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MONTHLY REVIEW .Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT V OL. o. 7 24, JULY FEDERAL RESERVE BANK OF KANSAS CITY 31, 1939 Business in the Tenth Federal Reserve District JUNE 1939 COMPARED WITH JUNE 1938 BUSINESS INDICATORS WYO. - ! i .·--------- --L.---: Denver• COLO. % INCREASE % DECREASE :' I •II 40 30 20 10 10 20 30 40 • )(ANS. ·-·--·--··--·--·~-.:--- % DECREASE 40 30 20 Financial % INCREASE 10 20 30 40 10 ______ Bank Debita_ ■ KANSA 6 MOS. 1939 COMPARED WITH 6 MOS. 1938 I F. R. Bk. Clearinga_ ■ ___ Mem. Bk. Loan,_ I ■ ■ ....Mem. Bk. Invest._ I _Demand Depoaita_ ■ I __ Life Ina. • Sale■ _ Trade The wheat crop was better than earlier anticipated but an unusually good corn prospect has been hurt by dry and very hot weather. Near the end of July t he corn crop remained highly uncertain. The price of both wheat and corn has tended downward since the first of June. Hog prices have strengthened somewhat since early in June but are about three and a half cents under a year ago. The price of beef steers is lower than earlier in the year and more than two cents a pound under last year. Wholesale and retail trade in June were above a year ago but the comparison with last year was less favorable than it was in May. Production figures are mixed. Building is less active, contracts awarded being 30 % and lumber sales 13 % lower. Bank deposits are holding at a high level and bank loans are increasing w h i 1e investments have tended downward in recent weeks. ·- I ■ ___ Wholeaale ___ Retail • ---• ■ ___ ......Lumber +155 __ _ .Wheat ___ _ ____ oat■---· - ··' I ··Cattle ____ • _ __Calves._ _ _ ' ____,Hoir•- ____Sheep _ _ ■ Pro,lriction I I ■ •• __ Calf Slaughter __ _ Hog Slaughter __ ■ I I ...Sheep Slaughter ___ ...Crude Petroleum_ 81 Ito __Bituminous Coal._ I Zinc Ore Shipments -■ Lead Ore Shipments Con•truction _ Total Awarda __ ■ +57 __ __corn _ _ __ ___ Flour_ _ I • Sale■ _ _ Cattle Slauirhter._ -- ■ I Mnrketing• I ■ I .. Dept. Store Salee_ I • • Sale■ Sale■ _ _____Rea. Awarda _ _ 18, _ Value of Permits .. -M i•cellaneou• ·-··· Rainfall ____ _ Cn1h Farm Income• _____ Employment __ ..........Pay Roll, ______ •For preflous month ' • I I ~5 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Member Bank Operations. Loans at reporting member banks in the Tenth District increased nearly 6 per cent from the middle of June to tpe third week 'of July, reflecting principally an increase in commercial loans incident to wheat financing and sizable increases also in holdings of ' paper and so-called "all other" loans. open market Investments continued to decline. Holdings of Treasury bills and Government bonds increased during the period but these increases were more than offset by a decrease in holdings of obligations guaranteed by the Government and a further decline in holdings of "other" securities. Volume of loans is the largest and investments the smallest this year, with loans now 13 but investments only 4 per cent above last year. Adjusted demand deposits of reporting member banks remained at a high level while their correspondent balances at other banks, their reserve balances at this bank, and deposits of other banks at these reporting banks rose sharply from the middle of June to the third week of July to new high levels for the year. Adjusted demand deposits are 4, correspondent balances 2, reserves 12, and interbank deposits 11 per cent larger than a year ago. Principal items of condition of 51 member banks: Loans and investments-total... ...... Loans-totaL. ................................ t ·· Coml., indust., agric ......................... Open market ·paper.......................... To security brokers and dealers..... Other to purchase or carry secur.. Real estate loans.............................. Loans to banks ... ~............................. All other loans.................................. Investments-total.. .......................... U.S. Treasury bills......................... U.S. Treasury notes....................... U.S. Govt. bonds .............................. Oblig. guar. by U.S. Govt.............. Other securities ................................ Reserve with F. R. Bank................... Balances with domestic banks ......... Demand deposits-adjusted ............. Time deposits .................................... , U.S. Govt. deposits........................... Interbank deposits ............................ *Comparable figures not available. Change from July 19 June 14 July 20 1939 1939 1938 (In thousands of dollars) 660,069 +11,367 +43,715 274,840 +15,270 +30,837 165,750 +11,463 +15,271 19,781 +2,397 +3,324 3,705 -432 -1 10,088 +297 -2,145 24,764 +74 +3,047 494 -24 -131 50,258 +1,495 +11,472 385,229 -3,903 +12,878 5,816 +1,331 * 76,844 -85 • 114,395 +5,083 • 55,698 -3,201 +10,136 132,476 -7,031 +14,489 170,882 +1,952 +17,761 310,069 +19,410 +6,847 503,412 +368 +21,405 144,231 -22 +35 23,170 -254 +4,995 403,633 +31,722 +38,721 Reserve Bank Operations Note circulation of this bank reached a new high level of 1721/2 million dollars in the first week of July, reflecting in part the usual demand for currency at the first of the month and seasonal increases in circulation incident to the holiday and to the wheat harvest. The previous high of 172¼ million doll,a rs occurred in the third week of last December when circulation is normally at the high point of the year. Circulation of 171¾ million in the third week of July compares with 1641/2 million a year ago. 