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ARM AND Q anch F I ULLETIN December 1970 Vol. 25, No. 12 A G R IC U L T U R A L C R E D IT IN T H E E L E V E N T H D IS T R IC T E X P A N D S Farm and ranch loans in the five states of the Eleventh District totaled slightly more than $5.9 billion at the beginning of 1970, up 8 percent from a year before. Non-real estate loans increased 14 percent, while real estate loans grew 5 percent. The largest proportion of non-real estate loans continued to be held by banks, although the share decreased from 70 percent to 68 percent during the year ended January 1, 1970. In contrast, pro duction credit associations expanded their share of the loan volume from 23 percent to 26 percent of the total. The Farmers Home Administration accounted for the remaining 6 percent, a decrease from 7 percent a year earlier. All lenders except the FHA, which financed only 1 percent of the loans at the beginning of both 1969 and 1970, increased their holdings of farm real estate loans. Life insurance companies regis tered only nominal growth but held 30 percent of the loans, compared with 31 percent a year before. Banks shared in 10 percent of the loan volume, up 1 percent from a year ago. Federal land banks held 23 percent and individual lenders 36 percent, the same as in 1969. The amount of farm loans, as well as the per centage increase in the amount of loans, varied widely in states of the District. The amount of gain in non-real estate loans ranged from 15 percent in Arizona and Texas to 10 percent in Louisiana. In contrast, real estate loans posted a 12-percent rise in Louisiana but only 1 percent in Arizona. PCA’s registered the greatest increase in non-real estate loans in the five states, while banks had the largest gain in real estate loans. F E D E R A L R E S E R V E DALLAS, Non-Real Estate Farm Loans Held By Principal Lenders January 1, 1970 (Dollar amounts in thousands) Area and lender Amount held Percent of state total ARIZONA Banks ..................... PCA’s ..................... F H A ....................... T o ta l................. . $ 225,252 15,733 3,566 $ 244,551 92 7 1 100 17 C1) 4 15 $ 74,701 63,334 17,001 $ 155,036 48 41 11 100 7 21 -9 10 $ 80,785 54,219 7,872 $ 142,876 57 38 5 100 12 20 -11 13 OKLAHOMA B a n k s................... . PCA’s ................... FHA ................... T o ta l................. . $ 315,151 133,191 20,830 $ 469,172 67 29 4 100 7 37 -1 13 TEXAS B a n k s ................... . PCA’s ................... FHA ................... T o ta l................. . $ 806,823 301,076 78,515 $1,186,414 68 25 7 100 12 34 -11 15 DISTRICT Banks ................... . PCA’s ................... FHA ................... T o ta l................. $1,502,712 567,553 127,784 $2,198,049 68 26 6 100 11 31 -9 14 LOUISIANA Banks ..................... PCA’s ..................... FHA ..................... T o ta l................. . NEW MEXICO Banks ................... . PCA’s ................... FHA ................... T o ta l................. Percent change from 1969 1 Less than 0.5 percent. SOURCE: The American Bankers Association. B A N K TEXAS OF D A L L A S Farm Real Estate Loans Held By Principal Lenders agricultural exports in fiscal 1970, when shipments totaled $6,646 million. That total is the third highest on record and is only 2 percent below the previous peak of $6,771 million reached in fiscal 1967, according to a recent USDA report. January 1, 1970 (Dollar amounts in thousands) Amount held Percent of state total Percent change from 1969 $ 8,892 36,355 106,164 118,930 1,296 $ 271,637 3 14 39 44 C1) 100 -9 -1 2 1 16 1 $ 70,675 138,404 139,496 168,252 4,565 $ 521,392 14 26 27 32 1 100 9 22 5 11 -8 12 $ 8,653 58,431 83,555 127,135 1,365 $ 279,139 3 21 30 46 (U 100 14 6 0) 3 -8 3 $ Area and lender ARIZONA Banks ..................... FLB’s ..................... Life ins. cos............ Individuals2 .......... FHA ..................... T o ta l................... LOUISIANA Banks . . . ............. FLB’s ..................... Life ins. cos............ Individuals2 ........... FHA ..................... T o ta l................... NEW MEXICO Banks ..................... FLB’s ..................... Life ins. cos............ Individuals2 ........... FHA ..................... T o ta l................... OKLAHOMA Banks ..................... FLB’s ..................... Life ins. cos............ Individuals2 ........... FHA ..................... T o ta l................... 94,414 126,214 175,698 229,290 6,066 $ 631,682 15 20 28 36 1 100 12 13 -1 6 -7 6 TEXAS Banks ..................... FLB’s ..................... Life ins. cos............ Individuals2 ........... FHA ..................... T o ta l................... $ 196,257 501,618 614,175 698,850 12,948 $2,023,848 10 25 30 34 1 100 20 5 1 5 -5 5 DISTRICT Banks ..................... F L B 's ..................... Life ins. cos............ Individuals 2........... FHA ..................... T o ta l................... $ 378,891 861,022 1,1 19,088 1,342,457 26,240 $3,727,698 10 23 30 36 1 100 15 9 1 5 -5 5 1 Less than 0.5 percent. 2 Estimates— individuals and all other sources of funds. SOURCE: The American Bankers Association. F I R S T Q U A R T E R U .S . F A R M EXPO R T S SET R EC O R D U.S. agricultural exports in the first quarter of fiscal 1971 totaled $1,648 million, nearly one-fifth above the $1,410 million for the same quarter in 1969. The record-breaking pace in the first quarter was an acceleration of the 16-percent advance in Soybean exports were nearly double those of a year earlier and accounted for much of the over all gain. The value of wheat grain exports was up two-fifths and contributed significantly to the in crease during the period. Exports of soybean meal, fruits and vegetables, dairy products, lard, tallow, and soybean oil also rose. The value of exports of cotton, tobacco, hides, pork, and rice declined over the same period. Agricultural exports to Japan — the top over seas m arket— advanced 23 percent in July-September 1970 to $291 million. The European Com munity increased its purchases of U.S. farm products by 27 percent to $358 million. Most of the gain in the European Community was in the nonvariable levy commodities, primarily soybeans. C H A N G E S IN T H E S T R U C T U R E O F T H E E G G IN D U S T R Y Many changes have occurred in the egg industry since the advent of specialized flocks for egg pro duction. The development of the broiler industry from the spring fryer markets has resulted in more emphasis being placed on the development of lay ing flocks for the sole purpose of producing eggs more efficiently. Consequently, the number of eggs produced per hen has increased due to a combina tion of improved technology, management prac tices, and feeding efficiency. Other characteristics of the industry are discussed below. Fewer But Larger Producers The number of farms selling eggs fell sharply from 2.4 million in 1949 to 527,000 in 1964. More eggs are being produced by fewer growers in a system that is moving toward more coordinated production. Growth of Contract Production Total egg production under some type of con tractual arrangement between the grower and other firms associated with the industry was prob ably less than 5 percent in the late 1950’s. By 1968, however, eggs produced under contract were estimated to account for 30 to 35 percent District states account for about 6 percent of egg production in the nation (In millions) Area 1960 1965 1969 Arizona .......................................... . . . . . . . . . Louisiana .......................................... ........ New Mexico .................................... ........ Oklahoma .......................................... ........ Texas ....................................................... ......... Total ................................................... ........ United States .................................... ........ 164 526 135 610 2,406 3,841 61,602 208 712 145 518 2,606 4,189 65,692 227 839 192 565 2,651 4,474 68,925 Percent change, 1969 from 1960 1965 38 60 42 -7 10 16 12 9 18 32 9 2 7 5 SOURCE: U.S. Department of Agriculture. of total egg production. Egg handlers, feed com panies, and producers had developed both con tract-production and owner-integrated programs to help solve quality, supply, and cost problems and to expand outlets for feed. Growers had en tered into contract programs in order to enlarge operations, reduce risks, acquire financial and technical assistance, and establish market outlets. prices trended generally downward to a low of 31 cents a dozen in 1967. Prices showed some recovery in 1968 and were particularly strong in 1969. A small reduction in egg output, strong consumer demand, relatively high meat prices, and increased quantities of eggs being used for both hatchery and breaking purposes contributed to the strength in 1969. Shift in Production to South and West Per capita egg consumption trends downward Egg production in the past decade has tended to shift to the South and the West. From 1959 to 1969, output increased 75 percent in the South and 39 percent in the West. In the same period, production in the North fell more than a fourth, with most of the decline in the north-central region. PER C AP I T A Marketing Changes Prior to the 1960’s, around two-thirds of all eggs produced moved through wholesale distribu tors to retailers and institutional buyers. About half of the eggs handled by these firms came from producers and the remainder from