The Demand and price situation

Material Information

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


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:
This item is a work of the U.S. federal government and not subject to copyright pursuant to 17 U.S.C. §105.
Resource Identifier:
004884312 ( ALEPH )
01768307 ( OCLC )
63024527 ( LCCN )
0501-9133 ( ISSN )
HD1751 .A91853 ( lcc )
338 ( ddc )

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 has the following downloads:

Full Text

-< /

June 1957

JUNE 25, A.M.







Approved by the Outlook and Situation Board, June 19, 1957
Increased spending for farm products this year reflects the rise
of some 5 percent in consumer income since the first quarter of 1956.
Total expenditures for food were up nearly 5 percent. Food expendi-
ture per capital rose by 3 percent, about the same as the gain in food
The increase in retail cost of food was accompanied by a propor-
tionate rise in costs of marketing and processing food as well as an
increase in value at the farm level. Thus the farmers' share of
larger outlays for food in the first quarter was around 39 percent of
the consumer food dollar, the same as a year earlier
Prices received for farm products in the first quarter averaged
4 percent above the opening months of 1956 and for the 5-month
period, January-May, they averaged 3 percent higher. With volume
of marketing slightly smaller, farmers' receipts from marketing
in the first 5 months of this year totaled 2 percent above a year
earlier. Prices paid by farmers for goods and services used in
production and family living have been at record levels this year,

(Continued on page 3)

*.AI j



2 -

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

Total outlays, seasonally adjusted 2/
Private residential
Housing starts 3' /
Construction contracts awarded 5/

Manufacturers' sales and inventories:
Total sales, seasonally adjusted
Durable goods
Unfilled orders-sales ratio 6
Inventory-sales ratio 7'
Durable goods

Employment and vages:
Total civilian employment 9/
Ilonagricultural 9/
Unemployment 2/
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 7

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

Consumer price index, all items 4/

Prices received by farmers 1
Livestock and products
Prices paid, interest, taxes and wage
rates 10/
Family giving items
Production items
Parity ratio 12/

Farm income and marketing: 0/
Volume of farm marketing
Cash receipts from farm marketing

: Unit or : 1956 : 197
Item : base : Year May Feb. Mar. Apr. ay
: period :

Anmnal data for most of these items for the years 1929, 1932 and
April 1957 issue of he Demand and Price Situation.


Mil. dol.
Mil. dol.
Mil. dol.

llil. dol.
Mil. dol.


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

Mil. dol.
Mil. dol.


L947-9- o100



Mil. dol.















116 115 119 119 119
112 111 14 13 114



118 93
2,999 2,022










JUNE 1957

240 234 238 242 243
249 234 237 242 244
232 234 238 242 241

286 294 295 296 296
278 284 284 285 286
250 256 258 260 259
84 80 81 82 82



91 90
1,897 1,929

on page 31 of the

/ Federal Reserve Board. 2/ U. S. Department of Commerce. 3/ Seasonally adjusted annual rates.
SU. S. Department of Labor, Bureau of labor Statistics. 2/ Data published by the Department of
Commerce in the Survey of Current Business, fron reports of the F. W. Dodge Cpopration. Y/ Unfilled
orders for durables divided by monthly deliveries. 7/ Inventories, book value, and of month, divided by
sales. 8 Bureau of the Census. g/ Starting with January 1957, figures are not strictly cainarable with
earlier periods because of changes in definitions of employment and unemployment. L/ U. S. Department
of Agriculture, Agricultural Marketing Service.





40, 503
14, 501



m T













DPS-30 3-- JUNE 1957


Approved by the Outlook and Situation Board, June 19, 1957


Page Page.

: Summary ........................ 1 Feed ......................... 15
: General Business Conditions .... 5 Wheat ....................... 15
: Foreign Demand ................. 9 Fruit ........................ 16 :
: Farm Income .................... 10 Commercial Vegetables .....*** 17 :
: Livestock and Meat .....*...*** ... Potatoes ...........* ........ 18 :
: Dairy Products ................. 11 Cotton ........................ 19 :
: Poultry and Eggs ............... 12 Wool ..............2..........* 20 :
: Oilseeds, Fats and Oils ........ 13 Tobacco ....................... 21 :

Continued from cover page -

4 percent above January-May 1956. With prices received by farmers up almost
as much, the parity ratio so far this year averages only fractionally below
the same months of 1956.

Weather conditions over the Nation as of early June were favorable for
a large total crop production this year. Crop prospects were rated as good
to excellent in most of the country although excessive rains reduced prospects
in parts of the South Central States. Pasture feed conditions were good to
excellent throughout most of the Nation in sharp contrast to last year. The
June 1 conditions of hay crops are reported to be the best in 30 years. Wheat
production, presently forecasted at nearly 971 million bushels, is down 3 per-
cent from last year. Weather conditions have caused a long delay in planting
of corn and soybeans.
A strong domestic economy is helping to support the market for farm
products. The firm demand for goods and services by consumers, industry, Gov-
ernment and the export market has contributed to a steady growth in final prod-
uct demand. This has helped to maintain output above last year despite pro-
duction and inventory adjustment, particularly in durable goods. Judging by
retail sales through May, consumer demand remains firm. Business investment
for plant and equipment, 12 percent above a year ago in the first quarter,
will, according to reported business plans, register a further rise in coming
months. The increase this year has been quite moderate compared with the sub-
stantial gains in business expenditures during 1956. Available data indicate
that federal expenditures for national defense and outlays by State and local
: The next issue of The Demand and :
: Price Situation is scheduled for release :
: July 24

DPS -30

JUNE 1957

Governments, which were 10 percent above a year ago in the first quarter, have
also continued upwards in the past two months.
A record foreign demand for all goods and services remains a factor in
maintaining a high level of economic activity. Agricultural exports, which
during the 10 months ending April were 43 percent above a year earlier, con-
tinue firm, with exports of wheat, rice, cotton, soybeans and soybean oil at
or above previous highs.

