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O CTO BER 1 9 5 4 business re view FEDERAL RESERVE BANK OF PHILADELPHIA MPETITION IN NYLONS three miles of nylon yam, most of it finer than the average n hair, go into a pair of high grade full-fashioned hosiery, oduct is fine, competition is fierce, and profits are falling, nnsylvania find the going especially rough. PARTMENT STORE SALES RELEASE eport covers the Philadelphia Metropolitan Area and many of the other large retail centers in the Third District. 1954 — A PROBLEM YEAR FOR THIRD DISTRICT FARMERS A mid-summer drought made the price-cost squeeze a little tighter. Early crops were disappointing, later ones are promising. Additional copies of this issue are available upon request to the Department of Research, Federal Reserve Bank of Philadelphia, Philadelphia 1, Pa. CO M P ETITIO N IN If you think you are in a competitive business, plague; the curse of multiple-shift operations; look at the industry that makes nylons. Prices glutted markets; evaporation of profits; wage are low. Profits are low. The market is over cuts; strikes; arbitration machinery; and efforts loaded. Mills are closing down and companies to rescue the Northern branch of the industry. are going out of business. Competition is really rough and rugged in nylons. Nylon, a man-made fiber derived from coal, gave the industry a lift. This synthetic wonder Competition is especially rough in Pennsyl appeared in 1940 and was rapidly accepted. By vania and other sections of the North. Only last the time we became involved in World War II, April a Philadelphia firm that had been in busi nylon was already a respectable competitor of ness for over a half-century closed its doors for silk. When the fighting started, Japanese silk More than 700 workers were without imports were naturally cut off and in a short jobs, and the machinery was sold. The story in the local press told about how the industry got time the country’s entire output of nylon was commandeered by the armed forces for para started in Philadelphia in 1887; higher hem lines in the twenties ushered in fashionable chutes and other military requirements. Through hosiery of sheer construction; silk became the of rayon or combinations of rayon and cotton. good. out most of the war, women wore stockings made dominant fiber; the country’s production of full- After the war the pent-up demand for nylon fashioned hose doubled between 1919 and 1925, stockings broke out in long nylon queues at re and doubled again between 1925 and 1929; tail stores all over the country. Manufacturers knitters made fabulous wages up to $7,000 a hustled to meet the demand as fast as they could year, became the aristocrats of labor, and some get nylon yarn. It took several years, but they of them set up in business for themselves; mills were years of profits and prosperity. Silk never in Philadelphia mushroomed to a peak of 81 in did stage a comeback. 1929; how the union flourished when the in lon capture the market that products of the women’s full-fashioned hosiery industry came dustry prospered. The nostalgic news item went on to tell about So thoroughly did ny to be known as “ nylons.” the collapse in the thirties; the shift to the South where lower wages prevailed; unsuccessful ef DIM ENSIONS OF THE INDUSTRY forts to unionize the South; the constant influx The United States industry that makes nylons of bigger machines that produced more stock ings of finer construction in less time; evils of is a comparatively small member of the great the “ stretch-out” ; the second-hand machinery year there were exactly 683 companies operat textile family. On New Year’s Day of this 3 business re v ie w ing 757 mills, not counting the small family shops. Anyone with courage and capital can ting progresses, exact leg contours are auto matically attained by needles periodically drop buy some yarn, a second-hand machine, and go ping out of play. into business— but it isn’t recommended. into the foot by adding threads at the point At lantic City has a number of hotels that could Reinforcements are knitted of wear. easily accommodate all the manufacturers in an Seaming is the next major operation, where nual convention. There are some college foot each flat-knit stocking is seamed up the back ball stadiums large enough to accommodate all the workers in the industry— who averaged just from toe to welt on a special high-speed sewing machine. After seaming come examination and a little short of 59,000 in 1953. finishing operations. One of the most important Using employment as a basis for comparison, the full-fashioned hosiery industry is about stockings are stretched over metal forms and equal in size to the industry that makes rail given way equipment or farm tractors. It is larger permanently “ freezes” the shape. Thereupon arm than the cigarette or cement industries but ever fuls of stockings are tied in special cloth bags so much smaller than