assemblerpackers. Since 1960, assembler-packers have be come predominant. In recent years, large-scale producers have tended to ship eggs direct to whole sale markets or to sell direct to large retail outlets. Consumption Growth Slow Total use of eggs has trended upward slowly, from 4.9 billion dozen in 1950 to 5.3 billion dozen in 1969 — an 8-percent gain. Consumption in creased during the 1950’s, declined in the early 1960’s, and has moved upward slowly since 1963. Price Declines Egg prices have generally declined in the last quarter-century. Prices paid to producers aver aged 46 cents a dozen in 1947-49. Since 1950, SOURCE: U.S. Depar t ment of Agr i c ul t ur e . Even though prices of eggs have trended down ward over the years, per capita egg use has also declined. Less strenuous work for much of the population has reduced the need for a large break fast; and with more married women in the labor force, eggs for breakfast have been replaced to a great extent by foods such as cereals, which are faster and easier to prepare. Slow Expansion The USDA expects that egg production and use will continue to expand slowly during the 1970’s — probably around 1 percent a year. Output per hen will likely continue to increase gradually to around 230 eggs per year by 1980, compared with 220 in 1969. Per capita consumption of eggs probably will trend downward by about 5 percent from the 316 eggs consumed in 1969. FARM COTTON ALLO TM EN TS A N N O U N C E D F O R 1 9 71 Upland Cotton. On October 15 the USDA announced a national marketing quota of 14.2 million bales and an allotment of 16 million acres for the 1971 upland cotton crop. The acreage allot ment is 1 million acres less than the 1970 allot ment and is the smallest permitted under the pres ent law. The marketing quota of 14.2 million bales was determined by relating the 16 million acre allotment to a four-year (1966-69) average yield of 426 pounds per planted acre. Extra-Long Staple Cotton. A marketing quota of 120,000 bales and an allotment of 117,791 acres have been set for the nation’s 1971 crop of extra-long staple cotton. The allotment is 39,393 acres larger than for 1970 — an increase of 50 percent over a year ago. Most of the national allotment has been apportioned to three states of the Eleventh District — Arizona, New Mexico, and Texas. The following are acreage allotments for extra-long staple cotton for these states. 1971 allotment 1970 allotment (Acres) (Acres) State Arizona .......... ............... New Mexico . . ............... Texas ............... ............... Total .......... ............... 51,097 23,933 41.613 116,643 34,037 15,914 27,666 77,617 SOURCE: U.S. Department of Agriculture. Twenty-seven counties in the three states were designated as suitable for the production of extralong staple cotton. Arizona New Mexico Texas Cochise Gila Graham Greenlee Maricopa Mohave Pima Pinal Yavapai Yuma Chaves Dona Ana Eddy Hidalgo Luna Otero Sierra Brewster Culberson El Paso Hudspeth Jeff Davis Loving Pecos Presidio Reeves Ward SOURCE: U.S. Department of Agriculture. FACTS In a total population of over 200 million peo ple, one out of 20 Americans lives on a farm. The nation has 2.9 million farms and a farm popula tion of 10.3 million. Crops were harvested from a total of 294 mil lion acres in 1969 — about 13 percent of total U.S. land area. Since some acreage is doublecropped, however, 334 million acres were actually used for crops. The top three crops by volume in 1969 were corn (4.6 billion bushels), wheat (about 1.5 billion bushels), and soybeans (1.1 billion bushels). Last year, average yield per acre for corn was 83.9 bushels; for sorghum, 55.2 bushels; for wheat, 30.7 bushels; and for soybeans, 27.3 bushels. Farmers’ gross income in 1969 was $54.6 bil lion, and net farm income was $16.2 billion — or $5,437 per farm. After-tax income of farm resi dents from all sources averaged $2,431 per person in 1969 — about 77 percent of earnings by non farm residents. A total of 12 million tons of plant nutrients (nitrogen, phosphorus, and potassium) were used in the United States and Puerto Rico during the year ended June 30, 1969. Approximately 15 per cent of the total was for nonfarm use. Average fertilizer application per acre in fiscal 1969 was approximately 40 pounds of nitrogen, 12 pounds of phosphorus, and 19 pounds of potassium. Output of about one of every five acres har vested is exported. Exports of U.S. farm products added up to $6.6 billion during the year ended June 30, 1970. Food grains, feed grains, and soy beans each accounted for around 15 percent of total export earnings. Imports of agricultural prod ucts were valued at $5.5 billion during fiscal year 1970. Prepared by C arl G. 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