DEMAND and PRI
JULY 24, A. M.
Published monthly by
AGRICULTURAL MARKETING SERVICE
UNITED STATES DEPARTMENT OF AGRICULTURE
US. D E: '3_l T:'RY
Approved by the Outlook and Situation Board, July 20, 1959
The development of 1959 crops has been generallyfavorable but
somewhat below the near ideal level of last year. Prospects for 1959
crops indicate a smaller total production than the 1958 record but
largerthaninanyotheryear. The all-crop production index, based
onJuly conditions, is 113 (1947-49=100) comparedwith 118 in 1958
but well above the previous high of 106 reached in 1957, 1956, and
1948. Output of livestockand livestockproducts this year is running
at an all-time high.
Corn output is forecast at a record 4.2 billion bushels but smaller
crops of oats, barley and sorghums will leave total feed grain ton-
nage slightly below the record of 1958. Production of wheat is down
aboutafifth from the 1.5 billionbushels in1958 but 7 percent above
average. Noncitrus fruit production in 1959 is expected to be up
about 6 percent. Summer vegetable production will be 3 percent
above a year ago but potato production will be moderately smaller.
Cotton planted in 1959 is estimated at 15.9 million acres, 28 per-
cent above the 12.4 million acres planted in 1958, when nearly 5 mil-
lion allotted acres were placed under the Acreage Reserve of the
Farm product prices for the first half of 1959 averaged about
3 percent below the same period of 1958. From May to June, prices
received by farmers declined 1 percent. Meat animal, poultry and
egg and vegetable prices were lower but potato prices rose 37 per-
cent. Prices paid by farmers, including interest, taxes and farm
wage rates, rose slightly in June. The parity ratio, at 81, was 5
percent below a year ago and the lowest in 2 years.
(Conjinued on page 3)
ECONOMIC FACTORS AFFECTING AGRICULTURE
Unit or : 1958 1959
Industrial production: Seasonally adj. j1
Total outlays, seasonally adjusted 2/
Manufacturers' sales and inventories:
Total sales, seasonally adjusted
Unfilled orders-sales ratio /
Inventory-sales ratio 6
Employment and wages: 7
Total civilian employment
Workweek in manufacturing
Hourly earnings in manufacturing
Income and spending:
Personal income payments 2/ /
Consumer credit outstanding /
Total retail sales, seasonally adj. 2/
Inventory-sales ratio 6
Wholesu-e prices, all commodities Y/
Commodities other than farm and food
Consumer price index, all items /
Prices received by farmers 8/
Livestock ard products
Prices paid, interest, taxes and wage
Family living items
Parity ratio 8/
Farm income and marketing:
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 and 1939-58
June Mar. Apr. May June
'947-49=100 : 134
do. : 136
Mil. dol. :48,980
Mil. dol. :15,033
Mil. dol. 17,884
Mil. dol. : 26,246
Mil. dol. 12,402
Bil. dol. 359.0
Mil. dol. : 45,065
Mil. dol. : 14,131
Mil. dol. b 0,682
Mil. dol. : 5,284
1947-49=100 : 119
do. : 95
do. i ll
1947-4=100 : 124
1910-14100 : 250
do. : 273
do. : 264
1947-49=100 : 125
1Uil. dol. 33,560
250 244 244 245 242
223 220 223 230 229
272 264 261 258 252
294 298 299 299 298
287 287 287 288 288
265 267 269 268 267
85 82 82 82 81
8 appear on page
i Federal Reserve Board. 2/ U. S. Department of Ccumerce. 3/ Seasonally adjusted annual rates.
/- U. S. Department of labor, Bureau of labor Statistics. 5/ Unfilled orders for durables divided by
monthly deliveries. _/ Inventories, book value, end of month, divided by sales. Y/ Bureau of the Census.
, U.. S. Department of Agriculture, Agricultural Marketing Service.
Approved by the Outlook and Situation Board, July 20, 1959
General Business Conditions ...
Agricultural Exports by
Farm Income ...................
Livestock and Meat ............
Dairy Products ................
Poultry and Eggs ..............
Oilseeds, Fats and Oils ........
Commercial Vegetables .......
Potatoes and Sweetpotatoes ...
Dry Edible Beans .............
Continued from cover -
The volume of farm marketing in the first 6 months of 1959 increased
almost 3 percent over the corresponding period of 1958. But because of lower
prices, cash receipts from farm marketing, at $13.9 billion, were close to
the $14.0 billion received during the first half of last year. Receipts from
crop sales were about 4 percent higher than a year earlier but cash receipts
for livestock and products were lower. Government payments were lower than
last year because Acreage Reserve payments were discontinued, and realized
gross farm income was down about 1 percent from the first half of 1958. Pro-
duction expenses continued their upward trend, reaching a record annual rate
-of $25.8 billion in the first 6 months of this year, 3 percent above the rate
during January-June 1958. Realized net income was at an annual average rate
of about $12 billion, a billion dollars below the first half of 1958 but over
a billion dollars higher than in 1957.
Business activity expanded rapidly in the second quarter of 1959, but
in early July the rate of increase had tapered off as industry approached the
normal summer lull. The steel industry was strike-bound in mid-July and auto-
mobile firms are approaching shutdowns for model changeovers. Personal income
reached an annual rate of $381.1 billion in the second quarter of 1959, up
7 percent from a year ago. With higher incomes, retail sales in April-June
were up nearly a tenth, with the largest gains in durable goods. Employment
reached a new record of 67.3 million in June, and industrial production at
155 (1947-49=100) was 17 percent above a year ago.
- 3 -
Cattle prices are likely to remain stable during the rest of this year.
Some seasonal declines are likely for sheep and lambs this summer, but prices
probably will average near those of last year. If producers' intentions to
increase farrowings this fall materialize, hog prices through next spring are
not expected to equal those of a year earlier.
A limited seasonal increase in eggprices is likely in the next few
months. Broiler prices in August are likely to exceed the monthly averages
to date in 1959.
Prices received by farmers for soybeans this summer probably will
average near the 1958 loan rate of $2.09 per bushel, or about the same as last
year. Production of lard in 1959-60 is likely to be 10 percent higher than
the 2,675 million pounds now estimated for the current marketing year.
Feed prices this summer and fall are expected to remain a little below
those of a year earlier because a large 1959 feed crop is in prospect and 1959
price supports are generally lower.
Supplies of fresh deciduous and citrus fruits are expected to be some-
what greater this summer than last as a result of larger crops of most fruits.
Prices received by farmers for fresh vegetables and sweetpotatoes pro-
probably will be about the same as those of last year, if present production
prospects materialize. Potato prices are likely to average considerably
above the low levels of last summer.
The Crop Reporting Board estimated on July 8 that 15.9 million acres
were planted to cotton in 1959, 3.5 million acres more than in 1958.
Incentive payments for the 1959 wool clip will be substantially below
the $85 million estimated for 1958 because of the firming of prices this season.
Indicated production in 1959 for all types of tobacco combined is about
3 percent above last year, but the third smallest since 1943.
GENERAL BUSINESS CONDITIONS
Business activity continued to advance in July but the rate of gain
apparently has slackened somewhat as the steel industry was still strike-
bound in mid-July and automobile companies approach model changeovers.