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 July 19 June 14 July 20 1939 1939 1938 (In thousands of doliars) 356,412 +15,306 +56,493 320 -118 + 133 16 Zero Zero 207 -14 -211 627 -8 +253 123,620 -8,520 +4,989 522,583 +5,443 +59,750 171,704 +1,650 +7,336 241,296 +1,743 +20,715 Dollar volume of check collections, which had increased sharply in May, rose somewhat further in June. Dollar volume in June was 7 and in the first half of the year 4 per cent larger than last year. Check collections through this bank and branches : ITEMS 1939 June ....................... . May....................... . Six months ............ AMOUNT 1938 1939 ( In thousands) 6,170 6,073 $ 950,251 6,248 5,864 938,716 35,540 34,876 5,384,900 1938 $ 891,780 833,575 5,156,613 Bank Debits Following a sharp rise in the preceding month, debits to individual accounts by banks in reporting centers of the District increased further during June. Debits in June were 6 and in the first half of the year 2 per cent larger than last year. For the whole country, debits both for June and the year to date were 4 per cent above a year ago. Payments by check in thirty District cities: 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 ...................... Change from June 1939 May 1939 June 1938 (In thousands of dollars) 15,832 +57 +1,759 2,975 -23 -67 27,347 -2,368 +890 6,338 +521 +611 8,184 -104 -936 14,050 +1,948 -138 151,304 -97 +1,970 2,813 -412 +74 13,749 +2,774 +2,037 2,854 +27 +310 3,611 -145 +369 1,476 +71 -164 13,545 +2,809 +1,974 3,213 +301 +351 9,453 +53 +812 18,445 +2,768 +2,610 306,174 -5,872 +14,419 3,720 +352 +190 30,239 +1,972 +3,263 7,605 -233 +1,103 109,653 -2,822 +12,742 2,447 -5 +7 146,438 +8,712 +12,476 3,550 +153 -60 13,374 +473 +1,416 11,123 +3,409 +2,347 25,845 +224 +2,618 20,219 +282 -249 136,527 +8,966 -2,752 46,866 + 6,265 + 10 District, 30 cities................. 1,158,969 +30,056 +59,992 United States, 141 cities ..... 33,987,920 +2,059,457 +1,190,897 FEDERAL RESERVE BANK OF KANSAS CITY Trade Wholesale sales and stocks reported by the Department of Commerce for this District: · RETAIL SALES Dollar volume of sales at reporting department stores in the District, following a considerable rise in the preceding month, declined somewhat more than is usual during June and sales, which in May had been 8 per cent above a year ago, in June were little changed from last year. Total sales for the first half of 1939 also show little change from the corresponding period of 1938. Sales in the first three weeks of July were about 2 per cent above last year. Retail stocks, which showed about the usual decline during the month, at the close of June were only 2 per cent under a year ago, the smallest decrease for any month this year. Collections on open accounts averaged 45.3 per cent in June as compared. with 45.6 per cent last year, while installment collections averaged 15.7 and 14.6 per cent, respectively. Department store sales and stocks in leading cities: SALES 3 SALES STOCKS June '39 6 Mos.'39 June 30, '39 No. of comp.to comp. to comp. to Firms June'38 6 Mos.'38 May 31,'39 June 30,'38 -(Per cent increase or decrease) Auto. supplies... 8 -1.3 +1.3 -1.7 +2.9 Clothing.............. 4 -14.3 +3.2 -22.0 Drugs.................. 8 -9.3 Zero -0.1 -1.2 Dry goods........... 7 -3.5 -2.5 -3.4 -20.4 Electl. goods ....... 11 +21.9 +9.6 -0.7 +6.5 Farm products.. . 9 +21.1 -10.2 +15.8 Furniture............ 3 Zero +4.2 -6.2 Groceries ............ 35 +2.3 -1.1 -8.3 Hdwre.-totaL..(14) -4.4 +4.6 -1.6 +2.0 General............. 5 -2.0 +1.6 -2.7 Zero Industrial......... 5 -12.9 +11.2 -0.7 +7.8 Plbg. & htg....... 4 +9:9 +4.4 Jewelry............... 3 +40.9 +6.1 +5.5 Machinery.......... 3 +20.7 Paper & prod ...... 3 -9.9 Tobacco & prod.. 7 -2.6 -2.9 All other lines .... 14 +12.1 -4.5 -5.0 +5.1 Total... ................129 +1.7 +o.3 -4.1 _...7,0 STOCKS June '39 6 Mos.'39 June 30, '39 No. of comp.to comp. to comp. to Stores June'38 6 Mos.'38 May 31,'39 June 30,'38 (Per cent increase or decrease) Denver............... 4 +2.0 +0.6 -6.6 -7.2 Kansas City....... 5 +2.7 +1.9 -6.4 -6.5 Oklahoma City.. 3 +2.3 +3.8 -6.8 +8.1 Tulsa ............. .. ... 4 -1.7 -1.2 -6.6 +15.1 Wichita .............. 3 +o.6 -1.2 Other cities ........ 20 -4.2 -0.8 -4.1 +o.4 Crops Abundant rainfall in J urie over the eastern part of the District was very beneficial to corn, and prospects near the first of July were the best of recent years. But extremely hot, dry weather during the first two weeks of July began to do serious damage. Although scattered light rains and cooler weather about the middle of the month relieved this situation somewhat, District....... ........39 +0.2 +o.6 -5.9 -2 .1 corn in most sections of the District is not yet past Total retail sales in the District both in June and the critical stage and the outcome is still quite unin the first six months of the year were better than 3 certain. Indicated per aGre yields of corn on July 1 per cent above a year ago. were heavy, due in part to the increasing use of hybrid Sales of independent retail stores reported by the seed, and production seems likely to be considerably Department of Commerce: above last year. Output of most other spring planted June 1939 per cent change from June 1938 Colo. Kans. Mo. Nebr. N.Mex. Okla. Wyo. crops appears to be lower than last year because of Automobile..... +23.3 +o.5 +34.5 +29.6 +8.0 ~ +19.3 much lighter per acre yields and in some cases a Country genl... +6.3 -11.9 +2.6 -5.7 +1.9 -0.6 +4.3 smaller acreage as well. Fruit crops this year are Department.... +3.4 -0.7 +5.8 -6.6 -6.6 +2.6 -3.6 Drug................ +1.2 -3.0 +3.7 +4.3 +8.1 -0.8 -5.1 especially heavy. Furniture........ -4.2 -5.2 +9.6 -0.9 +11.8 -3.8 +12.1 Department of Agriculture crop .estimates for the Grocery........... -1.4 -2.4 -0.3 -2.1 -2.3 +0.6 -2.3 Hardware ........ -3.2 -25.3 -1.9 -11.8 +10.9 +2.4 seven states wholly or partly in this District: Lbr. & mtls ..... -2.0 -14.3 +13.2 Men's wear..... -0.6 -0.9 +8.7 Women'swear -5.0 +1.3 -0.6 -5.0 -8.8 -0.1 +21.3 +9.6 +3.2 +5.0 -16.1 -8.4 +o.7 +5.6 ---Total... ............. +3.7 -5.5 +7.6 ---- -0.1 +5.6 WHOLESALE SALES The value of wholesale sales in the District rose further from May to June but, in contrast with a May increase of 6 per cent over last year, June sales were only 2 per cent larger and total sales for the year to date remain at about~the 1938 level. Wholesale stocks, which at the beginning of 1939 had been 13 per cent smaller than a year earlier, at the end of June were only 7 per cent under a year ago. Collections in June averaged 79.8 per cent as compared with 76:7 per cent last year. ACREAGE July 1 1939 (1,000 Corn, bu .............................. 17,656 Winter wheat, bu .............. • 20,819 Spring wheat, bu............... 476 Oats, bu............................... 6,079 Barley, bu........................... 2,952 Rye, bu................................ 722 Flaxseed, bu ...............,.,.,... 129 Tame hay, tons.................. 7,207 Wild h~y, tons................... . 4,452 White potatoes, bu............ 318 Sugar beets, short tons..... · 289 Dry beans, 100 lb. bag~ ...., 503 Cotton, bales ....•................. , 2,$29 Apples; bu ....... ~ ·-----~=-·-: ........ , :, Peaches, bu.,............... .. ::...:· Pears, bu ............................. _ Grapes, tons ...................... . PRODUCTION July 1 Harv. Harv. 1939 1938 1938 (1,000 units) acres) 17,215. · 394,536 311,320 240,045 . 314,092 28,040 4;848 10,338 838 104,945 172,587 6,899 40,826 . 47,434 2,175 5,701 6,701 627 887 395 56 8,848 ' 9,010 6,725 · · . 3,300 3,900 4,352 27,312 31,137 312 3,128 3,796 267 1,692 2,689 545 · 99·5· . ~,~92. · -4,888 ..... . · 3,606 - 2,345 1,018 534 27 17 4 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS As a result of the rains and favorable growing part of wheat receipts is earmarked for storage under weather of late May and the first two weeks of June, Federal loans. Marketings of corn and oats in June the wheat crop in Oklahoma, Kansas, and Missouri were only about half their normal volume. turned out somewhat better than was thought probJune grain receipts at five District markets: Wheat Corn Oats able earlier. However, continued heavy rains into late June delayed harvesting and caused some loss of Hutchinson............................ 6,925,000 (In bushels) wheat from lodging, flood, and shattering. 66,000 705,000 Kansas City........................... 15,253,000 154,000 862,000 Omaha................................... . 1,847,000 June rainfall for Nebraska averaged 101, Kansas St. 154,000 137,000 Joseph ............................. . 1,707,000 1,000 115, Missouri 116, Oklahoma 137, and Wyoming 104 Wichita................................. . 9,851,000 per cent of normal but in Colorado it was only 35 and June 1939............................... 34,583,000 1,705,000 374,000 May 1939................................ 10,038,000 2,046,000 1,076,000 in New Mexico 53 per cent of normal. June 1938............................... 6 Mos. 1939............................ 6 Mos.1938............................ Rainfall COLORADO Denver............................... Leadville............................ Pueblo................................ Lamar................................ Steamboat Springs .......... June 1939 6 Mos.1939 Total Normal Total Normal (lninch~ .57 1.38 5.43 7.62 .38 1.16 7.71 8.54 .05 1.36 6.79 5.64 1.67 2.28 6.20 7.99 1.09 1.28 11.98 12.35 KANSAS Topeka............................... 5.63 Iola. .................................... 2.45 Concordia.................. _....... 3.33 Salina................................. 3.02 Wichita .............................. 8.90 Hays................................... 4.71 Goodland............................ 2.64 Dodge City........................ 2.48 Elkhart.............................. 1.25 MISSOURI St. Joseph.......................... 7.52 Kansas City.. 10.99 Joplin................................. 5.94 4.65 5.28 4.41 4.65 4.38 4.10 3.05 3.30 2.04 14.17 16.14 12.96 9.80 18.88 9.87 11.06 7.93 6.46 16.46 19.31 13.67 13.93 15.53 11.93 9.39 10.20 7.56 4.96 4.99 6.00 18.49 18.27 24.28 18.25 25.59 23.10 5.42 4.16 2.22 4.78 3.59 3.51 4.88 4.09 4.56 4.32 4.85 4.05 3.18 3.22 2.51 2.87 10.65 11.66 9.35 12.29 10.43 9.01 9.05 10.85 13.80 13.63 14.48 13.12 9.78 9.80 9.14 10.15 Clayton.............................. 