The Demand and price situation


Material Information

The Demand and price situation
Abbreviated Title:
Demand price situat.
Physical Description:
v. : ill. ; 27 cm.
United States -- Bureau of Agricultural Economics
United States -- Agricultural Marketing Service
United States -- Dept. of Agriculture. -- Economic Research Service
U.S. Dept. of Agriculture, Bureau of Agricultural Economics
Place of Publication:
Washington, D.C
monthly[ former <1940>-1962]


Subjects / Keywords:
Agriculture -- Economic aspects -- Periodicals -- United States   ( lcsh )
Economic conditions -- Periodicals -- United States   ( lcsh )
statistics   ( marcgt )
federal government publication   ( marcgt )


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
lcc - HD1751 .A91853
ddc - 338
System ID:

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

October 1958
OCT. 21, P.M.



U ", FP -.lU -y

Published monthly by

/q e z.'i6


otlooand Situation Board, October 15, 1958

Crop production this year, according to the October 1 report,
is now estimated to be some 10 percent larger than in 1957, which
equaled the previous high. Record crops are indicated for wheat
and feed grains, which have been in heavy surplus for some years.
Per acre yields of major crops, reflecting in part more favorable
weather this year, are averaging 12 percent higher than in 1957 and
over 30 percent above those of 5 years earlier. For most areas,
pasture conditions on October 1 were much above a year ago, and
in range areas the current moisture situation points toward the
largest supply of forage for fall and winter grazing in over 15 years.
The index of prices received by farmers rose 3 percent to 258
(1910-14=100) during the month ending September 15, andwas 5 per-
cent above a year earlier. About half of the increase from August
to September reflected very high grapefruit and orange prices, for
which marketing are at low ebb. But, in addition, increases oc-
curred for beef cattle, eggs, cotton and milk. A more rapid in-
crease in farm product prices than in prices paid by farmers for
commodities, interest, taxes and farm wage rates, lifted the parity

(Coninued on pae 3)


2 -


: Unit or 1957 198
Item : base : : :
Itba period Year Sept. Jne Jly M Ag. Sept.

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

Total outlays, seasonally adjusted 2
Public construction
Private resident4*'
Housing starts

Manufacturers' sales and inventories: 2
Total sales, seasonally adjusted
Durable goods
Unfilled orders-sales ratio /
Inventory-sales ratio
Durable goods

Employment and wages: V/
Total civilian employment
Workweek in manufacturing
Hourly earnings in manufacturing

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

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

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

Consumer price index, all items 4/

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

Farm income and marketing: Y
Volume of farm marketing
Cash receipts from farm marketing
Annual data for most of these items for
issue of The Demand and Price Situation.

the years 1929



Mil. dol.
Mil. dol.

Mil. dol.
Mil. dol.


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

Mil. dol.
Mil. dol.

1947-49=100 :e




1947-49=00 :
Mil. dol.















120 121
115 117

242 245
233 227
249 260



and 1939-5'





52.0 358.8
122 43,026
691 14,673

581 16,721
149 5,221
L.45 1.43

119 119
125 126
96 95
114 113

124 124
122 122

255 254
232 228
275 277

133 111
2,934 2,423
f appear on page


35 of











356.1 357.5

16,859 16,571
5,214 5,147



251 258
225 232
275 280


131 146
2,862 3.300
the April 1958j

1/ Federal Reserve Board. / U. S. Department of Conerce. 3/ Seasonally adjusted annual rates.
SU. S. Department of Labor, Bureau of labor Statistics. / Unfilled orders for durables divided by
monthly deliveries. / Inventories, book value, end of month, divided by sales. / Bureau of the
Census. / U. S.-Department of Agriculture, Agricultural Marketing Service.

: *







DPS-46 3- OCTOBER 1958


Approved by the Outlook and Situation Board, October 15, 1958


Page Page

: Summary ........ .......... 1 Wheat .......................... 12
:General Business Activity .... 4 Rice .......................... 13
: Farm Income .................. 8 Fruit .......................... 13
: Livestock and Meat ........... 8 Commercial Vegetables .......... 14 :
:Dairy Products ............... 8 Potatoes and Sweetpotatoes ..... 15
: Poultry and Eggs ............. 9 Cotton ........................ 15
: Oilseeds, Fats and Oils ...... 10 Wool ........................... 16 :
: Feed ......................... 11 Tobacco ........................ 17

Continued from cover page -
ratio to 85 compared with 83 in August this year and in September a year ear-
lier. However, the first part of October, prices of important agricultural
commodities on major central markets averaged slightly lower than in mid-
September, with declines reported for eggs, broilers, hogs, and potatoes.
Cash receipts from farm marketing in the first three quarters of 1958
were up 11 percent from a year earlier; prices averaged 6 percent higher and
the volume of marketing was up 5 percent. Livestock and products receipts
were up about a tenth because of higher prices, largely from cattle, hogs and
eggs. Crop receipts were up about an eighth due mostly to bigger wheat and
cotton marketing.
Economic activity continued to improve in early fall. Consumer incomes
in September, spurred by rising wage and salary payments, were about 1 percent
above a year earlier. Nonfarm employment registered a better than seasonal
rise in September, and unemployment, seasonally adjusted, dropped moderately
below August but was still nearly 2 million above a year earlier. Retail sales
declined about 2 percent between August and September. Construction activity,
led by increases in private housing, registered the fourth successive monthly
advance. Factory production in September, while still below the previous peak,
was about 9 percent above the April low.
Commodity Highlights
Feeder cattle prices may remain unchanged this winter in contrast with
the steady advance of last winter. Hog slaughter this fall will average about
the same as last year. Hog prices will probably decline for the rest of this
year and in 1959 will be continuously below 1958.


