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ARM AND Q anch F I ULLETIN August 1970 Vol. 25, No. 8 D EM A N D FO R FA R M P R O D U C TS IN C R E A SES Projections of population and economic growth point to strong domestic markets for food and other farm products during the 1970’s, according to a recent USDA report. By 1980 the population of the United States is expected to be around 235 million, and these consumers will probably spend over $1 trillion annually. Growing Demand fo r Farm Products As the decade of the seventies begins, consumer outlays for products containing items of farm origin are running close to $180 billion each year and make up about a third of total consumer spending. Although consumers will spend more for these items during this decade, the rate of in crease may be less rapid than during the 1960’s. These gains in expenditures will be influenced primarily by the extent of population growth, the advance in after-tax incomes, trends toward an upgraded diet, and consumer demands for more “built-in” services. cass-weight basis) by 1980. Trends point to ad vances in per capita consumption of poultry, processed fruits and vegetables, and vegetable oils during the coming decade. Per capita con sumption of pork is expected to hold about steady at 66 pounds (carcass-weight basis), while the volume of lamb and veal will probably continue to decline. Dietary and health recommendations could lead to further substitution of vegetable oils PER CAPITA CONSUMPTION OF SELECTED LIVESTOCK PRODUCTS POUNDS Consumers will have larger after-tax incomes in the seventies, but they will continue to spend a declining portion of their incomes on food. Even though rising incomes enable consumers to pur chase more expensive foods, such as beef, they usually do so by cutting down on consumption of other foods. Therefore, total pounds of food con sumed per person are expected to remain fairly stable. As the accompanying chart shows, trends in food preference patterns indicate that consumers will probably continue to eat more beef. Per capita consumption will likely reach 130 pounds (car F E D E R A L R E S E R V E D A L L A S , 1 9 5 7 -5 9 1 9 67-6 9 1980 p r o j e c t e d . S O U R C E ; U. S. D e p a r t me n t of A g r i c u l t u r e . B A N K T E X A S OF D A L L A S 1980 for animal fats, as well as a further decline in per capita consumption of eggs and dairy products (milk equivalent). Higher prices of dairy products could also encourage greater use of less expensive substitutes, the USD A reports. PER CAPITA CONSUMPTION OF EGGS AND MILK NUMBER POUNDS income per farm increased more than 80 percent. The gain was due, in part, to a decline in the number of smaller farms. As the seventies progress, income prospects are generally more encouraging for livestock pro ducers than for crop farmers. But the USDA ex pects rising production and general cost-price pressures to continue to limit gains in farmers’ realized net incomes. Average income per farm will probably rise, however, because of a decline in the number of farms. Off-farm income oppor tunities are also expected to boost after-tax in comes of farm people. Demand fo r Farm Inputs Expands Modern agriculture continues to be one of the nation’s most productive industries. The value of farm output in the last decade expanded more than a third. This increase took place on fewer but larger farms with substantially less labor and slightly less total land. 1 9 5 7-5 9 1967-6 9 1980 The number of farms dropped from around four million in 1960 to about three million by 1969. Although most of the decline occurred in the sec tor of commercial farms with cash receipts below $10,000, the number of part-time and part-retire ment farms also fell sharply. In contrast, the number of farms with sales exceeding $40,000 in creased about 75 percent during the decade. 1980 p r o j e c t e d . S O U R C E : U. S. D e p a r t m e n t o f A g r i c u l t u r e . Continued declines are expected in per capita consumption of fresh vegetables, fruits, and pota toes, although use of these foods in processed forms is expected to increase. Trends in eating habits are expected to reflect the move of people to urban areas and the housewife’s demand for products that can be prepared easily and quickly. How Farmers W ill Fare Although incomes in agriculture have lagged behind those in the nonfarm sector, farmers made significant advances during the last decade. Much of the gain in cash incomes accrued to livestock producers, although receipts to crop farmers also increased. However, farm production expenses climbed in every year except one during the sixties, offsetting much of the rise in gross income. As a result, realized net farm income was more than a third higher by the end of the decade, but net Marketing of Farm Products In recent years, farmers, processors, and dis tributors have moved increasingly toward closer coordination to reduce some of the uncertainties that characterize agriculture. Trends have been toward contract growing, mergers, cooperative marketing-processing agreements, farm consolida tion, and farm management information systems. This more efficient production-marketing system is expected to contribute to steadier earning flows for farmers and other businessmen in the agri business system. Currently, about four-fifths of total agricultural output is sold to intermediate producing and pro cessing industries and the remainder directly to final users. And by 1980, according to the USDA report, this latter proportion will probably dimin ish as the trend toward coordination continues and consumers demand