the automobile industry, and dumped into revolving drums submerged in as you might suppose. hot water for dyeing. The dye house is wet and finishing operations a pressurized is pre-boarding, steam treatment where which The full-fashioned hosiery industry in 1952 sultry, as might be supposed, but the adjoining utilized about 250 million dollars’ worth of ny room where the dyes are mixed with mortar lon yarn, kilowatts, dyes, and other manufactur and pestle looks somewhat like, and has the neat ing essentials. By the application of a generous ness of, an apothecary’s shop. The newly dyed amount of work and worry, technically called stockings are again boarded for drying and “ value added,” it turned out $550 million of smoothing, and after that come final inspection, nylons. Production was slightly over 50 million matching for length, stamping, and boxing for dozen pairs. An industry that produces over a market. half-billion dollars’ worth of stuff may not strike In every mill the knitting machine is the you as small, but in manufacturing, as in al major piece of equipment. It is a 16-ton, pre most everything else, all things are relative. cision machine with about 180,000 parts, capa ble of knitting 30 or 32 stockings simultane FROM N Y LO N TO N Y LO N S ously in about 35 minutes. At today’s prices, With the aid of modern machinery, the making one of these machines with modern attachments, of nylons is a comparatively simple job as manu like automatic welt turners and electronic con facturing operations go. In the knitting depart trols, comes to about $40,000 fully equipped. ment of a large mill are rows of machines where Since the average number of machines per mill miles of nylon yarn take on the preliminary is twelve, all-new equipment would require about shape of the final product. a half-million dollars for knitting machinery alone. Nylons with seam s Actually, an average mill might be hard to A full-fashioned stocking is knitted flat starting find. at the top and ending with the toe. As the knit family units to huge companies. The two largest 4 Mills range in size from one-machine business re v ie w have 400 to 500 machines each. Nevertheless, unit of weight of a standard 450-meter skein; the industry is essentially small-scale; no com hence the lower the denier the finer the yarn. pany produces as much as 10 per cent of the Only two years ago 15-denier was the sheerest. industry output. Today, manufacturers are interested in 10-denier Concerns are generally inte grated in the sense that they perform all of the nylon yarns to process on their new 72- and 75- operations from start to finish, though some of gauge knitters. Over three miles of yarn— for the smaller operators engage only in knitting. the most part finer than the average human hair Their products— gray goods— go to commercial — go into a pair of 15-denier, 60-gauge full- finishers or an integrated mill for dyeing and fashioned hosiery that weighs less than half an related finishing operations. Some manufactur ounce. Legs clad with such sheerness are clothed ers make branded merchandise only, others un in next to nothing. It has The style trend toward ever-finer hosiery ap been estimated that less than 30 per cent of parently pleases the ladies and probably the ma women’s full-fashioned hosiery sales consists of chinery manufacturers, but it aggravates competi branded goods. tion in the manufacture of nylons. It intensifies branded, and still others make both. competition in two ways. First, the equipment is SHEER, SHEERER, SHEEREST costly; so it takes big money to keep up to date. One way competition asserts itself is in the seem Second, the displaced machines that are not ingly endless effort to produce finer stockings. scrapped or exported are bought at second-hand Sheerness of the product depends upon the gauge of the machine and the denier of the yarn. The prices and go back to work in the buyer’s mill, thus adding to the total output of hosiery, and gauge is the number of needles per inch-and-ahalf on the needle bar of the knitting machine. FULL-FASHIONED KNITTING MACHINES Since each needle produces a single loop in (Dec. 31, 1953) every row of knitting, the greater the number GAUGE of needles the finer the cloth. Thus a 51-gauge stocking is sheerer than a 45-gauge. In 1940, manufacturers were buying 51-gauge machines to replace their 45’s and coarser gauges. By 1950, the progressive mills were re placing their 51- and coarser-gauge machinery with 60’s. In 1953 the 66’s were introduced, and now 72- and 75-gauge machines are being in stalled— the latter turn out the sheerest of the sheers. Most of the equipment comes from two Reading, Pennsylvania, knitting machinery com panies, one of which is the world’s largest. Along with the development of ever-finer gauge machinery has come ever-finer nylon yarn. Di ameter of yarn is expressed by denier. It is a 5 business re v ie w TRENDS OF GAUGES EXPRESSED IN PER