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Monthly F E D E R A Volume XXXIV L R E S E R Review V E B A N K O F A T L A Atlanta, Georgia, October 31, 1949 N T A Number 10 The Pecan Industry in the Sixth District 1846, when the pecan tree was first successfully E. Colomb of St. James Parish, Louisiana, propagated pecans propagated by grafting, pecan growing has become one by grafting, but the process did not become widely known of the principal horticultural industries of the South. In 1945until 1877 when another grower in the same parish revived District growers received about 16.4 million dollars from the the idea and developed the Van Deman variety. During the sale of 63 million pounds of these nuts. Although pecans are next decade many excellent varieties were offered for sale by a minor crop from the standpoint of total farm income, they nurserymen and most of the new plantings, therefore, were contribute significantly to the income of several thousand improved trees. farmers in the commercial growing area. Prospects for profits in growing pecans naturally attracted The pecan is a hickory and is indigenous throughout most speculators, and from 1900 to 1930 large acreages were of the Mississippi Valley and along the larger rivers in planted by individuals and corporations for resale to poten Texas. It is not native to Georgia, Florida, and most of Ala tial investors. The promotional activity that occurred around bama. The name “pecan” was used by the Indians to desig Putney, Georgia, is typical of this period. A Chicago com nate all nuts that were so hard that a stone was needed to pany bought large acreages and planted them to pecans for crack them, but the French settlers of the Mississippi Valley resale in blocks of five to ten acres. The purchase price began using the name only for the nuts now known as included complete orchard care for the first five years. The pecans. One of the first references to the pecans was by De land was carefully selected, desirable varieties were planted, Soto in 1541 when he reported that the natives were using the young orchards were given reasonably good care, and them for food. It was not until the beginning of the eigh many of them proved to be profitable. teenth century, however, that the tree was scattered from its Another company soon entered the area with a similar native area through the Southern states to the Atlantic Coast. plan of operation except that land not suited for pecans was Shortly after Texas was settled, a thriving business began often planted and orchards as small as one acre were sold. Many investors bought with in nuts from the wild, native the expectation that they trees. These nuts are common would begin to get profits ly called seedlings. In 1880 a after the five-year period, million and a quarter pounds only to find that several more were gathered and shipped to years of rather expensive care eastern markets, mainly from were required before their the area around San Antonio. property would begin to show These sales aroused interest a profit and that they had too in the commercial possibilities small an acreage to justify of the crop and seedling or the necessary cultural prac chards were planted from tices. It took the sharp price Texas to the Carolinas. Be decline of the early thirties, tween 1870 and 1890 seedling however, to halt the expan orchards were planted near sion of pecan acreage. The Ocean Springs, Mississippi; season average price of im Mound, Louisiana; Montgom proved pecans dropped from ery, Alabama; Albany, Geor 28 cents in 1930 to 14 cents in gia; and Monticello, Florida. 1931; for the next ten years By 1890 some of these or it ranged from about 11 to 15 chards had come into bearing cents. For this reason most of and although large nuts with the investors with small acre thin shells had been planted, ages either abandoned them only a small percentage of the trees produced nuts of that or sold them to local farmers quality. As early as 1846, A. or pecan growers. in c e S 9 4 M o n t h l y R e v ie w o f th e F e d e r a l R e s e r v e B a n k o f A tla n ta f o r O c to b e r 1 9 4 9 According to the farm census reports, growers in the Dis trict states had only 176,000 trees of bearing age in 1900. By 1910 there were over a million trees—262,000 of which were of bearing age. The period of most active planting was from 1920 to 1925 and by 1925 there were about 4.6 million trees. Since that time there has been little change in the total number of trees, but the number of trees of bearing age has increased steadily. More than four-fifths of the trees in the District states are of improved varieties. Approximately fourfifths of the total crop of improved pecans and about onethird of the total crop of wild, or seedling, pecans normally come from these states. Many of the early ventures in pecan growing were not prof itable because inadequate attention was given to soil fertility and moisture requirements. The pecan is a native of the fer tile, well-watered soils of the Mississippi and other river deltas of the Southwest. Most of the orchards in the District were planted on upland soils that had become low in organic matter, mineral nutrients, and water-holding capacity after many years of field crop production. Although pecans will thrive on a wide range of soils, they usually require legumi nous cover crops, fertilization, and insect and disease control. Spraying to control insects and diseases is apparently the most essential operation in profitable production. Injury from diseases has increased in recent years to the point where it is the first limiting factor in pecan production. Several of the diseases and insects cause heavy losses but scab is the most destructive disease. Some tests made at Albany, Georgia, in 1948 on the relative efficiency of spray materials illus trate the necessity for controlling scab. On