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MONTHLY REVIEW Agricultural and Business Conditions TENTH FE:PERAL RESERVE DISTRICT VoL. 24, No. 2 FEDERAL RESERVE BANK OF KANSAS CITY ! i ---------'----·: Denver• COLO. ·--------KANSA :' •• ·--·-··-··-··-----..-.!--I )(ANS • I On this page are four charts that show at a glance some of the important factors in the farm situation in this District. The first chart shows farm income and land values for the seven states of this District. The purchase of an article is simply the purchase of the right to receive the income it produces and cash farm income and land values are, consequently, closely related. Farm income after rising from the low point of 1932 has dropped back to the level of 1934 and 1935 and this explains the very little lif_t that has taken place in land values. The second c h a r t shows changes in the number and value of hogs in these states. On page 7 of this issue of the Monthly Review will be found the detailed livestock figures for all states as of January 1, 1939. In the last year there has been an increase of 22 % in the number of hogs. The largest relative increases were in Kansas, Nebraska, and Oklahoma. At the same time, hog prices have remained firm with the result that the value of hogs in the District is 27 % higher than a year ago. Cattle have increased in number much less than hogs. This is what would be expected as hog numbers can be increased very much more quickly than can those of cattle. The largest increase was in Kansas while there was a 9 % decrease in New Mexico due to large shipments last year. The two grain charts go a long way in explaining the radical drop in farm income. The wheat crop last year was nearly as large as the year before but it was worth little more than half as much. This unsatisfactory experience is tending to restrict wheat acreage. The corn crop in this District last year was appreciably larger than the year before but it was worth 12 % less. Large corn crops in eastern Corn Belt states in the last two years and small livestock numbers are responsible for the present low price. The charts emphasize the importance of prices. Crops and livestock have a very definite cost of production and the economic position of the farm depends on the margin, if any, that exists above these costs. Livestock on the whole was profitable last year because of satisfactory prices but a large wheat crop meant very little in buying power or capacity to pay debts. FEBRUARY 28, 1939 The charts are for the seven states that are wholly or partly in this District. LAND VALUES AND FARM INCOME ---+-------11 ◄ 0 1918 1923 1928 1933 HOGS MILLION HEAD 17 MILLION DOLLARS 120 WHEAT MILLION BUSHELS 3~0 MILLION DOLLARS 3~ CORN MILLION BUSHELS 800 MIL L ION DOLLARS 280 O L-----lL---1-----1---.L-----'---'40 1932 1933 1934 103!> 1938 1937 1938 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Summary Precipitation in January was much above normal and the critical moisture situation is somewhat relieved. Construction activity continues one of the favorable factors and lumber sales in January were nearly 19 per cent above last year. Life insurance sales were nearly half again as large as in January a year ago. Department store sales are little changed. Corn marketings are much below last year. The slaughter of nearly all livestock is lower. Production of crude petroleum is 20 per cent under last year but flour output is 5 per cent higher. Demand deposits and bank investments are somewhat above a year ago, but bank loans are 4 per cent lower. February, while seasonally lower than last December, compares with 165¼ million a year ago and about 160 million at this time in 1937. 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 assets................................... F. R. notes in circulation............. Member bank reserve deposits._ Change from Feb.15 Jan.18 Feb.16 1939 1939 1938 .(In thousands of dollars) 313,510 +3,493 +17,748 532 -454 -338 16 Zero Zero 231 -14 -257 709 +59 +610 132,098 Zero -6 482,301 +642 +12,399 167,721 -488 +2,329 224,782 -10,098 -17,542 Dollar volume of check collections in January was seasonally lower than in the preceding month but about 3 per cent larger than in the corresponding month a year ago. Check collections through this bank and branches: Member Bank Operations The gradual rise-in loans at reporting member banks in the Tenth District has recently leveled off, a rather steady decline in the volume of commercial loans since Items Amount the first of the year being largely responsible. Invest--(In thousands) ments are tending to rise again as the result of a January 1939......................................... 5,768 $ 932,377 sharp increase in holdings of Government obligations December 1938...................................... 6,476 1,008,396 902,975 from the middle of January to the middle of February. January 1938......................................... 