THE~

1952 OUTLOOK ISSUE FOR RELEASE OCT. 29, A. M.

~(})~_ SITUATION

BUREAU OF AGRICULTURAL ECONOMICS

UNITED STATES DEPARTMENT OF AGRICULTURE

_W_,_A .... S_H_I_N_G_T_O_N_. _o_. _c_. ________ « ~B. 0 C T 0 8 E R 1 9 51

!pproved by the Outlook and Situation Board, October 24, 1951

CONTENTS

~ :OUtlook for Agricultural Prices

and Income in 1952 ••••••••• 1 :Recent Economic Trends •••••••••••• 6

Gross National Product •••••••••• 6 Personal Consumption Expendi-

tures .•••••••.••••••.•••••• 8 Groee Private Domestic In-

vestment••••••••••••••••••• 9 Government Purchases ot Goode

and Serv1ces•••••••••••••••l0 Net Foreign Inveetment •••••••• ll

Financing u. s. Export• of : Goods and Servieee ••••••••• ll : Agriaultural Exporta •••••••••••• l3 :Commodity Pr1ces •••••••••••••••••• l4 :7ara Income ••••••••••••••••••••••• l?

~ Livestock and Meat •••••••••••••• l8 Dair.y Producte••••••••••••••••••20 Poultry and Eggs •••••••••••••••• 21 Fats, Oils and Oilseeds ••••••••• 22 Corn and Other Feeda •••••••••••• 23 Wheat ••••••••••••••••••••••••••• 24 : Fru1t ••••••••••••••••••••••••••• 2S Commercial Truck Cropa •••••••••• 26 Potatoea and Sweetpotatoea •••••• 27 Dry Edible Beans and Peas ••••••• 28 Cotton••••••••••••••••••••••••••28 Wool••••••••••••••••••••••••••••29 Tobacco ••••••••••••••••••••••••• 31 Sugar.~···••••••••••••••••••••••32 Foree\ Products ••••••••••••••••• )) :

OUTLOOK FOR AGRICULTURAL PRICES AND INCOME IN 1952

The demand for farm products, as well as for most other goods and services, ie expected to continue strong in 1952, as employment and income rise. However, record agricultural production this year and prospects for a continued high output next year if the weather permits together with ex­isting price control authority, indicate that average prices received by farmers in 1952 may not differ much from 1951.

Caab receipts from farm marketings may show some increase next year, largely a reflection ot somewhat heavier marketings. But production costa will also rise above the record level in 1951. The realized net income of fa~ operators in 1952 may be about the same as this year. With higher living costa in prospect, the purchasing power of farmers' net income in 1952 is not likely to show any improvement over 1951 and will remain sub­stantially lees than in 1947 and 1948. Nonagricultural income, however, ie currently at a record high and ia expected to continue to rise in 1952.

OCTOBER 1951 - 2 -

ECONOMIC FACTORS AFFECTING AGRICULTURE

1950 Item

Unit or base

period Average: Sept.

Ind11strial produr-tion l/ Total •.•••••• , ••••••••••••••• : (1935-39 ... 100):

All manuf~tures ••••••••••• : do. Durable goods •••••••••••••• : do, Nondurable goods ••••••••••• : do.

Minerals ...........•........• : do.

Construetion ~tivity 1/

200 209 237 187 148

Contra~ts, total ••••••••••••• : (1935-39:100): 514 Contraets, residential •••••••• do. 748

Wholesale pri~es £/ All ~ommodities •••••••••••••• : (1926:100)

All ~ommodities ex~ept farm : and food .•••••••••.•.• : do.

Farm pro due ta ••••.•••..•..• : do. Food •••••••••.••.••.••.•••• : do.

Pri~es re~eived and paid by farmers J}

Priecs reeeived, all prod~ts :(1910-14al00): Pri~ee paid, interest, taxes

and wage rates ....•.•••• : Parity ratio ..... ., •.•.......• :

Consumers' priee gj ~

do, do.

162

153 170 166

256

255 100

Total ••••••••••••••••••••••••:(1935-39al00): 172 Food ••••••••••••••••••••••• : do. 2Q4. Nonfood •••••..••.••.•••...• : do. 154

Ineome Nonagrieultural payments 21 :Sil. dol. 206.6 .

Ineome of industrial workers J} :(1935-39-lOO): 369

Produ~tion worker pay rolls~ ••

Weekly earnings of f~tory workers zj

do.

All manufa~turing •••••••••••• : Dollars Durable goods .••.•••••••••• : do. Nondurable goods •••••••••••· do.

Employment : Total ~ivilian 21 •••.•••••••• : Millions Nonagri~ultural 21 ••••••••• : do. Agri~ultural 21 •••.•••••..• : do.

Government finan~e (Federal) 2/ Ineome, eash operating ••••••• : Outgo, ~ash operating •••••••• : Net ~ash operating in~ome or

outgo ..........•....•.•• :

Mil. dol. do.

do.

396

59.23 63.19 54.66

60.0 52.4 7.5

:3.538 3.497

.. 40

211 220 251 194 16.3

559 814

170

159 180 177

272

260 10.5

175 210 156

212.9

396

429

60.64 65.14 55.~0

61.2 5).4

7.8

4,865 3,199

t-1,666

June

221 231 274 197 16.5

6.52 708

182

170 199 186

301

282 107

185 227 164

230.].

429

464

65.)2 70.47 58 • .58

61.8 5).8 8.o

7.367 5.223

+ 2,144

1951

July Aug.

213 223 266 189 156

528 730

179

169 194 186

294

282 1o4

186 228 164

230.1

422

453

64.56 69.21 58.44

2,854 4,843

-1.989

218 228 269 194 16.5

505 711

178

167 191 187

292

282 lo4

186 227 164

231 • .5

428

64.72 70.26 57.87

Sept.

220 230 273 195 166

178

167 189 188

291

282 103

Annual data for the years 1929-49 appear on page )2 of the April 1951 issue of The Demand and Pries Situation. -:-r----l/ Federal Reserve :Soard, Mnstr~tion Mtivity eonverted to 19.35-.39 base. zJ U. S. Department of l·ADor, Bureau of Labor Statisti~s. 1/ U. S. Department of Agri~ulture 1 Bureau of Agrieul tural E~o­nomi,.s, to f!Onvert priees 1•e1!8ived and priees paid,. ~ntere st • taxes ana. wage ra tee to the 1935-39 base, multiply by • 93110 and • 79872 respeetively, ':±! Cons·.lf.lere 1 price index for moderate 1.n~ome families in lar~ eitiea. 21 U. s. Department of Commerce revised figur's~ seasonally adjusted at annual rates, ~ U. S. Department of Commerce, Bureau of the Census. 2 u. S, Department of Treasury. Data for 1950 are on average monthly basis.

OCTOBER 1951 - 3 -

. Since tha beg1nn1ng of the Eorean conf11et jn ~~~ 1950 total demands on the eCO;IlOnzy' hfr·t~-.~xpe~~·,f'~'91.J..l;v. As a J.-eeult, employlllent .rose, exist­ing .f.'acU.iti~.~ ~9ecanie :~ol,'e 'f'u~J.;r utJ.).hed} and. proauetive capa_city was ex·panded. Tota.1 out·pv.t of gopd.e e.1,1d.·. services inc:eessed about 10 percent from the :f':J.rst ha!:t" of 1950 to the first half of this ;yoar.. The rise :In output., however, wa.e not suff'jcient. to meet tl':.e ehe.rply expar ... le<i demand "oy consumers and bi 'l:ms~:n~e~ for. ind.lJatrial e~'Panei.on.·and. inventory accumu­Jatiou, ,plue ~ho. ,s·br"llJ·~Uii in' Fe~eral ex.pe11ditureF.: for 1efe-ne'B'.1 without a rise in ·pr1ceer.;, · c~}ne':.lmer p:c'1 ce-s rose by 9 perce.nt with .:an eve,n greater 1ncreaee'1n whQ~ae~l~ prices. ·

l '

W.ith larger outp~t and higher prices, the gross national product in tr.e first htl.lf o:f thie yea.r waa nearly· one .. fifth la:r·ger than a year ago. Contributi i:J.g to thl s rise~ conaumer ~xpeno 1 turea 'fere up ~r.out 10 percent, most of which wae due to. higl:sr' pr!.ces; Go.,ernment expendJ tures. expanded ·b.r nearly 40 pe::?ce:::J.t; and bus:!.nese outlays for new plant o.uQ. equi:pnont -w·ere up about 42 :percent. ' Net 1.n7e:lto:r.y acoumulatior: !'ose to an a.."l!lual re.te of almost 12 bill:i.on dollars in the :f:i.re.rt. half of ::.95:1. c~mpared with 3 .2 ~111;1 O"I".1. a year earlier •

. Since. tht:1 fi:cet quarter of this yee.r conswaer d.eiD8.nd for many goods nnd. P-erv1cea.-has moderated d.esp:tte a continued rj se in irJ.comee. ·Cor..sumer eX]?enchtures.for goods an.i serv:tces in the uecond quarter o.f' 1951 ~TOre down 6 billion dollars from the first quarter 110 an a.''lrmal rate of 202 bil­lion· dollai·s. Available evidence for .:t;he thlrd q·.larter 1nd:icat.e·5 cnl.f a moderate :pick··Up in sales of nondurable goods and Pervicee. The rate; of :pe:r.sona.l savings r...a.t' rison to the highE:1st level since the end of World Wer II. Re~uced co:::J.sumer buying and continued high output of consumer goode ocn~ributed to a record rate of net i~ve~"tory bu±l1~up in the second q·t.":arter of 1951. :Uowe·..-er, in recent months the rate of accun.ulati.on. has slowed. coneidere.bly. Curre:::J.tly the ga:in repreeor.1.ts pl·iU>.r11y defense goode­in-: :process. Su.tstant:tal .::ut"ba.ck€1 l~e.ve 13-leo occurred ,_n _product:!. on of ctm• s~tfier goode as a result _of restricted use of materials 7 generally lighter dj;mt4"'ld and large in7en"tor~.es of :many copeumer goods. 'l1~e easing in demand ha.a:·.p~en ,acc_O~lieo, by a continued gradual decline in the ge.L"leral lev·E~l o::' whole.s~l~. p:r1c~e. Wholesale pr~.ces have become mere firm in recent weeks and.'~· ~d,-pc~~ber they averaged. 3.5 percent below the m"d-.March poe.k but e.bout._5, percent high'='r tl:.an a year ago. Prices received by farmers in mid­Se-ptenib'er were 7 percent belO\¥ the peak in FE>brul'l.ry thia year although still '7 percent above a year earHer. Prir:ee :paiCi. ·oy farmere rose until May 1951, a.nd r..a·ve l'!3mafned v:,:,rtual1y unchanged since then. On September 15t 1951, they were 8o~ percent .abov~ a year earliero

The generally s~rar.g demard in prospect roi:- -cne c:l!lll.r.:g ~·t~<u· ~s uctot~~..~. largely on the expected rise :i,n employment a~ cons~er_ l.fl,Cu~ea as defense preparations expand in 19"52. The planned bw.li-l:p l.n ex:pendl.turea for defense from an annual ra.te of 41 l:rl.l,l~on dollars ~-n the third quarter o£ t.his year to .a.round 65 b~llion doll:a.rs ,by .:tl1e. fall o! ~95.2 .is th.e J40St important factor .in the du:tlook f.or ne.:zt, ·:re.u· .. · Business <iemanl £or new plant and equipment is e.Jt.pected. to, qontip.1.:a high in 1952. &rl:~ available .. supplie~ ot steel probabL'y will permit a ,cQ.ltinue~· ijigh. ra.te·,07' in~stme~t through moat of next year., Co1.'.t.l3tiU!'::GiCI.!l ol:.tlays (iiicll.i.dJ.ng resl.dentl.al) l.n the comina yea:r may total a little lower because of credit controls and :restricted use of ineterie:ls., N3t inventory t=tccumulation in 1952 will very likely be much smaller tl'an the rate ~o :fsr this year. Although material allocations n~y reduce output and limit cons~e:r expenditures for durable

OCTOBER 1951 - 4

goods tn the coining ·year;· rhmewli.at larger ·supplies of foods and most· otlier nondurable goode are. in prOS[)ect •. With' r1e'i:r..g incmiws 1 total expenditures for goods and sen lees in 1952 are expected to be· greater than this· year even though personal s~w ings .corit inue high. · · ·

If !ftk dofense :fl:'ogr'a.tri develope about as planned, the gross national product will :tncr~ase in 1952 but not. by 'as much as from 1950 to 1951. Total employment· and ·wage rates are expected to continue to· rise during the next year though at a ·slower rate than in the past year. But, with higher tax :rates, consumer disposable :tncomes oyer t:rie next year· are ·likely to show a considerab}y smaller gain than the 9 percent increase which occurred from the third qua:rrter in ·1950 to the third quarter :1'!1 195L In add.i tion to a somewhat smaller r:tse :1.n dincomes, increased productive capacity} relatively la.cge :ln'Ventories, :J:'e(:O!'cl farm o1Atput, pri·Je arid. wage controls, credit restrictions, and higher taxes p:roba'bly wil.Czrioder~te upward. pressure on prices :tn: 1952.

·:Obviously> any major change in clefense plans for 1952; either a ~~te-p-up o:~ a dampening~ would materially influende tne outlook. In the ev-ent that i-nternational tensions ahpali':l. tighten further bri~ging another wave v:E' ··~·cca:::-e buying'' both hy consumers and by b·.lsinf:lss and an upward revieto::~. 'in de·fense outlays, inflationary p:r·essures could. be auginente:i · sharply. On· the otr.er r:&nd, if "Ghe int.erne.tional situation should enable some reduction in defense outlays, bue:!.ness ·plans 'for capital· expansion probably would ~e ·cut ~ack and further ease the economy,·

WhJ.le a continued ~:tgh le-ve1 of demand for fCloC. a:nd. farm·producte ie in prospect for 19~i2, with average ~rO"..ring condit:'.oo;-:,a,. :cecc:nl-larger supplies of f~.X'm products are expected next yeo.r. Crop prod·.;;ctiOY'. nvallable for . sale in the 1951.;52 ~rketing year is ·currently esti!TIIJ.i:.ed. at 7 to 8 pel:'cent l:l.'Dove a year ago. One of the important' factors in this estlill~ted increase· is the subste.ntially·larger cotton crop. However, outp11t of frtlite, truck crops and tobacco 1s also well above a: year ago. Moreover, cattle slaugh.:. ter is expecte1. -t:.o te larger in 1952 and ·pox·k, po·1-11try anti dairy ·prod.uctfon prob'ably will continue at a high le-iel. Although i:Jopulation gro-wth will :provide an aC..ditional 2 mill16n pe'tsons to feed, prospeGtive near•recoro· . crop output for the 1951.52 ma:rketing year and larg~r supplies of :nW'at in 1952 probably wnl permH som"> further increase in per capita food con- ' sum:pt:ton in the{ comi:hg :year., .. · ·

Fore:tgn.dernand. fo!' farm'products is ex:pectt;d to continue fairly strong. Larger cotto~ exports probably will more than offset a smaller · voh.ime of coarse grains, dairy and poultry products, and some other com­modities d:uring the 1951~52 fiscal year. Exports. of tobacco will b~ -a·' little iarger wh:ile ·.vheat exports d·<Aring 1951-52· are expected to be about in line w~ th those in 1950.;.5L . Even tho:ug.'ll crop prospects are relatively poor in the Southern. H:emisphere; world wheat supplies may be somewhat more plentlw ful in 1952 following this fall v s record CanaU.ian harvest. The value of agricultural 'exports' in 19:50-51 totaled 3 .·4 billion dollars 'c·ompar~d to 3 .o billion dollars 1n i949-50, The eupply of gold and dolla:ce available· to foreign countries ''in fisce.~ 1951-52 :l.s expe:cted to be larger than in the ·:prev:tous· fiscal ;year.

