View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

MONTHLY
I
BUSINESS
REVIEW
oft h e

FEDERAL

Volume 35

RESERVE

of

BANK

Dallas

Dallas, Texas, July 1, 1950

Number 7

LOOKING AHEAD WITH THE SOUTHWEST BEEF CATTLE INDUSTRY
PRITCHETT, Agricu,lt1-tral Eco/~omist
Federal Reserve Bank of Dalla~

W. M.

The cattle industry serves two principal purposes-to produce beef and to produce daIry products.
These two purposes are not mutually exclusive, however, for fully one-third of the beef, including
veal, produced in the United States is from the slaughter of animals from herds kept mainly for the
production of dairy products. Moreover, many dual-purpose cattle are maintained in some sections
of the country where emphasis shifts between milk and beef production, depending upon relative
prices and other factors. Slaughter of these dual-purpose cattle represents an additional 15 percent
of the total production of beef. Hence, only about one-half the Nation's output of beef is from the
slaughter of cattle kept primarily for meat production. These animals, commonly called "beef cattle," comprise the range herds of the West and Southwest and large numbers of farm herds scattered
throughout the country.
The relationship of long-term trends in the numbers of beef
cattle 1 to numbers of milk cows in the United States is shown in
Figure 1. It will be observed that throughout most of the 70-year
period the number of milk cows has shown a fairly steady expansion and has increased relative to the number of beef cattle. This
gradual expansion in the number of milk cows has been induced
by the necessity of producing milk for a growing population and,
as a consequence, the expanding dairy industry through the years
has yielded an increasing quantity of beef and veal. Because of
the steadily rising quantity of beef and veal produced as a byProduct of the dairy industry, the year-to-year variations in the
Production of beef and veal have occurred principally in the beef
Cattle industry, resulting in wide variations in the numbers of
~e~f cattle on farms and ranches. For this reason, this article is
e1ng confined chiefly to a discussion of the beef cattle industry.

"gUIitC I

CATTLE ON FARMS AND RANCHES IN THE
UNITED STATES. JANUARY 1.1880-1950
tl W'lN l.I'A

0
0

1\

0
0

ALL CATTLE

0

II""\.

0

1 1\ )

'l/
o

JI

0

/"

--

1/\

1\

V
.,ILK

-:-._ '

A

A

I !\ l/\.

tv

rv

/

cows .........

I

'w

r-\':~(~
.\:'
.

....--....
_.~,- 1

,-"","

-

I On January 1 of this year there were an estimated 80,277,000
0
,.,
"0· - ,,:
lead of all types of cattle on farms in the United States, which
Consisted of 24,625,000 milk cows and 55,652,000 head of all :~~~:'~:.~:;:~:c':r'~"~~:,~~:U.,.
~ther types of cattle. The number of milk cows was about 3,000,OO
h below the all-time peak in 1945 but more than double the number in 1880. Beef cattle, which
ad reached a peak of 44,724,000 head on January 1, 1945, declined during the following 3 years. The
te
\7ersal of the trend in 1948 and 1949 initiated a new period of expansion in beef cattle raising.
I

.. itO

I~

'>0

This year many farmers have undertaken, or are considering, beef cattle raising as a busine s
Qr Supplementary enterprise to compensate for loss of acreages of such cash crops as cotton, rice,
I'~

lData on number s of beef cattle as now defined by the United States Depa rtment of Agriculture are not avail able f or
0 11 all cattl other t han milk

~O!l'S prior to ] 920. Consequently, in a nalyzin g long-term trends it is necessary to use llumbers

a.

This publication was digitized and made available the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
This ublication was digitized and made available I:!Jby the Federal Reserve Banko[Dallas' Historical Library (FedHistory@daL rb.org)

110

MONTHLY BUSINESS REVIEW

wheat, or peanuts under production control programs. This action is being taken because the farmers
are unable to continue using all their resources-land, labor, machinery, etc.-in the production of
these crops and, consequently, they must find alternative uses for the resources taken out of production in order to obtain the largest possible income from their farms.
Farmers' interest in beef cattle raising is given encouragement from various quarters, and many
slogans are being offered to point out the course they should follow in adjusting their farm operations
to meet changing conditions. One reads such slogans as: "Put more land in cattle," "Raise more
cattle," "Put more land in grass." Suggestions such as these naturally raise questions concerning the
extent to which the beef cattle industry may be profitably expanded. Can present producers, as a
group, advantageously extend their operations far beyond present levels? Is there room in the industry
for more producers? How much beef will the United States consume at a price profitable to producers?
Will consumer demand for beef and market prices of beef cattle, which currently are very favorable to the producer, decline sharply within the near future? These and similar questions, which are
causing considerable anxiety to cattle raisers, suggest that the present is a very appropriate time to
consider the immediate and long-term outlook for beef cattle production.
The Cyclical Behavior of Beef Cattle Numbers

The beef cattle industry in the United States since about 1880 has been characterized by cyclical
variations in numbers of beef cattle and corresponding, although not simultaneous, cycles in beef
production. In fact, between 1880 and 1948 there were five well-defined cycles of beef cattle numbers, as shown in Figure 1. The full term of these cycles, measured from the date when numbers
began to rise in one period to the corresponding date in the next period, varied from about 10 to
16 years. There were three 16-year cycles after 1880 which brought beef cattle numbers to a cyclical
low in 1928. Afterwards, the usual rise followed, but the cycle did not reach its expected maximum
because of the forced slaughter of millions of cattle occasioned by the severe drought of 1934-35.
Following several years of decline, beef cattle numbers again
rlGU"ca
began to rise and, according to January 1 estimates, reached the JANUARY I INVENTORIES AND ANNUAL AVERAGE
all-time peak in 1945, as mentioned previously.
PURCHASING PQWER OF BEEF CATTLE
UNITED STATES, 1880-1950

The cycles in annual beef production have some of the characteristics of cycles in numbers of cattle on farms. The outstanding difference is the tendency for the "high" and "low" points of
the beef production cycles to lag a few years behind those of the
cycles in cattle inventories. The yearly production of beef continues to increase for 3 to 5 years after the turn downward in
numbers of cattle on farms, because the annual liquidation of
stock cattle is added to the number of head that otherwise are to
be marketed. A similar delay occurs after cattle numbers have
again turned upward, for the production of bee f does not recover
until the effect of the small calf crops, plus withholdings for replacements, is offset by the larger calf crops as cow herds are
rebuilt.

1910~lg 1 4

~~ 0

-100

IIGfN

IB 0

.

0
16
I.

-jj

BEEF CATTLE

0

J
IA rV"
°L\ /)1 \ //\ \ IlY ~
\
°Vf \ Y; \ ! \ r\ /
If
V , \/

12

10

01 - - - _ P1JRCHALN':':aWER'

~

0

,
,
,. "
"
'"
"
The relationship of cattle numbers to purchasing power of
cattle, or to values per head adjusted for changes in the general
price level, is sh9wn graphically in Figure 2. When the purchasing
power of cattle is relatively high, animals are held back to replenish herds, and fewer are marketed.
Conversely, when the purchasing power is low, breeding stock gradually are liquidated and marketing;
are large compared with the number on farms. In other words, there are always large numbers 0
cattle being marketed, but the number varies depending upon whethet· cattle are being held bac~
to replenish herds or are being sold at an excessively high rate to reduce numbers on hand.
0

,

~

• AU. CATTLe OTH[ iII TH AN N ILIC cow s.
tll'TH A£[ YEM' Jot OVINO AVU ACl .

lOU!tC(1u , O' ,. ... ,.T .. £H 1' Of AG~leU UU III[ .

Why is it that farmers and ranchers do not increase or decrease their cattle numbers in immedi ,
ate response to changes in purchasing power? When the price of cattle is rising in reJation to priceJ
of all commodities, or the purchasing power is rising, cattlemen expand the number of cattle on h~J1
as rapidly as possible; however, because of the relatively slow rate of cattle reproduction, it takes tJ1~
to accomplish this. When prices start to fall there is some liquidation of stock cattle, but apparent 1

111

MONTHLY BUSINESS REVIEW

farmers and ranchers hold on with the hope that prices will rise, at least temporarily, and they will
have an opportunity to sell at favorable prices. As this usually does not occur at this phase of the
cycle, they sell out or are sold out when the purchasing power is low. Based on previous experience,
an unusu,ally large element of risk. is involved in beginning to expand cattle raising after the purchasing pO'UJer of cattle has risen above the long-term, average. It is not always possible to determine
where the purchasing power of cattle is in relation to average, but it is probable that purchasing power
at the present time is beyond midway in its cyclical rise. If such is the case, it is of significance to anyone
contemplating going into the beef cattle raising business, for it reflects the high degree of risk one
faces in undertaking cattle raising at this time.
When cattle numbers are increased or reduced, the various classes do not share equally in the
change-at least not immediately-and an understanding of these variations is essential in appraising current developments in the cattle industry. When the purchasing power of cattle is rising, the
first increase occurs in the number of calves held back. This condition characterized the past 2 years,
when farmers and ranchers withheld large numbers of young stock from the market for restocking
purposes. When the purchasing power of cattle is high, the rate of increase in the inventory of cows,
heifers, and calves usually is very rapid in relation to the rate of increase in the number of male animals. This appears to characterize the present situation, for there was a record number of beef cows
on farms the first of this year. On the other hand, when the purchasing power of cattle is low and
liquidation of cattle herds begins, steers, heifers, and calves are sold most rapidly, as they will bring
higher prices than other classes.
General Review of the Present Situation
Beef cattle numbers are increasing in response to the continued strong demand for beef and
veal and the rather favorable market enjoyed by cattle producers during the past several years, the
improved condition of pastures and ranges in some areas, the abundance of feeds and feed grains,
acreage restrictions on certain crops, and possiblv. other factors.
On January 1, 1950, the United States Department of AgriculHUM AN POPULATION.B~EFCATTLE NUMBERS,
ture reported 43,012,000 head of beef cattle 2 on the Nation's
AND BEEF PRODUCTlON,uNITED STATES
farms and ranches-2,061,000 head above the cyclical "low" ",,'NT
1900-1950 '
reached in 1948 but 1,712,000 head below t he wartime peak. In
taking a long-term view of the relative position of beef cattle eo
!:J(
,
numbers at present, it is important to note that they are not very
18
POPUL.ATI~ vJ
far above the level of 30 years ago. Beef cattle inventories practi16 0
~EE~' ;\
II
cally have been stabilized, except for cyclical changes, while the
,"
/,UCTION/ vv
/'v
/'~
Nation's human population has continued to expand. On January
I.
v..... \.. 1
·..)/\
V
"v!
1, 1950, there were only 29 beef cattle per 100 people in the
0~
l.!. ........" ,
Dnited States, as compared with 38 per 100 people in 1920.
V
~ :"-BEEF CATTLE
rlC;UItE)

~

~

0

What does this decline in cattle numbers in relation to pop0
ulation mean to cattlemen? Are cattlemen to conclude that it
0
would be profitable to increase numbers again to 3 8 or more head
0
per] 00 people? There appears to be little basis for drawing such
0
,,'0
a conclusion. The important factor is the production of beef and
\Teal-not the inventory of cattle numbers-and live-weight production has kept pace with population for the past decade, even
though cattle inventories have not. The Nation's cattlemen have
learned to produce more meat with a given inventory of cattle than was accomplished 50, or even 30,
Years ago.
ItoO

ItlO

1910

'940

-

The relationship of trends in population to those in numbers of beef cattle and to trends in
htoduction of beef is shown graphically in Figure 3. For purposes of comparison, the series of data
I aVe been converted to percentages of the corresponding data for the year 1900. Beef production
agged during the 1920's and 1930's but during the 1940's was in about the same relationship to
POPulation as in the period 1900-20. The demand of the consumer is for meat, not cattle, and cattlemen have supplied the growing population with meat (with the assistance of increased producdll '

ll'y

~These figures apply to beef cattle as classified by the United States Department of Agriculture and exclude all
animals.

