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:
AA00012195:00013

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
A ,9o:4o


April 1958
FOR RELEASE
APR. 24, P. M.


DEMAND and PRICE


SITUATION


DPS-40


I a.-. ->' I

I U.S. DEPOSITORY


Published monthly by
AGRICULTURAL MARKETING SERVICE
UNITED STATES DEPARTMENT OF AGRICULTURE


Approved by the Outlook and Situation Board, April 18, 1958
AGRICULTURAL OUTLOOK AND SITUATION
Substantial gains were recorded in prices and incomes to
farmers in the first quarter of the year. Prices received by
farmers averaged more than 7 percent above the first quarter
of 1957, and in mid-March were at the highest level in almost
5 years. Although prices paid by farmers have continued to reach
new highs, the parity ratio has also been improved, averaging
84 in the first quarter of 1958 compared with 81 in the same quar-
ter a year earlier. The annual rate of farm operators' realized
net income in the first quarter of 1958 rose to about 13 billion dol-
lars compared with a rate of 11.7 billion a year earlier. While
the flow of income to farmers was augmented earlier this year by
delayed marketing from last year's late harvests, most of the
gain in farm income reflected the current improvement in the
agricultural price situation.

Prices of farm products are running well above last year and
are expected to average higher for the year than in 1957. However,
as the new harvests approach and with prospects that supplies of


(Contined on page 3)






-2-
ECONOMIC FACTORS AFFECTING AGRICUIEURE


Unit or : 1957 1958
Item base
tem : bae Year Mar. Dec. Jan. : Feb. Mar.
Period : : : : :


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

Construction:
Total outlays, seasonally adjusted 2
Public construction
Private residential
Housing starts
Manufacturers' sales and inventories:
Total sales, seasonally adjusted
Durable goods
Unfilled orders-sales ratio 52
Inventory-sales ratio 6/
Durable goods

QEployment and wages: /
Total civilian employment
Nonagricultural
Unemployment
Workweek in manufacturing
Hourly earnings in manufacturing

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

Total retail sales, seasonally adj. 2
Durable goods
Inventory-sales ratio 6

Prices:
Wholesale prices, all commodities 4/
Commodities other than farm and food
Farm products
Foods processed

Consumer price index, all items 4
Food

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

Farm income and marketing: :8
Volume of farm marketing
Cash receipts from farm marketing


2


1.947-49100 : 143
do. 145
do. : 160
do. : 130
do. 128


Mil. dol. : 47,255
Mil. dol. : 13,942
MIL dol. : 16,571
Thousands : 1,041

Mil. dol. : 28,383
Mil. dol. : 14,159
3.40
1.89
2.20


Millions : 65.0
do. : 58.8
do. : 2.9
Hours : 39.8
Dollars 2.07


Bil. dol. : 343.4
Mil. dol. : 44,776
Mil. dol. : 15,496

Mil. dol. : 16,601
Mil. dol. : 5,588
1.47


1947-49=100 : 118
do. 126
do. : 91
do. 106

1947-49=100 : 120
do. : 115

1910-1=100 : 242
do. : 234
do. : 249

1910-14=100 : 296
do. : 286
do. : 258
S 82


1947-49=100 : 116
Mil. dol. : 30,019


3,912
1,160
1,383
933

28,426
14,198
4.25
1.88
2.20


63.9
58.4
2.9
40.1
2.05


340.2
40,735
14,528

16,298
5,685
1.45


117
125
89
104

119
113

238
237
238

294
284
258
81


90 131
1,880 2,933


4,034
1,249
1,403
1,030


26,350
12,646
3.68
2.01
2.50


62.2
57.2
4.5
38.7
2.10


343.6
43,966
15,326

16,718
5,538
1.46


119
126
94
110


4,024
1,247
1,408
890


25,593
11,990
3.78
2.05
2.52


62.0
57.2
5.2
38.4
2.10


341.8
43,043
15,122

16,115
5,055
1.51


119
126
96
110


4,010
1,260
1,389
880


4,051
1,197
1,444
1,000


26,690
13,092
3.68
2.01
2.38


64.4
59.0
3.4
39.4
2.10


343.6
44,776
15,496

16,855
5,588
1.45


118
126
93
107

122
116

242
218
264

299
289
263
81


122 122
118 119

247 252 263
225 229 244
267 273 280


301
289
264
82


120 97
2,708 2,144


304
293
268
87


89
2,100


Annual data for most of these items for
issue of The Demand and Price Situation.


the years 1929 and 1939-57 appear on page 35 of the Aprll 1958


1/ Federal Reserve Board. 2/ U. S. Department of Commerce. V/ Seasonally adjusted annual rates.
f/U. S. Depearlent of abor, Bureau of labor Statistics. 5/ Unfilled orderS for durables divided by
monthly deliveries. 6/ Inventories, book value, end of month, divided by sales. 7/ Bureau of the Census.
8 U. S. Department of Agriculture, Agricultural Marketing Service.


DPS-.40


APRIL 1958


-


62.3
57.2
5.2
38.5
2.10





15,920
4,932



120
126
100
111






DPS-40 3 APRIL 1958


----- -- -. -. -. -. -
THE DEMAND AND PRICE SITUATION


Approved by the Outlook and Situation Board, April 18, 1958



CONTENTS :

Page Page

: Summary ...................... 3 Feed ........................... 24 :
:General Business Activity ..... 6 Wheat .......................... 25
:Farm Prices, Supplies and Rice .......................... 27
: Income ....................... 13 Fruit .......................... 27
: Foreign Demand ................ 16 Commercial Vegetables .......... 29
Livestock and Meat .*.......... 18 Potatoes and Sweetpotatoes ..... 30
Dairy Products ................ 19 Cotton ........................ 31
:Poultry and Eggs .............. 21 Wool ......................... 32 :
: Oilseeds, Fats and Oils ....... 21 Tobacco ........................ 33


Continued from page 1 -

farm products will increase, notably vegetables, hogs, fed cattle and eggs,
current levels of prices and incomes may move toward the levels of 1957. Even
so, farm operators' realized net income in 1958 is expected to'be 5 to 10 per-
cent larger than the 11.5 billions in 1957. This will reflect some increase
in cash receipts from marketing and larger outlays to farmers for participa-
tion in the Soil Bank which will be only partly offset by some increase in
production expenses, especially for feeder livestock and for such overhead
costs as interest and taxes. If weather conditions are more nearly average
than last year, when harvests were late and crop inventories sharply increased
at year end, farm held inventories of farm products may show some reduction
this year.

Domestic demand for food has continued strong and consumer markets for
nonfood farm products has apparently been little affected by the current reces-
sion, the third of the postwar period. Although there has been a substantial
cutback in industrial output and a rise in unemployment since last fall, the
flow of income to consumers, cushioned by increasing unemployment compensation
payments, has not been drastically reduced--less than 2 percent from the record
rate of last August. Most of the decline in economic activity thus far has
resulted from weakening in the capital goods industries and in consumer dura-
bles, particularly automobiles, which was accompanied by a substantial decline
in business inventories. Sales at retail food stores, however, have continued
to increase, averaging some 9 percent higher in the first quarter of 1958 than
a year earlier.







The underlying forces in the economy suggest that consumer incomes may
well stabilize close to current levels with some rise later in the year. Con-
sequently, consumer demand for food should continue fairly strong and steady
for the remainder of the year.
The current heavy rate of inventory decline has reduced production below
consumption in a number of major industries. If final demands are maintained
close to current levels, as seems likely, the rate of inventory liquidation
will lessen and production and employment schedules increase. Although business
investment in new plant and equipment is being reduced sharply this year, re-
flecting the rapid build-up in industrial facilities since 1955 and the emer-
gence of excess capacity in many industries, the impact of this development will
likely be offset by expansion elsewhere in the economy. Housing construction
for which funds are becoming more readily available and purchase terms have
been eased, may well improve later this year. Outlays of State and local
Governments for schools, highways and other public facilities continue to rise
steadily and expenditures of the Federal Government which have been relatively
stable for some months are scheduled to rise significantly in coming months.

With domestic demand holding quite steady, the improved price situation
in agriculture very largely reflects reduced supplies. Cattle slaughter in
the first quarter of this year was down about 11 percent from a year earlier,
reflecting the cyclical downtrend in cattle numbers, a later feeding season as
well as some recent withholding of cattle for breeding purposes. Accompanying
the smaller supplies, beef cattle prices averaged 35 percent above January-
March 1957 and are expected to continue higher this year than last. Hog
slaughter too, in January-March was down 7 to 8 percent from the same months
of 1957 and prices averaged 16 percent higher. Hog prices will decline in the
last half of the year when supplies will rise seasonally and be above 1957
levels. With reduced red meat supplies and a smaller output of eggs, poultry
product prices in January-March averagedl5 percent above a year earlier. Cold,
unfavorable growing weather this winter and spring reduced production of citrus
fruits, winter vegetables and potatoes. As a result, commercial vegetable
prices were up 50 percent and potatoes more than 60 percent from the relatively
low prices in the opening quarter of 1957, but prices are likely to recede
from these levels later in the season.

On the other hand, prices of commodities for which supplies continue
heavy (wheat, feed grains and oil-bearing crops) are below a year ago.
Supplies of these products will likely continue large in 1958-59. A sub-
stantial increase in wheat production is presently indicated with prospects
for some further rise in carryover by mid-1959. The price support for 1958
crop wheat has been reduced about 10 percent. While farmers intended to plant
less feed grain acreage (March 1 intentions) the carryover is a record high
insuring large supplies in 1958-59. Price supports for feed grains for the
coming crop are the same or slightly lower than for the 1957 crop. Farmers
also intended to plant 10 percent more acreage in soybeans this year than last.
The stock position of cotton has been improved substantially in the last 2 years
and there is larger participation in the 1958 acreage reserve of the Soil Bank
for cotton than in 1957. Prices received by farmers for cotton are currently


DPS-40


APRIL 1958






APRIL 1959


substantially below a year earlier, primarily a reflection of the poor quality
of the 1957 crop, but central market prices for standard grades have remained
firm. The price support for 1958 crop cotton is appreciably higher than for
the 1957 crop.

Foreign takings of U. S. farm products during the current fiscal year
ending June 30 are expected to be 10 to 15 percent lower than the record
4.7 billion dollars exported in 1956-57. Most of the decline is occurring in
the shipments of wheat, cotton and rice, of which exports last year were
exceptionally high. Exports of feed grains, however, have increased. Pros-
pects for the remainder of 1958 indicate that our volume of exports will be
maintained close to current levels.

Commodity Highlights

Considerable withholding of meat animals for an expansion of inventor-
ies and a later feeding season have reduced slaughter in recent months and
strengthened prices; however, fed cattle prices are expected to decline
seasonally this spring, and hog prices likely will remain around early-spring
levels until mid-summer and then decline.

Prices to farmers for manufacturing milk and butterfat declined slightly
around April 1, in line with the reduction in support to 75 percent of parity;
the price to farmers for all milk this year may average from 12 to 14 cents
under the $4.20 per cwt. in 1957.

