered to the CCC by July 1, 1957. Cash wheat prices
August 7 were at or near the lowest level of the season to date. Since April,
wheat prices have been adjusting downward seasonally, though delayed harvest-
ing and damage of wet fields resulted in temporary increases. Since August 15
there has been a slight increase in prices of hard red winter wheat at Kansas
City and soft red winter at St. Louis but further declines in soft white at
Portland. Prices of hard spring wheat at Minneapolis were unchanged with
market prices well below the support level (except in the Pacific Northwest),
large quantities of wheat will again be placed under the support program and
prices will advance seasonally so that farmers will redeem substantial quan-
tities to satisfy market needs. It is estimated that the average price to
farmers in 1957-58 may again average near the national support level of
$2.00 per bushel.
Rice exports for the year ended July 31, 1957 are estimated at about
37.0 million cwt., in rough rice equivalent. These constitute an all time
record, sharply above the previous record of 25.1 million in 1952-53, and were
made possible largely by Governmental Programs.
The supply for the 1956-57 marketing year totaled 82.3 million cwt.,
in rough rice equivalent, consisting of the August 1 carryover of 34.6 million
cwt., a crop of 47.4 and imports of 0.3. Domestic disappearance is estimated
at 26.3 million cwt. Carryover stocks on August 1, 1957, on the basis of the
total disappearance of 63.3 million cwt., is indicated at close to 19 million
cwt. The official estimate of carryover stocks is scheduled for release on
The 1957 crop is estimated as of August 1 at 40.5 million cwt., com-
pared with 47.4 million a year ago and the 1951-55 average of 53.5 million.
With likely imports of about .2 million, this would indicate total supplies of
59.7 million cwt., which compares with 82.4 million a year earlier and the
1951-55 average of 62.3 million.
The record exports in 1956-57 were largely responsible for the sharp
reduction in carryover from 34.6 million cwt. on August 1, 1956 to about
19.0 this August 1. Exports in 1957-58 are expected to again be large, though
not at nearly the high level of 1956-57, and this will further reduce the
carryover at the end of the current marketing year.
A national average support price for 1957-crop rice of $4.72 per cwt.
was announced on August 1. This price is 82 percent of the rice parity price
of $5.75 per cwt. on that date. The national support price is 27 cents per
cwt. above the advance "minimum" 1957-crop support price as announced November
20, 1956. The increase resulted from a combination of a higher rice parity
price, a smaller estimated 1957 rice crop and larger estimated 1957-58 mar-
keting year rice exports than the estimate last fall.
- 21 -
During late summer, supplies of fresh deciduous fruits will continue
seasonally large while those of citrus, except lemons and limes, will be sea-
sonally light. Total supplies of fresh fruits as well as of processed fruits
may be a little larger than a year earlier. Although demand for fresh fruit
continues strong, demand for fruit for processing does not appear to be as
good as a year ago.
Supplies of California Valencia oranges remaining for use during late
summer and fall are a little lighter than a year ago. In contrast, supplies
of lemons and limes are larger. Supplies of grapefruit are about the same as
a year ago. In early August, prospects for the 1957 58 citrus crops were not
quite as good as a year earlier, especially in California.
Total production of deciduous fruits is expected to be about as large
as in 1956. Among fruits marketed in large volume in late summer, production
of pears is larger than in 1956, but that of peaches, grapes, and prunes is
smaller. With lighter crops of almonds and pecans more than offsetting
heavier crops of filberts and walnuts, total production of tree nuts in 1957
is expected to be 14 percent smaller than in 1956.
In California, the crop of dried prunes is expected to be about 11 per-
cent smaller than in 1956, and production of raisin variety grapes, the
principal source of raisins, is also down 11 percent. The 1957 packs of
canned peaches, purple plums, and a few other fruits probably will be smaller
than the 1956 packs. But some increase seems likely in cherries and berries.
The pack of frozen cherries also is expected to be larger than in 1956.
Output of frozen orange concentrate in Florida in 1956-57 was about 72 million
gallons, 2 percent larger than in 1955-56 and a new record.