112

MONTHLY BUSINESS REVIEW

tion of beef by the dairy industry) through increased efficiency in production rather than through
increased inventories of beef cattle. Therefore, with production of beef keeping pace with increases
in population, cattlemen must give thoughtful consideration to the suggestions from various sources
that substantial expansion in cattle production should be undertaken.
The productivity of the national cattle herd is just as important as its size, insofar as quantity
meat production is concerned; it may be even more important from the standpoint of quality production. The quantity of meat produced in relation to size of the cattle herd is determined by: (1) the
proportion of cows in the herd; (2) the number of calves born per 100 cows; (3) whether calves
are sold for slaughter or are retained for further growth; and (4) practices used in raising and feeding cattle, which affect the weight at which they are slaughtered. Improvements in breeding, feeding, control of diseases, and other scientific advances have contributed greatly toward the increase
in output of beef and veal in relation to cattle numbers.
The increased productivity of the beef cattle population is reflected in figures showing its composition in selected years. On January 1, 1900, steers I-year old and over constituted 36 percent of
the total number of beef animals on farms and ranches in the United States, 25 percent in 1920, 17
percent in 1940, and 16 percent in 1950. This development has been made possible within the memory
of many living cattlemen by cutting in half the time required to produce a steer for slaughter. On
corresponding dates, calves represented 22 percent, 30 percent, 34 percent, and 29 percent, respectively,
of the total number of beef animals. Cattle raisers in many sections have shifted primarily to a cowand-calf basis. This is emphasized by the record number of beef cows on United States farms. Cattle
feeders demand animals that can be finished quickly and marketed as young slaughter animals grading
«high Good" or «Choice." On the other hand, midwestern and eastern markets for 2- and 3-year-old
steers have become more and more limited.
The increased productivity of the cattle herd is shown also
by figures on numbers of calves born annually per 100 cows. The
figures for the past several years have ranged from 85 to 88 (for
all cows), as compared with 74 some 25 years ago. This greater
productivity is accounted for partly by the improvement in the
quality of cattle herds during recent years-largely the result of
an increase in the use of purebred animals, particularly for breeding purposes. No census of purebred livestock has been taken since
1930, but the increase in numbers of purebred cattle is reflected
in data on registrations of purebred animals during the years
1931-47. These data show that annual registrations of beef cattle
increased about 250 percent during this period. However, the
proportions of total registrations in 1947 represented by the several breeds differ greatly. Herefords represented 62 percent; Shorthorns and Aberdeen-Angus, 14 percent each; Polled Herefords,
6 percent; Brahmans, 3 percent; and others combined, about 1
percent.

PO

UNDI

ANNUAL PER CAPITA CONSUMPTION
OF BEEF AND VEAL IN THE
UNITED STATES, 1900-1950

10
0

:~\
'\J
0

~

~~OTAL BEEF ANO V:AL

\. ., Q
\~/ V\
v

0

"r··· \

/.Iv'- !l~

'-1rJ/l\. . \l

8EEF........

•

.~

·V

0

0
VEAL-....

10
0

r--

-f=Y'<.

---.I--"'

~

-r;,o

",0
One question that must not be overlooked in a discussion of
the relative growth of beef production and population is whether
or not any changes in per capita consumption of beef and veal
have been taking place. Annual estimates for the years for which data are available, as shown in Figure
4, indicate that the average yearly per capita consumption of these meats in recent years has been b!l
a par with 50 years ago. For a period of this length, it may be assumed that supply is determined hY
demand, although in shorter periods the reverse may be true. The only noteworthy change for t Ij
period was a decline of 4 pounds in per capita consumption of beef, which was offset by an equJe
increase for veal. There is little evidence here to support any contention that during the next dec a 'I
the average person will eat much more beef, including veal, than during the past 5 years, assuming
income-price relationships that are likely to prevail. In fact, to the extent that families throughout t 5
Nation expand their expenditures for consumer durable goods, such as automobiles and television set d
in relation to total expenditures, there will be increasing competition for the consumer's dollar a!l
expenditures for meat may be curtailed in favor of other purchases.
1t00

IftO

1
910

I ' 0

!lOVRC:[ ' U I Orl"AII TM[HT 0' AOR ICUI,.TUR[ ,

ahe

MONTHLY BUSINESS REVIEW

113

In this connection, it should be stated that the beef and veal consumed during the past decade
have come almost entirely from United States farms and ranches; the maintenance of consumption
of these meats at a high level has not been the result of imports. In fact, imports during the period
1940-48 were the equivalent of only 1 percent of consumption, and a quantity equal to a sizable proportion of these imports was exported, excluding that in connection with military operations. There
have been quite a few slaughter cattle imported in some years, principally from Canada, but they have
been of minor importance so far as the total United States production of beef and veal is concerned.
The foot-and-mouth disease has shut off imports from Mexico and certain other countries.
One of the most important factors in the present cattle situation-especially important from the
standpoint of the Southwest-is the change in the geographical distribution of cattle raising that has
taken place during recent years. In every major region of the United States except the Southwest, beef
cattle numbers have been expanded sharply since 1939, i.e., they have been expanded more, percentagewise, than would have been expected from the usual cyclical rise. Some of the states east of the Mississippi River are developing substantial beef cattle industries in order to offset the decline in production of cotton, peanuts, and other crops and to establish a better balanced agricultural economy. Last
year the southeastern states accounted for almost one-half of the increase in the United States cattle
inventory.
Despite the gains recently made by the southeastern states, however, the Southwest continues as
the dominant cattle raising section of the Nation.
The Status of the Beef Cattle Industry in the Southwest
On January 1, 1950, the five southwestern states-Arizona, Louisiana, New Mexico, Oklahoma,
and Texas-had over 18 percent of all cattle and almost one-fourth of the beef cattle in the United
States. The 11,027,000 head of beef cattle D reported on· that date reflects an increase for the second
Consecutive year and compares with a cyclical low of 10,588,000 head reported in 1948 and an alltime peak of 11,693,000 head in 1945.
The beef cattle industry pervades almost every section of the
Southwest and accounts for about one-fourth of its cash farm
income. The greatest current activity connected with the expansion of the cattle industry is in the sections east of the 1OOth
Meridian, or in those sections which for many years have been
overwhelmingly devoted to the production of cotton, rice, corn,
vegetables, and other crops. It is this expansion in cattle raising
that has enabled many farmers to make readjustments in their
farming operations and placed them in a better position to adjust
to changes made necessary by crop control programs.

•

BEEF CATTLE ON FARMS,1880-1950

~O

IL ION HU.O

/ UNITEO STATES

V

/"'"

IV

/' I"

v

/""'vo

""

A.

\/

FIVE

•

SOUTHWESTERN
The trend in numbers of beef cattle in Texas during the past
_--< STA~ ~.
10
70 years, shown in Figure 5, appears to have been slightly downB
Ward, but this is attributed partly to the fact that there were
"" ,
V
/1
/
B/
serious droughts in the Southwest in 1917 and again in 1934- 35 ,
\ ,.J V'
' " TEXAS V
:Vhen cattle numbers, otherwise, would have been expected to
Increase to cyclical peaks. The peak of 1945 was considerably
I
,
"'2
below the peaks of 1891 and 1902, but there is some evidence that
,to.
""
last year farmers and ranchers laid plans which, within the next ~~~~;:m::IF.~~~1::::~::~:~lAHONA.ANoTUAL
several years, will boost the total number of cattle to a higher level
.0U'' 'U.0'' ' NtHTO' "",CUlTU'•.
than that of 1945-and to what may prove to be the highest level in half a century.
A

010

""

II ..

Trends in cattle numbers in the southwestern area have been very much in line with those for
Texas. This is to be expected, ·at least in part, since Texas raises about 60 percent of the beef cattle
Produced in the 5-state area. The data represented in Figure 5 show that the cyclical variation in cattle
nUmbers in the Southwest is closely related to that for the Nation, although turning points in the cycle
l1lay vary a year or two; in fact, the turning points have varied among the southwestern states. During
c
"Figures in this paragraph apply to beef cattle and do not correspond to data shown. in Figure 5, which include .all
little other than milk cows. Data on beef cattle as such are not available for years pnor to 1920, and for showmg
~aphical1Y the long-term trends it is necessary to use data on all cattle other than milk cows, which include dairy calves
lld dairy heifers.

114

MONTHLY BUSINESS REVIEW

the latest upturn in the cattle cycle, for example, the January 1 estimates indicate that the numbers
of beef cattle in Louisiana and Oklahoma began increasing in 1948, numbers in Texas started to rise
in 1949, while numbers in New Mexico rose in 1948 and declined again in 1949; those in Arizona
continued to decline through 1949.
There are two distinct phases of the beef cattle industry to be
considered: one is cattle production, and the other is cattle feeding
for the slaughter market. The Southwest has devoted most of its
past efforts to cattle production, with many of the steers and
heifers produced being shipped to feeding and grazing areas in
other parts of the country, and tradition has tended to maintain
the practice. The industry's development on this basis is attributed
to a number of factors, some of which are discussed in a su bsequent section.