Eg prices reached a peak in mid-September, about a month earlier than
usual. In the next 6 months prices to producers are expected to remain below
a year-earlier levels. Record large stocks of frozen turkeys will probably
hold turkey prices in the next 3 months close to last year's levels despite
some decline in turkey production this year.

Soybean oil prices during the heavy October-December marketing period
probably will average somewhat lower than a year earlier while meal prices may
average a little above.

The 1958 National support price for corn in the commercial area for
complying farmers will be $1.36 per bushel, the same as the previously
announced minimum. The rate for non-complying growers in the commercial area
will be $1.06.

Prospective production of early and mid-season oranges in the 1958-59
season is up about 2 percent from the reduced 1957-58 crop. Total production
of grapefruit, excluding the California summer crop, is about 7 percent larger
than the relatively light 1957-58 crop.

Total supplies of fresh vegetables for fall harvest are expected to be
slightly larger than last year. Most of the increase is in early fall cabbage
and carrots. Heavy supplies of processed vegetables will be available for
distribution into mid-1959.

A national marketing quota of 12.2 million bales of cotton and a
national acreage allotment of 16 million acres for the 1959 upland cotton crop
were announced on September 29. The referendum on marketing quotas will be
held on December 15.

Domestic mill use of carpet wool in August rose above the same month a
year earlier for the first time this year; the August rate was 6 percent above
August 1957.

By October 10 approximately three-fourths of this year's flue-cured
tobacco crop had been marketed. Auction prices by that date averaged 57.8 cents
per pound, 3 percent higher than in the corresponding period last year.


Economic activity continued to improve during September. Consumer in-
comes rose further spurred by higher wage and'salary payments. Retail sales
were down about 2 percent between August and September. Construction outlays
in September were at the high for the year, led by a sizable increase in pri-
vate housing, and housing starts reached the highest level in 3 years.
The job situation improved in September, and unemployment after seasonal
adjustment declined to 7.2 percent of the civilian labor force, but the


absolute number was 1.8 million above a year ago. Manufacturers' sales
improved a little and the rate of inventory liquidation eased further during
August. Industrial production increased further in September and was about
9 percent above the April low.

Consumer incomes in September reached an annual rate of $357.5 million
up 1,. million from August and 5.4 million above a ye ar earlier. Most of the
gain from August to September was due to higher wage and salary payments, as
employment and the average workweek improved some. Average hourly earnings oa
factory workers were also a little higher.

Retail sales, according to advance reports and seasonally adjusted,
totaled 1. billion dollars, down a little from August and from the peak rate
a year earlier. Durable goods store sales declined between August and Septem-
ber and were 10 percent below a year earlier. New automobile sales continued
to run substantially below a year earlier but sales of the furniture and
appliance group improved. Retail sales of nondurable goods totaled l.1I bil-
lion dollars, down about 2 percent from August and 2 percent higher than a
year earlier.

Consumer installment debt outstanding at the end of August rose a little
to 33.2 billion dollars, aftrii straight months of decline. Repayments of
consumer debt continued at about the same rate as recent months, but extensions
increased as gpins in consumer goods loans, repair and modernization loans and
personal loans more than offset further declines in the amount of automobile

Construction outlays totaled 4,185 million dollars, seasonally adjusted,
in September, up about i percent from August, 6& percent from the lor for the
year and in he and up 3 percent from September a year ago. Private construe-
tion activity totaled 2,896 million dollars, up about l~ percent, practically
all the gain was accounted for by a rise in outlays for residential buildings.
New private nonfarm housing starts, which lead outlays, on an annual rate basis
totaled 1,220 million units, the highest since September 1955. Industrial and
co ercial building activity continued to decline with small gains registered
for building of private institutions and public utilities. Public construc-
tion totaled 1,289 mi llon dollars in September, up about 2 percent from August
and 7 percent higher than a year earlier. Gains were registered for most types
of construction, but outlays for buildings and sewer and water systems were
up the most.

The Job situation improved during the late samer and early fall.
Civilian eployent at 64.6 million declined less than the usual seasonal
amount for September; however, esployent was 1.0 million below the level of a
year earlier. Agricultural emloyment declined over the month, but there were
less than usual declines in nonagricultural employment to 58.4 million, compared
with 58.7 million in August and 59.2 million a year earlier. In manufacturing
establishments employment, seasonally adjusted, reached 15.5 million, up about
l0, 000 from August but 1.2 million below a year earlier. Practically all the
gain between August and September was in the durable goods industries.


