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MONTHLY REVIEW Agricultural and Business Conditions . TENTH FEDERAL RESER VE DISTRICT VoL. 23, No. 4 FEDERAL RESEllVE BANK OF KANSAS CITY A PRIL 30, 1938 Business in the Tenth Federal Reserve District MARCH 1938 COMPARED WITH MARCH 1937 --..-----"----·: 1 Denver• COLO. -··-•• •• % DECREASE i 40 30 20 10 •·--------: KANSA I I I l(ANS. • ·-··-··-··-··-··-r-!--- ■ I I ■ Spring has brought some seasonal improvement over the winter months but the comparison with the same period a year ago continues to grow worse. Wholesale and retail sales are less favorable and life insurance sales are down sharply. Lumber s1les are stronger than last month. Wheat and corn are coming to market in larger quantities than a year ago but marketings of other grains and Ii vestock are much lower. Livestock slaughter, flour and petroleum production, and zinc and lead shipments are far below last year. Payments by check are 15% and bank investments are 14% below last year. Bank loans tend downward. Demand deposits show Ii ttle change. The bright spot continues to be the moisture situation. March was a wet month and rainfall for the first quarter of the year was more than 35% above normal. A very large wheat crop is in prospect. • ■ % INCREASE 10 20 3 MOS. 1938 COMPARED WITH 3 MOS. 1937 BUSINESS INDICATORS 30 40 ,. % % DECREASE -- 40 30 20 10 Financial __ Bank Debits_ F. R. Bk. Clearings_ ___Mem. Bk. Loan,_ ...Mem. Bk. Invest._ _ Demand Depoaita_ INCREASE 10 20 30 40 • • I ■ _.Life Ina. Salee _ _ Trade _ Wholesale Salee_, ___ Retail Salee_ ...Dept. Store Sales_ ·-• ■ ■ __ Lumber Salee_ Markeling• _ __Wheat _ _ • ■ 1• _ _ _ _ ____cattle_ _ __ _ _ ___ Hoga __ _ __ ■ _ _ ■ _ _ Calves _ ■ 1• •• ••• _Corn _ _ __ _ Sheep _ _ Production _ Flour _ _ _ Cattle Slaughter_ _ .. Calf Slaughter_ _ Hog Slaughter_ _ .... Sheep Slaughter_ __crude Petroleum_ _ Bituminous Coal_ Zane Ore Shipmenta Lead Ore Shipmenta Conatruclion __ Total Awarda_ ____Rea. Awards_ ,. - ■- ♦,, _ oats _ __ ·-,.• I ■ I -1• ■ • ■ _ Value of Permita_ M iacellaneou• _ _ Rainfall _ __ Cub Farm Income.• _Employment.__ -·-··-·Pay Rolla _ _ .•For pre1•lo11s month ·■ ■ 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Member Bank Operation& Loans and investments of reporting member banks in the Tenth District declined somewhat from the middle of March through the third week of April. Commercial loans continued to decline and there was also a decrease in loans to security brokers and dealers. Holdings of Government obligations at the middle of April were little changed from a month earlier but in the following week they declined rather sharply. Volume of loans is now 2 per cent lower than a year ago and investments are about 13 per cent lower. Effective at the opening of business April 16, reserve requirements were reduced by approximately the amount of the increase which had been in effect since May 1, 1937. This reduction in reserve requirements was reflected during the following week in a decrease in reserve balances carried with this bank and a marked increase in correspondent balances carried with other banks as well as in deposits of other banks at these reporting banks. Adjusted demand deposits show a further small decline and are about 4 per cent lower than a year ago. Principal items of condition of 51 member banks: Loans and investments-totaL-........ . Loans-totaL_...................................... . Coml., indust., and agric ............... Open market paper......................... . To security brokers and dealers... . Other to purchase or carry secur. Real estate loans·-··························· Loans to banks ............................... . All other loans................................. . Investments-total.. ............................. . U.S. Govt. direct obligations....... . Oblig. guar. by U. S. Govt.·-········· Other securities............................... . Reserve with F. R. Bank._................ . Balances with domestic banks .......... Demand deposits-adjusted ............... . Time deposits ..................................... . U. S. Govt. deposits........................... . Interbank deposits ............................. . •Comparable figures not available. Change from Apr. 20 Mar. 16 Apr. 21 1938 1938 1937 (In thousandsof dollars) 630,320 - 17,535 - 61,328 246,020 -10,281 - 4,950 151,252 - 7,963 * 18,125 - 446 * 3,419 - 1,088 - 1,510 12,402 +34 * 21,087 + 147 + 2,082 494 +26 - 653 39,241 - 991 * 384,300 - 7,254 - 56,378 227,149 - 5,867 -32,891 45,628 - 454 +1,704 111,523 - 933 - 25,191 158,454 -4,267 +3,312 247,636 +20,951 +20,437 471,245 - 1,964 - 16,931 144,359 - 566 - 1,283 18,263 +74 +14,070 340,595 +2 ,477 - 37,756 Reserve Bank Operations Volume of industrial loans, which had increased slightly in February; has since declined, resuming the downward trend since early in 1936. Commitments to make industrial advances have recently shown an increase. Federal Reserve note circulation of this bank in the third week of April is slightly lower than five weeks earlier. In the quarterly reallocation of Government securities in the System's open market account, this bank's participation was reduced about 7½ million dollars or nearly 6 per cent. Present holdings of $124,626,500 represent $32,946,500 in Treasury bonds, $57,315,000 in notes, ~nd $34,365,000 in bills. Principal items of condition of the Federal Reserve Bank of Kansas City and branches: Total reserves.. ................................ Bills discounted._........................ ..... Bills purchased................................ Industrial advances........................ Commit. to make indust. adv. ...... U.S. Government securities.......... Total resources................................ F. R. notes in circulation._............. Member bank reserve deposits...... Change from Apr. 20 Mar. 16 Apr. 21 1938 1938 1937 (In thousands of dollars) 320,473 +32,182 +36,627 417 -154 +288 16 Zero -71 456 -11 -248 295 +198 +159 124,627 -7,477 +1,687 480,392 +15,909 +29,333 165,364 -574 +5,394 224,841 -13,929 -3,967 Dollar volume of check collections increased seasonally from February to March but continues below a year ago, volume for March being about 14 and that for the first quarter about 10 per cent lower. Check collections through this bank and branches: ITEMS 1938 March............................... . February........................... . Three months ................. . Bank 6,344 5,030 17,002 AMOUNT 1937 1938 1937 (In thousands) 6,700 $ 919,052 $1,069,392 5,220 753,695 833,489 17,342 2,575,722 2,847,614 Debit■ Debits to individual accounts by banks in reporting centers of the District showed about the usual seasonal increase during March but were 15 per cent smaller than in March of last year. For the first quarter of the year, debits were about 11 per cent lower than a year ago as compared with a decrease of 23 per cent for the country as a whole. Payments by check in thirty District cities: Casper, Wyo .. -..................... Cheyenne, Wyo ................... Colorado Springs, Colo ...... . Denver, Colo....... ................ Emporia, Kans .................... . Enid, Okla.·--······················· Fremont, Nebr.................... . Grand Junction, Colo ......... Guthrie, Okla...................... . Hutchinson, Kans ............... Independence, Kans .......... . Joplin, Mo.·-··-····················· Kansas City, Kans ... .......... Kansas City, Mo ................. Lawrence, Kans .................. . Lincoln, Nebr ....................... Muskogee, Okla .................. . Oklahoma City, Okla ........ . Okmulgee, Okla.................. Omaha, Nebr .....................,,.. Pittsburg, Kans .................. . Pueblo, Colo........................ . Salina, Kans ........................ . St. Joseph, Mo .................... . Topeka, Kans ...................... . Tulsa, Okla .......................... . Wichita, Kans ... ................. . Change from Mar. 1938 Feb. 1938 Mar. 1937 (In thousands of dollars) 13,281 +1,056 - 662 2,903 +315 - 813 27,106 +3,615 - 4,099 5,174 +598 -6 7,990 +1,793 - 948 13,182 +2,941 -7,119 145,450 +19,222 -45,641 3,002 +166 - 268 10,535 +1,123 +155 2,447 +367 - 357 3,519 +558 - 588 1,800 +214 -37 11,550 +1,760 -1,203 2,674 +164 - 224 9,373 +1,258 -1,973 13,519 +773 - 1,369 289,873 +50,071 -37,562 3,512 +604 - 371 25,070 +2,860 - 5,650 8,063 +1,566 -192 105,364 +14,915 -12,573 2,902 +556 - 676 137,069 +22,130 - 25,952 3,640 + 18 - 843 13,011 - 1,570 - 6,178 8,243 +542 - 1,191 23,892 +3,080 - 3,747 17,854 +1,376 +495 138,664 +16,934 - 20,251 43,687 +4,399 - 8,288 District, 30 cities·-··············· United States, 141 cities...... 1,094,349 32,109,230 Albuquerque, N. Mex ...... . Atchison, Kans ...·-··············· Bartlesville, Okla ................. +153,404 +6,571,149 - 188,131 - 9,893,800 3 FEDERAL RESERVE BANK OF KANSAS CITY cent over the preceding month. Total sales for the the first quarter of the year were about 12 per cent lower than last year, wholesalers of hardware reporting relatively the largest decline. Wholesale sales and stocks reported by the Department of Commerce for this District: Trade DEPARTMENT STORE SALES Dollar volume of March sales at reporting department stores in the District was about 8 per cent lower than a year ago and sales for the first quarter of the year were about 6 per cent lower. Part of the March decline is accounted for by the fact that Easter came SALES STOCKS Mar.'38 3 Mos.'38 Mar.31,'38 in March last year and was three weeks later this year. No. of comp.to comp.to comp. to However, a comparison of sales for the six-week period Firms Mar.'37 3 Mos.'37 Feb.28,'38 Mar.31,'37 ending April 16, which includes Easter shopping both - - ·~ e r cent increase or decrease) ...................... 7 +0.3 -3.2 -0.2 -8.1 this year and last, shows a decrease of 7 per cent from Drugs Dry goods·---········· 4 -7.1 -18.4 -5.4 -14.8 last year. Weather conditions in the first week of Electrical goods._... 8 -14.6 -11.7 -3.9 -1.7 -16.5 April were unfavorable for the movement of spring Furniture................ 4 -4.8 +4.3 +5.0 Groceries·---··········· 9 +3.7 -7.7 merchandise. Retail prices continued to decline through Hardware-total... ...23 -36.2 -35.4 +4.3 -9.5 -18.4 General.. ............. 9 -14.0 +6.2 March and, according to the Fairchild Index, are now -0.2 Industrial............ 9 -55.8 -51.3 +0.1 -8.4 Zero 4 per cent lower than a year ago. - 18.8 Plbg. & htg......... n -29.3 & opt. gds . .. 3 -5.0 +5.5 +0.5 Stocks of merchandise increased seasonally during Jwlry. Paper........................ 3 -12.8 -1.8 -2.8 -0.7 -6.8 March but are nearly 9 per cent smaller than a year All other lines ........ 10 - 12.1 ago. Collections on open accounts averaged 44.7 per Total.......................71 -5.9 -0.3 - 11.9 -14.0 cent of receivables in March as compared with 45.8 per cent a year earlier, while installment collections Crops averaged 16.0 and 15.7 per cent, respectively. The first official estimates of winter wheat production Department store sales and stocks in leading cities: indicate average yields or better on the heavy acreage seeded last fall despite rather heavy abandonment SALES STOCKS Mar. '38 3 Mos.'38 Mar.31,'38 again this year in parts of the plains area. The estiNo. of comp.to comp.to compared to mates do not take into account any damage that may Stores Mar. '37 3 Mos.'37 Feb.28,'38 Mar.31,'37 (Per cent increase or decrease) have occurred from freezing in April. If present prosDenver.............. 