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MONTHLY REVIEW Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT VoL. 29, No. 2 FEDERAL RESERVE BANK OF KANSAS CITY ·THE CATTLE SITUATION The Department of Agriculture estimates that on January 1, 1944, there were 82,192,000 head of cattle on American farms. The detailed figures will be found on page 7. This record-breaking number ·was more than 3 million larger than a year earlier and over 7¾ million more than at the top of the last cattle cycle in 1934. In the last three years cattle numbers have increased nearly 103/4 million head. The foregoing facts help to explain why many people who lived through the cattle debacle following the last war are again growing uneasy. The chart below shows what happened during and immediately following the first World War and the current situation. The prices shown are the top prices of beef steers FEBRUARY 29, 1944 at Kansas City. The chart deserves the closest study. Between 1913 and 1918 there was an increase of 16½ million head of cattle in this country, or 29 per cent. While· this was going on, prices were rising rapidly-beef steers advancing from 10 to 20 cents a pound. For a short time just after the Armistice in 1918 beef steers reached 25 cents at Kansas City. The combination of rapidly increasing numbers and sharply rising prices is not only exceedingly profitable but also very unusual as normally numbers and prices tend to move in opposite directions. Greatly enlarged domestic consumer demand for meat growing out of the war boom and the concentration of the very large European war demand in this market due to a shortage of shipping facilities account for the long rise in cattle prices and numbers preceding the Armistice. CATrIE NUMEERS AND PRICES - UNITED STATES Number in millions Price in~ per lb. 25 80 74 20 CATTLE~ NUMBERS 68 ' 15 62 10 56 .._,_...__-'--...L-.....L...--1..__.___.___.__..L..-_ _ ___.___.____.,_.__..L..-_.__...-.__.___.____.,_..,..__.__...______._____.__..._____~ - - - 1912 15 20 25 30 35 40 44 5 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 2 The two years following the Armistice were among to operating on borrowed money. In the last war cattlethe most tragic in the history of the cattle industry men were borrowing heavily and banks became deeply from the standpoint both of cattlemen and banks with involved. When prices began to weaken, liquidation large cattle loans. The following quotation from became necessary and this liquidation, in turn, forced Commerce Monthly, published at one time by the old prices still lower. There can be little doubt that disNational Bank of Commerce in New York, explains tress cattle forced onto the market contributed very what happened. greatly to the collapse of cattle prices in 1919 and 1920. In response to the stimulus of abnormal European Today the situation is very different-cattle loans are demand for beef created by the war, coupled with diffimoderate and banks are well provided with short-term culties of transporting sufficient quantities of beef from Southern Hemisphere producers under the war-time Government securjties that will supply funds for any conditions, the beef herds of the United States were calls that may be made on them. . Forced liquidation again built up, increasing by a third in five years. The export market was lost almost immediately after the on the scale that took place twenty-five years ago close of the war. Producers were faced with the necesseems impossible. sity of getting rid of this increment of beef cattle, produced under high-cost conditions, in a domestic market And there is another thing that must not be forgotwhich had undergone only normal growth and which during part of the time was flooded with cheap pork. ten. The domestic market is much larger than it was A glance at the chart on the first page shows how twenty-five years ago.- It is true that there are now strikingly similar the current situation is to that of nine million more cattle in this country than there the last war. For eight years cattle prices, while not were in 1918 but there are also thirty-two million extremely high, have been very profitable and conse- more.mouths to feed. On the basis of population alone, quently stimulating numbers. The formation of the the home market is nearly a third larger than in 1918. curves on the chart in the last five years is very simi- This is a rapidly growing country and it is misleading lar to that between 1913 and 1918. But a number of to compare the absolute number of cattle over long things must be taken into consideration before one periods of time. A more trustworthy picture will be jumps too hastily to the conclusion that another secured by expressing cattle numbers