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MONTHLY REVIEW Agricultural and Business Conditions TENTH FEDERAL RESER VE DISTRICT VoL. 36, No. 4 FEDERAL RESERVE BANK OF KANSAS CITY APRIL 30, 1951 CROP PRODUCTION IN 1951 Crop plantings for harvest in 1951 are being influenced to a very considerable extent by current world conditions. Agriculture is an important segment of the highly interrelated modern economy. It is the source of most of the raw material for the food and textile industries and provides raw material for many other industries. During periods of international tension, prices of raw materials usually increase because of sha rp increases in demand. The production of war goods is em phasized. Production of consumer goods t ends to decline because not enough resources are available to m eet both civilian and military demand. Employment is high, incomes are high, and the amount of goods available for civilian consumption is relatively low. Under these circumstances, prices increase. Agricultural products are basic in the conduct of a war. The swollen purchasing power generated by war production and finance, the need for food for the armed forces, and the food required to undertake relief and rehabilitation programs in war torn areas greatly increase the demand for food. This strong demand for agricultural products during wartime periods has been influential in causing t he pr ices of agricultural products to increase during the past year. Supplies of most agricultural products are adequate or excessive for normal times, but anticipation of large future requirements and expanded current takings have caused prices to increase. In view of the potentially large requirements for agricultural products, farmers are planning to increase production. It has been estimated that plantings of principal crops in the United Stat es for the 1951 harvest may total 366,000,000 acres, allowing for duplications and numerous crops not yet surveyed. Such an acreage would be about 8,000,000 acres larger than that planted for harvest in 1950. If this increase is attained, it would mean that most of the acreage not planted to crops in 1950 would be in use this season. The report of the United States Department of Agriculture on spring planting intentions of farmers reveals that they intend to dec~ease acreages planted to oats, barley, sorghums, flaxseed, hay, soybeans, potatoes, cowpeas, sweet potatoes, peanuts, and sugar beets. Increases are expected for corn, spring wheat, rice, tobacco, dry beans, and dry peas. Farmers already had increased the acreage seeded to winter wheat last fall, and the expectation is that cotton plantings this year will be increased substantially. PLANTED ACREAGES United States Spr ing wheat ....... ................... Corn......................................... . Oats ......... ................................. . Barley...................................... . Flaxseed .................................. . Rice ... ......................................... Sorghum s, all purposes ......... Potatoes .................................... Sweet potatoes ...................... . T obacco.................................... . Beans, dr y edible .................. . Soybea n s................................... P eanu ts .................................... . Hay ........................................... . Sug ar beet s ...... ...................... .. 1951 1950 P er cent Intended Act u al 1951 of 1950 (Thousand acres) (%) 21,850 18,509 118.1 85,694 84,370 101.6 44,191 46,642 94.7 11,413 13,235 86.2 3,921 4,064 96.5 1,931 1,620 119.2 12,540 16,587 75.6 1,590 1,866 85.2 444 573 77.5 1,745 1,594 109.5 1,664 1,632 102.0 13,772 14,704 93.7 2,614 2,752 95.0 75,656 75,741 99.9 887 1,013 87.6 The Bureau of Agricultural Economics emphasizes that the indicated acreages for 1951 are interpretations of reports from growers and are based on past relationships between such reports and acreages actually planted. The acreages actually planted in 1951 will be influenced by many factors including weather conditions, price changes, labor supply, financial conditions, adjustments suggested by Government agencies, and the effect of the crop report itself upon farmers' actions. Conditions at present are favorable for large production of crops as a whole. Soil moisture is satisfactory except for an extensive area in the Southwest and for local areas Current Conditions 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS in other parts of the United States. Irrigation water supplies are adequate in northern areas but are very poor in New Mexico and Arizona. Loss of farm boys and hired labor to the armed services and defense industries is causing concern about the adequacy of the labor supply. Shortages of farm labor for the spring planting season prevail in local areas although the supply, in general, is adequate. Severe shortages of labor are being anticipated by farmers for the harvest season. There are indications that farmers are shifting toward less intensive cropping and increasingly are substituting machinery for labor. Although the demand for farm machinery is large, machinery now available appears to be adequate for present needs. Much of the