CATTLE AND CALVES ON FEED
JANUARY I. 19'0 ·I.~

400i - - - -f - - - - j --

-

"'"----j-j

'001 - - --

From 1,000,000 to 2,000,000 head of cattle are shipped out
of the Southwest each year to feeding and grazing areas; however,
an increasing number of cattle have been grain-fed for market in
the Southwest in recent years as grain production has been expanded. Cattle on feed on January 1 of each year are reported by
the United States Department of Agriculture for four of the five
southwestern states-Oklahoma, Texas, New Mexico, and Arizona-with Texas contributing, on an average, about one-half
the totaL Cattle on feed in the four states increased irregularly
from 140,000 head in 1930 to a peak of 345,000 head in 1942, as
shown in Figure 6. Although the number fed annually has been smaller since that year, the increases
of the. past 3 years brought the total for January 1, 1950, to 292,000 head, which represents only 6
percent of the United States total on that date.
If> A"I ZOHA, N[ W NUI CO. IJICi....... OIo4 .. . IoHO TE XA' .
HOHI 1t ! l"OltTl! O 'Oft LOUI SI ANA.
SOUltCC' U I , Of'Alt rM r: HT Of AC;'UGUl.T Ull r.
.

Data on shipments of cattle out of the 5-state area into other
sections of the United States are not available, but figures are
reported for the State of Texas, and these data will serve to indicate the extent to which cattle move from this area, although
there are included some cattle which have gone to the other four
southwestern states.
During the 5 years, 1925-29, shipments of cattle out of
Texas averaged about 850,000 head annually, as shown graphically in Figure 7. Shipments increased sharply after the drought
during the 1930's, averaging over 1,500,000 head annually from
1943 through 1947. Shipments have been smaller in each of the
last 2 years because of the decline in total cattle numbers from
the wartime peak and because of the withholding of cattle from
market for restocking purposes. Seasonal peaks in shipments of
cattle out of the State occur in the spring months, as a result of
a very heavy movement of cattle and relatively small shipments
of calves, and in the fall months, due to a heavy movement of
calves and another, although smaller, peak in shipments of cattle.

FlOUA( .,

ANNUAL SHIPMENTS OF CATTLE
OUT OF TEXAS, 1925-1949

SOORCE ' U S OCiI'AA TN[HT OF "GiII'CUL.TU"C.

There is considerable significance in the destination of outof-state cattle and calf shipments, i.e., (1) markets, (2) feeding
areas, and (3) grazing areas. Large numbers are shipped to markets in other sections of the country,
partly in expectation of obtaining better prices and partly because slaughter and packing facilities lJl
the State are not sufficient to handle the heavy receipts in peak marketing seasons. Annual shipmeJltS
of cattle a~d calves from Texas to out-of-state markets during the past two decades fluctuated ~e'
tween 200,000 and 400,000 head. The leading markets, in order of their relative importance in recel'"
ing Texas cattle and calves in 1949, were Kansas City, Los Angeles, East St. Louis, Denver, and Okla'
homa City.

MONTHLY BUSINESS REVIEW

115

Shipments of cattle for feeding are sent principally to Iowa, Colorado, Missouri, Illinois, and
Nebraska, although quite a few are sent to other states. These shipments have increased very markedly
in recent years, as shown in Figure 7, and account for most of the increase in the total out-of-state
movement. Cattle going to these areas averaged 160,000 head annually during the 5 years, 1925-29,
but increased to an annual average of over 750,000 head in 1943-47. This movement declined during
the past 2 years, amounting to only 460,000 head in 1949, for reasons set forth above.
The principal grazing areas receiving Texas cattle are the Flint Hills of Kansas and the adjacent
Osage pastures of Oklahoma. Annual shipments to these areas from 1925 through 1949 fluctuated
considerably, but there was little over-all expansion during the period. Shipments averaged 360,000
head annually during 1925-29 and 380,000 head annually during 1943-47 but were lower in 1948
and 1949.
After allowance is made for cattle shipped out of the State, the remainder of those disposed of
each year are marketed for slaughter within the State or are slaughtered on farms and ranches where
produced. During the past 3 years, the annual slaughter of cattle and calves in Federally inspected
and other wholesale and retail plants in Texas averaged about 2,165,000 head, or 7 percent of the
United States average for the same period. In addition to commercial slaughter in the State, some
. 50,000 to 75,000 head of cattle and calves are slaughtered on farms and ranches each year.
By way of summary, the Southwest produces almost
however, a considerable part of this production is shipped
fattening or for slaughter. Cattle feeding operations in the
compared with other phases of the beef cattle industry; the
represents only about 60 percent of the production.

one-fourth of the Nation's beef cattle;
to other regions for further growth or
Southwest are on a rather small scale as
number of cattle slaughtered in the area

Factors in the Longo-Range Outlook for Beef Production
It was indicated previously that the purchasing power of beef cattle during the past year was
beyond midway on its cyclical rise and that the cyclical increase in beef cattle numbers in the United
States is well under way. It was stated further that, on the basis of previous experience, it may be
unprofitable for beef cattle producers, as a group, to expand beef cattle numbers much beyond
present ~evels and that considerable risk is involved for individual farmers entering the beef cattle
raising business at this time. However, these conclusions may well be substantiated or qualified by
other factors, some of which are not entirely divorced from the beef cattle cycle.
The profitability of cattle raising during the years ahead will be affected greatly by prevailing
economic conditions. Naturally, opinions differ concerning what these conditions will be, but within
the national economy are many stabilizing factors which bolster hopes for reasonably favorable conditions. It seems reasonable to believe thlt unemployment compensation, farm price supports, minimum
'Wages, retirement pensions, public works programs, and many other similar or related programs and
Policies will prevent abrupt changes in the economy and, to some extent, will add stability to business
conditions, although they cannot be expected to assure continued prosperity. Many orderly readjustlllents in the economy have occurred since the end of the war, and it is hoped that readjustments
Which 100m ahead may be made without serious consequences for the economy as a whole. Cattlemen
'Will be benefited by this increased stability because experience has shown that the cattle industry can
adjust satisfactorily to changing economic conditions, provided these changes do not occur abruptly.
The optimism that many people have concerning the long-term outlook for cattle raising stems
from a wide assortment of other factors. On the national economic scene, the United States population is increasing at the rate of about 2,600,000 persons per year, which is an important factor tending
to increase the quantity of meat demanded by the consuming public. Also, through educational
Programs relating to nutrition, people are being urged to eat more meat, although it would be difficult
to establish that such programs thus far have had any real success. Currently, the demand for beef is
being stimulated by · the inflationary effects of large Federal expenditures for military preparedness
and for aid to foreign countries; these are expected to be contimled, at least for the immediate future.
A potentially important factor in the prospective cattle situation is the probability of continued
S\lPPort of grain prices at relatively high levels. If cattle prices should fall substantially below current

116

MONTHLY BUSINESS REVIEW

levels, it probably would become more profitable for farmers to place their grain under loan, or sell
it to the Government, than to feed it to cattle. Should this practice become general, cattle may be
marketed at lighter weights, which, in turn, would require larger numbers of cattle to supply the
same amount of meat. For example, sale of cattle at an average of 50 to 75 pounds below current
weights would require perhaps an additional 1,000,000 animals to supply the demand for beef.
While many factors favorable to cattle raising are expected to be present in the years immediately
ahead, there are other factors less favorable and, indeed, some which may be considered unfavorable
that should not be disregarded. In the first place, the average of prices of all commodities is now substantially below that of 2 years ago, and if further readjustments in the price level occur, they are
going to have a deflationary effect upon cattle and beef prices. More specifically, prices of other meats,
such as pork and poultry, have dropped sharply below postwar peaks, and one would expect that the
lower prices for these meats would have a weakening influence on the price of beef, at least to the
extent to which consumers are willing to substitute one meat for another because of price differentials.
Moreover, there are no support programs in operation currently for hogs, broilers, and beef cattle to
prevent their prices from falling below given levels. Whether or not, in the event of sharply declining
prices, a program to support beef cattle is inaugurated may depend, in part, upon the attitude of
cattlemen, many of whom in the past have indicated opposition to price supports.
Trends in dairy cattle numbers exert an important influence upon beef supplies, as stated
previously, and prospects for dairying should be considered in appraising the outlook for beef production. It will be recalled that in the past the dairy branch of the cattle industry has contributed about
one-third of the United States supply of beef and veal. The dairy industry experienced some
contraction during the 5 years prior to 1949, but the January 1, 1950, estimates of livestock on
farms show that the numbers of cows, heifers, and calves in the Nation's dairy herd increased 1 percent,
2 percent, and 6 percent, respectively, during 1949. These increases indicate that additional expansion
in the dairy industry is under way. Encouragement for expansion comes from such factors as increases
in population and greater consumption of dairy products per person in the United States. Further
increases in numbers of dairy cattle will mean larger supplies of beef and veal from this sector of the
cattle industry. However, the effects of the larger demand for dairy products, as applied to the supply
of beef and veal, may be partly offset by increases in milk production per cow.
Despite these seemingly unfavorable factors, the farmer who adds a beef cattle enterprise to
his farming operations has some basis for encouragement. For example, a farmer whose cotton acreage
has been reduced by acreage control programs may find that beef production is the most desirable
of the alternative enterprises from which he may choose. By utilizing home-grown feeds, crop residues,
and available pastures, the cash outlay for feed will be relatively small. If the total cash cost of operating
the farm without the beef cattle enterprise is compared with the annual cash operating cost with the
beef cattle enterprise, it may be found that actually there is very little additional cash cost involved
in raising cattle. Since the cost of producing cattle on this basis is very small, the farmer is in a position
to raise cattle on a competitive basis with the large commercial producer and may even weather periods
of low prices without losses-certainly without heavy losses. This flexibility in the operation of farIl1S
and the relatively strong competitive position of beef cattle production as a supplementary farm
enterprise explain why there has been such a marked trend toward beef cattle production on this basis
in recent years. Success in this enterprise, of course, will depend upon efficient management in pro~
ducing and marketing cattle.
The conclusion that the beef cattle industry already is producing, or has laid plans to produce,
at a high level in relation to demand for beef and veal and that further large expansion may have !I
depressing effect on prices of cattle does not preclude the possibility of expansion in a specific phase
of the industry in a given area. In the Southwest, an expansion in cattle feeding operations appears
to be a highly potential source of farm income.
The Southwest Can Finish More Cattle

The practice of producing cattle in the Southwest and shipping them to the Midwest and East
for finishing arose in the early years of the development of this section of the country. The thickly
populated areas were in the eastern states and, without refrigeration, it was not possible to haul fresh
meat a thousand miles or more. It was, therefore, necessary to drive the cattle, and later to haul theJl1'

MONTHLY BUSINESS REVIEW

117

eastward for slaughter near the centers of large population. In addition to this factor, most of the
Nation's grain was produced east of the Mississippi River, and it was necessary to bring the cattle
and grain together to produce finished cattle. Eastern farmers welcomed this means of marketing their
grain, as it not only offered them this source of income from grain production but permitted them
to obtain large quantities of manure for use in maintaining the fertility of their farm lands. In looking
back over the years, the development of the cattle industry along those lines seems logical. However,
the conditions which encouraged this development have changed immensely during the past several
decades and, in fact, have been reversed to some extent. The thickly populated areas are no longer
confined to that part of the country east of the Mississippi River. From July 1, 1939, to July 1, 1949,
the civilian population of the five southwestern states increased 13.5 percent. During the same period,
the civilian population of Texas rose 17.2 percent, compared with 13.1 percent for the United States;
yet, the production of beef in this area has not kept pace with population changes, despite the large
numbers of cattle produced here.