on a per capita debacle in the cattle industry, similar to that of 1919 basis. In the following chart both cattle and hog numbers are shown on a per ·capita basis. Hogs, of and 1920, is in the making. The first thing that must be remembered is that so course, cannot be left out of the picture, for they also far cattlemen have been more conservative in regard compete for the domestic meat market. CATTLE AND HOG NOMIERS ON A FER CAPITA BASIS - UNITED STATES Number Per Capita .60 /"-' / " I r"'"" Nun1ber Per Caui ta \ I ' ' --'I "' ' .60 ·/ .50 ' ,,. ""' / '-.../ .40 I .50 I " I A \ \ I \ I I V .40 I \ HOGS➔\ ,..... \,/ I ...., ,/ .30 .30 1912 15 20 2.5 30 35 40 44 FEDERAL RESERVE BANK OF KANSAS CITY The chart shows that on a per capita basis present cattle numbers are only slightly higher than at the top of the cattle cycle in 1934 and they are much below 1918. In 1918 there was seven-tenths of an animal for each person in the United States while at present there is only six-tenths. Special attention is ·called to the great per capita increase in the number of hogs. The increase in hog numbers has been little short of sensational. The Department of Agriculture estimates that on January 1, 1944, there were 83,756,000 hogs on American farms while at the low point in 1935 there were only 39,066,000. There are 29½ million more hogs than three years ago ; 23 million more than two years ago; and 10 million more than a year ago. On a per capita basis hog numbers are as high as they were in the last war. In considering the cattle situation, this great increase in hog numbers cannot be ignored for it will be remembered that one thing that bedeviled the cattle situation in 1919 and 1920 was the fact that for a time the domestic market was flooded with cheap pork. Poultry also should be brought into the picture. On January 1, there were 572,460,000 chickens on American farms-an increase of nearly 150,000,000 in three years. The number of turkeys has also increased in recent years, the increase being more than a million head in the last ten years. On the other hand, sheep numbers have declined. A year ago there were 55,775,000 sheep but the number now is estimated to be only 51,718,000. The cattle situation in the postwar period will be governed by conditions in both the domestic and the foreign market. The two factors supporting present prices-very large domestic demand for meat resulting from greatly swollen industrial pay rolls and record Government purchases of meat for our military organizations and for export under lend-lease arrangements-are bo_th of a highly temporary nature. The domestic demand for meat after the war will be greatly affected by the volume of employment and income. At the close of the last war there was great optimism among American cattlemen over the outlook in the foreign market, for the livestock population of Europe had been greatly diminished and it was believed this insured a large export market for our surplus meat. But it did not turn out that way for the export market was lost almost immediately. · When the war is over, a vast amount of reconstruction in Europe will be in order, and the rebuilding of the cattle herds will be a part of it. Much will depend on credits that are made ayailable. At the outbreak of war in 1939, Brazil had about 42 million cattle; Argentina, 34.million.; Mexico, 18 million; Canada, 9 million ·; and Australia, 13 ·million. It is not ·k nown how ·the war has affected cattle numbers in some ofthe·se coun- 8 tries but competition for the foreign market may be expected to be keen. It is sometimes said that the in~rease in cattle numbers in this country is not as serious as some people contend because, it is maintained, the increase has been quite largely in dairy cattle. The facts hardly bear out this statement. If we subtract the number of "milk cows and heifers" from "all cattle and calves" and call the remainder "beef cattle," the following table shows the percentage changes since 1938. The year 1938 represents the recent low point in cattle numbers and the figures for the last three years are percentages showing the relative changes since 1938. ·cHANGES IN THE NUMBER OF BEEF AND . DAIRY CATTLE SINCE 1938 State Colorado.......... Kansas............ Missouri......... Nebraska........ New Mexico.... Oklahoma....... Wyoming........ 7 States........... United States. 