Personal Incomes and Retail Sales
Personal income was at a record annual rate in the second quarter
of 1959 of $381.1 billion, compared with $371.8 billion in January-March and
$355.0 billion a year ago. Higher wage and salary payments accounted for most
of the increase in income. With substantially improved levels of corporate
- 4 -
profits, dividend payments have increased. Interest and transfer payments also
Consumer Prices Steady
The Bureau of Labor Statistics' Consumer Price Index in the second
quarter of 1959 averaged only fractionally higher than the comparable period
a year ago. The Farm Family Living Index in the second quarter of 1959 also
was up fractionally. In both indexes, lower food prices just about offset
increases in the cost of other items. Clothing, building materials and
automobiles purchased by farmers were higher than a year ago. Urban consumers,
whose spending patterns are different from farmers', paid substantially higher
prices for services such as rent, transportation, and medical care, than last
Retail Sales at High Rate
Retail sales in the second quarter of 1959 averaged $18.1 billion, up
nearly a tenth from a year ago. The rise in retail sales reflects optimism
of consumers concerning their income and job prospects and a willingness to
increase their debts to purchase consumer durable goods. Consumer install-
ment credit outstanding increased about $1.9 billion in the first 5 months of
1959, compared with a net decline of half a billion dollars in the same period
Durable Goods Sales Up Sharply
Retail sales of durable goods stores were up nearly a fifth in June
from a year earlier. Automobile sales have shown the most striking recovery
and in June were $3.8 billion, up a fourth from a year ago. The number of
dealer sales in the past several months has held relatively steady and in June
averaged about 45 percent above the same period last year. Sales of appliances
and household equipment have also increased, in part reflecting substantially
higher housing completions. Retail sales of furniture and appliances in June
were 15 percent above a year ago.
Retail sales of nondurable goods, which are more closely tied to day-
to-day needs of consumers than durables, in June were 5 percent above a year
ago. Sales of clothing and shoes have increased rapidly and in June retail
sales of apparel were up 13 percent from a year ago. Gasoline and oil pur-
chases continued -.eir long term increase and retail sales of service stations
were up 12 percent. Food and alcoholic beverages purchases continued to rise
although prices have declined around 3 percent in the past year. Retail sales
of the food group in June were nearly 4 percent above a year ago.
Businessmen increased their investment in manufacturing and trade
inventories in April-May 1959 by $1.6 billion compared with liquidation of a
like amount a year earlier. The increase in investment in inventories reflects
- 5 -
the improved level of sales at manufacturing and trade levels. Manufacturers'
sales in May were up a fifth and retail sales in June were 10 percent above
a year ago. Sales have risen faster than inventories. The stock-sales ratio
for all manufacturing was 1.69 in May, compared with 2.02 a year ago. The
retail stock-sales ratio in May of 1.34 was down from 1.44 in May 1958. In
recent months, part of the accumulation in manufacturing inventories was by
steel users in anticipation of a strike, but there were gains in most other
industry groups. The largest increases in retail inventories were for
automobiles. Dealers' inventories at the end of June were close to record
levels, but in relation to current sales the stock-sales ratio is considerably
below June 1958.
The trend in outlays for new construction in the past year has been
dominated by residential outlays which in the second quarter of 1959 were
36 percent above a year earlier. Residential outlays have leveled out in
recent months and from May to June rose less than seasonally. The number of
new nonfarm housing starts in June was at an annual rate of 1,370,000 units,
compared with the 1,432,000 peak of December 1958. The tightening of credit,
particularly during the last 6 months, has tended to restrict the volume of
new housing starts by increasing the cost of financing and reducing the flow
of funds into mortgages.
Capital spending by business for 1959 is expected to total $32- billion,
up 7 percent from 1958, according to a recent survey conducted by the
Securities and Exchange Commission and the Department of Commerce. While
industrial and related construction is substantially below a year ago, con-
tract awards have turned up recently for the first time since 1957. In June,
most private nonresidential construction outlays rose more than seasonally.
Industrial building outlays, while 14 percent below a year ago, were up 5 per-
cent between May and June. According to the recent McGraw-Hill survey of
spending plans, business intended to spend a higher proportion of its capital
outlays for new equipment in 1959 than in any previous year.
Purchases by Federal, State and local Governments of goods and services
in the first quarter of 1959 were at an annual rate of $97.4 billion, about
$8 billion above the first quarter of 1958.
For the first 11 months of fiscal year 1958-59 budget expenditures for
the Defense Department rose $2.1 billion and the Atomic Energy Commission about
$300 million. CCC price support activities were mainly responsible for the
$2.3 billion increase in the Agriculture Department's expenditures from 1957-58
to 1958-59. Higher wages and salaries also have accounted for some of the
increase in expenditures.
- 6 -
DPS-55 7 JULY 1959
Net budget expenditures for the first 11 months of fiscal year 1958-59
were almost $7 billion above 1957-58. Net budget receipts were slightly
lower, reflecting the decline in business activity in 1958 upon receipts,
particularly from corporations. The budget deficit in the first 11 months of
1958-59 was $14 billion compared with $7 billion in the same period a year
earlier (table 1).
Purchases by State and local Governments increased over $4 billion
between the first quarter of 1958 and the first quarter of 1959. Rising
demand for essential public services, associated in large part with a growing
population, have contributed to much of the increase in outlays. The State
highway programs, financed in large part by Federal grants, have contributed
to the increase in purchases.
Export Balance Continues
United States exports through May of fiscal 1958-59 totaled $15.9 bil-
lion, $3.3 billion more than imports of $12.6 billion. This compares with
an export balance of 5.6 billion for the corresponding period a year ago.
Through the first 11 months of fiscal 1957-58,exports amounted to $17.3 bil-
lion, while imports totaled $11.7 billion.
The decline in exports from the 1956-57 peak continues to be attribu-
table largely to coal and coke, petroleum, steel and steel products and non-
ferrous metals. Shipments of these commodities dropped sharply after the Suez
crisis and remained below the 1956-57 level throughout 1958 because of the
recession in Europe and Japan and lower export earnings of primary-producing
countries. Exports of these items have remained relatively low through early
1959. On the other hand, United States imports were stable during the business
recession in this country and have risen to an all-time high since the
economic recovery began.
Table 1.--Federal Budget Receipts, Expenditures and Deficit for July-May
1957-58 and July-May 1958-59, with change
57581958-59 Change 1958-59
195-8 1/ from 1957-58
: Bil. dol. Bil. dol. Bil. dol.
Net budget receipts 58.3 58.1 -.2
Net budget expenditures 65.3 72.1 6.8
Major national security 39.6 41.9 2.1
Department of Agriculture : 4.4 6.7 2.3
Other 21.1 23.5 2.4
Budget deficit (-) -7.0 -14.0 7.0
Production and Employment
Industrial production reached a new record of 155 (1947-49=100) in June,
17 percent above a year ago. In early July, steel production declined
moderately but automobile output is running at about the same rate as in June.
Durable goods production at 172 was up 2 percent from May and 24 percent above
last June. Steel production averaged 90 percent of capacity in June, slightly
below the May rate, as steel users continued to build stocks in anticipation
of the work stoppage which started on July 15. Automobile production in June
was 2 percent above May and 58 percent higher than a year ago. Nondurable
output changed little between May and June and the index was 13 percent higher
than June 1958.