trees of the Schley variety where control was effective, the yield was 65 pounds of large size nuts per tree, whereas the trees in an untreated check-plot produced only 8 pounds of small and low quality nuts per tree. Insect and disease control is, however, the most expensive operation in growing improved varieties of pecans. Last year effective,control on some of the major varieties cost about 65 dollars an acre. Economics of Production As the damage from insects and disease has become more severe, production costs have risen rapidly with the result that many growers are facing the problem of how to reduce these costs. Some of the leading varieties that were planted primarily because they were resistant to scab have become susceptible to the disease in recent years. Since most of these varieties bring lower prices than others, such as Schley and Stuart, a costly spray program can make production unprofi table. In the larger orchards that have a small proportion of trees in varieties susceptible to scab, some growers are not attempting control on those varieties, but are relying upon the more resistant ones for their income. Many pecan growers during the war began pasturing the cover crops that had formerly been grown only for soil im provement in an effort to produce more beef. Other growers who have scab-susceptible varieties are also experimenting with grazing their cover crops in order to obtain part of their operation costs from sources other than pecans. Until this was tried, it was not known whether pecan production could be maintained under such a system. Preliminary results from these experiments indicate that yields can actually be im proved under a management system which includes grazing of cover crops. No data are available on the returns made from beef cattle pastured on the test plots, but it is estimated that they have been large enough to cover the cost of ferti lizing and planting the cover crops. This combination of beef cattle and pecans on the same land may prove to be a prac tical method of lowering the costs of production for those growers who have farm enterprises other than pecans. Since the number of cattle must be adjusted from time to time ac cording to the grazing available and pastures must be pro vided when the orchards cannot be grazed, the plan works well only in a diversified farming system. Although pecan orchards range in size from a few trees around the house to thousands of acres, low cost production is usually possible only if the orchard contains 100 acres or more. For efficient disease and insect control, a spray outfit capable of maintaining a pressure of 400 to 600 pounds is usually required. Such equipment is adequate for a mature orchard of 150 to 200 acres. Unless the orchard is large enough for full utilization of this equipment, the cost of spraying is likely to be excessive. Since spraying is the most expensive single operation, any increase in spraying costs adds significantly to total costs. Custom spraying is available in parts of the commercial growing area, but it does not offset the production cost advantage of the larger acreage. Production costs and systems of management, of course, are closely related to average yields and to the variety grown. Costs are highest on those varieties such as Schley that re quire heavy spraying and that have relatively light yields. An expensive spray program for this variety can be justified only if the other necessary cultural practices are followed to keep the trees in condition to produce the greatest possible yields of high quality nuts. The Stuart variety, on the other hand, can produce fairly high yields of good quality nuts in some years with very little spraying and a minimum of other cultural practices. How much growers can afford to spend in producing any variety, of course, depends upon the prices received. A large number of varieties are grown in the commercial area under a wide range of soil and weather conditions. Although pecan growers have a whole complex of problems in the economics of production, it is generally recognized that costs must be reduced if the industry is to be permanently prosperous. Marketing and Processing Most growers sell their pecans on an “orchard run” basis to accumulators or buyers from local processing plants. The buyer usually bids upon some arbitrary standard such as 90 percent sound nuts and raises or lowers the offered price after examining a sample of the nuts. The crops from large orchards are usually bought directly by buyers from the processing plants. Small crops are often bought by accumu lators who sell them to the processing plants. Most of the nuts are processed in the area of production, but large quan tities are also shipped outside of the area for processing. Some growers ship their own pecans to trade outlets beyond the producing area. Then too, truckers buy considerable quantities of unshelled pecans directly from growers and sell them directly to the retail outlets. For the unshelled nuts, processing usually consists of grad ing, sizing, cleaning, and packing into containers for ship ment. Light or unfilled nuts are removed by machines. Nuts that are off-colored, cracked, or have adhering hulls are M o n t h ly R e v ie w o f th e F e d e r a l R e s e r v e B a n k o f A tla n ta f o r O c to b e r 1 9 4 9 removed by hand. The sound nuts are then sized by machines into classes varying by one-sixteenth of an inch. After the nuts are sized, they are cleaned, bleached, and in some in stances artificially colored before packaging. If the nuts are to be shelled, they are soaked in water to soften the shells and to reduce breaking of the kernels. The cracked nuts are conveyed to machines that separate shells from kernels. The kernels are then sized, graded, and dried to a constant moisture content before they are packaged for stor age or shipment. In warm