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Business
Review
-

February 1974

The Energy CrisisOutlook for Petroleum
In the Southwest Mixed

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

The Energy Crisis-

Outlook for Petroleum
In the Southwest Mixed
r:r:he energy crisis could be espeRally significant to states of the
leventh District. Users in these
Southwestern states have long
be.en accustomed to plentiful supPli.es of oil and gas that sold at
prIces considerably less than in the
nation as a whole. Moreover, a
h~avy portion of the region's industlllal base is directly tied to oil and
gas production.
.Now, with imports sharply curtailed and the outlook for domestic
pr.oduction to increase only to a
~hlUor. degree relative to demand,
ere IS a sudden awareness that
~?ortages and distribution disrup. IOns may occur at least temporarIly and that users in the Southwest
will have to begin paying more for
energy. The region's industrial
future is bound to be affected.
Many industries will face problems. And there could be problems
~or some segments of the petroleum
Industry itself. Refinery runs, for
example, have been sharply cut in
response to the drop in imports of
~rude oil. Crude buyers in produc~ng states of the Southwest report
rouble finding enough domestic
crud.e to keep refineries going. Im~edlate prospects for increasing
e domestic supply of crude oil
re dim. Demand for crude has
een rising at least 6 percent a
~ear, and production in Texas
lds, for example, has been falling
out 3 percent a year.
lil ~s reserves dwindle, it is less
C{e y that the Texas Railroad
°mmission will relax some of its
c~nservation requirements in an
~ ort to boost production. On the
s~ntrary, some of the commission's
r aff sees preservation of the state's
eserves as more crucial than ever.

b

ab

n Usiness R eVlew
. / February 1974

Since, under Texas law, the commission is viewed primarily as a
conservation agency, it may have
no choice but to insist that reserves
be stretched out as long as possible.
With fuel prices rising, the outlook is for renewed efforts to discover and develop new reserves.
And higher fuel prices will mean
more income in the Eleventh District from oil and gas production.
Both aspects of the change brighten
prospects in the Southwest. Also,
with more wells being drilled, there
should be a sustained boom for the
oil field equipment and supply industries that abound in southwestern states.
Coupled to the District's oil and
gas production, however, are large
concentrations of industries based
on cheap energy and the ready
availability of petroleum feedstocks. As oil and gas prices rise,
these industries face possible setbacks that could take years to
overcome. The outlook for petrochemicals is especially uncertain.
Just how important any setback
in processing could be for District
industry is suggested by the assignment of weights to the Texas
industrial production index prepared by the Federal Reserve Bank
of Dallas. About half the weight
used in compiling this index is assigned to the petroleum producing
and processing industries. Of that,
close to half-about 20 percent of
the total-is assigned to processing.

here and abroad. One important
factor, however, has been the absence of any unified energy policy
in this country until recently. But
several public policies, all independently arrived at, combined to
bring about the same effect-to provide an abundance of comparatively inexpensive fuel.
Under such an unstated but,
nevertheless, national policy, producers and consumers benefited
in the beginning. After huge new
petroleum reserves were found
overseas in the 1950's, a quota system was imposed on imports to
prevent a possibly massive inflow
of low-priced crude from abroad.
Unlike most protective policies,
the system was devised to promote
national security, recognizing that
an unchecked flow of cheap foreign
oil would create a dependence on
imports that might not always be
available. This system, along with
the prorationing system devised by
producing states, accounted for the
spare capacity in the Southwest.
Because of their enormous reserves, the District states had already prorationed production to
stabilize markets and, thereby,
avoid wasteful pumping. As demand for energy rose, the rise in
domestic prices was held back by
increasing state production allocations and by allowing more foreign
oil into the country. Americans had
not merely stable oil prices but, in
constant dollars, gradually declining prices.
Source of shortage
The abundance of oil was reinforced by enormous reserves in the
The loss of spare capacity that
brought such significant changes in natural gas market. Until pipelines
were laid nationwide, there was no
the outlook for the petroleum inneed to encourage exploration for
dustry in the Southwest was due
natural gas. And even long after
to a number of developments both
1

Developments in oil production
impacted similarly on the Southwest. The self-imposed restraints
on output postponed income into
the future, making it harder for
producers to finance their operations. As regulation of natural gas
prices curtailed exploration, so
eventually did prorationing of oil
production.
Moreover, drilling costs rose.
Producers were caught in a costprice bind that finally brought a
decline in the Southwest's multimillion-dollar exploration industry.

gripped consumers has been due
to developments that have been
building for many years.
The nation's energy requirements have doubled since 1950.
And until the recent cut in imports,
they were expected to double again
by 1985. But domestic energy supplies have become tight with the
loss of spare capacity for the production of petroleum.
Most of this capacity has been
in southwestern states. These
states have long dominated domestic oil and gas production, as they
are apt to do for years to come.
Petroleum in the Southwest
Excluding undeveloped reserves
The immediate problem is due, of
in Alaska, they account for some
course, to the interruption of im73 percent of the nation's proved
ports from the Middle East. But
crude oil reserves and about 85 perthe growing sense of crisis that has cent of its natural gas reserves.
Only Alaska is in a class with
the Southwest as a potential producer of petroleum. Although enormous reserves have been discovNatural gas reserves in Texas decline,
ered on its North Slope, it will still
limiting further increases in production
be years before Alaska can bring
these reserves into production. And
TRILLION CUBIC FEET
130------------------------------_____________________
even then, it will be hard to transport Alaskan oil to the Atlantic
Seaboard, now served mainly by
120states in the Eleventh District.
Of the five District states, only
Arizona
is not a major producer of
110 petroleum. Texas and Louisiana
are the nation's leading producer
states. Texas alone produces more
100than a third of all domestic oil and
gas. Of the record $8 billion in min90erals
produced in this state in 1973,
-:::some
93 percent was petroleum. In
9Louisiana, where petroleum accounted for a similarly high pro8portion of the output, mineral
production reached well over $5
billion that year. Oklahoma is the
7 - _-------....-PRODUCTION
fourth most important producer
state, and New Mexico is sixth.
Without dramatic new discover6 I
I
I
I
I
ies-possibly offshore-production ill
I
I
1966
1967
1968
1969
1970
1971
1972
these states is probably close to its
SOURCE: American Gas Association
crest, however. Even with an increase in exploration, production
in the Southwest is expected to

pipelines opened a national market
for gas and demand soared, little
effort was made to find new gas
because of the abundance of gas
reserves discovered earlier in the
search for oil in the District. This
backlog of reserves helped further
in keeping energy prices low.
Regulation of natural gas developed independently of policies governing crude production. But the
aim was the same-to keep energy
prices down. As demand for natural
gas rose, controls were imposed to
regulate the price of gas sold interstate. And as regulation of gas
prices took its place in a national
policy, artificially low gas prices
contributed to a slackening in
exploration, and natural gas supplies tightened.