Civilian employment increased further in June to 67.3 million, up about
2.4 million from a year ago. There were further gains in manufacturing employ-
ment, among both durable and nondurable goods firms. The number of factory
workers in June totaled 16.5 million, up substantially from a year ago.. In
nonmanufacturing industries, employment continued to rise slowly in June and
it was 900 thousand above a year ago. Above average gains were registered
between May and June in trade, State and local Government, and services.
Unemployment in June totaled 4.0 million, up 600 thousand from May but
11 million below a year ago. A large number of students normally enter the
labor force in June resulting in a sharp rise in unemployment. The increase
in unemployment last month was about normal for that month of the year.
Unemployment, seasonally adjusted, was 4.9 percent of the civilian labor force,
unchanged from May, and compares with 4 to 4- percent in June 1955-57.
Production Advances Faster
than Rise in Jobs
The gains in output of goods and services continue to exceed increases
in labor input. The gross national product rose 9 percent from the low in the
first quarter of 1958 to the first quarter of this year. Employment in the first
quarter of this year averaged lr percent higher than in January-March period,1958.
Gains in output in relation to employment have been greatest in industry.
Output of the nation's factories and mines has risen sharply since the reces-
sion low last April but industrial employment is up only moderately (table 2).
Although manhours worked have expanded, partly through an increase in the work
week, aggregate manhours have risen much less than output. This is true of
both durable and nondurable goods industries. In mining, employment has
declined 2 percent since the botton of the recession while production of
minerals has risen 16 percent. Employment in mining has been trending down-
ward for many years through recession and recovery alike.
Changes in the pattern of factory employment and output in the present
recovery period thus far have paralleled those of the period of recovery from
the 1953-54 recession. Both the number of jobs in manufacturing and total
manhours never regained the peak level of 17.3 million reached in mid-1953.
- 8 -
Table 2.--Production, employment, and hours in
April 1958 and June 1959
: April June : change
Item : Unit 1958 : 959 :Apr. 1958
: : : : to
: : : :June 1959
All manufacturing : :
Index of production ............... :1947-49=100: 128 159 24
Manufacturing employment ..........: Thousands : 15,104 16,487 9
Average weekly hours ..............: Hours : 38.3 40.6 6
Index of production .............. 1947-49=100: 131 172 31
Durables manufacturing employment.: Thousands : 3,864 9,549 12
Average weekly hours .............: Hours : 38.8 41.2 6
Nondurables manufacturing .........
Index of production ..............:1947-49=100: 125 146 17
employment ......................: Thousands : 6,540 6,938 6
Average weekly hours .............: Hours : 37.7 39.6 5
Index of production ............... :1947-49=100: 109 126 16
Mining employment .................: Thousands : 716 701 -2
Average weekly hours ..............: Hours : 37.4 1/40.8 9
1/ May 1959, preliminary.
Agricultural and Industrial Prices
Prices received by farmers in mid-June averaged 3 percent below a year
ago. The decline was due principally to increased supplies of hogs, eggs,
poultry, and fruit. Prices of some products, particularly potatoes, averaged
higher than a year earlier.
The index of prices received by farmers in June at 242 (1910-14=100),
averaged 1 percent below May. Most of the decline was in the livestock and
products group which was down 2 percent, reflecting contraseasonal declines in
meat animals, mostly hogs and cattle. The poultry and egg index continued to
decline seasonally in June and was 27 percent below a year ago, but prices have
strengthened in the last month. Midwestern eggs, mixed colors at New York on
July 10 were up 15 percent from mid-June. Vegetable prices were down about
a sixth from mid-May to mid-June, while potato prices were up about 37 percent.
Supplies of potatoes are currently considerably smaller than a year earlier.
Wheat prices also declined seasonally with the beginning of harvest on the
1959 crop (table 3).
- 9 -
Table 3.--Agricultural and industrial prices, annual averages
1958, and June 1958 and June 1959, with change
: : :Percentage
: : : : change
Item : 1957 : 1958 June June :June 1959
: : 1958 1959 : from
S.: : : :June 1958
:1947-49 1947-49 1947-49 1947-49
:= 100 = 100 = 0100 100 Percent
Prices received by farmers: 87 92 92 89 3.3
Crops 91 90 90 93 3.3
Livestock and Products 84 93 93 86 7.5
Prices paid by farmers, in-
terest,taxes and wage rates : 114 117 117 119 1.7
Production : 108 111 112 113 .9
Wholesale prices (BLS) : 118 119 119 120 0
Farm products and processed:
Farm products : 91 95 96 90 6.0
Processed foods : 114 111 114 108 5.3
All commodities other than :
farm and foods(industrial): 126 126 125 128 2.4
Departments of Agriculture and Labor.
In contrast with declining farm product prices, wholesale industrial
price have increased about 2 percent since mid-1958. Industrial output,
which increased 17 percent since June 1958, has stimulated demand for indus-
trial products. There has been a sharp recovery in some nonfood crude materials
which in May were about 6 percent above a year ago. Leather and leather prod-
ucts prices in June were 19 percent above a year ago, reflecting a record
demand for shoes as well as smaller supplies of hides. The high rate of home-
building has increased prices of lumber and products 11 percent from June 1958.
In recent months, however, lumber prices have tended to level out as new
housing starts have eased a little. Fuel prices have declined in recent months.
Rising costs in the production of intermediate materials and finished
goods have also been a factor responsible for the increase in industrial prices.
Intermediate nonfood materials used for manufacturing in May were up about
3j percent for durables and 2 percent for nondurables from a year ago. Mate-
rials, supplies and components used in construction increased about 4 percent
between May 1958 and May 1959. Among the final products, producers' finished
goods prices increased about 2 percent in the past year and those of consumer
nondurables other than food were up a similar amount. Part of the rise in
wage costs, which amounted to about 5 percent in average hourly earnings of
factory workers between mid-1958 and mid-1959, is apparently reflected in the
higher prices of intermediate and final products.
- 10 -
DPS-55 11 JULY 1959
AGRICULTURAL EXPORTS BY DESTINATION
Exports to the Five Leading
The 5 leading outlets for United States agricultural exports-the
United Kingdom, Japan, Canada, Western Germany and the Netherlands-reduced
their takings from $1,959 million in 1957 to $1,606 million in 1958. They
received 42 percent of the $3,854 million total, approximately the same percent
of the $4,506 million total of a year earlier. The decline primarily resulted
from smaller purchases of cotton. In 1958, these countries accounted for
41 percent of the $661 million value of cotton exports, compared with 55 per-
cent of the $1,060 million in 1957. The United Kingdom and Western Germany
reduced imports of cotton by well over one-half and the other 3 countries by
one-third or more.
The United Kingdom in 1958 kept its traditional place as the best
customer for United States farm products, although shipments to that country
dropped to $409 million from a peak of $501 million 1957. Agricultural exports
in 1958 were almost $70 million above the 1950-54 average. The decline in
economic activity in Britain was particularly severe in the textile industry
and cotton purchases were reduced by aboct $80 million. Feed grain, fruit,
vegetable and nut shipments rose by $18 million, but were not large enough to
offset smaller exports of food grains, fats and oils, and tobacco. Feed grain
purchases, totaling $101 million, in 1958 compared with $87 million the year
before, reflected growing livestock numbers and a drop in the production of
oats and barley in 1958. Tobacco exports were 3 percent below the previous
year. The United States share in the United Kingdom's tobacco market declined
from 78 percent in the immediate pre-war period to 52 percent in 1958 because
of: (1) a long-term guaranteed purchase agreement between the United Kingdom
and Rhodesia, (2) a preferential import duty system which imposes a higher
tariff on non-Commonwealth tobacco, and (3) a regulation in the United Kingdom
which specifies the maximum percentage of tobacco from dollar sources which a
British firm may use in the manufacture of tobacco products for home consump-
United States agricultural exports to Japan totaled $361 million in
1958, $93 million below the previous year and about $35 million below the
1950-54 average. Although exports of cotton to Japan fell to a 5-year low of
$118 million, that country was the largest United States outlet for cotton.
