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:
AA00012195:00014

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)


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Full Text

A 8.a',qYi~i


August 1958
FOR RELEASE
AUG. 26, P.M.


DEMAND and PRICE


SITUATION


DPS 44


.
ii


-I.
.V- _.


,/


I UN ON L L -
SDOCIMENTS tTOr



U.S. DEPOSITORY


Published monthly by
AGRICULTURAL MARKETING SERVICE
UNITED STATES DEPARTMENT OF AGRICULTURE


71a


Approved by the Outlook and Situation Board, August 20, 1958
SUMMARY
Consumer incomes have improved since April and in July ex-
ceeded the peak levels reached in the summer of 1957. Although
real income per person is still below the peak a year ago, the
market for food continues strong. Retail sales of food stores in
July were about 5 percent above last year. Prices received by
farmers in mid-July, though down about 4 percent below their
spring peak, were 3 percent above a year earlier. Market sup-
plies of vegetables and some fruits have substantially improved and
prices have declined sharply in recent months. Slaughter of cattle
has increased seasonally in recent months and prices of meat ani-
mals as a group though off a little from their May high, still aver-
age 17 percent above last July. The cost of goods and services
purchased by farmers has risen and in mid-July the parity ratio
was 83, the same as a year earlier.

The August Crop Report pointed to a new record crop produc-
tion for 1958. The all-crop production index is now estimated at
113 (1947-49=100), about 7 percent above the record of 106 estab-
lished in 1948 and equaled in 1956 and 1957. During July growing

(Confinued on page 3)






-2-
ECONOMIC FACTORS AFFECTING AGRICULTURE


AUGUST 1958


: Unit or : 1957 1958
Item: base : :
te baeriod : Year : July : Apr. May June July
period


Industrial production: Seasonally adj. y
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 5/
Inventory-sales ratio 6/
Durable goods

Employment and wages:
Total civilian employment
Ilonagricultural
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 _/
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 8/
Family living items
Production items
Parity ratio 8/

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


1947-49-100
do.

1910-14100o
do.
do.

1910-14100o
do.
do.



1947-49=100
Mil. dol.


120 121
115 117

242 246
233 237
249 254


116
29,757


'.947-49=100
do.
do.
do.
do.


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


1i1. dol. :
Mil. dol.





Millions
do.
do.
Hours
Dollars


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

Mil. dol. :
Mil. dol.



1947-49=100
do.
do.
do.


143
145
160
130
128


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


28,383
14,159
3.40
1.88
2.20


65.0
58.8
2.9
39.8
2.07


347.9
44,776
15,496

16,668
5,705
1.47


118
126
91
106


145
147
162
131
128


3,934
1,123
1,383
.1,015


29,030
14,573
3.85
1.86
2.17


67.2
59.4
3.0
39.8
2.07


351.8
42,668
15,329

17,034
5,839
1.42


118
126
93
107


133
136
141
130
114


4,036
1,243
1,420
1,160


126
128
131
125
110


3,960
1,226
1,350
950


24,945
11,532
3.82
2.06
2.55


62.9
57.3
5.1
38.3
2.11


348.1
42,665
14,788

16,512
5,163
1.45


119
126
98
112


124 124 124
122 122 122


264 255 254
246 232 228
280 275 277


115 91 96 111 122
2,511 2,198 2,286 2,423 2,700


Annual data for most of these items for the years 1929
issue of The Demand and Price Situation.


and 1939-57 appear on page 35 of the April 1958


/ Federal Reserve Board. 2/ U. S. Department of Commerce. 3/ Seasonally adjusted annual rates.
_/ U. S. Department of Labor, Bureau of labor Statistics. / Unfilled orders for durables divided by
monthly deliveries. 6/ Inventories, book value, end of month, divided by sales. y/ Bureau of the
Census. 8/ U. S. Department of Agriculture, Agricultural Marketing Service.


DPS-44


128
130
134
126
109


3,929
1,213
1,334
1,010


25,206
11,643
3.74
2.02
2.49


64.1
57.8
4.9
38.6
2.12


349.9
43,027
14,713

16,562
5,235
1.44


120
125
98
113


131
134
139
129
112


3,969
1,226
1,368
1,090


25,705
12,025
3.60
1.96
2.38


65.0
58.1
5.4
39.2
2.12


352.0
43,122
14,691

16,581
5,149
1.45


119
125
96
114


65.2
58.5
5.3
39.2
2.13


358.9



16,573
5,150



119
126
95
113







DPS-44 3 AUGUST 1958


THE DEMAND AND PRICE SITUATION


Approved by the Outlook and Situation Board, August 20, 1958


CONTENTS

Page Page

: Summary ....................... 1 Wheat ...................... 18
: General Economic Conditions ... 5 Rice ....................... 19
: Agricultural Exports .......... 11 Fruit ...................... 19
: Farm Income ................... 13 Commercial Vegetables ...... 20
:Livestock and Meat ............ 14 Potatoes and Sweetpotatoes 21
:Dairy Products ................ 15 Cotton .................... 21
: Poultry and Eggs .............. 15 Wool ....................... 22
: Oilseeds, Fats and Oils ....... 16 Tobacco ..................... 23
: Feed ......................... 17


Continued from cover page -
conditions pointed to major gains in output of corn, oats, barley, spring wheat,
flaxseed, and dry beans, and smaller gains were indicated for winter wheat,
hay, rice and tobacco. Wheat production is now estimated at a new high of more
than 1.4 billion bushels and the corn crop of almost 3.5 billion bushels is the
second highest of record. Feed grain production for 1958 is likely to exceed
the record 1957 crop. Hay production may be a little below last year's record
but the pasture condition on August 1 was the best since 1915. A record out-
put of soybeans is indicated as well as a sizable increase in cottonseed. Pro-
duction of peaches is up sharply, and vegetables and potatoes are estimated to
be well above 1957.

Hog slaughter is expected to be about the same this fall as last and the
total for the year is likely to be slightly less than 1957. Although market
supplies of fed cattle this fall may be above last year, beef slaughter this
year is not likely to show an increase over 1957. Egg production in July ex-
ceeded a year earlier and with a prospective increase in the laying flock, pro-
duction is likely to exceed year earlier levels for the. remainder of 1958.
Milk production, although currently less than a year earlier, may approximate
the 1957 record production.

Farmers' cash receipts through July were running 11 percent above last
year. Prices were up 7 percent and the volume of marketing was 4 percent
larger. Receipts from livestock and products were up 11 percent and those from
crops 12 percent.


: The next issue of The Demand and Price
: Situation is scheduled for release on
: September 25, 1958.









With the decline in prices from this spring's high, cash receipts in
July were above 1957 by a smaller margin than earlier in the year. Receipts
from livestock and products were about 6 percent higher and crops were up
9 percent, while combined receipts in July totaled 7 percent.