2.00 Santa Fe............................ .01 Farmington....................... Zero 1.92 1.08 .50 6.69 5.28 2.56 7.59 5.56 3.51 4.90 3.36 7.83 6.03 5.04 6.04 4.47 4.88 4.78 3.67 4.31 3.61 4.24 3.59 18.55 18.78 17.14 16.82 15.66 17.96 16.12 20.83 23.49 16.12 18.58 14.65 15.66 12.70 .83 .80 .80 2.28 1.61 1.57 1.15 2.04 7.52 5.05 6.38 10.29 8.11 8.76 7.85 9.32 NEBRASKA Omaha......................•......... Lincoln ............................... Norfolk.............................. Grand Island ..................... McCook.............................. North Platte..................... Bridgeport......................... Valentine........................... NEW MEXICO OKLAHOMA Tulsa.................................. McAlester.......................... Oklahoma City.................. Pauls Valley...................... Hobart................................ Enid.................................... Woodward ......................... WYOMING Cheyenne........................... Casper................................ Lander................................ Sheridan ................·-········· Grain Marketing Reflecting liberal marketings from the large supplies of old crop wheat and an unusually early movement of the new crop, June wheat receipts were the largest of record for that month and were more than double a year ago and the June ten-year average. Marketings in the forepart of July, although heavy, were somewhat short of a year earlier. A substantial 13,574,000 71,741,000 45,708,000 1,711,000 9,963,000 13,949,000 312,000 5,135,000 3,899,000 Cash wheat prices, influenced by improved crop prospects, the heavy early movement of new crop wheat to market, and price weakness abroad, have declined rather sharply since early in June. The decline erased all of the advance that had occurred in May and has carried wheat prices substantially below the 1939 loan level to the lowest point in about seven years. Cash corn prices have fallen to a six-year low. The lower range of cash prices at Kansas City: July 24 June 30 May 31 June 30 1939 1939 1939 1938 No. 1 hd., dk. wheat, bu ...... . $ .58½ $ .681/4, $ .78¼ $ .69½ No. 2 mixed corn, bu ........... . .40¼ .47½ .51 .53½ No. 2 white oats, bu ............. .25¾ ~1¼ ~4½ .26½ No. 2 rye, bu ......................... . .38 ½ .45 .54 .47 No. 2 barley, bu .................... .38 .40 .43 ½ .46 .96 1.07 1.01 No. 2 white kafir, cwt......... . 1.03 Livestock MARKETINGS Marketings of livestock declined considerably during June. Hog marketings, as in other recent months, were substantially above last year, the June increase measuring 45 per cent, but receipts of calves were 5 and of cattle and sheep 8 per cent lower than last year. Marketings of cattle were 21, calves 4, hogs 40, and sheep 12 per cent below the June ten-year average. Although the number of southwestern cattle put on pasture last spring was much larger than a year ago, delayed marketings of grass cattle because of good feed conditions partly accounted for small receipts. June livestock receipts at six District markets: Denver................. Kansas City........ Oklahoma City... Omaha................. St. Joseph ........... Wichita............... Cattle 25,687 67,436 30,663 87,481 19,063 12,662 Calves 4,041 18,120 14,383 4,869 4,674 2,486 Hogs 27,453 126,695 32,369 122,863 63,055 23,830 Sheep 149,040 91,472 20,881 110,565 67,267 20,343 June 1939............ May 1939............. June 1938............ 6 Mos.1939 ......... 6 Mos. 1938.... _._ 242,892 311,407 263,294 1,643,398 1,714,525 48,573 54,057 50,963 302,486 331,012 396,265 463,891 274,017 2,469,190 2,011,670 459,568 582,427 499,219 3,198,458 3,407,083 PRICES Prices of beef steers and lambs showed further seasonal weakness during June and the forepart of FEDERAL RESERVE :BANK July. Although prime beef steers brought $13 a hundredweight early in June as compared with the year's top price of $14 last January, most fed cattle in July are selling below $10 a hundredweight, or more than $2 lower than a year ago when beef steer prices had advanced sharply. Stock_e r and feeder cattle prices remain relatively strong, stock steer calves in June selling at the highest level since 1930. Lamb prices have declined more than $2 a hundredweight from their spring peak of $11.35 and are about the same as a year ago. Hog prices recovered seasonally from a five-year low of $6.25 a hundredweight early in June to $7.10 late in the month but later declined. Hog prices are about $1.50 below last spring and $3.50 below a year ago and the corn-hog ratio is much less favorable. Of principal significance, however, is the fact that livestock prices so far this year have generally been more profitable to producers and feeders than in the early part of 1938. Top livestock prices at the Kansas City market: Beef steers ........... . Stocker cattle...... . Feeder cattle........ . Calves ..................... Hogs ...................... . Sheep...................... Lambs ................... . OF KANSAS CITY 5 tions. Contracting of feeder lambs for fall delivery so far has been very limited. Good calf and lamb crops this year are reported generally. PIG CROP The spring pig crop in this District was 40 per cent larger than a year ago and the number of sows to farrow in the fall is indicated to be 27 per cent larger than last year. Although hog production in this District is increasing faster than in the country as a whole, it had declined much more sharply during the drought years and the 1939 spring pig crop was still 11 per cent short of the 1928-37 average in contrast with a national crop 13 per cent above average. Department of Agriculture pig crop estimates: PIGS SAVED SOWS FARROWED Spring Fall 1939 Colo .......................... . Kans .......................... Mo ............................ . Nebr .......................... N.Mex ..................... . Okla ......................... . '\Vyo .......................... . 283 1,376 2,614 3,077 67 887 63 Aver. 1938 '28-'37 *1939 --(In thousands) 165 307 36 855 1,659 171 2,092 2,709 354 2,128 4,011 158 54 50 11 632 634 147 40 71 3 1938 25 122 295 132 July 24 June May June June June 9 1939 1939 1939 1938 1937 1936 109 - - (In dollars per hundredweight)-2 10.25 13.00 11.00 10.75 15.00 8.75 10.00 11.00 10.25 8.85 9.50 8.00 8,367 5,966 9,441 880 694 9.00 10.50 10.60 9.15 10.25 8.15 7 States..................... 5,092 4,372 9.50 9.50 10.00 9.00 9.75 8.50 · U.S........................... 52,314 43,450 46,257 6.60 7.10 6.80 9.05 11.80 10.60 *Number indicated to farrow from breeding intentions reports. 7.50 7.00 8.00 7.00 9.35 9.00 9.00 10.40 11.35 10.15 12.50 11.50 Farm Income s·ToCKERS AND FEEDERS Cash farm income in the District in May was 21 per cent above a year ago as compared with an increase of 9 per cent for the first five months of the year. May receipts from the sale of crops were 11 and from the sale of livestock and livestock products 15 per cent larger than last year and Government payments were substantially greater. So far this year, income from crops is up 6 and from livestock 3 per cent and Government payments are 53 per cent larger. The largest percentage increase for the year has been in Nebraska where commodity credit loans and sales of Sheep corn have been an important factor in income. In Okla19,515 homa and New Mexico, income has been seriously 8,138 14,093 affected by greatly reduced receipts from cotton. For 8,349 the whole country, cash farm income in May was 50,095 only 7 and in the first five months of the year only 2 55,881 per cent above last year. 51,375 Department of Agriculture farm income estimates: 322,765 Shipments of stocker and feeder cattle from markets back to the country fell off considerably during June and were 35 per cent less than a year ago and 17 per cent below the June ten-year average. Country demand continued strong for calves, shipments of which were 45 per cent larger than last year and 76 per cent above average, and was heavy for sheep, the movement of which was little changed from last year and was 6 per cent above average. June stocker-feeder shipments from four markets: Denver......................... Kansas City................ Omaha......................... St. Joseph................... Cattle 4,046 22,554 6,842 2,901 June 1939.................... May 1939..................... June 1938.................... 6 Mos.1939 ................. 6 Mos.1938 ................. 36,343 62,250 56,140 377,359 347,534 Calves 7,105 2,078 958 Hogs --15 2,400 913 1,308 11,044 12,469 7,627 81,358 47,845 4,636 4,101 5,206 25,306 24,229 ·9 03 248,769 RANGES AND PASTURES Abundant rainfall during June improved ranges and pastures in Wyoming, Nebraska, Kansas, and Oklahoma but rainfall was markedly deficient in Colorado and New Mexico and there was a severe decline in the condition of ranges and some loss of flesh in cattle and sheep in these two states. Grasshoppers continue as a threat to ranges in many sec- Colorado ...................... Kansas ....................... ~ Missouri. .................... . Nebraska ................... . New Mexico ............... Oklahoma.................. . Wyoming ................... . Seven states .............. .. United States ............. 5 Mos. May 5 Mos. May 1938 1939 1938 1939 --(In thousands of dollars) 7,650 6,059 41,084 38,992 23,571 16,021 96,580 89,136 19,942 19,933 87,889 83,463 18,179 15,384 97,243 80,048 2,413 2,039 10,540 11,279 14,863 12,271 54,366 53,792 2,686 1,984 12,571 10,539 89,304 589,000 73,691 553,000 400,273 2,829,000 367,249 2,782,000 6 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Meat Packing Decreased marketings of livestock were reflected in a reduction of about 17 per cent in meat-packing operations in the District during June. Packers' purchases of hogs, as in other recent months, were substantially larger than last year, but purchases of cattle were about 3, calves 19, and sheep 5 per cent smaller than a year ago. The slaughter of cattle was 16, calves 24, hogs 37, and sheep 15 per cent below the June average of the past ten years. June packers' purchases at six District markets: Denver________________________, Kansas City _______________ , Oklahoma City __________• Omaha________________________• St. Joseph __________________ , Wichita _______________________. Cattle 16,220 40,362 13,437 61,755 14,849 8,422 Calves 3,164 9,329 9,048 2,733 3,704 2,246 Hogs 24,103 121,373 21,320 101,951 66,883 20,537 Sheep 25,252 77,894 11,630 80,914 69,279 17,502 June 1939 ____________________ May 1939 ... ·-······-········· June 1938 ___________________ , Mos. 1938. 