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ARM A N D Q anch □ ULLETIN Vol. 23, No. 8 August 1968 AGRICULTURE HELPS TO RESTORE A BALANCE According to the Statistical Reporting Ser vice, American agriculture has been helping to right the balance of payments. In 1967, at a time when the value of commercial exports of nonagricultural commodities lagged behind the value of imports, agricultural trade brought nearly $1 billion into the United States. billion without the net contribution of agricul tural trade. The $1 billion contributed by the agricultural sector was the difference between the $5.5 billion earned by commercial farm ex ports plus returns on Government export pro grams (noncommercial) and the $4.5 billion spent abroad to pay for imported farm products. The balance of payments is an accounting of all money entering or leaving the country for any reason. For example, money leaving the country includes money paid for imports, foreign spending by U.S. firms, money spent abroad by American tourists, and U.S. Gov ernment spending abroad. Money entering the country includes payments received for U.S. exports, foreign loan repayments, expenditures of tourists visiting America, and foreign invest ment in the United States. A favorable balance of payments occurs when dollar income ex ceeds dollar outflow. When the reverse is true, as in recent years, the balance is in favor of foreign holders who can demand gold or build up future claims on U.S. goods. U.S. net commercial trade added $19 mil lion to the plus side of the payments account in 1967. The value of all exports sold com mercially was $26,999 million, as compared with $26,980 million paid for imported goods. All of the net dollar income from U.S. trade came from agriculture, since exports of com modities other than farm goods were less than the amount paid for similar types of imports. The commercial agricultural trade balance was a deficit in 1960, being $435 million on the minus side. Exports and imports were BALANCE OF PAYMENTS (D EFICIT-) As R e c o r d e d a n d E x c l u d i n g Agriculture's Net Cont rib uti on The balance-of-payments deficit, which had been diminishing gradually for several years, jumped again last year to the highest level since 1960. The SRS noted that this turn around caused widespread concern because it came at a time when some foreign currencies were being devalued. The overall payments deficit in 1967 more than doubled from the 1966 level and amounted to $3.6 billion (liquidity basis); how ever, the deficit would have mounted to $4.6 F E D E R A L R E S E R V E DALLAS , SOURCE: U.S. Department of Agriculture. B A N K TEXAS OF D A L L A S about equal by 1963. The balance became favorable and peaked at $984 million in 1966. The commercial agricultural balance of trade was favorable by a total of $660 million in 1967. normal rainfall, two or three well-timed spring irrigations should produce high yields of winter wheat. A Look at the Grocery Shelves The average American food store does a big Imported nonagricultural goods have be come increasingly attractive to Americans. The business in nonfoods by stocking a little bit United States paid nearly $ 11 billion for non of practically everything on its shelves — toys agricultural imports in 1960, but the Nation’s for the tots, records for the teens, and maga import bill increased to $22.5 billion by 1967. zines for the man and woman of the house. The balance of nonagricultural trade was fa The best selling items, however, are still food vorable between 1960 and 1964, earning $2 products, which generally account for about billion or more each year; however, the margin three-fourths of total store sales, according to fell to $1 billion in 1965. The balance between the Economic Research Service. exports and imports of nonagricultural goods The following table shows the relative im has been negative for the past 2 years, reach portance of various food and nonfood items in ing a deficit of $641 million in 1967. 1966, when total food store sales amounted to $64.7 billion. The $660 million favorable balance of com mercial agricultural trade in 1967 was large Share of total enough to offset losses from other trade and store sales leave a surplus of $19 million in the commer Commodity in 1966 cial balance of trade. Noncommercial exports group (Percent) of agricultural commodities amounted to $328 Food items million in 1967. Added to the $660 million fa vorable commercial agricultural trade balance, Meat, poultry, and fish............. 26.5 the net contribution of U.S. farming to the plus E g g s............................................ 1.0 Dairy products ........................ 