Economic activity continued to improve in July. An increase in consum-
er incomes was due mainly to a higher wage and salary payment total. Retail
sales remained at June levels with no significant changes for either durable
or nondurable goods. Construction activity picked up a little in July. New
private housing starts, were at a rate of 1,160,000 units, the highest in 2-
years. The labor situation changed little between June and July, but employ-
ment gained and unemployment dropped less than the usual seasonal amounts.
Industrial production rose further in July.

Commodity Highlights

Hog slaughter this fall will be about the same as the same period last
year, and prices may average close to year earlier levels. Prices of fed
cattle (choice grade) declined $5.00 per 100 pounds between their high in late
March and late August; market supplies may be so large as to prevent more than
a small seasonal increase in prices this fall.

Milk output in the first seven months of 1958 was slightly lower than
in the same period of 1957, but with excellent pasture and feed prospects,
production for 1958 is likely to approximate the 1957 record.

With a larger laying flock than last year, egg production in the last
half of the year is likely to be above 1957 levels, and the usual fall rise in
egg prices will be dampened.

Supplies of edible fats, oils and oilseeds according to the August Crop
Report are expected to set a new record in the 1958-59 marketing year about a
tenth above the current year.

The supply of feed grains and other concentrates for 1958-59 is expected
to exceed by 6 percent the record last year. Feed prices probably will move
downward in the next few months as 1958 feed crops become available in volume.

Wheat supplies in 1958-59 are expected to exceed the previous record by
almost 270 million bushels. With domestic disappearance and exports about the
same as 1957-58, the carryover on July 1, 1959 may total about 1,300 million
bushels.
Fresh market supplies of apples, peaches and grapes will be larger during
the late summer than a year earlier.

Most fresh vegetables during early summer were in ample to heavy supply,
and prices averaged significantly below the relatively high levels of last
summer. Supplies are expected to continue plentiful during the next few weeks.


DPS-44


- 4 -


AUGUST 1958






AUGUST 1958


In early August the production of fall potatoes was estimated to be
11 percent above last year and 14 percent above the 1949-56 average.

The 1958 cotton crop was estimated on August 1 at 11.5 million running
bales, up about 6 percent from last year. With disappearance tentatively esti-
mated at 12 million bales, a further reduction of about 1 million in the carry-
over on August 1, 1959 is anticipated.

Domestic production of shorn wool in 1958 is likely to be up 2 percent
from last year, and with further increases in sheep numbers this year higher
wool production in 1959 is in prospect.

Marketings of the comparatively small flue-cured tobacco crop began
last month, and prices through August 19 were about 5 percent above a year ago.

GENERAL ECONOMIC CONDITIONS

Most economic indicators in July continued to advance from their late
spring lows, though the gains from June to July in most cases were small. Con-
sumer income was up 7 billion dollars, reflecting in part retroactive payments
and higher salaries of Federal Government employees. Retail sales remained at
the levels of recent months. Civilian employment increased a little less than
usual in July. Unemployment declined less than seasonally and the percentage
of the civilian labor force unemployed rose from 6.8 percent in June to
7.3 percent. Construction outlays were up some, reflecting rising private res-
idential building. Industrial production continued to recover in July. There
was some increase in manufacturers' new orders in June. Inventory liquidation
in June eased some from the high rates of previous months. There was little
change in prices during July.

Gross National Output
U a Little in Apr.l-June

Small gains in personal consumption expenditures and Government pur-
chases more than offset further declines in private investment so that gross
national output rose to an annual rate of 429 billion dollars in April-June
from 425.8 billion dollars in the first quarter. As consumer incomes improved
some in the second quarter of 1958, expenditures for soft goods and services
edged up, and the decline in durables apparently leveled out. Gross private
domestic investment spending totaled 49 billion dollars in the second quarter,
down about a half a billion from January-March and some 18 billion below a year
earlier. The rate of inventory liquidation in the second quarter was 8 billion
dollars down from the 9- billion dollars in the first quarter. By the end of
the second quarter there was some increase in retail stocks and wholesale in-
ventories had stabilized, but manufacturers' continued to liquidate inventories
at the high rates established earlier this year. Capital spending by business-
men, down a fifth over the year, continued to decline in April-June at a slower
pace than in previous quarters. Government spending rose some in April-June as
Federal purchases made a mild turnaround and State and local spending continued
to rise.


DPS-44


- 5 -








Table 1.--Gross


national product and disposable personal income, 1956, 1957 and
1957 and 1958, by quarters


: 1957 : 1958 : Percentage
S: : : : : : : :change from
Item : 1956 : : : : : : :2nd qtr. 1957
Year I II III IV I II
: : : : : : : to 2nd qtr.
: : : : : : : : : 1958
Bil. Bil. Bil. Bil. B. il. Bil. Bil.
dol. dol. dol. dol. dol. dol. dol. dol. Pet.
Gross national
product...............: 419.2 440.3 436.3 441.2 445.6 438.9. 425.8 429.0 -2.8
Personal consumption :
expenditures .......: 269.4 284.4 279.8 282.5 288.3 287.2 286.2 288.3 2.1
Durable goods......: 38.4 39.9 40.2 39.5 40.4 39.6 36.3 35.6 -9.9
Nondurable goods...: 131.4 138.0 135.5 137.1 140.5 138.8 139.8 141.4 3.1
Services............: 99.6 106.5 104.1 105.9 107.4 108.7 110.1 111.3 5.1

Gross private:
domestic investment.: 68.2 65.3 65.9 67.0 66.7 61.5 49.6 49.2 -26.6
New construction...: 35.7 36.5 36.1 36.1 36.6 37.1 36.3 34.9 -3.3
Residential (non-:
farm) ..........: 17.7 17.0 17.2 16.5 16.9 17.6 17.1 16.2 -1.8
Other ...........: 18.1 19.5 18.9 19.6 19.7 19.6 19.2 18.7 -4.6
Producers' durable :
equipment .......: 27.0 27.9 28.7 28.1 28.0 26.7 22.9 22.3 -20.6
Change in business
inventories ......: 5.4 1.0 1.1 2.9 2.2 -2.3 -9.5 -8.0

Net foreign invest- :
ment ...............: 1.4 3.5 4.2 4.2 3.6 1.9 .5 .5

Government purchases 80.3 87.1 86.4 87.5 87.0 88.3 89.5 90.9 3.9
of goods and services.
Disposable personal
income ............. 290.5 305.1 300.0 305.7 308.7 306.8 305.0 307.5 .6


Department of Commerce.






AUGUST 1958


Consumer Incomes Up
Moderately inJuly

The improvement in consumer income, which started in the second quarter,
continued in July. Consumer incomes after seasonal adjustment were at annual
rates of 358.9 billion dollars in July, up 7 billion from June and for the
first time exceeded the previous peak 352 billion dollars reached last August.
Wage and salary payments rose 6 billion dollars from June to July and were
responsible for most of the gain in income. Higher salaries and retroactive
payments to Federal Government employees accounted for nearly all of the
51 billion dollars gain in Government wages and salaries. But, some further
improvement in nonagricultural employment, and higher wages increased private
wages and salaries 1 billion dollars during the month.