1939.·---····-······· 66 Mos. _____________ ___ 155,045 185,541 159,449 940,631 996,791 30,224 34,612 37,375 186,112 232,600 346,167 417,167 243,376 2,164,010 1,778,922 272,471 332,796 287,710 1,911,397 1,947,702 Cold Storage Holdings After allowing for usual seasonal influences, United States cold storage holdings generally increased during June. There was less than the usual decrease in stocks of beef and pork, a contraseasonal increase in holdings of Iamb, poultry, and miscellaneous meats, and more than the usual increase in stocks of lard. Holdings of eggs increased at about the normal rate, while butter stocks increased less than is usual. Except for beef, stocks of which were 30 per cent below the July 1 five-year average, holdings of most commodities are about average or considerably above. Stocks of poultry and butter are especially large. United States cold storage holdings: Beef, lbs.·-----·-··-··--··--·-·-·---··-·Pork, lbs.__________ ______________________ Lamb and mutton, lbs,_ _______ , Poultry, lbs. __________________________ , Miscellaneous meats, lbs._ __. Lard, lbs. ______________________________ _. Eggs, shell, cases_________________ Eggs, frozen (case equiv.)_. Butter, creamery, lbs .. ________ , Cheese, all varieties, lbs,_ ___, July 1 June 1 July 1 July 1 1939 1939 1938 5-Yr.Av. --(In thousands of units) 34,650 33,730 47,920 33,556 496,273 520,261 417,704 600,997 1,822 1,791 2,148 1,853 67,421 66,796 63,432 62,263 68,326 61,945 60,400 65,136 148,169 139,336 126,066 139,556 6,971 5,880 6,255 7,684 4,011 3,369 3,957 3,652 132,370 84,967 121,467 88,988 98,439 79,272 114,788 95,631 Flour Milling Operations at southwestern flour mills rose somewhat in June and output was 7 per cent above the average of the past ten years although 3 per cent less than in June a year ago. Production in the first half of 1939 was slightly larger than last year. Sales of new crop flour increased sharply after the middle of June, when flour prices declined, and reached seasonal proportions in the first week of July when wheat prices had dropped substantially below the Federal loan level and flour sales aggregated 281 per cent of capacity. Most sales were for shipment within 90 to 120 days. Export business generally was dull throughout June but improved slightly after the announcement of new s1:1bsidy rates on July 10. Flour output reported by the Northwestern Miller: June 1939 Kansas City...·-··-·-------·-·-~, Salina _______________________________ Wichita ___________________________ _. Other cities _____________ ________ ., 586,000 228,000 172,000 1,046,000 Change from May 1939 June 1938 ( In barrels) -69,000 +24,000 +21,000 +7,000 -4,000 +22,000 +58,000 -19,000 Southwest_______________________ ., 2,031,000 +99,000 -59,000 United States *-------····---·5,589,000 -48,000 +207,000 *Represents about 60 per cent of total output in United States. Petroleum Preliminary estimates indicate that daily average crude oil production in the District declined 4 per cent during June after rising gradually in preceding months this year. Output for June, which was about equal to the average of the past ten years, was 7 per cent larger than a year ago but production for the year to date, because of large decreases in the early months of the year, is 3 per cent lower than last year. Oil production reported by the American Petroleum Institute and the Bureau of Mines: Colo, ______________ _ Kans. _____________ _ N.Mex. _________ _ Okla._ _____________, Wyo. ________ ______ , June 1939 May 1939 June 1938 Gross D. Av. Gross D. Av. Gross D. Av. --(-In thousands of barrels) - 118 3.9 132 4.3 135 4.5 4,902 163.4 5,359 172.9 4,702 156.8 3,234 107.8 3,318 107.0 2,606 86.9 13,508 450.3 14,811 477.8 12,919 430.7 1,879 62.6 1,908 61.6 1,717 57.2 5 States _________ , 23,641 788.0 25,528 823.6 U. S, ______________ _. 103,392 3,446.4 110,541 3,565.8 22,079 736.1 94,277 3,142.5 Stocks of crude petroleum produced in this District, which are at the 1owest level of recent years, showed a small decline in June. Prices of crude oil and of refined products generally are weak. Demand for gasoline is strong but supplies are burdensome. Coal June production of bituminous coal in the District was 24 per cent less than a year ago. However, output for the year to date is 3 per cent larger than last year because of heavy production last spring. Coal output estimated from reports of the National Bituminous Coal Commission: June 1939 Colorado. _________________________ _ Kansas and Missouri _____ _ New Mexico ____________________ _ Oklahoma ________________________ , Wyoming. _______ _________________ , Six states_________________________ United States__________________ 208,000 204,000 65,000 19,000 312,000 Change from May 1939 June 1938 (In tons) -61,000 +12,000 -145,000 -30,000 -10,000 -35,000 -3,000 -30,000 +93,000 +17,000 808,000 +62,000 28,506,000 +10,626,000 -254,000 +6,999,000 7 FEDERAL RESERVE BANK OF KANSAS CITY Zinc and Lead June shipments of zinc and lead from the TriState district were almost double a year ago. In the first half of 1939, zinc shipments were 14 and production 12 per cent larger than in 1938, while lead shipments were 21 , per cent larger and production 24 per cent smaller. Mid-year stocks of zinc were only a fourth and lead less than a tenth of what they were a year earlier, with zinc stocks the lowest in twenty-three years. June ore shipments from the Tri-State district: ZINC ORE LEAD ORE Kansas .......................... . Missouri.. ....................... Oklahoma...................... Tons Value 10,207 $ 306,209 2,501 75,026 21,778 653,341 Tons Value 1,336 $ 72,256 232 12,506 2,970 160,987 June 1939....................... May 1939....................... June 1938....................... 