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2-17,9
F3/3
Federal Reserve Bank of Chicago -

June 22, 1962
EXPORTS of agricultural products reached a record
$5 billion in 1961,_ about 4 per cent above the previous
record in 1960. The livestock, meat and meat pro-ducts
shipped abroad during 1961 had a value of $366 ,million.
While this is a relatively small figure compared with
either total exports or farmers' total marketings of livestock, exports are nevertheless very important for many
individual meat products.
Primarily the "by-products" are exported. These
are obtained in the process of slaughtering animals to
provide meat for American dinner tables. The largest in
terms of value are tallow, lard and "variety" -meats, all
of which have limited markets in the United Stales.
Tallow exports reached a volume of 1,597 million
pounds compared with 1,526 million a year earlier. The
continued large slaughter of heavy cattle in 1961 provided- abundant supplies of tallow for export. United
States production of tallow and grease last year totaled
about 4 billion pounds—more than half the world output—
and 40 percent of United States production was exported.

•

1,000

800

IMPORTS of agricultural products totaled $3,690
million in 1961, the lowest in 12 years. Volume, however, was up 3 per cent from 1960. Livestock, meat and
meat product imports- totaled $541 million—an increase
of about 20 per cent from 1960.
While exports of meat products depend on total
slaughter in the United States, imports of meat and animals depend on prices for particular kinds of livestock
in the United States. For example, beef imports into the
United States were low during the mid-1950's when cow
slaughter was at high levels and prices were low. Then
cow slaughter declined at the end of 1957 as western
ranchers began enlarging their cattle breeding herds.
With smaller supplies of processing beef, prices rose
sharply and attracted beef imports.

Thousand head
Cow
Slaughter,
U. S. •

7,000

•
•
•
•

,000

600
,000

•
400

...mm,muma

%

ffam40

•

%

200

Lard exports of 419 million pounds last year were
201 million below the high level of 1960, reflecting the
loss of,the Cuban market as well as smaller production
and higher prices. Over 17 per cent of 1961 lard production moved into export.
Shipments in 1961 of 124 million pounds of variety
meats (livers, tongues and edible offal), a new r ecord,
were 6 million pounds larger than the previous year.
Booming-_ economic activity in Western Europe and,the
popularity of relatively low-priced variety meats to supplement local meat production has greatly stimulated
United States shipments to that area. About three-fourths
of-United -States variety-meat exports move toWestern
Europe. This favorable export situation, however, could
change since the European Common Market countries
have begun to increase tariffs.

•

Million lbs.

1950

% •

%,•

,,
Beet imports
Lilt
'52
'54

it
'56

i

I
'58

t

,000

I
160

About 90 per cent of beef and veal imports go into
processed meats. As a consequence, beef imports move
closely with, and in the opposite direction from, cow
slaughter in the United States. In 1959, for example,
cow slaughter dropped to its lowest level in the past
decade and beef imports reached a record high. As cow
slaughter increased in 1960, imports dropped but then
increased again last year as a faster build-up in domes- -tic cattle herds reduced slaughter of cows.
Even at the peak, imports of beef in 1959 amounted
to only 8 per cent of total beef supplies in the United
States. And after allowing for the meat equivalent of
feeder cattle imports, the total was still less than 9 per
cent. When the present expansion of cattle herds levels,
off or is reduced, domestic supplies will rise and imports
probably will decline again to the low levels of the mid1950's when imports were around 2 per cent of total
supplies.
Imports of feeder cattle tend to follow a pattern
similar to meat imports. In the expansion phase of the
cattle inventory cycle higher prices of feeder cattle encourage imports from Canada and Mexico. Because of
the high level of feeder cattle imports in recent years,
Corn Belt farmers have paid lower prices for feeder animals than otherwise would have prevailed.
Research Department