C mmodity Highlights

Marketings of meat animals, at the season's low this summer, will be a
little smaller than last summer. Prices will probably maintain a modest mar-
gin above a year ago.

Prices received by farmers for milk delivered to plants are averaging
above a year earlier for the third consecutive year.

Eg prices in mid-June were above their earlier lows and prospects
continue good for further price increases after mid-year. By late summer,
prices are likely to be above a year earlier.

Current prices of soybeans are near the relatively low levels that pre-
vailed at the beginning of the marketing year and probably will continue
around present levels for the rest of the marketing year.

Growing conditions and planted acreage as of June 1 point to a total
1957 wheat crop of about 971 million bushels, 3 percent below last year's.
The winter wheat crop appeared to be about the same as last year and the
spring wheat crop about 10 percent smaller.

Supplies of early season peaches are expected to be moderately larger
than last year and supplies of most other early deciduous fruits probably
will be at least as large. Supplies of lemons are larger than a year ago.

Indications in early June were that production of early summer vege-
tables for fresh market, excluding melons, is likely to be about 9 percent
more than last year. Aggregate output of vegetables for processing this year
is expected to be substantially smaller than the 1956 record. Potatoes will
likely be in heavy supply, with prices continuing at relatively low levels
through early summer.

The average weekly rate of mill use of apparel wool in the United
States during April was 19 percent below a year earlier, the sixth month in
succession during which use was lower than a year before.
Stocks of cotton owned by the Commodity Credit Corporation or held as
collateral for outstanding loans in early June totaled 5.8 million bales, the
smallest since October 1953.
Due to this year's sharp reduction in flue-cured tobacco acreage, the
1957-58 total supply--the crop plus the carryover--probably will be 5 to 7
percent below 1956-57. Auctions for flue-cured begin in the latter part of
July in the Georgia-Florida producing area.

- 4 -

June 1957


General business activity continues to rise gradually. Information
for April and May point to further increases in business investment and
Government spending, while consumer purchases of goods and services are being
maintained at about 5 percent above a year ago. Industrial production has
slipped below the level of recent months as output of steel and some durable
goods eased. Construction activity picked up in April and May after declining
for several months. Housing starts rose in May, to a rate of 990,000,
approackdng for the first time in 1957 the million-unit rate exceeded each year
since 1948. Total employment remains at record levels, with a seasonal pick-
up beginning in the construction and food processing industries. Unemployment
is small except for a few labor surplus areas.

Consumer incomes continue to rise despite a shorter work week and lower
average weekly earnings in certain manufacturing industries. The volume of
business inventories has been reduced slightly this year after a period of
substantial inventory accumulation. However, with a rise in the flow of goods
and services into consumption, output has been maintained despite the change
in inventory policy. Wholesale prices for all commodities have averaged
fairly steady. The combined effect of greater capacity and lower inventory
demand has been to reduce somewhat the inflationary pressure on wholesale
prices. Consumer prices are rising slowly, continuing the trend of the past
8 months.

Consumer disposable income in the first quarter of 1957, at an annual
rate of 295.4 billion, was more than 5 percent above a year ago, due largely
to an increase in wages and salaries. Personal consumption expenditures in the
first quarter totaled 275 billion dollars, also 5 percent above a year ago.
These gains generally reflected higher prices and increases in population;
thus, per capital income and spending adjusted for price changes remained re-
latively steady. However, larger disposable incomes led to some increase in
personal savings over a year ago.

Total consumer debt outstanding changed little in recent months, as
repayments approximately offset new extensions of credit. The increase in
installment debt of 259 million dollars in April compares with 307 million a
year ago and 551 million during the auto-buying surge of April 1955. Repay-
ments during April of 3.3 billion dollars were 200 million dollars above a
year ago.


- 5 -

JUNE 1957

Table l.--Consumer income, expenditures, prices and
first quarter 1957 and comparisons

selected indicators,

: Change from
Unit : First :
Item : or : quarter : Fourth : First
: base : 1957 :quarter : quarter
: : 1956 : 1956
:Percent Percent

Personal disposable income / : Bil. dol. : 295.4 .7 5.4
Compensation of employees : do. : 248.7 1.3 6.7

Personal consumption
expenditure i/ do. :275.0 1.5 5.1
Durable goods do. : 35.9 3.2 3.2
Nondurable goods do. :136.4 1.3 4.5
Food and beverages : do. : 82.5 1.9 4.7
Clothing : do. : 21.6 -2.3 3.8
Services : do. :102.7 1.3 6.5
Consumer credit outstanding : do. 40.6 -.7 7.7
Personal saving / : do. : 20.4 -8.9 9.7

Population 2/ Millions :170.3 .4 1.8
Non-agricultural employment 1/: do. : 52.1 .2 2.0

Consumer price index :1947-49-00 : 118.6 .7 3.5
Food : do. :113.2 .2 3.9
Clothing do. : 106.4 -.5 1.8
Wholesale price index : -do. 116.9 .9 4.0
Industrial prices U/ : o. : 125.4 1.0 3.9

Per capital disposable income
at av ,q first quarter 1956:
consumer pr ices : Dollars :1,678 -.4 .1
Per capital consumer expendi-
tures at average first quar- :
ter 1956 consumer prices : do. :1,572 .4 -.2

/ At seasonally adjusted annual rates.
2/ Includes ArmeC Forces overseas.
/ Wholesale priceL other than farm products and processed foods.