5,628 Holdings of other securities, which had been increas- Bank Debits ing, declined during this period. Debits to individual accounts by banks in reporting Adjusted and other demand deposits declined from centers of the District dropped sharply from Decemthe middle of January to the middle of February and ber to January and were about 2 per cent lower than in there was a large decrease in reserve balances carried January a year ago. at this bank and in correspondent balances carried at Payments by check in thirty District cities: other banks. Change from Jan.1939 Dec.1938 Jan.1938 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 dlers... Other to purch. or carry secur.. Real estate loans....................... Loans to banks.......................... · All other loans........................... Investments-totaL....................... U.S. Govt. direct obligations... Oblig. guar. ?r U.S. Govt......... Other secunties.......................... Reserve with F. R. Bank.............. Balances with domestic banks ... Demand deposits-adjusted ......... Time deposits .................................. U.S. Govt. deposits........................ Interbank deposits ......................... Change from Feb.15 Jan.18 Feb.16 1939 1939 _1938 ( In thousands of dollars) 661,191 +6,323 +13,449 258,056 -35 -1946 154,821 -2,341 -8:346 18,532 +790 -168 4,891 -10 +1,119 11,899 +436 -456 22,805 +303 +1,804 507 -195 -7 44,601 +982 +4,108 403,135 + 6 358 + 15 395 215,861 +6'837 -11'322 53,802 +3:136 +s:406 133,472 -3 615 +18 311 155,489 -8:578 -13'825 268,478 -6 698 +33'117 498,349 -4:263 +12'359 144,505 +274 ~175 22,400 +295 +8 814 352,463 -5,617 +5:702 Reserve Bank Operations Note circulation of this bank had risen to a new high of 172¼ million dollars in the latter part of December, when circulation normally is the heaviest of the year, and continues to hold well above the level of a year earlier. Circulation of 167¾ million at the middle of Albuquerque, N. Mex ....... . Atchison, Kans .................. . Bartlesville, Okla.............. . 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 .................... . ( In thousands of dollars) 15,264 -1,859 +1,237 2,815 -639 -174 30,427 +1,313 +3,095 6,265 -1,781 +127 8,310 -1,858 +790 15,159 -1,292 +568 151,148 -18,881 +2,921 3,547 -176 +363 9,658 -1,081 -1,673 2,594 -209 +195 3,455 -621 -54 1,837 +167 -33 9,989 -930 -896 3,192 -52 +72 10,076 -476 +354 19,231 +2,044 +1,182 288,615 -52,560 -23,378 3,451 -535 -269 25,572 -6,358 -1,315 8,754 +324 +476 104,657 -9,019 -5,422 2,867 -235 +255 145,767 -16,089 +3,843 4,167 -271 -106 15,926 -974 +866 7,241 -1,633 -1,091 29,314 +1,497 +330 22,025 +2,012 +4,818 140,692 -33,869 -13,947 45,265 -1,883 -1,497 District, 30 cities.............. . 1,137,280 U. S., 141 cities................... 32,339,577 -145,924 -7,590,023 -28,363 +2n5,971 FEDERAL RESERVE BANK OF KANSAS CITY The Department of Commerce retail sales report: Trade RETAIL SALES Dollar volume of sales at reporting department stores in the District in December and January had been virtually unchanged from a year earlier but sales in the first three weeks of February were about 3 per cent above a year ago. Sales showed about the usual seasonal decline from December to January. Retail prices, according to the Fairchild Index, are about 4 per cent below a year ago. During January prices advanced slightly for the first time in nearly a year and a half. Stocks of merchandise declined by about the usual seasonal amount during January. Collections on open accounts averaged 47.4 per cent as compared with 47.1 per cent in January of last year, while installment collections averaged 14.9 and 14.6 per cent, respectively. Department store sales and stocks in leading cities: SALES Denver............................ Kansas City................... Oklahoma City............. . Omaha........................... . Tulsa.. ·-·························· Wichita........................... Other cities................... . STOCKS 39 +0.2 -5.6 -5.0 Total retail sales in January were larger than a year ago in Missouri, Nebraska, Wyoming, and New Mexico, but somewhat smaller in Kansas, Oklahoma, and Colorado. Sales of independent retail stores reported by the Department of Commerce: Total............ Jan. 1939 per cent change from Jan. 1938 Colo. Kans. Mo. Nebr. N.Mex. Okla. Wyo. -8.5 -4.8 +5.1 -2.7 -9.1 +26.9 -0.2 -6.9 -3.7 -6.5 -16.5 -10.6 -10.9 -2.5 -5.2 +0.2 -1.1 +o.7 -0.9 -2.1 -3.7 -3.5 +o.4 +3.2 -0.8 -4.0 -6.0 +2.3 -7.0 +2.3 +10.7 +27.2 -0.6 +0.2 -5.1 +3.1 -2.7 -1.5 -4.2 -8.6 -7.5 -11.2 +2.8 -0.5 +2.8 +0.6 +14.6 -6.9 -3.2 +17.1 -4.5 +16.6 +8.0 +10.1 +10.9 -11.6 +28.4 +20.4 +0.9 -4.3 +38.6 -1.0 -5.6 +2.3 +2.5 +1.5 -2.7 Year '38 comp. to Year '37 Year '38 comp. to Year '37 (%) (%) COLORADO Denver....................... . Pueblo......................... Colorado Springs ..... . Greeley ...................... . Trinidad...................... Fort Collins................ -6.9 -18.3 -16.3 -19.2 -2.4 -15.2 Boulder.................. . Grand Junction ...... Longmont............... Loveland ............... .. Durango................ . Fort Morgan ......... . -18.7 -11.3 -17.2 -15.3 -2.1 -24.1 KANSAS Kansas City.............. . -7.8 Wichita ...................... . -7.5 Topeka ........................ -14.0 Hutchinson............... . -20.9 Salina.......................... -6.6 Pittsburg................ -12.2 Parsons................... -2.2 Emporia................. -10.6 Lawrence................ -6.7 McPherson ............. -15.0 MISSOURI -8.0 -8.1 Joplin...................... -15.4 Omaha........................ -6.6 Lincoln...................... . -10.8 Grand Island.......... -5.2 North Platte.......... -13.6 Kansas City.............. . Saint Joseph ............. . NEBRASKA NEW MEXICO Albuquerque ............. . -20.2 Santa Fe................. -18.9 OKLAHOMA -5.0 -6.9 Muskogee............... -4.4 Bartlesville............ -14.8 Cheyenne.................... -10.5 Casper....................... . -21.0 Laramie.................. -13.0 Sheridan................. +2.0 Oklahoma City......... . Tulsa.......................... . WYOMING J an.'39 Jan. 31, '39 No. of comp.to compared to Stores Jan.'38 Dec.31,'38 Jan.31,'38 (Per cent increase or decrease) 4 -1.3 +o.6 -3.2 4 +0.1 -4.2 -14.0 3 +11.3 -11.0 +4.7 3 +4.5 -13.9 +1.8 4 -6~ -2~ +32 3 -3.1 18 -2.8 -6.7 -10.6 District........................... Apparel....... General........ Department Drug........... ~ Furniture.... Grocery........ Hardware.... Lbr. & mtls. Automobile. 3 +6.5 WHOLESALE SALES The value of wholesale sales in the District in January continued slightly above a year earlier. Sales declined about 9 per cent from December to January. Dollar inventories increased nearly 6 per cent during January but at the close of the mop.th were 14 per cent lower than a year ago. Wholesale sales and stocks reported by the Department of Commerce for this District: SALES STOCKS Jan.'39 Jan. 31, '39 No. of comp.to comp.to Firms Jan.'38 Dec.31,'38 Jan.31,'38 - - (Per cent increase or decrease) Auto. supplies.............. . 6 -7.1 Clothing........................ . -11.8 3 +15.8 +50.0 Drugs............................ . -5.2 8 +1.3 +10.6 Dry goods ..................... . -32.8 6 +2.6 +13.3 Electrical goods ............ -8.1 10 +36.6 +21.6 Furniture....................... 5 +8.1 Groceries ........................ 37 -2.1 -13.8 +4.1 Hardware-total.. ....... . (16) +3.1 -1.5 +4.9 General. ...................... 5 -3.5 -2.7 +5.6 Industrial. .................. 6 +14.9 +2.8 +2.6 Plbg.&htg............... . 5 +8.9 Tobacco & prod............ . 5 -3.8 All other lines .............. . 21 -6.5 -0.8 -11.2 Total. .............................. 117 +o.6 +5.8 -14.0 The foil owing table shows percentage changes in re- Lumber Following substantial improvement in the last half tail sales for the year 1938 as compared with 1937 in cities of the District. These percentage changes are of 1938, retail lumber sales at reporting yards in the based on reports of independent retail stores in ap- District in January were 19 per cent larger than in proximately twenty kinds of business. For the states the same month a year ago. Collections on amounts outstanding averaged 33.5 as a whole, sales in Colorado and Kansas declined 12 per cent in 1938, in Missouri 8, in Nebraska 9, in New per cent in January as compared with 36.9 per cent Mexico 17, in Oklahoma 6, and in Wyoming 14 per cent. in December and 33.0 per cent in January of last year. REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 4 Lumber trade at 151 retail yards in the District: Jan.1939 per cent change from Dec.1938 Jan.1938 Sales of lumber, board feet ........................ . -7.7 +18.7 Sales of all materials, dollars .................... . +1.1 +10.5 Stocks of lumber, board feet ....................... +2.2 -7.2 Outstandings, dollars ................................... -1.9 +13.0 Building In January construction awards in the District were 19 per cent larger than a year ago. A wards for residential building accounted for all of this increase, being more than double what they were last year. Construction figures, F. W. Dodge Corporation: 37 EASTERN STATES TENTH DISTRICT Residential Total Residential Total ( In thousands of dollars) January 1939.............. 3,131 9,114 80,163 251,673 December 1938........... 3,529 21,746 91,539 389,439 January 1938.............. 1,474 7,631 36,207 195,472 The value of building permits issued in reporting District cities in January was 53 per cent larger than in the same month a year ago and was the largest for any January since 1931. January building permits issued in District cities: PERMITS 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 ............... 1939 1938 51 ~ 27 30 366 38 19 24 110 84 154 59 43 13 31 38 262 45 7 17 104 63 170 38 36 11 8 16 23 21 128 168 10 30 68 127 $ Meat Packing Packers' purchases of cattle and calves in January were 16 and 28 per cent, respectively, lower than a year ago, with an unusually large proportion of market receipts continuing to return to the country as stockers and feeders. Hog slaughter was 6 per cent smaller and sheep slaughter 8 per cent larger than a year ago. The slaughter of cattle was 14, calves 23, hogs 35, and sheep 11 per cent under the January ten-year average. January packers' purchases at six District markets: Denver......................... Kansas City................ Oklahoma City........... Omaha......................... St.Joseph.................... Wichita.............. .'......... Cattle 14,610 47,318 16,237 66,142 17,603 12,129 Calves 2,744 10,728 6,190 5,630 2,941 3,718 Hogs 27,627 146,474 23,672 185,675 Q3,003 21,300 Sheep 29,639 100,844 10,311 84,025 81,479 16,369 Jan. 1939.............. ,...... Dec.1938..................... Jan.1938 ..................... 173,939 137,824 208,149 31,951 33,711 44,643 467,751 433,439 495,974 322,667 259,030 298,236 Petroleum Daily average production of crude petroleum in the District declined further in January. Output was 20 per cent smaller than a year ago although only 4 per cent under the January average of the past ten years. ESTIMATED COST 1939 1938 Oil production reported by the American Petroleum 245,000 $ 52,000 Institute and the Bureau of Mines: 33,000 36,000 366,000 32,000 35,000 103,000 180,000 349,000 395,000 112,000 35,000 24,000 4,000 283,000 32,000 324,000 200,000 50,000 41,000 265,000 239,000 7,000 7,000 278,000 43,000 462,000 26,000 25,000 26,000 8,000 6,000 33,000 94,000 155,000 Jan. 1939 Gross D. Av. Colo .............. Kans ........... . N.Mex ......... Okla............ . Wyo ............ . 5 States....... U.S.............. 128 4,573 3,060 13,036 1,522 Dec. 1938 Jan. 1938 Gross D. Av. Gross D. Av. --(-In thousands of barrels) 4.2 110 3.6 114 3.7 147.5 4,826 155.7 5,680 183.3 98.7 3,039 98.0 3,256 105.0 420.5 13,816 445.7 17,409 561.6 49.1 1,561 50.4 1,465 47.3 22,319 720.0 23,352 753.4 27,924 900.9 101,124 3,262.1 102,287 3,299.6 106,007 3,419.6 The steady decline in crude petroleum stocks in the District since last May flattened out in December and stocks the past two months have shown little change. While the statistical position of the petroleum indusJanuary.......................... 1,366 1,114 $2,788,000 $1,817,000 try is much better than a year ago, Mid-continent crude oil prices and prices of refined products are Life Insurance rather weak. Field operations have shown renewed Life insurance· sales in the District in January were activity since the first of the year, particularly in 43 per cent larger than a year ago, with all states par- western Kansas, owing to the fact that many leases ticipating in this increase. will expire in 1939 unless drilled. The Life Insurance Sales Research Bureau report: Change from Jan.1939 Dec.1938 Jan.1938 ( In thousands of dollars) Colorado...................................... 6,139 -1,672 +880 8,336 -3,705 +1,845 ~i:ss:;ri ..................................... . 24,701 -3,937 +8,287 Nebraska................................... 7,994 -1,576 +3,176 New Mexico ................................ 1,359 -497 +535 Oklahoma.................................... 11,828 -1,900 +3,289 Wyoming................................... . 1,146 -328 +472 Flour Milling January production of southwestern flour mills, although slightly under normal for the month, was 5 per cent larger than in the corresponding month a year ago. Operations are holding up well in view of the relative scarcity of new orders and the unusually small volume of unfilled orders on mills' books. Flour sales improved markedly,.in the last week of January but Seven states............................... 61,503 -13,615 +18,484 United States............................. 729,766 -168,120 +235,951 have since declined although inquiries indicate flour FEDERAL RESERVE BANK OF KANSAS CITY stocks of jobbers and bakers are low. Flour prices eased further in January and early February, while prices for by-product millfeeds are higher. Flour output reported by the Northwestern Miller: Jan.1939 Kansas City....................... . Salina.................................. Wichita ............................... . Other cities ......................... 560,000 219,000 165,000 1,024,000 Change from Dec.1938 Jan.1938 ( In barrels) -26,000 -6,000 -16,000 +67,000 -10,000 +3,000 -63,000 +28,000 Southwest........................... 1,968,000 -115,000 +92,000 United States*................... 5,383,000 -96,000 +267,000 *Represents about 60 per cent of total output in United States. Zinc and Lead January shipments of zinc from the Tri-State district were 7 per cent smaller than a year ago but shipments of lead were heavy, being nearly three times what they were a year ago and more than double production for the month. January ore shipments from the Tri-State district: ZINC ORE 5 Crops The moisture situation was materially improved by the rains and snows of January which, in nearly all sections of the District, furnished much needed moisture to the top soil. Precipitation was abnormally heavy in parts of western Nebraska, Kansas, and Oklahoma and in parts of eastern Colorado and New Mexico. For the states as a whole, precipitation in Nebraska was 27 per cent above normal, in Kansas 18, in Oklahoma 90, in New Mexico 136, and in Colorado 55 per cent. The general condition of winter wheat showed some improvement in Nebraska, in eastern Kansas, and in north-central and northwestern Oklahoma, but in many sections the condition is still very poor. February precipitation has been light and additional moisture is needed. Low temperatures and high winds in February have been detrimental to wheat because of its generally weak condition. Grain Marketing LEAD ORE January marketings of wheat were little changed from a year ago and were 17 per cent under the January average of the past ten years. Receipts of corn were considerably less than half as large as in January Jan. 1939........................ 