6 Mos.1939.................... 6 Mos. 1938.................... 34,486 $1,034,576 35,169 1,055,064 19,106 491,257 196,502 5,806,111 172,650 4,679,524 4,538 $ 245,749 4,084 217,455 2,059 87,0(}.0 32,291 1,739,681 26,642 1,297,456 Employment and Pay Rolls Industrial employment and pay rolls in the District increased somewhat from the middle of May to the middle of June when employment was 3 and pay rolls 7 per cent higher than a year earlier. Preliminary figures of the Department of Labor: June 1939 per cent change from May 1939 Employment Pay Rolls !!~if[t:~::=.~:=.::~:.~-i:.i!!!:!!i!~:i::i:!::~=-:~ !f:i 1i:i New Mexico................................................ i~~~i~:.·.-.·.·.·.·.·.~·.~·.·.·_-_-_-_-.·.·.·.·.·.·.·.·.·.·.·.~·.·_-_-_-_-.·_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-: Seven states............................................... -1.2 -14.3 -- -- +g:~ +0.8 +~~:~ +2.7 Building Value of construction contracts awarded during June in the Kansas City area (Nebraska, Kansas, Oklahoma, and western half of Missouri) was 30 per cent less than a year ago, narrowing the gain for the first half of the year to 6 per cent. Public works construction, which in June was only a fourth and in the first six months of the year only half as large as last year, is the principal retarding factor. In the first half of July, awards were about equal to 1938. Construction figures of F. W. Dodge Corporation: Residential building.......... . Nonresidential building..... Public Works construction Utility construction.......... . June June 6 Mos. 6 Mos. 1939 1938 1939 1938 - - (In thousands of dollars) 2,827 3,040 21,404 14,729 2,856 3,226 20,006 17,803 1,357 5,884 9,989 18,474 2,022 757 11,097 7,762 Kansas City area................ 9,062 12,907 62,496 58,768 37 Eastern states................ 288,316 251,006 1,699,364 1,294,272 The value of building permits issued in reporting District cities rose substantially from May to June and was almost three times what it was in June a year ago so that the value of permits for the year to date shows an increase of 55 per cent over last year. June building permits issued in District cities: PERMITS 1939 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 ................. J 1938 96 76 69 80 705 52 19 35 138 239 161 177 116 14 17 22 92 145 250 70 58 553 58 20 37 180 211 177 169 92 12 16 17 71 121 317 ESTIMATED COST 1939 $ 337,000 $ 101,000 54,000 1,163,000 38,000 52,000 1,971,000 367,000 170,000 344,000 2,165,000 133,000 37,000 33,000 20,000 110,000 316,000 217,000 1938 113,000 94,000 33,000 502,000 25,000 132,000 43,000 258,000 133,000 405,000 289,000 40,000 22,000 5,000 10,000 101,000 259,000 178,000 June ................................. 2,427 2,255 $ 7,628,000 $ 2,642,000 May.................................. 2,708 2,449 4,229,000 3,412,000 Six months ...................... 12,449 11,418 25,635,000 16,570,000 Lumber Following five months of sizable gains over last year, June board feet sales of lumber at reporting retail yards in the District dropped 13 per cent under a year ago. Total sales so far in 1939 now show an increase of only 7 per cent over the corresponding period of 1938. Stocks of lumber remain at a level about 8 per cent under a year ago. Collections in June averaged 34.1 per cent as compared with 34.0 per cent in May and 33.3 per cent in June last year. Lumber trade at 150 retail yards in the District: June 1939 per cent change from May 1939 June 1938 Sales of lumber, board feet....................... -20.1 -13.1 Sales of all materials, dollars.. ................. -20.4 -8.5 Stocks of lumber, board feet.. ................... -2.2 -8.0 Outstandings, dollars.................................. -4.0 + 1.6 Life Insurance June life insurance sales in the District were about 2 per cent above a year ago while sales for the first half of the year were up more than 7 per cent. The Life Insurance Sales Research Bureau report: Change from . June 1939 May 1939 June 1938 ( In thousands of dollars) Colorado ..................................... . 5,015 +236 +51 Kansas ......................................... 6,687 + 540 + 505 Missouri. .................................... . 16,405 -860 +45 Nebraska ..................................... 5,740 +325 +371 New Mexico ............................... . 941 -245 -145 Oklahoma.................................... 7,910 -23 -105 Wyoming .................................... 1,062 +162 +17 Seven states................................ United States ............................ 