It should be noted further that the production of grain has shifted westward, and the eastern
states are no longer exclusive in this field. The production of the four principal feed grains-corn,
oats, barley, and sorghum grains-in the five southwestern states in 1949 totaled almost 300,000,000
bushels, or 6 percent of the United States total. If wheat is added to the total for these states, the
production in this area was almost 500,000,000 bushels of grain, or 8 percent of the national total.
The use of adapted hybrids has contributed much to the production of corn in the Southwest, while
the development of higher-yielding varieties has boosted production of sorghum grains, oats, barley,
and wheat. The use of machinery for more timely preparation of land and for seeding, cultivation,
and harvesting of crops has also been among the important factors in expanding grain production in
this area.
Refrigeration has entered the picture on a large scale during recent years. Coupled with this is
the more recently developed frozen meat industry. These developments make it possible to transport
surplus supplies of meat, if such should be produced in the Southwest, for sale in any section of the
country. No longer are the consumers in industrialized areas dependent upon local slaughter for
their daily meat supply.
Despite the change in conditions as set forth above, the Southwest still ships hundreds of thousands
indeed, in some years as many as 1,500,000 head of cattle to other parts of the country for finIshing. The freight costs on these shipments, plus the losses in weight in transit, are borne by southWestern cattlemen. Then, millions of pounds of meat must be hauled back to the Southwest, especially
~uring certain seasons of the year, to supply its rapidly growing population. The cost of this freight
IS borne largely by the consumer, although the cattle raiser and many others share in this cost. With
the large numbers of cattle produced, the tremendous supplies of feed and feed grains available or
tlhat can be produced, the large supplies of protein supplements such as cottonseed meal, and with a
arge demand for beef and veal in the immediate area, it seems reasonable to ask why there should
nOt be a larger beef cattle feeding business in the Southwest.
~nd,

Space does not permit a full discussion of the farm management factors that are involved in

t~eding beef cattle for market. Many such factors were pointed out in an article entitled "Rates of
Ivestock Production-A Measure of Farming Efficiency," which appeared in the June 1, 1949, issue

of the Monthly Bnsiness Review of the Federal Reserve Bank of Dallas. Suffice it to say that beef cattle
feeding will fit into the operational plans of most southwestern farms. This enterprise can be varied
l110re than any other part of the farm operation to fit an individual farmer's resources of capital, labor,
and ability. The enterprise may be primarily a beef-cow herd, with the producer fattening those
animals going to market. Or, the farmer may have a larger beef enterprise by buying feeder cattle
to supplement his calf raising and expand his feeding operation. Other producers may rely entirely
on. buying cattle to feed. Regardless of what combination a farmer chooses, beef production provides
~ lllarket for large amounts of roughage, crop residues, pastures, and forage, which are hard to market
~n. any other way. A full program of beef cattle raising, with emphasis on feeding, will enable a
artner to improve his crop rotation through the use of more legumes, which, together with the
tnanure from the cattle, contribute to high crop yields and conservation of soil.
.
Itt

A cattle feeding enterprise, properly managed, would be a valuable addition to thousands of farms
the Southwest, benefiting the producer and the consumer.

MONTHLY BUSINESS REVIEW

118

Review of Business. Industrial. Agricultural. and Financial Conditions
DISTRICT SUMMARY

BUSINESS

Department store sales in the Eleventh District, stimulated
by the continued heavy demand for consumer durable goods,
rose seasonally by about 8 percent from April to May and
exceeded those of May last year by 10 percent. The unusually
large year-to-year gain, however, reflected the effect of one
additional trading day this year and the curtailment of sales
in May last year by the severe flood in Fort Worth, Texas.
Sales in some soft goods departments, which had experienced
a noticeable weakness during the past year, reflected some improvement during May. Furniture store sales showed a substantial seasonal increase as compared with April but fell noticeably
below the unusually large volume of sales in May 1949.

Department store sales in the Eleventh Federal Reserve District in May continued at the high level of the past several
months, exceeding the May 1949 total by 10 percent. This
unusually large year-to-year increase was partly the result of
the additional trading day this year and the adverse effect on
sales in May last year of the severe flood in Fort Worth, Texas.
During the first 5 months of this year, district sales averaged
6 percent higher than in the corresponding period of last year.
This gain is larger than in any other Federal Reserve district
and contrasts with a decrease of 3 percent for all reporting
department stores in the Nation.

Spring-planted crops throughout the Eleventh District improved considerably during May, as open weather permitted
the completion of cotton planting and much needed cultivation of crops. Recent rains have afforded some relief to the
drought areas of northwest Texas and eastern New Mexico;
in south Texas, heavy rains caused some local damage to maturing crops but were generally beneficial to crops and pastures.
Harvesting of matured crops is making good progress. Livestock are in fair to good condition except in some of the
drought areas, where some shrinkage is occurring despite supplemental feeding. Most commercial vegetables are making
good progress, with the harvesting of tomatoes, watermelons,
cantaloupe, potatoes, and onions active in south and east Texas.
Marketings of livestock increased seasonally during May and
were somewhat larger than a year ago.
Construction activity in the District continued at a high
level in May for the twelfth consecutive month. The value
of construction contracts awarded, while 3 percent below the
high April total, was 86 percent above that in May last year.
Residential awards in May reached a newall-time peak at a level
about 200 percent higher than in May last year. Awards during
the first 5 months of 1950 showed gains of 143 percent in
residential building, 30 percent in other types of construction,
and 67 percent in total construction.
The petroleum industry during May and June continued to
improve its economic position. The demand for petroleum
products is being maintained at a high level for this season
and is exceeding the increased volume of production, necessitating further withdrawals from stocks. At the end of May,
stocks of the four major petroleum products were about 31,000,000 barrels lower than a year earlier. The higher national
production of crude petroleum in May reflected chiefly the
expanded output in this District, since a greater part of the
adjustment of crude oil production to demand tends to be
concentrated in this area. The June production rate in the
District, which is exceeding year-earlier levels by 400,000 bar-'
rels per day, is at the highest level in 16 months. Production
allowables in Texas for July were increased by about 67,000
barrels per day.
The deposits of selected member banks in leading cities of
the District increased by about $133,000,000 between May
10 and June 14, with approximately one-half of the total being
redeposited with correspondents. The loans and investments
of these banks rose approximately $21,000,000 during the 5week period and on June 14 were $292,000,000 higher than
on the corresponding date in 1949.

The consumer durable goods departments continue to constitute the principal elements of strength in department store
sales, although some soft goods departments showed a somewhat more favorable picture in May than in previous months.
Sales of major household appliances, after a moderate decline
in April from the record March level, rose 25 percent in May
to establish a new high. Moreover, such sales were 55 percent
greater than the relatively high level of Maya year ago. Furniture sales also showed a substantial increase and exceeded yearearlier levels by 49 percent. Although radio, phonograph, and
television sales showed a moderate decline in May, they were
still at very high levels-more than double the sales in May of
last year. In contrast with the strength in the aforementioned
departments, the domestic floor covering department made 1I
disappointing showing in May, with sales down 21 percent
from the previous month and 2 percent from the low level
of a year ago.
Sales of women's and misses' dresses, after a somewhat unfavorable showing during the past year, made a noticeable
recovery in May, exceeding the previous month's sales by 13
percent and registering a 4-percent gain over the correspon,ding month of last year. Moreover, sales of women's accessone;
were up slightly in May and showed a year-to-year gain 0
5 percent. Women's and misses' coat and suit sales showed ~
substantial seasonal decline in May but were 25 percent higher
than the depressed level of May a year ago. Although .the
May sales figures for these soft goods items indicate some iJ11provement, it will be noted that the additional trading daY
this May, as well as the reduced sales in May last year because
of the Fort Worth flood, is undoubtedly responsible in part
for the more favorable statistical picture.
Men's clothing sales continued their favorable performance,
with May sales showing a year-to-year gain for the sixth conse7utive month. In fact, except for the seasonally large sales I~
December, sales of men's clothing in May were at the hig hesd
level in the past 3 years. Sales of silverware and jewelry showe_
a substantial seasonal increase but fell 2 percent below yell~
earlier levels. Although basement store sales continued to sho _
b
a year-to-year decline, the I-percent decrease in May waS su
stantially smaller than in the previous 2 months.
Instalment sales in May continued in heavy volume, exceedd
ing by 56 percent the volume in May of last year. Cash lI;Jl
charge account sales, which in other recent months had sho Jlt
year-to-year declines, increased during May-charge aC cou tsales being up 10 percent and cash sales, 1 percent. The proPdid
tions of the various types of sales comprising total sal~s
not change significantly during the month, but in relatlOlleJlt
a year ago the proportion of instalment sales rose to 12 petc
from 8 percent, the proportion of cash sales was down to

,I

119

MONTHLY BUSINESS REVIEW
percent from 34 percent, and the proportion of charge account
sales declined to 57 percent from 58 percent.
WHOLESAJ.E TRADE STATISTICS

Line," of tr.de:'
Automotive supplies ............. .
Drugs and sundries .............. .
Dry goods . . ...... . .. . .... . .. . .. .
Grocery (full-line wholes.lers not
sponsorm g groups) ............. .
Hardw.re .................. .... .
Industrial supplies ........ ... . .. . .
Tobaceo ................ .. . .. ... .
Wines and liquors .. .. .. . ........ .
Wiring suppltos, oonstruotion mntcrials dIstributors . . ... . . . " ... .