- 5 -

OOB6hER 1958

Employment in nondurable goods industries at 6.7 was approximately the sam as
in the previous month, and 234,000 below a year earlier. Employers. reports
to local public eaployent offices indicate a continuation of the recent gradual
uptrend in employment through mid-November. If these gains are realized, the
bulk of the increase will be centered in the noamaufaeturing sector of the
economy. Hiring by trade establishment in preparation for the holiday shopping
season will be partially offset by the usual decreases in construction activity.
Small gains are anticipated in manufacturing employmnt--notably steel, farm
machinery aid ordnance industries. Employment in auto centers is expected to
rise as model changeovers are capleted and volume production gets auder way,
but small further declines in aircraft appear likely.

With som isrovement in the job situation, unemploymnt at 4.1 million
in September was down 600,000 from August. The rate of unemployment after
seasonal adjustment was 7.2 percent of the civilian labor force in September,
down from the 7.6 percent rate in August. This compares with a rate of 4.5
percent in September of 1957.

Weekly hours of factory production workers averaged 39.8 in September
compared with 39.6 in August and 39.9 a year earlier. Average weekly earnings
increased to $85.17, up 82 cents from August and $2.18 from a year earlier.

Manufacturers' sales rose during August to a seasonally adjusted total
of 26. billion dollars up 10 million dollars from July, but still 2.2 billion
dollars below a year earlier. There were inaor increases in most durable goods
industries. Nondurable goods sales were unchanged. New orders placed with
manufacturers' declined 100 million to 26.3 billion dollars, as a cutback in
defense contracts placed with aircraft industries offset increases in business
placed with most other manufacturing industries. With sales and new orders
about the same in August, there was little change in order backlogs.

The rate of manufacturers' inventory liquidation eased further in August.
The book value of their inventories declined 300 million to 49.5 billion dollars
compared with 54.2 billion dollars a year earlier. Both durable sad nondurable
goods shared evenly in the reduction during August.

Factory production continued to advance in September; the Federal Reserve
Board's index of industrial production at 137 (1947-49.m00) was up a point
from August and 9 percent above the lows of last April but 5 percent below a
year earlier. The index of durable goods production in Septembe was 144, the
same as in August. Steel mill operations continued to limb in the early fall,
and the primary metals index of 110 was 13 percent above the low for the year
in April. Machinery, metal fabricating, and furniture output also climbed
between August and September. Consumer durables output at 104 was down 10 per-
cent between August and September due to a sharp decline in automobile produc-
tion. Nondurable goods production at 134 was up a point from Augast. Textile,
rubber, chemical, petroleum and paper output was up a little while food produe-
tion was the sae as in the preceding month. The output of minerals reached
123 up 2 percent from August, but 5 percent below September 1957.


- 6 -


Wholesale prices were about the same in both August and September. The
overall index averaged 119.1 (1947-49=100) the same as in August and 118.0 a
year earlier. Between August and September, farm product and processed food
prices declined slightly while industrial prices averaged a little higher.

Prices paid by farmers for family living items averaged the same in
September as a month earlier, with a decline in food prices offset by a general
advance of other categories of consumer goods. Urban consumer prices declined
0.2 percent between July and August, the first reduction in two years. Food
prices dropped nearly 1 percent due principally to lower prices for fresh
fruits and vegetables, meats and poultry. Partially offsetting lower food
prices were increases in the cost of housing, transportation, medical and
personal care, and reading and recreation.

The Index of Prices Received b Farmers rose 2.8 percent from August to
September to 25(910-14=100) and was 5.3 percent above September last year.
Prices of grapefruit and oranges were responsible for about half of the increase
in the index. The index of prices received for fruit was up 17 percent from
August and 44 percent from a year ago. Beef cattle, eggs, milk, and cotton
also contributed to the increase over the month. Lower prices for hogs,
chickens and corn were partially offsetting. The average prices received for
upland cotton rose 4 percent during the month to 34.54 cents per pound, the
highest in nearly 4 years. Ginnings up to mid-September contained a high
proportion of strict middling and higher grades.

The Index of Prices Paid by Farmers for commodities and services,
interest, taxes and farm wage rates rose 1 point to 305 in the month ending
mid-September. This was 3 percent higher than in September last year. A
small average increase in prices of production items caused the fractional
increase in the index. Prices of feed and farm supplies declined but these
were more than offset by advancing prices of most other production items,
particularly feeder cattle.

Since prices received advanced more rapidly over the month than prices
paid, the parity ratio rose 2 percent to 85 in September. The ratio stood at
83 in the previous month and also in September 1957.

Prices of farm commodities on major central markets averaged lower in
mid-October than in mid-September. Hog prices at Chicago averaged about 4 per-
cent down. Fed cattle prices at Chicago were up fractionally. Midwestern
eggs at New York declined about 17 percent over the month. Prices of North
Georgia broilers were down around 12 percent. Hard Winter wheat at Kansas City
rose about 2 percent from mid-September to mid-October. Rye, corn and oats
averaged unchanged. Long Island potatoes declined about 7 percent in the
New York market. Prices of soybeans at Chicago were down around 2 percent.