weather both shelled and unshelled nuts must be kept in cold storage to prevent rancidity. During the 1948 crop season, pecan marketing problems were more acute than at any other time since the early thirties. The season average price of improved varieties dropped from 29.4 cents in 1947 to 14.8 cents in 1948. Few growers of the improved varieties were able to pay produc tion costs at the 1948 prices. The crop was the largest on record and below average in quality. Since the quality of the nuts cannot be determined from the outside appearance and the marketing was not regulated, many unshelled pecans of low quality were sold. Distributors who usually handled good quality nuts had to buy pecans of low quality in order to meet competitors’ prices. Retailers who were not able to sell the good quality nuts at a profit soon lost interest in handling pecans at all. The consumers who bought the in ferior nuts were often dissatisfied, with the result that pecans lost ground to other nut trees. After an unsuccessful attempt to obtain a Government price-support program for their crop, growers in Alabama, Georgia, Florida, Mississippi, and South Carolina proposed a Federal marketing agreement and order to regulate mar keting of unshelled pecans from the five-state area. In a re cent referendum, the agreement and order was approved by growers who produced 89 percent of the total 1948 produc tion for market represented by those voting. The agreement and order established grade and size regu lations designed to maintain orderly marketing and to pre vent movement of low quality and small size pecans from the area. Prior inspection of unshelled pecans shipped out of the area in quantities exceeding 200 pounds daily to any con signee will be required and will be conducted by the FederalState or Federal Inspection Services. Prices and Production Although marketing difficulties have been a major factor in the low returns often received by growers, price problems of the pecan grower are not likely to be solved simply by changes in the marketing system. Pecans, like many other tree crops, have a pronounced tendency toward alternate bearing. If the trees are vigorous and growing conditions are favorable, they may set a heavy crop of nuts. During a year of heavy production, the trees often cannot mature the crop of nuts and at the same time build up enough reserve plant food in the trees to develop the next year’s fruit buds. As a result the following crop is light and the current crop often contains a large percentage of poorly filled and low quality nuts. This tendency toward alternate bearing creates a serious price problem for the growers of improved pecans. For crops of less than average size, the demand for improved pecans is relatively elastic. This means that a one-percent increase in quantity is associated with a price decrease of less than one 9 5 percent. Crops of more than average size, on the other hand, have a relatively inelastic demand. For these crops a onepercent increase in quantity is associated with a price de crease of more than one percent. Because of these relation ships, crops that are above or below average in size are worth less to the growers than crops of average size. Under the present marketing system, quality is also an important price factor, since extremely large crops frequently have a high proportion of low quality nuts that demoralize the mar ket for high quality nuts. PECAN PRODUCTION IN THE UNITED STATES Growers could increase their total returns from the crop, therefore, by reducing the annual variations in the size of the crop and by improving the quality, particularly in the years of large crops. Some variations in the size of the crop, of course, are inevitable because of changes in the weather and in disease and insect infestation. Several experiments are now being conducted at state and Federal experiment stations to control alternate bearing. So far, efforts to control the set of fruit by hormone sprays at the time of fertilization have been unsatisfactory. This method, which has worked well on apples and some other fruits, is not practical for pecans since fertilization occurs over a two- or three-week period and several expensive sprays are required. The Georgia Coastal Plain Experiment Station began an experiment in 1940 in which the fertilizer application was split. The first half was applied about April 1 and the re maining half about May 1, or as soon as some estimate could be made of the size of the crop set. If the set was heavy, all the remaining half was applied in order to provide enough plant food to mature the current crop and to build up reserve plant food in the tree for the next year’s fruit buds. At the United States Pecan Field Station, Albany, Georgia, tests are in progress on controlling the set of nuts by cul tural practices. The usual practice of turning under fertilized winter legume cover crops tends to produce heavy crops of nuts. There is some evidence that excessive nitrogen from the cover crop may cause the trees to set heavy crops. The test program consists of using a cover crop that can be grazed and applying 300 to 500 pounds of fertilizer that contains 9 6 M o n t h ly R e v ie w o f th e F e d e r a l R e s e r v e B a n k o f A tla n ta f o r O c to b e r 1 9 4 9 no nitrogen. Cattle are turned into the orchard as soon as the cover crop has made sufficient growth. Cultivation is begun at the usual time but only about half of the area is turned at one time. As soon as the native grasses on the turned area begin to furnish some grazing, the remaining area is turned. The number of cattle is adjusted from time to time according to the grazing available. The tests with split fertilizer applications and changes in cultural methods have not been in operation long enough to yield conclusive results. They do show some promise as a means of reducing alternate