Retail Sales Remain
At April-June Levels

Retail sales in July,according to advanced reports,totaled 16.6 billion
dollars after adjustment for seasonal influences. This is about the same as
June, but nearly 3 percent below the peak rate of 17.0 billion dollars in July-
August 1957. Sales at nondurable goods stores at 11.4 billion were the same as
June and 2 percent above July 1957. Sales of the food group were 5 percent
above July 1957. Sales of durable goods reached a low in March and have recov-
ered a little in recent months. In July sales of durable goods were 12 percent
below a year earlier. Dealer sales of new automobiles continue about a fourth
below a year earlier. Furniture and appliance sales also have declined and in
July were down 41 percent from the same month in 1957, and the lumber, build-
ing, hardware and farm equipment group was down 8 percent over the year.

Consumers reduced their installment debt in June by 127 million dollars,
seasonally adjusted, about the same amount as April and May. Extensions of new
credit were down about a quarter of a billion dollars from a year earlier,
while repayments have stayed about the same. The largest decline in credit
outstanding was for automobiles.

Construction Activity
Advances

New construction put in place in July totaled 4,036 million dollars,
seasonally adjusted, up 11 percent from June, but 4 percent below the December
1957 peak. July was the second successive month in which outlays have increased
with gains in both private and public construction. Private construction was
up nearly 2 percent, reflecting mainly an increase of nearly 4 percent in non-
farm residential buildings, with small changes in other types of private con-
struction. Public construction in July rose nearly l1 percent from June with
outlays for buildings and military facilities accounting for most of the gain.
Highway construction declined a little in July.


DPS-44


- 7 -






AUGUST 1958


-8-


New Housing Starts
Reach New High for Year

Construction contract awards and new housing starts are indicators of
the trend of future construction put in place. Construction contract awards
rose sharply in May and continued to rise in June, led by higher housing and
public works contract awards. New private nonfarm housing starts, seasonally
adjusted, were at an annual rate of 1,160,000 units in July, the highest since
January 1956. This brings the average rate for the year to about 1,000,000
units.

Employment Situation
Unchanged

Civilian employment totaled 65.2 million in July, according to the
Bureau of the Census, up less than seasonally from June and 3 percent below a
year earlier. Employment in agriculture was not materially changed between
June and July. Nonagricultural employment totaled 58.5 million in July,
380,000 above June but a little less than usual for this time of year; however,
manufacturing employment, seasonally adjusted, increased slightly to 15.3 mil-
lion, up 100,000 from the low in May, but 1.6 million below a year earlier.
Most of the gains between June and July was in durable goods industries. Em-
ployment changes in nonmanufacturing establishments in July were small and
generally confined to seasonal movements.

Employers expect a slight improvement in the nonfarm jobs through mid-
September based upon reports to local public employment offices. A major share
of the rise in jobs is expected to be seasonal, particularly in construction,
trade, apparel and food processing. However, gains in several durable goods
industries, including metals, electrical machinery, instruments, furniture and
ordnance are anticipated by employers in addition to the usual fall pickup.

Unemployment Declines
Less Than Usual

Unemployment declined about 150,000 between June and July to 5.3 mil-
lion. The changes were less than the usual seasonal amount for the month; as
a result, unemployment as a percent of the civilian labor force rose to 7.3 in
July from 6.8 in June. The July rate was about the same as April and May.
There was a larger than usual number of June entrants into the labor force
still unemployed in July, and the rates of unemployment by industry groups
continued comparatively stable.

Average Hours of Factory
Workers Unchanged

The average workweek for factory workers in July was the same as June.
Hourly earnings increased one cent between June and July to $2.13 compared with
$2.07 a year earlier. Average weekly earnings reached $83.50 in July, up
40 cents from June and $1.11 from July 1957.


DPS-44






AUGUST 1958


Manufacturers Sales
and New Orders Rise

From May to June manufacturers' sales and new orders increased some,
though both were still well below a year earlier. The rise in sales was cen-
tered in durable goods industries, particularly primary metals and fabricated
metal products industries. New orders placed with manufacturers in June were
1 percent above May after seasonal adjustment. Increases in the primary metals,
fabricated metals and aircraft industries accounted for most of the gain.

Industrial Production
Up Moderately

The output of the Nation's factories and mines increased moderately
between June and July, as the Federal Reserve Board's index of industrial pro-
duction reached 133 (1947-49=100) in July, up 2 points from June and 6 percent
from the low for the year in April. The index was still 8 percent below a year
earlier.

Durable goods production increased again in July, but the gain was less
than the 4 percent in the preceding month. The index of primary metals produc-
tion reached 104, up a point from June. The output of consumer durables climbed
3 points to 14 in July as new passenger car production was maintained and
television and furniture output advanced further. Machinery, fabricated metal
and lumber output increased over the month.

Nondurable goods production advanced further in July, but the rise was
less than in June. The largest gain occurred in textiles, apparel, rubber,
leather and petroleum. There were small gains in most industries. The output
of minerals picked up further as crude oil production increased and coal and
metal mining changed little.

Price Level Stable
in July

Prices on the average held fairly steady in July at about June levels.
Prices received by farmers declined a little, but industrial prices at whole-
sale were a little firmer. Prices paid by farmers for family living and pro-
duction items were unchanged from mid-June to mid-July, while urban consumer
prices rose fractionally in June.

The index of prices received by farmers in mid-July at 254 (1910-14=100)
was down a point from mid-June but prices paid for commodities and services,
including interest, taxes and farm wage rates was unchanged at 305. The parity
ratio declined a point to 83, which was the same as a year ago.

Prices received by farmers for livestock and products rose fractionally
to 277 (1910-14=100) in July but remained below the high of 280 reached in
March and May. Meat animal prices averaged a little lower than June, but
were 17 percent above July 1957. Prices of hogs, beef cattle and sheep averaged


- 9 -


DPS -44






DPS-44 J AUGUST 1958

a little lower but prices for calves and lambs were a little higher. Market-
ings of meat animals in the 4 weeks ending in mid-July were a little lower
than in the same period in the preceding year with hogs up some and beef
cattle running below year earlier levels. Dairy product prices rose 2 percent
during the month, due principally to a seasonal upturn in wholesale milk
prices. Lower chicken and turkey prices were more than offset by higher
prices of eggs so that the poultry and egg index rose about 2 percent from
June to July.

Crop prices declined nearly 2 percent between mid-June and mid-July,
continuing the downtrend since April. Commercial vegetable prices in July
were almost 50 percent below the record level last March when supplies were
sharply reduced by adverse weather and delayed spring plantings. The decline
was mainly due to substantial increases in market supplies as a result of the
more than usual overlap in harvesting of spring and summer crops. Fruit
prices declined 9 percent from June to July with sharply lower prices for
peaches and summer apples. Reflecting large supplies of new crop wheat and
the lower support level, food grain prices continued the decline which began
last April, falling about 4 percent from June to July. Potato and cotton
prices rose during the month.