1942 1943 1944 Beef Dairy· Beef Dairy Beef Dairy (Percentage of number in 1938) 112 104 125 106 140 107 155 111 174 117 178 119 141 109 155 114 167 119 122 107 137 112 148 114 105 112 110 112 99 111 134 119 153 127 155 128 109 101 119 104 131 103 128 120 142 128 111 108 116 111 150 134 119 113 The matters so far discussed are of special interest to this area for the Tenth District is a livestock country. In this District cash farm income at the present time from livestock and its products is nearly three times that from crops. Excluding Government payments, the table below gives the percentage that income from crops and from livestock was of the total 1 in 1943. DISTRIBUTION OF INCOME FROM CROPS AND LIVESTOCK, 1943 CROPS LIVESTOCK State Colorado ........ . Kansas .......... . Missouri ........: Nebraska ...... . New Mexico ... Oklahoma.:... . . Wyoming...... . % of Total % of Total 59 7 States ......... . United States· 28 41 41 32 17 25 35 32 19 68 83 . 75 65 68 81 72 59 The table shows that livestock in this area is relatively much more important than for the country as a whole. There is also considerable variation among the different states as income from crops rriakes the best showing ·in Colorad-0; New Mexico, . Oklahoma, and Kansas -whiUdncome from .livestock and its products is especially° Important' in Missouri, ·Nebraska, and Wyoming. REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Probably few people realize what a large part cattle represent in the total value of livestock. The table below is based upon the value of livestock on farms January 1, 1944, as estimated by the United States Department (?f Agriculture. DISTRIBUTION OF THE TOTAL VALUE OF CATTLE, HOGS, AND SHEEP CATTLE HOGS SHEEP State Colorado........... Kansas .............. Missouri .......... . Nebraska.......... New Mexico ..... Oklahoma......... Wyoming......... . % of Total 77 84 % of Total % of Total 16 7 States............. United States.. 7 13 3 5 71 25 26 66 2 8 2 3 18 2 32 76 75 16 19 8 6 70 80 90 It is probably safe to say that for the Tenth District, cattle at the present time represent about threefourths of the value of all livestock-cattle, hogs, and sheep-hogs about a sixth and sheep about a twelfth. But there is great variation among the several states. Hogs are important in Missouri and Nebraska; sheep are a large part of the total in Wyoming, New Mexico, · and Colorado; while cattle in Oklahoma and Kansas represent the overwhelming proportion of livestock values. It is appropriate to pause here and point out the bearing of all this on certain significant phases of financing the cattle industry. It must be clear that, from the standpoint of invested capital, the cattle industry is.a towering giant compared with other livestock. The cattle cycle is also a very long one-it takes time to reproduce cattle, and periods of expansion and contraction are relatively long. In periods of expansion, consequently, when borrowed capital is being increasingly employed, the turnover of capital is slow as time must elapse for a program to produce anticipated results. This is in marked contrast to hogs where the smaller outlay of capital and the rapidity of reproduction enable the producer to adjust his position quickly to unforeseen developments. The cattle industry has its own speculative aspects and cattle loans their own peculiar hazards. To those interested in the cattle industry recent regional changes in cattle numbers are highly illuminating. If we eliminate Missouri, cattle numbers in the other six states of this District-Kansas, Nebraska, Wyoming, Colorado, New Mexico, and Oklahoma-are only 502,000 more than they were in 1934, the previous peak of cattle numbers. The cattle population of Texas is still about three-quarters of a million less than in 1934 and the Dakotas have gained only 140,000. On the other hand, the total number in the seven states-Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, and Iowa-is 3,657,000 larger than ten years ago. In California, Oregon, and Washington there are 1,103,000 more cattle than in 1934 and the Old South has 1,306,000 more. While some sections are getting full of cattle and there is a good deal of pressure from various sources to increase marketings, it is clear that the central part of the country is not yet seriously overstocked. The geographical changes in the cattle industry shown in the preceding paragraph are highly significant to this area. The Tenth District is a cattle country, for the seven states still have 23 per cent of all the cattle in the United States. The protracted drought of the middle Thirties in the central region of this country from Canada to the Gulf greatly reduced cattle numbers in that area and only in recent years are they getting back to nor~al. While the drought was denuding this area of its cattle, other and more fortunate sections of the country filled the gap. When the war demand for beef has passed, it is not yet clear what numbers domestic demand alone can support at prices that will make cattle raising profitable. Under such changed conditions, it remains to be seen which