Prices of eggs to farmers continue above last spring. Production is
smaller and storage stocks of shell eggs on April 1 were less than 10 percent
of a year earlier. Replacement hatch through March was about 8 percent above
1957.

Current estimates of soybean crushings and exports indicate a new peak
for this marketing year, but supplies of soybeans are also record large leav-
ing a carryover on October 1, 1958 of around 30 million bushels.

Prices to farmers for feed grains have advanced, in recent months from
the low levels of last winter, but with record supplies relative to feed
requirements they will probably continue lower than a year earlier this spring
and summer.

A winter wheat crop of 964 million bushels indicated on April 1 and an
assumed spring wheat crop of 225 million bushels would push total wheat pro-
duction to about 1.2 billion bushels. Even with disappearance of possibly a
billion bushels, this output would result in a build up of stocks in the 1958-
1959 marketing year.

Cold-storage stocks of apples on April 1 were much larger than last year
and prices have averaged considerably under the high prices last year.
Supplies of fresh oranges and grapefruit are substantially smaller this
spring and prices are much above last year.


DPS-


- 5 -






APRIL 1958


Supplies of vegetables for fresh market may be about the same as a
year earlier during the remainder of this spring. Supplies of potatoes are
substantially smaller this spring than last and prices in the next 6 to 8
weeks are likely to continue well above the low levels of a year earlier.

Disappearance of cotton this marketing year is now estimated at 13.6
million bales, and the carryover is expected to drop 2.6 million bales to
about 8.7 million bales August 1, 1958.

Prices of domestic wools at Boston early in April were 15 to 50 cents
a pound (clean basis) lower than a year earlier, reflecting the decline of
world demand for wool. Indications are that prices received by farmers for
wool this season will average lower than in 1957-58, but with the same incen-
tive level in 1958 as in 1957, payments will be higher.

The 1958 output and consumption of most manufactured tobacco products
are expected to continue near 1957 levels. Cigarette production last year was
at a record level of 442 billion.

GENERAL BUSINESS ACTIVITY

Economic activity in the first quarter of 1958 continued the decline
which started last fall; but the rate of decline in a number of important
indicators apparently slowed between February and March.

Businessmen plan to reduce capital spending in 1958. Business inven-
tories were also being cut back sharply in the first quarter of 1958.
Construction activity, however, continues close to peak levels. Government
spending is scheduled to rise moderately during the remainder of 1958, partic-
ularly as Federal spending picks up. Consumer incomes after taxes have
declined only moderately in recent months as rising unemployment benefits and
other Government payments partly offset declines in wages and salaries.
Consumer expenditures for durable goods such as automobiles are also down, but
sales of food stores continue substantially above year-earlier levels.
Employment and production continued to decline in March and unemployment
reached 7 percent of the civilian labor force.

Investment Expenditures

Reduced investment outlays by businessmen for industrial plant and
equipment, commercial construction, and for inventory stocks have accounted
for much of the recent decline in economic activity. Further declines in
investment are scheduled, though increases in Government outlays for defense
programs and for State and local facilities may largely counterbalance the
effect of reduced private investment spending.
Business Investment Outlays
To Decline Further
Capital spending by businessmen in 1958 is expected to be 13 percent
lower than the record level of 37 billion dollars in 1957, according to a
recent survey of business intentions by the Department of Commerce and the


WP)o-40


- 6 -





APRIL 1958


Securities and Exchange Conmission. Scheduled declines in 1958 are general
except for public utility outlays which are expected to rise moderately.
Manufacturing companies plan to spend about a sixth less than in 1957 while
metals, motor vehicles and textiles will be down sharply. Spending by the
chemical, machinery, petroleum and food industries are scheduled to be
moderately below 1957. Spending by railroad companies is expected to be a
third lower, and about a 15 percent cut is scheduled in capital outlays by
mining and commercial companies.


Table 1.--Gross national product or expenditure, first quarter 1957
to first quarter 1958

(Seasonally adjusted annual rates)
:.1957 : 1958
Item First Second Third Fourth first
quarter
quarter: quarter quarter: quarter -
Bil. Bil. Bil. Bil. Bil.
dol. dol. dol. dol. dol.

Gross national product : 429.9 435.5 440.0 432.6 424.0
Personal consumption expenditures: 276.7 278.9 283.6 282.4 281.0
Durable goods : 35.9 35.0 35.0 34.4 31.5
Nondurable goods : 137.3 139.1 142.5 140.8 141.5
Services : 103.4 104.9 106.1 107.2 108.0

Gross private domestic investment : 63.6 66.2 66.5 61.3 53.5
New construction :32.8 32.7 33.0 34.0 33.3
Residential (nonfarm) : 14.4 13.7 14.0 14.5 14.3
Other : 18.5 19.0 19.0 19.5 19.0
Producers' durable equipment 30.7 30.5 30.5 30.0 27.7
Change in business inventories : .0 2.9 3.0 -2.7 -7.5
Net foreign investment : 4.1 3.5 3.2 2.0 1.5

Government purchases of goods
and services :85.6 86.9 86.7 87.0 88.0
Federal 2/ : 50.3 51.1 50.6 49.7 49.7
National security :45.5 46.3 45.8 45.0 45.0
Other : 5.2 5.2 5.2 5.0 5.0
State and local :35.3 35.8 36.1 37.3 38.3

Disposable personal income : 296.1 300.4 303.3 302.1 299.3


SPreliminary first quarter estimates by Council
2/ Less government sales.


of Economic Advisers.


Note.- Detail will not necessarily add to totals because of rounding.


Department of Commerce.


DPs-40


- 7 -






APRIL 1958


Capital spending turned down in the last quarter of 1957 and is scheduled
to decline through 1958. The first quarter of this year is scheduled at an
annual rate of 34 billion dollars and the second at 32 billion dollars, down
from the peak annual rate of 37.8 billion dollars in the third quarter of 1957.
Although no specific plans for investment spending are reported for the last
two quarters, schedules for the year imply a further decline this fall to a
level possibly a fifth below the fall of 1957.

Business Inventories and
Sales Decline

Businessmen expanded their investment in inventories rapidly in 1955 and
1956. By early 1957, as sales and new orders of many industries leveled out
or began to decline, inventory policies shifted and inventory growth slowed.
manufacturing and trade sales slipped further in the last months of 1957, and
businessmen began to reduce inventories. The cutbacks were at an annual rate
of 2.7 billion dollars in the fourth quarter, and in the early months of this
year apparently accelerated to an annual rate of about 6 billion dollars.


Table 2.--Business sales and inventories, first
quarter 1957 to first quarter 1958

: : 1957 : 195
Item Unit : First : Second Third Fourth First
: : quarter. quarter quarter quarter quarter



Manufacturing:
Sales 2/ :Bil.dol.: 29.3 28.5 28.6 27.3 26.0
Inventories :Bil.dol.: 52.9 53.8 54.2 53.8 52.7
Stock-sales ratio: Ratio : 1.81 1.89 1.90 1.97 2.03

Wholesale: :
Sales 2 :Bil.dol.: 11.5 11.4 11.3 10.9 10.6
Inventories :Bil.dol.: 12.8 12.7 12.8 12.8 12.6
Stock-sales ratio: Ratio : 1.11 1.11 1.13 1.17 1.19

Retail: :
Sales 2/ :Bil.dol.: 16.3 16.6 17.0 16.7 16.4
Inventories :Bil.dol.: 23.9 23.9 24.3 24.3 24.4
Stock-sales ratio: Ratio : 1.47 1.44 1.43 1.46 1.49


/2 month average.
/ Monthly average.


Department of Commerce.


-8 -


DPS-40






APRIL 1958


Manufacturers' sales and new orders during the first 2 months of 1958
were down 13 and 16 percent, respectively, from the same period in 1957, but
inventories were about the same, although they were about 3 percent below the
peak last fall. Thus, the ratio of stocks to sales has risen from 1.77 in the
first two months of 1957 to 2.03 in the first 2 months of this year. The
sharp decline in sales of durable goods raised the stock-sales ratio to 2.51
from 2.07 in the first 2 months of 1957. Stocks are large relative to sales
for all industries except food. Stock-sales ratios at retail have remained
relatively stable in recent months. The automobile group is an exception with
a near-record volume of new passenger car inventories and sales around 15 per-
cent below the early months of 1957.

New Construction Activity
.Holds Steady

New construction in the first quarter of 1958 continued close to the
peak rates of last fall. Some declines in private construction have occurred
in recent months, but public construction is running above late 1957 due pri-
marily to increases for public housing and highways.

Private residential construction rose 6 percent from the second to the
fourth quarter of 1957, and outlays declined slightly in the first quarter to
14.3 billion dollars seasonally adjusted annual rate. Nonfarm housing starts
have declined in recent months, and for the first quarter of 1958 totaled
933,000 units on a seasonally adjusted annual rate basis compared with about a
million units started in the last quarter of 1957. Unusually bad weather
during February and March apparently delayed building somewhat. The recently
enacted emergency housing legislation is planned to provide additional funds
for the purchase of mortgages, reduce down payment requirements on FHA insured
mortgages and extend the VA direct loan and guaranty programs for 2 years.
The objective of this legislation is to stimulate the demand for residential
housing by making it easier than in recent years to secure financing for the
purchase of homes. Other private construction activity--industrial, commer-
cial, farm, public utility and private institutional buildings--reached a
peak annual rate of 19.5 billion dollars in the final quarter of 1957. But
during the first quarter of 1958 these outlays declined by about a half bil-
lion dollars as business investment spending declined.

Industrial and commercial building was down 7 percent from the last
quarter of 1957, and 8 percent from the first quarter of 1957. Farm con-
struction was virtually unchanged in the first quarter and at about the level
of a year earlier. Public utility outlays were slightly below the last quarter
of 1957 but 12 percent above a year earlier.

Government Demand

Government outlays by Federal and State and local Governments continued
to rise in 1957, except for a dip in the third quarter. But the rise was
slower than in 1956. Government spending is scheduled to increase further
this year.


- 9 -


DPS-40






APRIL 1958


Federal Government purchases advanced in 1956 and early 1957 and by mid-
year were up 4I billion dollars from a year earlier with all the gain in
national security programs. However, purchases were cut back about 1 billion
dollars between the second and fourth quarters of 1957 and have remained at
the reduced level in the first quarter of 1958. The Budget submitted to the
Congress early this year contained recommendations which would increase pur-
chases 2 billion dollars in the fiscal year ending June 30, 1959. Since that
time the President has submitted additional requests for new appropriations as
well as ordering a speedup of contracting on the basis of existing funds.

State and local Governments increased their outlays 3.0 billion dollars
between early 1957 and early 1958. Wage and salary payments of State and
local Governments increased during the past year. Employment increased a quar-
ter of a million and wage rates were generally higher. Construction outlays
for schools, hospitals, other buildings and highways all advanced during 1957.
A continuation of the uptrend in State and local Government outlays in recent
years is likely during the remainder of 1958. Increased Federal aid for high-
ways and a further expansion in schools and other facilities will contribute
to the expansion of outlays in 1958.