- 6 -

Total compensation of private and public employees approached an
annual rate of $249 billion in the first quarter, a little above the fourth
quarter and about 61- percent above a year ago. Total employment as well as
the number of factory workers changed only fractionally between mid-May 1957
and a year before, but the number of production workers was down in both the
durable and non-durable goods industries. Most of the rise in earnings was
in the distributive and service industries. Manufacturing payrolls which
continued to rise slowly in the first quarter, declined during the following
2 months, but in May were still 2.4 percent above May 1956. Increases in
hourly earnings have been the major supporting factor in the upward trend of
manufacturing payrolls during the past year. In recent months, hourly earn-
ings in manufacturing industries have held steady but overtime work was cut
back and the length of the work week was reduced. As a result, weekly earnings
declined from $84.05 last December to $81.78 in May. With this drop, weekly
wages are only some 31 percent larger than a year ago.

The bulk of the increase in consumer expenditures in the past year was
for nondurable goods and services. Outlays for nondurable goods reached a
record first quarter rate of 136.4 billion dollars, and expenditures for
services reached 102.7 billion dollars. These gains were 4- and 61 percent,
respectively, from January-March 1956.

With new home starts through May of this year running about 15 percent
below a year earlier, demand by home builders for household durables has been
reduced. Retail sales of household durables in the first 4 months of this
year were only slightly above a year ago; the increase apparently reflected
higher prices. Compared with the latter part of 1956, however, there has
been a considerable pickup in durable sales with an expanding volume of ex-
penditures for the newer household items such as air conditioners, clothes
dryers, and for automobile parts. Auto sales through May of this year have
trailed year-earlier rates by 3 percent.

Expenditures for food are rising, as consumers continue to spend about
one fourth of their expanding incomes for food. Consumer outlays in the first
quarter were nearly 5 percent above January-March 1956. This gain was due
largely to increases in population and prices; real outlays per person changed
little. Expenditures for clothing and shoes increased nearly 4 percent from
a year ago.

Costs of marketing and processing food as well as the farm value also
rose over the year by about the same percentage as the increase in retail
value. Thus the farmer's share of the retail food dollar, at 39 cents in
the first quarter, was unchanged from a year earlier.


- 7 -

JUNE 1957

JUNE 1957

Business investment for new plant and equipment continues to support a
high level of economic activity. Estimated outlays in the second quarter of
this year are up slightly from the first quarter and 8 percent above a year
earlier. The increase over the year was sparked by a 30 percent increase in
public utility outlays and an estimated one-sixth rise in spending by indus-
tries manufacturing durable goods. Business investment plans for the third
quarter, according to a recent survey by the Securities and Exchange Commis-
sion and the Department of Commerce, indicate a less than seasonal decline in
total investment from the second quarter rate. Investment outlays during the
9 months ending September are planned at a level 9 percent larger than actual
outlays January-September 1956, with substantial increases for most major in-
dustry groups except commercial (trade, service and construction). A
similar survey of business investment plans by the McGraw-Hill publishing
company, suggests that business investment outlays this year may total 12 per-
cent above 1956. Moreover, this survey indicates investment spending will be
maintained at a high rate during the period 1958 to 1960.

Apparently businessmen are generally optimistic about their future
sales prospects. In addition, attempts to improve efficiency and reduce costs
in production and marketing also have been important factors in investment
decisions. Although the money market continues generally tight, corporations
have more funds for internal financing. Profits before taxes are at a peak
rate about 6- percent above a year earlier. With reserves for depreciation
also up, gross business savings in the first quarter were nearly a tenth above
January-March 1956. Moreover, subscriptions to new security offerings, which
totaled nearly 11 billion dollars in 1956, were up about 60 percent in the
first quarter from a year ago.

Increased Government outlays for goods and services contributed
materially to the expanded demand during the past year. Federal expenditures
for national security programs in the first quarter were nearly a tenth above
a year earlier and apparently have risen further in recent months. Outlays
by State and local Governments in the first quarter were also up about a
tenth and are expected to continue upward in coming months.

The reduction in business inventories was a major factor influencing
production rates and the length of the work week in some industries. Business
inventories were cut back at a billion dollar annual rate in January-March,
compared with a build-up at a rate of nearly 4 billion dollars in the closing
months of 1956. The decline in inventories, as more goods moved into con-
sumption, resulted in an improved general inventory situation. In some
industries, however, inventories remain large relative to sales; this is
particularly true for dealer inventory of automobiles.

Accompanying the decline in inventory buying, output of durable goods
dropped nearly 4 percent from last December to May this year. Production of
consumers' durable goods was 9 percent lower, including a 14 percent fall in
auto output. Steel mill activity also declined from around 100 percent of
rated capacity in the fourth quarter of 1956 to a low of 84 in mid-May.

- 8 -


JUE 1957

This represented a 13 percent drop in actual output, since rated capacity only
rose 4 percent between 1956 and 1957. There was a pickup in mid-June, with
mills operating at 88 percent of capacity, but the usual seasonal decline is
expected to take place in July and August. Production of nondurable goods has
been stable in recent months while mineral output averaged a little below the
final months of 1956. Reflecting the decline in durable goods and minerals
output, the Federal Reserve Board's index of industrial production eased for
the third month, and in May was 143 percent of the 1947-49 average. This was
31 percent above a year ago, but 3 percent below December 1956. Manufacturers'
sales have declined slightly, and in April were about 2- percent below
January. Orders and order backlogs also eased same since January, although
new orders placed in April were up slightly front March.


Economic activity abroad has continued to rise this year, and coupled
with the oil needs arising from the Suez crisis, demands for United States
exports have been at record levels.

Non-military exports during January-April of this year totaled 7.2 bil-
lion dollars compared with the previous record of 5.8 in 1956. This rate of
increase, one-fourth above a year ago, has been maintained since the
beginning of the current fiscal year in July, and commercial exports for the 10
months ending April 1957 totaled 17 billion dollars. Exports have been one of
the major factors contributing to high activity in the petroleum, coal, heavy
machinery, and shipbuilding industries. U. S. imports, except for agri-
cultural commodities, are also above last year but have increased at a much
slower rate than exports. As a result, net foreign investment was at an
annual rate of 4 billion dollars during the first quarter of 1957. The rise
of 3.9 billion from a year ago accounted for 16 percent of the rise in the
Gross National Product.