4 -3.7 -5.5 +4.9 -8.5 pects are realized, production in the District this Kansas City._... 4 -13.6 -10.6 +5.9 -15.1 Oklahoma City 3 -4~ -0.4 +a3 +2.0 year will again be much above the average and the largest Omaha.............. 3 ' +1.6 -2.1 +4.0 - 8.8 since 1931. However, good yields are still more than Tulsa.-............... 4 - 6.6 - 0.3 +6.5 +0.3 Wichita.............. 3 - 13.1 - 8.9 +3.0 - 11.7 usually dependent on well distributed rain during the Other cities..... -. 21 - 11.2 -6.6 +4.5 - 9.4 remainder of the growing season because of the lack District.............. 42 -7.5 -5.6 +5.0 -8.7 of moisture in the subsoil. RETAIL SALES Wheat estimates of the Department of Agriculture: YIELD PER SEEDED ACRE PRODUCTION March sales of independent retail stores in the DisIndic. Final Aver. Indic. Final Aver. trict were 13 per cent lower than a year ago and sales 1938 1937 '27-'36 1938 1937 '27-'36 for the first quarter of the year about 10 per cent lower. (Bushels)-(000 Bushels)-Colo............ . 9,399 11,151 9,672 6.5 8.1 6.3 Sales of independent retail stores reported by the Kans.·--······· 174,460 158,040 , 133,463 10.0 9.2 10.0 Mo .............. . 37,940 41,097 21,576 14.0 12.1 12.4 Department of Commerce: Mar. 1938 per cent change from Mar. 1937 Colo. Kans. Mo. Nebr. Okla. Apparel_ ................................. -20.8 -14.3 -18.8 -17.0 -14.6 Country general.. ............... . -13.3 -13.3 -14.9 -18.2 -21.3 Department........................... . +4.0 -9.9 -8.3 -3.7 -4.3 Drug....................................... . +0.5 -1.5 -0.6 -0.4 +1.1 Furn. and appliances ........... . +7.0 -15.4 -15.0 -15.5 -9.9 -9.0 -10.8 -13.0 -8.4 -13.5 Grocery __ ······························· Hardware............................... . -29.3 -11.4 +14.1 -26.0 -10.9 Lbr. and bldg. mtls .............. . -5.2 -13.6 -19.6 -6.4 -13.7 Motor vehicle....................... . -39.1 -21.3 -32.9 -24.2 -21.5 Total....................................... -12.4 -13.0 -14.0 -11.7 -10.9 WHOLESALE SALES The value of March wholesale sales in this District was 14 per cent lower than a year ago, only drug and grocery sales keeping pace with last year. Wholesale sales showed a seasonal expansion of nearly 25 per 61,373 4,100 71,508 1,589 45,654 2,829 65,462 1,392 46,400 2,277 44,015 1,273 13.0 10.0 12.0 7.0 10.3 6.9 11.6 5.8 13.0 5.6 9.4 8.2 7 States·--··· 360,369 U.S ............. 725,707 325,625 685,102 258,676 546,396 12.6 11.9 12.0 Nebr.·-········· N.Mex ....... Okla ............ . Wyo............ . March weather was unusually warm and wet. Precipitation in the District ranged from 9 per cent above normal in Wyoming up to 92 per cent above normal in Oklahoma. As a result of the warm weather and the greatly improved moisture situation, winter wheat was farther advanced than usual and was making rank growth in southcentral and southeastern Kansas and in central and southwestern Oklahoma when freezing . temperatures and snow storms occurred toward the end of March and early in April. Early fruit was dam- REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 4 aged severely but reports indicate that the benefit from the snow and cold weather in supplying moisture and retarding plant growth would probably more than offset injury to wheat that had already jointed. Heavy early growth and rapid development of wheat, which is about three to four weeks ahead of normal, have drained heavily on the supply of soil moisture and increased the hazard from dry weather as well as excessive straw production. Harvest apparently will be early this year. . Rainfall COLORADO Denver .............................................. Leadville·-········································· Pueblo·--··········································· Lamar................................................ Garnett.-........................................... Steamboat Springs.......................... Mar. 1938 3 Mos. 1938 Total Normal Total Normal (In inches) 2.12 1.04 3.32 1.97 1.66 5.04 4.30 2.56 .59 2.64 1.37 1.32 1.19 .80 2.19 1.66 .95 .39 1.85 .71 3.73 2.34 7.26 6.97 KANSAS 2.20 4.22 1.17 2.12 1.91 1.87 2.54 1.63 .35 2.10 2.59 1.23 1.39 1.75 .93 . 90 .89 .85 4.26 7.88 2.81 3.24 4.51 2.58 2.85 2.25 .97 4.55 5.39 2.72 3.09 3.78 2.08 1.68 2.07 1.69 St. Joseph_ __ ..................................... 1.69 Kansas City·-··································· 3.06 Joplin................................................ 6.91 2.48 2.53 3.20 3.37 5.85 13.76 5.43 5.47 7.04 . 51 1.70 1.21 .78 1.51 .79 .93 1.27 1.37 1.27 1.20 1.32 .88 .86 .82 1.25 2.10 3.78 2.76 1.98 1.91 1.11 1.19 2.10 2.96 2.86 2.67 2.67 1.88 1.78 1.69 2.33 Clayton·--········································· .52 Santa Fe.-......................................... .81 Farmington ...................................... 1.78 .58 •80 .66 1.17 1.86 2.84 2.22 5.90 4.85 5.51 5.31 2.64 2.51 1.85 3.02 3.09 1.98 2.10 1.58 1.60 1.43 12.65 16.77 10.09 16.45 5.62 5.11 3.82 6.59 8.16 4.28 5.19 3.30 3.84 3.11 Cheyenne.......................................... 1.33 Casper·--··········································· .53 Lander.............................................. 1.66 Sheridan............................................ 1.00 1.02 1.24 1.19 1.16 1.98 1.48 2.43 2.34 2.08 2.75 2.38 2.71 Topeka.............................................. Iola .................................................... Concordia.-....................................... Salina................................................ Wichita.