CENT OF MACHINE SECTIONS ( facturers have to go back to 1950 for the last good year. But even that year does not bring so much joy to their hearts as the plush years of 1950 -195 3 ) 1946 through 1948 when nylons were sold as PER CENT fast as they could be made to satisfy the big post-war demand. Since 1950, profits have been shrinking almost steadily, according to reports of the companies that publish statements. According to one survey, profits expressed as a percentage of sales declined from about 8 per cent in 1950 to around 3 per cent last year. That was for the larger concerns — those with a net worth of a million or more. For the smaller companies the erosion was gen erally worse. The story on profits, expressed as a percentage of net worth, is much the same. Companies that made 9 to 14 per cent on their net worth four years ago did well if they made 4 per cent last year. During the past decade the large companies generally have done some what better than the smaller firms. This was also true last year, but the big companies surpassed their smaller competitors by only a very small often at prices that undermine the market struc margin, profit-wise. ture. FA LLIN G PRICES To be sure, there is a limit to how sheer a stocking can be made. According to opinion in Price-wise, nylons are badly out of step with the the trade, the limit has about been reached and times. While prices of apparel have held firm, competition henceforth is more likely to be di prices of nylons have been falling— as shown in rected toward the installation of more efficient equipment— for example, higher-speed machines the chart. As of June 1954, the index of retail that knit more courses per minute. The type of apparel prices was 4 per cent above the 19471949 base, but the wholesale price of nylons was machines according to gauge now in place and 39 per cent below the base. There are indeed the trend of gauges appear in the preceeding very few things that can be bought for so much charts. less money today than six years ago. The decline in wholesale prices is directly re V A N IS H IN G PROFITS flected in retail markets. This spring, 12-denier, In recent years it has been increasingly difficult 66-gauge stockings were sold retail at 89 cents a to make money in the full-fashioned hosiery busi pair. ness. Turning the pages of their ledgers, manu gains in 51-gauge, 15-denier nylons at 75 cents 6 The early-morning radio advertises bar b usiness re v ie w Some food stores and drug stores use entered and 87 left, for a net reduction of 42 nylons with big mark-downs as a “ come on” mills; but the industry is still overcrowded. The a pair. operating concerns have 9,000 knitting machines to bring customers into their stores. For five years, price-cutting has plagued the industry. Contrary to popular belief, it is not in place, whereas 6,000 machines would be enough to turn out the industry’s current volume only the small producers who cut prices in the of 50 million dozen pairs annually. Some of these hope of getting a bigger share of the market; machines are on the way out because they are some of the biggest producers are the biggest too old and too low gauge. price cutters. Several years ago one of the trade Because of the human propensity for over associations sponsored a three-point plan to lift estimating the chances of gain, there is a con the industry out of the doldrums. The three stant influx of new enterprises. Entrance into the planks in the program were: first, know your industry has not been difficult despite the high costs; second, don’t sell without a profit; and, cost of new knitting machines. Second-hand third, don’t make anything you can’t sell. It equipment is always available and one knitting didn’t work. Apparently each manufacturer ex machine is all that is necessary to get into the pected the rest of the industry to adopt the plan. business. Moreover, the knit fabric can be sent The major trouble is that there are too many nylons. The industry has about 58 million poten to other companies for finishing. tial customers— the country’s female population competition to the regular companies. Once in 15 years of age and over. Each year since 1950, nylon production has flowed at a fairly even keel business, producers— whether large or small— eager to get the most out of their capital invested Because of their lower labor costs, family shops offer severe of slightly over 50 million dozen pairs. Falling in machinery, operate on a two- or three-shift prices do not seem to discourage production, in basis. That of course adds to the total output accordance with the law of supply and demand. thrown on the market and depresses selling prices Almost every year more mills come into the still more. Because of the large number of con industry than go out. Last year and the year cerns in the industry and the absence of any one leader there is no such thing as price leadership before were exceptions. In 