Pereontage ch.nge in
Net sales
Stockst -~
May 1950 from
5 mo. 1050 M.y 1050 from
M.y
April eomp. with M.y
April
1949
1950 5 mo. 1949 1949
1950
2
0
G

I~

15
10
- 20

20

- 6

II

~'i

4

- 3

-

"'3

- II

6

5

19

- 6
17
I

24
9

-2
14
2
7
14

i

3

-

24

I

5

- 13

7

18
7
21

7
-

-

-0

I Indiontes ohange of less than one-h.lf of I peroent.
• Proliminnry dat•. Compilod by United States Buronu of Census.
t Stooks .t end of month .

RETAIL TRADE STATISTICS
~---

DOPartmont stores :
60tal Eleventh Distriot . .... .. . ... .
DorlPus Christi. ................. ..

F' las ......... ' ................ .

nort Worth .. ......... .. ......... .
souston .. .. . . .. . .... . ........... .
S~n Antonio ............ . .. ...... .
OthOVo~ort, La ........ . ......... ..
F ~ r OltlOS ..................... .
urnlturo stores :
6~\fl Eleventh Distriot ... ..• ... . .•

~eu::~I;.'.·.::::::::::::::: :: ::::: :

sort Arthur ................... .. .
S~n Antonio ... ..... . . ... ... .. ... .
Wr~oport, L............... . . ... .
fI 10 Ita Falls ... .... ...... ..... " .
,ou8ehold applianeo storos:
£~~I Elovonth Distriot . .. ........ .
lilt • .... . ..• . .................

Porccntago ohango in -----~
Not sales
Stockot-~
M.y 1950 from
May 1950 from
5 mo. 1950
April
May
April oomp. with May
1949
5 mo. 1949
1949
1950
1950
10
13
II
21
2
16
9
8
- 5
- 15
- 4
- 20
- 9
7
22

15
8
24
70
12
27
- 3

83

9
3
4
17
10
18

4
2
6
4
-6
- 6

6

"'2

2
4

-5

~'2

6
6

8
8
14
6
8
9
13
- 1

-

~ i4

6
4

- 3

18
18

58

-

-

5
0
2
II
3
10
-

-

H
~ io

t Stocks at end of 1D0nth.
I Indiontes ohango of less than one-half of I pereent.

same date last year. Moreover, May was the third month in
which stocks showed a year-to-year increase, with the margin
of increase widening each succeeding month. The purchases of
fall merchandise, which in recent years were reflected in sharp
increases in orders outstanding during June and July, appear
this year to have gotten under way a little earlier. Orders
outstanding at the end of May were 4 percent higher than a
month earlier and 29 percent higher than on the corresponding
date of a year ago. The increase in ordering this year may
reflect, in part, the confidence of merchants in a continued
high level of sales during the remainder of this year, as well
as some tightening in the supply situation and some hedging
against possible increases in prices. Despite the increase in
stocks and orders outstanding, there is little evidence of inventory speculation. In the main, it appears that these developments reflect the efforts of merchants to keep stocks in line
with the higher volume of actual and anticipated sales .
Furniture stores in the District showed a substantial seasonal increase in sales during May, but sales dropped 5 percent below the unusually large volume for May of last year
and failed to match the very favorable showing of the furniture departments of district department stores. The year-toyear May decline in sales at furniture stores was the first in 7
months. Although instalment sales showed a noticeable increase from April to May, it is noteworthy that they fell 10
percent below the year-earlier level. Prior to last month, instalment sales had shown marked year-to-year gains for 7
consecutive months and for 10 out of the past 12 months.
On the other hand, a 28-percent gain in cash sales in Mayas
compared with April enabled this type of sale to reverse, at
least temporarily, the pattern of year-to-year declines which
had been evident in all but 2 of the past 40 months. Cash
sales in May were 10 percent higher than in the corresponding month a year earlier. Collections were up moderately in
May. Nevertheless, accounts receivable at the end of the
month showed a small increase and were 27 percent higher
than on the same date of last year. Stocks showed a small seasonal decline as compared with April but exceeded year-earlier
levels for the second successive month, with a gain of 2
percent.

INDEXES OF DEPARTMENT STORE SALES AND STOCKS

AGRICULTURE
Daily avorago 8,le.- (1085-30 - 100)
----Unadjustcd··---~---Adju.tcd---~

~l)IO"onth D'ISt riO • • ••. .
' ali
.•

ltoU::~n .'.'.::::::::::

May
1950
391
352
424

April
1050
398
326
428

Mar.
1950
362
344
374

May
1949
373
333
437r

Muy
1950
403
375
442

April
1950
401
343
432

Mar.
1950
389
366
435

May
1949
385
354
455r

Siocks - (1936-39 - 100)
----Un.djU8tcd·---~---AdjU8tcd----

~Io"

cnth District . ....

May
1050
380

AI)ril
1950
393

Mar.
1950
384

M.y
1949
368r

M.y
1050
380

April
1950
375

Mar.
1950
362

May
1949
363r

~:aoviaed.

Unadjuatcd for S0880Dal variation.

Ie ~harge account collections improved in May, with the col-

h~thon ratio rising to 53 percent, which is 2 percentage points
~r than in May of 1949. On the other hand, a further
t\~"'~ng in instalment account collections was apparent, and
foc Instalment collection ratio, at 13 percent, was the lowest

1
,1&

p/ any month for the 16 years of record

and was down 7

rcentage points from May of last year.

(ju~epartmen t store

stocks showed less than a seasonal decline

va r~ng May. The stock index which is adjusted for seasonal

thtlation stood in May at the highest level in 17 months. At
C end of the month stocks were 9 percent higher than on the

Prospects for crop production in the District have improved
during the past month as open weather over the central and
eastern portions permitted replanting of cotton and much
needed cultivation of cotton and corn. Early June rains
brought some relief to dry areas in south Texas and to the
drought stricken North High Plains and adjacent areas of
New Mexico. Harvesting of all matured crops is making good
progress, and livestock are in fair to good condition as ranges
are supplying abundant feed, except in western New Mexico
where supplemental feeding continues.
The estimate of 1950 wheat production in Texas of
24,687,000 bushels, based on conditions as of June 1, is unchanged from the estimate of a month earlier. This estimate
is only 24 percent as large as the 1949 crop, and-if realizedproduction would be the smallest since 1936. Wheat harvest
is in full swing, although delayed temporarily during early
June by local showers. Yields from the earlier fields have
been better than anticipated. Quality of the wheat is unusually
good, with test weights running as high as 63 pounds per
bushel.
The 1950 UniteJ States winter wheat emp is estimated at
710,156,000 bushels, based on conditions 3S of June 1, representing an increase of nearly 21,000,000 bushels during May.

·-.

-

-

.-

-

.

~-.-----.--~.

120

-~

MONTHLY BUSINESS REVIEW

The seeding of spring wheat in northern states was delayed
because of excessive rains, and acreage as well as yields may
be substantially below earlier estimates. The Department of
Agriculture, however, estimates production at 234,000,000
bushels, which, added to the winter wheat crop, would give a
total crop of nearly 945,000,000 bushels - the lowest since
1943.
The Texas cotton crop is making fair to good progress, as
open weather during June permitted the reseeding of many
washed-out fields in northern counties and the cultivation of
fields that were up to a stand. Chopping is nearing completion
in central, east, and north Texas and northern Louisiana. Rains
in early June permitted the seeding of most of the west Texas
crop under generally favorable moisture conditions, although
some counties west of Lubbock still were in need of additional
rain. Picking is under way in the Lower Rio Grande Valley,
and fruiting is heavy in all southern areas. The Louisiana crop
has been delayed by cool weather and frequent showers but has
improved with the advent of warmer weather. New Mexico's
irrigated cotton crop is making satisfactory progress under
generally favorable conditions.
Cotton insect infestations are reported to be heavy in all
parts of the District except the irrigated sections of New
Mexico and Arizona. Weather conditions to mid-June were
unusually favorable for weevils, and some fields in northcentral Texas showed as many as 2,500 or more weevils per
acre. Other insects, such as thrips and aphids, are also causing
considerable damage in fields that have not been poisoned. It
is reported that the control of all insects has been very satisfactory in communities that are carrying out community-wide
poisoning campaigns.
The condition of the cotton crop throughout the Cotton
Belt is reported to be generally good, although weevil infestations are heavy in central and eastern sections and rainy weather
during May and early June delayed cultivation and the application of insecticides.
The Texas corn crop has made considerable progress during
the past month, and in central and east Texas, fields have
benefited greatly from the warmer weather. Planting of sorghums is nearing completion in the late maturing High Plains
area of Texas and eastern and northeastern counties of New
Mexico, where June rains permitted the seeding of a crop on
much abandoned wheat land. The crop is making fair to good
progress throughout central and northern counties of Texas.
Combining of sorghums started in the Lower Rio Grande Valley about mid-June and is under way in the Coastal Bend area,
where very good yields are in prospect.

Most commercial vegetables in Texas have made good progress during the past month. Torrential rains early in June in
the Lower Rio Grande Valley and the Gulf Coast area caused
considerable damage to tomatoes, onions, watermelons, and
cantaloupes; however, acreage losses of these crops were a comparatively small part of the total, since production is dispersed
over a wide area. Field work was resumed in the commercial
vegetable area by mid-June, and harvest of matured crops continued. The movement of east Texas tomatoes to market is well
under way, and shipments are increasing rapidly. Harvest of
potatoes is active in central and east Texas, with the qualitY
of much of the crop reduced materially by wet fields. Harvest
of watermelons and cantaloupes is again active, following a
temporary delay in mid-June caused by heavy rains and some
hail in the Falfurrias-Riviera area. Harvest of sweet corn is
under way in central and eastern counties of Texas.
CASH RECEIPTS f.·ROM FARM MARKE'I'INOS
(In thousand. of dollars)
April 1950
April
Cumulativo reeeipU!
1949 ~ Jan . 1 to April aoCrops Livestook Total
Total
1950
1940
State
Arizp!IR . ... .. .......... . $ 8,294 $ 6,388 $ 14.682 $ 16.778 $ 72,324 $ 76,84 4
73,836
LOuisiana ...... . ...... . ..
8,257
7,120
15,377
16,984
63,028
37,783
7,870
12,520
35,716
Now Mexico ... ... .. . .. . .
865
8,735
125,771
Oklahoma .. ..... ... .....
5,214
18,472
27,979
135,264
23,686
391,371
Texas .. .. . . ... .. .... . ... 22,334
88,484
110,818
128,820
492,264

--

TotaL . . . . ... .. . . .. ... $44,964 $128,334 $173,298 $263,076
SOURCE: United States Dopartment of Agriculture.