Consumer Income and Expenditures

Consumer income and spending has declined only slightly overall in
recent months despite a substantial cutback in industrial output, employment
and wage and salary payments. With increased unemployment insurance payments,
consumer income after taxes in the first quarter totaled 1 percent below the
final quarter of 1957. Per capital incomes are down more, and if incomes are
adjusted for higher consumer prices, real incomes per person in the first
quarter averaged about 3 percent below the third quarter of 1957.

Durable Goods Sales
Down Sharply

As consumer incomes continued to decline in the opening months of 1958,
expenditures by consumers on durables declined to a level sane 8 percent below
the fourth quarter 1957 rate and 12 percent below a year earlier. In recent
months there has been a sharp curtailment of automobile sales and some letdown
in furniture and appliance sales.

Installment credit outstanding decreased 435 million dollars during
February to a level of 33.3 billion dollars. After allowing for the usual
seasonal factors, outstanding credit decreased 166 million dollars. This
decline, which interrupted an uptrend which began late in 1954, reflected
reduced sales of durable goods, particularly automobiles. Repayments on con-
sumer debt continue to rise, but as sales are reduced, new credit extended
has also declined resulting in a contraction in total indebtedness outstanding
during February.
A recent survey of consumer buying intentions conducted by the Survey
Research Center of the University of Michigan for the Federal Reserve Board
indicates that consumers plan to purchase fewer new and existing housing


DPS _O


- 10 -





APRIL 1958


than in 1955-57 and they plan to purchase slightly less furniture and
appliances than last year. They plan to purchase substantially fewer new
automobiles than in recent years, but more plan to buy used automobiles.

Nondurable Sales
Down Slightly

In contrast with sharp declines in expenditures for durable goods, con-
sumers have reduced their purchases of nondurables only slightly fran last fall.
Retail sales of nondurable goods stores in the first quarter of 1958 averaged
4 percent above a year earlier but 1 percent below the third quarter of 1957.
Based upon data through February, food store sales seasonally adjusted for
the first 2 months of 1958 were 9 percent above a year earlier and 1 to 2 per-
cent above the monthly average for the last quarter of 1957. Retail food
prices were up 2 percent between December and February but they averaged nearly
5 percent higher than a year earlier.

Consumers continued in the first quarter of 1958 to expand their
expenditures on services. They reached an annual rate of 108 billion dollars,
up about 1 percent from the last quarter of 1957 and about 4 percent above a
year earlier. Most of the rise in services reflects higher costs rather than
increased volume.

Employment and Production

Employment trends since last fall have followed the decline in output.
Civilian employment, seasonally adjusted, in the first quarter of 1958 totaled
64.0 million, down about a million from the high in the third quarter of 1957.
Agricultural employment continued to decline, influenced by the long term down-
trend. However, the recent increases in unemployment tend to reduce nonfarm
job opportunities which have attracted farm workers in recent years. An easing
in demand for consumers' and producers' durable goods in particular as well as
substantial inventory liquidation have reduced the length of the work week
and industrial employment. The number of workers on nonfarm payrolls in the
first quarter of 1958 totaled 51.1 million, after seasonal adjustment, some
3 percent below the third quarter of 1957. Among the industry groups there
was considerable variation in declines in employment. The sharp curtailmnts
in purchases for durable goods reduced employment in durable manufacturing in
the first quarter to a level 9 percent below the third quarter of 1957.
Employment in nondurable manufacturing during the same period was down 3 per-
cent. Employment in mining, construction and public utilities was also
reduced about 6 percent. However, trade, finance, service, and Government
industries increased their employment in recent months.

The factory work week in March 1958 averaged 38.5 hours, about the same
as February but 1.6 hours below a year earlier and the lowest for any March
in the postwar period. Hourly earnings were steady at $2.10, up 5 cents frao
March 1957. Weekly earnings of $80.85 were about the same as in February
but, with a shorter work week, they totaled $1.36 below March 1957.


DPS J-


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APRIL 1958


Unemployment in March
levels Out

The rapid increase in unemployment that began last fall leveled out in
March and remained close to the February level of 5.2 million workers. Nor-
mally there is a moderate decline in unemployment at this time of year. The
seasonally adjusted unemployment rate, therefore, rose to 7.0 percent of the
civilian labor force in March, up from 6.7 percent in February and 3-9 percent
in March 1957.

Industrial Output
Well Below Last Fall

Output of the Nation's mines and factories in March, as measured by the
Federal Reserve Board, stood at 128 percent of the 1947-49 average, down
12 percent from last August. Although the rate of decline apparently eased
during March, production rates are well below capacity in a large number of
major industries. The sharpest reduction in output have taken place in dnra-
ble manufacturing. The index, seasonally adjusted, at 135 (1947-49=100) was
down 17 percent from a year earlier. Among the durable industries, automobile
production in March was down about 30 percent from a year earlier. Primary
metals production reached 92 in March, down 3 percent from February and a
third below a year earlier. Steel mills in March operated at 52 percent of
capacity compared with 54 percent in February and 93 percent in March 1957.
Output of machinery at 142 and fabricated metal products at 122 was down 17 and
12 percent, respectively, reflecting the cutback in investment spending.

Nondurable production eased off to 124 (1947-49=100), down about 1 per-
cent from February and 5 percent from a year earlier. Production of textiles,
paper and chemicals was lower while food and rubber were unchanged between
February and March. Minerals output at 113 in March was down 5 percent from
February and 14 percent from a year earlier.


Price Trends

During 1957 and early 1958 prices have moved up both at the retail and
wholesale levels. The wholesale price index in the past year has reflected
mixed price trends for industrial products and rising prices of many farm
products and processed foods. Smaller supplies of red meats and of fruits and
vegetables, because of cold weather have been largely responsible for the
strengthening of retail food prices. In addition to food, consumer prices were
higher for practically all groups including rents, medical care and transpor-
tation.

Wholesale prices of industrial products at 125.7 (1947-49=100) in March
1958 were only a fraction higher than a year earlier. Since late summer and
fall the index has fluctuated around present levels; however, spot market


DPS-40


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APRIL 1958


prices for raw materials in March were about 7 percent below a year earlier.
Price trends during the past year have been mixed with increases for consumer
durables, machinery, hides, skins and leather, chemicals, pulp and paper and
declines for textile products, fuel and power supplies, lumber and same
metals. Farm product and processed food prices at wholesale were up 13 and
7 percent, respectively, during the year reflecting shorter supplies mainly of
livestock, vegetables and citrus fruits.

Urban consumer prices in February 1958 were up 3 percent from the open-
ing months of 1957. Food prices rose 4.? percent led by a 10 percent increase
in the meat, poultry and fish group and a 7 percent rise in fruits and vege-
tables. Rents continued their long-term increase rising by 2 percent and
transportation costs were up 3 percent. Costs of medical care rose nearly
5 percent. All services increased about 4 percent while commodities were up
nearly 3 percent.

Prices paid by farmers for family living items on March 15 reached an
all-time high of 293 (1910-14=100), up 3 percent over the year. Food and
tobacco prices were up 5 percent above March 1957. Clothing prices and autos
were up 2 percent while the cost of household operation averaged 3 percent
higher. Prices paid for building materials and household furnishings were
unchanged.


FARM PRICES, SUPPLIES, AND INCOMES

Farm product prices during the first 3 months of this year averaged more
than 7 percent above year earlier levels. The index of prices received by
farmers for all crops, which declined through most of 1957, recovered in the
beginning of the year and by mid-March, crop prices were up 3 percent from
March 1957. The sharpest gains in recent months have been in livestock
prices, which averaged 15 percent higher in the first 3 months of this year
than in January-March 1957.

The recent strengthening in farm prices has occurred despite declining
economic activity. Reduced supplies of some major commodities and a well
maintained demand for food and farm products are largely responsible for
higher farm product prices. According to preliminary estimates, the decline in
consumer income after taxes from the peak in the third quarter of last year to
the first quarter of this year has been less than 2 percent.

The largest price increases in recent months have been in citrus fruits
and vegetables and in hogs and cattle. Supplies of the former were cut
heavily by bad weather this winter. Reduced production of cattle and hogs as
well as some buildup in inventories this spring has reduced supplies of meats.
Livestock production in 1958 will likely be up slightly from 1957. Larger
spring and fall pig crops are expected this year while beef cattle marketing
will continue lower than a year earlier. Livestock prices during the first
half of this year will probably remain well above the same period of 1957.
Later in the year heavier slaughter of both cattle and hogs than last fall is


DPS-4O


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APRIL 1958


Table 3.- Agricultural prices, first quarter 1957 to first quarter 1958


(1910-14-100)
: -1957 : 1958
Item First Second Third Fourth First
quarter quarter quarter quarter quarter

Prices received, all farm products : 237 243 247 241 254
Crops : 236 242 233 222 233
Livestock and products : 237 243 258 259 273

Prices paid, interest, taxes and wage
rates : 293 296 295 298 302
Family living : 284 286 287 288 291
Production : 256 259 257 260 266
Parity ratio 81 82 84 81 84


Table 4.--Cmparison of average prices received for selected camnodities with
support prices for 1956, 1957 and 1958

Support Season Support Season Support : Average
Co"dity it price average price average price : prices
Commodity1956 price 1957 price 1958 received
crops :1956-57 : crops 1957-58 crops : *r. 15,
1958
Tobacco:
Flue-cured : Ct. per lb. : 48.9 51.5 50.8 55.5 /54. --
Burley : Ct. per Ib. : 48.1 63.6 51.7 60.1 1/55.0 -
Food grains:
Wheat : Dol. per bu. : 2.00 1.97 2.00 1.94 /1.78 1.96
Rye : Dol. per bu. : 1.27 1.16 1.18 1.10 1.10 .966
Rice (rough) : Dol. per cwt. : 4.57 4.86 4.72 5.03 1/4.33 5.04
Feed grains:
Corn Dol. per bu. : 1.50 1.29 1/ 2/1.40 1.17 1/ 21.36 1.00
Oats : Dol. per bu. : .65 .688 .61 .614 .61 .621
Barley : Dol. per bu. 1.02 .984 .95 .871 .93 .851
Grain sorghums : Dol. per cwt. : 1.97 2.05 1.86 1.55 1.83 1.69
Oilseeds:
Cottonseed : Dol. per ton : 48.00 53.40 46.00 50.90 45.00 51.20
Soybeans : Dol. per bu. : 2.15 2.18 2.09 2.09 2.09 2.10
Peanuts :Ct. per lb. : 11.4 11.2 11.1 10.5 1/10.7 10.1
Flaxseed :Dol. per bu. : 3.09 2.99 2.92 3.02 2.78 2.73
Dry edible beans : Dol. per cwt. : 6.31 6.91 6.31 7.10 6.18 7.64

Cotton:
American Upland : t. per Ib. : 29.34 31.63 98.81 3/32.50 1/30.75 26.05
Wool (grease basis) : Ct. per lb. : 62.0 44.2 62.0 /54.4 62.0 40.7

1/ Minimum support levels.
/ Support price in commercial area, in compliance with allotments. In 1957 the support for
non-compliance corn in commercial area was $1.10.
Average price to December 1, all cotton.
10-month average.