- 7 -



Farmers' cash receipts from marketing in the first 9 months of 1958
totaled 22.8 billion dollars, 11 percent above the corresponding period in
1957. Prices averaged 6 percent above last year, and the volume of marketing
was up 5 percent. Receipts from livestock and products of 13.8 billion dollars
were 10 percent above a year ago, largely because of higher prices for cattle,
hogs, and eggs. Crop receipts of 9.0 billion dollars were up 13 percent from
a year ago, due mostly to the large wheat and cotton crops. Higher average
prices resulted in somewhat larger cash receipts from fruits.

Total cash receipts in September were about 3.3 billion dollars, 12 per-
cent more than a year ago. Prices and marketing were both up from September
1957. Receipts from livestock and products of 1.7 billion dollars were up
10 percent, with higher average prices for cattle, calves, and eggs. Larger
cattle marketing also contributed to the increase. Crop receipts in September
were about 1.6 billion dollars, 15 percent above September of last year.
Prices of crops averaged slightly higher than a year ago, and marketing were
up substantially. Larger marketing of wheat, cotton, soybeans, and tobacco
contributed substantially to the gain in total crop receipts.


Cattle slaughter continues to lag a little behind last year's rate
despite larger marketing of fed cattle. About as many fed cattle probably
will be slaughtered this fall as a year ago but fewer grass cattle. The
number in feed lots on October 1 was 12 percent larger than last October with
about the same proportion headed for market before the end of the year.
Prices will likely retain their recent gains and might increase somewhat more
before the end of the year.

Abundant feed and excellent ranges have given a boost to feeder cattle
prices. Prices may remain about unchanged this winter. They are unlikely to
advance steadily as they did last winter.

Hog slaughter has been above year-earlier levels since June largely
because the 2 percent gain in 1958 spring pigs came in the first part of the
season. Slaughter the rest of this fall will average about the same as last
year. Early next year'it will be significantly above the early 1958 rate.
Hog prices will probably decline the rest of 1958. Prices in 1959 will be
continuously below those of 1958.


Production of milk is seasonally low, and about equal to a year earlier.
Current commercial use exceeds current production so that commercial storage
holdings, except for nonfat dry milk, have been reduced. Consequently, little
butter and cheese are being purchased for price support. However, substantial
price support purchases are being made of nonfat dry milk. Wholesale prices
for butter and cheese continue above the level when these products were being
.purchased in volume for price support.


- 8-


The number of milk cows on farms apparently has declined so far in
1958 at a faster rate than in other recent years. Up until this year the
slight reduction in milk cow numbers has been more than'offset by an. increase
in rate of production per cow, and total milk flow has reached successive new
highs. This year, however, cow numbers have been declining at an accelerated
rate and total milk flow has dropped somewhat from the record reached in 1957.
In the remaining months of the year, output probably will run near that of a
year earlier, but the total for the year may not quite equal the 1957 record

Consumption of cheese per person continues to show a substantial in-
crease over a year earlier. Consumption of other dairy items shows no
increase, and use of fluid whole milk, on a per capital basis, apparently is
running a little below a year earlier.

But with milk output down a little, and a larger population, the surplus
of milk (equivalent, fat basis), is running about one-third smaller this mar-
keting year than last. However, purchases of nonfat dry milk have been the
largest on record. For 1958 as a whole the milk equivalent of purchases will
be less than 4 percent of production compared with 4.7 percent in 1957.
Uncommitted stocks of cheese in early October were down to 13 million pounds,
the smallest in 6 years; butter stocks were 52 million pounds compared with
55 million a year ago and nonfat dry milk, 122 million pounds compared with
65 million a year earlier.

Prices to farmers for milk and butterfat have increased a little,
seasonally, but ar a little under a year earlier. With lower feed prices,
the milk-feed price relationships continue well above average.


Average egg prices to farmers reached a peak in the middle of September,
two months earlier than in 1957 and about one month earlier than usual. On
September 15 prices to farmers averaged 41.0 cents per dozen, compared with
36.9 cents a month earlier and 40.3 cents a year ago. Egg price movements
since mid-September have been mixed. In the next 6 months prices to producers
are likely to be below a year earlier.

The 306 million layers on farms October 1 were very slightly below the
corresponding number on this date last year. Relative to a year earlier, the
number will increase in the next 3 months. By January 1, 1959 the nation's
laying flock will probably be at least 2 to 4 percent larger than on the first
of this year.

Rate of lay on October 1 was 3 percent higher than on the same date in
1957, and probably will continue above year-ago levels, continuing the trend of
past years.

- 9 -


For the rest of 1958 egg production will exceed the 1957 level by 3 to
5 percent. Production will continue greater than a year earlier through the
early part of 1959.

On October 2, 1958 the the U.S.D.A. announced that it will buy dried
whole egg for the school lunch program. The amount to be purchased weekly
will depend largely on prices and quantities offered.