bearing. Such a reduction, of course, will tend to improve the quality of the crop. Some of the recent decline in pecan prices is not attribu table to production methods or defects in the marketing sys tem. The domestic production of competing tree nuts—wal nuts, almonds, and filberts—has doubled in the past fifteen years. Imports of tree nuts, which fell to very low levels dur ing the war, have risen to prewar levels and pecan growers are facing more competition from other tree nut producers in the United States as well as in foreign areas. Pecans are more competitive with domestic walnuts than with any other tree nuts. Walnut production is likely to con tinue upward and may increase 10 percent within the next ten years. Because of shifts in the varieties planted, however, an increasing proportion of the crop will be harvested late. Since the in-shell market for both walnuts and pecans must be supplied between Thanksgiving and Christmas, the in creased walnut production may not affect the market for in-shell pecans significantly. Imports of tree nuts are likely to continue at near the prewar volume with changes in the amount from year to year depending upon tariff rates and the supply of domestic tree nuts and domestic purchasing power. In this competition with foreign tree nuts, pecans will have an advantage over the other domestic tree nuts in that the direct competition by imports of pecans will be negligible. Price Stabilization In view of the conditions under which pecans are grown and marketed and the competition from other nut growers, such as the highly-organized walnut growers, pecan producers probably will have to work together to stabilize prices at a level that will make the industry permanent and prosperous. Successful action of this nature, however, will require an understanding of what determines pecan prices and how those forces can best be used for the benefit of the entire industry from the grower to the distributor. A statistical analysis of pecan prices from 1919 to 1948 indicates that changes in prices are more closely associated with changes in supply and in consumer purchasing power than with changes in any other factor. The remaining factors used in the analysis—the supply of competing nuts and the net imports of tree nuts—apparently had little effect upon pecan prices from year to year. In some years, of course, these factors may have affected prices signifiicantly. During the war years, when tree nut imports were severely restricted, pecan prices were probably considerably higher than they would have been had nuts been imported at the usual rate. Before the war, year-to-year changes in the supply of pecans, the supply of competing nuts, net imports of nuts, and consumer purchasing power apparently accounted for about four-fifths of the year-to-year changes in pecan prices. Some of the remaining variation was undoubtedly caused by differences in the quality of the crop. Pecan growers can do little or nothing, of course, to cause any changes in consumer purchasing power or the production of other tree nuts. Even if they could affect net imports through changes in the tariff rates, it would require such a large reduction in imports to cause even a small increase in pecan prices that little is likely to be accomplished in this direction. Of all the forces affect ing prices, the supply of pecans has been the most important. Pecan growers, therefore, have a good opportunity to raise the price of their product by smoothing out the year-to-year fluctuations in supply and by improving the quality, par ticularly when the crop is above average in size. Growers of improved pecans should benefit most from a stabilization of the supply from year to year. Nearly all of the seedling pecans enter the market as shelled nuts. The demand for shelled nuts is relatively elastic, compared to that for nuts in the shell. A large crop of shelled nuts does not depress prices as much as a large crop of improved nuts. Since most growers of improved pecans already follow an intensive and rather expensive production program, they have much to gain and very little to lose by increased re search and experimentation in reducing alternate bearing. If alternate bearing can be reduced, growers can go a long way in solving their own price problems. To maintain rather constant supplies of pecans on the market at all times, how- CENTS PER POUND FACTORS ASSOCIATED WITH CHANGES IN THE SEASON AVERAGE PRICE OF PECANS. 1919-48 INDEX OF SUPPLY Changes in the supply of pecans are associ ated with pronounced price changes, but INDEX OF SUPPLY OF COMPETING DOMESTIC NUTS Changes in the supply of competing nuts are accompanied by negligible price changes. C£NTS p£R p()UND INDEX OF CONSUMER PURCHASING POWER Pecan prices are also affected significantly by changes in consumer purchasing power. M o n t h ly R e v ie w o f th e F e d e r a l R e s e r v e B a n k o f A tla n ta f o r O c to b e r 1 9 4 9 ever, may also require changes in marketing that go beyond the marketing agreement recently adopted. One method of stabilizing supplies is to set aside a reserve out of large crops to be sold in the following season when the crop is likely to be small. Since pecans must be held in cold storage, however, such a system might not be practical. ESTIMATED GROSS RETURNS TO GROWERS, WITH DISPOSABLE INCOME AT THE 1948 LEVEL millions of dollars millions of dollars Large crops of seedling pecans yield growers greater returns than aver age, or smaller than average, crops. Large crops of improved pecans, however, yield smaller returns than average, or smaller than average, crops except when a large proportion of the crop is sold as shelled pecans. The walnut industry, which has one of the oldest and most successful marketing control programs, controls supply in the in-shell market by fixing the percentage of the total crop that can be sold in