current demand for farm machinery is anticipatory. A large proportion of crop production in the United States is utilized as feed for livestock. Livestock numbers have been increasing during the past two years. During 1950, the net increase amounted to 4 per cent. Although livestock numbers are increasing, the prospective plantings report indicates that farmers are intending to cut the acreage seeded to the feed grain crops. The indicated corn acreage was 1.3 mi11ion acres larger than last year, but declines of 2.5 million acres for oats, 1.8 million acres for barley, and 4 million acres for grain sorghums more than offset the increase in intended corn plantings. Increasing livestock numbers and a declining acreage of feed grain production could result in a substantial reduction in the current large stocks of feed grains. As a result, the United States Department of Agriculture has recommended a larger acreage of feed grains for 1951 than farmers have indicated that they intend to plant. Programs that encourage an expanded production and price supports for feed grains may cause acreage planted to these crops to be larger than that indicated in the prospective plantings report. Currently, many uncertainties prevail. Farmers are being encouraged to undertake all-out agricultural production in order that the nation be in as favorable a position as possible in case of widespread war. In undertaking such a production program there is a tendency to increase current production at the expense of conserving resources for future use. In case of an extended period of world tension, increasing production by exploiting the use of resources would be inadvisable. Furthermore, if peaceful conditions should be achieved in the near future, many farmers would prefer to continue with a wellbalanced program in which their resources are used most effectively in the long run. Yet, in case of a major war within the next few years, it would be necessary immediately to maximize agricultural produc- tion. Currently, it is felt that stocks of agricultural products must be increased even though peaceful conditions could result in the production of some surplus agricultural products. The complexity of world conditions renders it extremely difficult to make production decisions at the present time. The desire for maximum production of most agricultural commodities has resulted in competition for the land by the different crops. Increased acreages devoted to cotton, wheat, and corn result in fewer acres remaining for the production of other crops. This competition of crops for land is causing a shifting of crop production not only within a given area but also between areas. For example, the anticipated increase in acreage to be planted to cotton has resulted in a decreased intended acreage for corn in the southern states. On the other hand, the favorable outlook for corn has caused farmers in the Corn Belt to increase the acreage devoted to that crop at the expense of crops that are not so well adapted to this area. Favorable prices for crops result in increased specialization in the production of those crops that are best adapted to a given area. Each crop tends to be produced to a greater extent in those areas where it is best adapted. Prospective plantings of grain sorghums are lower than last year because of the increased acreage of winter wheat and the probable increase in acreage to be seeded to cotton. The decrease in intended oat and soybean acreage is largely due to the increase in the corn and wheat acreage. Abandonment of a large acreage of winter barley, oats, and wheat, however, may result in larger than indicated seedings of grain sorghums and cotton in some areas. Farm production appears to be shifting toward programs embracing grasslands, livestock, and grain operations on an extensive scale. Mechanization, ample supplies of most seeds, improved varieties of many crops, improved insecticides, chemical weed killers, and greater and more effective use of fertilizers all will help to maintain the upward trend of yields. Average or favorable weather conditions could result in near-record production of agricultural commodities during 1951. Low production of some individual commodities might occur but, as a whole, agricultural production should be large. Competition Among Crops for Land In the seven states, all or parts of which are included in the Tenth District, farmers indicated in the "Intentions to Plant" report that they intended to increase the acreage planted to corn, spring wheat, hay, and soybeans. They reported intended decreases for oats, barley, Tenth District FEDERAL RESERVE BANK OF KANSAS CITY PLANTED ACREAGES Ten th District Spring wheat.......... ................ Corn. ......................................... Oats........................................... Barley....................................... Flaxseed................................... Hay.. .......................................... Sorghums, all purposes........ Soybeans.................................. Sugar beets.............................. 