~

2

With decline in exploration ,
nUmber of producing oil wells falls
THOU
SAN D WELLS
600 --______________________________________________
___

55 0 PRODUCING WELLS IN UNITED STATES

500 -

45 0 ~
60-

r

20
Iii
1950

j

I

iii

iii

iii

1955

1960

1965

1970

SOU RCE: World Oi l

-dhcline in the years immediately
a ead. In Texas, for example, the
W of oil is expected to drop from
~ out 3.5 million barrels a day in
?72 to 2.5 million in 1985 without
SIgnificant new discoveries.
'1' 'l'he output of natural gas in
we){as has already reached a point
here it is backed by reserves that
1:?uld .last only about ten years.
l' ~~t IS the reserve-to-production
~ 10 generally believed the mini1i\1u~ needed for year-round deh eries. And as the reserve base
bas d~clined, there have already
'l'een Interruptions in deliveries of
e){as gas.
With recent increases in oil and
gasp'
rIces-and probably more to
nus'!ness Review / February 1974

fib

come-the value of production in
the Southwest will very likely hold
up for many years, protecting the
region's economy from any marked
declines in oil-based revenues.
Meanwhile, higher prices have
spurred drilling.
Nationwide, 5.6 percent more
wells were drilled in 1972 than in
1971. Much of this increase was in
the Southwest. In Texas alone, 8.5
percent more wells were drilled and
5.4 percent more wildcat wells were
sunk in search of new reserves.
While this increase still leaves
the number of wells drilled far
short of the peak reached in the
midfifties, it marks a decided turnaround from the downtrend of the

past decade. By 1971, the number
of wells drilled in the United States
had dropped to the lowest level in
the post-World War II period.
Although any further increases
in drilling could be limited by other
factors-such as the availability of
risk capital and capable oil field
workers-the availability of equipment is also a constraint. And this
constraint, in itself, helps improve
the outlook for business activity in
the Eleventh District, especially
in Texas. A major producer of oil
field equipment, Texas built oil
field machinery valued at $606.5
million in 1971.
Construction of offshore rigs has
been going full tilt in Texas for
some time, and there are enough
backorders to keep Texas yards
busy for years. Altogether, some
25 offshore rigs and drilling ships
are under construction in Texas
and Louisiana. With the upturn in
onshore drilling, construction of
land rigs has also increased.
Closely connected to the production of petroleum in the Southwest
is the nation's heaviest concentration of refineries and petrochemical plants. Prospects for the
region's petroleum processing
industries are-for the long runtotally different from the outlook
for its oil and gas production. If
long-run supplies of feedstocks
tighten, growth of these industries
is clearly threatened.
Refineries and petrochemical
plants are important enough to the
economy of the Southwest that any
slowing in the growth of petroleum
processing could have a significant
impact on the region and the nation. Fully 40 percent of both the
nation's refining capacity and its
petrochemical capacity is along the
coast of Texas and Louisiana-producing, for example, 80 percent of
the country's synthetic rubber.
In Texas alone, more than
100,000 workers were employed in
petroleum processing plants in
3

the Southwest. On the positive
side, continued demand for petroleum products provides the most
1967=100
persuasive contention that the out140
look for the processing industries
is still bright.
With fuel supplies tight, refineries had been operating close to
130 capacity when the Arabs put an
embargo on crude from the Middle
East. Thus, even when Middle
Eastern oil is available again, more
120 refineries will have to be built.
Refiners budgeted nearly $1.2
billion on capital equipment in
110 1973, and more may be spent this
year, much of it in the Southwest.
Producers of chemicals and allied
products budgeted close to $4.3
100~~--"~~------.--------r-------'--------,-billion on capital equipment in
1973 before the Arab embargo, and
1967
1971
1972
1970
1968
1969
they were expected to invest a silnilar amount in 1974. This includes
... and stayed below other wholesale prices
large sums for pollution abatement.
1967=100
With petroleum reserves declin130
ing in the Southwest and processing plants becoming increasingly
dependent on imports for feedstocks, it might be expected that
120 most of this future construction
would be closer to principal markets-as, for example, in the N ortheast. Concern over the environment
110 in such areas continues, howeverdespite the energy crisis. This concern has prevented construction of
refineries and petrochemical plants
100~"~;;~~----~------------'-----------r--------~and of the superports needed to
1967
1968
1971
1969
1972
1970
accommodate tankers large enough
SOURCE: Independent Petroleum Association of America
to help offset some of the rising
cost of imports.
There is a very good chance of
a superport being built near New
Orleans. And indications are that
1972. Payrolls of these plants tocent of the value added by manuthe next of these new facilities will
taled about $1 billion that year.
facturing in the state that year.
most likely be built in Texas. HouSProducts of Texas refineries were More than 61,000 workers were
ton and Galveston want to build
worth $7.3 billion in 1971. That
employed in Texas chemical plants superports, and other Texas Gulf
represented more than $1.5 billion
in 1973.
Coast ports would also like to have
in value added by refineries-or
facilities
to receive supertankers.
some 10 percent of the value added Outlook for processing ...
Were such superports to be built
by all the state's manufacturing
There are both positive and negain the District, prospects for the
plants. Chemicals and allied prodtive factors at work shaping prosregion's refining expansion would
ucts accounted for about 20 perpects for petroleum processing in
be boosted.

Crude prices in the past
increased less than drilling costs . ..