Agricultural exports through April of the current fiscal year are
estimated at 4 billion dollars, an increase of 43 percent over a year ago.
The increase for agricultural products accounted for about one-third of the
gain in total exports.

More than half of the increase in the value of farm exports to date
stems from the operation of the cotton export program. Exports of cotton are
expected to reach 7-y million bales by the end of the marketing season,
compared with 2.2 million last year. The poor European wheat crop, coupled
with exhaustion of accumulated foreign rice surpluses has brought about an
increase of nearly 50 percent in the combined exports of grains and feeds this
fiscal year, despite a decline in exports of sorghum grains and barley. Wheat
exports through April totaled 445 million bushels, 82 percent over last year,
and may reach 535 million bushels by the end of June. Rice exports (milled
basis) during July-April totaled 22.6 million bags (100 lbs.) compared with
9.2 million during the 10 months ending April 1956. Exports of fats and oils
(excluding butter) are running 20 percent higher than last year, with exports

- 9 -


DPS-30 10 JUNE 1957

of soybean oil more than 2Q times as large. Exports of most other comnodi-
ties, with the major exception of tobacco, are likewise running in excess of a
year ago. Most of the export gains are attributable to CCC sales at competi-
tive prices, foreign currency sales, and other Government export programs.
Approximately one-third of total farm exports during the nine months ending
March 31 moved under P. L. 480. Including exports under the Mutual Security
Act and Export Import Bank loans, Government financed exports amounted to
41 percent of the total value of farm exports during July 1956-March 1957, the
same as in 1955-56. Deliveries to barter contractors amounted to 315 million
dollars or 9 percent of the total. This activity may be reduced under the
newly announced barter conditions, which will require proof by exporters that
barter trade will not replace dollar exports.

Table 2.-United States foreign trade, 1956, 1957

Item July 1955- July 1956- change
SApril 1956 April 1957 :

SMillion Million Million
Dollars dollars dollars
Total exports l/ 13,512 17,004 3,492

Total agricultural exports 2,782 3,969 1,187
Cotton 276 935 659
Rice 68 158 90
Wheat and flour 428 763 335
Corn, sorghum grain and
barley 296 266 30
Tobacco, leaf 337 287 50
Lard and tallow 157 157 -
'Cottonseed oil and soybean
oil 121 189 68
All other / 1,099 1,214 215
Total imports for consumption 9,014 9,493 479

Agricultural imports -3,112 2,900 212

E/ Excluding military grant-aid shipments. 2/ Includes food exported for
relief and charity, and hence sane of the items above falling into this


Farmers received about 10.4 billion dollars from marketing in
the first 5 months of 1957, up 2 percent frco the corresponding period
in 1956. Prices averaged 3 percent higher than last year, but the

JUNE 1957

volume of marketing was down slightly. Cash receipts from livestock and pro-
ducts were about 6.7 billion dollars, or 5 percent above a year ago. Higher
prices for cattle and hogs raised cash receipts from meat animals 12 percent
above last year, and slightly higher prices of milk also held dairy receipts
above a year ago. Crop receipts in the January-May period are estimated at
3.7 billion dollars, 3 percent below 1956. Smaller marketing of wheat and
cotton and lower prices of potatoes more than offset increased marketing of
corn and soybeans.

Farmers' total cash receipts in May were approximately 2.0 billion
dollars, about the same as in May 1956. Prices averaged slightly higher but
marketing were smaller. Receipts from livestock and products in May were
about 1.4 billion dollars, much the same as a year ago. Cattle and hog re-
ceipts were above last year because of higher prices, but lower prices re-
sulted in a substantial decline in receipts from eggs and chickens. Crop re-
ceipts of 0.6 billion dollars in May were below a year ago.


Marketings of meat animals at the season's low this summer will be a
little below the levels of last summer. Receipts of grass cattle, in parti-
cular, will be below a year ago. Sales of fed cattle may be as large or
larger than last summer. Hog slaughter will likely continue slightly below
the 1956 slaughter rate at least until early spring pigs are marketed in vol-
ume late this summer. Meat animal prices this summer will probably maintain
a modest margin over last summer.

Prices for most grades and classes of cattle in mid-June were $2 to $3
per 100 pounds above a year ago. Steady to stronger prices are in prospect
for fed cattle during the next several months. Prices for the lower grades of
cattle will decline seasonally but, supported by a strong demand for feed lot
replacements, will remain at a higher level than last year.

Hog prices will probably continue above a year earlier during the sum-
mer and early fall. The seasonal price decline this fall will probably be
sharper than last fall and prices at the end of this year may be below prices
late last year.

Lamb prices, currently about $2 per 100 pounds below a year earlier,
will likely decline seasonally this summer and fall but may average as high
or possibly a little higher than last year.


Prices received by farmers for milk delivered to plants are averaging a
little above a year earlier for the third consecutive year. These increases
reflect higher prices for fluid and manufacturing milk, and some increase in
the proportion of milk utilized as fluid. Relative to feed costs, milk prices


- 11 -


- 12 -

JUNE 1957

in the past year have been the most favorable in some time. However, the rel-
ative price of milk compared with prices for hogs and beef is about average.
As a result of these price relationships and improved producing methods,
dairymen are increasing milk output.

Production of milk in the first quarter of 1957 was slightly above a
year earlier and the total for 1957 is likely to be a record high, possibly as
much as 2 billion pounds above the 125.7 billion in 1956. The new record out-
put wholly reflects an increase in production per cow since the country's to-
tal dairy herd is the smallest in 33 years of record.

