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ARM AND Q anch F I ULLETIN Vol. 20, No. 1 January 1965 A G R IC U L T U R A L O U T L O O K FO R The outlook for agriculture in 1965 is for continued stability, according to the U. S. Department of Agriculture. Further economic expansion, rising consumer incomes, and popu lation growth probably will increase domestic demand for farm products. Per capita food con sumption in 1965 is expected to continue at about the high level of 1964. Exports likely will be only slightly below the record of last year. U. S. farm production expenses are expected to increase but at a lower percentage than the average for the past decade. Expenditures for such production items as feed, livestock, and fertilizers likely will rise, as will over head costs, but labor costs are estimated to be lower. A continual reduction in farm labor needs is anticipated as a result of the general substitution of machines for labor. Gross income realized by farmers (including cash receipts from farm marketings, Govern ment payments, and nonmoney income, such as farm-produced food and fuel) is expected to be at about the level of the past 2 years. Ac cordingly, realized net farm income in 1965 may not change much from the relatively stable level of recent years. Cash receipts from sales of livestock and products may show a small gain in 1965, reflecting a further increase in marketings but little change in average prices. Cash receipts from dairy and poultry products are expected to be about the same as last year. The smaller prospective crop receipts likely will be partly offset by larger Government payments. 1965 The following are summaries of national out look statements by the Department of Agricul ture for some important commodities in the Southwest. C off on The cotton outlook is highlighted by (1) another large crop, (2) rising mill use, and (3) a further buildup in stocks. The U. S. carry over of cotton on August 1, 1965, is expected to total about 13.0 million bales, or 0.6 million bales more than a year earlier. A carry-over of this size would mark the fourth consecutive year in which the carry-over has increased and would be the largest volume since the record 14.5 million bales in 1956. Despite the prospective increase in carry over this year, Commodity Credit Corporation stocks of cotton may be reduced, because com mercial interests are likely to increase holdings during 1964-65. CCC stocks on August 1, 1964, were the largest in recent years, while commercial holdings were the smallest since 1959. The 1964 U. S. cotton crop of 15.4 million bales is fractionally above the preceding year’s production and is the largest output since 1953. The crop is expected to exceed the anticipated disappearance during the 1964-65 season (August 1, 1964-July 31, 1965). U. S. mill consumption of cotton may total 9.7 million bales for 1964-65, or an increase of about 1.1 million bales over the previous season. This rise in use is resulting from lower F E D E R A L FEBERAl RBSBfiVE BftNK QFKDALtAB D A L L A S DALLAS, TEXAS net costs to users and some rebuilding of cot ton textile inventories. Although exports may decline from the previous year’s high level, they are expected to remain above the 5 mil lion-bale figure. The national acreage allotment for the 1965 crop of upland cotton has been set at the stat utory minimum of 16 million acres. The na tional acreage allotment for 1965-crop extralong staple cotton has been set at 77,758 acres, compared with 112,500 for the 1964 crop. Total U. S. disappearance of wheat in 196465 is estimated at 1,310 million bushels, with exports accounting for 675 million bushels. Exports at this level are considerably below the record 860 million bushels in the preceding season but are in line with wheat shipments in recent years. The expected record world wheat crop likely will increase competition for com mercial markets. Domestic disappearance of wheat may rise to 635 million bushels, or somewhat above that in the past few years. This gain is expected to result from a moderate increase in the use of wheat for feed. The decline in per capita con sumption of wheat in the United States is ex pected to continue in 1964-65, maintaining the total quantity of wheat used for food at the 500 million-bushel level. With total disappear ance of wheat slightly larger than the 1964 production, carry-over stocks on July 1, 1965, may be reduced slightly. The level of price support for 1965-crop cotton — between 65 and 90 percent of parity — will be determined by the Secretary of Agri culture after taking into consideration specified factors, including changes in production costs. Farmers who plant only their domestic allot ment in 1965 will be eligible to receive a basic price support through loans, plus an additional payment not to exceed 15 percent of the basic price support. As in the case of the 1964 crop, most farmers with 1965 allotments of 15 acres Based on the present supply and demand out or less will not be required to reduce their look, the price