4

Much of the addition to refining
capacity so far has come through
the expansion and modernization
of existing plants. And as the Texas
and Louisiana Gulf Coast already
has more refineries than any other
region, the Southwest is likely to
Continue to see this type of construction. Texas, for example, has
40 big oil refineries. Together, they
can process some 3.5 million barrels of crude a day, accounting for
rOUghly a fourth of the nation's refining capacity.
All these factors favoring plant
expansion in the Southwest relate
primarily to refineries and their dependence on crude oil. But without
a basic change in inputs to petrochemical production in this country, the declining availability of
~atural gas in the Southwest could
amper growth in the region's
petrochemical industry.

liquids. In recent years, it has consumed about a third of the natural
gas liquids produced in this country and about half the natural gas
used by all industries.
But as regulation continued to
hold down prices-even after reserves became less plentiful-no effort was made to discourage use of
natural gas. And without price increases, there was little incentive
for further exploration. The result
was a steady deterioration in reserves and, eventually, in the supply of natural gas.
Now, gas prices are up sharply.
To get the fuel and feedstock they
need to expand operations, petro-

... may not be bright
Petrochemical plants in the Elev~nth District were built originally
o make use of the byproducts of
petroleum refining. But very early
In the development of the petrochemical industry, plants in Texas
ar d Louisiana began making use
o the cheap gas and gas byprod~cts available from fields nearby.
p s a result, they have long been det endent largely on cheap gas and
\V~~hg~tseous liquids produced along

BILLION BARRELS

chemical plants not only have to
pay much higher prices, they must
also face the possibility of other
users bidding away their supplies.
Most petrochemical companies
have been protected from increases
in gas prices by long-term contracts
that give them comparatively lowpriced gas. But companies that
respond to the rise in demand for
petrochemicals by expanding their
facilities-and, therefore, have to
negotiate for additional gas supplies-could be caught in a pinch
between the prices they have to
pay for more inputs and the prices
markets will bear for their output.
New contracts for natural gas call

Production exceeds additions to U.S . crude reserves,
despite dramatic discoveries in Alaska

40-------------------------------------------------PROVED RESERVES

35-

1 •

\V With gas reserves in the South-

rnest so much larger than the de'l' ands on them, prices were low.
dihey Were low enough, in fact, for
thsthnt residential markets to bear
A e eavy costs of transmission.
thn~as-consUming plants along
the U~f Coast came to dominate
e natIOn's
chemical industry ,
b00
t·
leaJ lUg.t~e United States to world
I ershlp III petrochemicals.
Pet n the process, however, the
nat~Ochemical industry became the
lIs lOn's largest single industrial
er of natural gas and natural gas

nUs'Uless Review /

February 1974

NEW RESERVES

10-

5-

~

~-

....CRUDE OIL PRODUCTION
O~I-,,~Ir-rl~I~I-,,~Ir-rl~I~I-,~I..-rl~~I-,~r-r-~~I-,--r-

1950

1955

1960

1965

1970

SOURCE : American Petroleum Institute

5

for prices 3 or 3 ~ times more than
just a few years ago. Prices of natural gas liquids are also up sharply.
Even companies with contracts
that provide favorably priced inputs face the risk of interruptions
in the flow of gas. The possibility
that the Government might begin
allocating gas to industry during
periods of peak demand makes the
availability of gas as a feedstock
uncertain, adding to the risks companies must take in expanding
their petrochemical plants. Because these plants are so expensive
to build, they must be operated
continuously to spread out their
high fixed overhead.
Nor can the industry escape the
gas shortage by drawing more heavily on natural gas liquids. With gas
becoming scarce, changes in regulatory policies are also all0wing
prices of gas liquids to rise. And
the industry faces new competition
for the supplies that are available.
Synthetic gas producers and
even some utility companies that
once dealt primarily in natural gas
have become interested.in b~ying
gas liquids to convert into gas that
can be sold directly to end-users
as fuel. If such interest continues,
these companies could help bid up
prices still further, putting these
hydrocarbons beyond the reach of
petrochemical producers.
Imports hold out few possibilities. Natural gas can be transported from overseas only as a
supercooled liquid-which makes it
too expensive-for uses other than
in meeting peak fuel demand and
possibly home consumption.

6

prices rise, abundant alternatives
in coal and shale oil.
With the change in the nation's
energy supply situation, policies
have changed. Steps were being
taken, even before the current crisis, to encourage the search for neW
reserves. Prices of gas sold interstate were allowed to rise. Import
policies and spare capacity combined to hold back rises in oil
prices for a while, as later did price
controls. But now, domestic crude
prices have been allowed to rise.
For domestic supplies to hold
imports to a level the country can
afford, wellhead prices will probably have to continue rising
sharply over the next few years.
With the Arab embargo and the
jarring increases in world crude
prices, domestic prices have already reached levels thought impossible just a few months ago.
These recent rapid changes will
have a decided effect on states of
the Southwest. Such sharply rising prices will go far not only in
offsetting the effects of gradually
declining production but also in
extending production by stimulating recovery efforts and exploratioJl
for new fields.
But prospects for higher oil and
gas prices do nothing to improve
the outlook for the region's petroImportance of prices
chemical industry. Based on inexWith the rapid increases in demand pensive gas and gas bypro ducts,
for energy and the falloff in drillthis industry does not have the
ing, problems were bound to depossibilities for relief that can be
velop in time. Many geologists beheld out to refineries. And lack of
lieve there are still large amounts
growth in petrochemicals could
of oil and gas reserves to be found
be important to the nation as a
in the United States and, as fuel
whole. For one thing, petrochemi-

New plants could be based on
feedstocks from crude refining.
Plants in Europe make extensive
use of refinery products. But because oil refineries in this country
were built for a different output
mix, use of feedstocks derived from
crude would require extensive
modification of both refineries and
petrochemical plants. The changeover would be enormously expensive and could be accomplished
only over several years.
The shortage of natural gas is
also threatening to boost another
important cost of plant operations,
further undermining the locational
advantages of the chemical industryon the Gulf Coast. The chemical industry consumes large
amounts of energy. About 40 percent of the electricity used by
Texas industry, for example, is
consumed at chemical plants. And
most of this comes from generating
plants burning natural gas.
With the cost of gas as a boiler
fuel going up, power companies in
Texas are planning to make more
use of other fuels, such as lignite,
and to switch to nuclear generating plants. Either move, however,
will make electricity more expensive than users have been accustomed to in the Southwest.

