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M
TWELFTH
FEDERAL
O
RESERVE
N
T
H
L
Y
R
E
V
I
E
W
DISTRICT
F e d e r a l r e s e r v e Ba n k o f S a n F r a n c is c o
N ovem ber 1953
th e o u t l o o k f o r l iv e s t o c k a n d l iv e s t o c k p r o d u c t s
A gricultural prices, values, and incomes have receded
- A from the high levels of 1951 and are likely to remain
lower in 1954 and after unless markets for farm products
can be expanded. This, essentially, is the conclusion developed at the Agricultural Outlook Conference held in
Washington, D. C. during the last few days of October.
The prospect of a “ small” reduction in consumer income
together with anticipations of little or no increase in farm
exports from the low level of 1953 led to this mildly pessimistic outlook for American agriculture.
Total agricultural output in 1953 will come very close
to equaling the 1952 record, but this high production together with reduced exports, despite a strong domestic
demand, has brought a rapid accumulation of stocks of
most important farm products. Stocks of cotton and wheat
have more than doubled in the last year and little or no
reduction of these stocks in 1954 appears in prospect.
Large increases also have occurred in stocks of corn and
of fats and oils. Acreage restrictions for wheat, for cotton,
and possibly on corn probably will result in significant
reductions in production but may not reduce total supplies of these products.
A smaller total agricultural output is in prospect for
1954 than in the current year according to the United
States Department of Agriculture and no general
strengthening in farm prices is anticipated. Therefore,
gross cash farm receipts in 1954 are not likely to equal
the $31.2 billion being received by United States farmers
this year. Production costs, on the other hand, are down
slightly from last year and may show some further decline
in the year ahead. A moderately lower level of production
I
n d exes
of
P
P
a r it y
r ic e s
R
R
a t io
T
able
e c e iv e d
a n d
, S
elected
November is, 1953
October 15, 1953........................
November is, 1952......................
M ay 15, 1952................................
February 15, 1951.............................
1
P
a id
a te s
by
, U
index of
index of
received
Paida
249
250
277
293
277
313b
F
a rm ers
n it e d
276
282
290b
277
S
a n d
t h e
tates
Parity ratio
2494- 277=
2504-276=
2774- 282=
90
91
98
293-r-29o=ioi
313-4-277=113
268
220
2684-220= 122^
• T ^ s paid, interest, taxes, and wage rates, sometimes called the “Parity
in dex ”............
October
15, 1946.................
D
bRecord high levels.
Sou rce : United States Department of Agriculture.
and attempts by farmers to ease the burden of high cost
are contributing factors in the expected decline of farm
production costs. The result is that the realized net in
come of farm operators may be fairly close to the $12.5
billion received this year.
The Twelfth District is an important supplier of both
cotton and wheat from which District farmers can expect
reduced cash receipts in 1954. Increased acreages of hay
and forage which are expected in 1954 may be marketed
at relatively low prices. Production of fruit and vegetables
*s expected to increase next year, but this increase is
expected to be offset by lower prices for these products,
Little if any improvement is expected in incomes to District farmers from sale of livestock and livestock products- These factors mean that gross farm receipts in the
District may decline by a percentage as large as, or perhaPs larSer than, that in prospect for the United States
as a whole.
The District as well as national outlook for livestock
and livestock products reveals some grounds for optimism. The national supply-demand picture for these products has begun to show signs of stabilizing and this is significant since the national supply-demand picture has a
more important bearing on the general health of Twelfth
District agriculture than any single internal District factor> Consumption of meat has been at high levels this
year an<^ there appears to be little reason to expect any
reduction m physical consumption of meat during the
commg year- In terms of dollar expenditures for meat, on
the other hand, consumers spent a smaller proportion of
their total incomes on meat in 1953 than previously and
little increase in this proportion is expected in 1954 since
meat prices are likely to remain relatively unchanged.
Consumer demand for most other livestock products is
expected to be stable and relatively strong. Little change
in production of livestock and livestock products is anticipated in 1954 except for some increase in supplies of pork,
eggs, and broilers. While it is generally agreed that there
•
^ r
•
j
is little p r o sp e c t f o r p ric e s a n d
•
jr
in c o m e s f r o m
i
r
sale o f
livestock and livestock products to be improved in 1954,
^
^
j
1
ir
g r e a te r sta b ility m p r o d u c tio n a n d m a rk e ta b le su p p lie s o f
,
these commodities may mean that there is also little likelihood of any further significant deterioration in the farm..
ers
J
t
p o sitio n . B e e f p ric e s a s W ell a s p ric es OI m o s t Other
138
November 1953
FEDERAL RESERVE B A N K OF S A N FRA NC ISCO
T able 2
C a s h F a r m R e ceipts from S a l e of L iv e sto c k a n d L ive sto ck
P roducts b y S t a t e s — J a n u a r y - A u g u s t 1953 w i t h
C o m p a r is o n s , T w e l f t h D is t r ic t
Cash farm receipts®
January-August
1953
(in millions
of dollars)
A r iz o n a .....................................