With sharp reductions in prices and increased movement of frozen
orange concentrate since May, Florida packers' stocks of this item by
August 3, 1957 had dropped slightly under the level of a year earlier. But
stocks of canned single-strength orange juice and other canned citrus juice
held by Florida packers were much larger. Packing of frozen deciduous fruits
and berries was seasonally heavy during July, resulting in a gain of 123 mil-
lion pounds in cold storage during that month. Total stocks (excluding
juices) were 11 percent larger on August 1, 1957 than a year earlier.
For Fresh Market
Unfavorable weather during July lowered yield prospects for many
vegetable crops. The most serious damage occurred along the Atlantic Coast
from Virginia through New England as a result of hot weather and prolonged
- 22 -
Production of late summer vegetables, excluding melons, is expected to
be moderately smaller than both last year and the 1949-55 average. Output
of late summer carrots and celery is expected to be substantially smaller
than a year earlier, and output of cabbage, sweet corn, tomatoes and onions
moderately smaller. Late summer cucumbers and green peppers are expected to
be in larger supply than a year earlier.
Among those crops for which only total summer estimates are available,
only one item-snap beans--promises to be in as large supply as last summer.
Production of lima beans, beets, cauliflower, eggplant, escarole, garlic and
spinach is expected to be down substantially from 1956, and that of lettuce
and green peas down slightly to moderately.
Economic activity is at a high level, and demand for vegetables is
expected to continue strong. Supplies of vegetables will be seasonally heavy
during the next 4 to 6 weeks. Prices during this period are expected to
decline from the relatively high levels of the past few months, but are likely
to continue to average above those of a year earlier.
Supplies of cantaloups in late summer promise to be substantially
larger than a year earlier, while supplies of watermelons are expected to be
noticeably smaller than the heavy supplies of last year. Prices of both
cantaloups and watermelons are expected to remain at moderate levels during
the next few weeks.
First reports indicate that production of early fall cabbage and celery
is likely to be substantially smaller than last year, and carrots slightly
For Commercial Processing
Early reports point to a substantially smaller production of vegetables
for commercial processing this year than last. August estimates for 6 vege-
tables, which make up 85 to 90 percent of total tonnage for processing, indi-
cates for these vegetables a tonnage about 18 percent smaller than last year's
high level. However, indicated production is still about 15 percent above
the 1946-55 average. Output of winter and spring spinach was about the same
as a year earlier; indicated production of tomatoes for processing is down
24 percent from the record large 1956 crop; sweet corn down 13 percent, and
contract cabbage for kraut down 21 percent. Production of snap beans is
expected to be moderately larger and that of green peas slightly larger than
a year earlier.
The expected smaller pack of vegetables this year will be largely off-
set by larger carryover stocks. However, total supplies of canned vegetables
probably will be a little smaller in 1957-58 than a year earlier, but substan-
tially larger than the 1949-55 average. Supplies of frozen vegetables are
likely to be at or near the record levels of a year earlier.
- 23 -
POTATOES AND SWEETPOTATOES
Production of potatoes for late summer harvest is estimated at 31.5 mil-
lion hundredweight, 7 percent less than a year ago and 5 percent below the
corresponding 1949-55 average.
Thus far this summer, distribution pipelines have been better stocked
than a year earlier, when the harvesting pattern was distorted, and prices
have continued substantially below the relatively high levels in the same
period of 1956. For the week ended August 10, f.o.b. shipping point prices
of U. S. No. 1 long whites, Delta District, Stockton, California, averaged
$2.56 per hundred pounds, compared with $4.00 a year earlier.
Indications point to a moderately smaller crop of potatoes for fall har-
vest than last year. However, potatoes were in surplus supply throughout the
1956-57 season and about 18.6 million hundredweight of the fall crop were
diverted to starch and livestock feed.
Prospective production of sweetpotatoes at 16.0 million hundredweight is
down 5 percent from last year and a fifth below the 1949-55 average. Prices
received by growers are expected to decline seasonally into the fall, but are
likely to remain moderately above year earlier levels.