More broilers than last year will continue to move to market in the
next three months. In September broiler growers received an average of
16.6 cents per pound live weight, about 11 cents below both a month and a
year ago. Little price recovery is expected in the last quarter, a period of
seasonally low demand.

Turkey prices probably will stay close to last year's level in the next
three months. Turkey storage on October 1 totaled 161 million pounds-
slightly higher than the previous record for the date set in 1957 and 29 per-
cent above August 1. The 78 million turkeys being raised for this year's crop
are 4 percent below last year's record of 81 million, but because of a large
late hatch, marketing the rest of this year will be above a year ago. To
October.~ lO U.S.D.A. bought 16 million pounds of turkeys for the school lunch
program; none were bought in 1957. On September 15, turkey growers received
23.7 cents per pound live weight compared to 24.9 cents in mid-August and
22.9 a year earlier.


Oilseed crop prospects were generally favorable during September and it
now appears certain that record supplies of edible fats, oils, and oilseeds
will be available in the 1958-59 marketing year which began October 1. Record
yields per acre are indicated for soybeans, cottonseed and peanuts.

October 1 conditions indicate that supplies of edible fats, oils and
oilseeds in 1958-59 will exceed the 11.7 billion pounds (oil equivalent) for
the year just ending by about 15 percent. The prospective 19 percent rise in
soybean output will contribute a large part of the increase in supply, although
lard and cottonseed oil production probably will increase about 11 and 6 per-
cent, respectively. Little change is expected in butter output. Carryover
stocks of food fats (including the oil equivalent of soybean stocks) on
October 1, 1958 probably were up nearly one-fifth from the relatively low
level of a year earlier.

The supplies of food fats available, including oil equivalent of soy-
beans, would permit substantially greater exports (including shipments) in
1958-59 than the 2.6 billion pounds estimated for 1957-58. Competition in
world markets is likely to continue keen as exportable supplies remain heavy
in same foreign countries. Nevertheless, a heavy outward movement from the
United States is likely to result from sales for dollars plus another large
P. L. 480 program. Agreements for large quantities of edible oils are expected
to be negotiated now that the P. L. 480 program has been extended through
December 31, 1959.

U. S. supplies of soybeans in 1958-59 are estimated at a record 593 mil-
lion bushels, 103 million bushels or 21 percent above last season. This in-
crease is equivalent to about 1.1 billion pounds of soybean oil and
2,450,000 tons of soybean meal. Soybean prices during the heavy harvesting
months are expected to be under the support rate of $2.09 per bushel but later
in the season probably will return to near the loan level. Prices during most
of the 1958-59 marketing year probably will not exceed the loan rate by any
substantial margin unless the fats and oils situation changes greatly.
Although total demand for beans probably will rise to a new peak in 1958-59,
carryover stocks on October 1, 1959 are expected to be well above this year's.

Current prospects are that soybean oil prices during the heavy October-
December 1958 marketing period probably will average somewhat lower than a
year earlier while meal prices may average a little above. As the outlook for
meal in 1958-59 currently appears more favorable than for oil, the value of
meal obtained from a bushel of beans is likely to be somewhat higher than that
for oil, as was the case for the 1957-58 year. Requirements for meal are
likely to be higher in 1958-59 due to a prospective increase in animal units
along with a continuation of the uptrend in the feeding rate per animal unit.

Based upon October 1 indications, the 1958 cottonseed crop may total
4,828,000 tons, about 5 percent more than last year's short crop. Prices to
farmers are expected to average slightly above the support price of $41 per
ton (CCC purchase price to producers, basis grade, 100), but less than the
last season's average of $51 per ton. Cottonseed oil prices in October-
December 1958 probably will average somewhat below last year because supplies
of cotton oil will be slightly larger and supplies of competitive food fats
(including oilseeds) will be much larger. Demand for cotton oil probably will
be at least as strong as last year.

Flaxseed production in 1958 was indicated as of October 1 at 40 million
bushels, 55 percent larger than last year's short crop. A crop this large is
likely to be about one-third more than probable commercial uses and CCC
probably will acquire the surplus. Prices in 1958-59 are expected to average
somewhat less than the $2.94 per bushel received by farmers last year,
reflecting a 5 percent reduction in the support price and production more than
large enough to keep prices near the loan level.


Corn and sorghum grain prices declined during September and early October
as farmers began harvesting the big 1958 crops. No. 3 Yellow corn at Chicago
dropped from the seasonal high of $L.36 per bushel for the week ended August 15
to $1.25 in early October a little more than the usual seasonal decline for
this period. Sorghum grain prices dropped about 50 cents per 100 pounds at
Kansas City during the same period. Corn prices probably will reach their
seasonal low earlier and make a more rapid recovery from the low than in
1957-58 when wet corn delayed marketing and held prices at a seasonally low


- 11 -


level from November through February. Average prices received by farmers for
feed grain were slightly lower in September than a year earlier and they
probably will average a little below those of a year ago during the next 2 or
3 months. High protein feed prices averaged 11 percent higher in September
this year than last, reflecting continued good demand for these feeds,
especially soybean meal and animal proteins.