California ................................
I d a h o .........................................
Nevada .....................................
Oregon .....................................
Utah .........................................
W ashington ............ ..............
75.3
645.0
94.1
18.6
102.5
66.2
121.1
Twelfth D istrict....................
1,122.7
United States ...................... 11,132.1
Percent change
in January-August 1953
cash farm receipts
r----from January-August---- \
1952
1951
— 4.8
— 5.4
— 8.8
— 18.8
— 4.3
— >12.0
— 5.4
+
—
—
—
—
—
—
—
—
— 8.6
— ’10.1
6.2
5.9
4.3
7.1
13.8
31.8
12.4
15.2
6.9
aFrom sale of livestock and livestock products.
Source: United States Department of Agriculture.
agricultural products have been reasonably stable since
early this year. Still, as indicated in Table 2, cash farm re
ceipts from sales of District livestock and livestock prod
ucts in the first eight months of this year were markedly
smaller in most District states than in comparable periods
of the last two years.
Continued large slaughter but more price stability
characterizes cattle outlook
Prices of slaughter cattle, while down substantially
from a year ago and from the high levels of 1951, have
been relatively stable in 1953. This was particularly true
during the first six months of the year. With increases
last July in prices of top grades of cattle and subsequent
decreases in prices of grass fed and lower quality beef,
the price range between high and low quality beef became
very wide. Prices of the better grades have held relatively
close to current levels since mid-July. At present, prices
of choice slaughter steers are about 30 percent below those
received by farmers in the fall of 1951, whereas prices of
most other qualities of beef are more than 50 percent
lower. The lower price levels of this year have been accom
panied by very large increases in slaughter and consump
tion of beef (Table 3 ). Total production of red meat in
1953 is expected to exceed production last year by about
7 percent.
The wide range between prices of various qualities of
cattle appears likely to continue. Indications as of Novem
ber 1 were that fewer cattle will be placed on feed this
season than a year earlier. Shipments of stockers and
feeders into nine Corn Belt states during the period July
through October of this year were about 24 percent
smaller than last year. Western cattle feeding operations
T a bl e 3
C o m m e r c ia l S l a u g h t e r of L iv e sto c k
Percent change
January-October 1953 from
f------------------ corresponding months------------------,--------- 1948-52--------- \
/-----------1952----------- %
Twelfth
United
Twelfth
United
District
States
District
States
Cattle and calves......................
H o g s ..............................................
Sheep and lam bs........................
+ 33
— 10
+14
+27
— 3
+17
Source: United States Department of Agriculture.
-{"24
— ’30
+12
+30
— 12
+13
also are expected to be below a year ago, although Cali
fornia is expected to continue these operations at or near
the record high levels of the 1952-53 feeding season. With
a smaller number of cattle going on feed this fall than last,
fed cattle prices are expected to hold up well. At the same
time, shortages of hay and feed in some areas, together
with the reduced demand for feeder and stocker cattle,
may result in continued relatively large marketings of
unfinished cattle. Prospects for cattle feeding profits,
which depend largely on the spread between feeder and
expected fat cattle prices, appear better this fall than they
have at any time in three years. These prospects may en
courage the movement of cattle to feed lots late this fall.
If so, seasonal price declines of fed cattle could occur but
probably would begin later and extend later into the
season than usual. As may be seen in Chart 1 beef cattle
prices are below parity. On the other hand, as shown in
Chart 2 the index of beef cattle prices is still above the
index of prices received by farmers for all farm products.
Government purchases of beef under the special pro
gram inaugurated in August this year are continuing.
Through December 14 purchases of 249.5 million pounds,
the equivalent of 864,000 head of cattle, had been made.
Actual deliveries to the Government are expected to total
145 million pounds by December 26,1953. The remainder
is scheduled for delivery by the end of March 1954. How
ever, the contracts provide that all purchases must have
been slaughtered by December 24. Most of the Govern
ment purchases are of lower quality beef for canning.
The trend of total cattle numbers constitutes
a fundamental problem
Six times since 1880 cattlemen have gone through peri
ods of expanding and then contracting cattle numbers.