29,983 $ 869,497 10,628 $576,590 of last year and were 54 per cent below average. The Dec. 1938........................ 38,333 1,035,491 5,298 282,030 Jan. 1938........................ 32,120 935,893 3,580 190,286 abnormally small volume of corn marketings reflects Zinc concentrate prices are unchanged but lead the tendency of growers to hold corn for better prices, prices have recently fluctuated somewhat and in the present favorable corn-livestock feeding ratios, and the large amount of corn pledged under Government third week of February declined. loans. Receipts of oats were heavy. January grain receipts at five District markets: Farm Income Kansas .......................... . Missouri ........................ . Oklahoma..................... . Tons Value 12,128 $ 351,712 1,712 49,638 16,143 468,147 Tons Value 2,723 $147,763 347 18,814 7,558 410,013 Wheat Corn Oats The following table gives annual estimates of cash (In bushels) farm income in states of this District for the past Hutchinson.............................. . 957,000 218,000 City.............................. 3,170,000 1,003,000 three years. These estimates include receipts from Kansas Omaha....................................... 944,000 853,000 430,000 sales of 78 crop and 14 livestock and livestock-product St. Joseph................................. 269,000 448,000 660,000 5,000 2,000 items, Government benefit payments, and, for the Wichita.................................... . 1,110,000 years 1937 and 1938, Government loans, minus redemp- Jan. 1939................................... 6,450,000 2,309,000 1,310,000 Dec. 1938................................... 8,933,000 3,678,000 1,342,000 tions, on wheat, corn, and cotton. Farm income in the Jan. 1938................................... 6,479,000 5,246,000 980,000 District in 1938 was 15 per cent lower than in 1937, the The upward trend of cash wheat and corn prices in declines ranging from 5 per cent in Missouri to 23 per November and December leveled off early in January. cent in Kansas and resulting mainly from the drastic Since that time prices have tended to ease slightly. reduction in income from crops. The 1938 income was Favorable moisture was a depressing factor in wheat the lowest since 1934 and but little above the figure for prices and export demand for corn has recently dethat year. clined. At the same time, however, there is little presDepartment of Agriculture income estimates: sure on the market from receipts and a fairly tight 1938 1937 1936 cash situation prevails, particularly for corn. ( In thousands of dollars) 125,003 108,496 Colorado..................................... . 102,321 The lower range of cash prices at Kansas City: Kansas ........................................ . Missouri. .................................... . Nebraska..................................... New Mexico............................... . Oklahoma................................... . Wyoming..................................... 232,732 241,334 192,200 41,219 169,920 38,756 301,740 253,660 234,572 50,867 186,155 46,652 276,860 251,864 273,514 43,317 148,838 42,721 Seven states................................ 1,018,482 United States............................. 7,631,809 1,198,649 8,574,445 1,145,610 7,943,631 Feb. 21 Jan. 31 Dec. 31 Jan.31 1939 1939 1938 1938 No.1 hard, dark wheat,bu .. . $ .69¾ $ .69¾ $ .70¾. $ .99¾. .47 No. 2 mixed corn, bu ............. .47 .55 .48½ .29¾, .29½ .29 No. 2 white oats, bu ............. . .32 No. 2 rye, bu ......................... . .45 .44½ .46½ .70 .40 .41 .40 No. 2 barley, bu..................... .55 .74 No. 2 white kafir, cwt.......... .75 .75 .92 6 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 29, and hogs 26 per cent larger than last year. Midwinter demand for cattle has been unusually good and Marketings of cattle in January were 9 and calves 13 demand is expected to be especially heavy when spring per cent lower than a year ago, while marketings of grass, which last year had recovered markedly from hogs and sheep showed little change from last year. the drought damage of previous years, adds new inReceipts of cattle, hogs, and sheep were very light but centive to country buying. Corn-livestock feeding calf receipts, notwithstanding the decline from a year ratios are exceptionally favorable, there is an abunago, were about normal for the month. dance of rough feeds available, and feeders are recovering the losses which they were experiencing at January livestock receipts at District markets: Sheep this time last year. Hogs Calves Cattle 96,190 37,774 Denver...................... 