the shell on the domestic market. The remainder must be exported or shelled. A similar procedure for pecans might prove feasible within the next few years. Since controlled marketing is just beginning in the pecan industry, the growers’ committee that administers the pro gram has neither the information nor the experience neces sary to manage a two-price marketing program at the present time. The present marketing agreement, however, provides that handlers shall report rather complete information on prices paid for pecans and prices received by grade, size, and type of market. After several years, sufficient information could be accumulated to effectively allocate supplies between the in-shell and shelled market. Since nearly all of the seedling crop enters the shelled market and over half of the improved crop enters the in-shell market, a comparison of the demand in the two markets gives some indication of the benefits that would accrue to the growers from the allocation of supplies between the two markets. Based on prices received from 1937 to 1948, grow ers would gain by a marketing system that diverted improved pecans from the in-shell market to the shelled market when the crop of improved pecans was well above average in size. This is because a given percentage change in supplies in the two markets affects their prices by different percentage amounts and consumers will not readily shift because of price changes from one market to another. The prospects for eliminating small size and low quality nuts from the in-shell market by the present marketing agree ment seem good. From the testimony at the public hear ings, the growers seem assured of co-operation from the 9 7 S ix th D is tr ic t S ta tistic s CONDITION O F 28 MEMBER BANKS IN LEADING CITIES (In T h o u sa n d s of D ollars) O ct. 19 1949 Item S e p t. 21 1949 O ct. 20 1948 P ercen t C h a n g e O ct. 19,1949, from S ep t. 21 1949 O ct. 20 1948 Loans and investm ents— 2,390,164 2,367,664 2,272,854 830,767 785,254 839,696 Loans—N et..................... 841,919 796,327 847,195 Loans—G ro ss..................... Commercial, industrial, and agricultural loans 496,920 462,644 523,584 Loans to brokers and dealers in secu rities... 7,402 7,737 6,090 O ther loans for pur chasing and carrying securities....................... 35,203 35,394 54,148 Real estate lo an s........... 70,166 72,427 65,635 Loans to b an k s............... 5,148 3,331 5,810 O ther lo an s...................... 226,110 215.764 191,928 Investm ents—to tal............. 1,559,397 1,582,410 1,433,158 Bills, certificates and n o tes.............................. 482,873 502,739 390,578 U. S. b o n d s______ ____ 852,858 874,583 870,104 Other securities............. 209,567 189,722 201,941 Reserve with F. R. B a n k .. 365,604 368,023 474,074 Cash in v au lt....................... 40,810 43,513 40,402 Balances with dom estic b an k s................................ 171,306 185,097 185,125 Demand deposits adjusted 1,721,227 1,703,503 1,760,299 Time dep o sits..................... 538,763 540,864 531,065 U. S. Gov't dep o sits.......... 57,598 53,793 34,262 Deposits of domestic banks 471,329 454,463 473,131 Borrowings.......................... 4,500 444- 1 6 6 -hi 5 — 1 — 1 4- 7 — 5 4- 5 4- 27 44— 4- 1 3 35 5 1 — 4— 44- 35 10 43 18 9 — 4 + 1 — 4 — 1 — 1 444— 24 3 6 23 — _ 7 0 — 2 4- 1 4- 68. — 0 4+ 8 1 — 0 4- 7 4-. 4 — DEBITS TO INDIVIDUAL BANK ACCOUNTS (In T h o u sa n d s of D ollars) Place No. of Banks Report ing ALABAMA Anniston......... Birmingham.. . D othan............. G ad sd en ......... M obile............. M ontgomery... 3 6 2 3 FLORIDA, Jacksonville.. Miami............... G reater Miami* O rlando........... P ensacola........ St. Petersburg Tam pa............. Sept. Aug. Sept. 1949 1949 1948 Percent Change Sept. 19 49, from Aug. Sept. 1949 1948 3 21,573 310,900 13,691 17,441 121,769 75,514 19,168 292,518 12,178 16,627 110,930 70,025 20,817 310,496 13,700 17,758 142,964 78,596 + 4444-1- 4 7 13 3 3 3 6 251,981 205,126 285,029 50,718 33,025 48,258 107,699 252,533 226,320 303,267 42,978 35,636 45,739 106,752 244,450 207,937 290,900 41,402 31,965 44,273 106,609 — 0 — 9 — 6 4- 18 — 7 4- 6 4- 1 4- 3 — 1 — 2 4- 23 4- 3 4- 9 4- 1 21,441 804,717 56,007 8,588 53,283 3,952 13,655 11,139 62,069 9,930 20,821 83,832 11,513 20,935 820,692 49,270 8,790 48,948 3,313 12,996 10,871 59,857 9,268 17,665 84,509 35,652 21,049 823,679 57,886 8,763 56,037 S avannah........ V aldosta.......... 3 4 3 2 4 2 3 2 3 2. 3 4 2 4- 2 — 2 4- 14 — 2 4- 9 4- 19 4- 5 4- 2 4- 4 4- 7 4- 18 — 1 — 68 — — — — — — 4— 4— — 4- 2 3 2 5 5 9 6 9 27 2 8 2 LOUISIANA Alexandria*. . . Baton R ouge.. Lake C h a rles.. New O rlean s.. 3 3 3 8 31,967 103,427 36,291 684,108 28,763 100,893 33,310 668,364 31,193 99,023 35,225 689,878 4- 11 4- 3 444— 2 4 3 1 MISSISSIPPI H attiesb u rg ... Jackson........... M eridian......... V icksburg........ 2 3 3 2 17,579 134,622 27,599 23,442 15,601 124,127 23,226 21,474 18,179 136,367 29,600 26,919 4- 13 4- 8 4- 19 — — —i — 3 1 7 13 TENNESSEE C hattanooga.. Knoxville......... N ashville......... 3 4 6 132,022 104,545 292,597 128,829 99,164 303,392 142,348 111,413 291,308 4- 2, 4- 5 — 4 — 6 4- 0 SIXTH DISTRICT 32 C ities........... 114 3,929,259 3,891,018 3,991,075 4- — 2 5 GEORGIA A ugusta........... Brunsw ick....... C olum bus........ E lberton........... Gainesville*. . . M acon............... N ew nan........... UNITED STATES. 333 C ities.......... 4.164 14!S47 10,542 68,066 7,838 21,185 91,053 11,313 101,080,000 99,055,000 104,729,000 r Not in c lu d e d in S ix th D istrict total. 