OCWBEB 1951 --;""'

Most' of the 7 perc~nt ·dMline in price~ rccei.ve<t· by farmers tram rnid-Febru~ry to mid···Sspte;::i!Jer resulted from redu.ced crop prtces • which averaged 16 percent lo;.ler tl:cw in 'F'ebrua.ry., Livestock and livestock pro­duct price's a.vere.gP.d on1y fractionally bel.-::v..r the February lev~l,. Al­though the deru.and .f'or ferm proct·ucta is expected to rise i.n 1952, large supplies probably will restmin 't!pwo.rd preasure on farm prices~~ The level of prices recoived by fa:...1118I'f3 next yee..r, ~rticularly in the· last half of the ;f~ar:~· will depend to a large extent oa;·,gro't'iing condi tiona duriag the 1952 Sf';asonG Unfavors.bla westh~r and reduced farm output with a high level of dema.nd for ferm products :)ou.ld P-Xert considerable upward pressure on prices as t.hey adju.st to new ... crop prospec":,so Jn mid··SGptember, crop prices i:h general were below pnrity and beleN ihinim~.un levels at which ceil­ing prices can be established. under the Defe:nse Production Act,s- as amended i:-1 1951~ P:rlce& of' all meat anilrv'1.ls excopt hogs \<Tere abo,re parity in mid­September, vvith ~;ogs '.:lelo"llr both parity and the legal minimLUn for ceiling pricer-,. Pdce ceilings have been in effect for all meats since late January this ~Siar,. · Horeove:r, prospective larger meat supplies in 1952 sho:Hd limit. up-ward pres'sure on meat prices. ·

Prices pa.id hy farmers have held relatively stable over the last 6 montl::s and are currently over 8 percent e.bove a year C\.goo In the com­ing year prices paid by farmers probably \\rill d.se a little above this year 1 Wage rates 1 · taxes e.nd j_nterest pa.yme1.1ts .s.:;."'e ell expected to be · higher in 1952} vfith pronpects also for soinewhat higher prices paid by farmers for commodities gener.::.lly, the parity ratio (the ratio of the index of prices recei v~d by farmers to prices peJ.d by farmers for com­mo±I±UJ3.s;~.: ;~dmterest, ·taxes and wa.ge rates) IDE.y average some-w·ha.t less than the 106 estimated .for 1951.. ·

.Q2f!lm~s!il:y' ~:J.gnl§

· .Qf".t'U~ and s:?J!-: slJ."..;.ghter is nxp~cted t0 · increa.se rrext yea:;:> 1 but h!?B p-.rod-uction may be about the same as in 195}.. J::ri.l!£ and other .£tl~ .:P.!21Bcts prices will be higher~ as demand e;ontinues to incree.se. Con­tinued high production of .~gg,~ and .P!21J .. ~.:t:~ is expected fo·c nl3xt year e.nd·l prices may avera.ge about the same as this ysar, Record. supplies of fill and .Q.i\1! are in prospcet for the 1951·~52 me.rketing year and. prices are likely to average lower than in 1950-51~ An increased ier.~.e.nct is likley for the smaller supply of .f~2 .e:.r.&!J:~ 1 particularly .£~!:g, which will mean somewhat· higher feed prices irt 19'51. Next. year~s . .f.:t£-iJ crop may be slightly smallor than t.his year if we&ther is avera.ge, but stocka of csnned fruits are expected to be larger and growers t pri.:~es will prob~bly be a.lrout the sama a.s in 1951. Subst&ntially·l<1.rger supplies of fresh Y?.E.£ta~ are expected in e2.rly 1952 and pr~ces for these crops may be lower than the high pr.ices of early 1951. Farmers are likely to produce sufficient wheat next yee.r ·to meet estimated requ.irflments and to increase stocks abovet';_-:­levol expected at the end of the current marketing year. Supplies of .E9i.F.L!:9.Ei.~ this year are e~.bout in line l-dth estimates of requirementso Prices are expected to st~Bggthen:nhr-aggh the winter and early spring of next year. ~~~~P~!to production may be larger liext year, as a nesQlt of this yea.rqs ema.ll crop and high prices. Prices for dry edj_ble berl.ns wjll be higher next year, a.nd stocks -vdll decline.. Carry:ove.rstocks-of cotton will be ~mall next yearl' despit0 the large 1951 ~rop; exports are~:­pected to inc"ease and domestic mill r.:onst111ption probably will continua

OCTOBER 1951

high. !'£2.2.~ pri.ces t:US likely to be relatively favorable in 1952, but probably will not average as· high as 1951.· Consumption of .t:P~.£.£2 ia ciga.rettes will continue to rise nett year, while e:ir~rts in 1952 pro­bably will remain ~:t about the 1951 level. Wo~ld .~.."!K!£ production p:ros ... pects -indicate ·that supplies for next yes.r will be adequate to· meet nor­mal demando The denand.for lumber ih 19;2 is exoected to remain close to th~ rcela·~ivi'JLy high U~vel"L~tained in l95lo · ·

RECENT ECONOMIC TRENDS

A gradual rise in emplcj~ent, higher vaso rates and increased business and farm incomes ka.ve contributed to an estimated 12 percent rise in total ·personal incomes from 1950 to 19/il.. After a.llowc:..nce for higher traxes ~ consu1ner incomes availe.blo for spending increased around 9 perceato Much of this g.._in was associated with a sharp rise in ag­gregate dewmd after the outbreak of hostilities in Korea.. The stronger demand resulted frum increased preparati·ons for defensep consumer "s~aree buying 11 in a.nticipation of shortages and ·higher prices, and a step-up in expenditures for new construction and for producer~i dur11ble equipment. Employment in 1951 may total nearly 2 percent larger than last year. Moreover, there lt.'as an increase in the a.rmed forces 0 These gains were ma.de possible by an increase in the labor force and a reudction ir! the number of unemployed fro;n over 3 million in 1950 to less than .2 million estimated for this year and 1.6 million in September. The length of the work week in maaufacturing industries· also increased following Korea~ From August 1950 through April 1~51. the work week averaged oYer 41 hours per .week bt:t it has aiuce declined and in August this year averaged 40.4 hours. per weeko In recent months avea~ge hourly earnings in manufacturing in­dust:..--ies averaged around .. 9·. percent above a year earlier" The continued rise in employment and wage· rates in prospect probably will result in in~· creased disposable incomes for 1952 even with higher. taxes ra'tee for next year, The gain in incooe, however, is not likely to be as large as from 1950L to 195ln

GROSS NATIONAL PRODUCT

Expanded demands on the economy following the outbreak of hostilit~es in Korea. were accoir.pained 'by a.~ increase in output and rising prices.- Con­seqwmtly} the gross national 'prodt:.ct·-,the total output of goods and services val'l~ed at prevailing prices;-r-for t.he third quarter w•ls estimated at an annual .rate of 320 billion dolla~s, a little higher than.the previous quarter and 14 percent above a year earlier. Higher prices acco~tedlfor approximately one.-half the gain over last year •

. If the defense program develops about as planned, ~he gross national product· is expected to continue to rise over the next year but at a some­what less rapid rate, ffihe ge.in from this year to next ~y be only about half as large as that from 1950 to 1951. ·

OCTOBER l9.5l - 7 ... '

Table 1.• Selected series on production, prices, employment and income · · 1935·39, 1949, 1950 and estimated 1951

----·----Calendar year Base

period or :- 1935-39 1949 1950

unit :·average. __ __,__,

. Item

Total civilian employment 1/ --.: ""!'M-:-:i-::-1-:-lion: 44.0- 58~7 6o.o Unemployment-~/ . - do. 9.4 3.4 3.1

Industrial production 2/ Durable goods -Nondurable goode

Consumers' prices (urban) 2/ Food Nonfood

Whole~le prices all com-modities 3/

Farm-products -Food products All excluding farm and food

Prices received by farmers

Prices paid, interest, taxes and wage rates

Parity price ratio

Farm cash income•. excluding Government payments

Realized net income·of fa1~ operators including Government payments

Volume of farm marltetings

. . ..

1935-39= 100 do. 100 clo. 100

do. 100 do. 100 do. 100

. . 1926 81

d.o. 76 d.o. 79 do. 81

1910-14: 107

1910-14: 125

.86

:Bilodo1.: 8.0

do. 4.6

1935-39: 100 . .. Gross national product 4/ :Bil.do1.:

Personal consumption expend. do. 84.0 63.6

Gross private domestic investment do.

Net fore:l.gh investment do. Government purchases of

goods and services do.

8.4 .4

11.8

176 202 168

170.2 201.9 150.6

155.0 165.5 161.4 147.3

249

100

' 28.0

13.5

151

257.3 180.2

:Personal income !~/ :: do. 68.6 205.1 Disposable personal income 4/. :. do. :· 66.2 186.4 ~/Bureau of the Census and Bureau of Labor Stalr:r8tics. g Federal Reserve Board. 3/ Bureau of labor Statistics, Y U. S. Department of Commerce.

200 237 187

171.9 204.5 154.2

161.5 170.4 166.2 153.2

256

255

100

28.8

12.7

144

282.6 193.6

48.9 .. 2.3

42.5

224.7 204.3

I!~sti.ma ted 1951 61.0 1.9

221 271~ 198

185 226 164

181 196 186 170

299

281

106

32.8

15

148

326 205

58.0 0

63.0

251 223

. OCTOBER 1951 - 8 ..

Shortly after Korea and again early in l95l after the Chinese inter­ventton, waves of antJcipatory buying resulted in sharp increases in con·· sumer expenditures both in relation to previous buying and relative to con­sumer income, with -prospects for shorta13es and higher prices, consumer pur­chases rose from 187 billlon ·dollars in the first half to an annual rate of' 202 bJllion in the third ~uarter of 1950, declined a little in the fourth quarter, then rose to a peal~ rate of 208 billion dollars in the first quarter of this year, nearly 12 percent above the first half of 1950. But the gain over 1950 represented only 2 to 3 percent more goods and services. Consumer buyins of durable goods rose sharply following Korea and was maintained at a high level through the first quarter of 1951. Although relative gains were smaller, increases vrere also registered in purchases of nondurable goods and services durj.ng that period.

Table 2.- Gross national product or expenditures, first half and third and fourth quarters of 1950 and first three quarters of ·19519 ·annual rates, seasonally

adjusted 1/ (Billions of ·dollars) ·--- --::--:-::-:---~---

__ 1=..::950 --=1,:...95"-"1=-----------·-·------- - ---·

Item lst 3rd : 4~: 1st 2nd : 3rd £./ ------- . _ ____, .. ____ ·--- __ _;__;I!~l:f.__!_Q!J,a.rt~_r :Quarter :Quarter :Quarter :Quarter

Gross national product or expenditure .. , .........•. , .•... __ 26~ _2~8;;.J.7..;:.''..:...4_...,.3..;;..0.--.3 .:.....~' 7_ ....... 3.<.;:;1.§, '"5-...;<3.:;;.2"-5 ;....;• 6'---_....,3.:.:;:;2;.;..8_ Personal consumption expen-ditures , .... , •.......•.....• : 186.7 Durable goods ......•.•..... :--:26.4 Nondurable goods ...•.•..... : 99.4 Services ....•.•..•......•.. : 60.8

202.') 34.3

105.5. 62.7

198.4 29.4

104.9 64.0

208. g____EQl.;_• 7:--=20=l--~ -3L5 25.9

111.5 109.5 65.2 66.2

Gross private domestic inv en tmen t __ 4_4.....; . ...,..o,... __ 4..:...7!....:-o' 3f-_ __ .;:.60;;...:..;. 2=---~5~9 •..:::6 _ ___;6;;..3::..:•...:.5 __ """5::...~7 __ New construction ........•.•.•. 20.8 23.5 23.3 23.9 22.3 Producerstd~rable equipment •. : 20,2 24.5 25.0 26.5 26.7 Change :in business inventories: 3.2 - .7 11.8 9.3 14.4

Net foreign investmen·b • , ..•.• , .. __ -...=.1::..;·...;:;6_ -3 ,.2

Government purchases of goods a!ld services < •••••• , •••• , ••••• ~ 40,7 Federal ...••...•.•.•.•.....•.. ---21.6 Less: Government sales .•.. ... .2 State and local .... , •.••..• ,.: 19.2

40.8 21.4

.2 19.7

-2.7

47.8 27.5

.2 20.4

.. 2 ·~3 __ ___:~<=~_......;::1::.-.--

52 .. ~9 _......;;6,.,...o.:..... o;...__6"'""6_ 32.1 38.7

.2 .2 21.1 21.4

Department of Commerce. 1/ retail will not necessarily add to total because of rounding. g/ Preliminary estimates by the Council of Economic Advisers.

ocroBER 19.5.1: .. , - 9 -·' -.'

''

-" ·Since the fil's't q~arte:r, _q:f :th~s y~ar conml.ili€Jr '(iemand for mapy goode and services has· ease~· d,eapi te, .':E;r c~~tinued rise ::tzi incomes.· Consumer expenditures· in the .second quart~r.· 9t: 1951·were ·down .6 bill'ion· dollars from ·the fj.rst q,uarter; to an .a+JnuaJ. 'rate 'of 202 b~llion dollars. . Apparently the summer lull in consumer buying \ras due primarily to heavy·advance buying after mid-1950, the continued availability and very substantial inVentory accumulati-ons of. I!Jfill.Y goode, :plus th~ prospects for a settlement:of the Korean conflict. Reduced corioumer purchases and the continued high output of goods resuJ.ted in a: r.~c.orcl rate 'of i;l~t li}Ventory accumUlation in excess of 14 billion dollars in the £econd quarter of 1951. And,· with rising incomes and reduced consumer buying, personal savings have risen to the highest rate since the .end of WorlQ. War II.

Although incomes continue to rise and restricted use of materials is cutting d.o:wn output of some durable goods, consumers are ·still buying· cautiously.· Preliminary esti.mates for the third quarter indicate a slight gain· in consumer expenditures for nondurable goods and for services. In recent months the rate of inventory accumu.la:bion has slowed considerably and apparently most of the gain is in defense goods-in-process. Substantial cutbacks have occurred in production of consumer goods as a result of

· restricted use of materials, generally lighter demand, and large inventories of many consumer goods. However, there is solne evidence in recent weeks to indicate that economic conditions are becoming a little more firm. In addi'tion to the small pick-up in sales inLthe third quarter,' wholesal·e. prices in·genexal have risen elightly in recent weeks.