Shipments of soybeans have been steadily rising in recent years because of their
importance as a cheap protein food. Exports of soybeans were further stimu-
lated after May 1958 when Japan broke trade relations with Communist China, a
major exporter. Among the other commodity groups, shipments of food grains,
animal products, fruits and vegetables declined, while those of tobacco, and
feed grains rose.
Agricultural exports to Canada amounted to $344 million in 1958, only
$10 million below the record $354 million registered in 1957, and $74 million
above the 1950-54 level. Canada was the principal export market for United
States fruits, vegetables and animal products. The value of exports of fruits
and vegetables has more than doubled since 1950, and in 1958 accounted for
- 12 -
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almost 50 percent of farm product exports to Canada. Shipments of cotton fell
from $43 million in 1957 to $29 million in 1958 because of increased Canadian
mill consumption of Central American and Mexican growths.
The drop in agricultural exports to Western Germany, from $411 mil-
lion in 1957 to $286 million in 1958, resulted from smaller shipments of food
grains, cotton, fats and oils and animal products. However, exports in 1958
were only 4 percent below the 1950-54 average. Increases occurred for feed
grains, tobacco, fruits and vegetables. United States exports of food grains
have declined in recent years because of increased production in Germany and
greater competition from other wheat exporting countries. In 1958, wheat
output in Germany was 23 percent above the 1950-54 average, while rye was
12 percent higher. Larger tobacco purchases reflected a rebuilding of stocks,
economic prosperity and a greater popularity for American type cigarettes.
The Netherlands received $205 million of United States farm products
in 1958 and replaced India as the fifth best market. The Netherlands usually
ranks among the top 5 markets. Agricultural exports in 1958 were 14 percent
below those in 1957, but 23 percent higher than 1950-54. Many agricultural
commodities shipped to the Netherlands are processed and re-exported to other
countries. Exports of all commodity groups except feed grains were below the
1957 level. Feed grain exports rose by $35 million as the Netherlands shared
in the striking rise in European demand for United States feed grains.
United States Agricultural Exports
to Smaller Markets Increase
Among the 10 leading countries, only Spain increased takings of United
States farm products in 1958 (table 4). Agricultural exports to Spain rose
from $100 million in 1957 to $144 million in 1958 because of a substantial in-
crease in government sponsored shipments of cotton and fats and oils. However,
7 of the next 10 market outlets increased their purchases. Larger shipments of
tobacco, fats and oils, and dried beans resulted in a $2.8 million increase in
exports to Mexico. United States cotton shipments to France in 1958 were about
40 percent larger than the year before and sufficient to offset smaller exports
of food and feed grains and fats and oils. French textile mills operated at
relatively high levels through October 1958, despite declining demand for
cotton products. A gain of $1.3 million was registered in Venezuela because of
larger shipments of wheat and flour. United States exports to Poland rose by
$16.6 million in 1958, reflecting increases in feed grains, cotton rye and
hides and skins. Approximately 84 percent of these exports were shipped under
Public Law 480. Poland is the only country in the Soviet Bloc eligible to
receive farm commodities acquired from ommodity Credit Corporation stocks.
Larger shipments of United States food grains and cotton to the Philip-
pines in 1958 increased exports $7.4 million above the previous year. Cotton
production in the Philippines provides an insignificant part of total mill con-
sumption in that country. Pakistan's 10 percent increase in takings of
United States farm products resulted from a sharp rise in food grains. Al-
though production of wheat and rice has risen in recent years in Pakistan,
- 13 -
domestic output is not adequate to fulfill increased consumption resulting
from higher standards of living and rising population. Drought in Israel
caused a poor feed grain crop, particularly barley, and spurred a $5.9 mil-
lion increase in United States feed grain exports. Furthermore, larger ship-
ments of fats and oils, cotton and some animal products were made. Total
agricultural exports to Israel were at the exceptionally high level of $54 mil-
lion in 1958, about $8.2 million above the year before.
Exports to Many Countries are under
Approximately 33 percent of United States agricultural exports in 1958
were non-dollar shipments, including sales for foreign currency, barter,
famine relief and donations. Farm products shipped under Government programs
went to all major world areas except Canada. Even though Europe accounted for
46 percent, less than 5 percent of exports to the 3 main markets in Europe
were Government-financed. The most important countries for Government spon-
sored exports to Europe were Spain, Italy, France, Poland, Turkey and Yugosla-
via. Shipments to Asia, where many countries lack dollars, represented 43 per-
cent of Government-financed exports. Almost all exports shipped to India,
DESTINATION OF U. S. AGRICULTURAL EXPORTS
Calendar Year, 1958
OCEANIA ERN GERMANY
CANADA + + +
U. S. AGRICULTURAL EXPORTS U. S. AGRICULTURAL EXPORTS
O OR RE T E RUNKTED KINGDOM+
SOU FOREIGN AGRICULTURAL 22SRVIC. UDA
'LATIN AMERICA/+ +
,, //// EUROPE 485% .::
UrE: FOREIGN AGRICULTURAL SERVICE, USDAGERAN
SOUprE: FOREIGN AGRICULTURAL SERVICE, USDA
U.S DPRMETOFARCUTRENG 78-5 7 ARCUTRL AKEIGSEVC
- 14 -
NEG. 7383-59 (7) AGRICULTURAL MARKETING SERVICE
U. S. DEPARTMENT OF AGRICULTURE
Jordan, Pakistan, Formosa and Vietnam were under Public Law 480 or the Mutual
Security Program. Latin America and Africa accounted for 8 and 2 percent,
respectively, of Government financed exports in 1958. Oceania received less
than 1 percent of exports under Public Law 480 and Mutual Security.
Cash receipts from farm marketing in the first half of 1959 totaled
approximately $13.9 billion, compared with $14.0 billion in the same period
of 1958. Prices received by farmers averaged about 3 percent lower than in
1958, while the volume of marketing was up nearly 3 percent.
Farmers received about $9.0 billion from livestock and livestock prod-
ucts in the first half of 1959, or 3 percent less than in the same period of
1958. Total meat animal receipts showed little change. Receipts frno cattle
rose substantially as prices increased but receipts from hogs dropped sharply as
prices more than offset larger marketing. Receipts from poultry and eggs were
down because of lower prices. The January-June 1959 volume of marketing of
livestock and products was up 2- percent from a year earlier because of larger
marketing of hogs and record-breaking sales of broilers.
Crop receipts of $4.9 billion in the first half of 1959 were about
5 percent above the revised estimate for the first half of 1958, with increased
marketing more than offsetting slightly lower prices. Movement to market of
last year's record wheat crop was the principal factor in maintaining cash
receipts in the first half of 1959 above a year earlier. Receipts from oranges,
corn, and tobacco were up also. These increases were partly offset by smaller
marketing of sorghum grain and lower average prices for potatoes.