In 1956, farmers again increased their milk sales more than production.
Farm household consumption dropped as the number of farms with milk cows de-
clined further. In addition, there was a further shift in sales from farm-
separated cream to whole milk. Sales of whole milk increased 4 billion pounds
above the 91 billion total in 1955, and production increased 2.6 billion
pounds. As sales of farm-separated cream for butter making declined in 1956,
for the first time over 50 percent of all milk utilized in making butter came
from milk sold as whole milk.

Consumption per person of all dairy products combined in 1956 was about
the same as a year before. Fluid milk and ice cream consumption increased,
but butter declined after two years of increases. Use of evaporated milk
reached the lowest per capital level since the middle 1930's. Use of butter
per person from commercial sources in 1956 was the lowest on record, despite
high consumer income and steady retail butter prices. Butter consumption per
person from all sources in 1956, which includes substantial quantities from
CCC stocks, also was below 1955. In the first quarter of 1957, per capital
uses of both butter and margarine apparently were below a year earlier.

CCC purchases in terms of milk equivalent are about equal to a year
earlier. Dispositions continue at a high rate, but unsold CCC supplies cur-
rently are increasing as acquisitions are seasonally heavy.


Egg prices in mid-June were above their earlier lows and prospects con-
tinue good for further price increases after mid-year. By late summer, egg
prices may be above a year earlier, in contrast to recent price levels which
were sharply lower than in 1956. In mid-May, the U.S. average price received
by farmers was 29 cents per dozen, compared with 37.6 cents in May 1956.

Storage stocks of shell eggs in 1957 are the second largest since 1952,
and the Department of Agriculture is purchasing spring-time eggs this year for
the first time since 1952. Commercial production of frozen egg is almost up
to year-ago levels. In February-May, diversion to storage and sale to the
Government accounted for about 13 percent of the 62 million cases of eggs pro-
duced on farms, and these diversions were a significant price-sustaining

JUNE 1957

The price strength expected after mid-summer will be in anticipation of
reduced supplies late in the year. The almost one-fifth reduction in replace-
ment chicks being raised this year will be reflected in smaller (though by a
considerably smaller percentage) egg production in the last quarter as ccm-
pared with a year earlier. Anticipation of this decline is likely to be
reflected in prices before the production cut is fully apparent.

Broiler prices since about mid-May have been 20 cents per pound and
higher in most commercial areas, contrasting with prices fully 2 cents lower
during most of the preceding 8 months. The mid-May U. S. average farm price
was 19.4 cents. In mid-May 1956, it was 21.1 cents, and in mid-June, 20.2
cents. Demand for broilers usually strengthens during the summer. Recent
chick placements and egg settings have been only slightly above corresponding
1956 activity, but they may rise in coming weeks if the broiler price rises
further. Chicks hatched in July or later would become marketable after warm-
weather demand had passed, and in competition with seasonally-increasing
supplies of other poultry and red meats.

The 1957 turkey crop is likely to exceed the 1956 record of 77 million
birds raised, although by a smaller margin than indicated earlier. Even if
poult hatchings during the remaining months of the season are at about the
1956 level, 12-month hatchings since September 1 will still exceed a year
earlier by about 5 percent.

Turkey slaughter to date in 1957 is 55 percent higher than a year
earlier in the larger commercial plants, but most of the crop is yet to be
marketed. The expected sizable increase in remaining slaughter, particularly
in months before holiday demand, and storage stocks about double a year ago are
discouraging turkey price rises. The mid-May price to farmers was 24.9 cents,
compared with 30.6 cents a year earlier.


Soybean prices (No. 1 Yellow, Chicago) declined moderately from about
$2.40 per bushel in mid-May to $2.32 in mid-June. Demand for crushing was
reduced following lower soybean oil and meal prices. Current bean prices are
near the relatively low levels that prevailed at the beginning of this mar-
keting year. Unless new demand develops, soybean prices probably will con-
tinue around present levels for the remainder of this marketing year.

Soybean crushings in October 1956-April 1957 totaled nearly 193 million
bushels, 19 million more than a year earlier. Crushings for the marketing
year are expected to reach a new high of 320 million bushels. Record
crushings are being encouraged by a strong export demand for edible oils.
Soybean crushings generally hold up fairly well through May before tapering
off seasonally. Crushings in May declined somewhat and are estimated to be
about 1 million less than in April. Some seasonal decrease is likely
during the remainder of the season. The relatively low prices for oil and
meal and a low conversion ratio may tend to limit the season's crush.


- 13 -

JUE 1957

Another economic factor which may retard the crush is the possible lack of
incentive to carry over large stocks of soybean oil. If another large crop
is in sight this fall and with the 1957 soybean price support 6 cents a bushel
less than in 1955, commercial inventories will tend to be minimized.

Soybean exports continue at record high levels. From October 1956
through mid-June, about 67 million bushels were shipped out, compared with
57 million a year earlier. Principal takers were Japan, the Netherlands, West
Germany and Canada. Total exports for the 1956-57 crop year probably will be
about 80 million bushels. The previous record was set in 1955-56 when 67 mil-
lion bushels were shipped out. Large U. S. bean exports this year, as in
recent years, reflect (1) strong foreign demand, especially in Europe,
(2) relatively small increases in foreign supplies, and (3) large U. S. export
availabilities at competitive prices.

Cottonseed crushings and oil output for the 1956-57 season are esti-
mated at 5 million tons and 1,675 million pounds respectively. Crushings and
crude oil output in August 1956-April 1957 were about in line with the 12 per-
cent decrease estimated for the entire season. The 1957 crop of cottonseed is
expected to be down somewhat from 1956 due primarily to participation by
cotton producers in the Acreage Reserve Program.