Prices paid by farmers at 282 (1910-14=100), averaged the same in June
and July. Prices paid for items used in farm production averaged the same in
mid-July as the preceding month. Feeder and replacement livestock prices were
up 1 percent, and feed prices were up for most feeds, while the motor vehicle
index declined over the month. Among the family living items higher food and
clothing prices were offset by lower quotations for new automobiles and build-
ing materials.

Urban consumer prices in June, at 123.7 (1947-49=100) were up fraction-
ally from May and were 2.9 percent higher than June 1957. Food prices were
unchanged for the second successive month. Sharp declines in fresh vegetable
prices were offset by advances in fresh fruits, meats--especially pork--and
the cost of restaurant meals. Housing costs were unchanged but there were
slight rises in the cost of transportation, reading and recreation, medical
care and personal care.

Wholesale prices in July at 119.2 (1947-49=100), were the same as
June. Farm product prices declined 0.6 percent from June due mainly to lower
prices for meat animals, live poultry, fresh vegetables and fruits. Lower
meat prices were largely responsible for the 0.7 percent drop in processed
food prices. Industrial prices rose to 125.7, up 0.3 percent from June, but
they were the same as a year earlier.


I \






AUGUST 1958


AGRICULTURAL EXPORTS

Agricultural exports in the fiscal year ending June 30, 1958 totaled
4 billion dollars, 15 percent less than the all-time high of 4.7 billion in
1956-57. In terms of quantity, the decline was about 13 percent. Most of
the reduction stemmed from lower exports of cotton, wheat and flour, rice,
and fats and oils. Exports of most of these items were between 20 and 35 per-
cent below the record level reached last year, and rice exports were less
than half the previous year's total. Exports of tobacco were only slightly
lower than in 1956-57. Shipments of the 4 major feed grains combined in-
creased 35 percent and soybean exports achieved a new high.



Table 2.--U. S. Agricultural Exports, selected commodities,
fiscal years 1956-57 and 1957-58


Percentage
Commodity Unit : 1956-57 : 1957-58 change

: Millions Millions Percent

Wheat and flour : Bu. 548 401 -27
Corn Bu. 141 182 29
Oats Bu. 25 26 3
Barley Bu. 57 87 51
Grain sorghums : Bu. 29 42 46
Rice, milled Cwt. 26 12 -53
Cotton Bale 7.3 5.7 -23
Tobacco Lb. 501 473 -3
Soybeans Bu. 77 88 15
Soybean oil Lb. 926 626 -32
Cottonseed oil : Lb. 450 296 -35
Lard Lb. 557 399 -28
Tallow Lb. 1,359 1,096 -19
Nonfat dry milk : Lb. 605 698 15
Evaporated milk : Lb. 168 141 -16
Cheese Lb. 174 188 8
Butter Lb. 20 18 -10
Dried prunes and :
raisins Lb. 234 184 -22
Fresh apples Bu. 84 249 194
Fresh oranges Bu. 753 503 -23
Dry edible beans : Cwt. 2.8 2.2 -22

Total value : Dol. 4,727 4,002 -15


Bureau of the Census.


- 11 -


DPS-4"






AUGUST 1958


Nearly four-fifths of the 719 million dollar decline in agricultural
exports was in exports under special government export programs. The largest
reduction, over $300 million, was in exports under barter. Total exports under
Public Law 480 (including barter), the Mutual Security Act,, and Export-Import
Bank loans amounted to 1.5 billion dollars compared with over 2 billion dollars
in 1956-57. Exports for dollars, which include CCC sales for export and ship-
ments under the International Wheat Agreement, were relatively well sustained.


Table 3.--U. S. Agricultural Exports, by means of financing,
fiscal years 1956-57 and 1957-58


Item : 1956-57 : 1957-58 1/ : Change

: Million Million Million
: dollars dollars dollars

Public Law 480
Foreign currency sales 902 654 -249
Grants and Donations 250 267 17
Barter 401 99 -302
Mutual Security Act
programs 396 227 -169
Dollar loans and Credits/ : 74 224 150
Other dollar sales 3/ 2,704 2,537 -167

Total exports 4,727 4,008 -719


/ Partly estimated.
/ Export-Import Bank Loans and CCC credit sales.
./ Includes that portion of CCC sales for export and sales under the Inter-
national Wheat Agreement not reported under the special export programs.
Foreign Agricultural Service, Commodity Stabilization Service and Export-
Import Bank.




Exports are likely to continue for the rest of 1958 at about the 1957-58
level. Compared to a year ago the gold and dollar position of most foreign
industrial countries who are customers of U. S. agriculture has improved sub-
stantially. On the other hand, foreign crop production has been generally
abundant.


DPS-44


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AUGUST 1958


FARM INCOME

Farmers received 16.6 billion dollars from marketing in the first
7 months of 1958, 11 percent more than last year. Prices averaged 7 percent
higher and the volume of marketing was 4 percent larger. Cash receipts from
livestock and products of 10.6 billion dollars were 1 percent more than in
the corresponding period of 1957, mostly because of larger receipts frm
cattle and calves, hogs, eggs, and broilers. Crop receipts totaled 6.0 bil-
lion-dollars, up 12 percent, reflecting increases in receipts frno wheat, corn,
citrus fruits, and potatoes.

Total cash receipts in July were about 2.7 billion dollars, up 7 percent
from July 1957 because of higher prices and larger marketing. Receipts from
livestock and products were 1.5 billion dollars, 6 percent above July of last
year with higher prices for cattle, hogs, and eggs. Crop receipts of approxi-
mately 1.2 billion dollars were 9 percent above last year, largely because of
increased receipts from the record wheat crop.


LIVESTOCK AND MEAT

Record supplies of feeds and good pastures during the past two years
plus relatively high livestock prices over much of this period are leading to
increases in meat animal production. For hogs and sheep the uptrend is
showing up as larger pig and lamb crops for 1958. For cattle it is in the
heavy volume of cattle feeding and the increase in numbers on farms that is
now beginning. Prospective increases in marketing and slaughter will appear
first for hogs, as a seasonal rise this fall will be followed by a higher
supply level next year. Considerably lower hog prices are in view for 1959.
Substantial increases in cattle slaughter, on the other hand, are farther in
the future.

The 1958 calf crop is expected to be slightly smaller than the 1957 crop.
But slaughter of cattle, and especially of calves, has been reduced and an in-
crease is expected in the inventory of cattle and calves on farms next
January 1. An upturn would end the recent decline in numbers after only
2 years. It seems likely that the expansion will continue in 1959 and later,
but that the rate will be slower than in the last cycle. Cattle slaughter
will likely show at most only a small gain during the first year or two of the
current cycle and prices should be relatively strong.