1953, 45 new mills or “ friendly competition.” The low cost of ship COMPARISON OF PRICES OF NYLONS AND APPAREL ping in relation to the value of the product means INDEX 1947-49 = 100 sheltered because of geographic isolation. that there are no areas in which competition is G EO G R A P H Y O F N Y LO N S The country’s full-fashioned hosiery mills are heavily concentrated in the Atlantic Seaboard and the Gulf states. Over half of the mills (56 per cent) are in the Northern states, about 38 per cent in the Southern states, and 6 per cent in the West— the regions being defined in the following map. 7 business re v ie w TERRITORIAL DIVISIONS OF THE UNITED STATES Pennsylvania. Since 1937, production in Penn sylvania has declined from 44 per cent to 27 per cent of the industry’s annual output; in fact, it has been more than a relative decline. Last year’s production in Pennsylvania was actually less than the 1937 output. The shift to the South has been caused by a number of factors. As mentioned in the February Business Review article entitled “ Textiles Are Slipping in Pennsylvania,” many areas in the South offer such advantages as lower labor, power, taxes, and construction costs, along with special Pennsylvania, formerly and for many years the inducements on the part of some local communi leading producer, still has the greatest number of ties to attract new industries into their area. It is mills. At the outset of 1954, Pennsylvania had difficult to pinpoint the relative importance of any 44 per cent of the mills in the industry. An addi of these factors, and of course they vary from one tional 12 per cent of the mills was scattered community to another. throughout New England, New York, and New Labor costs, no doubt, are one of the great Jersey. North Carolina has the largest concentra attractions. The three principal elements of cost tion of mills in the South. At the beginning of in operating a hosiery mill are materials, labor, this year, North Carolina had 19 per cent of the and overhead. Nylon, the principal raw material, country’s mills, and an additional 19 per cent was costs the same for all manufacturers, regardless located in the other Southern states. of size or location. Labor is a big cost item, and Though the North has most of the mills, the prevailing differences between the North and South has most of the machinery. In January South are still significant despite narrowing dif- 1954, the Southern states had about 54 per cent of the industry’ s full-fashioned knitting machines, in contrast with about 40 per cent in the North and 6 per cent in the West. FULL-FASHIONED HOSIERY PRODUCTION Per cent distribution between North and South PER CENT When it comes to production of full-fashioned hose, the contrast between the North and the South is even more pronounced. Southern mills ac counted for 62 per cent of last year’s output and Northern mills, 38 per cent. The changing relation ship between the two major regions is shown in the accompanying chart. In 1937, Northern mills produced 70 per cent of the industry’s output, and Southern mills 30 per cent. The relationship will soon be reversed if recent trends continue. The shift to the South has been particularly rough on 8 1937 1939 1941 1943 1945 1947 1949 1951 1953 business re v ie w ferentials in basic wage rates as a result of the of seamless nylons. The distinguishing character growing industrialization of the South. istic of seamless nylons is, of course, the absence Although average hourly earnings are almost of a seam up the back of the stocking. The stock as much in mills in the Southeast as those in the ings are made in tubular form on a special ma Middle Atlantic states, according to a recent chine equipped with a circular needle bar. The survey, mills in the Southeast have a definite number of loops in a stocking is determined by advantage when it comes to knitters— an occupa the number of needles in the cylinder of the tion of great importance in terms of skill and machine. Most of the machines now in use have number of workers. For years it has been the 400 needles on the 3 % inch cylinder, which means practice for an individual knitter to operate a that it will produce 400 loops in the circumference single full-fashioned machine. Technological de of a stocking throughout its entire length, which velopments, however, have made these machines is about equivalent to the 51-gauge, full-fashioned more automatic, and some employers consider it machine. feasible for a knitter to operate two machines, equivalent to a 60-gauge, full-fashioned machine. The 474-needle circular knitter is usually with the aid of a helper. Mills in the A 400-needle circular machine costs in the North were a bit slow in adopting the two-machine neighborhood of $3,000 and knits one stocking at system, owing in part to union opposition. a time. Operating 24 hours a day for 250 working The South also has the advantage of more days a year, the