Edible oil prices this marketing year rose sharply to a seasonal peak
in January, but have since declined. Prices in April were about the same as
at the beginning of the crop year but they slid off further in May to a new
low for the season. Oil prices may pick up somewhat later in the season from
present levels.

Lard prices (tanks, loose, Chicago) trended downward from 13.9 cents
per pound in January to 12.9 cents in April, then declined abruptly to
10.8 cents in late May. Prices since have improved somewhat and in mid-June
were 12.5 cents per pound, compared with 10.2 cents in June 1956.

Lard output for the 1956-57 marketing year, including farm production,
is estimated at 2,650 million pounds. Total exports and shipments are esti-
mated at 600 million pounds, compared with 719 million in 1955-56. Current
prices for lard could result in somewhat larger exports than now estimated.
Domestic disappearance of lard is running above a year earlier, the gain due
almost entirely to the increased use of lard in shortening. Total disap-
pearance should be large enough to reduce stocks appreciably by October 1,

Tung oil output from the 1956 crop through April totaled about 32 mil-
lion pounds, up sharply from the previous year when output was negligible due
to freeze damage. This is likely to be the total for the crop year, as the
milling season has been nearing completion. Through mid-June, producers
placed 20.5 million pounds or 64 percent of the estimated output under
support. About 325 thousand pounds have been redeemed. Loans and purchase
agreements are available through June 30.


JUNE 1957

The Tariff Commission recommended to the President on May 31 that an
import fee of 3 cents per pound, but not more than 50 percent ad valorem, be
imposed on imports of tung oil for an indefinite period, to prevent inter-
ference with the price support program for tung nuts and tung oil. Tung oil
is presently free of import duty.


Feed prices are generally lower this spring than a year ago. The index
of prices received for feed grains in May was 8 percent lower than on that
date last year, prices paid for al& feeds purchased averaged 2 percent lower,
and the index of wholesale prices of high protein feeds was down 12 percent.
Currently lower feed prices this spring reflect larger stocks of "free" corn
on hand for the remainder of the-corn marketing year, generally favorable
prospects for 1957 small grain crops, for which price supports will be lower
than in 1956, and the much better condition of pastures and ranges than a year
ago. Prices of oats and barley have declined seasonally since May as the
harvest time for the 1957 crops approaches. If feed crop prospects continue
generally favorable, feed grain prices probably will average somewhat lower
this summer than in 1956.

Since last fall corn prices have remained substantially below the
1956 support level of $1.50-per bushel to cooperating producers, and a little
below the $1.25 support to ion-complying producers. Through May 15 farmers
had placed 435 million bushels of 1956 corn under loan and purchase agreement,
compared with 388 million in the same period of 1955-56. The national average
support price for 1957 corn to cooperating producers in the commercial area
has been announced at not less than $1.36 per bushel. The National average
support price for 1957 oats is 60 cents per bushel, barley 94 cents per
bushel, and sorghum grain $1.83 per 100 pounds.

Condition of pastures and ranges are much better this spring than a
year earlier, especially in the midwest and Southwest where rainfall has been
the heaviest in recent years. Cool wet weather also has favored growth of
oats and barley, except in areas where excessive rains have caused damage
from lodging and flooding. Excessive rains delayed corn planting and cool
weather retarded growth in large areas of the Corn Belt and Northwest. Much
less than the normal percentage of the crop had been planted by June 1 in
most of the Corn Belt States.


The U. S. 1957 wheat crop as of June 1 was forecast at 971 million
bushels, 3 percent below the 1956 crop of 997 million. The winter wheat
crop was forecast at 736 million bushels, and the spring crop at 235 million


- 15 -

JUNE 1957

bushels. The indicated total crop is less than the prospective domestic use
plus likely exports during the next 12 months. As a result, the carryover is
expected to be down again on July 1, 1958.

Exports from the United States continued heavy in recent months. The
total for the 1956-57 marketing year is estimated at 535 million bushels.
Domestic disappearance is estimated at about 600 million bushels. With total
supplies for the 1956-57 year of 2,038 million bushels (July 1, 1956 carryover
of 1,033 million, production of 997 million and imports of about 8 million), a
carryover of about 900 million bushels is indicated. This would be down
130 million bushels from a year earlier, and the first substantial reduction
in carryover since stocks began to accumulate in 1952. The official estimate
of the stocks of old-crop wheat will be released July 24. The bulk of the
carryover will again be held by the CCC.

Cash prices have been declining seasonally, though delayed combining
and some concern over damage because of wet fields in the Southwest have
resulted in temporary increases. Compared with the high levels reached in
April, prices on June 18 were as follows: No. 2 Hard Winter, ordinary protein,
at Kansas City, at $2.20, down 14 cents; No. 1 Dark Northern Spring at
Minneapolis, at $2.24, down 9 cents; No. 2 Soft Red Winter at St. Louis, at
$2.06, down 23 cents; and No. 1 Soft White at Portland, at $2.50, down 14 cents.

Of the 233.5 million bushels of 1956-crop wheat placed under loan up to
May 15, 95.0 million had been repaid and 116.1 had been delivered to the CCC.
Of the 18.5 million under purchase agreements, of which producers had elected
to deliver 11.8 million, they had delivered 2.9 million. As of May 15, pro-
ducers had extended 1956-crop loans for another year on 1.8 million bushels.


Supplies of early-season peaches are expected to be moderately larger
than in 1956, and supplies of most other early deciduous fruits probably will
be at least as large. Supplies of lemons are much larger than a year ago.
But supplies of California Valencia oranges may be a little smaller than last
summer. Consumer demand for fruit continues strong.

June 1 prospects were generally favorable for the 1957 deciduous fruit
crop. The outlook is for larger crops of peaches, pears, apricots, sweet
cherries, and strawberries, but for smaller crops of California plum and
dried prunes. Prospective production of California walnuts is up 6 percent
over 1956. But prospects for California almonds are not as good as last year.
Favorable prospects are indicated for the 1957-58 citrus crops.