' '

With a continued rise in consumer incomes in prospept over the coming 'year; expenditures for goods and services are also expected to rise. Re-stricted use of critical ~terials has already cut down output of some

·consumer durables and, for the fourth quarter, allocations of metals for ·such goods as automobiles, ~ousehold appliances, and television and radio sets will in general permit production at about 60 percent of·the rates of the first half of 1950. Although few, if any, shortages of consumer goods now exist, supplies of some durablo goods may become tighter as inventories are worked down, Material allocations in the coming-year probably will restrict output of many consumer durables. However, output of these goods will also depend largely on ~he rate of increase in defense production, the build-up of productive capaci tyrJof basic materials, and the extent to which ·pr.?ducers can reduce use of critical materials per unit of output by chanses in design and. use of substitutes. Somewhat larger supplies of· food and other :f?.Ondurable goods are in prospect for next yea:j:' arid, _if eJi;pend'itures'for dur~ble goode are limited by rest~*cted output, some'of this buyi~ power may be·· shifted into the purchase ·of foods and other nondurable goods. Total con­sumer expcndi tures for goods and services in 1952 probably vTill be larcer than this year even ~hough.person~l savings continue high.

Gross Privato Domestic Inv~';trJ.en:~ ~~~- '-~

Gross· privaLe dor:J.c~t:,c invont1nemt in .. the- .i.'~rst i1:1lf of, ;;~1is ysc:r ~v:::.s a:t·an annual r•at"e of.61.6 c,'illirn rJollc-lr:J, up l~O -percent fr.o:rrt~c s·.·-me pel~iod B. ';ycn:r' en.rl-:;,f!l', H0r0 th£n on0_~tc..lf o:C L.h'.f1. c;aln wa:; in lo.x·f3Cl' b··);slnc:Js ln­vcntcriefJ. HOVlt...Ver, 0X'O~Cnd.:..tu.1n< s f'o::.n ct'Jr~i.blG l,quiphle:nt vrcrc {•P•'"t)OU:t o.:JG­third c-,nd mnv con struct5.on cXp,:nd i. tun: .. :..> tn~r'~;_::;c.,d .~:bou.t 11 perc ·:·nt ~.--Dove

~CTOBER 1951 10 ·-.

the first hf11r' of l~~b. ·. Pr~limf'nar;y · est,imates fo1· the: tlf.ird qhart·er in­dicate a deCline :l,n total p:r.ivate investment expenditurea·:J.:argely ~13 are· sult C')f· a s~ller ·n.~t ·i'me~toty ac~~v.la~·i9n:; .' .Ex:pendi.turelf.for producers 1

durable equ:l:p:tnent conttoued. to rise into the third q,uart~r :while new con­struction was down a little and n~t inventory accumul:at'ion wal3 reduced from an annual rate .of 11~; 4 ·bill:!. on doilars in the second quarter ·to Eiround one-half that· rate 'for the third ~uarter; ··

',(

Unde~. th~ :tnrpact of the d~fen.se program, business. expenditures. for new plant and equipment-'have ri~en each quarter' since early l950and for the third quarter were at·a record aririuai rate of·e7.2 billion dollars, about 45 percent above a year ago. However, the rate of ·gain is slow:l.ng as sup­plies of critical materials and other contr-ols linii t business inve:stment. Plans of business men in late July and August indicated a continued high level.of.expenditnres for new plant and. equi:pmentw1tl;l the pros:pect that the

. total for 1951 wfll. be more than one-third higher than last year., Current investment programs are being encouraged b~r such Government aids as the "raptd. tax DJllortization'' authorized for defense-supporting indust'I'ial faci .. li ties and b;y direct loans arid loan guarantees., Moreover, earnings and sales are, in general, relatively high.

For: the coming year,: the drive to· expand capacity of basic indus­tries to support: 'both military and clviJ.ian·production should lend consider­a·ble strength ·.·to the clernand for capital· goods. However, capital outlays in non-defense industries :proba,bly will be reduced depending largely on ava'il· ·· able supplies of critical materials. In total it is expected that bus1.ness expend:i tures for. :i.nvestment will continue at a high rate over the next year. Housing starts. next year probably will be 16vrer ·than in 1951 and cute are also in :prospect for commercial and non.:.deferise industrial construction' in 1952. Rapidly expanding output of defense goods may 'require a relatively large net inventory accumulation. But net gain· in business 'inventories next year probably will average much lower than so far· thi~ .year, ·All investment prospects combined poirit 'to some reduction in total private domestic iuvest­thent in·:l952 compared ~o this yea~.

Government Purchases of Good.s al'ld Services

Government e;~penditures (Federal.j State and local) have risen steadily since the outbreak of hostilities 1 in Koren. In the third quarter of this year total expenditures were two-thirds'larger·than in the first half of 1950. Expanded defenr:H~ ·€xpenditure·s accounted ·for the gain, rising from an annual ratea:r'0tind 16.3 billion dallars''in··the first half of 1950 to about 41 b:!.l-

.lion by the third quarter of this year; ·Currently expenditures f'or.:defense represent. over 12 !percent o:f. the gross nat:tonal product. Gove'!'Ilment expendi­tures for goods .and service's this. year may total around 50 percent more than in 1950. '

The planned build-up in e,zpenditures for defense from an annu.al rate of about 41 bUlion dollars· in the third quarter of thts :year to around 65 billion a year hence is 'the most important factor in the outlook for 1952. Although non-defense expenditures may decline a little, total Goverr..ment ex:pendi tures for goods and services next year are 'expected to be subs·t;an,;. tially higher 'than the to·cal for this year if the defense program develops about as planned,

OCTOBER 1951 - 11 -

In the fiscal year 1950-51,. as in the pr!ilceding year, this compo-nent of the gross national prod ac-t lTas negative.: · 'lhat is, our merchandise and service transactions with foreign cotJntries ·(our export surplus) was exceeded by our Government g.i~ants and private g:i.fts to those countries with the result that in both ~care ·otir net foreign aa.sets including gold decreased. The net foreign investment in .f1sc'al 1950 .. 51 we.s minus 2.1 'Qillion dollars compared to minus l. 0 billion .in the preceding year.

Financing United States FJCports of Goods and Services

Ill fisca:i year 1950-51, ·the total value 9r United States exports of goode and· ser-vices 1vas 17.3 billion dollars co~ared with 1~·. 0 billion in the prt3ce;di:r;.g yee.r, an~ increase of 24 percent. , I!l both years, foreign countries received moro.dollar exchanee from U.S. imports'of goods and. ser­vices,. United States Government foreign grants anrl loans, and other lees im­portant sourc&s than was necess~ry to finance U. s. exports of soods and·ser­vices. Consequently, these countries had a net accumulation ot; gold and·dol­lar assets (Col. 3, table 3) ins~ead of a net liquidation as in the immediate postwar years. Of the :two principal sources of for·eign :;:eceipts of gold and dollars- -U. S. imports and_ U. S. Government foreign grants and loans- -im­po:cts.have been consiaten~ly larger and have shown an upward trend since the war while for~ign grants and loans have decljned since 1949. In fiscal 1950-51 U. S. imports of eoods and services were valued at 14.7 billion dol­lars, up almost 50 percent from the preceding year·. on· the· ·other hand, Government foreign grants and loans fell 10 per·cent to 4. 4 Uillion dollars in fiscal 1950-)l from the preceding year. '11hus,, .fore.ign recelpts of gold and dollars from these two principal s'ources rose from 14.8 l)illion in 1949-50 to 19.1 in 19)0-51. Foreign countries are expe;cted in fjscal 1951-52 to ea.rn more dollars from Untted States impOlts oi' gocds and services and receive more dollars from U. 3. foreign Brants and 'loans than in the preceding year even though a.rJproprd.ations for foreign economic and military aid as contained in the bill sent to the P!;esident ·ohow a decrec;.se to ·7. 3 'billion dollars from the B.6'biliion dollars actually appropriated:.ln fiscal 1~50-51. The ex­pected 1ncrease in fore.ign receipts-of foreign aiu dollar~ is· due to large· o'b:.iga.tC:Id but. undisbursed balances oi' U. S. Government foreign grants and loans fo:.· mll1 tary aici.. on hand en Jul;y 1, 1951. In addition to an ex­pected increase in foreign receipts of dollar exchange in 1951--52 compared with-~he previous year, -foreign holdings of gold and dollars at the be~inning o~ 1951-52 tota+ed 20.1 billion dollars, up 3.4 billion or 20 perc~nt· from the holdings a year earlier. Total. foreign boldine~, plus receipts''dur:'.ng the year.-that is, the supply of gold and dollal:'s available to forei~n count­ries during th~ ye~r- -are expected to be larger in fiscal 1951-52 than in the preceding 3ear. This expected increase in the foreien supply of dollar ex­change in f~scal 1951·52 includes.(as indicated above) some dollars earmarked as military foreign aid which wiif probably be used for procurement of pri­marily npnagricul tm:•al ·items. However; the foreign supply of dollars, even excluding military foreign aid is expected to be larger in 1951-52 than in the preceding year due mainly to the 20 percent increase in foreign holdin~s of gold and dollars.

OCTOBh'R 1951

Table 3.- Fir~ncing of United States exports Qf goods and services in specified periods :

Period

·-·-- (Billions of dollar~~ _____ ....__ ____ _

• . . . Means of financing

: ·u. s. . : expdrte U. S. : ·sale of gold : · U · S • · · : Other : of importt(and short-and:Government: sources : goods of :long-term dol-: foreigh· : ·and : and • eo oils : lar assets by : gt"S.n ts and.: bala,nc1;ig :services: and : foreign :: loans ;item 1/ ; ;~ervices;countries (Net~ (Net) (Net)

(1) (2) (3) (4) (5)

1935-39 annual average : . 4 .o 3.4 1.1 ~/(-) 0.1 (.) 0.4 0,8 1946 14.7 7.0 1.9 5.0

1947 19.8 8.3 4.5 5.8 I 1.2 1948 17.0 10.3 o .. 8 5.0 0.8 1949

.1st g_t~. (ann. rate) : 17.4 10.1 (~) 0.1 6.7 0.7 2nd qtr. (ann. rate) :. 17.6 9.5 l.lt 6.7 0 3rd.qtr; (ann. :rate). . ; 14.8 9-3 0.3 5.9 (-) 0.7 4th qtr• (arm. :cate) : ':!.4. 0 9.5 (!.).1.9 4.6 1.8

"

Total .... J .. " •••••• : 16.0 9.6 ( -) 0.1 6.0 Oo5

1950 1st g_tr. (ann. rate) 13.0 10.1 (-) 1.8 4.4 0.3 2nd qtr. ( am1. rate) 14.1 10.8 (-)-2.7 4.6 1.4 3rd g_tr. (ann. :rate) 14.0 13.5 (-) 6.2 3.6 ·3.1 4th .qtr .. (ann. rato) · 16.6 14.1 (-) 3·9 4.5 -1.9

Total . . 14.4 12.1 ( .. ) 3.6 J/4-3 1.6 ., ........... ., .. .. ··"'

1951 1st qtr •. (ann. rate) 17 ·5 15,7 (-) 3.4 4.4 0.8 2nd g_tr. (ann. rate) 21.0 15.7 (-) 0.7 5.1 0.9

' '

1/ Includes loans Of U. S. dolJara by the International Bank and by the Inter­natiana.l MonetEI,ry Fund, In 1949 these loans totaled 137 million dollars. In 1950 they totaled 1{ -million dollars. Private remittances and irtvestments abroad are also included except in the 1935-39 average. · g) Includes pri va. te loans and rami ttartces' to foreigners which in other periods are in· column 5. I • • • • • • •

3/ Includes 2.7 in ERP·grants, 0.5 in grants. for·Government relief in occupied~ areas and 0.5 for the Mutual Defense Assistance program. ·

OCTOBER 1951 - 13 -

As~icul~~a~EiP.~~s

United States exports of agricultural products in--fiscal 1950-51 were valued at 3.4 billion dollars) 1~ percent larger than th~ 3.0 billion in the preceding year. ·The g_uan.ti ty index of agricu1tur.a-1 e-xports de-'clined 4 percent between the t¥rc, fiscal years,· ·

One .. factor contributing to the :r-ise in the value of agricultural ex­ports wa·s the increase of about one-fifth in -the supply of· gold and dollars available:to foreign qountries in 195G-51 over the previous year. This in-

, crease·_made it possible. for foreign countries to .. fina.nce a large!' share of our agricu~tural exports out of their own dollar resources. In 1950-51, only about one-third of the value of agricultural exports was financed with ECA and Garioa funds compared to about tw0-thirds for 1949-50 ..

Table 4 ... Exports .pf United 3tate~ agricultural products financed. under the unde'r: the two major foreign aid programs, ECA 1/ l;lnd Garioa. g) and by

.· · all means forth~ years beginning July l, 1949 and 1950

1049-50 195d-51 -~-:Financed with ECA: Total :Financed with ECA: Total

agri­:cultural

:and Garioa fun~: agri- :and Gar~oa funds Percent :cultur-: Percent Commodity

: Value : of : al ex-: Value : of :exports --------- -----~~-':"~_total :ports 3/: '__;.,: -.:t;.;;o...;.ta;:;;l--....::-.... 3~/-~

:Mil.dol. Pch MiLdol. :M.il.doL ~ Mil.dol.

Brea~ grains (wheat, all : wheat f'lour, rye) •. , , •••..•.•. :

Coarse grains (corn, oats, barley, buckwheat·, grain : sorgh um.s ) • ~· ... o • ~ o ......... - •• :

Other grains and-grain pre• para t 1 on s ... , . o • • • • •• ,, • • • • • • !

Oils, fats, oilseeds, and · peanuts· (edible and inedtble):

Tobacco unmanufactured .••..••. Cotton and linters ..••.•.•..••. All'other agricultural products

(edible ·e.nd.- inedible) ...•••..

·Total ' . • ,_ .............. ! .. . .

606 '- .

209

13

161 149 695

131

87

18

60 63 73

26

66

693

239

102

268 235 9L~9

501

346

188

7

48 131 412

27

1,,159

46

53

6

12 48 44

5

. 34

760

355

121

3 409

l)·The EcQnomic-cooperation A~nistration data include all programs administered by ECA. The ECA data are the values of liftings, corrected for late reports through August 31, 1951. · gj Garioa stands for "Government and relief in occupied areas" the budget title of funds appropriated to the Departme~t of Defense. i/ Includes agricultural exports. financed with ECA and Garioa funds and with all other Government and private funds.

OCTOBER 1951 -14~

The outbreak of hostilities in Korea aJso contributed to an increase in the value of agricuJ tmal exports in 1950-51. .As a result of post-Korean price tncreases, personal incomes rose in raw-material-producing countries. In addition, the Korean cc,nflict caused foreign countries to build up their stock of' food and. ra·w materials in. anticipation of shortages .and higher prices.