circular knitter will turn out about up-to-date plants and equipment. Of more recent I, 000 dozen pairs of seamless hosiery. As in the construction, Southern mills are usually one-story, air-conditioned plants, specifically designed to full-fashioned division of the industry, most of the seamless hosiery machinery is made by one produce hosiery. They stand out quite in contrast concern, but in this case located in New England. with the older mill-type multi-story plants in the Limited quantities of seamless nylons appeared on the market right after the close of World War North. In four of the past five years the installation II. For some years, consumer acceptance was of new machines in Pennsylvania lagged behind somewhat hesitant but with successive improve North Carolina and other Southern states. Since ments in quality and sheerness the hesitant de mand suddenly caught fire. the South has been getting more of the longersection, higher-gauge, faster-operating, and more Production of seamless nylons rose from 4.3 automatic knitting machines the effect on labor million dozen pairs in 1950 to 6.3 million dozen costs is obvious. In 1953, however, Pennsylvania pairs in 1953, when one pair of seamless nylons replaced North Carolina as the recipient of the was produced for every eight pairs of full- greatest number of new machines. Whether this fashioned nylons. There are slightly over 6,000 is the beginning of a new trend or merely a tem seamless machines in place and they are kept porary interruption of an old trend we do not running day and night— so great is the demand know. for seamless nylons. The only thing that prevents installation of more circular knitting machines N Y LO N S W ITHOUT SEAMS Competition in the women’s full-fashioned hosiery is the inability to produce the machines fast enough. The leading machinery manufacturer is industry is intensified by the growing popularity reported to be booked into 1957. 9 business re v ie w Seamless hosiery appeals to those who like the industry in this area. What about the non-union bare-leg effect and also those who go in for wide- plants that are in trouble or have gone out of open footwear. The absence of seams also appeals business or have moved out of the state? The to those who find it a nuisance to keep seams union is trying to help mills in the North to stay straight. On the other hand, full-fashioned hosiery in the competitive race by granting them the is said to have a slenderizing effect, and of course cancellation of the existing KP/^-cent-per-hour, “ full-fashioned” originally set the pace for high- cost-of-living wage increase, doing away with the style hosiery. Estimates as to how deep a dent second week of vacation, eliminating most of the paid holidays, and also discontinuing the 4 per seamless will make in the full-fashioned market range from 12 to 50 per cent. Many full-fashioned producers have installed circular knitting machin ery to make both lines. cent contribution formerly made by the employers to the pension fund. The industry has gone through former periods of severe price competition and over-production, IN C O N C LU SIO N as veterans in the business well remember. The The story told at the outset about a Pennsylvania current stretch of stormy weather has been of unusually long duration, and the competitive mill going out of business is, unfortunately, not an isolated case. There are others. The competi scene is complicated by the advent of seamless tive pressure is still on. In the constant churning hosiery. with new firms entering the industry and harassed branded, integrated or non-integrated, big mills Seams or no seams, branded or un manufacturers dropping by the wayside, Penn or small, North or South, the things that count sylvania has steadily been losing out. Since most are modern equipment and able manage Pennsylvania has been a union stronghold it is ment. Despite the severity of competition, it is easy to blame the union for the decline of the possible to prosper. Some do. A NEW DEPARTM ENT STO RE SA LES RELEASE Starting October 13, our weekly report on depart district and center-city Philadelphia. This report ment-store sales in Philadelphia will cover the gave an up-to-the-minute indication of trends in metropolitan area instead of just the center-city retail sales in the district and its largest com stores. Also, the weekly report is expanded to mercial center. A much more complete break include the Lancaster, Reading, Scranton, Wilkes- down of department-store sales in the district was Barre, and Wilmington areas for the first time. provided in our monthly report. In the monthly For many years this Bank had been issuing a breakdown, Philadelphia department-store sales weekly report on department-store sales for the were measured on a metropolitan or eight-county 10 b usiness re v ie w area basis. Also, department-store sales in seven There did appear to be some tendency for center- other