1951 Intended ( Thousand 302 16,352 7,132 1,788 29 14,388 5,979 1,723 242 1950 Actual acres) 298 15,874 8,078 2,524 49 14,194 6,935 1,624 254 Per cent 1951 of 1950 ( %) 101 103 88 71 59 101 86 106 95 sorghums, flaxseed, and sugar beets. Since the data for the report were collected as of March 1, 1951, it has become evident that considerable abandonment of winter wheat acreage will occur this spring. Early seeded wheat has been severely damaged in large 3 areas of Colorado, Kansas, New Mexico, and Oklahoma. The acreage abandoned will either be planted to some other crop or fallowed. Since much of this land was faPowed last year, farmers will tend to plant grain sorghums on it because of rather abundant soil moisture supplies. In parts of Oklahoma, some of the abandoned wheat acreage will be seeded to cotton. Moisture conditions have improved throughout most of the District in recent weeks. Production on individual farms will be low because of unfavorable weather conditions and damage to certain commodities from insects and diseases, but for the District as a whole agricultural production should be large if weather conditions are average or better through the growing season. THE FEED GRAIN SITUATION The "Prospective Plantings for 1951" report released by the United States Department of Agriculture indicates that the supply of feed grains-corn, oats, grain sorghums, and barley-available for 1951-52 will be smaller than the abundant supplies of the last two years. As of March 1, farmers indicated that they intended to plant 85.7 million acres of corn this spring. This would be only 1.6 per cent more than the small acreage planted in 1950, when allotments were in effect. Prospective plantings of other feed grains for 1951 are smaller than those for last year. Farmers have indicated that they intend to plant 5 per cent less oats, 14 per cent less barley, and 24 per cent less sorghums this year than last. If farmers carry out these early intentions, and if yields by states should be about the same as the 1945-49 average, the total production of feed grains would be 118 million tons. Although this would be about one fifth larger than production just before World War II, it would fail by about 10 per cent of providing for the estimated requirementfl' of 132 million tons for the 1950-51 feeding year. Unfavorable growing conditions, such as existed during 1947, would cause production to be about one fourth less than requirements, resulting in a complete depletion of our reserves and a curtailment of livestock production. If the per acre yield of corn by states in 1951 is the same as the 1945-49 average, corn production on the prospective acreage would total about 3,050 million bushels. It is estimated that the carry-over of corn next October 1 will be around 550 million bushels. On this basis, the total supply of corn available for the 1951-52 feeding year would be 3.6 billion bushels. Corn requirements for 1950-51 are estimated at about 3.4 billion bushels. Consequently, the United States Department of Agriculture has asked farmers to increase the acreage devoted to the planting of feed grains. FEED GRAIN SUPPLIES United States Total supply Feeding feed Year grains (Million tons) Average 1937-38 to 1941-42.. 116.2 1942-43...................................... 139.3 1943-44...................................... 129.9 1944-45...................................... 128.3 1945-46...................................... 129.3 1946-47...................................... 135.2 1947-48...................................... 109.3 1948-49...................................... 146.2 1949-50...................................... 156.7 1950-51....................... ............... 156.2 1951-52...................................... 141.5 Grain consuming animal units (Millions) 153.1 192.4 193.2 173.7 167.8 161.4 155.9 162.9 170.1 174.0 177.0 Supply per animal unit (Tons) .76 .72 .67 .74 .77 .84 .70 .90 .92 .90 .80 According to the Bureau of Agricultural Economics, the estimated supply of feed grains on a per animal unit basis for the 1951-52 feeding year is quite large. Current supplies would be adequate if normal conditions prevailed. However, livestock numbers have been increasing and the high prices of livestock and livestock products have encouraged farmers to feed profusely during the past two years. These factors have caused the demand for feed grains to be strong. Regardless of the strong demand for feed grains, the acreage planted to barley, oats, and sorghums probably will be smaller because of the removal of acreage restrictions on the planting of wheat, corn, and cotton. As larger acreages are planted to wheat, corn, and cot- 4 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS ton, less land is available for the production of other crops. Some private sources are indicating that a severe jolt could hit the livestock industry unless the acreage planted to feed grains is increased and weather conditions are favorable. Unfavorable weather conditions, with a tight supply offeed, could force farmers to liquidate part of their livestock. In such an event, livestock prices likely would be depressed temporarily and then would rebound as supplies of livestock products become scarce. Such a development would create instability in the livestock industry at a time when both farmers and consumers could be