?als are basic inputs to almost all
Industries. For another, petrochemicals have been a source of
strength to the nation's balance of
payments.
This country is the world's largest chemical producer. Its exports
of chemicals for 1973 were at more
than twice the value of its chemical imports-over $5.6 billion, comPared with imports of about $2.4
billion. The U.S. share of world
exports has been declining, however, and the surplus in chemical
trade could be endangered.
Much of this trade advantage
has been due to superior technolOgy. But much of it has also been
d.ue to the availability of inexpenSIVe energy and feedstocks. As
these cost advantages slip, technical Superiority becomes less important-and even this advantage
could be lost.
With plenty of money for investlllent in plants and an overabundance of cheap oil and gas, producer countries in North Africa
and the Middle East could become
formidable competitors in chemicals. Saudi Arabia, for example,
b~uany flares about 3.5 trillion cu. IC feet of natural gas a year. That
IS rOughly 16 percent of total U.S.
consumption. And in the Middle
East, oil generally costs no more
than 20 cents a barrel to produce.
Some production costs are reputed
to run as little as 5 cents. Countries with such cheap feedstocks .
could undersell any other chemical
Producer in the world.
-Stephen L. Gardner

l!usiness Review / February 1974

7

New member banks
The Dallas/Fort Worth Airport National Bank, Irving, Texas, a newly organized
institution located in the territory served by the Head Office of the Federal
Reserve Bank of Dallas, opened for business January 3, 1974, as a member of the
Federal Reserve System. The new member bank opened with capital of $500,000,
surplus of $500,000, and undivided profits of $250,000. The officers are: Ronald G.
Steinhart, Chairman of the Board; A. E. "AI" Goode, President; Jon J. Collins,
Assistant Vice President; and Jerry W. Corley, Cashier.
The Kingwood Commerce Bank, N. A., Humble, Texas, a newly organized
institution located in the territory served by the Houston Branch of the Federal
Reserve Bank of Dallas, opened for business January 7, 1974, as a member of the
Federal Reserve System. The new member bank opened with capital of $400,000,
surplus of $400,000, and undivided profits of $200,000. The officers are: William S.
Pebworth, Jr., Chairman of the Board; Terry Tuggle, President; and Robert A.
Thompson, Vice President and Cashier.

New par banks
The Addison State Bank, Addison, Texas, an insured nonmember bank located
in the territory served by the Head Office of the Federal Reserve Bank of Dallas,
was added to the Par List on its opening date, January 2, 1974. The officers are:
William F. Stevens, President, and Mrs. Sue Coleman, Cashier.
The Forest Hill State Bank, Forest Hill, Texas, an insured nonmember bank
located in the territory served by the Head Office of the Federal Reserve Bank of
Dallas, was added to the Par List on its opening date, January 7, 1974. The
officers are: Michael C. Stinson, President, and Robert R. Cleveland, Vice
President and Cashier.
The New Ulm State Bank, New Ulm, Texas, an insured nonmember bank located
in the territory served by the Houston Branch of the Federal Reserve Bank of
Dallas, was added to the Par List on January 7, 1974. The officers are: Winston B.
Harris, Chairman of the Board and President; Lew Ellyn Gross, Executive Vice
President; Charles W. Mewis, Executive Vice President; Gilbert Glaeser, Vice
President; Mrs. Violet Buechmann, Assistant Vice President; Jack Schultz
Cashier; and Mrs. Beatrice Rinn, Assistant Cashier.
'
The Bank of Vernon, Vernon, Texas, an insured nonmember bank located in the
territory served by the Head Office of the Federal Reserve Bank of Dallas was
added to the Par List on its opening date, January 21, 1974. The officers ~re:
J. W. Munson, President, and Brian Hooper, Vice President and Cashier.

8

Federal Reserve Bank of Dallas
February 1974

Statistical Supplement to the Business Review

-

Total credit at weekly reporting
banks in the Eleventh District rose
iOderately in the five weeks ended
anuary 23, reflecting greater than
usual increases in both total loans
~nd investments. With a decline in
otal deposits the growth in bank
c1'edi t Was financed
'
mainly by sizable net purchases of Federal funds.
. Although real estate loans rose
~gnificantly, most ofthe gain re.ected the reclassification of some
~lzable loans by one large District
ank that shifted funds out of comlllercial and industrial loans in to .
~~al estate loans. After adjustment
1 l' the reclassification, real estate
Dans still rose slightly more than
~:~al, probably because rising inin tones of unsold homes may have
of~e~sed interim financing needs
uilders.
Cl'Adjusted business loans still dethned contraseasonally, reflecting
he slowdown in economic activity.
<V1 01'eo
.
by
vel~, mventory accumulation
b lllany mdustries apparently has
f eef restricted due to shortages of
s~~ tnaterials, and parts. Conbl y cer loans were also weak, probaba k urbed by employment cuts and the slowdown in econo. lc activity

n/

se~n .balan~e, banks added to their
~eeklty holdings over the five

erntns . AI.though holdings of GovhOldi ent ls~ues l'.o~e less tha!1.usual,
incr ngs of mumclpal secuntles
.eased
th ell'
f . more than usual . With
t
au'ly high rate of return and
aX-ex
CU1'it. etnpt status, municipal set1'act~es ~ave been an especially atT lYe Investment.
tely ot~l deposits declined moderain d' wlth an especially shal'p drop
typ:~and deposits. Every major
COl'Qtne ~~posltor except foreign
draw llclal banks made net witha s from their checking ac-

counts. Time and savings deposits
rose markedly, however, mainly reflecting a sizable increase in the volume of large CD's outstanding. District banks moderately reduced
their borrowings in the Eurodollar
and commercial paper markets.
The seasonally adjusted Texas industrial production index fell about
2 percent in December, the second
consecutive month of decline. The
petroleum industry remained the
major contributor to the reduced
output. Crude petroleum mining
fell almost 3 percent, and petroleum refining was down 10 percent
due to shortages of crude oil and
widespread shutdowns for maintenance and repall'.
In contrast with the November
decline, the drop in industrial activity was not confined to petroleumrelated industries, and total manufacturing decreased faster than a
month before. After growing at progressively slower rates the previous
two months, durable goods manufacturing-the most sensitive cyclical component of the index-fell for
the first month since JUly .
Seasonally adjusted total employment in the five southwestern
states was vU'tually unchanged in
December. This followed only a
slight increase in the previous
month and was the first month
since June that employment failed
to grow. Total unemployment was
up nearly 5 percent, and the unemployment rate rose to 3.9 percent
from 3.7 percent a month earlier.
Seasonally adjusted depal'tment
store sales in the Eleventh District
increased 4.5 percent from midDecember to mid-Janual'y, the
thll'd consecutive four-week gain.

The rate of increase represented the
largest monthly advance since department store sales turned upward
in mid-October.
Seasonally adjusted new Cal' registrations in the four largest metropolitan counties of Texas-Bexal',
Dallas, Harris, and Tarrant-declined 1.4 percent in December.
New car registrations have fallen in
three of the past four months. The
rate of decrease in December, however, was slower than in other recent months, and the drop in new
Cal' sales in Texas was less severe
than the national decline. Registrations were off 15.6 percent in
Tarrant County (Fort Worth), 6.6
percent in Bexar County (San Antonio), and 1.4 percent in Dallas
County. Registrations were up 7.2
percent in Hal'ris County (Houston). Cumulative registrations for
1973 were 8.3 percent greater than
in 1972, reflecting strong sales early
in the yeal'.
Texas oil production in the last four
months of 1973 was 4 million barrels less than in the same period in
1972, even though allow abIes continued at full effective production. Despite the loss in production, revenues
increased as the price of crude oil
rose. The state, for example, collected $8 million more in taxes on
oil production during this period
than in the last four months of 1972.
Cold weather in December and January slowed agricultural activities
in states of the Eleventh District.
Freezing temperatures damaged
tender vegetables in Arizona and
Texas, causing heavy losses to tomatoes and peppers. Citrus crops,
however, received light damage.