principal trade areas of the district were city stores to make larger gains around the Easter provided monthly. and Christmas buying seasons and for suburban stores to show larger pluses in the off seasons. But C en te r-city and m etro p o lita n -a re a Ph ilad elp h ia generally the center-city sales’ figures provided For some months everyone who watched Philadel adelphia area. a fair gauge of retail trends in the whole Phil phia department-store sales has realized that the In 1954, however, all this has changed. Sub- weekly series (center-city stores) was lagging behind the monthly series (metropolitan area) mainly because of the growth in number and YEAR-AGO CHANGES IN SALES PER CENT importance of suburban stores. Users of the data, however, frequently overlooked the distinction be tween the areas covered by the two reports and this resulted in misinterpretations. In addition, as the gap between the two series widened the value of center-city figures as a general business indicator was impaired. The charts illustrate the different sales record of center-city and suburban stores. In the first chart, the solid line shows center-city departmentstore sales and the broken line, sales of subur ban stores. J f m a m j j a 1954 Both lines are on an index with As can urban department stores have usually gained be seen, changes in 1953 were not too different. faster than their mid-city counterparts. The gap MONTHLY TRENDS IN DEPARTMENT STORE SALES between the lines in the first chart has widened considerably in 1954. This means that suburban ( Philadelphia Area) stores monthly sales are outpacing sales in the sales in January 1953, taken as 100. center city, when the figures are put on an index. IN D E X (JAN. 1953 = !OC0 This is further illustrated in the second chart, which measures monthly sales in 1954 against sales in the same month a year ago. The black bars in this chart show changes in center-city department-store sales. The colored bars include sales of center-city and suburban stores in the eight-county Philadelphia area. Since the early part of the year, sales in the eight-county area have held up much better than sales measured only at center-city stores, though both have generally run below a year ago. For ll business re v ie w example, for the first eight months of 1954, sales department-store activity varies considerably in at center-city stores were 7 per cent below year- the separate centers. ago levels. In the eight-county Philadelphia area, For many years our monthly department-store sales were just 2 per cent behind last year. When report has included separate figures for several of the gap between the weekly and monthly series the larger metropolitan areas in the district. A became pronounced we began the task of expand major feature of the present revision of the weekly ing the weekly report to show the entire metro release is the expansion of local information to politan area covered in the monthly report. With the cooperation of the stores in the area, we are include six of the major areas in the district. All of the stores in these areas that have provided us now able to report weekly sales in the eight coun with monthly figures over the years have gener ties. Our center-city series is being discontinued ously cooperated to make this improvement in the to avoid possible misinterpretations in the future. weekly report possible. Trade centers outside the P h ila d e lp h ia a re a Outside the Philadelphia area there are many Analysts who in the past have noted monthly changes in sales by local areas may be surprised by the size of some of the weekly percentage changes. Year-ago changes on a weekly basis are retail centers that contribute substantially to the apt to fluctuate rather widely, and too much sig total trade activity of the Third Federal Reserve nificance may easily be attached to a weekly District. Because of differences in general eco change that may “ wash out” over the course of nomic conditions, merchandising policies, etc., a month. 1954 —A PROBLEM Y EA R FOR TH IRD D ISTRICT FARM ERS Farming, just like other business enterprises, has lems were attributable directly or indirectly to the its good years and its “ off” years. Looking back mid-summer drought. All of them had some bear over the main production season in the Third ing on farm cash income, and on the purchasing Federal Reserve District it appears certain that power of farmers in the tri-state area of eastern 1954 will not be rated a banner year for agri Pennsylvania, southern New Jersey, and Delaware. culture. Nor could it rightly be remembered as in this area. County agricultural agents and repre Fa rm e rs’ purchasing pow er m ay be low ered ranking among the poorest seasons experienced sentatives of the extension services have indicated We won’t know the final score in agriculture until that the past season presented somewhat more than the season’s harvests are in and a large percentage