-........................................... Hays.................................................. Goodland.......................................... Dodge City...................................... Elkhart.............................................. MISSOURI NEBRASKA Omaha.............................................. Lincoln .............................................. Norfolk. ............................................. Grand Island.................................... McCook............................................ North Platte.................................... Bridgeport........................................ Valentine .......................................... NEW MEXICO 1.02 1.74 OKLAHOMA Tulsa· - •·············································· McAlester·--····································· Oklahoma City................................ Pauls Valley·--································· Hobart.............................................. Enid .................................................. Woodward........................................ Receipts of grain at five markets in the District: Wheat Except for wheat, marketings of principal grains continued in small volume in March. Receipts of wheat were substantially larger than in March of last year and equal to the March average during the past t~n years, while corn marketings were little changed from a year ago and less than half the average volume. Receipts of oats were sharply lower than a year ago and 33 per cent below the average. Oats Hutchinson .......... Kansas City........ Omaha ................ St. Joseph·--······· Wichita................ 1,427 3,451 733 250 862 691 1,065 360 4 132 282 282 2 Mar. 1938............ Feb. 1938............ Mar. 1937............ 3 Mos. 1938........ 3 Mos. 1937........ 6,723 5,544 4,832 18,745 12,534 2,120 2,545 2,087 9,911 6,318 698 846 1,391 2,523 4,005 Rye Barley Kafir 1 20 41 3 13 3 65 111 59 352 86 16 17 92 49 193 18 45 63 69 57 369 218 With prospects for a large wheat crop again this year, growers are reducing their large holdings and cash wheat prices continue to work irregularly lower. Federal corn loans have been a steadying influence on marketings of corn, and cash corn prices, supported by a recent broadening in export demand, have strengthened. In Nebraska, the principal corn producing state of the District, loans had been made on 3,124,404 bushels of corn up to early April. Cash grain prices at the Kansas City market: No. 1 hd., dk. wheat, bu. ~........ . No. 2 mixed corn, bu ....... .......... No. 2 white oats, bu .................. . No. 2 rye, bu .............................. . No. 2 barley, bu.·--····················· No. 2 white kafir, cwt ................ . Apr. 23 Mar. 31 Feb. 28 Mar. 31 1938 1938 1938 1937 $1.41 ,¼' $ .86 $ .87 ¾ $ .98 .53 .55¾ .55½ 1.30½ .31 ,½ .53 ,½ .29 ¾ .30¾ .60 .62 ,½ .71 1.10 .52 .54 .90 .55 .84 .85 .87 2.29 Livestock MARKETINGS Marketings of cattle, calves, and sheep increased seasonally during March but hog marketings showed a contraseasonal decrease. Receipts of calves were 23 per cent above and cattle 4 per cent below the March average of the past ten years, while hog receipts continued about 60 and sheep 20 per cent below average . Marketings are running somewhat under a year ago, the March total showing a decrease of about 11 per cent and the total for the first quarter of the year a decrease of about 7 per cent. Hog receipts were at a new low both for March and the three months. Livestock receipts at six markets in the District: WYOMING Grain Mark~ Corn (In thousands of busheW- Denver ...................... Kansas CitY·-··········· Oklahoma City........ Omaha.... .................. St. Joseph___············· Wichita._................... Cattle 31,283 95,235 38,845 94,776 22,939 28,114 Calves 4,246 19,988 16,027 9,504 5,621 6,225 Hogs 23,427 82,378 38,826 71,827 46,675 20,314 Sheep 193,935 108,813 20,803 132,488 115,465 13,394 Mar. 1938... -............. Feb. 1938.................. Mar. 1937._ __ ........... 3 Mos. 1938.............. 3 Mos. 1937.............. 311,192 247,315 336,364 915,429 935,955 61,611 43,969 68,908 173,590 196,486 283,447 335,358 374,933 1,174,881 1,233,960 584,898 480,815 615,040 1,536,294 1,710,177 PRICES The strong upward trend in livestock priceS1 after the middle of February was reversed in the latter part of March. Prices of nearly all classes of livestock at FEDERAL n~sERVE BANK OF KANSAS CITY the middle of March had reached their highest level this year, with the top price for beef steers within 15 cents of the January top, fed lambs the highest since last December, and hogs and stocker and feeder cattle the highest since November. In the subsequent decline, hog prices lost virtually all of their advance from the early February low and beef steers and fed lambs lost about half of their advance, lamb prices suffering the most severe setback since the break which occurred early last December. General business conditions provided little support for the higher price levels, and a rather sharp increase in fed cattle and lamb receipts as prices advanced was also a factor in the decline. First arrivals of new crop spring lambs brought $10.00 a hundredweight before the decline as compared with $13.75 a year ago, and beef steers were about $4.65, hogs $1.00, and fed lambs $S.50 a hundredweight under a year ago. In the first three weeks of April, cattle prices strengthened, but hog and lamb prices show further weakness. Top livestock prices at the Kansas City market: Apr. 22 Mar. Feb. Mar. Mar. Mar. 1938 1938 1938 1937 1936 1935 ( I n dollarsper hundredweight)9.75 9.85 9.25 14.50 10.40 13.75 Beef steers......................... . 8.50 8.50 8.25 9.25 8.60 8.75 Stocker cattle·-··················· 8.25 8.40 8.25 10.00 8.50 10.00 Feeder cattle..................... . 9.00 10.00 10.00 10.00 9.50 9.00 Calves................................. . 8.20 9.35 8.85 '10.35 10.60 9.70 Hogs· .................................. . 