6.9 side of the payments balance totaled $988 Fruits and vegetables............... 17.9 million in 1967. Irrigation in Texas High Plains Land under irrigation is increasing in the Texas High Plains, and the ground-water sup ply is decreasing. The water table has receded almost 3 feet per year since 1962, and wheat farmers who depend on irrigation are becom ing concerned. U.S. Department of Agriculture engineers have analyzed the problem and have come up with the following suggestions. Where water is limited, a single, well-timed irrigation of winter wheat is better than two ill-timed appli cations. The most critical need for irrigation of winter wheat is from the booting through the early grain-filling stages. USDA scientists found that less than normal amounts of mois ture during early spring did not affect yields appreciably if enough water were applied dur ing the critical stage. Findings also showed that during any crop season with normal or above Cereal and bakery products. . . Nonalcoholic beverages........... Other foods1 ............................ 9.1 5.1 8.1 Total f o o d ........................ 74.6 Nonfood items Alcoholic beverages ............... Pet fo o d ..................................... Tobacco ................................... Health and beauty aids............. Soaps and laundry supplies. . . Paper products and foil........... Housewares and household supplies2 ............. Magazines, books, and records. . Other n o nfoods........................ Total n o n fo o d ................. 4.9 .9 3.8 3.1 2.5 1.6 2.1 .3 6.2 25.4 1 Includes frozen prepared foods; baking needs; candy and chewing gum; desserts; food fats and dressings; jams, jellies, and preserves; sugars and sweeteners; and other foods. 2 Includes cooking and serving utensils, kitchen aids, and such items as pesticides, waxes, mops, brooms, light bulbs, and deodor izers. 1969 W heat Program and Acreage Allotment Secretary of Agriculture Orville L. Freeman recently announced the 1969 wheat program. The national wheat allotment was set at 51.6 million acres, down 13 percent from the 59.3 million acres in effect for the 1968 crop year. Secretary Freeman said that with normal yields, production from the 1969 allotment should total about 1.30 billion bushels, compared with 1.55 billion bushels anticipated from the 1968 wheat crop. ment. As usual, payment will be contingent upon a conserving use of diverted acreage. Farmers signing up in the voluntary program can also qualify for alternative cropping op tions. If a farmer signs up in both the wheat and feed grain programs, one option can be substitution between wheat and feed grain acre age. Another option is the overplanting of allotment acreages by one-half, with wheat from excess acreage to be stored under bond. Also included in the 1969 wheat program A farmer will again be able to substitute wheat are the following features. for barley, oats, and rye if he so requests and Price-support loans on 1969 wheat will con he has a history of production of these crops tinue to be available at a national average of in 1959-60. Barley will again be excluded $1.25 per bushel. Total price support equal from the regular feed grain program. to 100 percent of parity (as of July 1, 1969) The 1969 wheat allotments for the five states will be available on 43 percent of the cooper in the Eleventh Federal Reserve District are ating farm’s projected production on its allotted given below, along with comparisons with the acreage. Domestic marketing certificates will 1968 and 1967 allotments. make up the difference between parity and the loan rate. A farmer may divert up to one-half his acreage allotment and receive 50 percent of the county loan rate times the allotment acre age diverted times the projected yield. Farms with 1969 allotments of 21.7 acres or less will be able to divert the entire allotment for pay State Wheat Allotment Acres 1969 1968 1967 Arizona .................. 39,207 Louisiana .............. 38,153 New Mexico ......... 427,349 Oklahoma .............. 4,454,409 Texas .................... 3,704,021 Total .................. 