Preliminary estimates indicate receipts from farm marketing of $2.3 bil-
lion in June 1959, up slightly from a year earlier. Receipts from livestock
and products are tentatively estimated at $1.5 billion, down about 4 percent
from a year ago. Receipts from crops, estimated at $0.8 billion, were somewhat
higher than June 1958, mostly due to the earlier 1959 wheat harvest.
LIVESTOCK AND MEAT
Livestock slaughter and meat production will continue above year-
earlier levels during the next few months. Hogs are expected to provide most
of the increase. Cattle slaughter may be up a little. Hog prices had declined
appreciably by late July, and probably will remain relatively low. Prices of
grass cattle are down somewhat and could decline a bit more. Fed cattle
prices may change little. Sheep and lamb marketing are expected to be up
from last summer and prices will likely average about the same or a little
lower than a year ago until late in the year.
- 15 -
Hogs slaughtered in July began to include some from the 1959 spring pig
crop which was 12 percent larger than the 1958 crop. These overlapped with
remaining hogs from 1958 fall farrowings. As pork continued to move out of
cold storage in July from stocks a third larger than last year, prices of hogs
declined. Same price recovery is likely, but because marketing will continue
large, it will be temporary. Some further dip in price is probable about mid-
fall. But on the whole, the summer and fall season may be marked by con-
siderably less seasonal change in hog prices than usual.
Producers' intentions for this fall are for 8 percent more farrowings
than last fall. If these plans are carried out and the uptrend in litter size
continues, the total pig crop this year would be 104.5 million head, 10 per-
cent more than last year and a peacetime record. Hence, through at least next
spring, hog prices will stay below a year earlier. The price outlook for hogs
justifies producers' considering the prospects carefully before making their
plans for 1960 farrowings.
Cattle prices are likely to be relatively stable the rest of this year.
Marketings of fed steers and heifers will remain large since the number of
cattle and calves on feed July 1 in 13 leading States was 10 percent greater
than last July. Producers' intentions as judged by the experience in previous
years, indicate about an equal gain in marketing during July-September over
Non-fed cattle slaughter this summer will be as large or a little larger
than the low volume last summer. Cow slaughter will continue small but is
expected to climb to about last summer's unusually low rate. Same declines
are possible in the price of cows and feeder cattle.
Sheep and lamb prices will likely decline somewhat as slaughter rises
seasonally this summer, but will probably average near those of last summer.
Demand for meat is expected to continue strong. Retail prices of meat
are expected to be unusually stable the next few months, except for lower
prices of pork.
Prices for dairy products are stable near year earlier levels. Milk
production on farms in the first half of 1959 was slightly below a year
earlier. Total civilian consumption is up slightly and purchases under the
support program are down a little.
The rate of milk production per cow has continued to set new record
highs. But with strong markets for beef cattle, the culling rate among milk-
ing herds has continued relatively high. As a result, total milk production
did not quite equal that of a year earlier during the first half of 1959.
Retail prices for fluid milk declined less between the first and
second quarters this year than last. Beginning with April, they have been a
little above last year. But with record consumer incomes, consumption of
fluid milk per person has been fully equal to a year earlier, if not a little
higher. Per capital consumption of frozen dairy products is showing a sizable
increase this year, reflecting also the larger incomes and, probably even
more, the reduction in retail prices on larger consumer size packages of
ice cream. Cheese consumption also is holding near last year's high levels.
So far in the marketing year which started April 1, Government
purchases of butter and cheese, in terms of milk equivalent, have been around
6 percent under the level of a year earlier. However, purchases of nonfat
dry milk continue near the record level of the 1958-59 marketing year.
POULTRY AND EGGS
The outlook is for limited seasonal egg price rises in the next few
months, with the increases--as usual--most pronounced for large eggs of the
better grades. However, U. S. average prices are not likely to exceed 1958
for any length of time until possibly the last month or two of the year.
In mid-June egg prices began a sharp recovery from the very low levels
to which they had fallen in the preceding 2 months. Following a slight
recession from their peak, in early July nearby eggs in New York City, at
44 cents per dozen for large whites, were about 3 cents below the year before,
while some quotations on the West Coast were even closer to last year.
Chicago prices were about 8 cents below 1958. Earlier this spring prices had
been generally 10 to 14 cents per dozen lower than a year earlier.
In mid-June the U. S. average price received by farmers for eggs was
24.9 cents per dozen, compared with 35.2 cents in June 1958. The rapid rise
in egg prices since mid-June has brought the U. S. average price much closer
Seasonally declining supplies of eggs are a factor in the recent rise,
following a greater than seasonal reduction in the size of the national flock
during May and June. In addition, considerable U.S.D.A. purchases of dried
egg, and an extension of the purchase program to frozen egg, have helped to
absorb the heavy egg production relative to last year. Production in January-
June was 5 percent--4 million cases--above 1958.
Increased commercial storage also helped to absorb the additional egg
production. Stocks on June 1 included 0.3 million cases more shell eggs than
last year, and the equivalent of more than 0.5 million cases more than last
year of eggs in frozen form. Use of eggs per person by civilian consumers in
January-May 1959 was not above the same period of 1958 even though retail
prices ranged from 2 percent below a year earlier in February to 20 percent
- 17 -
- 18 -
below in May. In the first half of each year consumption is seasonally large
and relatively less responsive to price changes than later in the year. In
the remainder of 1959, per capital civilian consumption is likely to exceed
the corresponding months of 1958, reflecting continued large production that
is in prospect, ample supplies in storage, and lower retail prices.
Despite the significant reduction in the size of the national laying
flock during May and June, the July 1 flock was only 1 percent smaller than
last year. The number of pullets for laying flock replacement to mature
before October 1 is larger than a year ago, and rate-of-lay per bird still
increases from year to year. As a result, monthly egg production in the
remaining months of 1959 is likely to exceed 1958. On January 1, 1960, the
number of layers on hand will probably be almost as large as the 327 million
of January 1, 1959.
Broiler prices picked up noticeably during the last half of June. A
further rise is likely by late July or August, because weekly chick placements
have been declining, and since early May have been below the year before. The
reduction in broiler marketing will be greatest in late July and August when
consumer demand for frying chicken is usually at its seasonal peak.
The mid-June U. S. average broiler price, 15.8 cents per pound, was the
lowest mid-month average to date for 1959. This did not reflect the price
increases of 2 cents per pound or more which occurred later in the month.
Average prices in late July and August are likely to exceed the 17+ cents of
If broiler prices increase as anticipated, weekly egg settings and
chick placements are unlikely to continue 7 and 8 percent below last year, as
they had been in recent weeks.
The 1959 turkey crop is likely to slightly exceed the record of 81 mil-
lion turkeys raised in 1957. An increased proportion of the crop will be
Beltsvilles and large white turkeys, and fewer will be Bronze, than in both
1957 and 1958.
The increase from last year in the turkey crop came in the hatches of
May and earlier. This indicates larger slaughter in the late summer months
than last year, much of which will move into storage until the holidays.
Recent prices for hens and other lightweight birds have been at a low level
which may be reflected in offering prices for such birds during the into-
storage season. Last year, USDA bought 23 million pounds of frozen turkey
from August through December.