received for wheat by U. S. plantings in order to be eligible for the addi farmers in the current marketing year is ex tional price support. pected to be near the national average pricesupport loan rate of $1.30 per bushel. Cash receipts from wheat in 1964-65 may amount W h eat to $2.1 billion, compared with $2.3 billion The USDA says that several new aspects in in the preceding season. the present wheat situation could cause the outlook for wheat in the 1964-65 marketing Announcements on the 1965 wheat program year (which began July l, 1964) to be sub indicate two important changes, each of which stantially different from that of any other re provides a greater range of alternatives to the cent year. For the first time since the 1953 crop, Nation’s farmers. One of the changes would wheat can be sold without marketing quotas. permit farmers to produce any amount of wheat The price-support rate for wheat is at a level they desire without losing acreage history that is competitive with feed grain prices; con credit, provided they comply with program sequently, wheat feeding has a potential for provisions relating to wheat. The other allows expansion that has not been feasible during the the substitution of acreages between wheat and past 10 to 15 years. feed grains for farmers enrolled in the programs for each of these grains. The national average The total U. S. wheat supply for 1964-65 is loan rate for wheat in 1965 will be $1.25 per estimated at 2,180 million bushels. This vol bushel; domestic and export certificates will be ume includes the 1964 crop of 1,275 million valued at 75 cents and 30 cents per bushel, bushels, the beginning carry-over of 900 mil respectively. lion bushels, and the usual small quantity of imports. The 1964 crop is estimated to be somewhat larger than the previous year’s pro Rice duction, but the July 1, 1964, wheat carry-over The 1964 national rice crop is estimated at is nearly 300 million bushels less than a year a record 72.2 million hundredweight, points earlier. out the USDA. The beginning carry-over on August l, 1964, of 7.5 million hundredweight, together with the 1964 crop and an allowance for a small quantity of imports, provides a supply of 79.8 million hundredweight for the 1964-65 marketing year. A supply of this size is 3 percent above the previous year’s large supply and is about one-fifth greater than the 1957-61 average. Total disappearance of rice in the current marketing year probably will be about the same as the 1963-64 record. Domestic disappearance may be slightly above a year earlier, since use of rice for food is expected to continue its longtime upward trend. On the other hand, use of rice for seed and industry probably will not be substantially different from that in the pre ceding season. Total U. S. exports of rice in 1964-65 may equal the peak 41 million hundredweight of the previous season, as a larger proportion of the crop is expected to be shipped under Public Law 480. India may again be our largest for eign customer for rice, all of which likely will move under the Food-for-Peace Program. The U. S. carry-over of rice on August 1, 1965, probably will be up from the level of the pre ceding 3 years but likely will be considerably below the 5-year average. Feed Feed grain output for 1964 is estimated to be 136 million tons, or 13 percent below the preceding year’s record. The reduction in pro duction may be attributed to lower yields per acre, as a result of dry weather, and to the planting of 5 percent fewer acres. Total feed grain supplies for the 1964-65 marketing year are placed at 206 million tons — only 6 per cent below last year, according to the USDA. The supply of feed grains and other concen trates for 1964-65 is estimated at 240 million tons, or 12 million tons below a year earlier. Corn has accounted for much of the reduc tion in the feed grain supply. The total supply of corn is expected to be 354 million bushels below a year earlier, and the 1964 crop is estimated to be 300 million bushels below total use. Supplies of other feed grains — oats, bar ley, and sorghum grain — are also below a year earlier. Lower wheat prices are influenc ing the feeding of wheat to livestock, and the quantity fed may reach 100 million bushels. Feed grain prices in 1964-65 may average a little above a year ago. Under the 1964 feed grain program, the Commodity Credit Cor poration cannot sell feed grains at less than the loan rate plus carrying charges. Supplies of high-protein feeds available for feeding in the 1964-65 year will likely rise slightly. Soybean meal output may be up about 4 percent over last year’s 10.6 million tons. Prices of high-protein feeds may average a little below the high level of the past 2 years. The hay supply, estimated at 135 million tons, is 5 million tons below a year earlier. The supply per animal unit is 4 percent smaller than last year and about 10 percent below the 5-year average. Feed grain exports in 1964-65 probably will at least equal, and may exceed, the year-earlier record of 18.7 million tons. Continued