8,663,139 45,068 43,851 488,865 5,117,838 4,258,167 9,953,789 51,821 50,376 560,302 5,881,345 4,896,216 11,440,060 Notes on Agriculture in the U.S.S.R. FC IC Aids Southwestern Farmers The Soviet Union has 39.8 million farm workers — IV 2 times the U.S. total — and 511 million acres of sown cropland — nearly IV2 times the U.S. total. In other inputs, the U.S.S.R. uses only one-third of the fertilizer, tractors, and trucks used by U.S. farmers. The Federal Crop Insurance Corporation has said it will pay an estimated $457,000 in damages to insured wheat farmers in 24 coun ties of the Panhandle and northern Texas and Curry County, New Mexico. The estimate puts losses slightly above the $423,000 paid a year ago. In output comparisons, the Soviet Union produces 2 Vi times as much mutton, lamb, and goat meat as the United States; 25 percent more milk; and much more sunflower seed. On the other hand, in comparison with the U.S.S.R., the United States produces 28 percent more food and feed grains; 2 Vi times as much beef and veal; AV2 times as much poultry meat; 42 times as many soybeans; twice as many eggs; and 1V2 times as much pork. The Federal Crop Insurance program is de signed to protect the farm working capital that must be invested and risked each year to pro duce a crop. When low yields attributable to unfavorable weather or other natural causes reduce crop values below policy guarantees, the FCIC makes up the difference in cash. Crop insurance is now available to farmers in 70 Texas counties. First Successful Hybrid Barley The U.S. Department of Agriculture and The University of Arizona recently announced the development of the first successful hybrid barley, which was produced by a completely new scientific method. The development of hybrid barley is in itself a research break through, promising greatly increased yields per acre. Of even greater significance, however, is the new breeding technique employed, because it makes possible the hybridization and in creased production of two of the world’s im portant food crops, rice and beans. USDA scientists estimate that the application of this new technique to such crops could boost the world food supply as much as 10 percent. per acre on the windward side of the area to be revegetated. This practice will give the grass a foothold from which it can spread across the dune. Each spring, apply nitrogen fertilizer to the advancing edge of the grass and fertilize the area covered by the previous year’s advance. 3. If it is considered desirable to seed bare areas rather than wait for existing vegetation to spread, plant grass seed and cover with mulch. Spread 2 Vi tons of hay per acre for mulch and anchor it with a tillage implement such as a disc packer. 4. After the grass is established, manage grazing carefully; do not overgraze. Through observance of these four steps, the ARS researchers obtained satisfactory stands Field tests at nine locations in Arizona of sand-binding grasses. Grasses that are native showed that Hembar, the first hybrid barley, to the Texas and Oklahoma Panhandles and yields from 15 to 35 percent more grain than southwestern Kansas performed much better does Arivat, the most widely grown variety in than those that were introduced. The principal the State. Although additional research is native grasses in these areas are giant sandreed, needed in order to develop hybrid barley for sand bluestem, blowout grass, and giant dropother regions of the United States, as well as seed. The site of the 5-year study conducted by other parts of the world, the way is now open the ARS was a dune area in the Oklahoma to reach this goal. Hybrids must be tailored to Panhandle located 30 miles south of Liberal, specific areas because climatic and farm man Kansas, and 20 miles north of Perryton, Texas. agement practices vary widely. Realized N et Income Per Farm Seed of the female parent of the hybrid 1965 1966 State 1967 Hembar is available in limited quantity upon written request to the Arizona Crop Improve A riz o n a ........... . $21,457 $22,826 $23,650 ment Association, Department of Agronomy, Louisiana . . . . 3,328 5,452 4,643 The University of Arizona, Tucson, Arizona New Mexico . . 6,004 8,689 8,143 85621. The male parent of the hybrid is the Oklahoma . . . . 4,001 3,387 3,486 commercial variety Arivat. The USDA has no Texas ............. 5,010 4,463 6,070 hybrid barley seed for distribution. NOTE. — Realized net income is farm income Grasses Hold Sand Dunes Making sand dunes “stay put” is now eco nomically feasible in the Texas and Oklahoma Panhandles and in southwestern Kansas. A study by the Agricultural Research Service shows that sand dunes in these areas can be maintained at a justifiable cost if the following cultural requirements are met.12 1. Keep livestock off the sand dunes until a grass cover is established. 2. In the spring of the first year, broadcast a complete fertilizer at the rate of 300 pounds which is not adjusted for changes in inventories. SOURCE: U.S. Department of Agriculture. Farm Real Estate Values (1957-59 — 100) State Mar. 1, 1968 Mar 1, 1967 Percent increase Arizona . . . . Louisiana . . New Mexico Oklahoma . . Texas ......... 141 208 169 199 184 138 195 166 181 172 2.2 6.7 1.8 9.9 7.0 SOURCE: U.S. Department of Agriculture.
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