sections of the country will supply the cattle. WINTER WHEAT Outstanding improvement in the moisture situation in recent months has materially changed the outlook for winter wheat. Rainfall in most sections of the District last year had been far below normal from July through November and the condition of winter wheat at the first of December had generally been quite poor. In December, Oklahoma and New Mexico received twice the normal amount of precipitation, while in Kansas and Missouri it was one of the wettest Decembers on record. In January, large areas of Nebraska and western Kansas that had been critically dry received a record-breaking fall of moisture for t.he winter season in the form of snow and rain, which was of especial benefit because the ground was not frozen and the moisture could penetrate into the subsoil. January precipitation in Colorado, New Mexico, and Oklahoma also was appreciably above normal and many sections of the District have received additional generous moisture in February. In Oklahoma, wheat had previously made little growth but is now beginning to provide some pasturage in all parts of the state, relieving the extremely tight feed situation, while in western Kansas and in Nebraska, wheat that had not germinated is sprouting as a result not only of the recent moisture but also of unusually mild temperatures. The fall drought in Wyoming has not yet been broken. The prospective supply of water for irrigation now in snow pack and reservoirs in Wyoming is only about half as much as FEDERAL RESERVE BANK OF KAN:SAS CITY was in sight at this time last year, and a similar situation prevails in northern Colorado. Late snows and spring rains could still restore normal prospects butJ unless conditions change materially, shortages of water seem likely to develop in many irrigated areas. As a result of the recent rains and snows, there is generally sufficient moisture to carry the wheat crop well into the spring growing season, and conditions are now favorable for seeding spring crops and for starting early grass. There are scattered reports of some further seedings of wheat but, for the most part, farmers are planning an early start on the planting of feed grains to enable these crops to mature before hot weather. From the standpoint of winter wheat, however, it should be pointed out that winter precipitation in this District usually amounts to only about 14 per cent of the annual total as compared with about 22 per cent for autumn rainfall and 35 per cent for the summer, that germination of wheat as late as January and February is usually associated with low yields and heavy abandonment, that subsoil moisture reserves are still deficient, and that the recent moisture does not entirely offset the lack of rain last summer and fall. In the western part of the winter wheat belt-the so-called hard wheat states centering in Kansas-late summer and fall precipitation is especially important in enabling farmers to prepare good seed beds and in insuring germination of wheat and the development of a good root system before the winter period of . dormancy sets in. In this area, the December 1 condition of wheat, which in 1943 was quite poor, usually has a significant relationship to the yield the following year. A normal rainfall during the crop growing season is not sufficient to insure good yields because subsoil moisture reserves also must be drawn upon, and with less than normal rainfall during 1943 there is no large reserve of subsoil moisture for 1944. Winter wheat, accordingly, will need at least normal or better rainfall this spring to assure even a fair crop. While recent rains and snows have unquestionably been helpful, particularly in Oklahoma and Kansas, considerable losses of seeded acreage are now very definitely certain in parts of the Great Plains, especially in Nebraska where the drought had been most severe and where summer crops will be far behind schedule unless the moisture deficiency is made up before July. Trade estimates indicate that production is highly uncertain from more than half of the 3¾ million acres seeded to winter wheat in Nebraska. The size of this year's crop is of particular importance in view of the record wartime rate at which wheat is being used and the rapid dis-appearance of once burdensome surpluses of wheat in this country. 