13 6 12 5 10 8 4- 9 4- 2 + 9 1 +• 2 4'4— — — — 4 0 0 2 15 4 4- 2 — 7 — 3 9 8 M o n t h ly R e v ie w o f th e F e d e r a l R e s e r v e B a n k o f A tla n ta f o r O c to b e r 1 9 4 9 handlers and processors of pecans. The agreement and order will be beneficial, however, only if its provisions are rigidly enforced. Such enforcement will be possible only if an over whelming majority of the operators in the industry assist the compliance officials of the Production and Marketing Administration in obtaining information about violations of the regulations. An improvement in quality and stabilization of the supply should result in the increased use of pecans. In a recent sur vey, industrial users of tree nuts were asked to suggest how the usage might be increased. Bakers, who use large quan tities of pecans, wanted to be able to buy pecans as needed and at a stable price. Rapidly changing prices and uncertain supplies of pecans make it difficult to promote an item that contains pecan meats. A confectionery manufacturer stated that pecans and almonds are the most satisfactory tree nuts for candies, but that quality must be improved and prices be stabilized before usage can be expanded. The distributors suggested that annual supplies be guaranteed to wholesalers and suppliers whose service outlets will be needed in years of record crops. Small firms, in particular, indicated that stable prices on tree nuts would enable them to plan a tree nut product, promote it, and maintain its production. S ix t h D is tr ic t I n d e x e s DEPARTMENT STORE SALES* A djusted* S e p t. A ug. 1949 S e p t. 1948 S e p t. 1949 A ug. 1949 S e p t. 1948 DISTRICT........ A tlanta.......... Baton R ouge. Birmingham. C hattanooga. Jackson......... Jacksonville. Knoxville___ M acon........... Miami........... Montgomery. N ashville.. . . New Orleans T am pa........... 367 407 425 356 329 371 387 360 410 393 326 343 353 352 399 311 375 313 406 379 467 394r 440r 425r 400r 366r 386r 412f 428r 345r 410r 370r 447r 363r 456r 381 452 472 381 352 438 383 394 356) 329 322 425 360 471 324 414 346 299 308 325 313 343 270 281 279 369 330 397 410 489 472 428 392 455 408 437 394 333 392 461 384 438 386 313 406 304 413 339 490 DEPARTMENT STORE STOCKS Place DISTRICT............. Birmingham___ M ontgom ery... N ashville.......... New O rle a n s... The Industry’s Future B row n R . Sept. Adjusted** Aug. Sept. 1949 Sept. 1949 U nadjusted Aug. Sept. 1948 1949 1949 1948 337 437 252 421 477 300, 319 427 257 292 476 271 372fl 471r 304r 366u 548r 341» 347 477 264 404 511 309 316 431 252 307 481 261 383 514 320 351 586 344 GASOLINE TAX COLLECTIONS** Despite its many problems, the pecan industry seems certain to continue as one of the many small but vital agricultural enterprises in the Sixth District. The pecan is adaptable to many commercial uses, is highly nutritious, and is likely to gain in favor with consumers. Pecan production, however, probably will be profitable only if it is fitted into a farming system that provides other major sources of income. Many growers must also reduce production costs if they are to obtain a profit from their pecan enterprise. Of the methods now being tested for reducing costs, grazing with beef cattle is one of the most promising. Pecan growing, like most other farm enterprises, will always be subject to the hazards of weather and insect and disease infestations, but there is a good possibility that the tendency of the tree to bear light and heavy crops alter nately may be partially corrected. The marketing agreement for in-shell pecans which was recently adopted should improve consumer acceptance and should give operators in the industry valuable experience in co-operating for the solution of the industry’s problems. If more extensive marketing controls are needed later, the pres ent agreement will provide much of the necessary statistical background as well as the practical experience in solving marketing problems collectively. If further marketing controls for improved pecans do be come necessary, the differences in the nature of the demand for shelled and in-shell nuts are such that an allocation of the total supply between the two markets could be made an effective instrument for price stabilization. Unlike the pro ducers of many farm products, pecan growers do not face a retrenchment through Government production controls. They are not dependent upon an export market financed by Gov ernment appropriations. If consumer purchasing power re mains reasonably stable, and if the growers, handlers, and other people in the industry work together in solving their problems, the industry has excellent prospects. U n a d ju ste d Place R a w l in g s U n a d ju ste d A djusted* Place SIX STATES... A labam a. . . . F lorida.......... G eorgia........ L o u isian a... M ississippi.. T e n n e sse e ... S ep t. 1949 A ug. 1949 S e p t. 1948 S e p t. 1949 A ug. 1949 214 215 188 211 196 196 171 178 218 225 184 208 211 242 207 219 208 186 202 200 236 218 222 196 218 210 181 206 238 206 221 254 213 223 220 S ep t. 1948 200 206 168 186 233 202 222 COTTON CONSUMPTION* ELECTRIC POW ER PRODUCTION* Sept!" 1949 A ug. 1949 S ep t. 1948 A ug. 1949 lu ly 1949 A ug. 1948 137’ 154 133 80 107 119 133 115 55 111 144 152 142 99 127 364 348 326 340 324 242 396 379 459 Place TOTAL........... A labam a... G eorgia___ M ississippi. Tennessee. CONSTRUCTION CONTRACTS A ug. A ug. July P la c e 1949 1949 1948 MANUFACTURING EMPLOYMENT*** P la c e SIX STATES.. A labam a... F lorida....... G eorgia__ Louisiana. . M ississippi. Tennessee. SIX STATES.. Hydro-' g enerated Fuel-* generated A ug. 1949 July 1949 A ug. 1948 139 142 129 134 150 132 142 136 138 127 130 149 129 141 151 157 129 147 152 154 160 DISTRICT.. . . R esidential. O th er.......... A labam a. . . G eo rg ia---L o u isian a.. M ississippi. T ennessee. 413 672 287 373 446 511 407 353 405 416 477 386 525 389 387 608 428 478 490 701 387 243 582 466 543 281 399 CONSUMERS PRICE INDEX ANNUAL RATE O F TURNOVER OF DEMAND DEPOSITS S e p t. 1949 S e p t. 1949 A ug. 1949 S ept. 1948 19.6 20.4 82.7 17.9 20.2 81.8 19.8 20.6 83.5 Item A ug. 1949 S e p t. 1948 178 174 ALL ITEMS.. 173 F ood.......... 208 206 220 206 C lo th in g ... 