injured severely by fluctuating meat prices and supplies. During the past 20 years there has been a downward trend in corn acreage in the United States, while production has been increasing because of the upward trend in yields. During the 1930's, land seeded to corn averaged approximately 102 million acres annually. During the 1940's, corn seedings averaged about 90 million acres annually. Average production during the 1930's was about 2.3 billion bushels, compared with an average production of approximately 3 billion bushels during the 1940's. The higher production of the 1940's can be attributed chiefly to more favorable weather conditions, to the introduction of hybrid seed corn, to proper use of fertilizer, and to other good production practices. Another factor that has contributed to the higher average yields received in recent years has been the withdrawal of lower-producing land from corn production and a shift toward increasing acreage in the higher-producing areas. Much of the increase in yield obtained during recent years can be retained because of technological advancement; however, weather continues to be a potent factor in influencing corn production. Corn In the Tenth District, grain sorghums are an important source of livestock feed. The acreage of grain sorghums harvested in the United States has varied considerably during the past 20 years. The general trend has been toward an increasing acreage of the crop. During the 1930's, the harvested acreage averaged approximately 4 million acres annually, compared with an annual average Grain Sorghums of 6.6 million acres during the 1940's. Total production in recent years has varied from a low of 18.5 million bushels in 1934 to a high of 237.5 million bushels in 1950. Production of grain sorghums fluctuates considerably more than corn production, since a major portion of the crop is produced in the southern Great Plains area where weather hazards are more severe than in the Corn Belt. Although farmers indicated that they intend to reduce the acreage seeded to sorghums by 24 per cent this season, changing conditions probably will cause the reduction to be less than that stated in the prospective plantings report. Subsequent to the issuance of this report, it has become apparent that abandonment of winter wheat acreage will be high in the sorghum production area. Beneficial rains have fallen throughout the area, and good moisture conditions will cause farmers to plant grain sorghums on much of the abandoned winter wheat acreage. With the anticipated tightness in the feed grain supply, grain sorghum is a good cash crop in those cases where the wheat crop has been destroyed. The acreage seeded to oats has remained rather stable during the past 20 years. The average annual acreage seeded during both the 1930's and 1940's was approximately 42 million acres. Production during the 1930's averaged about 1 billion bushels annually, compared with an average annual production of about 1.3 billion bushels during the 1940's. The increased yields during the 1940's can be attributed to more favorable weather, improved varieties, better rotations, and other technological advancements. Oats The acreage seeded to barley has fluctuated considerably. During the past 20 years it has varied from a low of 11.2 million acres in 1949 to a high of 19.7 million acres in 1942. The acreage seeded to the crop has not followed a consistent trend, although plantings during the past six years have been relatively low. Since 1930, United States production has varied from a low of 117 million bushels during 1934 to a high of 429 million bushels in 1942. Although barley is not one of the most important feed grains, it is of considerable importance in certain parts of the Tenth District. Barley AGRICULTURAL AND BUSINESS CONDITIONS WINTER WHEAT A winter wheat crop of 726,512,000 bushels was forecast for the United States by the Department of Agriculture in its April summary of crop conditions. This estimate is a reduction of 172,584,000 bushels from the initial forecast of 899,096,000 bushels based FEDERAL RESERVE BANK OF KANSAS CITY on conditions as of December 1, 1950. Dry surface soil, severe winter weather, insect infestation, and plant diseases have combined to cause an estimated 23.4 per cent abandonment of acreage, with low yields probable on much of the acreage remaining for harvest. The indicated yield was placed at 12.9 bushels per seeded acre. This estimate compares with an estimated yield of 14.2 bushels per seeded acre for the corresponding date a year ago. WINTER WHEAT PRODUCTION FOR 1951 Colorado..................... . Kansas ........................ . Missouri ...................... . Nebraska .................... . New Mexico ............... . Oklahoma................... . Wyoming .................... . Estimated Estimated April 1 D ecember 1 1951 1950 (Thousand bushels) 34,430 48,202 152,218 202,958 24,416 22,672 91,728 96,096 1,400 5,600 41,880 77,316 5,915 6,422 Seven states................ United States.............. 