Turkey slaughter after October is likely to be below 1958 since the
June hatch was smaller than a year earlier, and settings have since declined
further. This, coupled with the facts that part of the increased turkey
crop is already slaughtered and eaten, and that storage stocks are
below last year, are plus factors in the turkey price outlook for the
closing months of this year.
OILSEEDS, FATS, AND OILS
Prices received by farmers for soybeans this summer are expected to
average near the 1958 loan rate of $2.09 per bushel, or about the same as
last year. If another large crop is in prospect this fall, soybean prices
later in the summer probably will begin adjusting to the lower 1959 soybean
loan rate of $1.85 per bushel. Processors and exporters of beans likely will
reduce their inventories to a minimum in anticipation of lower prices for
1959 crop soybeans. The timing of the 1959 harvest will be an important
factor determining the beginning of the price adjustment to the lower support
Soybean crushing in October-June 1958-59 (June estimated) were
about 312 million bushels, around 45 million more than the previous year.
Some seasonal decrease is likely in the July-September quarter, but crushings
for the entire marketing year probably will reach a new high of about
400 million bushels, compared with 354 million last year.
Soybean exports continue to run way ahead of last year and are
expected to set a new record of around 105 million bushels for the 1958-59
marketing year. This compares with 85 million the previous year. From
October 1958 through July 10 about 91 million bushels (based in part on
inspection data) were shipped out, compared with 74 million a year earlier.
Large quantities are moving to Western Europe, Japan, and Canada. The
improved European demand stemmed from shorter copra supplies and reduced
Northern European oil stocks. Exports to Japan are up as a result of the
break in trade relations between that country and Communist China.
Soybean oil prices (crude, Decatur) this season have declined from
10.4 cents in November to 9.3 cents in February. They have remained
relatively stable since, averaging about 1.5 cents below last year and the
lowest since the spring of 1941.
Bean oil prices over the next few months probably will continue below
last year in spite of record disappearance, reflecting large supplies of
soybeans, soybean oil and competitive food fats. Soybean oil prices for the
entire 1958-59 marketing year probably will average about 9.5 cents per pound,
compared with 10.8 cents last year.
Exports of soybean and cottonseed oils in October-May 1958-59 totaled
724 million pounds compared with 672 million a year earlier. Exports
of these edible vegetable oils under PL 400 during the 8 months amounted
to 439 million pounds compared with 359 million the previous season. In
view of the lag in purchases of edible oils under authorizations issued
and effective in the current marketing year, it now appears that a good
part of the 1.3 billion pounds of program oil may remain unshipped on
September 30, 1959. Total exports of soybean and cottonseed oils for the
entire 1958-59 marketing year may be about 1.4 billion pounds compared
with 1.0 billion last year and the record 1.2 billion in 1956-57.
- 19 -
Lard output in 1959-60 is expected to increase around 10 percent from
the 2,675 million pounds now estimated for the current marketing year. The
increase would mainly reflect a rise in hog slaughter. The 1959 pig crop,
which will provide most of the hogs for slaughter in 1959-60, is expected to
total 104.5 million head compared with 94.7 million for 1958.
The 1959 flaxseed crop was indicated as of July 1 at nearly 28 million
bushels, about 30 percent less than the 40 million bushels produced last year.
The drop reflects the decline in acreage, due mainly to the sharp drop of
40 cents per bushel in the 1959 support price, and relatively poor yield
prospects. A flax crop the size of the one indicated would be about equal to
probable domestic requirements, and prices to farmers would likely average
near the support price of $2.38 per bushel.
The July 1 Orop Report indicated soybeans planted alone for all purposes
at 22.9 million acres, 8 percent below 1958. About 22.0 million acres of the
total will be harvested for beans if growers carry out their intentions.
Cottonseed output is expected to rise sharply this year reflecting the 28 per-
cent increase in cotton acreage planted.
The first production forecasts for soybeans and cottonseed will be
released in August.
Growing conditions have been generally favorable for feed crops through
early July, and another record supply of feed grain is in prospect for 1959-60.
Based on early July indications, feed grain production will be only slightly
below the record production of 158 million tons in 1958. The indicated
bumper corn crop of around 4.2 billion bushels would be more than 400 million
bushels above the 1958 crop. But this is expected to be offset by smaller
crops of oats, barley and sorghum grain. The total carryover of feed grains
into 1959-60 is expected to be up 8 to 10 million tons over the 59 million
in 1958-59. This would add to a total feed grain supply a little above the
record supply last year.
Hay crops and pastures have made about average growth so far this year.
The 1959 crop was estimated in July at 110 million tons, 10 percent below the
big 1958 crop. Hay supplies per animal unit are below the big supplies of the
past 2 years, but are a little above the 1953-57 average. The conditions of
pastures averaged 83 percent of normal on July 1, which was near average for
that date, but 5 percentage points below a year earlier.
Feed prices were slightly to moderately higher than a year earlier
during most of the past winter and spring. But this summer they have shown
less strength than in the summer of 1958 and cash prices of feed grains at
terminal markets in early July were about 4 percent below those of a year
earlier. Wholesale prices of high protein feeds averaged 8 percent lower.
- 20 -
With the big 1959 feed grain production in prospect and generally lower 1959
supports, feed grain prices are expected to continue a little below a year
earlier this summer and fall. However, smaller crops of oats and barley are
expected to hold prices of these grains higher relative to the support rates
than in 1958.
The price of No. 3 Yellow corn at Chicago declined 5 cents per bushel
from late June to an average price of $1.24 for the week ended July 10. This
was 10 cents lower than a year earlier. Prices of oats and barley at Minneap-
olis remained generally firm through the first half of July. Minimum sales
prices for CCC oats, barley and sorghum grain for domestic use, announced for
July, which are based on the 1959 supports, are well below prices in effect
during the 1958-59 season. The sale price on corn will be adjusted to the 1959
support basis in October.
The total wheat supply for the marketing year beginning July 1, 1959 is
now estimated at a record of about 2,450 million bushels, 4 percent above the
previous record of a year earlier and 20 percent above the 1953-57 average.
The increase results from a substantially larger carryover than a year earlier.
A much smaller crop is in prospect.
The July 1, 1959 carryover is expected to be about 1,290 million
bushels. The official estimate of stocks of old-crop wheat in all positions
on July 1 will be released July 24. The bulk of the carryover will again be
held by CCC. The crop was forecast at 1,155 million bushels as of July 1.
The supply estimate also includes an allowance for imports of about 8 million
bushels, mostly of feeding quality wheat.
Domestic disappearance for 1959-60 is estimated at about 625 million
bushels, slightly above the marketing year just ending. Exports are assumed
at about 425 million bushels, less than the 445 million estimated for 1958-59
because of favorable crop prospects in importing countries. This would leave
a carryover July 1, 1960 of about 1,400 million bushels, over 100 million
bushels above the estimated carryover this July and a new record.
The average price received by farmers in mid-June was $1.69, down from
the season's high of $1.77 in the two previous months. In mid-June a year
ago, the average price was $1.70. On July 20, prices of No. 2 Hard Winter at
Kansas City and No. 2 Soft Red Wheat at St. Louis were only about 10 cents
below the new effective support. This is not as much as usual at this time of
the year. Moreover, at many country points prices have been above the effec-
tive support level. Wheat prices in the hard spring wheat area, where wheat is
still to be harvested and where dry conditions have reduced crop prospects, are
above the net support level for new crop wheat. Prices in the Pacific North-
west, where wheat has not been harvested, are slightly above the net support.