Utilization of Florida Valencia oranges has lagged this spring, and
supplies of these oranges may be heavier during early summer than in 1956.
But supplies of California Valencias from the smaller 1957 crop, which will
comprise the major volume of fresh oranges in summer, may be a little lighter.

- 16 -


Grower prices for Florida oranges have been lower this spring than a year
earlier. Although auction prices for California oranges also have averaged
lower than the relatively high prices of a year ago, they have held up at a
fairly high level this year.

With Florida Valencia oranges being processed at a lower rate this
spring than a year earlier, output of frozen orange concentrate dropped a
little under that of last year. By June 1, production of 61.4 million gallons
was down 3 percent. Even so, output by the end of the season should exceed
the 70 million gallons of 1955-56. The pack of Florida canned single-strength
citrus juices by June 1 was 33.9 million cases (24-2's), up 4 percent. With
retail prices declining since last fall, consumer purchases of frozen orange
concentrate have increased. In March 1957, the last month for which data are
available, retail prices were moderately lower, and purchases moderately
larger, than in this month of 1956. Stocks of frozen orange juice in cold
storage June 1, 1957 were 7y percent larger than a year earlier.

Cold storage stocks of frozen strawberries increased moderately during
May when movement of strawberries to freezers was seasonally heavy but on
June 1 stocks were 5 percent below a year earlier. Stocks of other fruits
and berries declined during May as freezing of these items had not yet gotten
well under way. Total stocks of frozen deciduous fruits and berries (excluding
citrus juices) on June 1, 1957 were about 276 million pounds, 1- percent
smaller than a year earlier.


Commercial Vegetables for
Fresh Market

Indications in early June are that production of early summer vegetables
for fresh market sales, excluding melons, is likely to be about 9 percent
larger than last year and 20 percent above the 1949-55 average. Substantially
more early summer celery, cucumbers, onions, and green peppers are in prospect
than a year earlier, and moderately more tomatoes. Production of carrots and
sweet corn are expected to be substantially smaller than in the early summer
of 1956, and production of cabbage slightly smaller. Demand for fresh vege-
tables during the next few months is expected to continue relatively strong.
But with the larger supplies of vegetables in prospect through early summer,
prices received by farmers are likely to average below the relatively high
levels of a year earlier.

Combined prospective production of cantaloups and honeydew melons for
early summer harvest is down about 16 percent from a year earlier, because of
a sharp cut in honeydews. Indications are that production of early summer
watermelons is likely to be about 10 percent above both last year and average.


- 17 -

JUE 1957

JUNE 1957

No production estimates are available for late summer vegetables, but
prospective acreage of onions is up moderately from a year earlier, while
acreages of cabbage, carrots, and watermelons are a little smaller. If yields
and abandonment are near the average of recent years, production of late
summer onions and cabbage on the indicated acreage would be about the same as
last year; production of carrots and watermelons would be moderately to sub-
stantially smaller.

Estimates for total summer production are now available for beets and
lettuce. Current conditions indicate a moderately smaller production of
summer beets than a year earlier, and a slightly larger production of lettuce.

For Comnercial

Aggregate production of vegetables for processing this year is expected
to be substantially smaller than the record output of 1956. Prospective
planted acreage of 9 vegetables for commercial processing is about 3 percent
smaller than last year, and if yields are average they will be below the
unusually high yields of last year.

According to the Crop Reporting Board, the planting and general devel-
opment of snap beans, sweet corn, green peas, and tomatoes for processing was
about as far advanced on June 1 as on the corresponding date last year. Like
the spring of 1956, this spring was generally cool and cloudy, and frequent
rains in most northern areas have interrupted planting schedules. In the
South Central States, heavy prolonged rains delayed plantings and in some
cases caused loss of acreage. In these States, acreage for harvest probably
will be reduced and harvest schedules delayed. For the country as a whole,
however, conditions of processing vegetable crops on June 1 were generally


Potatoes are likely to continue in heavy supply through early summer,
even though production for early summer harvest is expected to be about the
same as a year earlier and below the 1949-55 average. During May and early
June heavy supplies of old (storage crop) potatoes competed for markets with
a 1957 spring crop almost a fifth larger than last year. Prices received by
growers during this period were the lowest since 1941 and only about half
of the relatively high level of a year earlier. As a result, shipments from
the larger spring crop were running under those of last year and later spring-
crop shipments are likely to overlap marketing from the early summer crop.

- 18 -



- 19 -

JUNE 1957


Disappearance of cotton in the United States in the 1956-57 marketing
year is expected to total about 16-1/4 million bales compared with 11.4 mil-
lion in 1955-56. Exports are expected to reach about 7 million bales, far
above last season's 2.2 million and the largest total since 1933-34. This
increase far offsets a probable decline of about 0.5 million bales in domestic
consumption. Carryover stocks on August 1, when the new marketing year
begins, are expected to be down to 11.6 million bales, almost 3 million less
than a year earlier.

High exports are resulting from (1) competitive prices at which CCC is
selling cotton for export, (2) a decrease of about 600,000 bales from last
year in foreign free world production, (3) an increase of about 1.9 million
bales in foreign free world stocks at the end of the current season over the
low levels of a year earlier, and (4) an increase of slightly more than a
million bales in foreign free world consumption.

The average price received by farmers for 1956 crop cotton sold to
May 1 was 31.7 cents per pound, the lowest in 7 years and about 0.6 cent
below the average for the 1955 crop. All of the cotton exported or an equiv-
alent quantity came from CCC stocks, and supplies available from commercial
channels (including the 1956 crop placed under loan) exceeded domestic mill
consumption. As a result, prices to farmers were about at the loan rates
which were lower than those for the 1955 crop.