351,987 726,512 459,266 899,096 Per cent Increase or Decrease Cash receipts of 15.6 billion dollars from livestock and livestock products were 1 per cent above their 1949 level, while cash receipts of 12.3 billion dollars from crops were 3 per cent less than those of 1949. Price increases for crops were a little larger than for livestock, but sales for a few of the important crops were significantly smaller. Changes in cash receipts from 1949 to 1950 by commodities ranged from an increase of 85 per cent for grapes to a decline of 30 per cent for potatoes. CASH RECEIPTS FROM FARM MARKETINGS United States (% ) -28.6 -25.0 +7.7 -4.6 -75.0 -45.8 - 7.9 -23.4 -19.2 5 Meat animals .................. . Dairy products ............... . Poultry and eggs ............ . Food grains ..................... . Feed crops ....................... . Cotton ............................... Oil-bearing crops ........... . Tobacco ............................ . Vegetables ...................... . Fruits and tree nuts ....... . Other ................................. 1950 1949 (Million dollars) 8,903 8,395 3,758 3,781 2,741 3,038 1,875 2,346 2,096 2,198 2,367 2,637 876 800 1,091 904 1,571 1,817 1,387 1,123 1,256 1,088 P er cent 1950 of 1949 ( %) 106 99 90 80 95 90 110 121 86 124 115 The greatest amount of deterioration of the crop occurred in the southern Great Plains region. Texas, 27,921 28,127 99 Oklahoma, New Mexico, southwestern Kansas, and Total. ................................ . southern Colorado report the larg st losses. Generous The Department of Agriculture estimates total rains have fallen over a major portion of this area realized net income from farming operations during since April 1, but in many of the fields plants had 1950 at 13.0 billion dollars. This represents a decline deteriorated to the point where they could not be re- of 8 per cent when compared with realized net income vived. Fields that were in doubtful condition prob- of 14.1 billion dollars for 1949. The realized net inably will receive considerable benefit from the mois- come of farmers is obtained by subtracting total exture. penses of production from gross farm income. Gross Cool spring weather has kept the wheat plants in farm income includes the value of crops and livestock a retarded state of growth. The weak plants have sold, placed under Government loans, or used in the been susceptible to injury from insects and disease. farm home during the year, plus Government payGood growing weather would do much to improve the ments to farmers and the rental value of farm homes. condition of the wheat crop. Neither gross income nor realized net income includes Date of planting and seedbed preparation appear the value of inventory changes during the year. to be significant factors influencing the condition of The farm income situation improved considerably the winter wheat crop this spring. Wheat seeded in during the last six months of 1950. The Bureau of the southern Great Plains area by August 15 is much Agricultural Economics expects realized net income more likely to be dead than is wheat seeded at a later of farm operators during 1951 to be higher than it date. Reports from farmers and research agencies was during 1950. Farmers' cash receipts from marindicate that on an average wheat seeded between ketings during the first four months of 1951 are estiSeptember 10 and September 20 appears to have sur- mated at 8.3 billion dollars. This is an increase of vived the winter in the best condition. Wheat seeded 18.6 per cent over the 7.0 billion dollars received durin firm seedbeds survived the winter in better condi- ing the corresponding months of 1950. Farmers' costs tion than did that seeded in a loose seedbed. during the first four months of 1951 averaged about 13 per cent higher than a year earlier. Cash receipts FARM INCOME from livestock and livestock products during the first The United States Department of Agriculture has four months were estimated at 5.7 billion dollars comestimated farmers' cash receipts from marketings for pared with 4.4 billion dollars for last year. As the 1950 at 27.9 billion dollars, or 1 per cent less than re- volume of livestock marketings was about the same as ceipts from farm marketings during 1949. A 6 per a year earlier, the increase in receipts can be atcent decline in physical volume of sales was largely tributed to generally higher livestock prices. Crop reoffset by higher average prices. ceipts were about the same as a year ago. REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 6 Cash receipts from farm marketings for the seven states of the Tenth District were 3 per cent lower in 1950 than in 1949. Wyoming and Nebraska had slightly higher receipts during 1950 than during 1949. Receipts for Kansas and Missouri were approximately the same, while those for New Mexico, Colorado, and Oklahoma declined. The large declines for Oklahoma and Colorado were caused by sharp decreases in receipts from crops. Cash receipts from livestock were higher in 1950 than in 1949 for all of the seven states. In those Tenth District states in which cash receipts for 1950 were lower than for 1949 the decreases in all cases were caused by decreased crop production. CASH RECEIPTS FROM FARM MARKETINGS Tenth District Colorado ............................ Kansas ............................. . Missouri ........................... . Nebraska ......................... . New Mexico ..................... . Oklahoma ........................ . Wyoming ......................... . 1950 1949 (Thousand dollars) 475,715 526,133 1,000,790 1,004,215 1,009,281 1,004,436 930,450 922,895 190,354 193,608 526,723 603,236 138,423 136,054 Seven states..................... 4,271,736 4,390,577 Per cent 1950 of 1949 ( %) 90 100 100 101 98 87 102 97 MEMBER BANK CREDIT Coincident with the heavy tax payments in midMarch, there was a moderate shift of deposits out of District banks as Government balances tended to move to the larger centers of the country. This outward movement was more pronounced at reserve city banks where, in addition to other drains, interbank deposits were reduced as country banks met a part of their own drain with these balances. In the four weeks ended March 28, demand deposits other than interbank deposits declined by 48 million dollars at reserve city member banks and by 42 million at country member banks; the former class also lost an additional 58 million dollars in interbank deposits. Loans continued to increase at both reserve city and country member banks between February 28 and March 28. In the former, the increase was 18 million dollars and in the latter, 10 million dollars. These continued demands from borrowers, when coupled with the deposit movement noted above, placed a considerable pressure on bank reserves, cash, and bank balances. These items declined by 31 million dollars at country member banks and by 53 million at reserve city members, where the largest part of the reduction was in items in process of collection. Both reserve city and country member banks sold Government securities in the four-week period ended March 28. Country member banks disposed of 19 million dollars of these issues, in part for the purpose of re-establishing a more normal volume of excess reserves than the level existing in the middle of February. Sales of 67 million dollars of Government securities by reserve city banks were required, in the main, by the shift of deposits, their excess reserves being about the same on March 28 as they were four weeks earlier. Judging on the basis of weekly reporting member banks, which include most of the reserve city member banks, loan volume continued to advance in the two weeks following March 28, with commercial, industrial, and agricultural loans and other loans, including loans to consumers, reaching new all-time high levels for this group of banks. DEPARTMENT STORE TRADE The dollar volume of department store sales in this District in March was 13 per cent above a year ago, while in the first half of April it was 2 per cent below last year. These changes reflect in part the variation in the date of Easter, which fell on March 25 in 1951 and on April 9 in 1950. Easter trade as a whole was about 7 per cent larger in dollar volume than a year ago but, allowing for price increases, physical volume was below last year. Reports in- SELECTED ITEMS OF CONDITION OF TENTH DISTRICT MEMBER BANKS (In millions of dollars) Loans and investments ....................................... Loans and discounts ........................................ U. s. Government obligations ...................... Oth er securities ................................................ Reserve with F. R. Bank ... ............................... Balances with banks in U. S ............................. Cash items in process of collection .................. Gross demand deposits ................................. ...... Deposits of banks ............................................ Other demand deposits ................................... Time deposits ....................................................... Total deposits ....................................................... B orroW1ngs . ............................................................ ALL MEMBER BANKS RESERVE CITY BANKS Mar.28 Feb.28 Mar.29 1951 1951 1950 4,679 4,735 4,519 1,986 1,958 1,694 2,219 2,305 2,401 474 472 424 872 870 732 556 596 549 285 337 218 5,381 5,530 5,044 809 868 782 4,572 4,662 4,262 688 683 688 6,069 6,213 5,732 20 20 15 COUNTRY BANKS Mar.28 Feb.28 Mar.29 1951 1951 1950 2,584 2,631 2,456 1,182 1,164 940 1,144 1,211 1,285 258 231 256 545 449 535 239 222 256 264 313 202 3,074 3,180 2,790 745 722 803 2,329 2,377 2,068 370 364 367 3,444 3,544 3,157 15 17 14 Mar.28 Feb.28 Mar.29 1951 1951 1950 2,095 2,104 2,063 804 794 754 1,075 1,094 1,116 216 216 193 327 335 283 317 340 327 21 24 16 2,307 2,350 2,254 64 65 60 2,243 2,285 2,194 318 319 321 2,625 2,669 2,575 5 3 1 FEDERAL RESERVE BANK OF KANSAS CITY dicate that the Easter season generally was disappointing, as cool weather this spring has not been favorable to the movement of seasonable merchandise such as apparel. Sales increased less than is usual from February to March, and the seasonally adjusted index of daily average sales declined further from 346 per cent of the 1935-39 average in February to 321 per cent in March as compared with the very high level of 395 last January. Department store inventories increased sharply during March, and the seasonally adjusted index of stocks rose from 343 per cent of the 1935-39 average at the end of February to a new record level of 365 per cent at the end of March, exceeding by a considerable margin the previous high of 351 last BANK DEBITS COLORADO Colo. Springs ..... Denver*.............. Gr. Junction ....... Greeley ............... Pueblo *............... KANSAS Atchison ............ Emporia .............. Hutchin son ......... Independence ..... Kansas City....... Lawrence ............ Manhattan** ...... Parsons ............... Pittsburg............ Salina .................. Topeka ................ Wichita ............... 11,963 13,447 44,954 8,216 91,920 13,545 11,584 8,942 14,238 38,419 111,162 333,163 35,270 41,348 130,685 24,253 258,355 37,559 34,632 26,775 41,315 118,371 321,699 933,861 12,862 32,208 1,339,941 118,720 +36 +25 +12 +21 +34 +22 +33 +34 +13 +23 +32 +21 +13 +32 +28 +14 +27 +21 +22 +28 +19 +27 37,808 92,025 3,857,255 361,503 +20 +26 +26 +23 +30 +32 19,578 30,821 16,659 100,844 685,502 63,717 86,944 49,376 286,984 1,997,361 +15 +35 +29 +23 +36 +32 +30 +37 +23 +44 139,769 36,803 389,910 99,353 +25 +27 179,260 37,373 5,486 19,212 28,757 9,109 435,780 8,119 21,189 596,662 497,060 110,869 15,967 53,665 85,469 26,469 1,217,473 23,015 64,308 1,776,019 +44 +7 +22 +32 +2 +24 +8 +17 +18 +8 +3 +27 +17 +13 +17 +25 37,040 37,978 107,028 114,561 +30 +10 +29 +26 District, 40 cities*. 5,577,952 U.S., 342 cities ...... 144,077,000 16,050,267 396,517,000 +26 +24 +29 +24 MISSOURI Independence* *. Joplin .................. Kansas City........ St. Joseph ........... NEBRASKA Fremont............. Grand Island ...... Hastings ............. Lincoln* .............. Om aha ................ NEW MEXICO Albuquerque* .... Santa Fe** ......... OKLAHOMA Bartlesville ........ Enid ..................... Guthrie ............... Lawton** ............ Muskogee ........... Norman** ........... Okla. City* ......... Okmulgee........... Ponca City.......... Tulsa ................... WYOMING Casper................. Cheyenne ............ January. Stocks on hand on March 31 were 22 per cent larger in value than a year earlier, and the volume of outstanding orders was 59 per cent greater. DEPARTMENT STORE SALES AND STOCKS SALES STOCKS Mar.1951 3 Mos.1951 Mar.31,1951 comp. to comp. to comp. to Mar.1950 3 Mos.1950 Mar.31,1950 ( Per cent increase or decrease) Denver .. ... ..................... ... . +11 +21 +27 Pueblo ................. ............. . +16 +24 +37 Hutchinson ... ................... . +13 +20 +11 Topeka ............................. . +19 +28 +9 Wichita ............................ . +31 +38 +24 Joplin ......... .... .................. . +26 +34 +14 Kansas City ................... . +17 +22 +18 St. Joseph ....................... . +12 +24 * Omaha ............................. . +8 +20 +41 Oklahoma City.............. . +3 +9 +24 Tulsa ................................ . +10 +19 * Other cities .................... . +15 +25 +12 District............................. Mar. 3 Mos. Change from '50 1951 1951 Mar. 3 Mos. ( Thousand dollars) (Per cent) 58,045 169,384 +46 +40 2,163,202 765,781 +24 +29 18,905 54,166 +28 +35 29,920 89,385 +34 +44 54,076 155,868 +30 +36 -- • Dollar figures include one or more additional reporting banks, beginning January, 1951; however, percentage changes shown are computed from comparable data for both 1951 and 1950. •• New reporting center, beginning January, 1951. 7 +13 +21 +22 • N ot show n separately but included in District total. NONFERROUS METALS While shortages of some raw materials appear to be easing, there continues to be a short supply of copper, lead, and zinc. Restrictions on civilian consumption are being extended further as defense demand gains momentum. Domestic production is rising but imports have fallen off substantially, owing to the fact that prices in the United States currently are lower than prices in foreign markets. Domestic prices for the refined metals, which have been unchanged since late last October, came under the general price freeze imposed in February. The import decline is greatest in the case of lead. January and February imports totaled 22,397 tons this year as compared with 60,478 tons in 1950, and industry sources predict that 1951 lead imports may decline by as much as one half. Foreign lead is priced abroad at 19 to 21½ cents a pound, while domestic lead is priced at 17 cents, New York basis. Moreover, lead import duties doubled at the first of the year. The discrepancy in domestic and foreign market prices is even greater in the case of copper and zinc. During the first quarter of the year, United States primary production of copper increased by 22,000 tons or 10 per cent from that in 1950 and total production by 1 per cent, while total imports declined 29,000 tons or by 25 per cent. The House has recently approved a bill to suspend the copper import duty of 2 cents a pound. It is anticipated that the Office of Price Stabilization will announce ceiling price orders for both primary and secondary nonferrous metals in the near future. While some within the industry are fearful of the long-run implications for production, it is generally recognized that price ceilings should restore more normal price relationships between some 8 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS categories of primary metal and secondary metal. In