strong demand in Europe and reduced Canadian pro duction will tend to strengthen U. S. exports. Cattle The total inventory of cattle and calves on the Nation’s farms as of January 1, 1965, is estimated by the USDA to be only slightly above the 106.3 million of a year ago. The slowdown in inventory growth results from in creased slaughter and further decreases in im ports of live animals. However, beef production in 1965 likely will be 2 to 3 percent above that of last year. Cattle slaughter prospects are slightly higher than in 1964, but total output probably will not gain proportionately because of lighter weights. A modest gain in per capita consumption of beef is expected. The large increase of 1964 is not likely to be repeated, however, despite lower supplies of competing meats. The USDA estimates that a record 100 pounds of beef were consumed per capita in 1964, reflecting a large rise in domestic production which more than offset a sharp drop in imports. Marketings in the first half of 1965 will depend largely on the number and the weight of cattle placed on feed during the fourth quarter of 1964 and the early months of 1965. The USDA estimates that fed cattle prices will remain near the October 1964 levels into the winter months. Feeder cattle prices probably will remain under pressure during the winter months because of large supplies; however, a favorable price relationship between feeder and fed cattle likely has encouraged large re placements in the fourth quarter of 1964 and early 1965. Dairy Milk production in 1965 is estimated to be about the same as the 125.7 billion pounds of 1964. A further decrease in the number of milk cows is anticipated, but gains in output per cow are expected to offset this decline. Farm marketings likely will increase again in 1965, and a continued gain in demand is in prospect, according to the USDA. Growing domestic disappearance and continued strong foreign demand are expected to hold prices at about the 1964 level, despite increases in farm marketings. W ool in early 1964, which caused a shift to the use of man-made fibers. Poultry and Eggs The production of poultry and eggs tends to increase each year. Broiler production has climbed for 18 consecutive years. Farm egg and turkey output has grown persistently, with only occasional interruptions in response to lower prices. Poultry meat production has in creased more than egg output. The two major reasons given by the USDA for this difference are the greater efficiency gains in poultry meat production and an increase in per capita consumption. Broilers are the bright spot in the poultry outlook for 1965. Output is expected to in crease only slightly, and competition from red meat is likely to be less severe, since pork production is estimated to be lower. Live broiler prices at the farm may average a little higher in 1965 than in 1964. The 1965 turkey output is expected to ex ceed the 98.7 million estimated for 1964. Im provement in production efficiency encourages the expansion in numbers, even though prices are expected to show weakness. Owners of breeder flocks report intentions to keep 4 percent more turkey breeder hens at the be ginning of 1965 as compared with 1964. Thus, the breeder flock will be large enough to sup port a sizable increase in turkey production in 1965. Shorn wool production in the United States is expected to continue downward in 1965 because of a further decrease in the sheep inventory, points out the USDA. Wool prices probably will be moderately lower than those received in early 1964. Mill consumption of apparel and carpet wool likely will show an advance over 1964, which recorded the lowest level since 1958. Imports of raw wool and wool products also are expected to increase in 1965. The shorn wool incentive level for 1965 will be 62 cents per pound, grease basis. This fig ure is the same that has been in effect since 1955, the beginning of the wool incentive program. The mohair support price will be 72 cents per pound — unchanged from 1964. Another increase in egg production is in prospect for 1965. The number of layers and replacement chickens currently on hand likely assures increased production through the first half of 1965. The volume of eggs during the second half of the year will depend on the number of replacement chickens started in the first half. Further improvements in the rate of lay are anticipated, with a resulting in crease in total production also being expected. U. S. apparel wool mill use likely will total 245 million to 250 million pounds in 1965. This figure represents a modest gain over 1964 and is the same as that in 1963. The decline in wool use during 1964 probably resulted from the relatively high level of world wool prices The price of eggs in early 1965 probably will remain high enough to encourage increas ing flock sizes, according to the USDA. If this pattern of placement materializes, however, egg prices in the second half of 1965 likely will be considerably below those in 1964.
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