Cattle cycles seem to arise because producers tend to
C
h a r t
1
A v era ge p rices received b y farm ers
fo r b eef cattle and parity prices for
be e f cattle— U nited States
1935-1953
C
h a r t
2
In d exes o f p rice s re ce ive d by farmers
fo r b e e f cattle and fo r all farm products
U n ited States, 1935-1953
(1910-14=100)
November 1953
139
M O N T H L Y R E V IE W
project current or recent past price and market con
ditions into the future and because under similar cir
cumstances they respond alike. The present cycle started
in 1949 at 76.8 million head and increased to 93.7 mil
lion head January 1, 1953. In the Twelfth District, num
bers increased from 7.6 million to 9.3 million head.
Last year production exceeded slaughter by 6 million
head, but for 1953 cattle and calf slaughter will roughly
equal the number of calves raised less death losses. This
means that the inventory next January will be approxi
mately the same as in January 1953. Breeding herds and
the productive capacity of the beef industry apparently
have not been reduced this year. However, in previous
cattle cycles a leveling off or a halting in the expansion in
numbers has been followed in the succeeding year by a
reduction in numbers (Charts 3 and 4 ). But in order for
such a reduction to occur in 1954, cattle and calf slaughter
would have to rise considerably above the 1953 level and
such a large rise is not expected. It is clear, however, that
any significant increase in total slaughter would be accom
panied by even lower prices and perhaps demoralized
market conditions.
C hart 4
NUMBER OF C A TT L E A N D CALVES ON FARMS
ON JANU ARY 1—TW E LFTH DISTRICT, 1936-1953
Millions
One reason why it is expected that cattle slaughter and
inventories of live cattle will remain relatively unchanged
next year is that, in the absence of severe drought, most
cattle producers will not be forced to liquidate herds. In
previous cattle production cycles rapid liquidation has
been accompanied by (1) severe drought as in 1934 and
1936; (2) very unfavorable prices accompanied by tight
credit and a general business recession as in 1921; or (3)
general and serious distrust of the outlook for prices as
in 1945-49. The last decline in 1945-49 was principally a
marketing of inventories of slaughter stock built up durC hart 3
1 Tw o years old and older.
Source : United States Department of Agriculture.
NUMBER OF C A TTLE A N D CALVES ON FARMS
ON JAN U ARY 1—UNITED STATES, 1900-1954
Millions
*1954 estimated.
xTw o years old and older.
Source : United States Department of Agriculture.
ing price control in addition to a contraction in the dairy
industry (Charts 3 and 4 ). Cattle prices are sufficiently
low at present that some marginal high cost producers
will be forced to retrench. However, they are not low
enough that any general cutback in cattle production is
expected.
Although, according to the United States Department
of Agriculture, general liquidation, increased slaughter,
and lower prices next year are not expected, a number of
reasons also exist for expecting no general or marked
increase in cattle numbers. Most important of these, per
haps, is that with beef cattle numbers already high, re
sources of the nation are not great enough to permit sig
nificant expansion without some changes in long-time
land uses. Another is that current and prospective prices
and incomes from beef production, while not low enough
to cause liquidation on a large scale, are not high enough
to attract additional capital and resources. Still, acreage
controls on wheat and other important crops and the pros
pect of increased acreages of feed crops may tend to retard
reduction of beef cattle numbers. They may even cause
expansion of some small sideline beef operations.
140
The total effect of all these factors cannot be assessed
accurately. Also, much depends upon weather and the
condition next year of pastures and ranges. A continua
tion or a spreading of drought conditions would have seri
ous effects. Furthermore, any additional and important
price decreases not related to seasonal factors would have
marked consequences. The most likely prospect, however,
is for no sizable change in cattle numbers in 1954.
M ore pork at lower prices appears
probable for late 1954
While the cattle cycle appears to have reached its peak,
the hog cycle appears to have reached its lowest point.
A new expansion in hog numbers appears to be in pros
pect. If farmers carry out their intentions for fall farrowings, 1953 will have seen the smallest annual pig crop in
many years including the short crop year of 1948. It is
believed, however, that the pig crop this fall will be larger
than indicated by farmers in their intentions as reported
last spring.
District production has been very markedly reduced. In
western areas of the United States only 60 percent as
many sows will be farrowed in 1953 as in 1948, whereas
farrowings in the North Central region of the nation are
expected to be 5 to 7 percent greater in 1953 than in 1948.
This contrast reflects a continued tendency of hog pro
duction to center in the Corn Belt, which now produces
about 80 percent of the nation’s pork.
All this year, farm prices of hogs have been far above
last year and the highest ever except for 1947 and 1948.
Hog prices are expected to remain high during the first
half of 1954, according to the United States Department
of Agriculture. Current small price declines for pork re
flect seasonal increases in production. As pointed out be
low, hog prices are expected to be lower in late 1954 than
currently, but they are not likely to be greatly depressed.