the usual number of problems. Many of the prob of them have been marketed. But it is clear at this 12 business re v ie w point that factors affecting purchasing power in well. this sector of the local economy have been less plaints from those who fatten cattle or raise breed favorable this year than last. Farm cash income in ing stock. Prices received have not brought re the three states included in this district was Tun sounding cheers nor have they shown anything And, market-wise, there are fewer com ing about 7 per cent below 1953 levels at mid-year. like the declines of early 1953. But when dairy Since then growing conditions for many crops men and cattle men alike have to dig into winter have been far from ideal. Drought damage was feed supplies in mid-summer there is plenty of incurred at the very peak of the growing season. cause for concern. It was severe in some areas but not of the dis These rations must be replaced from the current astrous proportions predicted by some observers. season’s harvests or purchased in the market. In Nevertheless, it did have a two-way impact on our all but our northern tier counties early cuttings of farm economy. Income from marketings was re hay made a mighty lean crop from which to build duced further because of smaller volume and new supplies. Corn for silage is going to be scarce lowered quality, and production costs climbed too. The late crop is maturing on short stalks, when the failure of pastures necessitated heavy which means it takes more acres to fill the silos. supplementary feeding of livestock. Mixed dairy feed, always an important expense item, has risen in price in some areas over the past Erratic gro w in g season created problem s in the e a rly m arkets considerably short of winter requirements, pur Drought damage and subsequent losses centered largely in the southeastern counties of this district. chased feed will be a somewhat heavier cost item in the farmer’s budget than it was in the 1953 Early corn and potatoes both were short crops, so season. year. Thus, with home-grown feeds likely to be receipts from marketings were smaller than usual. Some crops, like early peaches, ripened pre maturely. Consequently, market offerings at the start of the season became too heavy and prices weakened. Vegetables for processing fared some The p oultrym en’s problem is over-production Last year was fine for those in the poultry busi what better than those produced for the fresh ness. Broilers were in good demand. So were eggs. Poultrymen, encouraged by the prices they market. Contract prices for tomatoes, beans, and received, built up flocks of both broilers and layers other processing crops were about the same as prevailed in 1953; but in many cases quality was in expectation of an even better season in 1954. But since early summer, broiler markets in New off. Thus a smaller percentage of these vegetables York City and elsewhere have been receiving just qualified for the top market grade and the prices too many dressed chickens. Broilers have come that go with a “ U.S. No. 1” rating. from local producers and from competitors as far Livestock fa rm e rs have their tro ubles, too sure just what happened to the egg market. It has This year it is the feed situation that bothers live shown some seasonal improvement lately and may stock men more than anything else. For dairymen, strengthen further as many farmers are cutting markets have been steady and prices mostly flocks more severely than they did last year. away as Arkansas and Georgia. No one knows for firm. So the milk check has come through fairly Feed costs for poultrymen are their big expense 13 business re v ie w item. Much of the poultry ration is purchased change in prices but they expect the crop to be feed which has remained high in price. Last year, marketed somewhat later. broilers, for example, hit 27 cents a pound in the New York market. This past summer, prices re Fruit grow ers also a re encouraged ceived dropped to 17 cents, so that the dressed In Franklin County the harvest of fall apples may birds did not cover feeding costs. Prices of poultry be the largest in several years. Growers in Adams feeds are expected to decline when the new sup County, too, are optimistic concerning their pros plies come in around the year-end. So the poultrymen may get some relief on this score. Real im pects. The marketing outlook is said to be excel lent. This judgment appears to be based largely provement in poultry markets, however, is not on a low carry-over of sauce, butter, and other looked for in the near future. apple products. Processing plants in the course of Late harvests a re much m ore prom ising restocking are expected to keep down the size of the apple pack for the fresh market. This will help The rains that came in August and September were to maintain prices for the higher-quality fruit sold most welcome, although they were a mixed bless ing. Because of frequent