DPS-40








expected and prices may dip below year earlier levels. For 1958 as a whole,
prices of both cattle and hogs will likely average higher than in 1957.
Broiler production is running above a year ago and prices are also up,
reflecting the reduced supply of red meats and a generally strong demand for
broilers despite some decline in consumer income. Prospects are that poultry
and egg prices this year will average above 1957. Dairy production will
probably total slightly higher again this year and, with lower support levels,
prices are expected to average below 1957 levels.

Carryovers of such major commodities as cotton, wheat, and rice, were
reduced during the 1957-58 marketing year. Stocks of food fats and oils
(including oil equivalent of soybeans) are about the same. The excellent con-
dition of the winter wheat crop, indicated plantings of spring wheat, and
prospective market outlets point to another substantial increase in the wheat
carryover during the 1958-59 marketing year. The prospects are for continued
heavy feed supplies. The carryover of feed grains into the 1958-59 marketing
year is expected to total around 60 million tons compared with 49 million at
the beginning of the 1957-58 season. Planting intentions as of early last
month indicated a 4 percent reduction in acreage of all feeds this spring.
With normal yields this would result in a feed grain crop 10 to 15 percent be-
low the 1957 record. But with the big carryover stocks in prospect this would
mean a feed supply for 1958-59 only slightly below this year. If planting
intentions are carried out and yields are average, output of all crops in 1958
would be down about 4 to 5 percent. However, in recent years production has
not declined as much as suggested by early season acreage indications.

Prices of commodities and services sold to farmers have been increasing
along with prices they receive for their products. The index of prices paid
by farmers for commodities, interest, taxes, and wage rates was up about
3 percent from the first 3 months of 1957 to the first 3 months of this year.
However, since prices received rose more rapidly than prices paid over the
past year, the parity ratio in the first quarter averaged nearly 4 percent
higher, than a year earlier.

Farm Income to
Rise in 195

Farmers' cash receipts from marketing in the first quarter this year
were up 7 percent from a year earlier. Higher prices accounted for most of
the gain though the volume of marketing was also a little larger. Increased
receipts from livestock products were largely responsible for the gain.

Cash receipts are expected to be higher this year than in 1957 with the
gain primarily in the first half of the year. Continued higher prices in
prospect for livestock products, except for dairy products, would maintain
incomes in coming months. With a substantial increase in hog marketing in
prospect and increased production of poultry products, some decline in prices
for these products is in prospect in the last half of the year. However, for


APRIL 1958


DPS-AO


- 15-








1958, as a whole, cash receipts from livestock products are expected to total
larger than in 1957. Receipts from crops this year augmented by larger Soil
Bank payments, will also likely total above 1957. Crop prices in the first
quarter were a little below a year earlier. The volume of crop marketing may
be a little larger, reflecting larger crops of wheat and soybeans and a
sizable reduction in farm carryover stocks of cotton.

Production expenditures are also expected to increase from 1957. Most
of the gain reflects higher costs for purchased livestock and increased
charges for taxes and interest. Even with increased production expenses, the
expected increase in gross farm income would result in a larger operators'
realized net income this year-possibly 5 to 10 percent above the 11.5 billion
estimated for 1957. Inventory gains last year reduced marketing. This year
some stocks may be sold off.


FOREIGN DEMAND

Agricultural exports during the fiscal year 1956-57 totaled 4.7 billion
dollars and during the calendar year 1957 they totaled 4.5 billion. Exports
for the current fiscal year, ending June 30, 1958, are estimated at 10 to 15
15 percent below the comparable period a year earlier in value. Exports
during the calendar year 1958 are expected to hold around the reduced levels
reached in late 1957 and early 1958.

The current estimates are based on a combination of factors. Foreign
supplies of a number of commodities are larger than a year ago, both due to
increased production and larger inventories. For other commodities temporarily
reduced availability from CCC stocks and smaller crops are currently impeding
exports. Furthermore, foreign import demand is being tempered by same
slackening of business activity abroad.

The level of foreign demand is also being affected by the
international financial position of foreign countries. Extraordinary
import demand and other factors, partly associated with the Suez crisis,
reduced the foreign currency earnings of many foreign countries. Currency
speculation aggravated the situation. As a result during most of 1957, the
gold and short-term dollar reserves of foreign countries, with few exceptions,
declined. Substantial loans from international and U. S. lending agencies
and anti-inflationary measures stemmed the decline in the latter part of the
year. In addition, foreign reserves were strengthened by a decline in the
U. S. export surplus (as U. S. exports in the second half of the year
declined while imports remained stable) and a record outflow of private
capital from the United States. The net increase in foreign gold and short-
term dollar holdings of 105 million dollars in 1957 compares with $1.5 bil-
lion in 1956. In the fourth quarter of 1957, however, the increase was at an
annual rate in excess of one billion dollars. Gold and dollar holdings con-
tinued to increase early in 1958 and, barring a major change in the U. S.
economy, appear likely to continue to increase during the year.


DPS- 40


- 16-


APRIL 1958






DPS-4o 17 APRIL 1958


Table 5.--Estimated foreign gold and short-term dollar
holdings, December 31, 1957

De 31, :Change fr Change from
Area 9/ : '57 Dec. 33 Sept. 30,
1956 1957
Million Million Million
dollars dollars dollars
Continental Western Europe Total 14,715 602 276
Begium Luxembourg 1,182 -45 17
Gemnany 4,099 770 36
France 947 -558 -57
Italy 2/ 1,522 254 65
Netherlands 1,044 -27 73
Switzerland : 2,671 159 144
Sterling Area Total 3,998 64 367
United Kingdom : 2,979 64 363
Canada 2,738 103 -53
latin American Republics Total 4,344 231 -217
Cuba 371 24 -45
Mexico / 557 -43 4
Venezuela 1,548 490 -67
Japan 708 -437 10
Other Asia and Africa 2,000 -17 -93
Total Foreign Countries 28,503 552 290
International Institutions 2,697 -447 18
Total above 31,200 105 308
y Includes dependencies of European countries and U. K., excludes gold
reserves of the U.S.S.R. and Eastern European countries. 2/ Includes latest
reported figure for gold reserves (Oct. 1957).
Federal Reserve Bulletin, March 1958.



Of the 11 best dollar markets for U. S. agricultural commodities, 7
actually increased their gold and dollar holdings during 1957. Eight, notably
the United Kingdam, showed substantial improvement during the last quarter of
1957. These 11 markets, Canada, Cuba, Mexico, Venezeula, Japan, Belgium,
Germany, Italy, the Netherlands, Switzerland and the United Kingdom accounted
for 2.8 billion dollars or nearly 60 percent of total agricultural exports in
1956-57 and nearly 80 percent of exports outside of P. L. 480 and Mutual
Security Act programs.

About 1 billion dollars worth, or 20 percent of farm exports during
1956-57 went to 10 countries in more-or-less chronic balance of payments
difficulty. Exports to these countries (Spain, Yugoslavia, Turkey, Israel,
India, Pakistan, Indonesia, Formosa, Korea and Chile) are largely dependent
on U. S. foreign aid and other special export programs. The contemplated
extension of Public Law 480, and continuation of the Mutual Security Program
as well as existing authorizations under these programs would seem to indicate
a substantial volume of exports to countries in need of such financing during
1958.





APRIL 1958


In view of these general demand and supply factors, the export outlook
for major commodities shapes up as follows:

Exports of wheat and flour during 1957-58 are estimated at about 25 per-
cent below the 548 million bushels (grain equivalent) exported during 1957-58
when the poor European harvest swelled foreign demand. Exports during the
first and second half of 1958 will likely be relatively stable. Rice exports
reached a record 26.5 million hundredweight (milled basis) in 1956-57, mostly
from CCC stocks. Reduced availability from this source during most of 1957-58
may result in a 50 percent drop in rice exports despite large foreign import
needs; some pick up is in prospect the latter half of 1958. With reduced
foreign output of feed grains and less feed-wheat, the outlook is for higher
aggregate exports, perhaps one-fifth above the nearly 7 million short tons
(including products) exported in 1956-57.

Exports of raw cotton may exceed 5.6 million running bales in 1957-58
compared with 7.3 million in 1956-57. Reduced textile activity abroad and
larger foreign free-world production may further curtail exports during the
second half of 1958. Tobacco exports are holding up better than expected in
view of the higher foreign output and may be within 5 percent of the 501 mil-
lion pounds exported in 1956-57. Exports of all fats and oils (excluding
butter) totaled 4,842 million pounds in 1956-57 on an oil equivalent basis.
For the current year only a slight reduction in this total is indicated
despite increased foreign competition. Reduced shipments of lard and vegeta-
ble oils will be nearly offset by record exports of soybeans. During the
second half of 1958 total exports of fats and oils may exceed the comparable
period in 1957. Among other livestock products, exports of meat will be less
than half the 1956-57 total of 291 million pounds (carcass weight) due to
reduced PL 480 activity; exports of hides and skins may again exceed 10 mil-
lion pieces; but egg exports (all forms- may total less than half the 55 mil-
lion dozen reached last fiscal year. Exports of dairy products, consisting
largely of foreign donations, should remain close to last year's level.
Reduced U. S. supplies together with larger European crops will curtail
somewhat exports of fresh citrus and may reduce exports of dried fruits by
possibly 25 percent. But, with smaller foreign and ample U. S. supplies,
exports of apples may more than double.


LIVESTOCK AND MEAT

Increasingly, 1958 is proving to be a year marked by a considerable
withholding of meat animals, with some expansion of inventories in prospect.
This seems to be true for all species, cattle, sheep and hogs, and it is one
of the few times that trends for the three have coincided.

The withholding occurs after two years of reduction in numbers of cattle
and production of hogs. With slaughter supplies tending downward, and consum-
er demand for meat weakening only a little, the immediate result of withholding
is to create a price boom. The boom feeds on itself; each rise in price
stimulates further holding back, to speed the expansion. This spiral, so


DPS-4O


- 18 -






APRIL 1958


dangerous to future prices, may not build as high as some have done previously,
such as that of 1950-51. One reason is that moderate increases in current
slaughter supplies are already underway, and the burst of demand accompanying
the Korean outbreak which fed the 1950-51 boom is absent.

Prices of meat and meat animals in late winter approached previous highs.
They did not reach them, and are not likely to do so. Late winter prices were
at or near the peak expected for 1958. Prices of fed cattle are expected to
decline seasonally this spring and to average moderately lower this summer
than during the winter. This reduction will probably choke off some of the
upsurge in prices of grass cattle. Prices of hogs may fluctuate about their
early-spring level until mid-summer. They will decline later; yet even at
their low this fall they will compare favorably with previous years. Prices of
lambs will doubtless share in the general price strength. On the whole, 1958
will rank as a comparatively good price year, and cash receipts from market-
ings of meat animals may be the highest since 1952.