$798,596

-

$705,105

Ranges and pastures are supplying good to very good feed
in all sections of the District except in western New Mexic,o
and some western Trans-Pecos counties of Texas where rain )5
urgently needed. Early June showers improved pastures in
south Texas and brought some temporary relief to the drough
stricken regions of the Panhandle and eastern and northeastern
New Mexico counties.
All classes of livestock are making good gains where abundant feed is available but are showing some shrinkage in western
New Mexico, where supplemental feeding continues and marketings are increasing as feed supplies are depleted. In TeJ{as
an unusually good calf crop is on the ground, and calves are
making good gains. The spring movement of steers to Osage
and Flint Hill pastures in Oklahoma and Kansas was someW'ha
d
less th"an a year ago and the smallest since 1944. Ewes an
lambs are making good gains on the improved green feed supplf
over most of the main sheep country. Marketing of year1~n~
lambs is generally complete, while the movement of spr~
lambs to market continues heavy. Because of the general ~
abundant green feed supply in most of the District, a stroll e
demand continues for stocker cows, calves, ewes, and eW
lambs,

The first estimate of the Texas oat crop, which is based on
conditions as of June 1, indicates a crop of 30,940,000 bushels,
compared with 34,020,000 bushels harvested in 1949 and the
1939-48 average of 31,195,000 bushels. This estimate reflects
the rapid improvement in the Texas crop since May 1, when
it was reported to be in the poorest condition as of that date
in recent years. Barley production in Texas is estimated at
1,935,000 bushels, compared with 2,774,000 bushels in 1949
and the 1939-48 average of 4,069,000 bushels.

§;'°es.sp
::.'.'::::::::.'::::::::: :::

Seeding of the Texas rice crop has been completed under
generally favorable conditions. The condition of the Texas
hay crop is reported at 5 points above the 10-year average,
reflecting weather conditions generally favorable for this crop.
The June 1 forecast of the Texas peach crop indicates a crop
of 1,015,000 bushels, 232,000 bushels less than the estimate
of a month ago and much less than the 2,400,000 bushels
harvested in 1949.

Combined receipts of livestock at the Fort W orth all~
Antonio markets in May were up 104 percent from Apflhogs ,
f1ecting increases of 177 percent in sheep, 12 percent ,)Il
46 percent in cattle, and 30 percent in calves. These)1l f
were due principally to a seasonal rise in the marketings 0
classes of livestock and-except for hogs, which have b t~Jl'
in number during the past year-do not indicate any su S

LIVESTOCK RECEIPTS
(Number)
Fort Worth market
May
May
ClaM
1950
1949
Cattle ....... ....... ......... .. 55,252 47,087
Calves .... . ..... ... ..... ' " .. . 15,236 13,539
64,828
45,759
366,832 283,946
• Includes gonts,

April
1950
34,623
9,766
58,556
128,884

Snn Antonio ~~
'1,,,1
May
" 60
1040
19 1
68
37,697 21'802
12,677
12'103
6,350
5'()98'
54,911' ~I,

May
19S0
35,481
14,094
6,709
56,382'

5;:

MONTHLY BUSINESS REVIEW
tial change in livestock numbers or unusual market conditions,
although the relatively favorable prices are encouraging the
marketing of aU finished animals. Compared with the same
month last year, marketings of all classes of livestock were 22
percent higher, with increases of 25 percent in sheep and lambs,
37 percent in hogs, and 7 percent in cattle and calves.
TOP LIVESTOCK PRICES
(Dollars per hundrcdwcight)
Fort Worth mllrkct
~Iaught.er steers . . , . . . . . . . . . . . ..
S/OCkcr stccrs..... . . .. . . .. . . ...
S aughter cows ..... ... . ..... ' "
Slaughter heifers and yearlillgs. ..
laughter ealves....... ........ .
S
slocker ealves .. .. . . . . . . . . . . . . ..
lIau~hter lambs.. . . ... .... . . ...
egs..... .......... .. .. .. . ....

May
1050
S30. 00
28 .00
22.50
31 .00
30.00
30.00
30.00
20.00

May
1040
$26 .00
26 .00
20.00
27.00
28 .00
26.50
30.00
21.00

April
1050
$28.50
27.00
21.00
30.00
20 .00
28 . 50
28 .50
17 .50

SlIn Antonio market
May
1050

May
1040
$25 .50

April
1050

20:00

25 .50
27.50
28.00
28.00
21.00

Prices received by farmers in the District for most agricultural commodities increased between mid-April and the middle
of May. The mid-May index of prices received by Texas farmers
s~ood at 277, up 3 points from a month earlier and the highest
Since May 1949, when the index was reported at 286. Increases
In prices received for aU classes of livestock and for cotton
lillt , cottonseed, corn, oats, flaxseed, and wool more than offset
Sl11a U declines in the prices of poultry and eggs, butter, milk,
grain sorghums, and wheat.
FINANCE
Almost :Ill of the major asset and liability :lccounts of semember banks in leading cities of the District showed
~nereases between May 10 and June 14, with growth in loans,
InVestments, balances with banks, and collection items largely
Teounting for an increase of $135,011,000 in total assets.
Otal deposits increased by slightly more than $133,000,000,
but reserves with the Federal Reserve Bank declined somewhat.

.

Beginning last summer, levels of business and other economic
activity, as reflected in employment, retail trade, construction,
~nd income, began to rise and continued to move upward dur~ng the remainder of the year. During the first 5 months of
50 seasonal contraction in business activity was markedly
.css in some sectors than that experienced in past years, and
~h~ther areas the upward movement initiated earlier continued.
It I~ eontraseasonal strength in the business situation shows
t~ In a comparison of banking figures for comparable dates in
thC 2 years. For example, with the exception of reserves with
orc Federal Reserve Bank, each major asset and liability account
IV Scl~cted member banks in the larger cities of the District
1915 significantly higher on June 14, 1950, than on June 15,
ll) 49. Total loans increased by almost $170,000,000, investCnts by approximately $122,600,000, balances with banks by
17
7,767,000, and total deposits by almost $323,000,000.

,9

o Expansion in total loans in the amount of $14,700,000
oCUtred during the 5 -week period from May 10 to June 14.
Ie n June 14, loan volume was almost $1,204,000,000. High
StVels of activity in construction, particularly residential conta~Uetion, demand for credit in the security market, a sust/ ned demand for consumer credit, and certain large loan
anSactions :lffected the trend of lending at member banks ill
<g . larger cities of the District. Commercial, Industrial, :md
~t rl~lltl1ral loans and loans to banks were fractionally lower
~n t e end of the 5-week period, but growth in loans to
ancc security trading and real-estate activity and a somewhat

121

greater increase in "all other" loans added more than $15,000,000 to loan portfolios.
Funds were available to member banks in the larger cltles
of the District during the period in sufficient amount not only
to add to loan volume and to balances with banks but also to
increase holdings of United States Government and other securities. Total investments of these banks rose by $6,523,000,
the greater portion of which was in the form of Treasury obligations. Although investments in 90-day bills rose substantially, in addition to a smaller increase in Government bond
holdings, the principal changes in the composition of security
portfolios were due to refunding operations of the Treasury
on June 1, which resulted in the retirement of an issue of 1 Y4percent certificates and the issuance of a new 1 Y4 -percent note
in exchange. Largely as a result of this refunding, holdings of
certificates of indebtedness declined by $70,907,000, while investments in Treasury notes rose by $61,429,000.
CONDITION STATISTICS OF WEEKLY REPORTING MEMBER BANKS
TN LEADING CITIES - Eleventh Federal Reserve Distriet
(In thousands of dollars)
June 14,
JUlie 15.
May 10,
Item
1050
1049
1050
Total loans (gross) and investments ........ , ........ $2,538.364 $2.246.069 $2.517,148
Total loans- nett .. .. .. .............. . .. ... ... 1,100,934
1.024,350
1,175.825
Totalloans - "ross ....... ... .. . .... . .... ... , . . . 1.203,043
1,034.253
1,180,250
Commoreial, mdustrial, and a!lriculturalloBDs. .. . 810,622
606,106
810,967
Loans to brokers and dealers In seeurities .... . . . .
6,805
0,391
6,805
Otber loans for pnrchasing or carrying sccurities. .
61,466
61,408
49,365
Real-estate loans. .. . . . . . . .. . . . . . .. . . . . . .. . . . .
100,044
87,102
08,867
Loana to banks.. .. . . . . . . . .. . . . . . . . .. . . .. .. . . .
279
481
320
All other loans. . . . . . . . . . . . .. . . . . .. . . . . . .. . . . . 226,827
102,765
213,927
Total investments. .. .... ... . .... .. . .. . . ..•. . . .. 1,334.421
1,211.816
1,327,898
U. S. Treasury bills..... .. . .. . . .. . . . . .. ... . . . .
103.678
48,218
04.596
U. S. Trcasury eertifieates of indebtedness... ....
170,153
282,782
250,060
U. S. Treasury notes... . ..... ... ... ...........
260,368
30,478
108,939
U. S. Government bonds (ine. gtd. ebligations).. . 665,100
719.954
050,498
Other seeurities. . . .. .. .. .. .. .. .. .. .. .. . .. .. . .
130. 113
121,384
138,805
H.csorves with Federal Reserve Balik.... ............
446.724
512,711
448,273
Balances with domestie banks . . .. ... ........... . . , . 376,073
208.306
317,960
1,020,711
DelOand deposits - adjusted". . . . .. . . . . ... . . . .. . .. 2,050.565
2,008.135
Time depOSIts except Government . . . . . . . . . . . .• . .. . .
454.029
441,332
446,260
United States Government deposits . .. " . . . . . .. . ... .
54,016
20.761
51.470
Interbaak demand dellosits..... .. .. ...... . ...... . . 647,877
513,604
624,419
Berrowings from Federal Reserve Bank. . . . . . . . . . . . .
0
o
o
t After deductions for reserves and unallocated ehnrgo-olTs.
• Ineludes all demand deposits other than interbank and United States Government, lesl
eash items reported as on hand or in IlrOOess of eollection.
.