The value of agricultural exports fluring the 1951-52 fiscal year pro­bably will total somewhat larger than in the preceding year. The volume of exports is expected to be 5 to 10 percent larger while average export prices may be a 11 ttle lower. ltTi th a larger cotton crop, removal of U, S. export controls, and relatively short foreign stocks, exports of cotton probably will be substantially larger during 1951-52 than in the previous year. In­creased cotton exports together with small increases in the quantity of ex­ports of tobacco are expec'1jed to more than offset a probable reduction in the volume of coarse grains and dairy and poultry products. Wheat exports in 1951-52 are not expected to change much from the previous year. However, export wheat prices may be up a little and the value of wheat exports should be somewhat llieher :l.n 1951-52. Wheat crop prospects are relatively poor in the major Southe:..'n Hemisphere exporting countr:l.es but a record Cane.dian crop may at least offset reduced. supplies from the Southern Hemisphere.

COMMODITY PRICES

Follo.wing the outbrea.J.c of .bostili ties in Korea, demands on ·t}J.e ec0nomy by c~msumers:, business, and the Governinent were sharplY. expanded. And though output~ of lgbods·; al~?o. r9s~ rapidly tpe increase was small relative to expanded demahd and the general.level of wholesale1 prices increased by about 17 percent from mid -1950 to a J?ectk in March this year. The rise from Febr·uary to March wa"s very slight following the imposition of the General Ceiling Price Regulat1.on '!.lhich became effective in late January 1951.

With the slackening in congumer buying since the first quarter of thls year average wholesale prices of all commo'di ties 'de.clin'ed gradually into mid-September and have since been firm at a level 3.) percent below· the March pee.k, but are 5.2 percent above mid-:oc·tober a year ·ago, and nearly •.:13:. percent above thEl avere.ge Just bef'ore Korea. This year 1 s record agricul­ture.l production is primartly respon:Jible for 'the 4. 6 percent decline in wholesale prices of farm products stnce mid-!Vf..e.rch .' Wnolesale food prices., moving against the e:eneral trend, ·w-ere 2. 7 perce.nt higher in mid-October. Both groups are substa."'ltially above mid-Octobe.r 1950--10.3 and ll.i perc.ent, respectively. The average for all commodities other than faro products and food· is 4. 3 percent bel. ow mid -March, and 2. 3 percent higher :than e. year ago· Textile products> clowrl ;I.ll . 5 percent f··.om. March and 3. 6 percent from Qcto ber 1950, are the only group which is currently low~r thari a year ago. Chemicals and allied product.a and building maverials in mid--October were 2.9 and 2.4 · percent respectively below March 1951 while metals and metal products were 1.3 percent higher.

·'

ocTOBER 1951

1 Table ;. ·oroup indexes'.o,f:,:wp.RlP.~a~e priees; .we~ encted OoWbe~ l~, l:-951-. · · · · wi'tlf'.~c9lll'.Pa~):sbn~ ·. · · ·

_,.,, '

--.-- _..._......_._ ~ .. ....__. _.J19.1~--=.lQP.l~~-- · 6 ni!. ' ~ · : : ·· ~ · : Week ended October 1; 'l77l

. · s · We~k ; Week · ; Week- ·:· Week :·: Week··: : ...,E.ercentage change f:.;:;;.r..,.om....__ . ·· _. .. ~ · ·:·ended' :ended· : ended.·: 'ended ~ended :: Week :·Wee~ : ~leek :'r1Week

Coll1!flod~ ty- Gr.oup :Oct.14:sept ~18, :Mar. 20, ;Oct. J, 7 ~'.tJune . 2~: ended .:-ended ; ended : ende~ ' 1951 r ·1951 ·: 1:951 .: 1950 : ·1950 ~Sept.l$,;J.znitt:,2Q~Q~ft'el7~(1pne 27

2 ~ 1951 : 1951 1950 1950 . ---• • "' All commoditie~: 17.7 t7, •I 176.4 184.22 168.9 157'.4 + .•. 7 .:..3.5 + 5.2 + 12~<t· ...

.. ). . . ' ' : I' •

Farm products L95.J 18816 '204.8 177.0 165.4 + 3j~ .-4•6 . + lCY.3 '+ 18~:1, ;. foods 191.6 .. 187 ·9 186.6 172.4 16~.4 ., 2.0 +:. ~.1 + u:.:t + ·1e.o · .. ·· ·

I ; , f Jj •

-: ~11 other th&n ' '

farm and food 165.1 16.5o4 !72.5 161.4 149.2 - .2 - 4.3 + ~·.3 + 10.7 Textile pro- . .. : • ducts 157.1 163.2 183~7 162.9 137.3 - 3.7 - 14·5 - ;.6 + 14.4

Fuel and lighting pro ....

2.5 + 4~5 ducts 138.a 138.6 1,38.6 135.4 132.8 + .1 +. ·l + Metals and products : 190.9 189.4 188.4 178.3 171.9 + .8 + 1.3, + .7.1 + 11.1

Building l!la t- : 1.6 + . 9.6 erials · 223.2 222e0 228.6 219.7 203.7 + ·5 -0 2.4 +

Chem:Lcals and: allied pro ducts 141 .. 2 140.4 145·4 132 .. 4 114·5 + .6 - 2.9. + ·6.6 _+ 23.3

Bureau of Labor ·statistics.

Average prices received by farmers for all. crops, livestock, and .-livestock products in mid-Septemb~r 1951 had receded. by 7 percet:J.t, fr<?m th~ pe~ r.eached in F~~urary of tpis. year. 6n September 15, 1951,. the BAE index of prices received by farmers was 291 (1910-14~100), ·compare! with 313 on Frbruary 15 ~f this year. and 272 a year ago. ·Prices received by·. tarmers in mid-September were 1$ percent above J~e of last year, just b~-fore· the outbreak -of the Korean conflict, ·

• •- • \• 'I ' . . • • r ' ~

·.··:· , . 1:-iqst .of :the decline in prices· received by farmers since early this . y.ear has occurred in crop ·prices although pri~es-received for wool an~ me~~-. ani.ma.ls have als.o declined. Cottpn price.s in. mid-September were dpwn·nearly on~~fifth from Feb~uary in response to the prospective 16.9 ~i~io~•~bale cr,op.for this-year •. With.record $Upplies of fats and oils jon the 1951-52 marketi:ng··year, .. prices of .. oil-bearing crops .iJl·mid-.Septeml;>er . .w~re almpst ...

· one-fourth lower than in Febr.uary. Fruit and .truck· crop. prio~s s.ea~on-' . ally adjustedJwe~e down du~ing this period by.12 and l7·percent~.;respective~y. Among the import~nt ·(actors.~ this 39 per.ce~t d~cline~~n wool p~i~es from .. Februaay to mi.d-Se:ptember were_.a.n1 easing in· consumer. de~apd 1 .. rel~tiv.el.y_. .. ..

· •rge.inn~t~ries a.t 'V·,rious pr-&cessing'levels., >1,,, '# a. s.~b~tan~ial incrt!as~-in the U66'_'0f ·comp&M.tiire ,fibers; and a t~mp()rary ·,al?a.-~ement'·''ifl;.' mlli.t.ar.y ~rocuremen~. l<lea.t animal prices in mid-Septembex: ·we~~ ·~'bC.n,lt. :k ,p~c!3nt be_low. February·largely ~ue to ~$aso~al decfines in .. pr£ces of h9~s~ ~~~s? ~nd s~eep. Season~ly· adjusted dairy pro~uct .PrJ.ces w~r-e gei?-~~I!l~.fY , .. ~.change.d, apd adJusted poultry and egg prices in Septembe~ averaged) percent higner than· in F~bruary.

OCTOBER 1951 ' ' ' ' '• : ' I ' ' ' j • ~ \ I ~ '' '• ~~ <, ' ', ~~ : " ~ ' f

Table 6.- (}.roup indexes 'of pr1qea ·t~pei'ved. b1- farmers-, September 15, 1951 with comparisons

--- ___ ...... --- ~Jl910--~4:0l00) - ' - : : • 1 : ·. ; Se;pte,mber 15,' 1§51

Commod1.ty group :sept _.15, :Feb .~5·, :Sep~ .'1~ ,.;June i5, <_p~entage change frorr:._ , : 1951 : 1951 1959 : 195~ .. ):Feb .15, :l?ept ,15, :June 15,

~--- ;....,._,,_...___"\"'"' ~----·:- . : ..:;____! . 1951 ~ 1250 1950

FoGlfl. grains .. ' Feed grains nnd h~y Oot.ton .-Tobacco Oil~bearing-~rops Fru!lt l/ ,. , Truck crops 1/ Other vegetables

All crops

Meat animals Dairy prod.ucta 1/ Poultry and eegs 1/ Wool -

Livestock and livestock product a

,Crops and'Uve-stcck and

' .. .

233 216 283 423 288 195 238 192

239

411 27 8

! . 228 376

337

·254-222 351 440 379 -222. 287 167

28j

425 279 222 612

221 194 336 428 303 215 181 1~3

243

372 244 184 3~-9

I 218· ,. 190 251 388 254 186 209 186

225

3h2 248 168 316

8 - 3 .. 19·'· - 4 - 24 - 12 - 17 + 15

... 16

- 3 2/

+ -3 - 39

- 1

+· 5" + ll

.· ... 16 - '1 - ~5 ... '9 + 31 + 18''

+ 10 + 14 + 24 + 8

+ 7 + 14 + 13 + 9

'· +' 13 + 5 + 14 + 3

+ 6'''

+' 20 + 12 + 36 + 19'

+ 13' ; + 26·

products 291 31'3 2'{2 247 . - 7 · + 7 + 18· -· !::-7..,-~s-ea_s ... o-naily adjuet6'-:d:-.-.2~Tr-teea than o .5 percent decrease. ---.:...-

..,.. ' . '

Alth.o:us!l. I!'JJ:trket'ings of some farm. products will be seasonally heavy dui'ins the .rest of' this y.ear, prices rece:!.ved in ·general are expected to be relatiyely strong d~ring the next few'monthe. Average~ wholesale prices of f~rm products in mid-October were up 3.6.percent from.the previous month. . .· · ·

' ' Although the de~1d for farm products· 1a expected to continue to r1ee in

1952, large supplies probably will ease upward pressure on farm pricee. Record suppl '\e.E'~; o~ farm products are in prospect for the. 1951 .. 52 marketing year and, with a: c,ontinued high level ·of demand and :f'e.vorable growing conditions, fa~· output 1n 1952 probaQly will -continue large. Crop production for sale ~d farm home conaumption.~vailable fqr the 1951-52 marketin,g year ·iS. currently~ estimated at 7 to 8 percent above a year ago.'' 'Record· S'9PPlie~;~· Of· fate and oils are in ~roe~ect for the marketing year beginning October i951. Feed supplies, are above ave!'age 1 . but expected e~pans1on in production of livestock end live· .. ·etook produgte in 1952 probably Yill make it naeeseary to draw on re~erve'feed grains and thua further.~~d~ce carry•over stocks-by the end,of the 1951-52 year. Output of livestock and livestock products in 1952 will likely be larger th&n thie ye~r. A .reasonable exp~.c~at.ion is that ''beef production and'· veal' production 'combineQ. ·next year may be" up ·about ib · percerit ab.ove' the low· levele,. of · ' this -.,year;. The build-up qf cattle inventories. this year 1-s expee~ed to : e_qual about one':"fourt;h of the number slaughtered d'Uring 1951.. Poultry_ produo­'tion also :may increase a 'little while' the output of pork ana -·da:fry products .. ' ',), oOrGbablY will .dct!ltinue li'e1atiYely''hil'lh .in l952; · •:' ·.' 1 ··.-:._ -· •• . ·" · .• ' •. ,·

OCTOBER 1951 ,J • ,

The level o£ prices recd.•roG. 'bt· farmers next ·jear, :particu].arly in the last half' of the year., w"tll depend ·to a large !:'X tent <?Il ·weather conditions during the 1952 growing sC3a.eon. Genei'ally un:~a-vorable weather co:.1.ditiorie and reduced. fann out:p'lt 'N:i~:1. a h~&"l level· of dE'·L'!a.7l~ for farm :fil'OcJ.ucts could ex-ert conej de:rable npward pressu1·e on pr:tc;,e as they l.ld.jt~ot, to ne:.r c:ro:p prospects~

Prices cuultl rise further und.t-Jf.' :J_J!'Udl::'llone of 1;}:-)e Det'enpe P rod1wtion Act aa am~mded ir... 1951. In miQ.,..Septioniber crop J;'rices in gr.meral '\<rere below ;parity and. m:!.nimum lev-els at which ct1ilir.e :prices c.cH1 l;o est:3.b}.iehod v:nder the Act • Row­ever, meat antmsl pr:J.'.:-~e, except for hogs, ve.'::·e aJ;o11e :pari~~:y tn miCi.·..SE:~ptemter and all except hogs and aileep were ab~re tl'J.e legal runimu:'Jl for ce:Uing pr1cec. Price e~Uinge hav-e bee~ in effect or. all meats s:l.nce Jan.uar,y 28, 1951.

'rhe ind.ex of pr1c~B :paid 1iy fa:rwers (including intE~rest, tax9e and farm wage ratee) 1n Mid ... Septerr.-:,er 1951 was 2 percent a'~:,ov-e thP. mid-F'ebrua.r,y level, hf1tv::1ng declined onl::r fl"'act:tonally from tl::e :record le·vel reached in April and May of' this year. Currently the parHy index ie around. 8 :percent higher tha.'l. a year e.c;o. Prices pd.id :!n mi•i~C~ept'=>m·oar for cr_..rmno<J.ltiee used in farm pro­duction were_ only fractionally b'3low t!Je pee.k. ".n Jlpril end ne~:rly 10 ;percent abov,'3 a yea:."' ago. Farm wage'3 Oi-~ October 1 wertl up seaeoc.lall3 from .Tuly and about 11 :percent h1 gher than las·~ year. Farm prod.uct:l.o.n. costs in 1952 are expected to b';) a little higher tnan for. this ;:rear. Gont1nue.C:. e:x::pans:l.on in the :nonagl'icult-ura.l sector of the economy e.nd prospects for higher wage ra·cee pro'bably will contrfhute to t.igher farm wage re.tee tn tr.e comine year. In­terest paymonta, taxes, ancl colDIJ1od:1ty pr1cee in g•::neral are all. expected to 1)e a little higher in 1952.

The pa:r1ty ratiO··-tha index of )Cr1::!es rt:)cei~red. by farmers divided by the index of :prices paid, interest, taxes, o.nd farm -wage rates--wets at 113 in Fe:Jrua:cy this year. But with the decline in farm p:d.ces dince February, the parity rs.tio M.d !'allen to 103 by mid-E'eptember. In the coming year this rat1o may average a ltttle lower than the 1o6 estimated for 1951.