The cattle industry, which has benefitted from fast growth in demand,
could incur difficulty if the expansion now beginning should proceed too fast.
Increases would start from a high level (the 1956-58 reduction in cattle num-
bers was only 3 million); and any slippage in consumer incomes will affect
beef more than pork. The consequence of too rapid an increase in cattle
numbers will not appear for two years or longer; until then, prices will hold
up well. Production of hogs is now on an uptrend. Farrowings this fall will
probably be up by somewhat more than the 5 or 6 percent gain apparently
occurring in spring farrowings. At such an expansion, prices next winter and
spring would be appreciably lower than this past season but yet relatively
favorable. Significant price effects of any overexpansion in hogs probably
would not occur before the fall of 1959.

Supplies of meat for consumption in 1958 may drop to 151 pounds from
last year's 159 pounds. This would be 1 pound below the average of the last
10 years. Prices of meat at retail may recede only moderately from their
early spring level. Prices of the high grades of beef may slip a little by
summer, and a decline for pork is in prospect for this fall.


DAIRY PRODUCTS

Prices to farmers for manufacturing milk and butterfat declined slightly
as a result of the reduction in support level effective April 1. The reduct-
ion to 75 percent of parity, amounted to a smaller dollars and cents decline
than appeared likely in earlier months, because of the 1 percent rise in the
parity price in March. The 1958-59 support price of $3.06 per hundredweight
is for manufacturing milk of the national yearly average fat test, which in
recent years has approximated 3.9 percent. The support level for butterfat
will be 56.6 cents per pound, 2 cents below the support level of the past
2 years.


DPs-O4


- 19 -






APRIL 1958


The reduction in manufacturing milk and butterfat prices will be gen-
eral throughout the country, but the effect of the change in the manufacturing
milk price on fluid milk prices will vary among markets with some not showing
any change for the time being. The price received by farmers for milk sold
wholesale of average fat test may show a decline of 12 to 14 cents from the
$4.20 of 1957. Despite these lower milk prices, relationships between milk
and feed prices will be considerably above average. Costs of production items
other than feed probably will be higher. This together with high meat an-ima
prices will tend to restrict milk output in some areas. On the other hand,
the higher meat animal prices have helped to increase cash receipts for the
dairy enterprise as a whole, in all areas.

Farmers began 1958 with 2 percent fewer cows. But with large supplies
of feed concentrates on hand, relatively favorable milk-feed price relation-
ships, and the general tendency for production per cow to increase, it is
likely that total milk production in 1958 will exceed by around 1 billion
pounds the previous record of 126.4 billion pounds in 1957. Sales of milk
by farmers probably will show a larger increase than production, as has been
the case for 16 years. Cash receipts from the sale of milk and cream prob-
ably will be a little under the 4.6 billion dollars for 1957, as the increase
in volume of sales will not quite offset the prospective reduction in
average price.

Utilization of milk sold by farmers showed little change from 1956 to
1957, and for the second consecutive year more butter was made from whole
milk than from farm-separated cream. Consumption of dairy products per person
showed an overall decline from 1956 to 1957 of about 2 percent. Fluid milk
and cream use averaged 351 pounds in 1957, down 3 pounds from 1956. Use of
all other items showed reductions. Slightly lower retail prices for manufac-
tured dairy products in 1958 will tend to stimulate their use. Consumer
incomes have declined slightly but in the past moderate changes in consumer
incomes have had little effect on demand for dairy products.

The expectation of price reductions on April 1 induced heavy sales to
the CCC of butter, American cheese and dry milk. Private stocks were reduced
to the lowest levels since 1954. In the 12 months ended March 31, the CCC
bought the equivalent of 6.8 billion pounds of milk, a volume second only to
the record high of 11 billion purchased in 1953-54. The 6.8 billion is
equivalent to a little over 5 percent of production, compared with 4 to 5
percent in each of the preceding 3 years. Some decline is likely in the
current marketing year. In March butter was added to the list of caomodities
available for relief distribution along with cheese, nonfat dry milk and
other items which have been distributed to all designated claimants for some
time.

In the message vetoing a bill pertaining to support levels on several
farm products, the President announced that during the remainder of 1958 no
dairy products would be sold to domestic commercial buyers at less than the
equivalent of 90 percent of parity. Last marketing year such sales were made
at only slightly above the support price and therefore somewhat below the
90 percent level.


- 20 -


DPS-0






APRIL 1958


POULRY AND EGGS

Prices received by farmers for eggs continue sharply above last spring,
broiler prices are up slightly, and prices for seasonally small marketing of
turkeys are about the same as a year earlier. When considered in the light of
the current supply situation, recent price levels indicate a strong demand for
eggs and poultry meat.

Local market egg price quotations in mid-April were lower than in mid-
March, when the average price to farmers was 40.8 cents per dozen but conti-
nued above a year ago. Production is smaller than last spring, reflecting a
3 percent reduction in the number of layers on hand. On April 1, storage
stocks of shell eggs were less than 10 percent of a year earlier, and frozen
eggs in storage were two-thirds of the year before.

Hatchings of replacement-type chicks in the first 3 months of 1958 aver-
aged 8 percent above 1957, and April 1 eggs in incubators were 2 percent above
last year. These moderate increases are not likely to result in a burdensome
increase in egg production this fall. Even though more pullets than last year
may be added to the laying flock, this may not cause a net increase in the
total number of layers because there is a larger than usual number of hens to
be replaced by pullets. Therefore, any increases in egg production in the last
quarter of 1958 from a year earlier will result from prospective increases in
rate of lay per bird.

Broiler production continues almost 10 percent above a year ago. Recent
prices in producing areas have been close to a year earlier. The mid-March
average price to farmers was 21.5 cents per pound. High prices and reduced
supplies of red meats have sustained the demand for broilers. Farm chickens
are also higher than last year, 16.7 cents per pound in mid-March compared with
14.8 cents in mid-March 1957.

Prices for dressed turkeys, now mostly from storage, are higher than last
year for hens and small turkeys but lower for toms. The number of poults
started for 1958 slaughter has been reduced 16 percent from early 1957 as indi-
cated by hatchings of poults September through March, and anticipated April
hatchings. Through the end of April, about 60 percent of the 1957-crop
turkeys had already been hatched. The percentage cut from 1957 in poult
hatchings is not likely to be as sharp in the remainder of the season as it has
been so far.


OILSEEDS, FATS AND OILS

Record supplies of soybeans will be available the rest of the marketing
year and farm prices probably will continue to average near the support level
of $2.09 per bushel. Based on current estimates of domestic use and exports
of soybean oil soybean crushings for the 1957-58 marketing year probably will
total around 340 million bushels, about 25 million more than the 1956-57
peak. Soybean exports for 1957-58 probably will be about 90 million bushels,


DPS-40


- 21 -






APRIL 1958


slightly ebove last year's record. This would leave a carryover on October 1,
1958 of approximately 30 million bushels, 20 million above a year earlier
but still only 6 percent of the crop.

The Government-likely will hold a considerable share of the carryover
of soybeans next October 1. About 88 million bushels remained under support
in mid-March and a substantial portion of this probably will be acquired by
CCC when loans mature on May 31. A large volume of soybeans is expected to
move from CCC hands into trade channels during the summer. Estimates of
crush and exports indicate about two-thirds of the beans under support will
be needed before 1958 crop is available.

Soybean oil prices through the spring are likely to continue around
present levels and somewhat below a year earlier. Prices later in the market-
ing year will be influenced by the size of supplies of edible oils. If crop
prospects suggest large supplies in 1958-59, pressure on supplies this summer
probably will not be great. Pressure would increase, however, with signs of
a drop in total carryover stocks of cottonseed and soybean oils below the
estimated 375-400 million pounds. The outlook for exports this fall also
will have a bearing on prices this summer.

Demand for soybean oil and meal will continue fairly strong, and the
price spread between the cost of soybeans and the value of products is not
likely to change much. There probably will be less incentive this year to
reduce commercial stocks of soybeans and soybean products to a minimum as the
support price for 1958 crop soybeans will be the same as for 1957.

Exports of cottonseed and soybean oils and the oil equivalent of soy-
beans in 1957-58 probably will total about 2.1 billion pounds compared with
last year's record of nearly 2.2 billion pounds. About 60 percent of the
edible oils (not including soybeans) is expected to move out under P. L. 180
and ICA programs. Shipments of soybean and cottonseed oils under P. L. &80
so far this marketing year are lagging more than commercial exports. However,
recently concluded P. L. 480 agreements for large amounts of oil are expected
to boost exports during the remainder of the marketing year.

Cottonseed crushing and oil output in August 1957-February 1958 were
down about 15 percent from the like period a year before. The decrease is
about in line with the smaller crush and oil production expected for the
entire season. The refining loss for cottonseed oil this season continues
to mount, reflecting rain damage to part of the crop. The loss during
August-February average 8.5 percent compared with 5.7 percent a year earlier.
The refining loss for the entire season probably will average about 8 percent.
In terms of oil, the loss may be around 35 million pounds above the 77 million
last season.


- 22 -


DPS.-oI






APRIL 1958


Prices of cottonseed oil (crude, Southeast mills) have trended upward
from 12.7 cents per pound in the early fall to a peak of 15.0 cents in
January 1958. They have benefited from the strong domestic demand and sharply
reduced supplies this marketing year. Cotton oil prices slid off slightly
after January and in mid-April were 13.8 cents per pound, about 0.5 cents above
a year earlier. Cotton oil prices probably will be well sustained during most
of the remainder of the crop year at an average somewhat above last year.
Demand will continue strong, and prices may rise as crushing mills shut down
and cottonseed oil stocks are reduced. Prices during the summer will be
influenced by new crop prospects.

The cottonseed oil supply will tighten before the 1958 crop is crushed.
Supplies in 1957-58 are 25 percent smaller than in the previous season. If
current estimates of exports and domestic use are reasonably accurate, carry-
over stocks of cottonseed oil on August 1, 1958 will be about 25 percent below
a year earlier and at the lowest level since 1948.

Lard output in the current marketing year is now forecast at 2,525 mil-
lion pounds, about 100 million below last year. Hog slaughter in the early
months of the marketing year was not as large as expected. Slaughter this
spring may average about the same as last spring. Exports of lard during Octo-
ber 1957-February 1958 dropped about 18 percent from the previous year as
foreign competition stiffened along with reduced world demand. Total lard
exports and shipments for the entire marketing year probably will total around
450 million pounds, compared with 590 million in 1956-57. Very little lard has
moved under P. L. 480 this year. Domestic use of lard so far this marketing
year is running around 10 percent below a year earlier. Use of lard in shorten-
ing is down sharply.