6 Largely because of sharply expanded use of wheat for livestock feeding and in the production of industrial alcohol, total domestic wheat supplies declined from their record ~evel of 1,613 million bushels in the 1942-43 crop year (July 1, 1942, carry-over plus 1942 crop) to 1,453 million bushels for the 1943-44 crop year and may drop to about 1,000 million bushels for 1944-45, depending, of course, upon the final outcome of the 1944 crop and present efforts to curtail the extraordinary use of wheat for alcohol and livestock feed. On the supply side, a marked increase in winter wheat acreage for the 1944 crop to meet the heavy demand for wheat so far has largely been offset by lower prospective yields per acre, while on the consumption side efforts are being made to import molasses from Cuba for manufacture into alcohol in place of wheat and to import wheat from Canada and Argentina, where large surpluses exist, to be substituted as much as possible in place of domestic grain in livestock feeding and thus assure ample supplies of wheat for food uses. Estimates of consumption of domestic wheat for the 1943-44 crop year range from 1,155 to 1,280 million bushels, distributed as follows: food, 535 to 540 million bushels; livestock feed, 380 to 500; seed, 80; industrial alcohol, 110; and exports, 50 million bushels. This rate of consumption would reduce the carryover next July 1 to only 175 to 300 million bushels as compared with 618 million a year earlier and 632 million two years earlier. A carry-over of this size would mean that this country will not have any appreciable excess of .wheat beyond lend-lease requirements, regular exports, and storage commitments under the International Wheat Agreement and, together with t_he likelihood of continued hig consumption and possibly of lower production in 1944, explains the growing concern over the adequacy of domestic wheat supplies. Thus far, however, the abundance of wheat in this war has contrasted sharply with the scarcity experienced in the last war. Aside from the adequacy of available domestic wheat supplies, it is becoming apparent that the milling industry under wartime conditions will have great difficulty in grinding the huge quantity of wheat necessary to meet the combined requirements of the · armed forces, lend-lease, foreign relief, and the civilian population. During 1943, flour production for the country as a whole totaled about 23 billion pounds, and official consumption estimates for 1944 call for a minimum of 28½ billion pounds. At the same time, mills are faced with an increasingly serious shortage of labor, a shortage of bags, the need for replacement parts for machinery strained by extension of the work week from 6 to 7 days, and transportation problems 6 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS complicated by the fact that flour must move promptly. Southwestern flour(milling operations in January averaged 99 per cent of full-time capacity based upon a 6-day work week, with many mills operating 7 days to meet the unprecedented demand for flour. Flour production in the southwest is the highest on record for this time of year and is more than one-third larger than the average of the last ten years. Increasing war requirements for flour have raised the question of possible priorities on Government orders to assure prompt delivery and of allocation of remaining supplies between bakers and distributors. DEPARTMENT STORE SALES Dollar volume of sales at reporting department stores in this District in January was only 6 per cent above a year ago, and in the first three weeks of February sales were 6 per cent under the abnormally high level of a year earlier, when the extension of rationing to shoes had touched off a heavy buying movement centering on women's and children's apparel and including many other items of clothing in addition to shoes. Changes in department store sales, however, show considerable variation among the leading cities of the District, reflecting in large part much stronger stimulation from the war effort at the present time in some areas than in others. In January, gains over the preceding year ranged up to 14 per cent at St. Joseph, 15 per cent at Oklahoma City, and 17 per cent at Wichita, and these same centers for the first three weeks of February reported little or no decrease in sales from last year. DEPARTMENT STORE SALES AND STOCKS SALES Denver................. Hutchinson......... Topeka................ Wichita............... ·Joplin......-............. Kansas City........ St. Joseph........... Omaha................. Oklahoma City... Tulsa................... Other cities......... STOCKS Jan. '44 Jan. 31, '44 No. of comp.to comp. to Stores Jan. '43 Jan. 31, '43 ( Per cent increase or decrease) 7 +6 +15 3 +10 * 3 +10 * 4 +17 * 3 +4 * 8 +2 +4 3 +14 4 * +6 6 +15 +15 5 -3 +12 30 -1 +3 District................ 