The CCC is selling its stocks of upland cotton for export at 5 to 7
cents below current support rates and current domestic spot market prices.
By June 11, CCC had sold about 7.7 million bales for export between August 1,
1956 and August 15, 1957. An additional 3.4 million bales had been sold for
export between August 16, 1957 and August 1, 1958.

Consumption of cotton by domestic mills continues at a rate equivalent
to about 8-3/4 million bales for the entire 1956-57 season. This rate
probably will hold for the next few months, making allowances for seasonal
trends, since the ratio of stocks of broadwoven goods to unfilled orders at
the mills continued to increase in February. Preliminary information indicates
a further rise in March.

Stocks of cotton held by CCC (owned and held as collateral against
outstanding loans and excluding cotton sold for export) on June 7, 1957 were
about 5.8 million bales. These were the smallest stocks held by CCC since
the end of October 1953. Of the June 7, 1957 total, about 1.9 million bales
of upland cotton were owned by CCC and about 3.9 million bales of upland
cotton were pledged as collateral against outstanding loans. On May 14 it
was announced that CCC will purchase all cotton from the 1956 crop held as
collateral against outstanding loans on July 31, 1957.

JUNE 1957

The 1957 State acreage allotments for upland cotton total about
17.6 million acres. About 3 million acres of this total have been placed in
the acreage reserve program leaving a maximum of about 14.6 million acres from
which upland cotton could be harvested this year. Harvested acreage for the
1956 crop was about 15.6 million acres. Some States signed a larger percentage
of allotments for the acreage reserve than others. When acreage allotments
are adjusted to include reserve sign-up, the shares of the total acreage for
most geographic areas change somewhat from the figure on July 1, 1956. The
proportions for the West increase from 7.8 percent to 8.4, and for the South-
east decline from 18.2 percent to 15.8 percent. The proportions for the
Southwest increase from 46.8 to 48.5 percent, and the proportions in the Delta
area are very nearly the same for both years, about 27.3 percent.

Increases in proportions of the total acreage occur for the two areas
with the highest and the lowest yields per acre in 1956, the West and the

The average minimum support level in 1957 for extra-long staple cotton
was announced at 59.7 cents per pound on May 10. This was 75 percent of the
mid-April parity price. If the parity price in effect on August 1 (that
announced for mid-July) is higher than the mid-April parity price of 79.6 cents
per pound, the support rate will be raised to 75 percent of the mid-July parity


Prices for some wools at the Australian auctions declined a little
during late May. Early in June, Boston quotations for Texas wools were some-
what higher than a month earlier. Prices of some fleece wools were up a
little. Quotations for most territory wools were the same as a month earlier.
Prices received by domestic growers for shorn wool during May averaged
55.2 cents per pound, grease basis, up 4.3 cents from the previous month and
up 13.8 cents from May 1956.

Commodity Credit Corporation disposed of 18 million pounds, actual
weight, of wool during May. Sales under the competitive bid program amounted
to 4.1 million pounds, about two-thirds of the monthly quota. About 3.3 mil-
lion pounds were sold at schedule prices, and 10.6 million pounds were selected
against barter exchange contracts. As of the end of May, CCC holdings were
down to 23 million pounds, from which an additional 1.7 million pounds remained
to be selected against barter contract.

The average weekly rate of woolen and worsted mill use of apparel wool
in the United States during April was 19 percent below a year earlier. April
was the sixth month in succession during which the rate of mill use was below
a year earlier. The average weekly rate for January-April was 14 percent
below a year earlier. However, the rate of woolen and worsted mill use of
man-made fiber during the same months was up 11 percent from a year earlier.


- 20 -

JUNE 1957

The ratio of prices of wool to prices of man-made fiber has increased substan-
tially since early last year. The April rate of mill use of carpet wool was
5 percent below that of April 1956. The rate for January-April was about
1 percent below a year earlier.

The decline in consumption of wool in the United States has been more
than offset by increases in other countries. World consumption during the
first quarter is estimated to have been about 5 percent above that of the
first quarter of 1956 and the highest since the first quarter of 1950.

United States imports of dutiable wool for consumption during the first
quarter were almost one-third below and imports of duty-free wools were one-
fifth below, a year earlier.


Marketings of 1956 crop Maryland, mostly at auctions but also at the
Baltimore hogshead market, totaled 23 million pounds for the season through
mid-June. This was equivalent to about 60 percent of the 1956 crop. Auction
prices averaged 50.9 cents--5 percent below the average for the comparable
period of last season.

March 1 grower intentions indicated that this year's acreage of flue-
cured would be about one-fourth less than in 1956 and the smallest since 1932.
However, the carryover on July 1 will be about one-tenth larger than a year
ago and a record high. Carryover plus this year's sharply reduced crop prob-
ably will provide a total 1957-58 supply 5 to 7 percent less than the record
1956-57 level. Auctions for flue-cured tobacco begin in the latter part of
July in the Georgia-Florida producing area.

Domestic use of flue-cured and burley during the current marketing year
is indicated to be a little below the preceding year's despite the increase
in cigarette output--the main outlet. The larger proportion of filter tip
cigarettes which require less tobacco per cigarette, the use of "processed
sheet," and improved machinery have aided manufacturers in turning out more
cigarettes per pound of leaf tobacco.

For the year ending June 30, output of cigarettes is estimated at 3 per-
cent above 1955-56. The 1956-57 output of cigars is indicated to be about the
same as in 1955-56 but the outputs of snuff, smoking tobacco, and chewing
tobacco were down 5 or 6 percent.

Exports of unmanufactured tobacco during the year ended June 30 are
estimated at about 545 million pounds (farm-sales weight)--about 15 percent
lower than the heavy 1955-56 shipments but from 6 to 9 percent higher than in
the preceding years.

- 21 -



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Washington 25, D. C.

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