Since only about 2J4 to 3 percent of all farrowing sows
are located in the western region of the United States,
Twelfth District hog producers’ prices and incomes will
be largely determined by decisions of Corn Belt hog
raisers. Under normal conditions the relationship of corn
prices to hog prices is a very important factor which Corn
Belt hog producers consider in making their decisions
concerning future hog production. In the past, changes
from one year to another in the September-December hogcorn price ratio1 have been closely accompanied by
changes in the number of sows farrowing the following
spring.
The hog-corn price ratio has been highly favorable to
increased hog production since early spring. Without con
sidering other factors, one would have expected a sub
stantial increase in farrowings this fall. But it is clear that
farmers consider prospective future prices as well as
actual current or recent past prices, and hog producers in
the last year have shown a lack of confidence in the future
of hog prices. Consequently, they reduced rather than in
1 The hog-corn price ratio represents the number of bushels of corn that a
hundredweight of hogs will buy, i.e., the price of hogs per hundredweight
divided by the price per bushel of corn.
November 1953
FEDERAL RESERVE B A N K OF S A N FRA N C ISCO
creased hog production. Ordinarily such a reaction would
have caused prices of corn to fall as there is little use for
corn except as feed. Large corn supplies and low corn
prices, together with short supplies of pork and high farm
prices for hogs would then quickly have increased the
hog-corn price ratio to high levels with consequent large
increases in hog production. Actually, however, the price
of corn has been supported at a relatively high level
through Government corn storage loans. This prevented
rapid adjustment of the hog-corn price ratio. Also, and
more important, hog producers decided not to take a
chance on marketing their corn via an uncertain hog mar
ket when guaranteed prices and returns from corn were
available through corn storage loans.
At present, with high hog prices in evidence all year,
hog producers have become reassured concerning the fu
ture of hog prices. Under such conditions an expansion,
once started, often occurs fast. Although a large increase
could occur in 1954, it does not appear likely. One reason
is that corn prices will continue to be supported through
1954. Department of Agriculture officials consider an in
crease of 5 to 10 percent the most reasonable forecast.
Continued increases in hog numbers after 1954 are
expected but it is not known how great or how rapid this
increase may be. The reaction of hog producers under
conditions of continued price support on corn is not
known, and there could be changes in the form or level
of price supports on corn. It is possible that hog numbers
will remain relatively low with hog prices relatively high
as long as price supports on corn remain at 90 percent of
parity.
Sheep and lamb outlook similar to prospects
for beef but more optimistic
Moving sympathetically with prices of beef, as usual,
lamb prices in 1953 were about one-third lower than they
were at their peak in 1951. Since cattle prices in 1954 are
expected to remain at the low level of 1953 but to exhibit
more stability, similar expectations are attached to prices
of lamb. However, lower prices have stimulated sheep and
lamb slaughterings (Tables 1 and 4 ). Consequently, supT a b le 4
A v e r a g e F a r m P r i c e s R e c e iv e d f o r L i v e s t o c k a n d P o u l t r y —
M o u n t a in * a n d P a c if ic C o a s t S t a t e s
N ovember 15, 1953
Percent change
r-Nov. 15, 1953—>
since
M ountain P a c.
/—N o v . 15, 1952-^
(in dollars)
M ou n tain P ac.
H o g s (cw t.) ....................
20.40
14.60
Beef cattle ( c w t .)..........
Calves (cw t.) .................
15.90
Sheep (cw t.) ...................
5.78
Lam bs (cw t.) .................
16.90
M ilk cows (h e a d ).......... 181.00
Chickens, all ( l b .) ...................236
Farm ( l b . ) ...............................215
C om ’l. broilers ( l b .) . .
.307
Turkeys ( l b . ) ............................ 326
22.60
16.00
16.40
5.85
16.80
197.00
.263
.209
.295
.311
+19
— 30
— 32
— 29
— 17
— 25
+ 1
+ 4
— 4
+ 3
+22
— 25
— 31
— 2
— 20
— 23
— 6
— 6
— 8
+ 1
United States
prices
as percent of
parity
N o v . 15, 1953
100
70
65
60
76
—
77
—
— .
89
aIn addition to the District states of Arizona, U tah, Nevada, and Idaho,
the Mountain states include Montana, W yom ing, Colorado, and New
M exico.
Source: Agricultural Prices, United States Department of Agriculture.
November 1953
141
M O N T H L Y R E V IE W
plies of slaughter lambs and sheep have been reduced to
the point that some increase in marketable sheep and lamb
prices may occur. Government policy and price supports
will be the principal determinants of wool prices in 1954.
If supports are continued as contemplated, 1954 wool
prices will be approximately equal to 1953 prices.1
T ab l e 5
P ercen tage of G ross F a r m I n c o m e from E ggs a n d P o u l t r y
T w e l f t h D is t r ic t S t a t e s a n d U n ite d S t a t e s
Arizona ............................................................................................................