6.00 7.00 6.00 10.00 7.85 6.25 Sheep................................... . 8.00 9.25 8.35 12.75 10.40 8.75 Fed lambs·-··--··················· 8.75 10.00 13.75 11.00 10.00 New crop spring lambs .... STOCKERS AND FEEDERS March shipments of stocker and feeder cattle and calves to the country were unusually heavy, reflecting in part the greatly improved moisture situation. The movement of cattle was 24 and calves 27 per cent above the March ten-year average. Although the corn-hog ratio is very favorable at the present time, hog shipments were little more than a third of normal. Shipments of sheep, while somewhat heavier than a year ago, were only two-thirds of normal. Stocker and feeder shipments from four markets: Denver............................. . Kansas City·-··················· Omaha............................. . St. Joseph·--·····•··············· Mar. 1938..·-····················· Feb. 1938.......................... Mar. 1937. ___ ................... 3 Mos. 1938...................... 3 Mos. 1937...................... Cattle Calves 7,883 . 1,328 43,031 4,623 15,561 2,881 4,285 829 70,760 43,148 62,248 179,473 168,737 9,661 4,866 9,315 25,147 25,048 1,687 902 807 Sheep 3,521 12,194 13,546 7,068 3,495 4,878 3,799 11,737 8,941 36,329 37,639 32,428 117,109 130,623 Hogs ~ The number of cattle on feed for market on April 1 was reported to be 35 per cent larger than a year ago in Nebraska and 15 per cent larger in Missouri. However, the number on feed in Missouri is only one-third what it was at this time in 1929. In Kansas, where cattle feeding has made no recovery after having been 5 greatly reduced during the drought years, the number on feed is 10 per cent smaller than a year ago and only one-sixth as large as in 1929. Feeders' intentions indicate that marketings will be much later than usual owing to the sharp drop in prices of fed cattle since last fall and the increased supplies and relatively low prices of feed grains. RANGES AND PASTURES Although subsoil moisture continues deficient, almost all of the 1937 drought area in western Nebraska, Kansas, and Oklahoma, in eastern Colorado, and in northeastern New Mexico now has sufficient topsoil moisture to start spring grass, and range feed prospects are the best in several years. Wheat pastures have provided much grazing in Kansas and Oklahoma and native pastures are ahead of normal. Livestock came through the winter in very good condition and calf and lamb crop prospects are good to excellent. Pasture leasing has been active in the Osage section of Oklahoma where pastures are in excellent condition and one to two weeks early but leasing has been slow in the Blue Stem area of Kansas where the condition is only fair and many pastures are weedy. Lease prices, the highest since 1931, are about the same as a year ago and acreage guarantees continue large. The spring movement of cattle from the southwest, about a third of which goes to these grazing areas, is expected to be considerably smaller than the very heavy movement of a year ago. Farm Income Cash farm income in this District is running about 14 per cent lower than a year ago, reflecting principally a substantially smaller volume of Government payments and a decline of about 18 per cent in receipts from the sale of crops, largely the result of lower prices. Receipts from the sale of livestock and its products are only about 3 per cent lower than a year ago. During the first two months of this year, income in Wyoming was 5 per cent larger than last year, but in Colorado it was 23, in New Mexico 31, in Nebraska 18, in Kansas 15, in Oklahoma 8, and in Missouri 2 per cent smaller. The decline in Oklahoma and Missouri is accounted for wholly by smaller Government payments. Income estimates of the Department of Agriculture: Colorado........................................... . Kansas ............................................. . Missouri. .......................................... . Nebraska ......................................... . New Mexico·-··································· Oklahoma._ ...................................... . Wyoming ......................................... . Seven states._................................... United States._................................. Change from Feb. 1938 Jan. 1938 Feb. 1937 (In thousands of dollars) 6,624 -1,482 -3,251 18,002 -2,712 -2,247 14,473 -2,747 +610 14,077 -2,651 -2,498 1,370 -2,056 -1,526 8,567 -273 -1,286 1,532 -680 -53 64,645 487,000 -12,501 -133,000 -10,251 -70,000 REVIEW OF AClUCutTURAL AND BUSINESS CONDITIONS Meat Packing The slaughter of cattle, calves, and sheep increased seasonally during March while hog slaughter declined, falling to the lowest March level of record. Packers' purchases of cat tle were 5, hogs 51, and sheep 16 per cent below t he March average of the past ten years, with calf purchases about 10 per cent above average. Slaughter is beginning to show a rather marked decline from a year ago, March operations being about 17 per cent smaller as compared with a decrease of only 7 per cent for the first quarter of the year. Packers' purchases at six markets in the District: Flour production reported by the Northwestern Miller: Mar. 1938 Kansas City ................. .............. . Salina.... ..................................... . Wichita._ .................................... . Other cities·-··-··························· 644,000 146,000 178,000 1,069,000 Change from Feb. 1938 Mar. 1937 (In barrels) + 77,000 + 1,000 - 46,000 +3,000 -33,000 + 30,000 -87,000 +140,000 Southwest.................................... 2,037,000 + 250,000 - 165,000 United States*............................ 