Demand deposits of individuals, partnerships, and corporations and interbank demand deposits showed marked increases
during the 5-week period, the greater portion of which occurred
during the final week. These changes, taken with smaller increases in other deposit accounts, combined to produce the
greatest growth in total deposits at these larger banks in any
4- or 5-week reporting period this year. While certain large
financial transactions resulted in a substantial transfer of funds
to the District, deposit growth was rather widespread at
weekly reporting banks.
Gross demand deposits of all member banks in the Eleventh
District, however, declined during May, continuing the trend
in evidence since January. Although both Reserve city and
country banks reported shrinkage in gross demand accounts
during the month, the latter institutions accounted for slightly
more than 83 percent of the total decrease. Despite the 4month downward trend this year, gross demand deposits of
all member banks in the District averaged $5,48 1,505,000 during May and were $5 39,000,000 higher than in the comparable
month of 1949. In contr:lst to the behavior of demand deposits,
the trend of time deposits was upward in May and in each of
the other months since January, '\\rith the exception of March,
when a rather sharp seasonal dip occurred. Reserve city banks
reported growth of almost $13,000,000 in time accounts during May, while the increase at country banks amounted to
$1,344,000.

MONTHLY BUSINESS REVIEW

122

GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Eleventh Fedenll Reservo District
(Averages of daily figures. In thousands of dollars)

Date
May 1948 . .. ......
May 1949 ... . .... ,
January 1950. . . . . .
February 1950 . . .. .
March 1950. . ... . . .
~riI1950 . ..... . ..
ay 1950 . ... .. .. .

Gross
demand
$4 ,997.789
4,942,647
5,733,218
5,617,162
5,566,562
5,521,595
5,481,505

Country bank.

Reserve city bank.

Combioed total
1'ime
$569,656
631,531
659,140
661,292
646,645
656,387
670,514

Gras..
demand
$2,384,586
2,365,633
2,752,603
2,660,793
2,643,667
2,634,090
2,627,31 6

Time
S358,943
411,889
423,289
420,111
405,065
410,645
423,428

Gross
demand
$2,613,203
2,577,014
2,9SO,615
2,956,369
2,922,805
2,887,505
2,854,180

Time
$210,713
219,642
235,851
241,181
241 ,580
245,742
247,086

The prevailing level and the trend of business actiVity
are reflected to some extent by debits to deposit accounts reported by banks in 24 cities throughout the District each
month. For example, at least one indication of the higher
tempo of business and other economic activity in May of this
year as compared with May 1949 is the difference between the
volume of debits for each of the 2 months-19 percent greater
this year. An increase of 6 percent from April to May this
year also reflects a continuation of the generally favorable levels
of business activity, incomes, and retail trade which have been
characteristic of the southwestern economy during 1950. Banks
in San Angelo, Laredo, Lubbock, and Monroe, Louisiana, reported the greatest increases in debits during May, while banks
in Waco, Texarkana, and Port Arthur reported the only decreases. The turnover of deposits, reflecting the average rate of
use of deposit accounts, was 13.1 in May, as compared with
12.5 in April and 11.9 a year ago.
BANK DEBITS, END-OF-MONTH DEPOSITS. AND ANNUAL RATE OF
TURNOVER OF DEPOSITS

City

May
1950

May
1949

April
1950

17
14

13
4

Deposits"
Annual rate of turnover
May aI,
1950

Mny
1950

May
1940

April
1050

87,670

8.3

8.2

7.9

43,648
ISO, 106

10 .6
9.5

9.8
0. 2

0.4
0.2

Arilona:
Tueson .• . ... ... . •. $ 60,486
Louisiana:
39,071
Monroe . ..... ... . .
141,082
Shreveport . . . .. ...
New Mexico
18,049
Roswell .. . . .. .. ...
Texas:
44,494
Abilene ........ .. .
100,089
Amarillo . . ...... . .
123,725
Austin ............
97,893
Beaumont . . ... .. ..
04,272
Corpus Christi. . ...
9,861
Corsicana . ... . .. ..
Dallas .... ........ 1,144,087
143,466
El Paso . ....... . . .
357,972
Fort Worth . . . . .. ..
66,892
Galveston . . .......
Houston .... . ...... 1,116,701
18,585
Laredo . .... .. .. . ..
SO,575
Lubbock . ...... .. .
29,317
Port Arthur ..... ..
46,701
San Angelo .. . . .. ..
314,845
San An tonio . ......
15,151
Texarkana"" . . .....
44,220
iJ;ler . . ...........
59,437
aco ... . . ... . ... .
62,408
Wichita Falls . .....

37

12

22,072

0.5

8.8

8.6

58
22
19
0
33
13
18
18
24
3
13
13
48
- 12
77
27
17
22
ao
18

9
2
1
3
7
4
5
7
7
2
5
16
13
- I
52
0
- I
2
- 13
2

45,042
95,326
114,422
90,430
00,248
20,760
820,083
126,701
318,507
05,244
005,053
23,385
86.121
40,739
46.945
348,692
22,836
51,310
65,174
91,157

12 . 1
12 .8
13 . 1
13.0
12. 6
5.6
17 .0
13 . 4
13.7
8.5
13 .6
0.2
11.5
8.0
12 . 4
10 .0
7.9
10.3
10.6
8.a

8.9
11.0
12 .0
10.9
10.8
5.3
15 .1
12.5
12.0
8.2
13.1
0.0
10 . 7
10 .0
8.3
0.6
7.0
8.6
8.3
8.0

11.4
12.7
12.8
12.6
12 .0
5.4
16.6
12 .5
13 . 1
8.4
13 . 2
8.2
10 .2
9.0
8.4
10 . 1
7.8
10. 1
11.4

Total- 24 cities . ... . $4,229,460

19

6

$3,923,570

13.1

11.0

12.5

---

CONDITON OF THE FEDERAL RESERVE BANK OF DALI,AS
(In thousands of dollars)

p

+ Debits to deposit accounts except interbank accounts.
" Demand and time deposits, including certified and officers' checks ouManding but excluding
deposits to the credit of banks.
"" This
includes only one bank in Texarkana, Tcxas. Total debits for all banks in
Texarkana, exas-Arkansas, lDeluding two banks located in the Eighth District, amounted to
$25,791.

firre

Principal changes in the condition statement of the Federal
Reserve Bank of Dallas between May 15 and June 15 included
declines of $42,026,000 in gold certificate reserves, $2,301,000
in member bank reserve balances, and $1,291,000 in Federal
Reserve notes in actual circulation. Total earning assets increased by approximately $9,000,000, which was more than

June 15,
1950
$646,372
100
679
800,039
806,81 8
794,386
607,246

Item
Total gold certificate reserves .. .. .. .. . •...
Discounts for member banks ..... . .... . ...... . .... .
Foreign loans on gold .... . ... .. ... . .. .. . . ... . .... .
U. S. Government securities . . ..... . . . ............ .
Total earning assets .......................... .. ..
Member bank reserve deposits ..... . ............•..
~'cd cral Reserve notes in nctual circulation ... . .... . .

June 15,
1949
$628,420
258
3, 171
841.770
846,100
860,566
596,123

Mny 15,
1050
$688,308

o

1,398
790,420
707,813
706,687
608,537

SAVINGS DEPOSITS
May 31, I060

City
Louisiana:
Shreveport . . .. .. . .•.
Texas :
Beaumont . ... . ... . . .
Dallas ..... .. .. .... .
Ell'aso ... .... .. ... .
Fort Worth .. .... ....
Galveston . . .... . ....
Houston .... ... . .. . ..
Lubbock .. . ...... ...
Port Arthur .. . .... ..
San Antonio . .. . . . . ..
W.co . ... ... .. .. . ...
Wichita Falls ........
All other ....... . .. . .. .
Total. .. ............. .

(Amounts in thousands of dollars)
Debits+
Petg. change from

accounted for by a slightly greater increase in holdings of
United States Government secur.ities. Despite the fact that the
notes of this bank in circulation declined by more than $17,000,000 between January 15 and June 15, the volume outstanding on the latter date was about $11,000,000 in
of the amount in circulation on the comparable date last year.

Number of
regortin g
anks

Number of

Amount of

savillgs

Ravings

deposits

dC
P03itors

Percelltnge ehan~o ill
savings deposits rOI~
May 31,
1940
a.6

- 1. 3

5,004,025
78,206,105
23,046,215
35,680,865
21,264,387
75,652,474
4,007,826
4,330,087
43,784,088
10,534,224
4,616,015
56,533,090

5.8
0.9
0.8
0. 4
- 0.2
1.0
25 . 6
- 6.3
- 2. 7
3.8
2. 4
3.4

-0. 1
0.1
- 0.04
0.7
0. 1
1.1
- 1.0
- 0.3
1.3
1.0
0.1

$388,436,602

0.3

_ 0.03

3

43,923

$ 24,866,462

-

3
8
2
4
4
8
2
2
5
3

-

56

12,221
144,889
32,670
44,326
22,687
95,464
2,004
6,026
41,087
10,444
8,326
67,521

102

632,534

3

April 29,
1050

- 1.7

The Secretary of the Treasury announced on May 31 the
completion of the Treasury's latest refunding operation-t~C
offering of a 13-month 1 Y4-percent note in exchange for t C
1 Y4 -percent certificate which rna tured June 1 and was outstanding in the amount of slightly more than $5,000,000,000~
Subscriptions to the new issue amounting to $4,817,451,00
were received and allotted. Rates on new issues of Treasury
bills have shown a gradual tendency to advance during
year, with the issue of June 8 selling at an average discount 0
1.179 percent.
-

thi

INDUSTRY

.
.. m
.
ConstructlOn activity. t he D"Istnct contmued at a verY
,(he
high level in May for the twelfth consecutive month. . b
1c
value of construction contract awards was $100,000,000, wh c
is one of the higher monthly totals of record. The May figurr~
however, is about 3 percent under that for April but is 86 peof
cent above that of May 1949. During the first 5 monthS 67
this year contract awards amounted to $441,000,000,
is
percent more than in the corresponding period last year. rd.
figure is also the highest for any corresponding period of reCOrds
During the 12-month period-June 1949-May 1950-awa til
Jl
totaled $935,000,000, which is one of thc largcr 12-J1'I°
totals of record.
were
In the Nation, construction contract awards in May c(running 53 percent ahead of last year, compared with ~6 ~ea(
cent in this District. During the first 5 months of d~IS th
:lwards in the Nation were 56 percent more than dunllg e(same period last year, this gain being smaller than the 67-P
cent increase in this District.