4 43,760 524,925 +135 -7,164 +739 +22,337 8 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTION PERCENT PERCENT 140 140 130 130 120 120 110 110 100 100 90 90 80 so 70 70 60 60 1934 1935 1936 1937 1938 1939 Index of physical volume of production, adju,;ied for s asonal va r iation, 1923-1025 average = lClO. By months, January, 1934, through June, 1939. FACTORY EMPLOYMENT PERCENT PERCENT 120 120 110 110 100 100 90 90 80 80 70 70 60 60 1934 1935 1936 1937 1938 1939 Index of number employed, adjusted for seasonal variation, 1923 -1925 average=lOO. By months, January, 1934, through June, 1939. FREIGHT Output of factories and mines increased in June reflecting chiefly sharp expansion at steel mills and bituminous coal mines. In the first half of July industrial activity was generally maintained. PRODUCTION The Board's seasonally adjusted index of industrial production advanced to 97 in June as compared with 92 in April and May. At steel mills output increased from a rate of 45 per cent of capacity in the third week of May to 54 at the end of June and to 56 in the third week of July. Automobile production, which had declined in May, showed some increase in June when a decline is customary. In the first three weeks of July automobile output was at a lower rate, reflecting in part curtailment preparatory to the changeover to new models. Plate glass production rose considerably in June. Output of lumber, which usually shows some increase over May, was unchanged. Among nondurable goods industries woolen mills showed increased activity in June, and activity at cotton and silk mills was maintained though declines are usual at this season. Meat packing was lower than in May. Mineral production increased considerably in June reflecting a sharp rise in output at bituminous coal mines which had been closed during April and the first half of May. Production of anthracite declined from May to June and there was some reduction in output of petroleum. Value of construction contracts awarded declined in June, according to F. W. Dodge Corporation figures, reflecting chiefly a greater than seasonal decrease in private residential building. Contracts awarded for public residential construction, principally for United States Housing Authority projects, were maintained at the advanced level reached in May, while public construction other than residential showed a small decline. EMPLOYMENT Factory employment and pay rolls increased somewhat from the middle of May to the middle of June according to reports from a number of important industrial states. There was a sharp expansion in employment at bituminous coal mines following the reopening of the mines in the middle of May, and the number employed on the railroads increased more than seasonally from May to June. DISTRIBUTION CARLOAOINGS PEIICENT PERCOIT 110 110 100 100 Department store sales showed a less than seasonal decline from May to June and the Board's adjusted index advanced from 85 to 86, which compares with a level of 88 during the first four months of the year. Sales at variety stores and by mail-order houses showed little change. Freight carloadings increased more than seasonally in June reflectinp: a sharp rise in shipments of coal and smaller increases in shipments of grain and miscellaneous freight. 90 90 80 80 70 70 COMMODITY PRICES 60 60 50 50 Prices of hides, silk, steel scrap, copper, and some other industrial materials advanced from the middle of June to the third week of July, while some farm products, particularly grains, declined. Prices of most other commodities showed little change. 40 40 1934 1935 1936 1937 1938 1939 AGRICULTURE Index of total loadings of revenue freight, adjusted for seasonal variation, 1923-1925 avcrag-e=lOO. By months, J an uary, 1934, through June, 1939. MEMBER BANKS IN 101 LEADING CITIES •LI.JONS OF DO.URS BILUOHS OF DOU.ARS 12 12 10 8 6 4 2 0 0 '34 1935 1936 1937 1938 1939 Wednesday figures for reporting member banks in 101 1 acling cities, September 5, 1934, through July 12. 1939. Commercial loans, which include industrial and agricultural loans, represent prior to M:iv 19, 1937, so-called "other loans" as then reported. A total wheat crop of 716,655,000 bushels was indicated on the basis of July 1 conditions, according to the Department of Agriculture. This would be much smaller than last year's large crop and somewhat below the 19281937 average. Cotton acreage in cultivation was estimated to be about the same as last year but one-third less than the 10-year average. A record tobacco crop is indicated. Most other major crops are expected to approximate last year's harvests and are generally larger than average. BANK CREDIT Total loans and investments of member banks in 101 leading cities continued to increase during the four weeks ending July 12, reflecting largely purchases of United States Government securities. Commercial loans, which had shown little change in recent months, increased slightly. Deposits and reserves at these banks rose to new high levels in July, reflecting continued gold imports and Treasury disbursements from its balances at the Reserve banks. MONEY RATES Prices of United States Government securities, which had declined somewhat during June, recovered part of the loss in July. The longest-term Treasury bond outstanding showed a yield of 2.31 per cent on July 20, as compared with a record low of 2.26 on June 5. Open-market money rates showed little change.
@FedFRASER