the case of copper, for example, domestic scrap has been selling above the established price for the refined metal. Restrictions on metal consumption have been extended to lead. The National Production Authority has announced that, beginning May 1, lead consumers will be limited, in any one month, to their average monthly use in the first half of 1950. This represents a substantial cutback, as lead consumption in recent months has been very high relative to the 1950 base period. Permitted inventories were reduced from 60 to 30 days' supply and the order also requires refiners and dealers to reserve up to 20 per cent of their supply in any month for defense orders. The NP A has announced a controlled materials plan for three basic metals-steel, copper, and aluminum-which will be put into operation on July 1. The metals will be allotted directly to defense producers on the basis of their detailed requirements, submitted in advance. The NP A Administrator has stated that, since the defense program is actually taking large quantities of basic materials, the CMP is believed to be the best method of providing for orderly distribution of these materials. Material requirements are being evaluated on two bases: (1) the near-term, in which defense demand, defensesupporting demand, and full civilian demand are computed; and (2) all-out mobilization. Aids to increased domestic metals production are moving into operation. An emergency priority has recently been granted to mining machinery and equipment manufacturers in order to provide them with adequate materials. On April 11, the Defense Minerals Administration announced regulations and terms under which the Government will help prospectors and mine operators finance the cost of searching for new ore supplies. For some of the most urgently needed minerals the Government will contribute up to 90 per cent of the exploration and development cost, and in the case of copper, lead, and zinc the contribution is 50 per cent, repayable out of production. Authority for this program is granted in the Defense Production Act which expires on June 30. The DMA Administrator has reported that as of March 31 his agency had processed 21 major procurement contracts calling for increased production of copper, aluminum, zinc, titanium, molybdenum, cobalt, tin, manganese, and tungsten and had recommended for approval 61 certificates for accelerated tax amortization totaling 494 million dollars. The DMA also had under consideration loans approximating 175 million dollars for expansion of copper, nickel, antimony, chromite, fluorspar, iron ore, manganese, and zinc production. In the Tenth District, work is nearing completion on the Colorado Leadville drainage tunnel. The project was initiated during World War II and revived last year. The 10,100-foot tunnel is expected to drain dozens of miles of rich underground workings containing lead, zinc, and manganese ores. Between 1860 and 1944, the value of metals produced in the Leadville district aggregated 462 million dollars, and drainage is expected to make extensive ore reserves again accessible. EMPLOYMENT Total civilian employment in the United States expanded by 11/4 million between February and March, owing to seasonal gains and rising defense production. A proportionately greater increase was shown among agricultural workers but, when March employment figures are compared with those for March a year ago, it can be seen that agricultural employment has declined by 4 per cent while nonagricultural employment has risen 5½ per cent. This is indicative of the expansion in industrial activity that has occurred since the outbreak of war in Korea, manufacturing employment by February, 1951, reaching its highest level since June, 1945. Military mobilization has also reduced the available labor supply, and March unemployment was only about half that in March, 1950. These national employment shifts are repeated in the Tenth District states. Nonagricultural employment began its normal spring rise in March while local employment offices warned of a coming labor shortage. In Nebraska, increased manpower needs caused the hiring of more women, and there was a growing shortage of unskilled as well as skilled labor and of agricultural workers. It was reported that rising employment in Wyoming is reducing the available labor supply earlier this spring than in previous years. The state Employment Security Commission paid out less in unemployment benefits during March than during February for the first time since 1943. General labor shortages are anticipated in most Wyoming communities by May. Among the District states, Kansas is experiencing the greatest employment boom, and March unemployment was 57 per cent below the level of a year ago. The rapid rise in manufacturing employment has centered at Wichita, seat of the aircraft industry, where the number of manufacturing workers has been increased by 73 per cent since March of 1950. February manufacturing employment figures are available for several of the District states and the gains shown over the year are as follows : Kansas, 25 per cent; New Mexico, 19 per cent; Nebraska, 12 per cent; Missouri, 11 per cent; and Oklahoma, 10 per cent.
@FedFRASER