76 +6 +9 *Not shown separately but included in District total. During 1943, gains in department store sales had been especially marked in the Dallas, Atlanta, and Kansas City Federal Reserve Districts, where the combination of rapidly rising employment and pay rolls and sharply expanding farm income. had generated a huge amount of consumer buying power. Sales in this District are still relatively higher than in the country as a whole and are still very large, but in recent months there has been a rather pronounced leveling off. A flattening out in the rising trend of employment and pay rolls and farm income helps to explain the reduced rate of increase 9f consumer purchases at department stores. Since September, 1943, total nonagricul~ural employment in this District has been little changed from a year earlier, or slightly smaller, reflecting a decrease in all states except Oklahoma and Missouri. In the last four months of 1943, cash farm income in this District was only 8 per cent above the preceding year as compared with an increase of 35 per cent for the first eight months, and farm income in Oklahoma and Wyoming for the entire year 1943 was very little larger than that in 1942. Another factor tending to limit sales is a shortage of many types of merchandise, although total inventories at department stores increased contraseasonally during January and are as large in relation to the current level of sales as they were a year ago. Increased purchases of war bonds and provision for the payment of higher income taxes also have been suggested as restrictive influences on sales. The fact that the February comparison of sales is with an abnormally high figure last year, of course, accounts in large part for the difference in the level of sales. The tremendous wartime expansion in the dollar value of department store sales, measuring about 66 per cent in this District since 1940, has been due not only to an increase in the physical volume of merchandise sold but also to a general price rise prior to the establishment of OP A c_eiling regulations in 1942 and, to some extent, to selective increases in ceiling prices allowed since that time. More recently, there has l;>een some increase in prices to the consumer by virtue of deterioration in quality and, in addition, many consumers have shifted to higher priced merchandise. As a result of the greatly enlarged amount of purchasing power in the hands of the public, together with certain restrictions on the use of credit and the absence for the duration of many commodities ordinarily bought on the instalment plan, marked changes have occurred in both the method and promptness of payment for merchandise purchase~ at department stores. In September, 1941, cash sales represented 42 per cent of total sales, but by January, 1944, the proportion of cash sales to the total ·had risen to 66 per cent. In the same time, the proportion of charge sales declined from 49 to 30 per cent and instalment sales from 9.to 4 per cent. Collections on open charge accounts in September, 1941, had averaged 47 -p er cent of receivables, but by January of this ye~r the collection ratio on open charge accounts-had risen to 71 per cent, while the collection ratio on instalment accounts had increased from 18 to 36 per cent. 7 FEDERAL RESERVE BANK OF KANSAS CITY LIVESTOCK ON FARMS JANUARY 1 Estimated by he United States Department of Agriculture Value, in thousands of dollars Number, in thousands of head 1942 85,622 180,054 157,935 177,943 64,050 117,346 49,890 1938 44,873 77,830 81,475 89,071 35,343 56,743 26,470 1934 25,709 58,672 44,275 69,650 22,152 30,525 16,800 1,139,403 1,174,574 13,333 17,848 5,647,875 5,502,802 65,249 74,369 MILK Cows AND HEIFERS KEPT FOR MILK 1944 1943 1938 1934 23,845 25,647 235 300 78,213 79,135 709 967 94,775 90,270 934 1,097 69,452 73,008 629 820 6,723 6,889 74 81 56,181 66,576 718 838 7,029 7,000 68 78 832,840 4,140,256 411,805 2,386,808 267,783 1,322,281 1942 17,568 57,378 65,344 50,400 5,166 47,712 5,382 1938 10,810 31,905 41,096 30,192 2,812 26,566 3,400 1934 6,600 21,274 20,843 21,320 2,025 13,408 2,106 348,554 2,697,652 248,950 2,056,148 146,781 1,333,886 87,576 727,137 1943 13,979 49,741 101,576 97,073 2,627 22,996 2,715 1942 6,257 24,884 56,660 45,745 1,614 12,068 1,328 1938 2,485 7,861 27,470 18,566 770 6,081 747 1934 1,496 8,384 14,190 21,543 241 3,245 300 290,707 13,327 239,810 1,471,753 1,661 ,215 58,621 ALL SHEEP AND LAMBS 1944 1943 1934 25,712 29,455 3,028 8,403 16,409 689 17,856 15,807 1,310 12,730 11,381 1,055 16,758 20,955 2,757 3,576 2,448 183 33,799 37,873 3,873 148,556 942,931 63,980 501,352 49,399 239,760 1942 27,535 10,496 15,641 10,774 18,092 3,179 37,991 1938 17,356 3,580 9,782 5,015 11,262 2,134 22,392 *1934 12,818 2,687 4,978 4,395 8,822 586 15,879 138,854 539,650 123,708 488,468 71 ,521 312,893 50,165 202,241 1943 13,477 26,759 36,318 29,126 5,860 21,139 6,113 1942 10,093 20,073 27,641 22,024 4,928 14,822 4,571 1938 16,137 28,225 41,855 35,024 6,926 24,969 7,802 1934 12,177 32,012 31,329 38,628 5,720 22,313 5,688 138,792 773,609 104,152 641,520 160,938 999,336 147,867 806,038 1943 990 4,552 18,543 3,337 875 10,289 140 1942 798 3,936 14,131 2,944 638 8,600 126 1938 1,109 5,920 23,024 4,802 798 14,814 1,500 1934 1,188 8,400 20,328 6,142 1,045 18,318 180 38,726 472,481 31,173 409,929 51,967 524,408 55,601 407,567 1943 1,745 3,960 3,258 3,642 1,352 3,123 965 1942 1,586 3,568 3,017 3,306 1,288 2,788 885 Seven states.................... 