. Average priGes pa:l.d by urban consumers of moderate incomes have stead­ied e1.nce June 1 aft1.1r ha.ving rtsen 2 percent from January 1951. The index we.a 185.5 (1935u39=JOO) in both July ani August. Preliminary data based on a sur-rey of e1ght le.rge cities indicate that; food pr:tcee contirraed etee.dy durins September. The urt.a.'tl cost of 11-ving may rise si.:J.ghtly in the next year·. Averag13 priceq paid ·tor co:mmodities used :l.n rural fami.ly living ha.ve continued ::elatively steaa.y over the paet 7 months. T~1e ,.ndex 1n mid­feptember was 268 pe1·cent ol' the 1910-l·l.j. avere.ge, slightly below the r·ecord reached in May 1 and 6 percent abov-e mid-Sep~ember a year a.go. Rural li vtng ccete are 'also Hkely to rise a little O'Ver the n0xt ye'ir,

FARM INCC1v1E

This ;rear's groee farm inco1:1e ie est:i.ma.ted a.t 37 ,') hillion dollart=~, ·or 14 perceh-:. h1g.1.er tban jn 1950, Product1o.c"L expeneos are up 12 percent to ap,proxtrr.ately 22 ... 5 b:Ulicn dolle.rs, And famers 1 realized net income is around 1.5 billion dollars, o.r 18 percent ·higher t!w.n la.st year's re·vised 'e.stiit.eote of 12"7 billion,. However, it is still substanUally below 1947 and 1948., :Hon."l.grlcultura.l income is curre,rd;ly at a record high a.nd is expected

·to continue t.o rise in 1952 9

OCTOBER 1951

Next ye<?-r'a gN~~s farm income rrl8:y b'e up as much as 5 percent from the 19.51 estilllate of 37o-5 bill!o::l ·dollarse Cash receipts frcm ma.rketings, Hs principal dc:r.lpcnel.,,+,~ are also e.xpectf!ld to increase around 5. percent from the estimated 1951 level of 32c8 billion, If growing conditions arT;~ averaga" the total v·o1um·3 of farm IIICI,.rketings will b"J larg~r than this year~ and pz-obably larger than il\ any previous yearo But.prices.in 1952 ars not exp::cted to a.verage slgnifica.nU;r hie;l1er ·tha.n in 1951 0 as a whole 0

Both c:o.·ops and livestock P.re e:JC9ecteo. to share in the small increasd in cash receipts proj~~ted for l952o Ni'th some gains li'kely in cattle and calvesl dairy prod.U·:!ts~ \<rheat~ corn,1 and cottono

Farme::-a' total cost of producti or1 is likely to r-ise further in 1952i vTith practically ell items of e:xpense contributing ·~o the increase., In­crea8es in a few :inci..i.viclual expense cs.tegories may be as mu.ch as 10 per­con+..., Consequent:'..y9 farm0rs' :raalizei net incorne in 1952 ma.y be about the same as ln 1951:-

jParma:r-s 1 .cash receipts th:'..s yf:ar will to~al about 32o8 billion io}."La.rs~ o:r J.L~ percant above .!.9)0(1 Recsipts frem livestock and U·rastock products~ estimated a: 19..,5 bilJ.ioa dollars 1 are 20 percent higher than las~ year~ b·u.t crop receipts of 13-;.3 billion are u:p only 6 percent.:­Governmant. pa~ifnle"t~.; s to farmers in 195:1. will pro tab 1.y total only slightly higher than in 1950o 'I'ta value of' ho:tr.e-consumed farm produ.cts 0. howeV'er, and the estimated =:-anta.l value of farm dwe1ling3~ are ee.ch ·..1p in e.bout the same proportion as total caah receip'ufl(.,

This year 1s rise of 12 percent in total production expense reflects indrcases in all the importa.nt i tems 0 1.£·he largest increase over last year.J arou::J.d. 30 pe:r.cent~ is ir. e7.J)enditures for pu:rchased livestock9 a.nd is mainly the result of higher prices(, ExpendHu!'ea for feed are about 15 pe:-cen·; a:oove last yea,r because of higher prices and an increased quantity pu.rchas~d.J Althou[,_;h the number of hired \vorkers is dowJl slightly, wag0 rates are higher~ and the total cost of hired labor is up about 10 :percent~ Fa.rmers are also paying about 10 percent more for fertilizer this year be':.a·asc;o they are buyl:ng larger quanti tieti at higher price so. :Depreciatiox: cha,rE;eS on machinery e.nd buildings ara abc.;u.t 8 percent higher tha.n last year tecause of ::.ncree.sed !nves·cment and higher replacement ~ostso ThE:l cost of o:pe:ra.ti:ng motor· vehicles is up about 7 percent because of higher prices ~ Jr fael .. lubricants~ and. repairs., And pa,ym~nts for taxes~ intorAst(i a.nd re:1ts~ alor1g with roa:r..y smaller items such as gi::ming co~ts~ ar~ also considorably le.rger than in 19)0.,

LIVESTOCK AND MEAT

All increase in xr..-sa.t :t.Jr.:;d:actio:1 will ba realized in 1952 from the expansion now taking place in numbers of meat animals on farms., The in­creasu ma.y 'be large encug.1. to provide a le·ITel of meat consumption per pe:::son equal to at least the 1948-50 a...-erage ot 141+ :pounde. Consumption in·1951 is UQW indicated at 141 pounds~

Most of the increase in outpt:.t of meat next year will be in beef e.nd vealto A lar(';er a.!.b-uehter of catt:Le· e.nd. calves than this' year seems certe.ino Cattle s::Laughter for 1951 ia e.t a 10-year low and calf slaughter may be an 18-year lown At the sa.mn time, numbere of cattle and calves on fe,rms a.re being increased~ perhaps by about 6 or 7 million hee.d~ and a nev,r high of

OCTOBER 1951 - 19 .. -' "

,·

around 90 to 91 million head·is ~~acted at the end of the year. Tl·ends during previous upswings in numb<:~rs Etnd the present favorable prices and gen­erally adeq,uate f~e~. SUJWl,i:E!l/~ .. ,wC?.ulO. po.:tnt .tQ a moderate increase in slaughter next Y,ear, an.d to .a con;t.:tnui~:S q1it slp:WEJ:r;' exP.an~ian of numbers on farms. Bas~d ,.on past .. e:x.peri~nc?, .. a ... ~~ason~b:t'e. ex,po.ctation would be an iDcrea~e in combined be'of und veal .outpu,t. of f.H'OUil;d 10 -percent. .

~ ,) I , I

Increas.eci th:i's ··J.ar:g~· in output o:f b~0f would loscen u-pward pressure on prices .of beef t:md catt.le and ll}j.ght bring som0 reductions at times of largest mD.rketings; But no substant':tal decrecse in pricer> of cattle for 1952 as. o. whole from the' 1951 a.ve.J;·age seems 'likely to recult fr0m t):le sla.ug4tor in P.rospe.ct.

''

If ,past trends are repeated, the 'biggest ir{creases in cattle slaughter wilJ_ come. a;f.ter 1952 ~ If percentnge increases follow past cycles, numberf:? of oattle, and co,lv.es :ma.y pass 1.00 mill-ion by 1955. Wt ch an inventory of 'thie size,' .rumua~ consu~o,ption .of beef per, person would be more than 70 pounds' the largGst' ~:Lnce 1909, ·a~ld.'a little above the postwu.r hlgh of 69 povndq in 1947. Prj:ce's of beef cattle; J;l.OW in a ·;ery favorable reJ.I:'ttionchip to price~ r)f most other. farm products, .would like~-.Y' te at a moro nearly average relation~hip.

' . '

Numbe~s of cattle on feed thl3 w:nter 1nay equal or exceed ~he ·record high of lE<.st' winter. PricGs being paid. for feeders this fall are a record for the season and returns :from feeding w:L~l be no more tnan o.verago if slaughter ca.ttle pricee :re:min at about prer.:ent levels. Returns will be small H' slaughter :prio0s should decline. · . . . .

~o:r:k 'production l!'1 the firnt 7 or 8 months of 1952 will probably be a little lar'ger· than th1.~ year, :ceflecting i~cr0ases in 1951 pig cl"ops. Pro­du0tion in latGr months of next year W~y be a little smellGr' than a year ear­lior, as tl:;l~ C)J.rrent feed si tuat~on ~y result i.n a mna12. decrease in the 1952 spril:fg pig crop. A downtrend :l.n hog production, should it ste.rt in 1952, woul~ be the first after five succe·ssive y0ars of expansion. It would result principally from the oiilaller feed supply relative to the livestock and poultry to be fed. Feed grain pt·oduction in 1951, althouc;h lare;er than in most y·ears bt:Jfore 1948, was a 'little· smaller than in 1950 and less than probable disap­peo.raU:ce. in the 195;1.~52 feeding y<=-ar, A rednct:ton of reser-v-es is Ekely. Pr:lcea of feed grains are higher tha.n last yt':lar, and tho hog-corn price r1.1.tio is now about average nfter staying o.b~ve average in most months of the laot 3 yeat-::3., ·

... ~he priq(!l ou~la?k fo_r hoes do~n t~ot point to any subs trmti~l chf:.Ilgo fro~.1951; Larger SU:f>pHes of other meats would likely restrict a.ny tendency toward much higher hog prices. Price control~ also would tend to limit prices

f.f I~ I

of pork and indirectly price8 of hog~ at the season of shorte~t supplies. . ' . . . . '·

Slt.ughter of sheep nnd lambs, lilce that of cattle, has been,.very omr.~.ll 'in 1951 ar> numbers on farms are being built up. A somewhat larger 'slaughter as w~ll as n. fUl'ther increase in inventory numbers ic in prospect for 1952. P;rice.o.~ o.£: bo:th.: lembs and ·wool will lU:ely r8m8.in relatively favorable •.

.. Pl:'oductian of meat animals is likel~r to continue gonerally profitable 1~ 1952. G:ro~s recQipts from sales may be a little larger than thin year, dep'$nd':i~e ·cfi~efll ·~n. volume' Of marketings.· However,. nigher prices will be

.Pa~d.,:f'o;:- .;f"oed. ·and.other items of expense. ' ' . . . ' ~ . . .'

-20-

.PAIRY PRODUCTS

Net income from dair-s farming in 1952 probe,bly will be about the se,me as in l95lo With milk prcduct:i.on expected about the S9.me and con.:.. su.me11 demand strongar.l p:rices of dairy product.s--and cash receipts from marketings-·~:proba-oly v.:ill ta somewhat higher tban in 19.51<) Howe·rer~

higher cost~ are expect;ed to c:f.'fse~; the increase in cas~1 receipta ,,

The numbe:- of milk co\vs in the United States has been stable the past 3 years after ~nding a 12·-percen',; decline which began in 1944,. Little change is likely d:J.ring th8 next year" Midwest a:-eas ha,re accounted for most of the decline" reflecting more attractive alternative farming oppor­tunities such as prod.uction of meat animals and grains for cash salec Many general farmers ha:,,e been able to realize st.fficient incomes from these and other sources so thet milking cows appeals le~s to them., More· ... over 1 in all sections of the c~~ntryi the attraction of nonfarm employment opportuni'ties has offerod dairymen strong competition for laboro Milk produc~ion per cow in 1951 '\oJas abou·t; equal to the record set in 1950 and probably will continue high in 19.52~ Total mllk production in the Uni'ted Ste,tes in 1952 will be about the sar::.e as the approximately 120 "billion pour-.d<s estimated for 1951,, The postwar lo"' in 1948 was 115,S billion pounds and the record high to date was 121.,.5 billion pounds reached. in 194,50

Since feed supp:!.ies are being used up faster than producedi feed concentrete prices may increase in the coming yearo Nevertheless, milk will be eq_uivalent in value to at least as mllch feed as in the past year and the long-time average, J3ut b-u·(;terfat may be a little below average re1ativ8 to feed prices again next year:. ,

Supplies of dairy products have fluctuated within narro~r~ limits since 1948 so that variaticns in demand. have been the main reason for: changes in dairy prices and utilization of milk~ \lith the prospective rise in consumer incomes in 1952, there 1rlill be some tendency for retail prices of dair;r products to ad-, .. ance,, The rise in incomes also will lead ·co a further slight shift in milk utilization toward more in fluid cut­lets and ice cream with less in butter" This will lead to an increase in whole milk sale~ "by farmers to plants and dealers to a level even a.bove the more than 7.'5 ".Jillion pound record of 1951.-, ]'arm sales of butte:r.~ butterfat~ and milk at retail will de~line further in 1952~

. J .

With the change in milk utilizat:t on 9 Americans are consuming con­siderably mor·e of the solids·--not• ·fat of milk than formerly., Total con­sumption of milk fat per person b.a.s been stable but it is being consumed. in different forms.J Consumpt~on of fluid milk and cream proba"bly will approximate 400 pounds per person next year~ a few pounds e,bove 1951, com­pared with about 385 in 1949 .:md 1950 and the prewar average of 340 pounds4 Cheese con.s-.::.mption has "been at. a record level in the past 2 years and will remain hie,h throug~1 1952c Ice cream consumption has been increasing the past year after ending a 4-A·yea.r decline,. · Butter is the only dairy proO.uct to show a decline in conau.mptic;m and in 1952 may decline to near 9 pounds per person ·comr)ared to the record low of 9., 7 pounds consumed in 19.51, and the prewar level of 16(/7 poundso This reflects several developments in• eluding a decline in damand for table spreads 9 increased supplies of , alternative products~ especially margarine and cheese spreads" The decline

OCTOBER 1951 -21-

in demand for butter, itself, is ·partly the cause of the drop in milk pro­duction in the important butter-producin~ ar~a,. And with increased demands for milk in other uses there has been a considerable decline in supply of milk f9r making butter, .. ,

POULTRY AND EGGS

Increased production of eggs and broilers is expected in 1952. Out­put of farm chickens probably wil.l be e.bout the same as in 1951. Turkey production may exceed the 1951 level, which was a record high~ Demand for poultry products, bolstered by further gains expected in consumer in­come and employment, will continue strong and prices for poultry products probabiy will aver~ge_about the same as in 1951 •

. The production. and price· outlook indice.tes the.t the total value of poultry products produce~ next year may be as much as 5 percent higher than the estime.ted 4 billion dollars for this year. Costs also will rise and net returns to poultry producers may be a little lower than in 1951.

Most of the increase in egg production over 1951 will occur in the first three quarters of 1952, Five percent more chickens were raised this year than last and the number of potential layers on farms next January 1 is likely to be 2 to 4 percent above a year earlier. Further­morei the rate of lay is likely to continue its long-time upward trend,

\lfi th egg prod.uction in· the spring expected to be higher than a year earlier, prices may average about the same or a little less than in the spring of 1951, Since feed costs will be higher, the egg-feed price ratio will be lower, The result is likely to be a reduction in the number o~ chickens ra.ised for farm floc){ replacement, By the end of 1952, egg• pro-duction probably will be down to or below 1951 levels~ ·

A reduction in number of chickei+.S raised next year would -reduce supply of,meat from young chickens~ This would be lar~ely offset by an increase in slaughter of mature farm chickens from the increased January 1 inventory~ Commercial broiler production, on the other hand, probably will continue its long-time increase, though the rate of gain is likely to be smaller than in 1951o The rise in broiler output will more than offset any possible decline in farm chickens and the total chicken meat supply will be larger than in 1951A

Consumer demand for chicken next year is expected to be strong enough to offset the increased supplies and prices for the year probably will average about the s·ame as in 19.51.