more built-in services. New Weeping Lovegrass Released A new variety of palatable weeping lovegrass well-suited for intensive grazing, as well as for hay production, has been released by the USDA and the Oklahoma Agricultural Experiment Station at Stillwater. The new variety, Morpa, derives its name from the words “more” and “palatable,” which describe the major attributes of the strain, report Agricultural Research Service scientists. In grazing trials, both beef cattle and sheep pre ferred the Morpa variety to other weeping lovegrasses. Hereford steers made from 12 to 13 per cent higher liveweight gains grazing on Morpa than animals grazing on common weeping love grass. During a three-year period, daily gains for both winter and summer grazing on Morpa were 0.68 and 1.85 pounds, respectively, compared with gains of 0.59 and 1.69 pounds on common weeping lovegrass. Forage yield tests at three locations in Okla homa showed that Morpa equaled or exceeded the yields of other varieties. Seed yields from two har vests of Morpa averaged 520 and 560 pounds per acre annually. Morpa is expected to be adapted to Oklahoma, except in the panhandle region, and to other areas where common weeping lovegrass is grown. The new variety will not withstand fall grazing in northern Oklahoma. Both breeder seed and foun dation seed are produced under the direction of the Oklahoma Agricultural Experiment Station, and certified seed is expected to be generally avail able for spring seeding in 1972. Moistening Treatments Improve Cotton Fiber Quality Cotton fiber and yam quality can be improved by moistening cleaned seed cotton before it is ginned. Two equally effective methods can be used, according to a marketing research report issued by the USDA. A spray method in which seed cotton is ex posed to a fine mist of water and a vapor method in which cotton is exposed to highly humidified warm air were tested by the Agricultural Research Service and the Economic Research Service. Ginning tests with cotton grown in Arizona and Texas were made for two years at the Southwest ern Cotton Ginning Research Laboratory, Mesilla Park, New Mexico. Test results agreed with those of earlier studies which showed that damage to fiber quality is re duced or eliminated by increasing the moisture content of seed cotton fibers to a level of 6 to 8 percent before the seed and lint are separated in the gin. The spray and vapor methods restore part of the moisture that is removed before ginning. Both moistening methods improved fiber length, yarn quality, and spinning performance. Farm Population Continues to Decline The number of people living on farms in the nation averaged 10.3 million during the 12-month period centered on April 1969. This estimate was prepared cooperatively by the U.S. Bureau of the Census and the Economic Research Service. Of the more than 200 million people in the United States, only 5.1 percent— or one person in 20 — resided on farms in 1969. This segment of the population has declined 5.3 million, or about one-third, since 1960, when there were 15.6 million people on farms. The annual average de crease in the total farm population between 1960 and 1969 was 4.6 percent. U.S. P O P U LA TIO N : T O T A L A N D FA R M April I960 to A pril 1969 (Numbers in thousands) Farm population Year 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 .... ... ... ... ... ... ... ... ... ... Total resident population Number of persons1 Percent of total popula tion 2179,323 182,350 185,208 187,998 190,724 193,258 195,377 197,367 199,374 201,422 15,635 14,803 14,313 13,367 12,954 12,363 11,595 10,875 10,454 10,307 8.7 8.1 7.7 7.1 6.8 6.4 5.9 5.5 5.2 5.1 1 April-centered annual averages. 2 Census count. SOURCES: U.S. Bureau of the Census. U.S. Department of Agriculture. CHANGE IN DOLLAR VALUE OF FARMLAND Percent change, March 1970 from March 1969 Gain in Farmland Value Slows The national index of farmland value (based on index numbers of average value per acre in cluding improvements) rose 4 percent from March 1969 to March 1970. However, the rate of increase has moderated during the past three years. The rate of gain slipped from 5 percent a year ago and from 6 percent and 7 percent during the preceding two years. According to the Economic Research Service, the rate of change varied widely throughout the 48 contiguous states. Some states registered in creases as high as 14 percent, while others suffered decreases up to 4 percent. The rates of gain in farmland value increased appreciably in the Eleventh Federal Reserve Dis trict states of Louisiana (8 percent), Oklahoma (7 percent), and New Mexico (4 percent). In Arizona, land value remained about steady. Land value in Texas rose 5 percent this year, com pared with a 6-percent increase a year ago. Among the reasons for increases in farmland value throughout the nation are the continued strong demand for land for nonfarm uses, a favor able outlook for milk and dairy products that en courages the expansion of dairy farms, the pres sure to develop cropland in order to increase total production, and the growing trend toward farm consolidation. Reasons cited for decreases in farmland value include the tight credit situation and continued uncertainty over future wheat and feed grain programs. Moreover, variations in the value of farmland in the western United States, for example, can be broken down by type of land or the purpose for which the land is used. The value of irrigated land declined in Arizona, Nevada, and Washington; but the value of dry farmland decreased in Cali fornia, Colorado, and Wyoming. Prepared by C arl G. A n d e r s o n , J r .