40,147 13,775 January stocker-feeder shipments: 126,739 19,147 155,076 Kansas City.............. 100,878 Livestock MARKETINGS 29,465 98,934 26,276 29,411 9,827 8,876 3,825 4,019 38,743 210,462 73,135 24,840 14,604 122,190 94,063 16,863 Jan.1939 ................... 325,111 Dec.1938 ................. ~ 276,673 Jan.1938 ................... 356,922 59,469 64,650 68,010 540,030 490,100 556,076 470,649 400,166 470,581 Oklahoma City........ Omaha...................... St. Joseph ................. Wichita ..................... PRICES In January, livestock prices generally advanced. In the first three weeks of February, there was a further increase in hog prices but some weakness in cattle and sheep prices. Prime quality finished steers in January had reached $14 a hundredweight, the highest for any month since October, 1937, and as high as in any January since 1930. This extreme top price, however, was not representative of fat cattle values in general, because the bulk of fed cattle marketings for some time have been short fed animals with a top limit under $12 a hundredweight. The cattle market is exceptionally strong for this time of year, being supported by relatively short supplies of the better grades, a broad demand for stocker and feeder grades, and small receipts due to the holding back of growing and breeding stock in producing areas. Hog prices, while lower than a year ago, are fairly stable. The unfavorable effect of the relatively low price of lard and of potentially increased hog supplies next spring as a result of the upward trend in hog production is about offset for the present by short supplies in late winter. Both sheep and lambs are selling above a year ago, with wool prices giving considerably more support to live values than at this time last year. Top livestock prices at the Kansas City market: Denver............................. . Kansas City..................... . Omaha............................... St. Joseph ........................ . Cattle 11,382 40,291 22,303 5,962 Calves 3,110 6,392 3,246 905 Hogs ~ 2,308 672 1,164 Sheep 24,986 7,582 13,391 9,886 Jan. 1939........................... Dec. 1938........................... Jan. 1938........................... 79,938 88,619 65,565 13,653 21,504 10,620 4,234 4,222 3,364 55,845 61,059 43,141 Reflecting the decrease in lamb feeding operations in Colorado and Nebraska this year, lamb marketings from the northern Colorado, Arkansas Valley, and Scottsbluff feeding areas so far this year have totaled only 1,108 cars as compared with 1,615 cars last year and 1,134 two years ago. Early in February, approximately 1,170,000 lambs were reported left in feed lots in these sections as compared with 1,265,000 a year ago, and 1,110,000 at that time in 1937. Continued mild weather up to early February was unusually favorable for livestock and permitted good use of ranges and pastures except in limited areas where stock water is scarce. Although winter wheat has furnished comparatively little pasturage this winter, old grass is generally plentiful so that supplemental feeding has been light and the large supplies of grain, hay, and other roughages have been conserved. Cattle and sheep have maintained a better than average condition and death losses have been light. Prospects for calf and lamb crops are exceptionally good at this time. LIVESTOCK ON FARMS Reversing the trend of recent years, the number of all cattle and calves on District farms increased about 2 per cent from January 1, 1938, to January 1, 1939, Feb. 22 Jan. Dec. Jan. Jan. Jan. milk cows and heifers 1 per cent, and hogs 22 per cent. 1939 1939 1938 1938 1937 1936 --(In dollars per hundredweight)-- The increase in hog numbers compares with an inBeef steers................. . 12.00 14.00 13.50 10.00 14.00 12.50 crease of only 11 per cent for the whole country and 9.50 8.25 8.35 9.00 Stocker cattle............ . 9.75 9.75 8.75 7.75 9.50 9.00 reflects the extremely low level to which hog numbers Feeder cattle ............... 10.00 10.35 9.50 12.00 11.00 in this District had fallen. The number of sheep and Calves......................... . 11.00 10.50 10.00 Hogs ............................ . 8.15 7.70 7.55 8.85 10.50 10.40 7.70 7.25 9.00 9.25 lambs showed a .further increase of about 3 per cent Sheep (Yearlings) .... . 7.50 8.10 9.15 8.35 10.65 11.00 and the numbers of horses and mules further decreasLambs ......................... . 