California ..........................................................................................................
I d a h o ...................................................................................................................
Nevada ..............................................................................................................
Oregon ..............................................................................................................
U t a h ............................................................................... ......................................
W ashington .....................................................................................................
United States ................................................................................................
2
10
4
2
11
18
9
11
In 1953, the slaughter of sheep and lambs increased
about 11 percent over 1952, but production of lambs in
1953 was only 7 percent greater. In other words, some
liquidation of breeding herds occurred this year. As a
result, lamb production and slaughter next year are ex
pected to fall back almost to the levels of 1952. A mild
winter, a good spring lamb crop, and normal range and
pasture conditions, however, could result in 1954 supplies
of lamb and mutton which would equal or exceed output
in 1953.
dairy products. Although the egg and poultry industry is
relatively less important in western areas, farmers of
Pacific Coast states and Utah receive a substantial pro
portion of their income from poultry (Table 5). Oregon
and California have become important producers of
broilers.
A relatively larger proportion of the 1953 lamb crop
was slaughtered during August through October than
last. Consequently, smaller numbers of lambs are avail
able for feeding this season compared with a year earlier.
Shipments of lambs into nine Corn Belt states have been
considerably smaller than last year but in several western
states, including California, lamb feeding operations may
be increased this fall and winter over the comparable
period last year. Partly as a result of the seasonal price
declines which have occurred and the prospective smaller
volume of lamb feeding this winter, slaughter lamb prices
have strengthened from the low point of near $15 per 100
pounds realized during the week ending September 5,
1953 to more than $18 per 100 pounds. Some additional
increase may occur.
Egg prices have declined seasonally as egg production
increased seasonally from the low point reached early in
September. For the past 5 months, monthly output of eggs
has exceeded that of 1952. Still, gross and net returns to
poultry producers have been relatively high in 1953. Egg
and broiler prices have been sustained at high levels
despite record high production of both products, partly
because demand for frozen eggs and poultry has been
higher than expected. Storage stocks of eggs on Novem
ber 1, 1953 were down to the lowest levels reported for
the date and November 1 stocks of frozen eggs were 9
percent below November 1952 holdings. In contrast to
the outlook for many other products, a continuation in
1954 of relatively profitable conditions in the poultry
industry appears probable.
It is interesting to note that numbers of stock sheep on
farms in the United States decreased steadily over the
period 1942 to 1950 from 49 million head to slightly more
than 26 million. Numbers have risen moderately in the
West since 1950 and in eastern states the rise has been
relatively sharp. Still, sheep numbers next January are
not likely to exceed 28 million head. Looking beyond
1954, it does not appear probable that sheep and lamb
production will expand greatly in the next few years. Ac
cording to the Department of Agriculture, “ It will be an
acceptable sideline enterprise on many farms, and will outcompete cattle on some pastures and ranges of the South
and West, but areas of intensive sheep production will
remain limited. The industry will hardly regain its one
time prominence in a country with as fast a growth in
population and industrialization as the United States.”2
With prospects for continuation of a favorable egg
price situation and relatively stable feed prices, poultry
and egg production probably will increase in 1954, accord
ing to the United States Department of Agriculture.
Chick hatchings in District states this fall have been run
ning ahead of last year. In September the hatcheries of
the United States produced the largest output of record
for the month. Again in the spring of 1954, demand by
the frozen egg industry may prevent large springtime egg
price reductions. If so, numbers of layers on farms and
egg production per hen may be increased greatly during
the summer and fall of 1954. In this event egg prices may
be considerably lower a year from now than at present.
Much will depend upon the reaction of producers to an
expected favorable price situation during the first half
of 1954.
Favorable prices and increased production
Turkey prices this fall have averaged about the same
as a year earlier despite a slower rate of marketing this
year than last. The decline of about 12 percent from last
year’s market volume is about half offset by Government
purchases of turkeys last year. The result of holiday mar
ketings of turkeys will largely determine plans of turkey
producers for 1954. According to early reports of breed
ing intentions the turkey industry will experience consid
erable expansion next year.
in prospect for poultry and eggs
Farmers of the United States receive a greater propor
tion of their gross income from poultry and eggs than
from any other farm product except meat animals and
1 The United States Department of Agriculture announced on December 9,
1953 that producer prices of 1954 crop wool will be supported at an average
of 52.1 cents a pound or 1 cent below this year’s support average. Secretary
Benson currently is considering recommendations for price support of wool
after 1954.
1 United States Department of Agriculture, Bureau of Agricultural E co
nomics, The Livestock and Meat Situation, October-Novem ber, 1953, p. 26.
Source: United States Department of Agriculture.