Early season indicators point to near-record supplies of food fats in
the 1958-59 marketing year. An increase in the output of lard is in sight.
Cottonseed oil output may decline slightly because of the 5 million cotton
acreage placed in the Soil Bank. Butter production is expected to be near this
year's level. Total supplies of soybeans (including carryover of soybeans) in
1958-59 are expected to be larger than in the current year.

Flaxseed prices (No. 1 Minneapolis) rose from a low point of $3.07 per
bushel last July to a peak of $3.42 in December, mainly in anticipation of a
short supply of flaxseed and linseed oil this marketing year. However, crusher
demand for flaxseed has declined in recent months reflecting a sharp drop in
the consumption of linseed oil. Flaxseed prices have been slipping and in mid-
April were $3.00 per bushel, 15 cents below a year earlier and somewhat under
the Minneapolis equivalent of the support level of the 1957 crop. Important
factors contributing to the drop in domestic use of linseed oil have been the
general decline in economic activity beginning last fall, the relatively high
price to which linseed oil had climbed in relation to competing oils, and
perhaps some reduction in inventories by the drying oil trade. These recent
developments have tended to ease what appeared to be a relatively tight situa-
tion only a few months ago.


- 23 -






APRIL 1958


Domestic consumption of linseed and other drying oils is likely to
continue somewhat below last year for the remainder of this marketing year,
because of the slackening in industrial production and competition from lower-
priced substitutes.


FEED

Farmers are planning a 4 percent reduction in the total 1958 acreage
of feed grains. But with an average growing season this year, the 1958-59
supply of feed concentrates probably would be down only a little from the
record supply for 1957-58. The 1958 prospective acreage, at 1952-56 average
yields adjusted for trends, would result in feed grain production around
10 percent below the record output of 142 million tons in 1957. A crop this
size plus the record carryover of around 60 million tons in prospect,however,
would give a total supply of all feed concentrates only slightly below the
record supply of 219 million tons last year. Supplies of protein feeds for
1958-59 also are expected to continue near the high level of 1957-58. The
60 million ton carryover of feed grains would be sufficient to maintain
domestic consumption at an average rate in 1958-59, even if the growing season
should be one of the poorest on record. The total number of grain-consuming
livestock is expected to increase to around 168 million units in 1958-59.
This would be 3 percent above the current feeding year and close to the post-
war peak in 1950-51.

Based on farmers' March 1 planting intentions, a 2 percent increase is
in prospect for corn acreage, but this is more than offset by prospective
reductions of 8 percent in oats, 3 percent in barley and 13 percent in sorghum.
The combined acreage of the four feed grains would total 146 million acres
(excluding an allowance for acreage of sorghums harvested for forage and
silage), 7 million acres less than in 1957 and 2 million below the 1952-56
average. More effective restrictions on the use of crop acreages under the
Acreage Reserve Program, increased acreage seeded to wheat and the additional
acreage going under the Conservation Reserve Program have contributed to the
reduction in the total feed grain acreage.

Farmers' plans for corn will be influenced to some extent by the
acreage of corn finally signed under the 1958 Acreage Reserve Program.
Farmers signed agreements in February to place about 4 million acres of corn
in the Reserve Program this year. This was the maximum permitted by funds
originally allocated to the 1957 corn program. An additional 3.1 million
acres have been offered by producers for reserve sign-up and legislation has
been enacted that would provide funds for about 3.0 million of this acreage,
or a total of about 7.0 million acres. In 1957, 5.2 million acres were
placed under the Acreage Reserve Program.


DPS-40






APRIL 1958


Feed prices have advanced during the past few months from the low
levels reached this past fall and winter. The price of No. 3 Yellow corn
at Chicago average $1.26 per bushel in the week ended on April 11, 17 cents
per bushel higher than the season low in late January. Average prices
received by farmers for sorghum grain rose 19 percent from November to March,
and prices of oats and barley have strengthened since last fall. While these
gains are partly seasonal, they also reflect generally favorable livestock
prices and the heavy movement of feed grains under the price support program.
Feed grain prices, however, continue lower than a year earlier, down 16 per-
cent in March and are generally below the 1957 supports. They probably will
continue lower than a year earlier this spring and summer if growing condit-
ions are favorable for 1958 crops. Prices of high protein feeds have advanced
sharply since January as supplies of some of these feeds are relatively
short. Demand for these feeds also has been enhanced by higher prices of
livestock and livestock products. In March they averaged 9 percent higher
than a year earlier.

The Department of Agriculture announced a national average price support
of $1.36 per bushel for 1958 corn produced in the commercial area in compli-
ance with acreage allotments, 4 cents lower than in 1957. Price supports,
previously announced for 1958 crops of other feed grains, are as follows:
oats, 61 cents per bushel, the same as 1957; barley, 93 cents per bushel,
2 cents lower than last year; and sorghum grain, $1.83 per cwt., 3 cents
lower.

Present indications are that a record tonnage of 1957 feed grains will
be placed under support with a reduced quantity of corn being more than off-
set by larger quantities of other feed grains. Through March 15, farmers
had placed 291 million bushels of sorghum grain and 142 million of barley
under price support from the big 1957 crops, the largest of record. Corn
placed under support through March 15 totaled 259 million bushels, much less
than the 362 million a year earlier. Fewer corn producers in the commercial
area are eligible.for the full price support and much of the corn is too high
in moisture content to qualify for price support.



WHEAT

The 1958 winter wheat crop was forecast at 964 million bushels as of
April 1. The first estimate of spring wheat production will be made June 10.
Assuming average yields of the last two years on intended acreage, the spring
wheat crop would total around 225 million bushels. This, together with the
964 million bushels of winter wheat, would indicate a total all wheat crop
of around 1,190 million bushels.


DPS- 0


- 25 -






APRIL 1958


With total disappearance of possibly 990 million bushels (590 domestic
and possible exports of 400 million), an increase July 1, 1959 of about 200
million bushels would be indicated from the estimated carryover of about
880 million bushels for July 1, 1958. A wheat crop of 1,190 million bushels
would be 26 percent above the 947 million bushels produced in 1957 and 7 per-
cent above the 1947-56 average of 1,116 million bushels.

A winter wheat crop of 964 million bushels would be 57 million bushels
above the December 1 forecast, nearly 36 percent larger than the 1957 crop
and 13 percent above average. Increases from prospects as of December 1 have
been largely confined to the Great Plains, Mountain and Pacific Coast States.
Such increases more than offset rather sharp reductions in production prospects
in the South Atlantic and South Central regions, except Oklahoma and Texas.

The indicated yield at 21.9 bushels per seeded acre is the highest of
record and compares with 18.8 in 1957 and the average of 15.9 bushels. Total
abandonment and diversion to uses other than grain is indicated at 2.5 million
acres, 5.6 percent of the total acreage seeded for all purposes last fall and
winter. This is slightly less than indicated last December. Last year, 5.9
million acres or 15.8 percent of the total acreage seeded were lost or diverted.
The acreage seeded to winter wheat was estimated in December at 43.9 million
acres, and intentions March 1 indicated 12.6 million acres of spring wheat.
These total 56.5 million acres. This year farmers are placing about 5.3 mil-
lion acres in the Acreage Reserve of the Soil Bank Program, of which 3.9 mil-
lion is winter and 1.4 million spring wheat acreage. Last year the total was
12.8 million acres.

Cash wheat prices on April 14 generally were at or close to the high
for the season to date. Prices at the various markets on that date were gener-
ally about at the support level for the 1957 crop, except white wheat at Port-
land which was 11 cents below the high reached on December 6 though one cent
above the loan. However, on April 18 prices had declined as follows: No. 2
Hard Winter at Kansas City, 8 cents; No. 2 Soft Red at St. Louis, 3 cents; and
No. 1 Soft White at Portland, 5 cents. At Minneapolis, the price of No. 1
Dark Northern Spring was up one cent.

On March 15 216.9 million bushels remained under loan and purchase
agreement fran the 1957 crop. Of the 255.5 million bushels originally placed
under the support program, farmers had repaid 26.9 million, delivered 2.0 mil-
lion to CCC and elected not to deliver 9.7 million under purchase agreements.
In addition, 7.5 million bushels of 1956-crop wheat and 2.5 million bushels
of 1955-crop wheat remained under reseal.

Exports of wheat, including products, July through March totaled about
286 million bushels, 112 million less than in the same period a year earlier.
Exports of about 400 million bushels continue to be expected for the entire
marketing year ending June 30, 1958.


DPS-40


- 26 -






APRIL 1958


RICE

The supply of rice, in rough rice equivalent, totals about 63.4 mil-
lion cwt. for 1957-58. Thiis 21.0 million cwt. below the record 84.4
million a year earlier and the smallest since 1953-54. The smaller supplies
this year reflect record large exports in 1956-57 and reduced production in
1957. Domestic disappearance is expected to total about 27.2 million cwt.,
which is about average. Quantities used for food, seed and by brewers are
expected to be higher, but feed use is expected to be below a year ago.
Exports may total about 19.0 million cut., largely frao CCC stocks and under
Government financing. This disappearance would leave about 17.2 million cwt.,
in terms of rough rice, as the carryover on August 1, 1958. While a carry-
over of this size would be down sharply from the record of 34.6 million cwt.
on August 1, 1956, it is still large, almost 7 times the average of 2.6
million cwt. in 1945-54 before stocks began to accumulate.

The acreage of rice seeded in 1958 may total 1.46 million acres,
according to March 1 planting intentions. An acreage of this size would be
6 percent above the 1.37 million in 1957 but 25 percent below the 1947-56
average of 1.94 million acres. If intended seedings materialize and yields
per acre equal the 1955-57 average by States, the 1958 production of rice
would be about 45 million cwt., 14 percent above the 43.1 million cwt.
produced last year. With domestic disappearance in 1958-59 estimated at about
272 million cwt., slightly higher than this year, a crop of this size would
require exports of about 18 million cwt. to avoid an increase in the
carryover August 1, 1958.


FRUIT

Consumer demand for fruit is expected to hold up well this spring and
summer. Total supplies of fresh and processed fruits will be somewhat smaller
than in the spring of 1957. Grower prices for most citrus fruits through
the summer are expected to continue above a year earlier as supplies will be
reduced.

The prolonged cold weather in the Eastern States delayed the
blossoming of early-season fruits such as peaches. The delayed bud develop-
ment of peaches will reduce the chances of later damage from spring frosts.
In the Southern States the April 1 condition of the peach crop was the best
for that date since 1945 and the second highest in 45 years of record. In
the Pacific slope States, the winter was relatively mild, but heavy rain-
storms, especially in California, in March and early April struck many of the
fruit and nut orchards while in bloom, causing as yet undetermined damage.


DPS-WO


- 27 -






APRIL 195


The cold and rainy weather several reduced the Florida winter crop of
strawberries and also delayed and perhaps reduced somewhat early spring pro-
duction in other States. Prospective smaller mid-spring and late-spring
acreages this year than in 1957 point to lighter supplies from these acreages
than in 1957. This part of the strawberry crop provides most of the volume
that is processed as well as that shipped to fresh markets. For most 1958
crop deciduous fruits, the season is not yet far enough advanced to give a
good indication of production.