5,460,000 +596,000 - 68,000 *Represents about 60 per cent of total output in United States . Petroleum Daily average crude oil production in the District continued to decline in March, with prospects for a Cattle Calves Hogs Sheep further small reduction in April. Daily average outDenver ................................. . 16,350 2,504 19,213 32,574 put, which had reached a near-record level last spring 77,257 83,375 Kansas City·-······················· 47,013 12,298 Oklahoma City ................... . 17,326 9,645 33,168 13,689 and summer, has been declining almost steadily since Omaha................................. . 59,167 6,190 62,886 88,973 St. Joseph.-........................... 16,105 4,790 42,016 102,183 last August because of burdensome storage stocks of 5,981 18,794 12,222 crude oil and the sharp curtailment in refinery operaWichita·-······························· 12,430 Mar. 1938·-·············· ············· 168,391 41,408 253,334 333,016 tions that started in the fall. March output was 16 Feb. 1938.............................. 155,732 34,054 281,785 310,136 per cent below a year ago and production for the first Mar. 1937...-......................... 188,694 '52,045 330,158 382,656 3 Mos. 1938.......................... 532,272 120,105 1,031,093 941,388 quarter of the year was about 10 per cent lower. How3 Mos. 193L....................... 548,001 155,365 1,083,117 1,048,039 ever, production is still about 9 per cent above the average of the past ten years. Cold Storage Holdings Oil production reported by the American Petroleum After allowing for usual seasonal changes, United Institute and the Bureau of Mines: States cold storage holdings generally showed little change in March except that.stocks of shell eggs showed March 1938 February 1938 March 1937 Gross D. Av. Gross D. Av. Gross D. Av. considerably less than the usual increase and butter ------Zin thousands of barre ~ · substantially less than the usual decline. April 1 hold- Colo............... 122 3.9 104 3.7 142 4.6 ings of beef were 39, pork 12, lamb 11, poultry 5, lard Kans............... 5,334 172.1 4,786 170.9 6,030 194.5 N. Mex......... 3,253 104.9 2,905 103.8 3,162 4, and shell eggs 4 per cent below the average of the past Okla............... 15,921 513.6 14,986 535.2 20,173 102.0 650.8 49.8 1,261 45.0 1,564 50.5 five years. Stocks of frozen eggs, butter, and ·cheese Wyo............... 1,544 continue high. 5 States.......... 26,174 844.3 24,042 858.6 31,071 1,002.4 u. s............... 105,084 3,389.8 94,662 3,380.8 106,724 3,442.7 United States cold storage holdings: Apr. 1 Mar. 1 Apr. 1 Apr. 1 Stocks of crude petroleum in the District have shown 1938 1938 1937 5-Yr.Av. little change since early last December. In the fore(In thousands of units) part of April they totaled about 151 million barrels Beef, lbs.·---····························· 50,468 r 57,023 142,691 82,076 Pork, lbs ................................... 543,407 582,654 755,777 620,147 as compared with 146 million barrels at this time last Lamb and mutton, lbs .......... . 2,940 3,523 7,174 3,314 year when stocks were rising rapidly. Poultry, lbs.·-··························· 78,725 100,493 120,328 83,002 Miscellaneous meats, lbs ..___ . 69,701 77,779 116,897 71,894 Lard, lbs .................................. . 121,413 116,979 217,227 126,885 Eggs, shell, cases._ .................. . 1,294 281 1,413 1,354 Eggs, frozen (case equiv.) ...... 2,735 2,536 1,516 1,270 Butter, creamery, lbs ............. 14,310 21,033 6,700 8,399 Cheese, all varieties, lbs ......... 77,141 85,656 85,216 66,596 Flour Milling Operations at southwestern flour mills continued in March at about the same rate as in the two preceding months, production for March and the first quarter of the year falling about 8 per cent below output in the corresponding periods of 1937. However, production is still slightly above the average of the past ten years. With a sizable backlog of unfilled orders and a small but fairly steady volume of new small-lot business for nearby shipment, milling operations are being maintained although flour buying interest has been checked by further declines in the wheat market. · Coal Production of bituminous coal in the District showed a further seasonal decline in March. Output was only half as large as in March of last year and production for the first quarter of 1938 is 37 per cent less than a year ago. Coal output estimated from reports of the National Bituminous Coal Commission: Mar. 1938 Colorado.................................. Kansas and Missouri.. ......... . New Mexico·--······················· Oklahoma.__ ··························· Wyoming............................... . 373,000 433,000 91,000 51,000 386,000 Six states................................ 1,334,000 United States. ___ ··················· 26,800,000 Change from Feb. 1938 Mar. 1937 (In tons) -163,000 - 394,000 -191,000 . - 497,000 -17,000 . .-108,000 -81,0QO -86,000 _:2os;ooo +21,0~---431,000 -200,000 ----1,293,000 -24,515,000 FEDERAL RESERVE BANK OF KANSAS CITY Zinc and Lead March shipments of zinc and lead ore from the TriState district were markedly lower than a year ago, with zinc shipments showing a decline of 18 and lead 5 per cent for the first quarter of the year. Output of zinc and lead, which had been increasing up to the last week of March, has since declined sharply. Shipments estimated from Joplin News-Herald reports: LEAD ORE ZINC ORE Kansas ................. . Missouri ............... . Oklahoma·-··········· Tons 10,800 2,697 20,458 Value $ 292,892 73,162 556,053 Tons Value 2,511 $ 120,794 674 32,417 2,842 136,693 Mar. 1938._........... Feb. 1938.............. Mar. 193L........... 3 Mos. 1938.......... 3 Mos. 1937.......... 