142
FEDERAL RESERVE B A N K OF SAN FRANCISCO
Government price supports are the principal
factor in the dairy outlook
Net returns from dairying in 1953 have been consider
ably lower than in 1952. Prices received by farmers for
milk and butterfat have declined 13 percent in the last
year. Meanwhile, costs of production have remained rela
tively high. In the light of these price declines, the outlook
for milk and other dairy products in 1954 is dependent
mainly upon the level at which dairy prices will be sup
ported after April 1, 1954. The Agricultural Act of 1949
provides for support of dairy prices at between 75 and 90
percent of parity. In the current year, beginning April 1,
1953, the Federal Government has extended support to
dairy prices at 90 percent of parity.
With milk production expanding rapidly between early
winter of 1952 and mid-1953, the support program for
dairy products has resulted in very large Government
holdings of butter and cheese. These stocks are equivalent
to about 8.5 billion pounds of milk or 7 percent of the
prospective supply for 1954. Carry-over supplies of dairy
products from one year to the next normally do not exceed
2 percent.
District milk production this fall has been 5 to 7 per
cent greater than during the fall of last year. Dairy pas
tures in Pacific Coast states have held up well and on
November 1 were furnishing good feed. In line with
tendencies in evidence across the country, District pro
duction of butter and manufactured dairy products in
1953 has greatly exceeded the relatively low 1952 produc
tion of these commodities.
Over the nation, milk production in 1954 is expected
to be approximately equal to the output in 1953. How
ever, total supply of dairy products in 1954 will exceed
any level of supply previously experienced in the dairy
industry. This means that in the absence of a price sup
port program on dairy products, substantial price and
production adjustments probably would occur in the dairy
industry. If price supports are continued at 90 percent of
parity, a strong probability exists that Government-held
stocks of butter and cheese will increase.
The dairy industry, both in the District and over the
United States, is faced with a number of important probT a b le 6
A verage P rices R eceived by F armers for M il k U sed in
M a k in g A m er ic an C h eese , B utter , a n d C ream ery
B y -P roducts
October 1953 Compared with October 1952
Selected Tw elfth District States and United States
Average prices
received in October 1953
Percent change
for milk used
in October 1953
prices since
f------------in making------------ >,
Butter and f------------October 1952------------- \
American
creamery
Butter and
cheese
products
American
creamery
(in dollars per 100 lbs. of milk)
cheese
products
Idaho ................................
3.11
3.74
— 20.5
— 14.6
California ......................
4.38
3.89
— 12.2
— 14.5
Oregon ............................. 4.98
3.95
— 10.4
— 12.6
Washington ..................................................4.14
...
— 7.2
Pacific Coast ...............
4.83
3.94
— 10.6
— 12.8
United S t a t e s ...............
3.64
3.78
— 18.2
— 10.6
Sourçç : United States Department of Agriculture.
November 1953
lems. These problems may become increasingly impor
tant as no completely satisfactory solutions appear readily
available.
One basic problem relates to the marked reductions
since about 1942 in consumer demand for butter and milk
fat. Per capita consumption of butter in 1952-53 was less
than 9 pounds compared with an average of about 16.8
pounds in the pre-World War II years. On the other
hand, consumption of whole milk and solids-not-fat have
increased greatly. The upward trend in the consumption
of whole milk and solids-not-fat is expected to continue.
Eventually, with little or no increase in production, ex
pected increases in consumption of liquid whole milk,
cheese, nonfat dry milk, ice cream, and miscellaneous
manufactured products would balance the reduced de
mand for butter.
Production, however, is not expected to remain con
stant. The combined force of a number of factors has led
to an increased production of milk and an increased pro
duction per cow and these upward trends may continue.
The relatively sharp drop in cash receipts from a number
of alternative enterprises is inducing many people to milk
cows who were not so inclined when cash income was
higher. In a general atmosphere of uncertainty, many
farmers prefer the regularity and relative certainty of
modest returns from milk production even to higher but
more speculative returns from other enterprises. Hay and
feed supplies are abundant. With marketing restrictions
in effect on some other important crops, supplies of hay
and forage probably will remain abundant and conducive
to increases in dairy herd sizes. After a gradual but con
sistent decline over the United States and in the District,
numbers of milk cows on farms have begun to increase.
In 1952 milk cow numbers increased 2 percent over the
United States.
Concurrently with the decline in cow numbers over the
period 1944-52 the quality of dairy herds increased. Prin
cipal factors responsible for recent increases in milk pro
duction per cow have been ( 1 ) a very high culling rate of
cows from milking herds partly as a result of high beef
prices, and (2) the rapidly growing use of artificial insem
ination for dairy cows.