- 21 -
The relative strength this year reflects adequate storage space for withholding
from the market, as a result of new construction, and reduced production from
the record level of last year.
A minimum 1960-crop wheat national average support price of $1.77 was
announced on July 8. This advance support price reflects 75 percent of the
estimated parity price. If marketing quotas are disapproved in the July 23
referendum, the support level will be at 50 percent of parity, or a national
average of about $1.18 per bushel. Compliance with allotments would continue
to be a condition of eligibility for the lower support price.
Because of larger crops of most fruits this year than in 1958, total
supplies of fresh deciduous and citrus fruits are expected to be somewhat
larger this summer than a year earlier. Until supplies from the new packs of
processed fruit become available this summer and fall, supplies of frozen
orange concentrate will continue much heavier, those of dried fruits lighter,
and those of other classes of processed fruits and fruit juices adequate for
the usual needs. Although demand for fruit is expected to continue strong,
season average prices for some fruits probably will be down from 1958 because
of larger crops.
Production prospects in early July for deciduous fruits were for total
1959 production of these fruits to be about 6 percent above 1958, and 10 per-
cent above average. The indications were for much larger crops of apricots,
sour cherries, plums, and prunes; moderate increases for peaches, pears, and
grapes; moderate decreases for apples and sweet cherries; and a large drop for
strawberries. The increase in peaches is mostly in the California clingstone
crop, which is used mostly for canning. Excluding clingstones,the U. S. peach
crop is a little smaller than in 1958, but considerably larger than average.
Production of dried prunes in California is expected to be more than l1 times
the relatively light tonnage in 1958, but a little below average. July 1
prospects for tree nuts were for a record crop of almonds, and for a heavier
crop of filberts, and a lighter crop of walnuts than in 1958.
Movement of canned fruits from canners to the distributive trade was
good for a number of months, but slowed down during April and May 1959, as
wholesalers reduced their stocks, apparently in anticipation of increased
packs of some items at lower prices than in 1958. On April 1, 1959, canners'
stocks of 9 items of canned fruits combined were about 13 percent smaller than
a year earlier, and on June 1 they were only 2 percent smaller. In contrast,
wholesale distributors' stocks of 7 of these 9 items on April 1, 1959 were
about 5 percent larger than on that date in 1958, but by June 1 had dropped
to about 9 percent smaller than a year earlier. Some increase in the total
pack of canned fruits in 1959 is expected.
- 22 -
As usual, most of the oranges marketed fresh during summer are Califor-
nia Valencias. The crop this year is more than l times the small crop last
year, but moderately below average. Prices are expected to continue under the
relatively high prices of last summer. Supplies of lemons continue large at
prices not greatly different from a year ago. But a larger crop of Florida
limes is bringing lower prices this summer. Supplies of grapefruit from the
California summer crop are somewhat larger than a year ago. Even so, supplies
will be seasonally light this summer as usual; they will become heavy again in
fall as fruit becomes available from the new crop in Florida, the main producer
With the 1958-59 season for making frozen orange concentrate in Florida
practically ended by July 4, approximately 80 million gallons of this product
had been packed. This is about 11 percent above the previous record in 1956-57
and 40 percent larger than the relatively light pack in 1957-58. Packers'
stocks on July 4 were about 55 percent larger than a year earlier, but only
16 percent larger than two years earlier. Retail prices are expected to con-
tinue somewhat below the relatively high prices of last summer. Output of
Florida canned single-strength orange juice in 1958-59 was about 26 percent
smaller than in 1957-58, and stocks on July 4 were about 3 percent below a
year earlier. But stocks of other canned citrus juices were considerably
larger. Cold-storage stocks of frozen deciduous fruits and berries (excluding
juices) were about 17 percent smaller on July 1, 1959 than a year earlier, due
partly to much lighter stocks of strawberries.
Vegetables for fresh market, excluding melons, may be in slightly
larger supply this summer than last. Early July estimates for 18 vegetables
making up about two-thirds of total summer tonnage indicate an output 3 percent
above last summer and materially above the 1949-57 average. Among individual
vegetables, production of summer cabbage, cauliflower, lima beans, eggplant,
beets, and green peas are substantially smaller than last year, and carrots,
and cucumbers moderately smaller. But production of early summer onions,
green peppers, and summer lettuce is materially larger than a year ago, and
summer sweet corn moderately larger. Prospective production of watermelons
for summer harvest is down 15 percent from the high level of a year earlier,
but slightly above average. Combined output of early and mid-summer canta-
loups is about in line with that of a year ago.
If present production prospects materialize, prices to growers for
fresh vegetables during the next 6 to 8 weeks, are expected to average about
the same as those of a year earlier. Prices at retail may be a little higher.
- 23 -
Supplies of processed vegetables continue substantially above average
levels. Acreage of vegetables for processing in 1959 is down 4 percent from
last year, and yields may average below the high levels of last year. But some
expected reduction in the canned pack, compared with 1958, will be partly off-
set by larger stocks at the beginning of the current season. Frozen supplies
are expected to be moderately larger than last season.
POTATOES AND SWEETPOTATOES
Production of potatoes for summer harvest promises to be moderately
smaller than last year. The early summer crop is down 7 percent, and the
important late summer crop is down 3 percent. Also, there is considerably
less overlap of supplies from late spring areas than last year. Prices both
at farm and retail are expected to average materially above the low levels
of last summer. Acreage of potatoes for fall harvest is 2 percent smaller
than last year.
Early reports indicate that sweetpotato production will be fractionally
larger than in 1958, but a tenth oelow the 1949-57 average. Prices to growers
this summer may average near those of a year earlier.
DRY BEANS AND PEAS
Dry edible beans are expected to be in about the same supply during
the 1959-60 season as a year earlier. But prospective supplies of dry field
peas are substantially larger than the small supplies of last season. Prices
received by growers for 1959-crop dry peas are expected to average well below
the relatively high levels for the 1958 crop. Barring another poor bean crop
in Europe and a consequent strong export demand for U. S. beans, prices to
growers in the 1959-60 season are likely to average substantially below those
of the previous season.
About 15.9 million acres were planted to cotton in 1959 according to
the July 8 estimate of the Crop Reporting Board. This was 3.5 million acres
or 28 percent above 1958 and 1.6 million acres above 1957. Total cotton
allotments for 1959, including acres added by upland farmers electing choice
(B) and allotments for extra-long staple amounted to 17.4 million acres. An
estimated 571,000 acres were placed in the Conservation Reserve of the Soil
Bank, leaving 16,830,000 allotment acres available for planting. Thus,
940,000 acres, or 5.6 percent of the remaining allotment acres, were not
- 24 -
Underplanting was proportionately greatest in the Southeast, indicating
that in these States a considerable proportion of the land which had been in
the Acreage Researve of the Soil Bank for 2-3 years has not been returned to
cotton production. In New Mexico, Arizona, California, Missouri, the irrigated
areas of Texas, and the Delta counties of the Central States the allotted acre-
age was generally planted.
Disappearance during the current season is estimated at about 11.5 mil-
lion bales. This assumes that mill consumption will total 8.6-8.7 million
bales and exports will be around 2.8 million bales.