193 193 Fuel, elec., 138 and refrig. 135 135 Home fur 193 nishings. . 182 182 152 155 Misc........... 154 Purchasing pow er o£ .56 d o lla r.. . . .57 .58 * Daily average basis) ** Adjusted for seasonal variation *** 1939 Monthly average = 100; O ther indexes, 1935-39 = 100* U n a d ju ste d .. Adjusted**. . . Index**......... CRUDE PETROLEUM PRODUCTION IN COASTAL LOUISIANA AND M ISSISSIPPI* U n ad ju sted .. A djusted**.. . r Revised S e p t. 1949 A ug. 1949 S ep t. 1948 281 284 278 278 296 299 M o n t h ly R e v ie w 99 o f th e F e d e r a l R e s e r v e B a n k o f A tla n ta f o r O c to b e r 1 9 4 9 District Business Conditions Instalment Credit and Retail Sales stores still continue below last year’s, the gap has narrowed. more instalment credit to their customers, by Jewelry store instalment sales beginning with March have requiring smaller down payments, and by lengthening exceeded those of last year for every month except one. the period of repayment, Sixth District retailers have beenThese sales have resulted in an increased amount of instal able to bolster their sagging sales of consumer durable goods ment credit outstanding. during recent months. In some cases they have been able to SLOWER COLLECTIONS. Another reason why consumers owe more than they did last year is that they are progressively raise them above last year’s level. taking longer to pay. At household appliance stores, for ex EASIER CREDIT TERMS. Instalment credit controls were removed completely in June. At first, many merchants tried avoiding ample, instalment accounts in September 1947 were outstand credit competition by sticking to the terftis prevailing when ing for an estimated eleven months. Now they run for over credit was regulated. Now, however, regardless of original nineteen. Instalment accounts at department stores now run intentions, more and more merchants are trying to attract cus an estimated twelve months, twice as long as in 1947. To help finance this credit expansion, merchants have tomers by offering easier terms, and in many cities through turned more and more to commercial banks and sales finance out the District the prospective buyer is being lured by offers institutions. This year, for example, District household ap of “No down payments, years to pay.” Moreover, buying on pliance dealers are selling instalment paper to the amount time has been made easier even for the consumer who might of 60 percent of their instalment sales, compared with 25 otherwise lack the necessary will power to save for the easy percent last year; presumably, other types of retailers are payments. He may have a meter installed on the appliance he is buying. Then, before he can enjoy the benefits, he must also selling a greater proportion of their paper in view of the increase in commercial bank holdings. Commercial banks periodically put a coin in the slot. The cumulative effect of these developments is now evi in the District now hold 57 percent more in purchased retail dent. In September, purchases by consumers of major appli paper than they did last year and about 39 percent of the ances at department stores were 19 percent greater than they increase is accounted for by other than automobile paper. were during the corresponding month last year. In many Current reports, however, show that banks and finance com cities of the District, furniture sales in August were above panies require stricter terms on the instalment accounts they buy than some merchants are currently advertising. those of last year. C .T .T . Although total sales of reporting household appliance y e x t e n d in g B SIXTH DISTRICT INSTALMENT SALE CREDIT I. Instalment sale credit outstanding has been expanding rapidly during . Commercial bank loans for automobile purchases have increased 30 million dollars since January I, but there has also been a growth of recent months in the Sixth District at both commercial banks and 5 million dollars in loans for the purchase of other consumer goods. retail stores, but charge account credit has remained relatively stable. MILLIONS OF DOLLARS MILLIONSOF DOLLARS MILLIONS OF DOLLARS PERCENT 1947 1948 1949 1947 1948 1949 3. Growth of instalment selling explains part of the expansion in ac 4. Longer terms, or slower collections, also explain part of the increase. counts outstanding. INSTALMENTSALES, 1948 M ONTHLYSALES*100 M ONTHS M ONTHS JEWELRY FURNITURE HOUSEHOLD m -M O N T H S A C C O U N T S O U T S T A N D IN G 20 -M O N T H S ACCOUNTS _ - APPLIANCE 160 r19481Ii J9 4 8 _ 140 120 “ I 1949 100 80 60 J S D J M J S D _ f \ i * I V/ 10 - / 40 J M S 0 y - FURNITURE — - / f* * DEPARTMENT / THREE'MONTH MOVING AVERAGE, - / HOUSEHOLD I APPLIANCE — 12 - 8 / / A - l JEW ELRY /V / JZ - , ___ L- 1 9 47 - ________.i_________ 1948 1949 : - • 'V 6 1.1,11.1.1igj Uyl.J-1.1.1.im u M 14 - & J O U T ST A N D IN G _ THREE-MONTH MOVING AVERAGE 16 - 18 1947 1948 1949 6 100 M o n t h ly o f th e F e d e r a l R e s e r v e B a n k o f A tla n ta f o r O c to b e r 1 9 4 9 R e v ie w Industry and Employment S ix th D is tr ic t S ta tis tic s L ender INSTALMENT CASH LOANS V olum e No. of P e rc e n t C h a n g e L e n d e rs S e p t. 1949# fro m R ep o rt S e p t. A u g u st in g 1948 1949 Federal credit u n io n s.......... State credit u n io n s............... Industrial banking com-' p a n ie s............... .................. Industrial loan com panies.. Small loan com panies.......... Commercial b a n k s............... + 28 42 20 + 35 + 28 + 46 —8 11 + — .4 — 9 . 