Hog slaughter this fall will not average greatly different than last fall,
as the 1958 spring pig crop was only 2 percent larger than the 1957 crop, while
more gilts from this year's crop will be retained for breeding. Prices this
fall likewise may average close to those of last fall.

Same further expansion is also taking place in sheep production. The
1958 lamb crop totaled 20,779,000 head, 4 percent larger than in 1957. The
number of breeding ewes was up and lambing conditions were favorable. So far
this year the slaughter rate for sheep and lambs, like that for cattle and


DPS-"+


- 13 -






AUGUST 1958


calves, has been below a year ago. Hence, the number on farms and ranches next
January 1 will be up from last January. lamb prices may be seasonally lower
this fall but probably around the levels of last fall.

Prices of fed cattle (choice grade) had declined $5.00 per 100 pounds by
late August from their high in late March. Market supplies of fed cattle may
be so large as to prevent more than a small recovery in prices this fall. How-
ever, inasmuch as cattle slaughter will remain cyclically small, prices of fed
cattle during much of 1959 are expected to average fairly high.

Profits in feeding of cattle were generally favorable this past feeding
season. Short-term feeding for early-spring sale, when prices were highest,
returned greater profits than did long term feeding. Because prices for feeder
cattle will be considerably higher this fall than last, it is almost certain
that profits in feeding this coming season will be less than last season. On
the other hand, the cattle cycle has not proceeded far enough for any marked
price declines to be expected, and prospects appear fairly favorable for
moderate profits in feeding.

Production of all meat in 1958 is expected to total about 25.9 billion
pounds, 4 percent below last year. Consumption per person for the year is fore-
cast at 150 pounds, down 9 pounds from 1957. Most of the reduction is in beef
and veal.


DAIRY PRODUCTS

Milk production currently exceeds commercial use to a smaller degree than
a year earlier. Production in the first seven months of 1958 was slightly
lower than in the same period last year. Total commercial use was a little
higher. Wholesale prices of manufactured dairy products and prices to farmers
for milk continue slightly below comparable periods in 1957.

The leveling out of milk production in the first half of 1958 followed
substantial increases in comparable periods of the two preceding years.
Failure of output to increase was associated with adverse weather last winter
and early spring and with the sharp advance in prices of meat animals over a
year ago, which induced a sharper reduction in number of milk cows.

For 1958 as a whole, milk output is likely to approximate the record of
126.4 billion pounds reached in 1957 despite the 0.2 billion pound drop in
January-July output. Milk-feed price relationships continue well above
average, supplies of feed concentrates are large and pastures in most areas
are exceptionally good for this time of year.

The further drop of 3.5 percent in number of milk cows in June from a
year earlier was due partly to rising meat animal prices. The higher prices
for meat animals had the effect also of raising dairymen's income for the
dairy enterprise as a whole.


DPS-44


- 14-






AUIUST 1958


The total number of milk cows has decreased each year since 1944 except
for 1953. The number in June 1958 was 23 percent below the mid-1944 level.
The drop in numbers in the past 14 years has not prevented total milk flow from
reaching new highs-output per cow has been setting successive records. It
appears that future increases in output per cow will be enough at least to off-
set further decreases in milk cow numbers. In fact, the rate per cow may in-
crease more rapidly in the future than in the past two decades. Also, the rate
of decline in milk cow numbers in the longer run probably will be less pro-
nounced than in first half of 1958, because of prospects for increased pro-
duction of meat and lower prices for meat animals.

Total use of fluid milk and cream continues a little above last year but
shows less increase than population. With no change in farm output of milk,
" production of manufactured products has totaled a little under a year earlier.

Consumption of American cheese is running substantially above 1957,
presumably reflecting higher retail prices for red meats. Butter and ice
cream continue around year-earlier levels, but evaporated milk use is down
considerably. Retail prices for all items except butter are above a year
earlier, but all except evaporated milk have declined from the first quarter
of the year.

Purchases of butter and American cheese for price support, combined in
terms of milk equivalent fat solids basis, were about one-third below a year
earlier in the first 4 months of this marketing year. Purchases of nonfat
dry milk, however, are running above 1957. All items are declining seasonally.


POULTRY AND EGGS

The Nation's laying flock is now about one percent larger than a year
earlier. It will become progressively larger in the next six months compared
to last year. By January 1, 1959 there will probably be at least 5 percent
more layers on farms than at the beginning of this year. It also will contain
more pullets and therefore the rate of lay is expected to be higher.

Egg production in July was 3 percent above July 1957. Further year-to-
year increases are expected in coming months and as a result, the usual
seasonal advance in egg prices will be dampened. During the last 3 months of
the year, prices will probably be lower than a year earlier.

Broiler marketing passed their seasonal peak in early August but are
still over 20 percent greater than in 1957. Despite relatively high red meat
prices, prices received for broilers on July 15 had dropped to 19.4 cents per
pound, 2 cents, or 9 percent, below the July 1957 price. Since mid-July prices
have declined further. Placements and settings, though still high, are slowly


DPS-44


- 15 -






AUGUST 1958


drifting toward last year's levels. But little or no lasting price increase
is likely in the next three months because these large supplies will be coming
to market at a time when demand is normally at its lowest level of the year.

Turkey storage stocks have been reduced rapidly. The 79 million pounds
on hand August 1 were 12 percent below a year earlier, but still 50 percent
above the average of the preceding 5 years. These stocks may limit price
recovery, despite a prospective cutback in the 1958 output. However, turkey
purchases for the school lunch program began on July 31 and by mid-August
5.5 million pounds had been contracted for. In mid-July turkey prices averaged
24.6 cents per pound compared to 21.8 a year earlier.


OIISEEDS, FATS AND OILS

Supplies of edible fats, oils and oilseeds will set a new record in the
1958-59 marketing year beginning October 1, 1958, according to August 1
indications. They are expected to exceed the current year's 11.7 billion
pounds (oil equivalent) by about 10 percent. Beginning stocks of food fats
(including the oil equivalent of soybean stocks) are likely to be up 20 per-
cent from the previous year's level. Output of lard is expected to increase
around 200 million pounds and cottonseed oil about 75 million pounds. Soybean
supplies are expected to increase by 66 million bushels-about 10 million due
to larger carryover stocks and 56 million larger 1958 output. This is
equivalent to about 700 million pounds of soybean oil.

Domestic disappearances of food fats per person probably will continue
at about the 1957-58 rate. With the population increasing, total use will be
up. This indicates that the supplies of food fats available for export in
1958-59 will be substantially greater than the 2.6 billion pounds estimated
for the year just ending. While it is too early to estimate the 1958-59
season exports, sales for dollars plus exports under Public Law 480 are
expected to result in a heavy outward movement. However, competition in world
markets is likely to continue keen as exportable supplies in several foreign
countries probably will continue large.