(Continued on back page)

CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS

Eleventh Federal Reserve District

.,

(Thousand dollars)

ASSETS

Jan. 23.
1974

Dec. 19,
1973

Jan . 24,
1973

1,760,991
9,851,187

1,722,914
9,807,100

1,016,549
8,772,762

4,332,751

4,388,114

3,886,326

298,396

298,511

245,389

473
49,927

473
51,521

1,329
79,371

4,638
450,758

4,474
463,907

7,119
504,608

159,460
746,390
1,441 ,723
32,078
54,222
1,051 ,699

151,768
714,758
1,389,793
33,951
53,470
1,054,133

137,275
685,990
1,226,186
21,579
13,799
966,303

20
1,228,652
4,100,713

20
1,202,207
3,998,927

0
997,488
4,077,891

966,458
128,391
0

950,182
130,414
0

1,096,331
262,634
0

145,486
522,678
169,903

142,641
516,911
160,216

174,104
461,349
198,244

125,255
2,724,948

155,839
2,615,492

258,203
2,437,059

22,699
261,353
1,486,679
1,247,878
132,574
518,914
13,700

18,484
258,930
1,609,807
1,123,376
134,532
463,113
13,682

13,603
272,695
1,453,649
912,442
116,415
387,693
14,944

824,058

854,303

682,089

LIABILITIES
Total deposits

Federal funds sold and securities purchased
under ag re ements to resell .......
Other loans and dlscounls, gross
Commercial and Industrial loans ...
Agricultural loans, excluding CCC
certificates of interest .................
Loans to brokers and dealers for
purchasing or carrying:
U.S. Government securities
Olher securities .......... ...... .
" .......
Other loans for purchasing or carrying:
U.S. Government securities ...
Olher securities .........................................
Loans to nonbank financial Institutions:
Sales fin ance, personal finance, factors,
and other business credit companies .
Other .......
Real estate loans .................................
Loans to domestic commercial banks
Loans to foreign banks .
Consumer Instalment loans ................
Loans to forelgh governments, official
institutions, central banks, and International
Institutions .
Other loans ..........
Total Investments .
Total U.S . Government securities ..
Treasury bills .................................... ....
Treasury certificates of Indebtedness ..
Treasury notes and U.S . Government
bonds maturing:
Within 1 year ..
1 year to 5 years ..
After 5 years ..................................................
Obligations of states and political subdivisions:
Tax warrants and short-term notes and bills .
All other ............................................................
Other bonds, corporate stocks, and securillas:
Certificates representing participations In
federal agency loans
. ..... ..
All other (Including corporate stocks)
Cash items In process of collection ...
Reserves with Federal Reserve Bank ....
Currency and coin ............ ,. .........................
Balances with banks In the United States .
Balances with banks In foreign countries ................
Other assets (Including Investments In subsidiaries
not consolidated) ..

TOTAL LIAB ILITIES , RESERVES. AND
CAPITAL ACCOUNTS .........................

----

Item

Dec. 26,
1973

Nov. 28,
1973

Dec . 27,
1972

ASSETS
Loans and discounts, gross .
U.S . Governm ent obligations
Other securltlas .. ...... ..... ..... ............. ...
Reserves with Federal Resarve Bank ., .. ,", ........ ...
Cash In vault .................................................
Balances with banks In the United States .
Balances with banks In foreign countrlese .
Cash Items In process of collection .
Other assalse ................................................

20,185
2,247
6,182
1,718
371
1,584
16
2,057
1,667

19,461
2,239
6,130
1,571
377
1,376
16
1,704
1,608

17,475
2,439
5,548
1,449
358
1,550
14
1,973
1,356

TOTAL LIABILITIES AND CAPITAL
ACCOUNTse .
e-Estimated

13,340~

7,293,081
5,208,000
371,633
234,117
1,305,228

7,106, 25

4,213
58,195
106,379
7,222,531

5,916
53,300
114,887
6,989,857

3815
39:864
116,281
6,233,79 1

1,150,360
4,021,572
1,905,925
20,105
99,373

1,145,466
3,867,451
1,835,545
7,991
99,942

1 ,199,0~l
3,220,0
1,665,1 29
25,5 60
1
111 ,72

25,176
20

23,616
320

11,1 00
1,120

3,504,728
272,203
506,313
180,943
24,133
1,258,599

3,300,638
174,965
526,725
168,962
14,614
1,258,912

19,936,694

---

1

4,960,0~6

525,7
248,4 91
1,211,95 1

2,195,8~
109,7
457,568

158,670

17.7656

1,1 54,7 2

----

~

19,727,754

g ,43~

----

(Dollar amounts in thousands)

Demanddep~

Roswell 2 ,.

(Million dollars)

.........

14,282,938

6,967,244
5,007,405
370,402
157,700
1,262,950

ANN UAL BAN K DEBITS AND AN NU AL RATE
OF TURNOVER OF DEMAND DEPOSITS

ARIZONA
Tucson ....
LOUISIANA
Monroe
Shreveport
NEW MEXICO

Eleventh Federal Reserve District

Total deposits .. .
Borrowings ........ ..... ............ ............. ........ "
Other lIabllltiese .................... ....................
Total capital accountse

14,189,775

----

19,727,754 17,434,434

CONDITION STATI STICS OF ALL MEMBER BANKS

TOTAL ASSETse

Jan . 24,
1973

------

Standard
metropolitan
statistical area

LIABILITIES AND CAPITAL ACCOUNTS
Demand deposits of banks ..
Other demand deposits
Time deposits .. ....... ,,, ......... ,

Dec. 19,
1973

,."

19,936,694

TOTAL ASSETS ..