A total supply of about 23.3 million running bales of cotton is indi-
cated for the 1957-58 season. This is 4.5 million below the record of the
1956-57 season and the smallest since 1953-54. About 70 percent of the
decrease is due to a reduction in the August 1 carryover from 14.5 million
bales in 1956 to about 11.4 million a year later. The remainder reflects an
expected decline in production. The August 1 estimate indicates a 1957 crop
of about 11.8 million running bales (11.9 million 500-pound bales) compared
with about 13.2 million last year. This will be the smallest crop since 1950.
The current supply also includes an estimate of imports of about 0.1 million
A further reduction in carryover stocks is expected to occur in the cur-
rent season. Disappearance during the 1957-58 marketing year is provisionally
estimated at between 13.5 and 15.0 million bales compared with about 16.4 mil-
lion a year earlier. If disappearance is at the midpoint of this range and
the supply turns out as indicated above, the carryover next August 1 will be
9.0 million bales, or about 2.4 million below that of August 1, 1957.
On August 8, the Department of Agriculture announced that the final
1957 loan rate for Middling 7/8 inch cotton at average location is 28.81 cents
per pound. This compares with 29.34 cents per pound last season and the mini-
mum level set on February 9 of 28.15 cents. The higher final rate reflects a
0.37 cent rise in the parity price between January (upon which the minimum rate
was based) and July and a one point increase in the applicable percent of parity
to 78 percent. Revised estimates of supply and disappearance of upland cotton
in 1957, information used in determining the parity percentage, were responsible
for the latter change.
The 1957 average loan rate for Middling 1-inch cotton at the 14 spot
markets is 32.56 cents per pound, 0.46 cents below that for the 1956 crop.
From August 1 through August 15, market prices for this quality at these mar-
kets averaged 33.76 cents per pound. A year earlier, they averaged 32.99
Strong world demand for wool has resulted in substantially higher
prices since late 1955, though supplies have increased. Boston quotations for
domestic wools early in August were considerably higher than in late 1955.
Quotations for fine and half-blood wools have advanced 30 to 45 percent and
early in August were between 25 and 35 percent higher than a year ago. Quo-
tations for three-eighth blood and coarser wools were up 10 to 30 percent from
levels prevailing at the time the advance began in late 1955, and up 5 to 30
percent from a year earlier. Quotations have changed little during the past
several weeks, with most the same in late July as in early May. During the
summer of 1956, prices of domestic wools were low relative to prices of for-
eign wools. However, in recent months the relationship has been about the
same as the average for recent years.
Prices received by domestic producers for shorn wool started to rise in
September 1956. The upward movement extended into the 1957 marketing year.
The monthly average of prices received in July was 55.6 cents, up 13.3 cents
from a year earlier and up 17.8 cents or 47 percent from January 1956. So far
this season, the monthly averages have been between 23 and 33 percent higher
than last season.
Prices of wool were considerably higher compared with prices of man-
made fiber in early 1957 than early last year. Prices of some of the non-
cellulosic staple fibers increased somewhat in late 1956, but the gains were
less than the reductions made in late 1955. The increases also were small
relative to the advances in wool prices since late 1955.
Supplies of wool in the United States early this year were smaller than
in the first part of 1956. Stocks of wool on April 1 amounted to 152 million
pounds, scoured basis, including 115 million pounds of apparel wool and 37
million pounds of carpet wool. Both were lower than a year earlier.
CCC holdings accounted for a little over one-fifth of total stocks of
apparel wool. But almost three-fourths of the wool held by CCC on April 1
was sold during the following 4 months.
CCC disposals during the first 7 months of this year amounted to 22
million pounds, clean. Of this total, about 5 million pounds were for export
under barter contracts. Sales during the corresponding months of 1956
amounted to 15 million pounds.
- 25 -
United States imports early this year were considerably below early
1956. Imports of dutiable wool for consumption during January-May were down
20 million pounds, clean, or 34 percent from last year. The decline reflects
lower mill consumption and slightly larger CCC sales for domestic use during
these months. Imports of duty-free wools for use primarily in the manufacture
of floor coverings were down 13 million pounds or 18 percent.
Domestic production of shorn wool this year is estimated at 226 million
pounds, grease basis, down 3 percent from last year. This is equivalent to
around 99 million pounds, clean. Production in the "Native" wool States is
estimated at 71 million pounds, grease basis, up 3 percent from last year.