The outstanding feature. of the outlook for turkeys is the prospect that farmers will raise more small birds,. The record turkey crop of 52.8 million birds producad this year included 8s3 million Beltsville Small Whites compared with 5~3 million in 1950, an increase of 55 percent~ The growlng popularity of small turkeys for year-round use suggests a f~rther increase. Year-round prodnction of these birds is more easily accomplished than is the case for the large breeds, In 1951, the in­crease in production of large turkeys, most of which are marketed for holidays, was about 10 percent o '

OCTOBER 1951

·, ••• to,? • 1' ....

,··.·· . '· . -22-, ..

• '. ·*' .. · . ' fl ••• ···,.~ ·-~. ' ••

• J ' '• l ' • ' ' ' ' '•{ ~·I

·'

Prices !'If fats and oils, in general, be~n the ~rket:irig y~ar. . . October 1, 1951 at about the same level as a. year earlier. However, laat year prices advanced sharply from Octnber 19.50 through February 1951. N-, su.ch ad.\rance is anticipat~d this Y.ear0 Prospective supplies are large enough to" maintain coneumpt,i on and exports at high ·level's and still 1-n-· crease ending-stceoks of most food. fats above t;he relati "1ely lCYW l·ev.el· prevailing .on October 1, 19.5lo pomestip di sa;ppea.rance of fats and oil-s· in the past year was high and is e!!i.:peo't;ed ~o S(') ·.conti~ue_ in .19.51-.52•

,, .. Total explllrts in the pa:'st year were at a record le'7el 1 totaling.: ..

2,173 million pounds f"'r the 11-m,.,nth per~od.,, October 1950..,/l.ugust 1951, · compared with 1,89.5 million pounds a year earlier.· This included.584 mil­lion ·pounds of lard and 69§ .million pounds .. of ·soybean oil and· the ou ... ··­equiva:i.ent of soybeans .and·457.mill1on pou~ds·C;f inedible tallow and greases. Exports of fats ann oils in 1951-52 again<wiil be'·large •. ·

•. . .

On the·'.basis of October i crop estimates and· 'pther · flldications, the total domestic'. output nf· fats ~nd oils in the yel:l.r which began October lt ' . ·. 1951 1"will be a.t a recol'!ileve·l of.about l2p8 b.iillon pounds cornpared·W~~­an estimate nf' nearly 1.2 0 4 .billion. pounds a· year: earlier (indlutlin'g the .. ,, ·: .. oil ·equivalent of exported soybeans, flaxseed,' and peanuts· f<b.r .crushing . '·. abroad:}. A decline in output of. ;Li~seed oil and butter will be more than offset by increases in otl):er fats. and .oils.~ Output of edil:iie v~getable oils may be nearly .. J.O percent greater than a yea·r earlier.· · : · · , .. :· ~·- ...

' ~ ' ' ' • : ~ ' I

• • • • , • ~ T I I, ' (\

... · The ·1951 crop of so;y:be~,, esti~at-ed Octobei' ·1 at 271 million <~. ;·.!: . bushels, is smaller than las~ year's record cr,;p but substantially· gr~a~~:r ... than for any other year. Prices to ·farmers for 1951 crop' soybean.s·:are:.being supported at a nat-ional avere.ge .. pf $2,~~ ;per. bushel compared with $2.11 the previ oti.s year. The mid-SepteJn'):>~r pri'c~e· received by farmers ·11ras·.$2·.·.59·.,per bushel. The price to f,arm~r~ probably "~~Jtll average .. near this ;level. ~h~ , . season average price last year was $2.45 per bushel., · ·,. · '·'

\ ' • ' • ~ I ' ' \ \

Prod:uction of C·ottonsee'd..'i~.l95l is calcula'ted at 6J845,·000 t.~n~. 68 percentf·Iarger than the 1950.crop and the·largest'since:·l9J7. ·Prices. to farmers for 1951-crop c o~tonseed e.re being sU.ppar ted by 1oo,ns at, .. l

$6.5,50 per ton and by direct purchases e.t $6i.,50 per ton, 'b·&sis grade : .. (lOO)o ':In:~addition, CCC will purq:P,ase cottonseed products at stipulated prie'es from ttrushers who pay producers. the loan rate for their··cottonseed. Pr1.ces to producers through October hav,e beEm near the support: level anQ.. ar'i' expected to average below last year's ·season aver~ge price of ·· $at;·.4o per ton. c.

·Producti~n ·of' 195lr .crqp, l2eanuts is estiptt3.ted at 1-.?' .bi.llion pou.ndf!, :n~:5':mi1Hotiless· than the year b;efore.· ;Beginning stocks, .. :lhowever., are .... : substantiallb'· gree.ter than on th'e same dat.e a ·year earlier:,. so total : ·. · -:: suppl'it'~s 'will not ,be ·down as muolf.' &s· .is in,dicated. by the· d:Z!'op ·in produc~.i.; tion. ····:Prices. t'o. :tarmer~ for 19.51 crop quota peanuts are 'being .support.e·d,- ·: at a schedule of prices based.on a national average ·of 11•.53 cents par · ,,.,, pound compared with 10~8 cents a year earlier. Prices received ~Y farme~s in mid-september averaged 11.0 cents per pound. Edible use.of·pe~nutsimaY increase slightly in 1951-52. The surplus for crushing and export may be considerably smaller than in 19.50-.51.

OCTOBER 1951 .... 23.-

Refleet,ing a substantial drop in yield, output of flaxseed in 1951 may total 32.3 million bushels, 7o0 million less than the year befor.e. T.otal dis­appear·ance of fle.xeeed ·and linseed oil in 1951-52 is expected to be over 50 per• cent gre_ater than production, necessitating a material redu.ction in stocks of · flaxseed and .some. reduction in the l.arge Government stocks of linseed o1.1 available at the begin,l!-ing of the ~eason,. Prices to farmers for 19.51-crop. flaxseed nre being supported at $2~65 per bushel, farm basis. It was announced ).n September that 1952-crop flaxseed will be supported at $3.77 per bushel, fa~m basis. Mar~et pr+ces in October indicate that producers were receiving about $3.85 per bushel, Pric.e.s. are expected to rema:i.n well above the 1951 support level for th~ :res.~ of ~};is .!'Ieason~

CORN AND OTHER FEED

A strong demand is in prospect for feed in 1951-52. Feed grain supplies are smaller and feed prices probably 111111 average higher than in 1950-5L The total quantity of. grains and other concentrates fed to livestock is ex~cted to be the heaviest since Wo.rld War I!, which will reduce further the reserve stocks of fe~d erains.

Prices of feed grains and. most of the byproduct feeds probably will aver­age higher in the 1951-52 feedin~ year than during the past year. The increase in feed 'grain prices, ho'I'Tever, will be limited by the sizee.ble reserves of corn held by CCC and by price ceilines~ which can be imposed on feed grain prices should they reach parity levels. Price supports on 1951 feed grains' are all higher than in 1950, ,and feed grain prices'' are generally above the sppports. ' ' . . .

. The total supply of all feed concentrates for 1951·52, including the grains and bYProduct feeds, is estimated at 176 million tons, 4 percent below the big supplies of the last 2 years, but nearly 30 ~rcent above the 1937-41 average. This includes a 5 percent smaller supply of feed grains than in 1950•51, another large supply of byproduct feeds, and an allowe.nce for wheat . and rye feeding a little above the 1950-51 rate. Total feed grain production, estimated in October at 120 million. tons, is 5 million tons less than in 1950 .. The carry-over of feed grains into 1951-52. totaling about 29 million~ tons, ·is 2 million tons below the record carry-over last year, Total disappearance of feed grains in 1951~52 probably will exceed the 1951 production by a~ound 8 to 10 million tons, causing a comparable reduction in the carry-·over at the close of the season. In this.event the remaining reserves would be only a little above the }>rewar average and would be smaller than pre·..,ra.r in relation to live-stock numbers and product~on. .

. '

The i951-52 corn supply of about 3,855 million bushels is 3 percent smaller than in 1950-51. Utilization of corn is expected to be greater than . in 1950-51, and the carry-over at the close of the season may be around one-third smaller than the carry-over of around 750 million bushels. this .. year. Supplies of oats and barley also. are a little smaller than last year, while the sorghum gr~in supply is nearly a third smaller. ·

. Supplies of byproduct feeds in 1951-52 are expected to be ab~ut equal to the record supply of 21,5 million tons j,n 195o-51. The total supply of pro­tein feeds is expected to be larger than in the past few years, but little, if any, larger in relation to the increasing number of livestock on farms.

·OCTOBBR 1951 :.. 24 ...

The strong d0mand. fo!' feed g:cai.ns during the past yea,r has.resulted. in a reduction in. the qaa.nth,y of i'f;Eld gta.ins held under price support. The total "~tolrune of feed ,:-;rains placed llllier loan in 19.50 was much smalle:c than in 19h8 and. 1949, an:i mcod; of the "19.50 loans "'ere re-pafd by farmers" The quantity of 1951 feed r-raj ns goi"ng und.ar price support is ~xpected to be comN pa.rativ·el;r smalJ and :price support stocks probably vrlll be reduc~d further in 1951-~.52.

A reccrd hay S1.lpp1y is avai"Lable ~or 1951'·'52. Ray and other forages are fully adequate fc•r the inere<~sing livegloc~.:: numb.ers. ih most of the northern half of the count:cy. Ir, the S::mth 1 however, hay productl.on was reduced by dry weathe]j and pastures and ra::1e-es have qeen poor this summer and fall.

WHEA~·

thth prices to be supported .;Lt a minimum of $2-,17 per bushel, farmers are likely tv prcduce emou.r,h wi:.aat in 1952 to meet domestic and export require·~ ments in 1952-53 and -Pl;·ovido f :.>r an increase in the carry .. -o-....er at the end of the marketing year. r_ehis ass"Lunes~ of r::ourse 8 average growing conditions.,

. !n the current 195l--··52 mal·ke"ting year~ less wheat is being produced than

is l:i.kcly to be used' in. thi.s country anri exported. The ca:t"ry-over on Ju;l.y 1~ 1952, proba.bly will be abo-,lt 90 mil~ ion bushels belotv the July 1951 figure of J95 million.

Prices for the 1951.,)2 crop are expec":.eli to average above the effecti.~1e loan level -- the sup~Jor·c price of 82~ 18 per bushel minus a storage deduction, :::Juring {he ea.rly· part of the marketing year prices have been belO'\'T the effective

. s.upport 1:~vel~ but recen'tly they have advanced ·~9 above that level~

If yielc.ts for next· year 1 s wheat crop are average, the 78..,9 million p:oal acreaee vronld result ··in a crop of 1,165 million bushels, 170 million above this year's ·estirrated :production, Ho1J,7ever, it is likely that the goal acrca.ge- will be exceeded. Rd:pcrts f!'om local P.H.A. committees indicate planting of wheat may ·slirhtly ex~eed'the goal. ·

A c:rcp of a.bout 1,165 million 'bushels and a carry-over of old wbeat on ,July 1:. 1952 estimatocl at abo·u.t 300 million b'1;1shels 0 would provide 1,465 mil.lion bushels of domestic wi1ea'!i {or 1952··5.3. Use of wheat in the: United States in 1952-53 is forecast at abo11t 7l}) million bushels o Assuming exports at 325 million ~ .. moderatP-ly less tha.n expected for 1951-52 ~·- the carrY··over on July 1 ~ 19.53, would ba about 400 million bushels. This "torould be about 100 millicn buAhels more the.n is expected to be carried over next July 1.

I

. . The minimum support price of S2,.17 for the 1952 crop announced by the

Secretary of Agriculture on Aug~st 29 is 90 percent of the mid~July parity price. If 90 percent of parity at the beginning of the marketing year.is higher, tbe support vrill be raised to tha"C leveL The support price announced in June for the 1951 crop was :52ol8 per q·u.sheL As '\'Tas the case in 1951. no allowance for farm storage or warehouse storage charges will be available to producers who deliver lc&.n \1lheat from'the 1952 \~!heat crop to ceo.. '

-- ·~. '! .-~:---/··· -. : .' ·'·~·

.• :~~:~;~;~~ ~~:Jii~5'i·~~ :~;:1'~CJ;~J~~~·,~,f~· 366 ¢ni.on ·. , - blieh~l.fi·;±rl.:l950.:. 51·· ''-"Th:Ef U·nl't~ · ateAreEl .. ~~o~t, o<fu6t~ .. Wld~r ·th«f ~Iift.erna ~1 onal vlb~~t.'Agr'ei~ent,· ... whicli .·ends w.ith th~ J9~~53~.1.e.ar;.,··1A.~botit ·250: mill'ion · 'ous~e;.te .l'er ~;yea.r.·.: .'Jl'riport&t:: :of 'non~.~~~~ept'.;:~ot!t~;l;, in '1952-'53 ~~e not. expected to·.'b~ .. a.s·:.targe· aei in 1950-51· wben:·tl}.ey. tota,led ~pout 115 miJ,.liori bushels. In .i950;5l·t]?.~:quant~ty of contra-ct·gt·aa.e:e~port wheat· i.n canada was·l~mited as. ·a:: resitl t ·of fro at -damage. · In adO.iti.on tra.nepor:ta tfon d1fficul.ties in Canada lh~erf.6~eet'-w-ith,~the ~port mov.ement.·.··,.~Expo!"ts of Uni~ed. .. States:~hea~t·:in 1950-5~ es:pec1ally during the· lest ha.J..f!.of t~.e year~ also were stilllula:ted by :the ·desire :: of i~,Por.t!ing countries to increase their reserves becaus-e· of; the in:tel:'tlational ;

.sitUation and inflation.· Furthermor~, .extrao\l;'(iimJ.ry d.em.and.s, such as those ., .. jfrOIII: .ruso.slaviei·ani:l India,- which. resu1te9- f;ro~ .. unrav:orable gr6wins .. con,ditions

•in 1950 also added ·tO th~;vrelatiV;ely high ·level Of' U. 8~ wheat. exports in :19.50•51. .. ' The itipact of.thia a.emand. i.e being car:dea. ov,er into J;he.·l951-52

.-::.::seas~~ in 'the case•· of ·rndia:.-.. :. ~·. · · · · · ·' ·' · · · · · . ' ,;· . :"'" : ' .. ~.- ' . ~ .-~ ; ' .·•

.'•:

.': • · .Dem,B.na: for u. S~ wheat- from the important deficit.: arefi·s of the Far East . :.·in 195~-53'. will'·depend··conside:ra'bly upon the extent to which rice continues

... · .. t·o :be ·avaiiab're •. Carry-over stocks in thes.e areas at the beg;inid.ng of the .. -1951. marketiitg: year are· very small and. production indicated for. l951·1s not

.large enpugh to. im:prove the stocks posi t:t.~n. by the begihning of the 1952 ... ~r~E!.tip.g year. Aqcordingly 1 any improvement in the si tUa.ti'on will need. to.