Domestic mill consumption of cotton for the 10 months ending May 31, 1959
totaled 7.2 million bales, 400,000 above the same months a year earlier. With
mill margins at their best levels in 2- years, unfilled orders high, stocks
relatively low, and summer shutdowns expected to be considerably shorter than
last year, the high rate of consumption is expected to carry through the end
of the current season.
Exports have been running at about half of last year's total during
most of the season. Through May, they totaled 2.4 million bales compared with
4.8 million during the same 10 months of the 1957-58 season. CCC sales for
export and registrations under the 1958-59 payment-in-kind program through
July 13 totaled 2,768,000 bales. Substantial sales or registrations are un-
likely to take place during the remainder of the season.
The total U. S. supply of all kinds of cotton in 1958-59 was about
20.3 million running bales, 2.1 million below the previous season. By May 31
the total supply had declined to 10 million bales, about the same as a year
earlier. Of this, about 1l million bales were held by mills and other con-
suming establishments, CCC holdings totaled approximately 7.4 million bales,
while "free" stocks amounted to approximately 1.6 million bales. Privately
held stocks thus amounted to 3.1 million bales, less than half of the esti-
mated 6.3 million held on May 31, 1958.
The high level of CCC holdings resulted from a record 60 percent, or
6.8 million bales of the 1958 crop having been placed under loan. As of
July 10, 6.1 million bales remained outstanding or under loan while CCC held
about 1.1 million bales of 1957 and prior crop cotton in its inventory.
The average price received by farmers for upland cotton in mid-June was
31.48 cents per pound. The June price was equal to 83 percent of parity and
2.39 cents above June 1958. The average price of Middling-inch cotton at the
14 spot markets reached a season low of 33.61 cents per pound on July 16,
compared with an average of 34.50 in June and a season average through June
1959 of 34.55 cents. The downward trend in recent weeks represents reduced mill
demand during the vacation shutdown period as well as discounting of current
prices in anticipation of the prices at which CCC will sell its holdings of
upland cotton after July 31, 1959.
- 25 -
- 26 -
The significant improvements in the world wool demand and prices have
continued in recent months. The closing auctions of the 1958-59 Australian
wool selling season were firm as most wools held steady. But in the U. S.,
mill vacation closings plus a tendency on the part of domestic wool sellers to
hold firm on prices whenever possible has slowed the wool market in this
Early in June, Boston quotations for domestic wools rose from the levels
which had prevailed since early May, as of July 10, ranging from 15 to 20 cents
a pound, or 13 to 22 percent above mid-January. The average prices received
by domestic growers for shorn wool in mid-June was 42.9 cents a pound, grease
basis, .2 cent above May and 4.3 cents over June 1958.
Incentive payments on shorn wool marketed between April 1, 1958 and
March 31, 1959 will soon be received by sheep and lamb producers. The shorn
wool incentive rate is 70.3 percent, the amount which brings the national
average return for wool from the 36.4 cents per pound received by growers up
to the 62-cent incentive level. To determine the wool incentive payment for
individual producers, the rate of 70.3 percent is applied to the dollar return
each producer received for wool after paying market charges.
No payments will be made on mohair sold during the 1958 marketing year
as the average price of 72.3 cents per pound received by producers was above
the 70-cent incentive level.
The wool program and incentive levels for the current marketing year
are the same as for the 1958 season. The firming of prices this season indi-
cates that incentive payments for the 1959 clip will be below the $85 million
estimated for the 1958 season.
United States consumption of apparel wool during January-May 1959 to-
taled 111 million pounds, scoured basis, 34 percent more than a year earlier.
Consumption of carpet wool during the same 5 months totaled 72 million pounds,
a gain of 69 percent. The May 1959 carpet wool consumption was 120 percent
more than in May 1958. Total raw wool consumption during the first 5 months
of 1959 of 183 million pounds was about 46 percent above a year earlier and
about equal to total consumption during the first 5 months of 1957.
Following a substantial decline during most of 1958, imports began
to increase in the final months of last year. During January-May 1959 imports
for consumption, clean basis, totaled 147 million pounds or double a year
earlier. Of the 73 million-pound increase, 22 million represented dutiable
The July indication for production of all types of tobacco combined at
1,783 million pounds is about 3 percent above the total 1958 crop but the third
smallest since 1943. Acreage of tobacco for harvest this year is estimated to
be 7 percent above 1958 when it was the lowest in 50 years. As of July 1,
average yield per acre of all types combined was indicated to be down about
4 percent from that realized last year--largely due to the lower prospective
yield for flue-cured. Prospective yields per acre for burley and the
Kentucky-Tennessee fire- and dark air-cured types are above those of 1958.
The July indication was for a total flue-cured crop of 1,082 million
pounds, slightly above the 1958 outturn. Flue-cured acreage increased 9 per-
cent but average yield per acre is indicated to be 8 percent lower than the
record high of last year. Carryover of flue-cured on July 1, 1959 is esti-
mated at 2,195 million pounds--5 percent below a year ago and nearly 13 per-
cent below the record high of 2 years ago. Carryover plus this year's pro-
duction will provide a total 1959-60 supply of about 3,277 million pounds--
3 percent less than for 1958-59 and 11 percent below the record level of
The domestic use of flue-cured in the year ended June 30 is estimated
at 750 million pounds--about 15 million pounds larger than in the previous
year. Exports at about 445 million pounds (farm-sales weight) were fairly
near the level of 1957-58 and also the recent 10-year average.
The southernmost auction markets for flue-cured--those in Florida and
Georgia--opened July 23. Price data for early sales were not available in
time for this issue. Markets in South Carolina and Border North Carolina
start July 30. Other markets in North Carolina and those in Virginia will be
opening during August and September.
The Government support level for 1959 crop flue-cured is 55.5 cents
per pound--nine-tenths of a cent above last year. Price support for flue-
cured is based on 90 percent of its parity price as of July 1.
Marketings of the 1958 crop of Maryland tobacco has been about com-
pleted. Auction markets closed July 17. The auction season average was
61.8 cents per pound--40 percent higher than last season and 21 percent above
2 years ago. The indicated 1959 crop of Maryland tobacco as of July 1 is
33 million pounds--6 percent larger than the current estimate for 1958.
The 1959 crop of burley tobacco, estimated at 486 million pounds as of
July 1, is nearly 4f percent above last year. This year's crop plus the carry-
over is expected to provide a total supply for 1959-60 of about 1,733 million
pounds--l percent below the 1958-59 level.
Flue-cured, burley and Maryland tobaccos are mainly cigarette tobaccos.
Fire-cured and dark air- and sun-cured tobaccos are used mainly in snuff and
chewing tobacco. According to July 1 indications, the 1959 fire-cured and
dark air-cured crops will each be up 15 percent from last year's record lows.
The 1959 sun-cured tobacco crop is indicated to be 44 percent above 1958.
The July indication for cigar filler tobacco was for about a 12 percent
increase from last year. The Connecticut Valley cigar binder crop is indicat-
ed to be 54 percent above the very small outturn of last year but far less
than those prior to 1956. The development of processed binder sheet has
sharply reduced cigar manufacturers' requirements for Connecticut Valley types.
The production of the Wisconsin binder types may be 12 percent larger than in
1958. A substantial share of Wisconsin tobacco is utilized in scrap chewing
tobacco. Indicated production of shade-grown cigar wrapper in the Connecticut
Valley and Georgia-Florida is up 6 and 21 percent, respectively, from last
- 27 -
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