heavy downpours, fall in packaged form. Even so, this year’s large crop plowing, seeding, and other seasonal operations problem for growers. of fall apples could create somewhat of a storage were delayed and some late cuttings of hay were hard to cure. But for crops like tobacco, fall apples, and late potatoes the beneficial effects of There is much prom ise in late potatoes, too the rains far exceeded any expectations. Late field In Lehigh County, where potatoes are an impor corn escaped permanent damage. And even some tant source of income, late varieties may help pastures revived sufficiently to furnish fair grazing farmers recover some of the losses experienced in for livestock, thus relieving some of the pressure marketing their early crop. Estimated yields have on the feed situation. risen considerably in recent weeks, quality has P en n sylvan ia tobacco w ill m ake a fine crop better than during the summer. In fact, all Penn improved, and marketing prospects are much sylvania potatoes may experience less competition Some observers claim they have never seen a more this fall. rapid recovery in the tobacco crop. By September potatoes have suffered considerable blight dam Current reports indicate that Maine the estimated yield was up nearly 15 per cent from age, so that the crop will be smaller and of lower a month earlier to 42 million pounds, and this quality. Southern potatoes and much of the Long year’s harvest promises to exceed the 1953 short Island crop have moved out early this year. In crop by approximately 20 per cent. The quality of local markets, prices have risen and are expected Lancaster County tobacco also has improved sub to remain firm over the remainder of the season. stantially in the past two months. This suggests a fair price for the crop. Last year the average Sum m ary price was 32 cents a pound, and the crop moved As it appears now, 1954 must be rated as an “ off” out unusually early— during late October and year for many Third District farmers. The price- November. cost squeeze became a little tighter because This year, growers look for little 14 business re v ie w receipts from marketings declined over much of farmers experienced markets that were just “ so- the season, while production costs remained high so” — not too bad, but not good enough to offset or even increased for those with livestock to feed. the cost of heavy supplementary feeding. Those Poultrymen may have been hurt most, and there who raise tobacco, grow fall apples, or produce is a strong possibility of flocks being reduced by late potatoes very likely will have fared the best early next year. Dairymen and other livestock of all this past season. 15 FO R THE R E C O R D . . . , N0EX « BILLIONS MEMBER BANKS 3RD ER.D Factory* Third Federal Reserve District United States Per cent change SUMMARY Per cent change 8 mos. August 1 954 from 1 954 from mo. year year ag o ag o ag o 8 mos. 1954 from year year ag o ag o August 1 9 54 from mo. ag o LO C A L CHANG ES EM PLO YM EN T A N D IN C O M E Factory employment ( T o t a l) ... -1 4 +36 -1 9 -1 4 +19 -2 2 + 8 + 2 +18 + 0 2 -1 1 -1 3 - 8 -1 2 + 2 TRADE** Department store s a le s ............ - 2 1 - - + 1 0 B A N K IN G ( A ll member banks) D eposits....................................... Lo a n s............................................ Investments.................................. U .S. G ovt, securities.............. O t h e r ......................................... C h e ck payments......................... 0 0 + + + - 8 6 + + 5 4 3 + 5 3 + 3 1 +12 1 t + 9t 5 + 3 + 5 + 1 0 + + 5 5t + + + + - - 8 + 6 -2 1 - - - 9 +13 -1 8 9 - 7 0 - 3 5 + 4 0 + 4 + 2 1 1 4 5 1 2 + 9 + 9 + 8 +13 + + + + 5 5 6 8 0 0 0 0 + + 1 1 Lancaster. . . C h eck Payments Employ ment Payrolls Stocks Sa le s Per cent Per cent Per cent Per cent Per cent change change change change change August August August August August 1 9 54 from 1 954 from 1 954 from 1 9 54 from 1 954 from mo. ag o OU TPU T M anufacturing production. . . + 2 Construction contracts*........... - 5 C o a l m ining................................ + 3 2 Department Store year mo. ago ag o year mo. ag o ago 0 -1 2 +1 -1 8 - 2 - 1 +1 -1 5 -3 -2 1 + 3 + 6 +1 - +2 - 3 6 5 - year mo. ag o ag o 4 - P h ila d e lp h ia . 0 -1 1 +1 -1 1 +13 - R e a d in g ........ 0 -1 1 -2 -1 5 - Scranton. . . . +2 - 6 +3 - Trenton......... -1 -1 3 -1 -1 2 W ilke s-B arre +3 - 9 +9 W ilm ington.. +2 -1 2 Y o r k ............... +3 - 9 +3 + 4 - 4 + 3 +7 - 6 - 3 +10 4 -1 4 6 +15 - year mo. year ago a g o a g o +8 - 5 + 3 + 9 7 +7 + 8 + 1 - 1 1 -1 -1 6 +11 - 9 +12 -1 7 +8 -1 4 + 8 + -2 - 9 + - 2 + 4 +10 +5 -1 0 + - 6 - 1 -1 0 - 1 - 5 + 5 +6 +35 1 PRICES Consum er..................................... o 'tl *Based on 3-month moving averages. **Adjusted for seasonal variation. 16 + 1} + 1*1 120 C itie s ^Philadelphia 8 8 -1 1 +1 *Not restricted to corporate limits of cities but covers areas of one or more counties.
@FedFRASER