Another problem of the dairy industry relates to costs
of production. Technological innovations in the dairy
industry have lagged behind those in most other farm
enterprise operations. Milk production on many farms
still is heavily dependent upon manual labor. In addition,
output per man-hour and returns imputed to labor in
dairying both are lower than in many other types of
farming. Increases in scale of operation and application
of new techniques, in time, may go far toward the realiza
tion of greater efficiency in dairying. Such increases in
scale of operation and efficiency will mean increased pro
duction. Still, in areas where population and demand for
fluid milk is increasing rapidly, as in some Twelfth Dis
trict states, small dairy farmers may find it profitable to
achieve lower per unit costs through increasing produc
tion per cow and total output.
N o v e m b e r 1953
143
M ONTHLY r e v ie w
BUSINESS INDEXES— TW ELFTH DISTRICT1
(1947-49 average = 100)
Year
and
month
Total
Waterborne
Retail
nonagri Total
Car
Dep’t
foreign
cultural mf’g loadings store
TOOCS
trade8' •
Wheat Electric employ employ (num
prices
sales
Lead8 Copper8 flour*
power
ment4 ber)2 (value)2 Si 1
Exports Imports
ment
Industrial production (physical volume)3
Pa4(*Alaiiml
Lumber Crude Refined Cement
97
51
41
54
70
74
58
72
79
93
93
90
90
72
85
97
104
99
112
114
107
87
57
52
62
64
71
75
67
67
69
74
85
93
97
94
100
101
99
98
106
107
78
55
50
56
61
65
64
63
63
68
71
83
93
98
91
98
100
103
103
112
116
54
36
27
33
58
56
45
56
61
81
96
79
63
65
81
96
104
100
112
128
124
165
100
72
86
96
114
92
93
108
109
114
100
90
78
70
94
105
101
109
89
86
105
49
17
37
64
88
58
80
94
107
123
125
112
90
71
106
101
93
115
115
112
90
86
75
87
81
84
81
91
87
87
88
98
101
112
108
113
98
88
86
95
96
29
29
26
30
34
38
36
40
43
49
60
76
82
78
78
90
101
108
119
136
144
‘ ÌÓÓ
101
96
95
99
102
99
103
112
116
* *47
54
60
51
55
63
83
121
164
158
122
97
100
102
97
105
122
130
1952
September
October
November
December
109
116
105
99
107
107
107
108
122
117
118
114
131
142
133
126
78
80
85
78
112
115
116
111
99
96
97
96
145
146
141
138
119
119
118
118
1953
January
February
March
April
M ay
June
July
August
September
116
117
120
120
112
120
111
107
100
107
108
109
108
109
110
110
109
109
115
117
123
122
127
121
125
124
126
105
131
126
132
142
134
140
134
133
77
85
85
83
75
78
64r
69r
71p
109
113
116
114
115
105
106
llO r
111 p
99
92
96
96
91
99
96
92
101
141
154
142
165
167
179
172
168
166
118
119
119
119
119
120
119
120r
122p
1929
1931
1933
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
102
68
52
66
77
81
72
77
82
95
102
99
105
100
101
106
100
94
97
100
101
30
25
18
24
28
30
28
31
33
40
49
59
65
72
91
99
104
98
105
109
114
64
50
42
48
48
50
48
47
47
52
63
69
68
70
80
96
103
100
100
113
115
190
138
110
135
131
170
164
163
132
124
80
72
109
116
119
87
95
101
‘ *89
129
86
85
91
186
171
* ’ ¿7
81
98
121
137
157
200
131
134
134
135
103a
98a
100a
102a
114
118
117
117
114
113
114
115
142
145
135
148
253
319
194
232
136
135
136
136
137
137
138
134 r
137 p
100a
103a
103a
102a
102a
103 a
98 a
99a
98a
116
116
119
116
124
120
117
113
110
114
112
113
113
113
113
113
113
114
151
158
179
164
118
114
195
187
336
336
384
372
356
BANKING AN D CREDIT STATISTICS— TW ELFTH DISTRICT
(amounts in millions of dollars)
Year
and
month
Condition Items of all member banks7
Bank
rates on
Loans
U.S.