U. S. supplies of soybeans during 1958-59 are estimated at a record
556 million bushels, about 66 million more than a year earlier. Based on
August 1 indications, the 1958 soybean crop is placed at 536 million bushels,
56 million above last year's peak. Farm prices during most of the 1958
harvesting season probably will average near the national support level of
$2.09 per bushel, which is the same as the 1957 level. Although total demand
for beans likely will rise to a new peak in 1958-59, end-of-year carryover
stocks probably will be at a record level.

If the ratio of lint to cottonseed yield is the same as the average for
the past 5 years, production of cottonseed as estimated August 1 would total
4,792,000 tons, 4 percent more than in 1957. Cotton acreage in cultivation is


DPS-4


- 16 -






DPS-44 -17 AUGUST 1958

down sharply this year because of heavier participation in the Soil Bank but
cotton yield per acre is record high. Farm prices for cottonseed are likely
to average slightly less than the $51 per ton received for the 1957 crop, which
was in short supply and of poor quality.

Production of peanuts is forecast at 1,657 million pounds, about 15 per-
cent more than in 1957. Prospective supplies are well above domestic needs for
food and farm uses and CCC probably will acquire a substantial portion of the
crop. Farm prices are likely to again average near the support program loan
level, which is slightly lower than a year earlier.

Flaxseed output in 1958 is forecast at 36.7 million bushels, 42 percent
greater e last year's short crop, but 11 percent smaller than the 1947-56
average. A crop this size would be at least 20 percent more than probable
commercial use and CCC likely will acquire the excess. Current prospects
indicate that farm prices for 1958 crop flaxseed probably will average near
the support price of $2.78 per bushel, which is 14 cents below the 1957 level.
In 1957 the season average farm price was 2 cents per bushel above the support
price.

Lard output in the marketing year beginning October 1, 1958 is expected
to total around 2,650 million pounds compared with 2,450 million estimated for
the year just ending. The increase would reflect a rise in hog slaughter and
lard yields per hog killed slightly above the year earlier level.

Inedible tallow and grease production is expected to remain large in
1958-59 and may increase slightly over the 2,750 million pounds estimated for
the current marketing year. More grease will be produced in 1958-59 because
of the expected 7 percent increase in hog slaughter. Tallow output probably
will remain at about the sane level since cattle slaughter is expected to be
maintained at the 1957-58 rate.


FEED

The total supply of feed grains and other concentrates for 1958-59 is
now estimated at 232 million tons, 6 percent above the 1957-58 record. The
1958 production of the four feed grains was estimated in early August at
144 million tons, 2 million more than the record of 1957. Stocks carried over
into 1958-59 are expected to total about 61 million tons, up about 12 million
tons.

Weather continued generally favorable for feed crops through early
August. The 1958 corn crop was estimated on August 1 at 3,487 million bushels,
84 million more than in 1957 and second only to 1948. This plus a prospective
carryover of 1,525 million bushels would give a total supply of 5,012 million
bushels, 4 percent above 1957-58. This continues the upward trend of the past
7 years. The sorghum grain crop of 496 million bushels is second only to last
year's record crop of 562 million bushels. Including the prospective 300 mil-
lion bushel carryover, the sorghum grain supply would be about 24 percent above
the record last year. Big supplies of oats and barley also are on hand, around
8 to 10 percent larger than in 1957-58.






AUGUST 1958


Prices of a number of feeds turned downward in late July and early
August after rising steadily during the first half of 1958. Feed prices prob-
ably will trend down over the next few months as the 1958 feed crops become
available in volume. The index of prices received by farmers for feed grains
rose 20 percent frcm January to June, then declined slightly in July. Whole-
sale prices of high-protein feeds rose about 27 percent from January to July,
but have declined some from this high level in the first half of August. The
strong demand for commercially prepared livestock and poultry feeds and de-
clining "free" stocks of feed grains, with comparatively small domestic sales
of CCC grain, have contributed.to rising feed prices. In July feed grain prices
averaged 3 percent lower than a year earlier, while high-protein feeds were
23 percent higher.

Livestock-feed price ratios continue generally favorable for expanding
livestock production, especially for hogs. Increasing livestock production is
expected to increase domestic consumption of feed grains in 1958-59. Exports
probably will continue at the high level of the past 3 years. But the big
1958 crop is expected to more than take care of 1958-59 requirements resulting
in a further increase in feed grain carryover at the close of the 1958-59
season.


WIEAT

Total wheat supplies for the marketing year which began July 1, 1958
are estimated at 2,312 million bushels. They exceed the previous peak in
1956-57 by 267 million bushels or by 13.percent and 1957-58 by 24 percent. A
50 percent increase in the 1958 crop much more than offsets a slightly smaller
carryover.

Supplies this year consist of the carryover July 1, 1958 of 881 million
bushels, the crop estimated as of August 1 at 1,421 million, and an allowance
for imports of about 10 million bushels, mostly of feeding quality wheat.

'Domestic disappearance in 1958-59 is estimated at about 610 million
bushels, slightly above 1957-58. This would leave about 1,700 million bushels
for export during the marketing year and carryover next July 1. Assuming
exports of about 400 million bushels, as now seems probable, the carryover
July 1, 1959 would total about 1,300 million bushels, about 420 million more
than a year earlier. Such an increase would be almost 2-3/4 times the 155 mil-
lion-bushel reduction between 1955 and 1958, and result in the largest carry-
over in our history.

Of the total carryover of 881 million bushels on July 1, 1958, the
Commodity Credit Corporation owned 828 million bushels--about the same as a
year earlier. With about 10.3 million bushels of the 1957 crop resealed,
12.7 million still outstanding under the 1957-crop price support program, and
2.2 million of 1956-crop wheat under extended reseal, 27.3 million bushels of
old-crop wheat were in "free" supply on July 1. Last year the "free" supply
amounted to about 53 million bushels.


DPS-44


- 18 -






AUGUST 1958


As a result of the large crop of hard red winter wheat and the extent of
noncompliance with acreage allotments, there probably are sufficient "free"
supplies of this class of wheat to take care of domestic requirements and ex-
ports. However, sales have been small thus far this season. Wheat that is
ineligible for support undoubtedly has been held back in expectation that the
market price will rise. The course of the market will depend on when the in-
eligible wheat is marketed. As a result of relatively weak hard winter wheat
prices, the U. S. average price to farmers in 1958-59 may be lower than usual
relative to the support level. The movement to market of soft red wheat also
has been small. This could be largely accounted for by the delayed harvest
because of wet weather.
RICE
The supply of rice for the 1957-58 marketing year totaled 63.5 million
hundredweight, in rough rice equivalent, substantially below the 84.6 million
hundredweight the previous year. The supply consisted of an August 1, 1957
carryover of 20.1 million cwt., a crop of 43.2 million and imports of 0.2 mil-
lion. Domestic disappearance is estimated at 26.6 million cwt. Exports may
total about 18 million cwt., rough rice equivalent, less than half of the re-
cord exports of 1956-57 and well below the average of recent years. Carryover
stocks on August 1, 1958, on the basis of estimated disappearance, are indica-
ted at about 19.5 million cwt. The official estimate of carryover stocks is
scheduled for release on October 30.
The 1958 crop was estimated as of August 1 at 48.0 million cwt., com-
pared with 43.2 million a year ago and the 1952-56 average of 54.2 million.
With likely imports of 0.2 million, the total supply for 1958-59 would be about
67.7 million cwt., compared with 63.5 million a year earlier and the 1952-56
average of 68.5 million.