Total demand deposits ........................................
Individuals, partnerships, and corporations ..
States and political subdivisions ..
U.S. Government ...............
Banks In the United States
Foreign:
Governments, official institutions, central
banks, and International Institutions .
Commercial banks ........................ " .............
Certified and officers' checks, ate.
Total tim e and savings deposits .........................
Individuals, partnerships, and corporations:
Savings deposits ......... , ............
Olher time deposits .................
Slates and political subdivisions .......................
U.S. Government (Including postal savings) ....
Banks In the United Siaies ............................
Foreign:
Governments, offlclallnstilutions, central
banks, and International Institutions .
Commercial banks .................................
Federal funds purchased and securities sold
under agreaments to repurchase .
Other lIabllllles for borrowed money
Other lIabllllies
............... " .........
Reserves on loans
Reserves on securities
................. ",
Total capital accounts .

Jan. 23,
1974

36,027

34,482

32,162

---

---

---

1,808
12,451
14,198

1,645
11,844
14,074

1,872
12,088
12,337

28,457
3,737
1,383
2,450

27,563
3,136
1,384
2,399

26,297
2,610
1,046
2,209

36,027

34,482

32,162

TEXAS
Abilene ..
Amarillo
Austin ........................... .
Beaumont-Port ArthurOrange .................... ..
Brownsvilie-HariingenSan Benito .............. ..
Bryan-College Station ..
Corpus Christi
Corsicana' ..
Dallas ......
EI Paso ..
Fort Worth .. .. .............. ..
Galveston-Texas City .
Houston .................. ..
Killeen-Temple .
Laredo
Lubbock ............ .
McAlien-PharrEdinburg
Midland .
Odessa ......
San Angelo
San Antonio ..........
Sherman-Denison
Texarkana (T exasArkansas) ...
Tyler .........................
Waco
Wichita Falls .

Debits to demand deposit accounts'

Annual rale
ofturnov~

1973

1972

Percent
Increase

1973

1~

$13,381,000

$9,741,062

37%

39.2

31.9

4,812,724
16,499,732

4,028,301
13,678,905

19
21

40.6
50.9

36. 5
46. 1

1,193,436

980,742

22

24.1

22. 5
21. 9
40.8
30.2

3,213,275
10,000,952
14,963,397

2,604,703
7,817,733
12,656, 101

23
28
18

22.9
44.8
32.6

8,316,362

6,939,177

20

28.9

3,050,114
1,547, 002
8,589,377
654,409
197,574,811
11,445,076
33,014 ,836
3,648,538
169,172,326
2,453,546
1,491 ,476
8,056,031

2,498,315
1,318,613
7,441,802
520,401
152,822,521
9,649,372
28,917,336
3,158,256
139,541.680
1,960,531
1,168,892
5,513,042

22
17
15
26
29
19
14
16
21
25
28
46

25.7
26.7
29.8
16.1
67.0
36.2
38.5
28.0
50.3
20.9
24.4
36.2

3,312,284
2,681,734
2,283,072
2,087,150
26,846,729
1,513,521

2,528,065
2,252,220
1,863,226
1,679,132
22,510,879
1,274,549

31
19
23
24
19
19

20.3
16.2
22.0
24.1
29.5
18.2

1,995, 064
3 ,115,190
4,537,034
3,508,658

1753598
2:933:259
3,929,629
2,951,249

14
6
15
19

220
24:5
29.0
23.7

20.6
25.1
27.3
22.3

24%

45.2

~

Total-30 centers ............ $564,958,856 $456,633,291

25. 3
25.5
27.5
14.8
55. 8
32.7
36.8
25.3
45.0
18.6
23.4
29. 2

1. Unadjusted depOSits of Individuals, partnerships, and corporations and of stateS
political subdivisions
2. County basis

and

BANK DEBITS, END. OF. MONTH DEPOSITS, AND DEPOSIT TURNOVER

SMSA's in Eleventh Federal Reserve District
(Dollar
amounts In thousands, seasonally adjusted)
_
DEBITS TO DEMAND DEPOSIT ACCOUNTS '

DEMAND DEPOSITS '

Percent change
Annua l rate
of turnover
December 1973 from
Dec,
12 months,
1973
Dec,
31,
Dec,
Nov,
Dec,
Dec,
1973 from
Standard metropo litan
(Annual-rate
Nov,
1973
1973
1973
1972
1972
1972
_
statistical area
basis)
1973
ARIZON~A~:~Tuc-s-o-n-------------------------------$-1-5,O-88,~798--------6-%-------------------------------------------------------------43,7
46,5
$354 ,665
37,5
37%
36%
42,6
43,1
117,847
LOUISIANA: Monroe ''''
"",,",,",,"",.
5,077,304
-3
40,0
16
19
49,1
352 ,453
55,8
49,6
10
20
NEW
Shreveport
''''''''''''''''''''''
16,625,042
- 10
21
,7
26,3
51
,285
22,7
TE MEXICO : Roswell'
1,112,326
- 17
21
9
XAS: Abilene
153,457
24.0
25.8
27
23
22.2
2
Amarillo
""""""""""""""""""""""""""""
130', 577159', ~8152
:: 6
45.6
250,Q97
50.7
40.8
28
28
Austin
"""'" '" """"""""""" " " """" " """,, ,
425,147
38.5
37.8
27. 1
37
19
306,765
30.3
33.3
25.2
29
20
,,,"" ,
_
Beaumoni:PoriArthur:O,;;;;ge : : " " " " "
26,0
120,940
22
22
28.5
24.2
Brownsville-Harlingen-San Benito , """ """"'"
3,122,746
- 10
30,3
17
59,323
23.7
30.4
37
Bryan-College Station
""""""""""
1,778,932
1
298,282
32.7
34 .3
19
15
28.2
Corpus Christi
9,517,547
- 2
17.3
16,7
42,829
9
31
25
15.8
Corsicana '
736,241
~allas ""'"
""""""",""
216,014,652
- 4
75.7
2,879,119
78.6
62,8
21
29
330,415
38.9
40.5
22
18
32.8
FI Paso ",,",,""",,""",,",,'"
12,203,971
- 2
43,7
866,879
41 ,1
14
30
35.2
32 ,6
15
136,558
28.8
26.3
1
33
3,509,724
54 .5
57 .9
21
46.7
25
~o u ston " """
188,138,784
- 2
118,270
23.1
25
21.6
32
18.6
Ileen-Temple
2,746,553
9
27
63, 186
25.2
28.4
32
21 .8
t~~ebdoOCk """""""'"'''''''''''' """" """" " ,,'
1,571,791
- 12
46
251,771
41 .4
81
42.6
27.9
31
154,794
21.9
25
22.7
18.8
19
194,857
16.2
19,0
26
14.8
Od
"""""""""" "'"
2,957,102
- 7
109,462
22
23.0
23,2
17.1
26
Sessa ""'"
2,438,282
0
24
93,802
24.7
24.6
30
21.7
San Angelo , """"""""'"
2,248,231
6
19
919,825
31.5
17
30.6
28.0
""" ' " ' ' ' ' ' '
84 ,924
18.3
18
20
19.1
16.4
14
99,755
20.8
23
22.8
18.2
T~~~rkana (Texas-Arkansas) """""""",,'
1,97 1,366
- 5
13
5
135,975
25.
0
26.9
30.5
3,172,052
- 3
Waco " """"""""'"
28,1
15
158,527
27,2
14
25.7
WlchliaFalls "',"""""""''''''''',',''''''','''','
::~~~:m
1:
155,705
27.7
24.6
34
19
23.8