Demand
Total
short-term
deposits
and
time
Gov’t
business
discounts securities adjusted8 deposits
loans9
_
2,239
1,898
1,486
1,537
1,682
1,871
1,869
1,967
2,130
2,451
2,170
2,106
2,254
2,663
4,068
5,358
6,032
5,925
7,093
7,866
8,839
495
547
720
1,275
1,334
1,270
1,323
1,450
1,482
1,738
3,630
6,235
8,263
10,450
8,426
7,247
6,366
7,016
6,415
6,463
6,619
1,234
984
951
1,389
1,791
1,740
1,781
1,983
2,390
2,893
4,356
5,998
6,950
8,203
8,821
8,922
8,655
8,536
9,254
9,937
10,520
1,790
1,727
1,609
2,064
2,101
2,187
2,221
2,267
2,360
2,425
2,609
3,226
4,144
5,211
5,797
6,006
6,087
6,255
6,302
6,777
7,502
3.20
3.35
3.66
3.95
1952
October
November
December
8,605
8,805
8,844
6,765
6,808
6,627
10,125
10,281
10,504
7,336
7,331
7,498
3.95
1953
January
February
March
April
M ay
June
July
August
September
October
8,816
8,838
8,983
9,054
9,092
9,156
9,167
9,229
9,241
9,255
6,633
6,474
6,299
6,173
6,020
5,997
6,675
6,589
6,481
6,556
10,390
9,911
9,937
10,011
9,843
9,899
10,005
9,950
10,018
10,248
7,490
7,551
7,560
7,597
7,627
7,703
7,729
7,749
7,794
7,854
1929
1931
1933
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
Member bank reserves and related items10
Reserve
bank
credit11
34
21
2
2
6
1
3
2
2
4
107
214
98
76
9
302
17
13
39
21
7
0
154
110
163
227
90
240
192
148
596
- 1 ,9 8 0
-3 ,7 5 1
-3 ,5 3 4
- 3 ,7 4 3
- 1 ,6 0 7
510
+ 472
930
- 1 ,1 4 1
- 1 ,5 8 2
- 1 ,9 1 2
h 23
- 154
- 150
- 219
- 454
- 157
- 276
- 245
- 420
-1,000
-2,826
-4,486
-4,483
-4,682
-1,329
- 698
- 482
+ 378
+ 1 ,1 9 8
+ 1 ,9 8 3
+ 2 ,2 6 5
+
+
236
72
299
-
295
29
240
+
+
+
268
79
422
+
+
138
83
220
16
12
39
75
100
113
19
-
263
119
147
277
174
531
184
98
308
391
+
+
+
+
+
+
+
+
+
136
13
240
239
293
435
275
176
217
394
+
+
+
—
+
+
+
+
+
+
+
4.01
Coin and
Commercial Treasury currency in
operations12 operations12 circulation11
+
+
+
+
+
4.18
—
4.17
+
+
+
—
_
Reserves
Bank debits
Index
31 cities8* 18
(1947-49100)2
6
48
18
14
38
3
20
31
96
227
643
708
789
545
326
206
209
65
14
189
132
175
147
185
287
479
549
565
584
754
930
1,232
1,462
1,706
2,033
2,094
2,202
2,420
1,924
2,026
2,269
2,514
42
28
18
25
30
32
29
30
32
39
48
60
66
72
86
95
103
102
115
132
140
+
+
32
34
12
2,527
2,616
2,514
146
141
157
—
77
22
18
11
22
39
3
36
4
7
2,565
2,491
2,394
2,378
2,463
2,274
2,452
2,397
2,425
2,449
146
150
164
153
150
155
148
142
149
142
+
+
+
+
+
+
+
+
+
+
+
—
__
—
—
+
+
+
+
+
+
+
+
+
1 Adjusted for seasonal variation, except where indicated. Except for department store statistics, all indexes are based upon data from outside sources as
follows: lumber, various lumber trade associations; petroleum, cement, copper, and lead, U.S. Bureau of Mines; wheat flour, U .S. Bureau of the Census*
electric power, Federal Power Commission; nonagricultural and manufacturing employment, U.S. Bureau of Labor Statistics and cooperating state agencies;
retail food prices, U.S. Bureau of Labor Statistics; carloadings, various railroads and railroad associations; and foreign trade, U.S. Bureau of the Census!
* Daily average.
< * N ot adjusted for seasonal variation.
4 Excludes fish, fruit, and vegetable canning.
6 Los Angeles, San Francisco, and
Seattle indexes combined.
6 Commercial cargo only, in physical volume, for Los Angeles, San Francisco, San Diego, Oregon, and Washington customs
districts; starting with July 1950, “ special category” exports are excluded because of security reasons.
i Annual figures are as of end of year, monthly
figures as of last Wednesday in month or, where applicable, as of call report date.
8 Demand deposits, excluding interbank and U.S. G ov’t deposits, less
cash items in process of collection. Monthly data partly estimated.
• Average rates on loans made in five major cities during the first 15 days of the month.
» End of year and end of month figures.
11 Changes from end of previous month or year.
12 Minus sign indicates flow of funds out of the District
in the case of commercial operations, and excess of receipts over disbursements in the case of Treasury operations.
18 Debits to total deposit accounts
prior to 1942, debits to demand deposit accounts from 1942 on, excluding interbank deposits.
a— New revised series.
p— Preliminary.
r— Revised.
@FedFRASER