A national average support price of $4.48 per cwt. for 1958-crop rice
was announced on August 6. This is 75 percent of the August 1958 rice parity
price of $5.98 per cwt. The support price is 15 cents per cwt. above the ad-
vance "minimum" 1958-crop support price announced November 20, 1957. The in-
crease resulted from a higher rice parity price than was in effect last fall
when the advance "minimum" price was determined.
FRUIT
Supplies of fresh market deciduous fruits are expected to be generally
larger during late summer than a year earlier. But those of fresh citrus fruits
will be smaller. Although consumer demand for fruit continues good, grower
prices for some deciduous fruits of which supplies are large have dropped below
a year ago while prices for those in lighter supply generally are above a year
ago. Prices for fresh citrus fruits continue generally higher than last summer.
With carryover stocks of most canned deciduous fruits smaller than a year ago,
grower prices for fruit for processing generally are higher than in 1957.

Growing conditions for the deciduous fruit crops were generally favorable
during July and early August. As of August 1, prospects were that production


- 19 -


DPS-44







AUGUST 1958


in 1958 would total about 3 percent larger than in 1957. Increases in peaches,
apples and grapes more than offset reductions in other fruits. Supplies of
these three fruits, especially apples and grapes, will be seasonally large
during late summer.

Production of tree nuts is expected to be 11 percent larger than in 1957
with heavy increases in walnuts and pecans more than offsetting large decreases
in almonds and filberts.

Supplies of all fresh citrus fruits will continue lighter than usual
until fruit from the new crops becomes available in the fall. Moreover,
supplies of all canned single-strength citrus juices and frozen orange concen-
trate will continue much smaller and priced higher than last summer. With
continued heavy movement of these juices, carryover stocks of processors next
fall will be somewhat smaller than in the fall of 1957. Growing conditions
for the 1958-59 citrus crops were generally favorable during July and early
August. The condition of the new orange crop in California on August 1 was
better than last year, when dry weather impaired development of the crop.

Current indications are that the 1958 pack of canned fruits will not
be greatly different from the large 1957 pack. Increased packs of peaches,
apples and applesauce, but decreased packs of apricots, cherries and pears
are expected. With a heavy reduction in dried prunes, total production of
dried fruits probably will be somewhat smaller than in 1957. Processing of
frozen strawberries is continuing in California and the 1958 pack will be
again large. But with a sharp reduction in frozen cherries, the total pack
of frozen deciduous fruits is expected to be somewhat smaller than in 1957.

COMMERCIAL VEGETABLES

For Fresh Market

During early summer most fresh market vegetables were in steady, ample
to heavy supply and prices averaged significantly below the relatively high
levels of the corresponding weeks of 1957. Indications are that vegetables
will continue in plentiful supply during the next few weeks.

Production of late summer vegetables, excluding melons, is expected to
be slightly smaller this year than last. Indicated production is substantially
larger for cabbage and sweet corn, and slightly to moderately larger for green
peppers and tomatoes. Prospective tonnages are materially smaller for celery
and onions, and moderately smaller for cucumbers. Lima beans are likely to be
in larger supply during the next few weeks than a year earlier, but supply of
cauliflower is expected to be smaller.

During the next few weeks many fresh vegetables will continue to be
available locally and supplies will be at or near the seasonal peak. Prices
received by growers during late summer are likely to average at least moder-
ately below those of the year earlier, when hot dry weather along the Atlantic
Coast retarded growth and curtailed supplies of some vegetables.


DPS-I4


- 20 -







AUGUST 1958


Reports point to continued large supplies of, and relatively low prices
for watermelons. Cantaloups are also expected to be in plentiful supply dur-
ing the next few weeks.

For Commercial Processing

Because of a substantially larger tonnage of tomatoes for processing
aggregate production of six important vegetables for commercial processing--
snap beans, cabbage for kraut, sweet corn, green peas, winter and spring
spinach, and tomatoes--is expected to be 13 percent larger this year than last.
These six typically make up 85-90 percent of the total tonnage of the 10
processing crops for which the Department of Agriculture makes official prod-
uction estimates. Excluding tomatoes, however, aggregate production of the
other five items promises to be about 6 percent smaller than last year.

Carryover stocks of canned and frozen vegetables were smaller than a
year earlier. If production is near indicated levels, total supplies of
canned vegetables in the 1958-59 season may be a little larger than last season.
Supplies of canned peas and corn are expected to be moderately below the large
supplies of last season. But supplies of snap beans are likely to be a little
larger than a year earlier, and tomatoes and most tomato products materially
larger. Total supplies of frozen vegetables are likely to be moderately
smaller.

POTATOES AND SWEETPOTATOES

Production of late summer potatoes is estimated at 35.8 million hundred-
weight, 11 percent more than last year and 8 percent above the 1949-56 average.
For the week ended August 9, f.o.b. Yakima Valley, Washington shipping point
prices of U. S. No. 1 Russetts, washed, averaged $1.88 per hundredweight
compared with $2.62 a year earlier.

Early August estimates indicate that production of potatoes for fall
harvest is likely to be 11 percent larger than last year and 14 percent above
the 1949-56 average.

The 1958 sweetpotato crop promises to be slightly smaller than last
year and a tenth below the 1949-56 average. Prices received by growers are
expected to decline seasonally from current early-season levels into the fall
and then advance into the winter and spring. Prices for the 1958-59 season
are likely to average about the same as last season.

COTTON
A total supply of about 20.3 million running bales of cotton is indi-
cated for the 1958-59 season. This is 2.0 million below the 1957-58 season and
the smallest since 1952-53. The carryover on August 1, 1958 was about 8.7 mil-
lion bales compared with 11.3 million a year earlier. The August 1 estimate
indicates a 1958 crop of about 11.5 million running bales (11.6 million 500-
pound bales) compared with about 10.9 million last year, representing an
increase of 6 percent. The 1958-59 supply also includes an estimate of imports
of about 0.1 million bales.


DPS-44


- 21 -







AUGUST 1958


A further reduction in carryover stocks is expected to occur in the
current season. Disappearance during the 1958-59 marketing year is tenta-
tively estimated at around 12.6 million bales compared with about 13.6 million
a year earlier. This assumes around a 1 million bale decline in exports. If
the supply and disappearance turn out as indicated above, the carryover next
August 1 would be about 1 million bales lower than on August 1, 1958.

On August 8, the Department of Agriculture announced that the final
1958 loan rate for Middling 7/8 inch cotton at average location is 31.23 cents
per pound. This compares with 28.81 cents per pound last season and the mini-
mum level set on February 7 of 30.75 cents. The higher final rate reflects a
0.59 cent rise in the parity price in effect between February and August, the
applicable percent of parity remaining at 81 percent.