. .. . come ·from 1952 rice :PJ?Od.Ucticin ... Th-E) only country in .Whi.Ch,.a marked. increa.se · · .. in prod·uction ·could· take place woq-J,.p. be. Indo~.'Ch:lna· and. tll.~:s 'would be dependent

, . dJ..PQn: ,im;nrov~etnent in the internal si tuation·1n that country,·. _Ri_ce· production ··.in· the· Uni-ted States :tn· 1952 is. expec.ted to be. somewhat. below the 1951.. record, With'~SJOm~ increase .. in exports~ · ·

. ; "

i · ... :;_ FRUIT

· Consumer deiila.nd for fruit in 195~· i e expected td. be ·a 1~ t:tle str~~ger , than in 1951. The 1952 crop of deciduous fruits probably· :will be -somewhat

sma.iier: than the· 1951· .crop; aS'SU!)ling average weather. StQcks of canned' fruits at ~~her' start bf the 195.2 .pack s~ason are .. ).ikely 'to 'be larger thar,t beginning stocks i.n 1951-, thus tending to. ·reduce .. demand. :tor fruit ;~or proce.ssing ... ·.Under thes~ · condi tiona,· the general level of pric·es ~hat. gro}'l;ers .will receive. for

. tlj.e '1952 deciduous crop. :p::.~o.Pa.bly will be abqu t . the same as in 1951·. · Ceiling :p':rii'ce a have been placed so fa.r oniy on processed fruits. · · · · -· · · ·

: . . . ~.. . . ~ . . .. . . . .. ' ..

. . ' ~~ outlook' appears favorable for increased exports of fruit in· .i952. Increased. exports of apples to the United Kingdom seem likely ·as ·a·: result of a change in British import :PG-li.cy restoring the handling of imparts to the commercial trade. .More dollars probably will be made available for such imports. Exports of 1951-crop apples, and also winter pears, again will be facilitated by export-payment programs conducted by the Un.fted.·.sta.ters Depart­meht o:r A@:'icui ture. 'Similar programs are in eff.ect .for l95i-52 pack raisins and d.rie~~ prunes to. ·assist the. 6Xp0rtatio.n o.f. su,i-:Piu:ses of. the.a,e. :f'rui ts. This d:s ~l1:·c~ittrast to the ·ei tua tion .in 1950 .. ~1,. yhen no ·auc}i · program·s ·were. opera ted

; f9r.~~isips·a.~ prune~'.bec.,a.use of' ;rela.tively ~small pl,ic·~. : .. ·larger :eXI.>orts of orahge·a 'in' l952 :a;tso. are .probab;L~ •.. · ' : . . : ' ' . . . ' . - .

,·. : .·;'

:imports o:r bananas,· the principal fre·sh· fruit "imported b·y the . United States, may not be quite as large in 1952 as in 1951. Imports have declined during the ,Past two years and. may dec.line further in 1952 partly as a .result qf reduced supplies of relatively higb-quality fruit, in tropical countries. Imports of fresh apples from Canada during the 1951-52 season, most o~ which will arrive after Jap.uary 1, are expected to be about the same as in l. 50-51J wh~n abo1ut 2 million bushels were imported. Continued large shipments o ·. calfllled p~neapp e and pineapple jUice al"e expected.

OCTOBER 1951 - 26.-

Total product.ion of decidtrllu.s fruits in 19'51 is about 10 pe:rcent larger than in 1950 nn.d 6 p'3rcent. above the 19~.0-',.9 average~ .Among im.­portc:mt 1951 crop fruits zrmaining to be marketed is the cominercial apple crop;. which is about 5 percc,nt sms.ller th?..n the 1950 cropc. Stocks in cold stora.ge Decembflr 31, 1951 prob::.bly \'rill bEl som8what smaller th~n on that date in 1950; l0;:l.di:1g to o.dvanc:ing prices after the first of the year in contra.st to decl5.ning p::-ices in thG w:!.nter and spring of 1950. L:i.kewj.se, stocks of pears prob2.bly will be smaller, and prices higher after the first of the yecr. Grower prio8s for cranberrien are 6Xpected to be somewhat higher this fall and wir..t<=>r thP.n in this part of 195GJ.51.

The 1951~52 crcp of ear:Ly and mid-saason orangesp as estimated Octob8:::- 1» is abo11+J .1:(. percent. larger than the big 1950-51 crop. Because of V'3ry J.~ght :prod c.cti,~n 5.n. 'I'8Xtl.s P the 1.9 5!..- 52 gr·~pefrui t crop· ( ex..clusi ve of the C?.l:i.forvd.a sv.rn:ner crop) is aboi.lt 12 p8rcent smaller than the below­average 1950···51 c:rop .• With incrr-:a.sing shi]::n'3~1t8 of new··crop citrus in late October and Novcu'Jer, groWf~:L~ prices P.re expected to decline. Prices may dec:Line further a.fte;r the first of the y'3~r because dr~mand from processors mey not be a.s strong as in. tl"!e 1950-.. 5:1. seasonr. as a result: ~16 incr€'ased stocks of d2.nn9d c:.nd. frozen citrus ju~ce., Pricen for ara!'lges this winter prob2.bly will average belo·w th':ls9 of the winter of 1950-51, but prices for grapefruit may a·.rerage higher ..

The 1951-52 pack of dried fruits is expec~ed to bB about 33 percent larger th,'1.n the 19~.0 .. -51 pack 1 mainly bec<:~.use of i!'lcreased output of raisins and driAd pr1mesQ The 1951-·52 pack of ca::1n<:!d fruits probably wiihl be from 5 to 10 percent l~rger than the 195G551 pack c:md second only to the record 1946-47 pack~ Oe1.tput of canned citrus juices in 1951 is expected to be about 25 P·3r..:ent Ja rger th~n in 1950~ A new record w.:J,s set in the pack of frozen concentrated orange ju±ne in 195la But because of smaller pacl~ of frozen stra.wberries and cherries .• total production of frozen fruits and fruit juices iu 1951 ;n.:;..y be only about 6 percent above the 1950 record.

Total prodtJ.ction of the four major tree nuts -- walnuts, almonds, filberts; and pecans - is about 1$ percent larger than in 1950, and only slightly under the record in 1949. Grower prices for the 1951 crops of walnuts and filbert..J are expected to average a little above the pnces for toe 1950 crops,. Prices for c-.lmonG.s proba.bly will be e.bout as higho But pric'3s for pecans are likely to be lowerlt Lerger imports of Brazil nuts, but smaller total impor·c.s of tree nuts, seem lik?ely in 1951-52 than in 1950·-51.,

COMMERCIAL TRUCK CROPS

For Fresh.rMad1et :.-"--....... -~-

Demand for fresh vegetables is expected to continue very strong in 1952. Procx;,ction during the first quarter cf 1952 is c:.pt to be significantly larger than that of a year earlier~ when adverse weather cut a.crea.ge and production substantiallyo If~this oceurs, prices paid to farmers for these crops may be lower than the extremely high prices received for the short production in early 195lo

~BER l95l .. 27 ..

· · · Killing· frosts in me.ny northern produ.oing areas and completion of harvest of most tender crops have about terminated home-grown supplies of fresh market truck crops in northern markets. At least the fall seasonal rise i;n the general level of pr:i.ces paid to farmers for commercial truck crops is expected during NovGmber and December. Total supplies available this fall are estimated to be abou-t 13 percent smaller tha.n a year e_a~lier

' though 6 percent larger than the l91D-49 average. Of 13 individual 'crops reported, fall supplies are estimated to be substantially smaller than

· last year for all but snap beans, cauliflower 1 celery (lat'e fall), green peppers, and tomatoes~

Acreage of cabbage for winter (Je.nuary through Iv.tar~h) harvest is expected to be slightly smaller than last winter, and considerably below

·average.

For Commercial Processing -- ----·--- ... .,

Civilian demand for oommercial ca1tned and frozen vegetables in 1952 is e~ectad to be slightly ctronger than in 1951 because of the larger 'population, continued high earnings, and presumably suste.ined long-time upward trend in per capita consumption of canned and frozen vegetables.

Military requirements for canned and frozen vegetables to be ob­tained from 1952 packs probably will be somewhat less than those being supplied out of thG 1951 packs. This probability is based on the as­sumptions that 'the size of the military force will remain relatively stable, and that initiaL filling of the pipe-lines was largely accomplished in -1951. Total packs will exceed the levels contemplated by the goals sug­gested at the beginning of the season~

. Indications are that prices paid farmers for 1951 processing crops ha~e been higher in general than those paid in 1950. Early reports sug­'gest that aggregate production of 9 important truck crops for processing p·robably will be about one-fourth larger than in 1950, with the substa;ntial decreases only in beets, cabbage (contract) for kraut, and pimientos.

POTATOES AND ffiVEETPOTATOES

Total demand for potatoes in 1952 is expected to be approximately the same as in 1951. ·Growth in the total population is expected to about offset the long-time downward trend in per capita consumption. Also there is at least a possibility that a higher level of living costs may to a slight extent help potatoes regain consumer favor as an economical and nutritious vegetable, high in food value per dollar spent.

Mid-month prices received by farmers for potatoes (Unit~d States average) increased from August to September this year in oontras·t to the usual seasonal decline, due largely to shrinkage in the apparent size of the 1951 crop, which was already closely in line with previously estimated needs. This strengthening in potato prices is expected to continue through the winter and early spring months. Reports also indicate concern by growers in same areas o~er the keepine quality of the storage crop.

OCWBER 1951 - 28 -

On September 15: this year-, the United states average price received by farmers fvr pota:t.oes was ~~J .. 23 per bushelJ 6 cents higher than a month earlier, and 18 oents higher than a year earlier~ ·

Prices for sweetpote:toes in early 1952' probably will be higher than the previous record-high prices in early 1949. The 1951 crop is now (October 1) es"bimated nt only 34.,6 million bushels, less than three-fifths the size of the :;.950 cr·op which was slightly below the lO .. year averagea 'l'hi s yeart s crc.p in Louisiana~ whioh produces a large part of the sweet­potatoes nonnal:i.y movin& into commercia.l channels is only a little more than half the size oi' last ye.a:r' s crop e.nd less then two-thirds of average ..

The hit;h prices for sweetpotatoes which seem certain this season may lead to so"ne acreage inoreases next year 9 but price prospects for alter­na-t:;ive crops are e.i::pec;ced to :remain favorable enough to pl~event any large extension of sweetpotJ,to acreage"

DRY t:DIBLS BEANS AHD PEAS

Prices .:-ec.J:i.ved by farmers :for d.r·y beans from month to month through the .first half of 1952 probably will be slightly higher than those received in corresponding montnJ of 1951. Demand for most types is expected to con­tinue strong throughout 1952, and consumption per capita probably will be at about the same rate as in 1951. Stocks at the end of the 1951 crop marketing year probab:i.y will be smaller than they wore at the beginning .. Probably some increase in production in 1952 over 1951 could be ab~orbed into trade and stocks without lowaring prices received by farmers substantially.

United States average prices received by farmers for dry beans September 15 were slightly h:.gher than rt month earlier, in contrast to the usual slight decline for ·l:;his time of year~ and were about 6 percent higher than on the sam-3 date last year, Prices probably vrill average slightly higher for the 1951 crop than for the 1950 crop.. Although large stocks of beans remained on hand at the beginning of the 1951 crop marketing yee.r, they were much reduced frcm those of a year earlier"

Of the ::~everal major types of beans, Baby Limas are the only one for which the 1951 crop appears 0onsido3rably in excess of probable disappearance at prices in lin6 with support levels~ On the other hand 1 the crop is somewhat short of' what might be desired in the case of Standard (or Largo) Limas and Pintcs~ Total supplies of pea (Navy) beans for the 1951 crop marketing year appear adequate to maintain disappearance and stocks at levels of' recent years~ with little change in prices.

Demand for dry field peas in 1952 is expected to be no stronger than in 1951 s when demand was much weaker than in the immediate postwar years. Prices which farmers vdll receive for the 1951 crop now being marketed may average no higher than the relatively low prices recoived for the 1950 crop,

COTTON

Despite an increase in the -supply of cotton in the United States during 1951-52, continued high do.mestic conswnption and a substantial in­eroase in exports are likely to result in a relatively mnal1 oa.rry-over of' about 3 million bales at the end of' t~e season. Although up slightly fr.om the 2o2 1nillion bales on August 1 this yea.r 1 the carry~over in August 1952 will be one of the smallest in the last two decades.

OCTOBER 1951 -29·-

Disa.ppearance in 1.9.51-.52 ~ :3 expec-ljed. to total 16 to 16-1/2 million bales3 AbO"l.t· 6.!0 millie~ 'ta.:~cs prc'Llably \~in be e.xpo:cte&., the largest quantity si:"lce World '\rJa.: !L, Domc3tic mi::..ls are expected to consume 10 to 10··1/2 million ba,le:sr. clos~S to the quantity consUilleU. in 1950"'~51 when mill consumptio11. was ths largest on recori cx(;ept for the peak wa:rti'ne years of 194L··42 aud 1942-43~

The large exports will be ca1A.9eu 'by a.n effo:rt on the part of some importing ccuntrie3 to replenish the extremely lew stocks existing at the beginning of th~ crop year and a continuation of world consumption slightly below the record level of last yBar(. The gold. and dollar supply of foreign ~ount:r:·ies 1 including short-term credits from the Export-Import Bank~ will be larger tha.n last year despite a reduction in funds from EGA~

High industrial actj vity 9 increA-ses in consumer purchasing po~oJer, and iLcreases in militarJ requ~reroents a.re expect~d to sustain domestic mill consu.11ption ;Jf cotton a·~ a Mgh levelo He:we•rerv large inventories and slow s~le~ of cotton te~tiles at the beginning of the season retarded mill consumption in August ana Septembero

The 1951-52 united Stca.tt:;;; supply will probably be about 19.)2 million ru:r:L."1ing bales,. This will be made up of 2~2 million bales carry-over stocks~ 16"8 million bales prod1.v~tion (October 8 crop estimate converted to ranning bales)~ and estimated imports of 200 thousa~d taleso .This supply will be about 14 percent larger than that 0f 1950-51~ but 14 percent smaller than the 1936-lJ-.5 ave:;:-age, :Oisappearancc in 1951··52 will be con·­siderably larger than it was in the earlier years. The world supply of commercial cotton will be about 44,.8 millio;.1 bales, large enough to parmi t an increase of only about 2 million bales in world. carry-over stocks,.