8.65 9.10 STOCKERS AND FEEDERS es of 5 and 4 per cent, respectively. The value of all Countryward shipments of stocker and feeder live- cattle was up 16, milk cows 13, and hogs 27 per cent, stock in January continued somewhat above a year while the value of sheep was down 1, horses 12, and earlier, with shipments of cattle 22, calves and sheep mules 11 per cent. 7 FEDERAL RESERVE BANK OF KANSAS CITY LIVESTOCK ON FARMS JANUARY 1 Estimated by the United States Department of Agriculture Value, in thousands o J dollars Number, in thousands of head ALL CATTLE AND CALVES 1936 1933 1939 1,510 1,614 50,463 3,149 3,580 101,631 2,658 2,850 95,821 3,491 3,610 112,412 1,039 36,129 1,395 2,422 2,470 65,421 849 956 30,967 1938 46,826 80,988 86,570 90,485 35,731 56,197 26,466 1937 50,579 82,731 74,575 93,788 38,104 48,622 23,423 1936 45,720 94,971 88,032 119,715 29,139 55,514 26,833 1933 25,985 61,576 52,440 67,868 21,065 34,827 19,024 14,300 15,118 16,475 492,844 423,263 66,803 67,929 70,214 2,569,793 2,417,235 MILK Cows AND HEIFERS KEPT FOR MILK 1937 1936 1938 1933 1939 253 248 11,664 11,270 280 805 866 34,425 890 40,196 946 1,017 1,080 44,415 42,020 684 720 30,192 768 36,288 76 76 3,192 2,660 76 728 766 26,381 778 30,240 70 70 3,685 3,400 75 411,822 2,275,182 459,924 2,315,847 282,785 1,386,107 1937 11,638 33,005 35,948 30,780 3,268 21,840 3,220 1936 10,416 36,372 41,697 35,280 3,420 23,746 3,290 1933 7,000 22,250 24,840 20,736 1,900 15,560 2,325 3,445 24,834 3,562 24,993 3,763 25,439 1939 278 1,045 3,120 1,998 85 954 49 1938 253 804 2,622 1,598 80 763 44 1937 298 874 2,622 1,567 72 700 44 1936 259 1,248 2,760 2,238 64 824 42 Seven states..................... 7,529 United States................... 49,011 6,164 44,218 6,177 42,770 7,435 42,837 1939 2,808 686 1,531 840 2,334 351 3,859 1938 2,853 614 1,441 859 2,385 313 3,647 1937 2,767 559 1,373 721 2,477 245 3,592 Seven states..................... 12,409 United States ................... 53,762 12,112 52,682 11,734 52,489 12,223 52,022 Colorado........................... Kansas .............................. M"1ssour1.. ........................... Nebraska.......................... New Mexico ..................... Oklahoma......................... Wyoming.......................... 1939 237 410 524 486 127 372 137 1938 249 450 529 523 130 400 137 1937 259 506 529 569 135 417 136 1936 264 554 519 618 141 426 140 Seven states..................... United States ................... 2,293 10,800 2,418 11,128 2,551 11,445 2,662 11,635 1939 1938 1937 Colorado........................... Kansas .............................. Missouri. ........................... Nebraska .......................... New Mexico ..................... Oklahoma......................... Wyoming.......................... 15 16 17 Seven states..................... United States ................... 559 4,382 Colorado........................... Kansas .............................. Missouri.. .......................... Nebraska .......................... New Mexico ..................... Oklahoma......................... Wyoming.......................... 1939 1,447 2,789 2,547 2,909 1,190 2,182 836 1938 1,492 2,607 2,497 2,824 1,302 2,139 820 Seven states..................... United States ................... 13,900 66,821 13,681 66,083 Colorado........................... Kansas .............................. Missouri. ........................... Nebraska.......................... New Mexico ..................... Oklahoma......................... Wyoming.......................... 1939 243 773 945 648 76 720 67 1938 245 765 955 629 70 713 68 Seven states ..................... 3,472 United States ................... 25,093 Colorado........................... Kansas .............................. Missouri. ........................... Nebraska .......................... New ~exico ...................... Oklahoma......................... Wyoming.......................... Colorado........................... Kansas .............................. Missouri. ........................... Nebraska .......................... New Mexico ..................... Oklahoma......................... Wyoming........................ ~ 1937 1,570 2,834 2,472 3,037 1,354 2,252 781 3,947 169,680 25,936 1,397,280 SWINE, INCLUDING PIGS 1933 1939 536 2,868 3,165 11,371 4,674 32,270 4,534 26,845 78 864 1,506 8,075 98 609 150,348 1,352,014 139,699 1,259,321 154,221 1,253,427 94,611 756,846 1938 2,485 7,861 27,470 19,684 770 6,358 548 1937 3,369 9,615 24,978 21,768 808 5,756 589 1936 3,452 13,862 31,263 32,999 681 9,336 588 1933 1,662 12,027 17,761 19,496 304 4,518 333 14,591 82,902 62,127 547,461 ALL SHEEP AND LAMBS 1936 1933 1939 2,904 3,093 16,760 590 671 3,885 1,386 1,269 9,371 1,068 1,115 5,118 2,450 2,820 11,906 235 188 1,696 3,590 3,893 23,813 65,176 498,070 66,883 508,643 92,181 544,911 56,101 261,730 1938 17,356 3,580 9,782 5,015 12,369 1,780 23,043 1937 17,216 3,254 8,490 4,154 13,224 1,259 20,952 1936 19,821 3,713 9,352 7,511 13,378 1,293 24,328 1933 8,970 1,812 3,426 3,122 6,486 508 12,458 72,925 322,525 68,549 315,780 79,396 331,922 36,782 154,226 1938 16,813 28,225 41,465 35,024 6,669 24,969 8,037 1937 19,623 38,080 44,944 47,335 8,318 29,145 8,982 1936 18,286 42,269 45,483 52,956 7,496 30,175 8,423 1933 9,858 25,748 24,165 31,326 3,625 13,728 4,264 2,889 141,664 161,202 12,291 911,572 1,012,217 MULES AND MULE COLTS 1936 1933 1939 1938 1,365 1,162 17 24 96 6,029 6,681 134 236 21,587 23,993 279 4,702 5,326 70 88 1,130 1,197 17 21 14,321 16,610 235 275 144 200 2 3 196,427 1,135,128 205,088 1,126,457 112,714 665,178 1937 1,625 8,479 25,696 7,050 1,360 19,565 210 1936 1,479 9,326 26,592 7,358 1,448 22,603 198 1933 936 6,968 16,740 4,928 777 12,375 123 63,985 593,526 69,004 563,781 42,847 304,895 13,049 53,075 72,549 309,180 HORSES AND COLTS 75 219 58 15 175 2 79 223 61 15 185 2 581 4,428 85 227 66 16 203 2 616 4,568 673 4,684 1933 318 628 537 681 145 416 164 824 5,046 1939 14,066 24,656 38,264 30,010 6,170 21,417 7,081 49,075 515,869 55,372 543,092 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 8 NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTION PERCENT PERCENT 140 \40 130 130 120 120 110 110 100 100 90 90 80 80 70 70 60 1-.