The 1958 national average support price for farmers in the commercial
area complying with their acreage allotments will be $1.36 per bushel, the
same as the previously announced minimum support rate. The Department of
Agriculture also announced a support price to noncomplying farmers in the
commercial area at a national average rate of $1.06 per bushel. The support
rates for both complying and noncomplying farmers are 4 cents per bushel
lower than for the 1957 crop.

Total feed grain production was estimated in October at 154 million
tons, 8 percent larger than last year's big crop. Including the record carry-
over of about 60 million tons and an allowance for wheat, rye and byproduct
feeds to be fed, the total feed concentrate supply for 1958-59 is estimated
at 243 million tons, 11 percent larger than last year and 32 percent above the
1952-56 average. The 1958 feed grain crop is more than ample for 1958-59
requirements and is expected to boost carryover stocks into 1959-60 by around
25 percent over the 1958-59 level.


Wheat prices have advanced to or close to the highest level of the mar-
keting year to date. This advance reflects an unusual degree of withholding
by farmers and the effect of the tensions in the Far East situation. Prices
generally are now nearly the same relative to support levels as a year ago,
except for white wheat in the Pacific Northwest where prices a year ago were
high compared with other markets. Early season prices this year were low
relative to the loan because of the record production.

Prices on October 14 were generally 15 cents (spring wheat) to 23 cents
(hard red winter) above the lows of the season, but the price of soft white
in the Pacific Northwest, which did not decline as much as other markets at
the beginning of the season was only 7 cents above the low. The October 14
prices were as follows (cents below or above the effective support level are
shown in parentheses): No. 1 Hard Red Winter, ordinary protein, at Kansas
City, $1.93, (13 below) and 13 percent protein, $2.12, (4 above); No. 1 Dark
Northern Spring, ordinary protein at Minneapolis, $2.09 (3 below); No. 2 Soft
Red Winter at St. Louis, $1.98 (8 below); and No. 1 Soft White at Portland,
$2.03 (5 above).

Marketings have not materially increased with the higher prices because
prices generally have not been high enough and the international situation
has encouraged holding. As a result, "free" supplies continue limited.

- 12 -

Total wheat supplies for the marketing year which began July 1, 1958
are estimated at 2,340 million bushels. These consist of the carryover
July 1 of 881 million bushels, the crop estimated at 1,449 million as of
August 1 for winter wheat and October 1 for spring wheat and an allowance
for imports of about 10 million bushels, mostly of feeding quality wheat.

Exports are now estimated at about 430 million bushels, 28 million
above last year. Domestic disappearance is expected to be about 610 million,
slightly above 1957-58. This would leave a carryover July 1, 1959 of about
1,330 million bushels, about 420 million more than a year earlier and the
largest in our history.


Exports of rice in 1957-58, in terms of rough rice, were 18.3 million
cwt., less than half the 1956-57 record of 37.5 million cwt. and almost a
fourth below the 1952-56 average. Domestic disappearance of 26.3 million cwt.
was below the 27.0 million a year earlier, as decreases in brewers and feed
use more than offset an increase in food.

The 1958 crop, on the basis of the October Crop Report, totaled 47.6 mil-
lion cwt., reflecting record yields per acre. The crop together with the
carryover and small imports indicates total supplies for 1958-59 of 66.0 million
cwt. With domestic disappearance estimated at 26.6 million cwt., slightly
above 1957-58, and the likelihood that exports will increase,the carryover on
August 1, 1959 is expected to be lower.


Prospective production of early and mid-season oranges in the 1958-59
season is about 2 percent larger than the reduced 1957-58 crop and 9 percent
above the 1947-56 average. A substantial increase over the short 1957-58
crop in California and a small increase in Texas more than offset a moderate
decrease from the reduced 1957-58 crop in Florida and small decreases in other
States. The prospective tangerine crop in Florida is about double the light
1957-58 crop but considerably below average. Total production of grapefruit
excluding the California summer crop, is expected to be about 7 percent larger
than the reduced 1957-58 crop, but 6 percent below average.

Light shipments of new-crop Florida grapefruit were made in late
September, and of oranges in early October, both starting several weeks later
than last year because of late maturity due to delayed bloom last winter.
Shipments probably will become seasonally heavy by early November. The
California summer crop of grapefruit moved earlier this summer than last,
resulting in lighter shipments in September than in this month of 1957. As

- 13 -




usual, light imports were made from Cuba in September. Shipments of
California Valencias from the small 1957-58 crop continued much lighter during
September and early October than in this period of 1957, and terminal auction
prices remained much above a year earlier.

Stocks of Florida frozen orange concentrate held by packers on
October 4, 1958 were down to about 14 million gallons, 34 percent smaller than
a year earlier. This means that carryover stocks this fall will be much
smaller than a year earlier and the smallest in several years. On the above
date, Florida packers' stocks of canned single-strength citrus juices were
down to about 2 million cases (24-2's), about half those of a year earlier.
With the delayed maturity of Florida citrus this fall, the new season for
freezing and canning will start later than usual.