33,955 33,345 45,484 99,420 121,230 $ 922,107 6,027 $ 289,904 5,483 276,713 7,712 [650,980 15,090 756,903 15,935 1,254,122 936,865 2,029,127 2,794,865 4,871,377 Zinc concentrate prices declined further in the latter part of March to about $28 a ton but lead prices remain unchanged at about $49 a ton. Comparable quotations a year ago, when prices were at an unusually high level, were $49 and $84, respectively. Employment and Pay Rolls Employment in the District showed a small increase from the middle of February to the middle of March while pay rolls declined slightly further. Employment in March was about 9 and pay rolls 10 per cent under a year ago as compared with declines of 7 and 6 per cent, respectively, for the first quarter of the year. Preliminary figures of the Department of Labor: 7 The value of March building permits issued in reporting District cities was ·41 per cent lower than a year ago. Although permits for the first two months of 1938 were little changed from 1937, the total value for the first quarter is 22 per cent lower. Building permits issued by eighteen District cities: PERMITS 1938 1937 Albuquerque, N. Mex ............. Cheyenne, Wyo ....................... Colorado Springs, Colo ........... Denver, Colo ........................... Hutchinson, Kans ... ................ Joplin, Mo.·----······················· Kansas City, Kans ................. Kansas City, Mo ..................... Lincoln, Nebr........................... Oklahoma City, Okla ............. Omaha, Nebr ........................... Pueblo, Colo ............................. Salina, Kans ............................. Shawnee, Okla......................... St. Joseph, Mo ......................... Topeka, Kans .. -....................... Tulsa, Okla.._........................... Wichita, Kans ......................... ---u 95 79 555 71 22 40 142 199 221 128 81 17 18 26 92 97 279 ESTIMATED COST 1938 1937 87 $ 130,000 $ 254,000 67 67 540 112 23 39 206 169 229 144 76 11 13 28 80 110 193 ---- 185,000 59,000 552,000 79,000 20,000 108,000 232,000 117,000 647,000 117,000 27,000 21,000 13,000 11,000 147,000 253,000 338,000 319,000 66,000 1,145,000 145,000 81,000 57,000 502,000 198,000 814,000 281,000 49,000 39,000 21,000 38,000 109,000 806,000 239,000 March. ....................................... 2,236 2,194 $3,056,000 $5,163,000 February·-····················•············ 1,133 1,238 2,735,000 2,886,000 Three months .......................... 4,483 4,275 7,609,000 9,728,000 Lumber In contrast with a February decline of 15 per cent from a year ago, board feet sales of lumber at reporting retail yards in the District in March were only 5 per cent lower than a year ago, thus narrowing the loss for the first quarter of the year to 7 per cent. Collections on amounts outstanding averaged 33.6 per cent in March as compared with 29.3 per cent in March 1938 per cent change from February and 41.9 per cent in March of last year. FC?hruary 1938 Lumber trade at 155 retail yards in the District: Employment Pay Rolls Colorado....................................... . Kansas .......................................... Missouri. ...................................... . Nebraska ..................................... . New Mexico................................. . Oklahoma..................................... . Wyoming .................................... . +1.0 - 0.5 +0.9 -1.0 +0.2 -1.6 - 1.3 - 0.1 - 0.2 +0.5 - 1.4 - 6.0 +0.1 - 2.8 Building Sales of lumber, board feet. ...... . Sales of all materials, dollars ... . Stocks of lumber, board feet..... . Outstandings, dollars ................. . March 1938 per cent change from February 1938 March 1937 +45.0 - 4.6 + 45.2 -2.4 - 0.3 -6.3 +6.9 +17.9 Life Insurance A notable expansion during March in awards for March life insurance sales in the District were about non-residential construction raised total awards in this 15 per cent smaller than last year. With this decrease, District to a level about 32 per cent above that in March sales for the year to date now show a decline of nearly of last year. With this increase, non-residential awards 8 per cent from a year ago. for the first quarter of the year were slightly larger than The Life Insurance Sales Research Bureau report: a year ago, sharply less residential building accountChange from ing for a decline of 11 per cent in total awards for the Mar. 1938 Feb. 1938 Mar. 1937 quarter. (In thousands of dollars) 5,651 +861 - 1,077 Construction figures of the F. W. Dodge Corporation: Colorado..........................-...... . TENTH DISTRICT Residential 37 EASTERN STATES Total Residential Total (In thousands of dollars) Mar. 1938........................ Feb. 1938 ....................... . Mar. 1937..._.................. . 3 Mos. 1938.................... 3 Mos. 1937................... . 2,826 1,694 3,889 5,994 9,939 11,014 5,342 r 8,350 23,987 27,010 79,396 40,023 I 90,168 155,626 231,578 226,918 119,038 231,246 541,428 662,606 Kansas_·······················-··········· Missouri.. ................................ Nebraska ............................... . New Mexico..·-······················· Oklahoma........... _................... . Wyoming ............................... . 7,137 18,193 5,669 1,293 9,656 1,114 +1,036 +1,809 +1,277 +125 +941 +332 - 1,401 - 4,197 - 1,294 -177 - 186 - 223 Seven states............................ United States............. ·-··········· 48,713 568,473 +6,381 +79,770 - 8,555 -154,158 8 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of GOYemon of the Federal Reaene System INDUSTRIAL PRODUCTION FUtCCMf Ille• Cf.NT 140 140 130 130 120 120 110 110 100 100 90 90 80 80 In March and the first three weeks of April industrial activity continued at about the same rate as in January and February. Distribution of commodities to consumers showed less than the usual seasonal increase and wholesale commodity prices declined further. PRODUCTION 70 70 eo ,___ ___.,__ _----'----'------'------' 60 1934 1935 19M 1937 1938 Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average 100. By months, January, 1934, through March, 1938. = WHOLESALE PRICES Volume of industrial production showed little change from February to March and the Board's index, which is adjusted for the number of working days and for usual seasonal variations, remained at 79 per cent of the 1923-1925 average. In the steel industry, output of ingots averaged 33 per cent of capacity in March and continued at about this level in the first three weeks of April. Shipments of finished steel in March, as in other recent months, were at a somewhat higher rate than output. Automobile production, which usually expands sharply at this time of the year, showed little change from the low level of January and February, and output of tires and plate glass likewise remained at a low rate. In the lumber and cement industries there were considerable increases in output in March. At cotton and silk textile mills and shoe factories activity rose somewhat, while production at woolen mills declined following a rise in February. Declines were reported also for meat packing and sugar refining. At mines, where production decreased generally in February, output of bituminous coal and nonferrous metals continued to decline in March, while production of anthracite and crude petroleum increased somewhat. Value of construction contracts awarded showed a considerable increase in March, according to figures of the F. W. Dodge Corporation. Awards for residential work, which had advanced moderately in February, increased sharply in March but were still 12 per cent less than in March, 1937. Contracts for other private work also increased in March, but remained considerably smaller than a year ago. The value of public projects showed an increase and was higher than last year. EMPLOYMENT 50 i - - - - - - - - ' - - - - - - - - ' ~ - - - ' - - - - - - ' - - -1934 1935 1938 1937 1938 ~o Indexes compiled by the United States Bureau of Labor Statistics, 1926 100. By weeks, 1934 through week ending April 16, 1938. = IILUOHSOF DOt..U.U MEMBER BANK RESERVES ...._._.,....._.._. • 9 Factory employment declined somewhat and pay rolls showed little change from the middle of February to the middle of March, although increases are usual at this season. The number employed in the machinery industries decreased considerably further and at woolen mills there was also a substantial decline, while most other manufacturing industries showed moderate declines or little change. Employment on the railroads and in the public utilities declined somewhat further in March, while in other nonmanufacturing lines there was little change in the number employed. DISTRIBUTION Sales at variety stores and by mail-order houses increased seasonally in March, while sales at department stores showed less than the usual rise. The Board's seasonally adjusted index of department store sales declined from 88 in February to 86 in March and figures for the first three weeks of April indicate some further decline. Freight carloadings showed little change from February to March, although a rise is usual at this time of the year. Shipments of coal declined substantially and miscellaneous loadings increased by less than the usual seasonal amount. COMMODITY PRICES 0 1934 1935 1936 1937 1938 W ednesday figures of total member bank reserve balances at Federal Reserve banks, with estimates of required and excess reserves, January 3, 1934, through April 20, 1938. MONEY RATES IN NEW YORK CITY Wholesale commodity prices generally declined from the middle of March to the third week of April. There were further decreases in prices of a number of raw and semifinished industrial commodities, and prices of some leading agricultural products also declined, reflecting in part seasonal influences. In the middle of April prices of some industrial materials advanced slightly from the lows reached earlier in the month. BANK CREDIT During March and the first three weeks of April, total loans at reporting member banks in 101 leading cities declined further, reflecting a substantial reduction in loans to brokers and dealers in securities a.pd also declines in commercial loans. Holdings of investments showed little net change, declining in March and increasing in April. As a part of the Government's program for encouragement of business recovery, the Board of Governors reduced reserve requirements of member banks by about $750,000,000, effective April 16, and excess reserves correspondingly increased. As a part of the same program the Treasury discontinued the inactive gold account and deposited about $1,400,000,000 of gold certificates with the Federal Reserve banks. Additions to excess reserves from this source will occur as the Treasury draws upon these deposits to meet current expenditures and the retirement of Treasury bills. MONEY RATES AND BOND YIELDS 1934 1935 1936 1937 1938 Discount rate of Federal Reserve Bank; weekly averages of daily yields on 3- to 5-year Treasury notes and on Treasury bonds callable after 8 years, and weekly average of daily dealers' quotations on 90-day Treasury bills or rate on new bills offered in week. For weeks ending January 6, 1934, through April 23, 1938. Yield~ on Treasury bonds declined from a level of 2.50 per cent in the first half of April to 2.32 per cent on April 22. The average yield on 3-5 year Treasury notes declined to a new low of 0.81 per cent, which compares with the previous low of 0.91 per cent in December, 1936. The rate on three-month Treasury bills declined to virtually a no-yield basis. Other short-term open-market money rates remained unchanged in)he first three weeks of April.
@FedFRASER