------''----__J.-_ 1934 1935 _ J __ 1936 ~ -~ 60 _ ___.__ _ 1937 1938 1939 Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average =100. By months, January, 1934, through January, 1939. FACTORY EMPLOYMENT PERCENT : : : - - ~ - ------.-------.--- - . -- -r-- --, 120 PEftCOIT 120 110 IOO 90 Industrial production increased less than seasonally in January and the first three weeks of February, following a rapid advance in the latter half of 1938. Wholesale commodity prices continued to show little change. PRODUCTION In January volume of industrial production, as measured by the Board's seasonally adjusted index, was at 101 per cent of the 1923-1925 average as compared with 104 in December. At steel mills, where activity usually increases considerably at this season, output in January and the first three weeks of February was at about the same rate as in December. Automobile production declined seasonally in the first two months of the year as retail sales showed about the usual decrease and dealers' stocks reached adequate levels. Output of cement declined in January, and there was also some reduction in output of lumber and plate glass. In the nondurable goods industries, where production had been at a high level in December, activity increased less than seasonally. Increases at cotton, silk, and tobacco factories were smaller than usual and at woolen mills there was a decline. Shoe production and sugar refining continued in substantial volume, and activity at meat-packing establishments showed little change, following a decline in December. Mineral production increased somewhat in January, reflecting an increase in output of crude petroleum. Value of construction contracts awarded declined in January, according to F. W. Dodge Corporation figures, owing principally to a reduction in awards for publicly-financed projects, which had been in large volume in December. Contracts for privately-financed residential building continued at the recent advanced level, while awards for private nonresidential building remained in small volume. 80 EMPLOYMENT - , 70 70 1 - - -- - + - -- - + - - - - + - - - - + - - - t - -60 1934 1935 1936 1937 1938 1939 Index of number employed, adjusted for seasonal variation, 1923-1925 average=l00. By months, January, 1934, thr ough January, 1939. DISTRIBUTION MEMBER BANK RESERVES AND RELATED ITEMS BILLIONS OF llOLLARS Factory employment and pay rolls showed the usual decline between the middle of December and the middle of January. In most individual industries, as well as in the total, changes in the number of employees were of approximately seasonal proportions. In trade, employment declined somewhat more than is usual after Christmas. BILLIONS Of OOLUR9 16 16 Sales at department and variety stores and by mail-order houses showed the usual sharp seasonal decline from December to January. In the first two weeks of February department store sales continued at the January level. Volume of freight carloadings in January and the first half of February was at about the same r ate a s in December. COMMODITY PRICES - - -+-----1 4 l'.I:=:==iiEtRVt"~t::'.'.::~:'.::::==::::::t:::t::~j:__ _j 2 o.,_.......,._,,,~""""--'L-'------""__,~ ~ -C'_-'-----__J_-_J o 1934 1935 1936 1937 1938 Wholesale commodity prices generally continued to show little change in January and the first three weeks of February. Grain prices declined somewhat, following a rise in December, while prices of hogs increased seasonally. Changes in prices of industrial materials were small. 1939 For weeks ending January 6, 1934, through F ebruary 18, 1939. BANK CREDIT MONEY RATES IN NEW YORK CITY 3 3 Excess reserves of member banks, which reached a record high level. of $3,600,000,000 on January 25, declined somewhat in February. This decline resulted chiefly from a temporary increase in Treasury balances with the Reserve banks representing cash receipts from the sale of the new United States Housing Authority and Reconstruction Finance Corporation notes. Purchases of these notes were also responsible for an increase in total loans and investments of reporting member banks in 101 leading cities, following a decline during January. 2 MONEY RATES 0L..--=-__J.-_.::___.i.:..:._.:.___:_i..__ _ 1934 1935 1936 1937 _,1===,,..__ 1938 _JQ 1939 Wednesday figures, January 3, 1934, through F ebruary 21, 1939. Average yields on United States Government securities declined further during the first three weeks of February to about the lowest levels ever reached. New issues of 91-day Treasury bills, after selling at par or at a slight premium in late December and early January, were again on a slight discount basis during February. Other open-market rates continued unchanged.
@FedFRASER