1 ~:g~g:~ci~

i

G~~~f~~\e~asClt'y':::'

3~:~~N~~

~

~fdAlallnedn-Pha;:':EdlribUrg

~:m:~~ci

~

2~:~~~:~~ri

_~

~~~r~~~~~riiso;; ::::::::::

~at-30 centers

" """""""""""""""""''',,
'" '" '" $620,611 ,830
-2%
1, Deposits f I
'
2, COunty b~Slsndlvlduals, p~rtnershIPs, and corporations and of states and political subdivisions

24%

$12,796,638

23%

49.4

51.4

42,1

DEMAND AND TIME DEPOSITS OF MEMBER BANKS

Eleventh Federal Reserve District
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS

(Averages of dally figures. Million dollars)

(Tho us
___ and dOllars)

~--------------------------

;:--Item
otal gold
Loan s t Certificate reserves "
~ther looa~ember banks "",,"""
Uedaral age ncy
'''''''''""""""""""",
T' S, GOvern
obligations """
MOtal earnln ment Securities " ""
F ember ban1. assets """""""""
ederal R
reserve deposits
ClrCUl at~s:rve notes In actual

~ """""""""""""

INOU

Jan. 23,
1974

Dec, 19,
1973

Dec, 20,
1972

515,254
157,230
0
87,430
3,599,587
4,359,501
1,940,704

658,072
51,630
0
77,710
3,364,149
3,475,489
1,774,638

211,268
191,155
0
51 ,019
3,052,745
3,294,919
1,392,108

2,409,081

2,439,627

2,280,725

STRIAL PRODUCTION

(Season all
..........
Y adjusted Indexes, 1967 = 100)

~d type of Index
TEXAS
Totallnd

Manufactu~~trlal production " ,
Durable g "".".,,"""""""

MI~~nduraiiie":

Utilltl~s "''''''''''''''''''''''''''''''''

UNITED
"""'"
TotanATES

Manufac~~~~trlal production
Durable

g ""."""",,.,,""

MI~~nduraiiie ':::

LJtlUtl~s '"'''''''''''' " ............. ,............. .

~"."".""""."."

DEMAND DEPOSITS

TIME DEPOSITS

Date

Total

Adjusted '

U.S.
Governm ent

Total

Savings

1971 : December "
1972: December "
1973: January"
February "
March ,
April
May "
June ."
July "
August "
September ,
October."".
November "
December "

11 ,981
13,439
13,636
13,270
13,203
13,237
13,136
13,2 18
13,259
12,941
13,039
13,289
13,455
14.008

8,388
9,688
9,802
9,516
9,454
9,550
9,502
9,551
9,567
9,492
9,442
9,461
9,816
10,086

266
289
317
379
395
331
341
279
261
172
208
239
167
244

10,273
12,261
12,501
12,811
13,038
13,249
13,336
13,374
13,396
13,507
13,618
13,795
13,953
14, 154

2,509
2,812
2,815
2,817
,2,848
2,855
2,859
2,884
2,868
2,857
2,854
2,863
2,871
2,883

1. Other than those of U.S. Government and domestic commercial banks, less cash Items
In process of collection
Dec.
1973p

Nov.
1973

Oct.
1973

Dec.
1972

139.6
143.9
161.3
131 .3
121.9
168.1

142,5
147.3
164.2
135.1
124,1
167.3

141 ,7r
147.7r
163.0
136.7r
121 .2r
163.6r

132,5
134.9
148.2
125,3
119,0
162,2

126.6
127.1
124.0
131.4
108.9
144.5

127.3
126.9
124.1
131 .2
110.4
153.5

127.0
126.3r
123.6r
130.3r
111 .3r
156.2r

121 .1r
120.4r
116.3r
126.2r
108.2r
148.5r

r-R rellmlnary
SOUevlsed

RCes· B
' F~dard of Governors of the Federal Reserve System
eral Res erve Bank of Dallas

RESERVE POSITIONS OF MEMBER BANKS

Eleventh Federal Reserve District
(Averages of dally figures . Tho usand dollars)

Item
Total reserves held "".""",,.
With Federal Res erve Bank"
Currency and coin """.
Required reserves "
Excess reserves ....
Borrowings
Free reserves

4 weeks ended
Jan. 2, 1974

4 weeks ended
Dec. 5, 1973

4 weeks ended
Jan . 3, 1973

1 ,899,091
1,567,849
331 ,242
1,937,430
-38,339
43,071
- 81 ,410

1,874 ,271
1,558,273
315,998
1,865,914
8,357
53 ,797
- 45,440

1,712,981
1,411 ,830
301,151
1,750,928
- 37 ,947
81,986
-119,993

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT

BUILDING PERMITS

Five Southwestern States'

VALUATION (Dollar amounts In thousands)
Perc ent change
Dec. 1973
from

NUMBER

Thousands of persons
12 months.

Area

Dec.
1973

ARIZONA
Tucson ..
LOUISIANA
MonroeWest Monroe ..
Shreveport..
TEXAS
Abilene ...
Amarillo
Austin ....
Beaumont .
Brownsvill e ..
Corpus Christl ..
Dallas .... ... ..
Denison ..
EI Paso ...........
Fort Worth ..
Galveston .
Houston .. .
Laredo
Lubbock
Midland .
Odessa ...
Port Arthur ..
San Angelo .
San Antonio ..
Sherman .
Texarkana ..
Waco ...... ....
Wichita Falls .
Total-26 cities ..

6.060

12 mos.
1973

Dec .
1973

12 mos.
1973

Dec.
1972

1973 from

1972

-27%

- 64%

- 13%

27.635
78.604

260
71

242
88

17
28

23.299
54.980
239.664
36.363
41.271
53.541
318.398
3.859
170.528
114.592
11.218
680.867
16.276
76.783
12.580
16.398
6.908
11 .770
223.888
21.560
5.997
36.080
37,475

- 46
224
- 31
69
- 36
- 48
- 39
848
43
41
- 50
- 18
- 84
51
- 80
- 40
0
- 28
-45
- 99
176
- 78
- 12

- 50
107
-27
- 69
25
- 64
- 21
126
-24
- 36
- 86
- 49
-77
39
- 47
-59
113
112
- 45
-70
118
- 89
- 54

36
62
0
20
159
- 12
- 17
- 2
- 1
23
-26
2
26
22
- 28
- 32
29
37
0
181
- 14
- 15
137

- 25%

- 36%

329

5.811

$3.882

$148.493

34
321

844
5,448

2.531
4.266

46
82
306
114
81
140
972
26