On April 1, 1958, cold-storage stocks of apples were much larger than
a year earlier, and those of pears were not greatly different from the stocks
of that date in 1957. In Washington, where most of the remaining stocks of
apples were located, grower prices for leading varieties, good quality and
condition, increased moderately during late March and early April but still
averaged considerably under the unusually high prices of a year earlier, when
stocks were much lighter. Prices for eastern apples continued fairly steady
at levels somewhat under a year earlier. On the principal terminal auctions,
prices for the D'Anjou pear, which comprised most of the pears in storage,
increased somewhat during late March, then declined. In early April, prices
averaged moderately under those of the same time in 1957.

Supplies of fresh oranges and grapefruit from Florida will be much
smaller this spring than a year earlier and the season of heavy shipments will
end earlier this spring than usual. This is mainly because of the reduced
crop due to the winter freezes and the increased utilization to minimize
losses from the freezes. With lighter production of California Valencia
oranges as well as Navels, supplies from that State will continue smaller
until next fall than comparable supplies from the 1956-57 crop. Grower prices
for both Florida oranges and grapefruit increased sharply in late March and
early April to levels much above a year earlier. Auction prices for
California oranges increased to a level about twice that of a year earlier.
Although remaining supplies of California lemons are not quite as large as a
year ago, they are expected to continue adequate for the usual domestic
requirements.

In Florida, the pack of frozen orange concentrate by April 5 was about
the same as comparable output in 1956-57. Packers' stocks were down about
9 percent. With increased retail prices this winter, utilization by house-
hold consumers has declined. Output of Florida canned single-strength orange
juice has been much heavier, that of grapefruit juice a little lighter,
through April 5 the 1957-58 season than in the same part of 1956-57. Packers'
stocks of canned orange juice were moderately above a year earlier, and those
of grapefruit juice about the sane as a year earlier. With the prospect for
much lighter production of frozen concentrate and canned juice from Florida
Valencias this spring than a year earlier, total supplies of frozen and
canned citrus juices are likely to be smaller this spring and summer than
last.


DPSO40


-28 -








Stocks of frozen deciduous fruits in cold storage on April 1, 1958 were
about 6 percent larger than a year earlier. But stocks of strawberries, the
leading item, were about 17 percent smaller.


COMMERCIAL VEGETABLES

For Fresh market

Supplies of vegetables for fresh market sale during the remainder of
the spring may be about the same as a year earlier. Estimates by the Crop
Reporting Board, in early April, indicate that aggregate production of 18 com-
mercial vegetables for fresh market is likely to be 4 percent smaller than
last year and 3 percent below the 1949-56 average. But marketing of many
crops have been much lighter in the early weeks of spring than a year ago so
that a larger percentage of the crops remain. These 18 crops typically make
up about three-fourths of the total spring tonnage, excluding melons. Among
more important vegetables, smaller production was estimated for early spring
broccoli, cabbage, cauliflower, lettuce and onions, early and mid-spring
asparagus combined, and spring carrots, celery, green peppers and spinach.
Early spring cucumbers and tomatoes are the only major crops for which size-
able increases over a year earlier are indicated. Production estimates are
not available for late spring asparagus, cabbage, onions, or watermelons, or
for the spring crops of lima beans and cantaloups. Indicated acreage of late
spring asparagus is slightly larger than last year and onions substantially
larger, while acreage of watermelons is slightly smaller and cabbage moderately
smaller. Acreages of spring lima beans and cantaloups are expected to be
materially smaller.

Consumer demand for fresh vegetables appears to be about the same as a
year earlier. During the next 6 to 8 weeks overall supplies of vegetables
will increase seasonally and prices will decline. However, prices during
this period are likely to average near the relatively high levels of a year
earlier.

Intentions reports indicate that acreage of early summer onions is
likely to be materially smaller than in 1957, cabbage slightly smaller and
watermelons substantially larger. A larger acreage is also indicated for late
summer onions and watermelons and a slightly smaller acreage for cabbage.


For Ccumercial Processing

Supplies of processed vegetables are moderately smaller than the large
supplies of a year ago. But total supplies are substantially larger than the
1949-56 average, with most major items in ample to heavy supply. Among major


DPS-40


APRIL 1958


- 29 -






APRIL 1958


canned items, stocks of green peas are much larger than a year ago, snap beans
substantially larger and sweet corn slightly larger. But remaining supplies
of sauerkraut are materially smaller than last year, and indications are that
tomatoes and tomato juice are also in lighter supply. With ample to heavy
carryover stocks of most items in prospect at the end of the current season,
processors are likely to seek an overall 1958 pack moderately smaller than
in 1957. Packers in early March, reported about 20 percent smaller acreage
of winter and spring spinach for processing than last year, with the prospect
of 15 percent lighter tonnage. Intentions reports also indicate plans to
plant or contract 15 percent less acreage of green peas for processing, 13
percent less sweet corn, 5 percent less green lima beans and slightly less
snap beans. Prospective acreage of cabbage for kraut (contract only) is up
9 percent, and tomatoes for processing up 1 percent. Should yields and
abandonment on the indicated acreage be near the average of recent years,
aggregate production of those crops would be a little smaller than in 1957.
Production of green peas and sweet corn would be substantially smaller than
in 1957, green lima beans at least moderately smaller, and snap beans the
same to slightly smaller. Production of tomatoes for processing would be
moderately larger.


POTATOES AND SWEETPOTATOES

Supplies of potatoes this spring are substantially smaller than a
year earlier. Stocks of fall crop potatoes and hand March 1 were 20 percent
smaller than a year ago, and indications are that spring production is likely
to be down from the high level of 1957. Prospective production for early
spring harvest is down 15 percent from last year. Prices received by farmers
during the next 6 to 8 weeks are expected to continue well above the low
levels of a year earlier. Acreage for late spring harvest is up moderately,
but the crop in some areas has been delayed and damaged by adverse weather.
Barring another'year of very high yields, such as last year, production on the
indicated acreage would be moderately smaller than the large 1957 crop.

Remaining supplies of sweetpotatoes appear to be relatively light, and
prices into early summer are expected to continue above those of a year
earlier. If farmers stick close to March 1 planting intentions, supplies
may be somewhat lighter in 1958-59 than in the current season. Prospective
acreage is up fractionally, but yields near the 1952-56 average, on this
acreage, would result in a production at least moderately below the 18.1 mil-
lion hundredweight harvested in 1957. Should this production materialize
prices probably would average moderately higher than in the current season.


DPS-40


- 30 -





APRIL 1958


COTTON

Disappearance of U. S. cotton during the 1957-58 marketing year is
now expected to total about 13.6 million bales, approximately 2.6 million
less than in the preceding season. Exports are expected to reach 5.6 mil-
lion bales or more, about 2 million bales below last season but higher than
in any other postwar year. The estimated domestic mill consumption of about
8 million bales will be about 0.6 million bales below the 1956-57 total.
Cotton ginned from the 1957 crop, according to the Bureau of the Census
totaled 10.9 million bales, 2.3 million below 1956. The carryover next
August 1 is expected to drop about 2.6 million bales from the 11.3 million
on hand a year earlier. This will be the second successive year that stocks
have declined following a steady buildup from 1951 through 1956.

Domestic mill consumption of cotton during the period August 1 through
March 1958 totaled about 5 1/2 million bales compared with 6 million bales
during the same period a year earlier. Mill consumption is likely to contin-
ue below a year earlier through the rest of 1957-58 since the ratio of stocks
to unfilled orders for gray goods at mills remains high. Consumption of
cotton per capital in the U. S. in 1957 was about 23.7 pounds, 2.2 pounds less
than in 1956 and 2.8 pounds below 1955. While the consumption of nylon and
other noncellulosic manmade fibers increased in 1957 the decline in cotton,
wool, rayon and acetate resulted in an aggregate decline of 6 percent in per
capital fiber consumption compared with 1956.

Exports of cotton from August 1, 1957 through February 1958 were about
3.3 million running bales compared with 4.6 million a year earlier. As of
April 18 sales of CCC stocks for export during the period August 15, 1957 to
July 31, 1958 totaled about 5.6 million bales and for unrestricted use
totaled 1.7 million bales. As a result of these sales, CCC inventory of 1956
and previous crop cotton totaled 1.4 million bales. In addition CCC had
loans outstanding on 3.1 million bales of 1957 crop cotton. Thus CCC stocks
as of mid-April totaled 4.5 million bales, 4.0 million bales less than a
year earlier and 9.7 million bales below the record reach on January 20, 1956.

On March 28 the Congress made available funds sufficient for payments
to all cotton farmers who had indicated desire to participate in the 1958
Acreage Reserve Program of the Soil Bank. As of that date, agreements
accepted and on waiting lists totaled 5.1 million acres. Maximum payments
on this number of acres would total $280 million. Actual agreements signed
through April 4 totaled 4.4 million acres with maximum payments of $244 mil-
lion. In view of the acreage reserve commitments the acreage harvested for
cotton is likely to be at least 5 million acres smaller than the national
acreage allotment of 17.6 million.


DPS-40


- 31 -








The minimum price support level for the 1958 crop of upland cotton
was announced on February 7 at 30.75 cents per pound for Middling, 7/8-inch
cotton at average location. This compares with 28.81 cents on the 1957 crop
and 29.34 cents for the 1956 crop. The 1958 support level reflects 81 per-
cent of the February parity price of 37.96 cents per pound. The announced
level of support will be increased if. a combination of the parity price on
August 1, 1958 and the supply percentage as of that date indicate a higher
level of support. However, it will not decline below the 30.75 cents already
announced. The parity price applicable in April is 38.33 cents.


WOOL

The 1958-59 domestic wool marketing season opened this month with wool
prices considerably lower than a year earlier, reflecting the decline in
world demand for wool. Late in March, prices at the Australian auction
centers ranged between 20 and 25 percent lower than a year earlier. Early
in April, Boston quotations for domestic wools were from 15 to 50 cents per
pound, clear basis, lower than a year earlier. The net declines from a
year earlier ranged between 18 and 30 percent.

Prices abroad began a decline toward the end of last May that extended
into early March of this year. Prices abroad have been relatively stable
since early March, though the decline in domestic markets continued into
early April.

The average of prices received by domestic growers this season is like-
ly to be lower than that for 1957-58 marketing year and payment rates under
the 1958 program will be higher than those for 1957 because the level of
incentive payment remains the same.

After an advance which extended from the first quarter of 1955 into
early 1957, the seasonally adjusted rate of wool consumption in the 11 coun-
tries, which report quarterly to the Commonwealth Economic Committee, declined
sharply during the third quarter of last year. During the final quarter of
the year it was 10 percent below a year earlier and the lowest since the last
quarter of 1955. Although complete information is not yet available for the
first quarter of this year, such limited information as is available suggests
that the rate continued well below a year earlier.