Th~ September 1.5 aYerage price recehred by fe.rmer.s, JJ" 73 cents per pound~ was 0~8? cents below the August 15 price and slightly below the ;parity price for the first time since June 1950.- . By September .5i the average 10-spot marketing price for lftiddling 15/16 inch cotton was )4~10 cents per pound~ the lowest since June 1950~ Then the price be§an to move slowly upward~. On seyeral, occasions recently the average 10-spot market price of Middling 15/16 inch has been above 37 cents per pound, e..nd on October 17 it was )6.,61.;· cents per pound,. Price strengthening fa.ctors were increasing export demand, reductions in indicated production and. the tendency of fa·I'm€rs to \'lithhold cotton from the market at prevailing prices.

Lareely because of the greatly increased cotton crop in the United States in 195l.and our removal of export restrictions, the spot prices ~f foreign growths during the last several months have fallen sharply from their peaks. of February 1951-:. In general 1 prices of foreign growths whose quality is similar to that of American ~pland cottori and which are beine actively marketed are at levels close to United States pricesQ The price of Karnak cotton is now below that of American-Ee:rptian cotton, which is supported by a Commodity Credit Gorporatioc purchase program~

WOOL

Prices to domestic growers for shorn wool in 1952 are likely to average somewhat higher than the average of 66~9 cents per pound, grease basisJ received in September this ye~;~.r., However, they p:r\lba.'tly will not

OCTOBER 1951

r~~ch •the recorC. l~V'I)J.s of las·t ,sp:ri·ng0 P-rices received: this y~a.r '];)robe.• bly wt1.l av~rage Q.et:,.;~t=;.n $Ot-90 and: $1~00 per ;pou:cdp owing ~o the. high .. · .. pri.::es re~ei VE:ll. i·n ~·ha early mont.hs of 195L Since wool is a .st.re.tegio · ccmm.cdi ty 9 r.hang'3s in the international ai tua.tion .a!!d. in Gov.er:nmen~ pr~­·grams and po:Ucie.s~· inch1.c1in~:; the vulume and scheduling of rnili tary ord.ers~ price ceili:r..ga, a.tt.:,)~ could be important factors in the price OU;t+ook"

World supply cf -wool for ~he 1951,-52 se~son is .expec?e~ to be about the s~me .as last seas.on,, Produ.ct-ion is likely .to 'te alight!Ly highe~., The carry-~ov~r fr0m last seae.on in the major export:Lng countr·ies 0 particll.l9.rl;r in Arg~ntina. ar.C.., Hew 2seala.nd~ t11as somewhat larg~r-. tha.n a yea~ earlier., T.hsse increases ·wlll Just abeu~ ~>ffSGt the ~·eduction in stocks in consuming ,countries and the, disposal of. the rema,ining h~ldings last t!eason of. the Joint Organi:zatio·o (Un:i.t~d Ki.ngd.o:m ... Domin.lons Wt1ol DJ.Sposal.s LimHed.) o

. Produc·tion of wo:..·l in the -Uni:ted. sta:tss next ye~:.:- is expected to be some-what larger thJ.n tbie yearo The l'Jwer :cate of slaughter rel.atlve to i)lvent.cz·iea this yeat" ~ndicates t~:t growt~rs ara continuing to bu:Ll.d up "breading herder- ?:r!)ductioil o! sho:n\ and. puller~ wool combined thie year is c.xpec.ted to be a·bout 2.5.?--260 millir,n pouno.s~ g:r-:;ase basisc-

Since it is unJ. ikely that the J.ncroase in produ~·tion will be sufficie:1t. to offs~.:..: a. pr()bable lower a:;rerag~ Pl"i.ce, n.ext year~ it is quite p;robo:b:Le ~hat cash l"e~e;i p";s froru shorn TtJooJ, neJDt .Year will .be slightl:r lower t:b.an this yea:r.., An increas.e in produ.ct:l ou co$t,s is also lil;:ely.,.

World ccnsumpiion of wool during.1946·-jo, practically all of which was for ch-i:-!.ian ·uses.~ ex.::eeded current prqductio~1 by 15 to. 20 percant., This l11as made po.ssible by the l.arge .wartime. accumulatiol.t., which has now been llquidatad., V~Jerrld consumption during the first half of 19.51 i R

e.~tima•lied 1io ha.v·e been at ar.~. ann:o.a.l ra.:te about eq:.1al .to cur.;ran·t produc·­tion an4 10 to 15 perce:1t balo\"11' that: cf the firs.t half of last year" The decline in raw wool consumption was accompanied 'by an i:q.creas~ of about 1..5 percent i:u the. use of other material~, particularly recla).me.d wool and sj~·nthE:-tia .fi1.taro HoweY"~rp t·otal fib~r cons\ll!lption on the woolen and worsted ~yst-9ms ·was dow~'l about Lt· :per\Oauto

World production of syn~heti~ svaple fiber is expe~te~ to con~inue to i:ucreaseo. Fxpansio:n p:•.ans of ~he' :rayon irJ.d.ustry in the Unt,lied .states call for an ·.increase :in O\J.tput of rayon staple fiber. of abo;ut 25 per.o.~nt by the end of 1953~ Expansion of production of the new~r synthetic sta.pie fibers 9 NyJ.on9 OrJ.onp Dacron') Dynel\1 Vicara, and Acrilanli ;!.s ajso p:i.anned by the sy.n"t;heti~ industryo ;,

Consumer irtcq~es are :e.xpected to continue to increase~ 'MilJ. demand ··for ra.w wodl for ~i~ITilian goods is. likely to strengthen as the ratio of ' i~v.entcries to sales in. m<lnufEi.ctur'j,ng and distributio~ che.nl,l.els .is re.duoed to a more ntla,rly normal working level e Military re.quirement's 'ror ·'-raw -wool will again be sub~tantial 0 " · ' · •

Consumption of apparel wool in the United States o.o. the woolen and worsted systems during the first eigll't month a of this rear was e.t a.n anml!itl rate about 7 pe~r?en~. -below ,:that of. last yearo Cons'\llllpti on for the full year probably will be: .'J7S to 42) million p0'1md.s 1 scour;ed basis, slightly. below last year a . To~al c~n:-1umpti Oil for mili,tary alld civilia,n goods next, year probably will ba about the same as in 19.51~

OCTOBER 1951 -31..;;..

Since thE~ b~ginning_ f.lf Wo:•ld \var II, over 60 percent of the apparel wool u.sed in the U:.1ited States ha.s beert imp<.>r·ted,l) Imports .of apparel ·wool this year propa.bly will :n.ot b.e grea:tly dif':hre.nt from the 2.50 million · pound~, clean basis, imp•Jrte-d: last yeat'<> !t is unUkelt that the de­pende~ce of the United State~ on f.or.ei€11 sources for raw apparel wool will lessen.next.y~a~o

Demand tor Un1 ted Statea cigaret~e tobacc:o is expected. to be strong in l9.52c ·United Sta.tee cigare·tte manufacture absrJrbs close to 60 percent of the tobacco used don1cstically and the output next year is likely· to excee<t the 412 'billion estimated ftr 1951 ~ Cigarette o·utput in 1950 was 392 billion~ The major increases between 1950 and 1951 were in domestic consumption ani shipments to overseas forcas~ but exports to foreign countries also are ·ap a little" :Flue.:..cured, Burley, an.d Maz·yla:J.d tobacco are us~a in cigaretteao ·

. l'he 1951 c:cop ·of flue-cured is now well. along in the marketing season, The much larga:r- p:::-oporti ~n fallinp in the lvwar-·priced grades than last year has pulled the over-a:!.l avera.ge price received ·oy growers belvw last s~asonts8 Thrcugh late. Octobert the average was about .52 cents per pound-·5 percent leos than the )4,7' cent ave::-age for the 19.51 seaso~., Most t6bacc~ in the higher-price~ grades brought higher prices than in the 1951 sea~on, but the prices for lower quality grades were gener~lly down~ . Thr:: :Burley auct'ioD.s 'begin around Decembar l" '.rhis year's crop is almost .. · 14 percent larger than lest year 1s but. st.ocks are 'lo.wer, A firm demand. is expected.> The 1951 support level for :Burley at 49"8 cents is 9 percent htg...1.er than a year ago., The .1950 season average pric.e vJas 48tt9 cents ;per :po:und~ ~laryland auctions begin next spring. Supplies of M4ryland leaf· · are large r·elative to the cun·ent rate .of disa.pp~a:rance and prices for this type will not be supported during the c~ming marketin~·seasone

The 1952 cro:J;• support levels for most tobacco types are likely to be a:pprC<lxi~tely the saJne or slightly lower than t-hose for the 19.51 crop')

The support prices for 1951 fire-cured and dark air-cured are 37~4 and 33~2 centsg respeqtivelyo Average prices received by growers will probably be fairly close to support levels. The domestic.use of' fire-cured and dar~ air-cured in ·snuff and chewing tobacco,. respectively,­llas changed very little in the last year or tv11o c.nd 11 ttle change i's ·ex-· pected in the year ahead~

.. Cigar filler and binder (types 42-·44, 51-55) ~ttill have higher price

supports in the coming season than in the 1950 crop season but Pennsylvania type 41 will not have price support because growers disapproved quotas for the 1951 crop~ Cigar ~ltplt in 19.51 will probably be around 5D7 billion-­up about 5 percent frcm last year and the second or third hiehest in the last 20 years., Some ft1rther sxr.all increase seems likely in 1952o

0C'IOBER1951 .. '~ 32 - 1 ... t. ~; ,. "'} ,, <;

Unlljsd States e:x.ports of unma.nufactore.d tobacco in 195·1 will total o·ver 500 m1llio~1 pom.:.G.s ( de<;l.;:.red ~.feigllt) compared with 477 .million in 1950, The expo.r·~ ·d.e!ll!lr.ui in 1952 is lj.kely to be at a relatively fe:rorable level bu·~ the tot.a.!. J.952 e:r.:por·ts ·;;:ill IJrobablJ not e:x:veed this year\' a. TJ:.e :fact.ors that tend. to ma:i:ntain ·tobacco expo::.'ts are (1) it is an 1mpOl1 t­ant consUJT:ption i l:;em in many cou:.J.tries u.."la'ble to .:_h"<.lcJ::t.::e any; or~ at beet, only a fract:to:c.:.., of their owT! reqvi:t:em.ents and. (2) ma:1y fo:r·eign governments de:r·ive a majo:r p:r.oport;i.on of their l'Efve:m:ues f:;:•om tc.l;)acco. Exports to some cou:ntr1es will be f'a·vored. by t.:..~ei:c improved gold. and •iollar position. On t!:e otr.e:r haj.:·.d) the sterling area l1as suffered a s:harp decli:n.e in gold and dollar holdingi:1 in recunt mo.o.t:':':.s and lf "Chis shoulo. continue, some imports from the. dollar a:::ea will pro·iJably ·:;,e tightened.

SUCJI.R

wo'rld. sugar produc.::;io:J. J.n 1951-52 probably will be about the same as in 1950~51 when it ·~ras +;.he higl1est O!.i. record and 26 :percent above the prewar average., The 1951-52 cro:ps in (;he U;:J.ited States, E·tn•ope, At<stralia and the Union of South .Africa will be smaller than in the previous season but the d.eclines are exp0cted to be offset ·by a substantial increase in Cubar! pro(lucti.o!l.

Th0 "world" IJrice and the United Sta-Ges ::firice of Cuban ra'\ot sugar · reached postvar highs 1n Jme of 1951) but ha-ve d.ecli:n.eCi since then, Prices recehed. by farmei:s for 1>otn ca:ne and beets :Increased. in 1950 ~ Bee.ts a·re::.·ae;ec. $r1 .20 pe1' ton compared to $10 .. So in 19h9. Cane prices :J.n­creased. from $6 ,.25. to $7,80 per ton.

Distributio:t of .:~!.lga.r in 1951 for U ~ €. domestic consUm:tJtion will not equal the record. 8,278 tnouaand to::;.a J./ clist:cl'butec. 1n 1950. Dietr-1 .. bution in May 1951 was nearly as g:;,~eat as-the 1,189 thousand tons· for July 1950 anti. tl!e 1,200 tlwu~v:l.nG. tons for September 1939, the hig:t.est of 1:·ecord fol"' any one month, Si...'"lce May, d.eH·veries have failed to keep pace with those in 1950.

On Oc'uo.ber 16 ,. the Department announced a reduction of 350,000 tor:..s to a level of 7,900,00C tons in the quantity of sugar determined to be needed. to saU.s7.'y Gons:lmptio:o:. require:m.ents in 1951, as a result of the :jow level of dem.<.:l.nd. an.d. ·wealmess i:r~ pncea of raw sugar in. recent months. Under the f!;ugar Act of 1948 i it is necessary to :pro·vid.e fair prices· to producers for t.b.0ir cu:: .. ":!.·ent crops ~nd to i.nsure actequate production :in the domestic areas and Cuoa"

--------1../ All quantities are short tons) raw value, unless other-wise indicated.

OCTOBER 1951 ·. - 33 -

Production of all typeE! of edible sirups in 1951 will :probably total slightly more than in 1950, w.hen it was the ;highest since 1948. 1'he increase in 1950 over 1949 was due ;primarily to an increase of 8 percent in corn sirup ;production.

Supplies of industrial molasses for the 12-month ;period ending June 30, 1951 declined 15 percent below the ;previous year. Although main­land ;production of these co~~odities increased 6 percent, lower imports-­particularly from Cuba-~caused tl1e reduction in available supplies., The situation will be reversed in the next fiscal ;year when mainland ;production is expected to fall by about 10 percent, while total supplies rise by 6 percent--due to substantial :lncreases in im;ports.e.nd inshi;pments.

FOPJGST PRODUCTS

1'he demand for lumber in 1952 is ex;pecteo. to remajn close to the relatively high· level attained in 1951. Construction uses, will ;probably not change greatly assuming present credit controls and other restrictions affecting construction are continued as expected. The high rate of in­dustrial and military expanelon, a~d a continuing high level of agricultural production, are also expected to sustain demands for factory and shipping lumber:

During l95l.the lumber industry lost some ground from the peak year of 1950. The impact of credit restrictions on home building, and the faflure'of milit'iry requirements to take u;p the slack in demand, adversely affected the lUillber market. Lumber ;prices dropped slightly below 1950 levels and lumber production likewise dropped below the ;peak output af 38 billion board feet in 1950. Imports in 1951 are estimated at 2.7 bil­lion board feet, or somewhat less than.~n 1950, while exports are expected to reach l billion board f~et, or almost double the 1950 rate. About 1.2 bil­lion board feet of lumber was added to stocks in 1951.

Pulpwood consumption in 1951 has been considerably higher than in 1950, averaging about 2.3 million cords ;per month for the first half year, or 28 ;percent more ~~an in 1950. Further increases in consumption are likely in 1952. Pulpwood prices have strengthened as a result of this continuing increase ln demand.

Demands for most other forest ;produ~·~s in 1952, including veneer logs, mine timbers, ;poles, ;piling, etc., are not expected to change appreciably from 1951 levels. The need for mine timbers and piling may increase somewhat in 1952 in response to growing military and defense requirements.

U. S~ Department o:: Agr:1cUl ttu>e Washington ~5, D. C.

OFFICIAL BUSD~!:SS

BAE-DPS-10/51-5000 Permit No. 1001