353
245
31
1,417
32
81
34
50
49
73
1.042
19
41
93
49

81 5
1.796
5,465
2.258
1.162
3.087
18.5 16
316
5.851
4.283
629
29,215
497
1.724
872
1.117
1.082
913
19.778
415
614
2.331
879

358
6.805
15.513
1.519
3,411
1.289
17.654
199
8.299
5.566
367
41.334
98
6.380
208
491
850
1.215
8.102
108
607
736
792

------

Nov.
1973

115.7 18 $132.580 $2.469.027

-

(Seasonally adjusted)

Item
Civilian labor forc e ..
Total employment
Total unemployment..
Unemployment rate .
Total nonagricultural
wage and salary
employment ................ ......
Manufacturing ..
Durable
Nondurable .
Nonmanufacturlng .
Mining .....................
Construction
Transportation and
public utilities
Trade
Finance
Service ...........
Government ..

.

Percent change
Dec. 1973 fro~

-

Dec.
1973p

Nov.
1973

1972r

Nov.
1973

DeC.
1972

9.014.4
8.664.9
349.5
3.9%

9.001.5
8.668.0
333.5
3.7%

8.747 .3
8.413.3
334.0
3.8%

0.1%
.0
4.8
' .2

3.1%
3.0
4.6
' .1

7.204.4
1.261.5
711 .7
549.8
5.942.9
235.4
507 .7

7.201 .6
1.256.9
710.9
546.0
5.944 .7
236.8
503.7

6.930.4
1.215.5
672.6
542.8
5.714.9
230.7
474.6

.0
.4
.1
.7
.0
-.6
.8

4.0
3.8
5.B
1.3
4.0
2.0
7.0

488.3
1.710.3
397.0
1.178.3
1,426.0

488.5
1.719.0
394.8
1.177.4
1,424.5

470.4
1.648.4
372.1
1.130.2
1.388.6

.0
-.5
.6
.1
.1%

3.B
3.8
6.7

Dec.

1. Arizona. Loui siana. New Mexico. Oklahoma. and Texas
2. Actual change
p-Prellmlnary
r-Revlsed
NOTE : Detail s may not add to totals because of rounding .
SOURCES : State employment agencies
Federal Reserve Bank of Dallas (seasonal adjustment)

~:~%

---

2%

DAILY AVERAGE PRODUCTION OF CRUDE OIL
(Thousand barrels)

VALUE OF CONSTRUCTION CONTRACTS
Percent

(MIllion dollars)
Area

Dec.
1973

Nov.
1973

1972r

Nov.
1973

FOUR SOUTHWESTERN
STATES ...........
Louisiana ... ....
New Mexico .......................
Oklahoma .......................
Texas .............
Gulf Coast ...
West Texas .................
East Texas (proper) ..
Panhandl e .
Rest of state ..
UNITED STATES .

6.512.0
2.148.6
271 .2
516.2
3.576.0
702.4
1,858.0
239.2
59.6
716.8
9.103.0

6.551 .3
2.134.5
265. 1
523.5
3,628.2
713.0
1.882.2
243.0
60.4
729.6
9.130.5

6.793.2
2,404.4
287.0
528.3
3.573.5
710.5
1.812.7
250.4
58.9
741 .0
9.347.3

-. 6%
.7
2.3
- 1.4
- 1.4
- 1.5
- 1.3
- 1.6
- 1.3
- 1.8
-. 3%

January - December
Area and type

Dec.
1973

Nov.
1973

Oct.
1973

1973

1972r

FIVE SOUTHWESTERN
STATES' ..
Residential building
Nonresidential building ..
Nonbulldlng construction ..
UNITED STATES ........
Resid ential building
Nonresidential bulldlns/- .....
Nonbulldlng construction ..

871
264
474
133
6.133
2.341
2.210
1.581

1.011
368
339
304
7.905
3.299
2.655
1.95 1

1.132
385
356
391
8.983
3.673
2.758
2.552

11 .902
5.258
4.259
2.384
100.071
46.246
31 .761
22.064

11 .322
5.752
3.083
2.487
90.979
44.975
27 .021
18.983

1. Arizona. Loui siana. New Mexico. Oklahoma. and Texas
r-R evlsed
NOTE : Details may not add to totals because of rounding.
SOURCE: F. W. Dodge. MCGraw-Hili . Inc.

Low temperatures and dry soils
have hindered winter wheat development in the High Plains_ And
with dryland wheat conditions deteriorating, some stocker cattle
have been moved off wheat pastures
into feedlots. Although the adverse
weather greatly increased supplemental feeding, most livestock remained in good condition.
The number of cattle and calves
on feed in Texas and Arizona on
January 1 was marginally below a
year earlier. Marketings in the
fourth quarter of 1973 were moderately higher than in the same

Dec .

"""

Change~

Dec.
197~
- 4.1'16
- 10.6
- 5.5
- 2.3
.1
- 1.1
2.5
- 4.5
1.2
- 3.3

- 2~

r- Revised
SOURCES : American Petroleum Institute
U.S. Bureau of Mines
Federal Reserve Bank of Dallas

period in 1972. But falling prices
and sharply lower earnings discouraged cattle feeders, and placements
into feedlots dropped below the
year-earlier level.
In the month ended December
15, a moderate advance in average
crop prices received by Texas farmers more than offset a decline in
livestock prices. As a result, the
index of prices received for all farm
products increased marginally from
a month earlier and was 42 percent
higher than a year eru:lier. The
index of prices paid by U.S. farmers
also advanced slightly in the month

ended December 15, primarily due
to higher prices for feed, f\;lel, and
fertilizer. The index was 17 percent
higher than a year before.
Bolstered by higher prices and increased production, cash receipts
from farm marketings in District
states through November 1973 totaled $9.5 billion-a significant 39
percent higher than in the same
period in 1972. Crop receipts advan'
ced 70 percent to nearly $3.8 billion, and livestock receipts, at $5. 7
billion, were up 24 percent.