17 38 33 7 0 — — 7 + 19 —6 + 12 + 2 + 0 + 3 + + 8 + 7 + 37 3 RETAIL FURNITURE STORE OPERATIONS N um ber P e rc e n t C h a n g e of S e p te m b e r 1949, from Item Stores! S e p t. 1948 A ug. 1949 R ep o rtin g Total s a le s.................................... . Cash sa le s.......................................... Instalment and other credit s a le s. . Accounts receivable, end of month Collections during m onth............... Inventories, end of m onth............... 101 101 112 112 — — + — + 84 — — — + — — 7 15 4 3 4 12 32 20 34 1 14 5 WHOLESALE SALES AND INVENTORIES* SALES INVENTORIES P e rc e n t C h a n g e No. of P e rc e n t C h an g e No. of S e p t. 1949, from F irm s Firm s S e p t. 30,1949, from R eportA ug. S e p t. Report- A ug. 31 S e p t. 30 in g 1949 1948 1949 1948 in g Electrical group! Wiring supplies — A p p lian ces......... G eneral h ard w are. . . Industrial su p p lie s .. Jew elry........................ Lumber and build-i ing m aterials.......... Machinery equip ment and supplies. Plumbing and heat-i 4 ing su p p lies........... 3 C onfectionery........... 7 Drugs and su n d ries.. 18 Dry g o o d s. . .......... Groceries! 30 Full lin e s........... 9 Specialty lin e s.. Shoes and other* footw ear............. 3 Tobacco products. 11 M iscellaneous........ 14 Total......................... 129 — — + + + 16 9 7 3 30 — 0 — — — — — 44 19 14 39 30 + 2 + 8 + B + 3 + 9 — + 54 — 3 + 3 + 7 — 2 — 13 4- 0 + 4 — 20 + 20 + i6 + — 1 -f- 5 1 -> 5 -• + 1 — 17 3 14 — 0 + 1 + 7 — 27 — 6 + 12 21 +i 5 + io + 2 — 10 11 + Item — 118 — 3 + o — 9 -b 8 — 7 — 1 — 15 — 13 5 7 17 83 5 * Based on U. S. Departm ent of Commerce figures.. DEPARTMENT STORE SALES AND INVENTORIES SALES INVENTORIES P e rc e n t C h a n g e N o. of N o. of P e rc e n t C h a n g e P lace S e p t. 1949, from S to re s S to res S e p t. 1949, from S e p t. R eport- A u g . 31 S e p t. 30 R eportA ug. in g in g 1949 1949 1948 ALABAMA Birm ingham .. — 11 + 5 — 17 M obile............ — 8 M ontgom ery.. — 18 + 32 FLORIDA Jacksonville.. 6 + 4 Miami.............. —1 —20‘ 3 O rlando.......... + 8 5 Tam pa............. + 7 + 5 — ii GEORGIA A tlanta............ 6 + ltt — 7 A u g u sta.......... — 9 4 + 10 + 14 —12 C olum bus---3 — 9 M acon.. . . ___ 6 + 10 — *7 —10 4 Rome............... 6 Savannah........ + 11 LOUISIANA — 13 4 Baton R o u g e .. + 4, — 10 6' New O rleans. + ia MISSISSIPPI —4 Jackson........... 4 + 7 + 2 M eridian........ — 18 3 TENNESSEE Bristol............. 3 3 + 2& + 3C h attan o o g a.. — 10 4 3 — 9 + 7 —10 Knoxville........ 4 — 8 N ashville........ 6 5 + 6 — 13 22, 22! — 13 OTHER CITIES* + 51 76) DISTRICT.......... 113 + 10 — 9 in a given city, * W hen few er than th ree stores report the sales or stocks are grouped together under "other cities." awarded in the District in September was down slightly from August. Residential contracts increased 11 percent and were 93 percent greater than in September 1948. For the first nine months of this year, residential awards were slightly greater than in the corresponding period last year, although total awards were down about 4 percent. Total awards increased for that period in Alabama, Georgia, Mississippi, and Tennessee; residential awards increased in Alabama, Georgia, and Mississippi. Resi dential contracts accounted for 58 percent of the September total, and for 44.5 percent of the nine-month total. ELECTRIC POWER PRODUCTION by the District’s public utilities, following the seasonal pattern, increased nearly 5 percent from July to August. The August rate was the highest since February, and was 8.6 percent above that for August 1948. The gain was about equal, percentagewise, in current gener ated by hydro-electric plants and by those using fuels. Com pared with August a year ago, hydro-generated power was up 40 percent, but fuel-generated power was 13 percent less. MANUFACTURING EMPLOYMENT in the District increased from July to August, the first increase since October. The index rose 1.8 percent in August, but was 7.8 percent below that of August 1948. The August gain was shared by all six states and by nearly all the large industries. In Louisiana and Ten nessee, where employment had increased in July, August increases were smaller than in the other four states. Textile employment increased 2.4 percent in August, and a further gain in September seems probable because of the September increase in cotton consumption by the mills. In lumber and wood products industries, August employment was up 1.6 percent from July, and a further increase is indi cated by the rise in freight car loadings of forest products by southern railroads during the last half of September and first half of October. Increases at Georgia and Alabama plants for canning and preserving fruits and vegetables and at Alabama seafood-canning plants largely accounted for a 4.2-percent gain in the District food and food products indus tries. Alabama and Florida employment in the food industries increased over August 1948. In apparel manufacturing estab lishments, August employment was up 4.8 percent from July. In transportation equipment, employment declined 6.7 per cent, largely because of losses at shipbuilding and repair establishments in Alabama, Florida, and Louisiana. THE VALUE OF CONSTRUCTION CONTRACTS O u ts ta n d in g s P e rc e n t C h a n g e S e p t. 1949, from S e p t. A u g u st 1948 1949 + is + iz + ie - D. E . M. B a n k A n n o u n c e m e n ts Two banks were added to the Par List in October. One was the Farmers and Merchants Bank, Waterloo, Alabama, a non member bank located in Birmingham Branch territory. This bank began to remit at par on October 10. It has capital of $10,000; surplus of $10,000; and deposits of $228,000. Mr. Buck Sharp, who was president since the bank’s organization in 1914, died in March this year. A. D. Ray is Vice President and Cashier; Miss Mary Pickens, Assistant Cashier. The other addition to the Par List was the newly organized Peoples State Bank of Groveland, Groveland, Florida. It began remitting at par on October 26. This bank’s capital amounts to $30,000; its surplus $12,000; undivided profits $6,000. J. S. Fairchild is President; George J. White, Vice President; J. E. Fairchild, Vice President and Cashier.
@FedFRASER