The crops of apples, grapes and cranberries are somewhat larger than
last year. But the crop of pears is smaller. With the increased availability
of fall and winter apples in September as harvest of these varieties gained
momentum, prices for most varieties at local shipping points declined, continu-
ing under a year earlier. Auction prices for Bartlett pears held fairly steady
in late September and early October but averaged under a year earlier.
Auction prices for California grapes fluctuated from week to week in September
and early October but continued above a year earlier. In early October,
wholesale prices for Massachusetts cranberries on the New York market averaged
a little higher than a year earlier.


For Fresh Market

Total supplies of fresh vegetables for fall harvest are expected to be
slightly larger than both last year, and the 1949-56 average. Most of the
increase over last fall is in early fall cabbage and carrots, and in early and
late fall cauliflower. Production of early fall cabbage is estimated at
9.7 million hundredweight, about 13 percent more than last year. Prospective
production of early fall carrots, at 4.8 million hundredweight is 9 percent
larger than last fall. Production of cauliflower is expected to be about
9 percent larger than last fall, and substantially more early fall spinach and
slightly more tomatoes are also in prospect. Output of early fall lettuce is
substantially below last year, but estimated production for late fall harvest
is materially larger. Supplies of celery in late fall promise to be substan-
tially smaller than a year earlier. Substantially more fall sweet corn and
eggplant is expected to be available but less snap beans, brussels sprouts and
green peppers.

Fresh market vegetables are again competing with heavy supplies of
processed items. Prices received by farmers for fresh market vegetables this
fall compared with last will vary for individual items, depending largely



upon supply and quality. But overall prices for fresh vegetables during the
next 8-10 weeks are expected to average near those of a year earlier.

For Processing

Indications are that heavy supplies of processed vegetables will be
available for distribution into mid-1959. Carryover stocks of both canned and
frozen vegetables were smaller at the beginning of the season than a year
earlier. But a larger prospective canned pack, particularly of tomato juice
and tomato products, probably will more than offset the smaller beginning
stocks. Supply of frozen vegetables is likely to be somewhat smaller than
last season, but most items will be in ample to heavy supply.

Costs of labor and some canning materials are higher this season than
last. Distribution costs are also up. Although consumers will find some
items less expensive, overall retail prices of processed vegetables into
mid-1959 are likely to average a little higher than a year earlier.


Combined production of late summer and fall potatoes is estimated at
2ll million hundredweight, 12 percent more than last year and much above
normal market sales. Most of the major producing areas are operating under
marketing orders and agreements which permit only good quality potatoes to be
marketed as tablestock. A potato diversion program is also in effect to aid
the industry in an orderly marketing program for the large crop. Nevertheless,
supplies available for regular market channels are burdensome and prices are
low. Mid-September prices received by farmers averaged $1.23 per hundredweight,
50 cents below a year earlier. Prices throughout the fall are expected to
continue significantly below those of last fall.

Supplies of sweetpotatoes available into mid-1959 appear to be about
1 percent larger than a year earlier, but about 8 percent smaller than the
1949-56 average. Prices received by farmers in mid-September averaged $2.74
per hundredweight compared with $2.97 a year earlier.


A national marketing quota of 12,167,000 bales (500 pounds gross weight)
and a national acreage allotment of 16 million acres for the 1959 crop of up-
land cotton were proclaimed on September 29. The acreage allotment is at the
minimum provided for by the Congress. The referendum on upland cotton market-
ing quotas will be held on December 15. At least two-thirds of the upland
cotton farmers voting in the referendum must approve marketing quotas if they
are to be effective. Such approval would put into effect the "choice" provi-
sion of the cotton section of the Agricultural Act of 1958 which provides
growers with an opportunity to increase acreage up to 40 percent with a lower
price support.

- 15 -


The Secretary of Agriculture on October 13 announced a national
marketing quota for extra long staple cotton of 74,000 bales and a national
acreage allotment of 71,000 acres for the 1959 crop. These compare with a
marketing quota of 79,000 bales and an acreage allotment of 83,000 acres for
the 1958 crop. A growers' referendum on these quotas has been set for
December 15.

The supply of cotton during the current marketing year is estimated at
20.5 million running bales. The downward revision from a month ago represents
a 360,000 running bale decrease in the October crop estimate from that made
in September as well as a slight downward revision in last year's imports.

As of October 1, 2.6 million bales had been ginned from the 1958 crop.
Cotton ginned as of that date was high in quality, but slightly shorter staple
than last year. Ginnings to October 1 represent 22.6 percent of the 1958 crop
as estimated on October 1, compared with the average of 37.8 percent ginned by
this date. Rains continued to delay harvesting during October, except in the
Far West.
Disappearance during 1958-59 is currently estimated at around 12 1/2
million bales. This includes exports of 4 to 4 1/2 million bales and domestic
consumption of around 8 million.