18,961 United States .................. 82 ,192 18,045 79,114 16,438 75,162 1944 Colorado ........................... 251 Kansas .............................. 841 M.1ssour1. ........................... 1,115 Nebraska ......................... 716 New Mexico ..................... 83 Oklahoma .................. ....... 921 Wyoming .......................... 70 1943 249 833 1,062 702 83 912 71 1942 244 786 1,021 672 82 852 69 Seven states .................... 3,997 United States .................. 27,607 3,912 27,106 3,726 26,398 3,367 24,466 1944 774 2,601 5,405 4,294 146 1,465 164 1943 . 656 2,408 4,914 3,491 143 1,495 130 1942 400 1,672 3,931 2,375 110 1,099 84 1938 253 804 2,622 1,507 80 730 60 Seven states .................... 14,849 United States .................. 83,756 13,237 73,736 9,671 60,377 6,056 44,525 1944 2,602 974 1,673 1,248 2,108 330 3,521 1943 2,711 1,658 1,780 1,285 2,228 424 3,744 1942 3,004 1,327 1,770 1,208 2,248 438 3,934 1938 2,853 614 1,441 859 2,170 375 3,543 Seven states.................... 12,456 United States .................. 51,718 13,830 55,775 13,929 56,735 11,855 51,210 1944 205 375 519 449 113 351 123 1943 211 375 519 458 115 351 128 1942 213 371 519 458 120 344 125 1938 239 450 534 523 135 400 133 Seven states .................... 2,135 United States .................. 9,330 2,157 9,675 2,150 9,907 2,414 10,995 Colorado.......................... Kansas ............................. M"1ssour1. . .......................... Nebraska ......................... NewMexice ..................... Oklahoma......................... Wyoming......................... Colorado ........................... Kansas ............................. M.1ssour1. ........................... Nebraska ....................•-··· New Mexico ..................... Oklahoma ........................ Wyoming ......................... Colorado........................... Kansas ............................. Missouri.. ......................... Nebraska ......................... New Mexico ..................... Oklahoma ........................ Wyoming ......................... Colorado....... ................... Kansas ............................. Missouri ........................... Nebraska ......................... New Mexico ........ :............ Oklahoma ......................... Wyoming......................... 1944 Colorado ........................... ~ Kansas ............................. 48 Missouri ........................... 172 Nebraska ......................... 36 New Mexico ..................... 10 Oklahoma......................... , 117 Wyoming......... ................. 2 1943 1942 11 12 54 192 41 11 130 2 60 194 47 11 138 2 Seven states .................... 395 441 United States .................. 3,559 3,704 *State figures computed by this bank. 464 3,813 ALL CATTLE AND CALVES 1944 1934 12'1,798 1,773 246,086 3,860 229,176 2,875 254,417 3,980 74,297 1,560 142,936 2,750 70,693 1,050 1943 124,407 259,349 219,044 256,139 80,602 169,043 65,990 1944 i,920 4,039 3,486 3,890 1,420 3,154 1,052 1938 1,430 2,505 2,350 2,780 1,288 2,160 820 336,189 4,181 26,931 2,816,357 HOGS, INCLUDING PIGS 1944 1934 10,187 440 37,360 2,430 4,113 80,394 94,034 5,010 1,888 67 1,18'.) 13,428 2,519 87 12,895 114,308 451,267 53,503 HORSES AND COLTS 1944 1934 11,967 297 25,015 604 36,904 531 26,415 666 5,669 143 421 16,15~ 5,040 158 127,162 2,820 12,052 733,911 MULES AND MULE COLTS 1944 1938 1934 814 22 4,128 70 120 18,138 214 264 2,919 55 83 743 10 19 8,065 165 258 • 150 15 3 ---rs 542 4,250 769 4,945 34,957 510,122 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 8 NATIONAL SUMMARY OF BUSINESS CONDITIONS INDUSTRIAL PRODUCTION ,UCUT 260 - ;... r 240 220 200 / 180 r 160 ~ 140 ;... 120 100 80 ,,. ~ 'l: / 1937 IV ) / I / ,r. 260 240 220 I 200 1939 1940 180 INDUSTRIAL PRODUCTION 160 140 i 120 - 1941 1942 1943 Federal R ~erve in dex. Monthly latest shown is for January, 1944. 1944 figu res, WHOLESALE PR!CES fl - - - - , - - - - - tHC • IOO------,-------,----.:..::; 140 ,___ 120 _ ._ _ __J__ t--r_>a_ M-PRo-+ ou-cr-s,-, -+---~ 140 ~ ---'--- _ / /,~ . . . . . 