The estimate for the 13 Western sheep States is 155 million pounds, down 5
percent from last year. The decline in these States is due largely to a re-
duction in the number of sheep shorn.
World production of wool during 1956-57 is now estimated at 4,965 mil-
lion pounds, grease basis. This is almost 5 percent above 1955-56. A slight
further increase appears likely for 1957-58.
World consumption of wool during the first quarter of this year is
estimated to have been about 5 percent higher than a year earlier. It was
higher than during any other quarter since the first quarter of 1950.
But in the United States, mill use of wool early this year was down
substantially from early 1956. Use of apparel wool during the first half of
the year was down 12 percent. It was only 2 percent above early 1954, when
consumption was at a postwar low. Consumption of other animal fiber and re-
processed and reused wool by woolen and worsted mills was also down 12 per-
cent. But use of man-made fiber was up 15 percent. The net result was a de-
cline of 9 percent in total fiber use by the wool textile industry in combing
and in the spinning of yarn other than carpet on the woolen system.
Mill use of carpet wool during the first half of this year was 4 per-
cent below a year earlier. Use of man-made fiber by woolen mills in the
spinning of carpet and rug yar was up 1 percent during the same months and
use of other fiber, mostly reused and reprocessed wool, was up 15 percent.
Marketings of this year's small crop of flue-cured have been under way
in the southern-most Belts since the latter part of July. In the type 14 Belt
(Georgia-Florida), marketing have finished. The volume was over one-third
less than last year and brought an average price of 55.9 cents per pound-16
percent above a year ago and a record high. In the type 13 Belt (North Cairona
border and South Carolina) the average price through mid-August was 57.3 cents
--nearly 15 percent above that in the comparable period of last year. The type
12 Belt (Eastern North Carolina) markets opened August 15. Prices for the
- 26 -
first 2 days' sales averaged 49.6 cents per pound one percent above the
early season average of a year ago. Markets in other Belts will open in
As of August 1, the flue-cured crop was indicated to be 35 percent less
than last year's crop. This year's production plus the carryover, which is up
11 percent, will provide a total supply for 1957-58 about 7 percent lower than
the record 1956-57 level.
Flue-cured is one of the principal cigarette tobaccos and also is ex-
ported in large volume. In the year ended June 30, domestic use of flue-cured
was 3 percent lower than in the preceding year despite the 31 percent increase
in cigarette manufacture. The average number of cigarettes turned out per
pound of farm-sales weight tobacco has increased. This is attributable to the
smaller average tobacco requirement for many filter tip brands, the reduced
size of some other brands, and the more complete use of the tobacco leaves.
The July 1956 June 1957 exports of flue-cured totaled 464 million
pounds (farm-sales weight) 16 percent less than the near record level of
1955-56 but about 8 percent above each of the 2 previous years. Exports of
all kinds of tobacco in 1956-57 totaled 558 million pounds (farm-sales weight)
- 14 percent below 1955-56. Exports of burley, Virginia fire-cured, cigar
tobacco, and Black Fat were lower. However, export of Kentucky-Tennessee
fire-cured and Maryland tobacco increased a little and exports of the dark
air-cured types were up substantially compared with 1955-56.
The 1957 burley crop as of August 1 was indicated to be 4 percent lower
than last year's harvesting. Indicated production on August 1 of fire-cured,
dark air-cured and Connecticut Valley binder types was sharply lower. Produc-
tion of most other cigar types this year is likely to be moderately lower than
The August 1 indication for Maryland tobacco was for a 21 percent
smaller crop than last year. Sales of last year's crop of Maryland on the
auction markets finished August 2. The market average for the 33.3 million
pounds sold over auctions was 51.0 cents per pound slightly above the
auction average of a year earlier.
UNIVERSITY OF FLORIDA
3 1262 08902 7543
U. S. Department of Agriculture
Washington 25, D. C.
Penalty for private use to avoid
payment of postage $300
The next. issue of The Demand and Price Situa- :
tion is$scheduled for release on September 24.:
If you no longer need this publication,
check here / / return this sheet,
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write the new address on this sheet
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