The 1958 average loan rate for Middling 1-inch cotton at the 14 spot
markets is 35-35 cents per pound, 2.79 cents above that for the 1957 crop.
From August 1 through August 15, market prices for this quality at these
markets averaged 34.85 cents per pound. A year earlier, they averaged
33.76 cents.

Prices received by farmers rose to 30.77 cents per pound in July which
was equal to 80 percent of parity. The mid-July price compares with 29.09
cents per pound in June and 32.29 cents a year earlier.

July sales of cotton by farmers were largely from redeemed loans with
only limited marketing of the new crop in South Texas. New crop quality was
reported to be good.and prices received by farmers were well above those for
end-of-season marketing of the old crop. Farm prices in most States showed
little change from mid-June but averaged higher in Texas and California, which
provided a higher proportion of sales than a month earlier.


WOOL


At mid-August, Boston quotations for domestic wools ranged from 18 to
36 percent or from 17.5 to 67.5 cents per pound, clean basis, below a year
earlier. Quotations for most descriptions were about the same as or slightly
higher than in early April.

Prices received by domestic growers for shorn wool during the first
4 months of the current marketing season averaged between 36.3 and 37.7 cents
per pound, grease basis. They averaged between 14.9 and 19.8 cents lower than
a year earlier and between 16.0 and 17.4 cents below the average of 53.7 cents
for the entire 1957 season. Unless world demand strengthens considerably in
the next few months, the 1958 season average is likely to be down sharply
from last season and may be the lowest since the incentive program went into
effect. The average total return per pound to growers for wool sold would,
of course, be the same as last season since the incentive level is unchanged
at 62 cents.
Because of the decline in prices, payments to be made next year on 1958
marketing are expected to be considerably higher than for 1957 marketing and
may be the largest under the National Wool Act of 1954. Also marketing may be


DPS-44


- 22 -





AUGUST 1958


considerably larger than for each of the first 3 years because of the substan-
tial quantity of 1957 clip wool carried over into the current season. The
delayed sales were due to the weak demand and low prices during the late
months of 1957 season, and to the expectation of some growers that the pay-
ment rate for 1958 would be higher and the total return per pound for their
1957 wool would be larger if sold during the 1958 marketing year.
The payment rates for shorn wool and unshorn lambs marketed last season
are much lower than those for 1956, since the 1957 average price for shorn
wool, 53.7 cents, was 9.4 cents higher than that for 1956. Shorn wool payments
to individual producers for the 1957 marketing year amounted to 15.5 percent of
their dollar returns from the sale of shorn wool. The rate for the 1956 market-
ing year was 40 percent. The 1957 payment rate on sales of unshorn lambs is
33 cents per hundredweight of live animal sold compared with 71 cents for the
1956 marketing year. Due to lower payment rates and smaller marketing, pay-
ments now being made on 1957 marketing are expected to total only about one-
third those for each of the first 2 years of the payments program.

The 1957-58 world wool clip is now estimated at 4,900 million pounds,
grease basis, about 2 percent smaller than that of 1956-57. The drop, the
first after 9 successive increases, was concentrated in merino wool. This
largely reflected drought conditions in Australia and the Union of South Africa.
Production of crossbred wool continued to increase. An increase in the world
clip of about 20 million pounds, a little less than 0.5 percent, has been
forecast for 1958-59. The Australian clip is expected to be down again due to
the drought last year and early this year.

Domestic production of shorn wool this year is estimated at 240 million
pounds, grease basis, up 2 percent from last year. The increase reflects the
flock expansion last year associated with improved range and pasture conditions,
favorable prices, and the incentive payments. With the payments program and
continued generally favorable feed conditions and lamb prices, some further
increase in sheep numbers this year, and, hence, in shorn wool production next
year is a likely prospect.
Domestic mill use of apparel wool this year is down for the second year
in a row. The quantity consumed during January-June was 26 percent below last
year. The lower rate of mill use largely reflects the general recession in
textiles which started during 1956. Increased competition from manmade fiber
and the long-term trend toward lighter-weight clothing also contributed.
After an advance of almost 2 years, the seasonally adjusted rate of mill
use of apparel wool began to decline in mid-1956. It appears to have "bottomed-
out" at about the turn of the year. Since then it has moved slowly upward.
TOBACCO
Marketings of this year's comparatively small crop of flue-cured have
been under way in the southernmost producing area since late July. In the
Georgia-Florida Belt (type 14), marketing are nearly finished. Through
August 19, 132 1/2 million pounds were sold at an average 57.3 cents per


- 23 -


DPS-44




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DPS-44 24 AUGUST 1958
pound 2 percent above a year earlier. The season average is likely to be a record
high. In the South Carolina-border North Carolina Belt (type 13), where auctions
opened August 5, about 88 million pounds had sold at an average 60.8 cents per
pound through August 19. This price average was 11 percent above the comparable
figure of a year ago. Auctions in the Eastern North Carolina Belt (type 12) be-
gan August 21 and in the other Belts, will start in September.
As of August 1, the flue-cured crop was indicated to be 8 percent larger
than last year's crop, which was the smallest since 1943. This year's crop plus
the carryover, which is down 8 percent from last year's record high, will pro-
vide a total supply for 1958-59 about 4 percent lower than for 1957-58.
Flue-cured is the leading domestic cigarette tobacco and also exported
in large volume. In the year ended June 30, domestic use of flue-cured turned up-
ward for the first time in several years. It gained 4 percent over a year earlier
but was still 5 percent below 5 years ago. The July 1957-June 1958 exports of
flue-cured totaled 442 million pounds (farm-sales weight)--5 percent less than a
year earlier but slightly above the recent 10 year average.
The 1958 burley crop as of August 1 was indicated to be l1 percent less
than last year's harvesting. Indicated production on August 1 of fire-cured
and Connecticut Valley binder is sharply lower than last year and the cigar
wrapper crop is moderately lower than last year's record. The August 1 indication
for Wisconsin binder is for a slightly larger crop than last year's and cigar
filler production is indicated to be well above last year.
In the fiscal year ended June 30, cigarette output totaled 449 billion--
up 31 percent over a year earlier. Cigar output in domestic factories totaled
almost 6 billion--up 3 percent over a year earlier. The July 1957-June 1958 out-
put of smoking tobacco was 75 million pounds, 9 percent above the longtime low
of 1956-57; but output of chewing tobacco and snuff at 70 and 35 million pounds,
respectively, were 4 and 5 percent below a year earlier.
In the recent fiscal year, exports of all types of tobacco combined totaled
530 million pounds (farm-sales weight)--5 percent lower than a year earlier but
nearly the same as the recent 10 year average. The sharpest relative declines
occurred in burley and One Sucker exports--down about a fourth and a half,
respectively, from their 1956-57 levels.




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