4 120 1 A.J.COJ,1\IOCITIES l'OO 100 l I 80 - - + - - - - - + - - - + - - - - 1 80 .",-r-,.J1,,.. • .,/,J 60 L,y~J v~ 60 1939 1940 1941 Industrial activity was maintained in January following a decline from November to December. Commodity prices were steady and retail sales continued in large volume in January and the first three weeks of February. - 80 1938 By the Board of Governon of the Federal Reserve System l'-'42 1943 1944 Bureau of Labor Statistics' indexes. Weekly figures, latest shown are for week ending February 19, 1944. In January the Board's seasonally adjusted index of industrial production stood at 242 per cent of the 1935-39 average as compared with the peak level of 247 in October and November, 1943. Steel production increased 4 per cent in January and continued to rise in the first three weeks of February, reflecting large military requirements for landing craft and other invasion equipment as well as increasing use of steel for farm machinery and railroad equipment. Aluminum production was curtailed in January from the peak rate in the last quarter of 1943. Activity in the transportation equipment group was 5 per cent lower in January than at the peak in November. The largest decline occurred ·in commercial shipyards, many of which were changing from the production of Liberty ships to Victory and other types of ships. In the automobile industry production of 3,000 trucks was reported during the month under the greatly enlarged civilian truck program for 1944 which calls for the product ion of 92,000 mediumweight and 31,500 heavy trucks during the year. Output of textiles, shoes, and manufactured foods rose slightly in January, following small declines in December. Chemicals production continued to decline, reflecting a fur ther curtailment of small arms ammunition output. Output of petroleum and r ubber products showed little change. Production of coal increased and crude petroleum output continued at a high level in January and the early part of February. Sunday work was instituted in anthracite mines during February as a measure to increase production, and output for the week ending February 12 was 13 per cent higher than the preceding week. The value of construction contracts awarded in January, according to reports of the F. W. Dodge Corporation, declined to the lowest level for the month since 1935. DISTRIBUTION MEMBER BANK RESERVES Value of department store sales in January and the first three weeks of February was maintained at a high level for this season of the year. Sales in January exceeded the large volume of a year ago by about 6 per cent but in February sales wer e somewhat smaller than last year when a buying wave developed following the announcement of shoe rationing. Freight carloadings declined less than usual in January and the first half of February, owing chiefly to the heavy volume of coal shipments. Movement of grain continued at the high level of last fall and livestock and lumber shipments were in large volume. COMMODITY PRICES l939 1940 1941 1942 l943 Wholesale prices of most commodities continued to show little change in January and the early part of F ebruary. Maximum prices for coke, wood pulp, furniture, and certain other products were increased moderately. The cost of living index of t he Bureau of Labor Statistics declined from 124.4 per cent of the 1935-39 average in December to 124.1 in January. 1944 Breakdown between requir ed a nd excess reserves partly estimated. W ednesday figu r es, latest shown are for February 16, 1944. BANK CREDIT MEMBER BANKS IN LEAD ING CITIES 1:LLIOHSOf'OOllAltS 50 • 1LL10Ptlor 0OL1 • .1."5 50 Purchases of securities in the Fourth War Loan. Drive by corporations and individuals resulted in a release of required reserves of member banks because funds were drawn from private deposit accounts, which require reserves, to the Government war loan accounts, which are exempt from r eserve requirements. As a consequence, member banks repurchased bills from the Reserve Banks, and the latter's holdings of Government securities declined by 520 million dollars. At reporting member banks in 101 leading cities, adjusted demand deposits decreased by 3.4 billion dollars in· the four weeks ending February 16, while U . S. Government deposits increased by 6.9 billion, reflecting purchases of Government securities by bank customers during the war loan drive. Government security holdings at reporting member banks increased 2.8 billion dollars over the four weeks, Loans to brokers and dealers increased by 320 million during the drive which was substantially less than in either of the two previous campaigns. Loans to others for purchasing or carrying Government securities rose by about 610 million, two-thirds of which was at New York City banks. Commercial loans, which had increased substantially during the Third War Loan Drive, showed little increase during the current period.
@FedFRASER