Prices received by farmers in September averaged 34.54 cents per pound
equal to 90 percent of parity. They were 1.6 cents above a year ago--at their
highest level in nearly 4 years, reflecting the high quality of the marketing
and the increased level of support for such quality cotton. Prices at the
14 spot markets in September averaged 34.70 cents for Middling 1-inch. This
was more than a half cent below the support rate at these markets. As a
result a substantial part of current marketing has been placed under loan.
Net loan entries through October 3 totalled 795,000 bales, more than 3 times
higher than a year ago.

Mill consumption in August was at a daily rate of nearly 32,000 bales.
While below a year ago, this rate represented a more than seasonal increase
from July, and on an annual rate basis indicated a level of mill consumption
of 8 1/4 million bales.

Exports in August totalled 209 thousand bales, compared with 336,000
a year ago. Through September 29, CCC sales of cotton for export during
1958-59 totalled about 3/4 million bales, about one-fifth of the quantity
sold by September 30, 1957 for export during 1957-58.


Early in October, prices of wool abroad ranged from about the same as
to slightly lower than a month earlier. Boston quotations for most domestic
wools were the same as a month earlier, but prices of some were slightly lower
than a month earlier. Prices in both domestic and foreign markets are substan-
tially lower than a year ago due largely to the easier world demand for wool.

- 16 -




Prices received by domestic growers for shorn wool averaged 36.9 cents
per pound, grease basis, in September, down 0.5 cents from August. For the
first 6 months of the current domestic marketing season, the monthly averages
have ranged between 14.9 and 19.8 cents per pound below a year earlier.

The average weekly rate of domestic mill use of apparel wool during
August, was 3 percent below a year earlier. It is likely to average above a
year earlier for the remaining months of 1958. The total for the first 8 months
was about 21 percent below last year. The general movement of the rate of
consumption was downward from aid-1956 through the end of last year, but it
turned upward early this year. During August, mill use of carpet wool was above
a year earlier for the first tiae since Mbrch 1957. In August it was up 6 per-
cent. For the first 8 months it was down about 27 percent from last year.

Imports of both dutiable and duty-free wool for consumption this year
have been running considerably lower than last year. The January-July total
for dutiable wool was down 25 percent and that for duty-free wool was down 23
percent. The smaller imports largely reflect the lower mill use.


By the first third of October, approximately three-fourths of this year's
flue-cured crop had been marketed. Through October 10, auction prices averaged
57.8 cents per pound, 3 percent higher than in the corresponding period last
year. About 11 percent of total market deliveries were placed under Governaent
loan, coamared with 6 percent in the comparable period of last season. The
support level for 1958 flue-cured is 54.6 cents per pound--7* percent more than
for the 1957 crop.

Marketing of most other types will begin late this fall or during the
winter. The 1958 support level for burley is 55.4 cents and for Maryland,
50.8 cents--about 7 percent and 6 percent, respectively, above last season.
The 1958 support for the fire-cured types is 38.8 cents, and for dark air-cured
and sun-cured, 31.5 cents--the same as in 1957.

For most kinds of tobacco, 1958-59 supplies are down from a year earlier,
principally because of smaller carryovers. However, supplies are generally
anple in relation to prospective disappearances. The 1958 production of tobacco
was indicated as of October 1 to be 7 percent larger than last year's chiefly
because of an increase in the flue-cured crop.

- 17 -



The quantity of tobacco (farm-sales weight) utilized in cigarettes
turned upwards in 1957-58 after declining for several years. This resulted
mainly from the increase to a new high in total number of cigarettes produced,
as the quantity of leaf used per unit of output was close to that of the
preceding year. On the average, manufacturers now get more cigarettes per
pound of unstemmed tobacco than they did a few years ago. This is because of
a smaller tobacco column in many filter tip cigarettes than in nonfilter tips;
the reduction in circumference of some cigarettes; and the use of sheet
tobacco and additional stems.

Cigarette output this year is estimated at a record 457 billion, com-
pared with 442 billion in 1957. About 18 billion will be exported and the rest
consumed by U. S. smokers in this country, our possessions, and among overseas
forces. This year, filter tip cigarettes may account for around half of all
cigarettes compared with close to two-fifths last year.

The 1958 consumption of cigars and cigarillos in the U. S. and by over-
seas forces is estimated to be 3 percent more than in 1957. Expanding use of
sheet binder and the larger share of cigarillos than a few years ago have
increased the number of units produced per pound of farm-sales weight cigar
tobacco. Output of smoking tobacco in 1958 is estimated at 9 percent above
1957, and will be the first upturn in 9 years. Production of chewing tobacco
and snuff is estimated at 5 percent and 6 percent, respectively, below 1957.

The 1958-59 total supply of continental cigar filler tobacco is a little
above that of 1957-58, but this year's supply of the binder types is over a
tenth smaller. Connecticut Valley growers have drastically reduced production
in the last 3 years largely through participation in the Soil Bank program.
Expanded use of processed sheet binders has curtailed demand for Connecticut
Valley binder tobacco. Government support levels for the cigar types range
from 23.4 cents to 56.2 cents a pound, and are mostly higher than last year's.

Exports of unmanufactured tobacco in calendar 1958 are expected to be
around 465 million pounds (declared weight)--about 7 percent below 1957.


- 18 -


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