Mill use of apparel wool in the U. S. during the first two months of
this year was about one-third lower than a year earlier. The rate of consump-
tion increased a little more than seasonally during February, when the
seasonally adjusted rate was the highest since last September. It is too
early to tell if the increase represents more than a temporary reversal of the
downward movement which started in the summer of 1956. Historically, apparel
wool consumption in the U. S. has shown a pronounced cyclical pattern.


APRIL 1958


DPS-h0


- 32 -






APRIL 1958


TOBACCO

Cigarette output in 1958 is expected to continue near the high level of
last year, when a record 442 billion cigarettes were produced. The 1958
consumption of cigars seems likely to be close to the 6.2 billion level of
1957, which was the highest since 1930. Output of smoking tobacco (mostly for
domestic consumption in pipes and "roll-your-own" cigarettes) reached a new
low of 70 1/2 million pounds in 1957, but indications are that the downtrend
which has persisted for many years may not continue in 1958. Production this
year may equal that in 1957 or show a small increase. However, the downtrend
in chewing tobacco is likely to continue in 1958 and the years ahead. Snuff
consumption this year is expected to remain fairly stable.

During 1957 additional cigarettes, about 80 millimeters in length, were
placed on the market under established and new brands. Formerly the king size,
close to 85 millimeters long, predominated among filter tips. The substantial
volume of these shorter cigarettes and the expanding use of sheet tobacco
were the principal factors in holding down use of tobacco leaf despite a
4 percent increase in total cigarette output.

The 1957-58 total supplies of flue-cured and burley are 5 and 1 percent
below 1956-57, respectively. Further small reductions in supplies for 1958-59
are in prospect. The 1958 indicated acreage for flue-cured is 2 percent less
than 1957 harvested acreage, while that of burley is 1 percent less. Although
acreage allotments for growers of flue-cured and burley were mostly the same
as in 1957, larger acreages than last year have been placed in the Soil Bank
Program. About 62,500 acres of flue-cured and 10,350 acres of burley have
been placed in the acreage reserve, equal to 9 percent and 3 percent of the
allotments, respectively. Additional flue-cured acreage is to be accepted in
accordance with recently authorized funds. The 1958-59 flue-cured supply
seems likely to be about 5 percent below the current year's, while the burley
supply may be down 1 percent.

The supply of Maryland tobacco in the current marketing year is 6 per-
cent below a year ago and the smallest in 6 years. Auctions for the 1957
crop will begin April 29, about the usual date for this type. The average
price of the 1956 crop (marketed mostly in 1957) was 51.6 cents per pound.
The Government support price for the 1957 crop is 48.0 cents-- 1 cent higher
than for the previous crop. Prospective 1958 acreage of Maryland is 5 percent
smaller than last year. As in 1957, substantial acreage has been placed in
the Soil Bank program.

Supplies of fire-cured and dark air-cured tobaccos in 1958-59 will be
moderately lower than in 1957-58. This year's prospective acreages are down
16 and 13 percent, respectively. This reflects about a 10 percent cut in
acreage allotments and placements in the Soil Bank.


DPs-40


- 33 -






APRIL 1958


The 1957-58 supplies of all cigar binder types combined are at a record
low level, and 1958-59 supplies are likely to be still lower. Use of sheet
binder on cigars in place of natural leaf binder continues to expand as addi-
tional manufacturers adopt it on their brands. Sizable drops in the supply
level of the Connecticut Valley binder types--particularly affected by this
development--are in prospect. Growers of Connecticut Valley binder types
placed considerable acreages in the Soil Bank program, as they did in 1957
and 1956.

The 1958 crops of tobacco will be supported at the following minimum
average levels (cents per pound): Flue-cured, 54.2; burley, 55.0; Virginia
and Kentucky-Tennessee fire-cured, 38.8; dark air- and sun-cured, 34.5;
Maryland, 50.6; Connecticut Broadleaf cigar binder, 55-7; Connecticut Havana
Seed cigar binder, 47.5; Ohio filler, 23.2; Southern Wisconsin cigar binder,
25.1; and Northern Wisconsin cigar binder, 30.7. Actual support levels will
be the higher of the announced minimum or 90 percent of parity for the parti-
cular tobacco as of the beginning of the marketing year (July 1 in the case
of flue-cured and October 1 for other types).

Calendar year 1957 exports of unmanufactured tobacco totaled 560 million
pounds (farm-sales weight)--2 percent less than in 1956 but 3 percent above
the recent 10-year average. Exports last year were equal to about one-third
of the small 1957 crop compared with a fourth of the larger crops of previous
years. About 8 percent of total tobacco exports in 1957 were shipped under
P. L. 480 programs. Exports in 1958 may show a small decline from last year
but are not expected to differ much from the recent 10-year average.


DPS-40









HOIMC MFAMCl AMW TIR ICMSUMOIR, 199, W 1939-57

: Uat : : t 1 :
Ita t or t 192 t 9 19 1 8 10 t 102 1943 1 t 1945 ,96 17 1lk 14 9 1950 1951 t 192 1953 t 1954 1 19558M6 195 8
b base z : t 8 i- -


Industrial production 1/
Total
Manufacturers
Durable goods
Nonurable goods
Minerals

Total outlay for new can-
straction 2/
Private residential

Total civilian employment 3/
Nla grioultural
Unamplyaeo

Inaome:
onaagriultural

Production-worker payrolls y/
weekly sernIng of prodsltion
workers in manufacturing
Durable
No urable

Agricultural trade 6
Dawmstle coaurts
Imports for consumption
Prices:
Wholesale prices, all
a odtlies A/
Ooscmdities other than far
and food
Farm products
Food, processed
Prices received by famers I/
Crops
Livestock an products
Prices paid interest, taxse
and age rates I/
Items used in living
Items used In production
Parity ratio

Consumr price inaex
Food

Government purchases of good
and services / /8 #
Federal (ess Government
sales)
State and local


1947.49.)00: 59 58
do. : 8 57
: do. 60 49
S do. : 56 66
do. : 68 68
SBillion :
: dollars : 0. 8.2
S o. : 3.6 2.7
: Million 47.6 45.8
S do. i 37.2 36.1
do. : 1.6 9.5

S:
Bil. Dol. : 77.7 67.1
:1947-49100: 35.0 29.9
SDllars :25.03 23.86
S do. 27.22 26.50
: do. :22.93 21.78
: Billion
:dollar : 1.7 .7
do. -I 2.2 1.1


:1974-W100: 62
2 I
: do. : 66
S do. : 59
: do. : 58

:1910.-14100: 148
: do. : 135
S do. : 159

:1910-141oo00 160
i do. : 154
: do. : 146
: : 92

:1947-49100: 73
: do. : 66

SBillion :
: dollars : 8.5

: do. : 1.3
: do. : 7.2


50
58
36
43

95
82
107
123
120
121
77

59
47

13.3
5.2
8.2


67 87 106 127 125 107 90 100 1 97 112 20
66 88 10 133 130 10 90 100 103 97 113 121
63 R 126 162 159 123 86 101 104 95 116 128
69 8 93 103 99 96 95 99 102 99 in1 U1
76 81 84 87 93 9A 91 10o 106 94 105 115

8.7 12.0 1.1 8,3 5.3 5.8 l.7 17.9 23.2 24.2 30.0 32.7
3.0 3.5 1.7 .9 .8 1.3 7.5 10.1 9.6 1.1 12.5
475 50.4 53.8 54.5 54.0 52.8 55.2 57.8 59.1 58.4 59.7 60.8
38.0 41.2 44.5 45.4 450 44.2 46.9 49.6 51.2 50.4 52.3 53.7
8.1 5.6 2.7 "*14 .7 1.0 2.3 2.4 2.3 3.7 3.4 2.1


72.6 880 111 137.6 151.6 156.8 161.1 172.8 188.5 190.8 210.5 235.7
34.0 49.3 72.2 99.0 102.8 87.8 8L.2 97.7 105.1 97.2 111.7 129.8

25.0 29.58 36.65 3.14 46.08 4 39 38 49.97 5.14 54.92 59.33 6471
28.44 34.k 273 49.30 52.07 49.05 46.49 52.46 57.1 58.03 63.32 69.47
22.27 24.92 29.13 2 37.2 38.29 1.4 46.96 50.61 5.41 54.71 58.46


.5 .7 1.2 2.1 21 2.3 3.2 4.0
1.3 1.7 1.3 1.5 1.8 1.7 2.3 2.8


51 57
59 6&
38 46
44 50

100 124
90 108
109 138
124 133
121 130
123 130
81 93

60 63
48 52

14.1 24.8

6.2 16.9
7.9 7.8


2k 134 125 139 143 IA1
12 136 127 144 45
136 153 137 155 159 160
11 118 116 126 129 190
114 116 111 122 129 aB8

34.8 37.1 39.6 44.6 46.1 47,3
12.8 13.8 15.4 18.7 17.6 16.6
61.0 61.9 60.9 6.9 0.7 65.0
54.2 55.4 54.4 56.2 58.1 58.8
1.9 1.9 3.6 2.9 2.8 2.9


253.1 269.2 271.3 290.6 311.7 327.5
136.6 151.4 137.7 152.9 161.4 162.7

67.97 71.69 71.86 76.52 79.99 82.39
73.46 77.23 77.18 83.21 86.31 88.66
60.96 63.60 -6.74 68.06 71.a0 7.09


3.5 3.6 2.9 4.0 3.4 2.8 3.1 3.2 k.2 4.5
3.1 2.9 4.0 5.2 4.5 4.2 4.0 4.0 3.9 3.9


103 115
105 116
98 113
100 111

258 302
233 265
280 336
256 282
246 268
246 273
101 107

103 111
101 113


59.7 88.6 96.5 82.9 30.9 28.6 36.6 43.6 42.o 62.8

52.0 81.2 89.0 74.8 20.9 15.8 21.0 25.4 22.1 41.0
7.7 7.4 7.5 8.1 10.0 12.8 15.6 18.2 19.9 21.8


ill 114 118

u17 122 126
90 88 91
lo2 102 106

236 235 242
236 240 234
236 230 249
28L 205 296
273 278 266
949 219 258
84 82 82

11 116 12O
111 112 115


77.6 84.4 76.6 77.1 80.2 86.4

54.3 59.5 48.9 46.8 47.2 50.4
23.2 24.9 27.7 30.3 33.0 36.0


1/ Federal Reserve Boari. 2/ U. S. Department of Coaerce. 3/ U. S. Department Labor for years 1929-39. Fim 1940-46 old definitions used, 197 to date neo definition
used, Bureau of the Census. / Monthly totals seasonally adjusted at annual rates. / U. 8. Department of Labor, Bureu= of Labor Statistios. 6f U. 8. Deprment of Agriclture,
Foreign Agricultural Service. / U. S. Department of Agriculture, Agricultural Marketng Service. 8/ Quarterly totals seasonally adjusted at annual rates.

Preliminary. # revised series.


- -;-- -- -- -


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