°rh

MONTHLY BUSINESS REVIEW
VALUE

or

CONSTRUCTION CONTRACTS AWARDED
(III

Ma
lU5 P
S 100.160
53.870
46.281
1.347.603
074.004
672.009

b

thou .. ",u. of dollars)
May
1040
$ 53.776
17.060
35.810
880.344
340.251
534.098

April
1050
102.763
47.317
55.446
1.350.406
674.830
075.660

Elevonth District - total. .
Residential. .. .. .... .. .
All othor .. . .. . .. . ... ..
Unit.ed Statcs·- total. . ..
Rcsidential. . .... .... ..
All other ..... . .... . ...
p - Preliminary .
• 37 stales enst of the Rocky MOlllltain •.
SOURCE: r. W Dodge Corporution.

JUlluary I to May 31
1050p
$ 441.462

212.208
220.104
6.508.085
2.020.074
2.870.011

1049
$ 263.645

87.262
176.383
3.522.000
1.254.047
e.207.053

Nonresidential construction awards in the District during
May, which amounted to $46,000,000, were 16 percent less
than in April but 29 percent more than during May 1949. During the first 5 months of 1950, nonresidential awards totaled
$229,00 0,000, or 30 percent more than during the same period
last year. The gains from a year earlier were moderately larger,
percentagewise, in the District than in the Nation.

123

(5) The marked increase in the building of and the strong
demand for so-called low-price homes. Most dwellings built
have been in the $6,000-$10,000 class. The average cost for
1- and 2-family dwellings in Texas was $8,763 during the
first 4 months of 1950, representing a I-percent decrease from
the like period of 1949.
( 6) The increasing belief on the part of prospective home
purchasers that construction costs are not likely to decline
appreciably during the next few years. Costs per square foot
during the first 4 months of 1950 were 4 percent lower than
a year earlier, but recently the tightening of the market for
building materials has resulted in some increase.
(7) The generally high level of business activity, employment, and income.
CltUDE OIL PRODUCTION
(Barrols)
May 1050

ArCl\

IiUILDlNG PERMITS
Percentage
Perccnta)!o ohallgo Jail. I to May 30, 1050 ehan~o
valuatIon frona
valuatIOn
Number Valuatioll May 1040 April 1050 Number Valuation from 1040
'May 1950

Louiaia~~t{
Shrevoport . ...
'I'oxas:
Abilene . .... ..
~a~iIIo .... . ,
Il u8tm ... . .. ..
COumont . ... .
g~lf.us Christi.
EI ,as . .. .. ...
~. laso . .. . .. .
Gort Worth ....
U'lv08ton .. ...
L OUston .......
pUbback .... ..
~tt Arthur ...
\V n Antonio .. .

304 $ 2,614,728

51

74

188 1,014,388
320 1,504,763
377 6,002,002
603,203
401
520 3,754,778
2,204 9,007,349
523 2,183,024
1,034 0,553,030
150 1,004,038
1,375 1'4,104,301
361 1,700,878
380,016
240
1,800 3,001,100
251 1,088,885
332,024
130

15
40
285
7
200
131
148
238
727
72
100
5
11
00
11

- 11
- 42
141
- 54
73
32
130
140
53
20
- 50
2
8

- a
-63

'rolal ....... .... 10,304 $57,lIl,02G

101

30

\V~~ta 'F~iI8: :

------

1,011 $ 10,884,171
884
1,007
1,820
1,770
2,122
0,617
1,080
4,440

82

5,082,505
8,502,005
17,350,804
5,124,730
11,495,305
43,756,003
0,345,882
10,800,850
2,850,334
50,063,380
10,234,108
2,270,323
20,575,848
0,128,030
2,057,043

110
56
88
20
124
62
136
105
23
91
174
52
58
170
40

45,887 $230,400,227

84

734

5,008
1,570
I,OG4
8,600
1,411
581

Residential awards in the District in May reached a new
Peak of $54,0 00,000. This total is 14 percent higher than that
~ the previous month and 200 percent greater than that for
ay 1949. The total for the first 5 months of the year approxilllated $212,0 00,000, or 143 percent more than in the same
pe~iod of 1949. In the Nation, and particularly in the District,
reSidential construction has increased faster than other conS
trUction. In view of the fact that houses seem to be moving
~s rapidly as they are built, it seems probable that residential
COnStruction will continue at a high level for some time.
10 l<.actors contributing to the housing boom include the fol-

"'111g:
b (1) The prevalence of low down payments on loans insured
Yl<liA and VA.

1)?) Low interest rates on mortgage loans: for FHA loans,
fo 4 percent (plus ~ percent FHA insurance premium) j and
r VA loans, 4 percent.
les (3) The strong appeal of monthly payments substantially
fo S than rent on alternative shelter. Even a liberal allowance
ciatb[epairs and maintenance apparently would leave an appree differential in favor of home purchase.
(4) The availability of large amounts of mortgage credit
banks, insurance companies, and others both within and
the area, More than half of this credit has been avail\vithout FHA or VA insl1l'ance.

--------~

Total
produetion

Daily avg.
production

Increaso or decrcaso in daily
averago production from

Toxns:
May 1040
Distriet
1. South Central. .. . . ....
851,450
27,460
1,746
2. Middlo Gulf. . . . . . .•. . .
3,850,300
124.404
5,784
3. Upper Gulf. . . . . . . . . . . . 12,308,200
307,030
39,030
4. Lower Gulf.. ......... .
6,13G,2oo
107,042
13,515
5. East Contral... ...... . .
080,050
31,034
- 2,550
O. Northeast.... ... .. . •.. 10,880,400
350,080
20,350
East Texas.. .... ...
8,151,800
202,OGI
15,827
Other fiolds .. .. .. .. .
2,728,600
88,010
4,520
7b. North Contral.. . .. . . .
2,080,600
07,116
10,232
70. West Central. .... . .. .
1,815,850
58,576
16,331
8. West .. .. .. . ... . ... ... 19,038,500
043,178
122,529
0. North .. . .. . . " . . .... .
4,300,200
130,000
12,948
10. Panh.ndle.. .. .... .. ...
2,834,350
01,431
2,44(
2,120,162
243,265
Total Texas . .. . . ........ . . 00,004,000
New Mexico . .. . . . . .... . .....
3,853,400
124,303
-4,142
North Louisiana.. . . ...... .. ..
4,123,000
133,000
15,911
Total Elevcnth Distriot. . . . . 73,080,400
2,380,465
255,034
Outside Elevonth District... .. 84,662,100
2,731,035
- 35,807
Unitod States... . . .. ... . .. .. . 158,642,500
5,117,500
210,227
SOURCE: Estimated frol1l American Potroleum Instituto weekly reports

April 1950
909
3,603
30,444
7,644
1,314
7,9C8
5,099
2,809
3,841
5,524
42,0(5
8,179
2,071
113,482
192
4,808
118,572
- 7,200
111,282

The petroleum industry during May continued to improve
its economic position. Demand has been strong, new supplies
have been under firm control, and the stock position has been
considerably better than a year earlier. The daily average production of crude oil in this District increased by 118,000 barrels during May, reaching a level 255,000 barrels higher than
in May 1949. The increases for the Nation were slightly smaller
than those for the District. The increase of 186,000 barrels
daily in production allow abIes ill Texas for June indicates that
further improvement is to be expected.
Daily average production ill the District during June may
approach approximately 2,550,000 barrels, or the largest in 16
months. This amount would be about 400,000 barrels higher
than production in June 1949. If daily average production in
the United States during June should reach the anticipated
level of 5,300,000 barrels, the increase over last year would
approxin1ate that shown for this District.
Indicative of the improvement in the Nation during the
first 5 months of this year was the II-percent increase ill indicated total demand over the cOl'l'esponding period of 1949.
While exports were down somewhat, the domestic demand increased about 13 percent. Sincc the new supply for the 5
months was about the same as in the corresponding period of
1949, stocks of crude oil and particularly refined products were
drawn down at a rate of 433,000 barrels per day, in contrast
with a rise in stocks of 209,000 barrels daily during the same
period last year. At the end of May, stocks of crude oil and
major refined products were 77,000,000 barrels less than a year
earlier, Of this decrease, 36,000,000 barrels were accounted for
by crude oil and 41,000,000 barrels by refined products.

MONTHLY BUSINESS REVIEW

124

r"""- 'l':rT1l
~~

RAILROAD COMMISSION OF TEXAS

OIL ANO GAS OISTRICTS

t_,--"-~

representing increases as compared with the same period of last
year of 21 percent and 8 percent, respectively. On the basis of
current estimates, it appears that well completions during 1950
will reach new peaks, with gains of about 13 percent over
1949 in the District and about 5 percent in the Nation.
PETROLEUM SUPPLY AN D DEM AND FO RECAST FOR TI'IE UN ITED STATES
(Amounts in millions of barrels)
1050

1949

(forec..t)

(aotual)

2,056. 4
1,880 .4
176 .0
278 .0
l7l .0
107 .0
2,334 .4
-25.6
- 11.0
- 14 .6
2,360 .0
000.0
620 .0
300.0
110 .0
335.0
96 .0
28 .0
68. 0
2,264 .0
064 .0
516 .0
381.0
114.0
280.0

1,000 .7
1,840.3
156 . 4
234 . 1
154 .9
70 .2
2,280.8
-2.0
-3. 3
0 .4
2,233 .7
052 .4
508.0
340 .2
105. 2
327.0
110 .5
3a . 1
86. 4
2,114 .2
013 .0
405 .3
328.0
102 .6
275 .3

Production .. . . .... . ............. ...... .. . ...... .
Crude........................... . .... . ....... .
Other oils .. ............ . ..... ... . .... .. . .... . .

Imc~~~·.·.::: : :::: ::: :::: ::::::::::::::::::::::::

Refined . . ............................. . . . .... .
New supply .... . ........ . . .... ........ . .. . .... . . .

ChC~~do~~~~~·. '. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :

Z

" IDOL(

sut.r

S. UP"[,, GUL'
4 . lOW£R IUL'
&.
I.
7&
1 0.

[AIT CfNTAAL
NOtITMtAST

e.

W($T

NORTH CENTRAL

wt5T CENTRAL

.. NORTH
10. 'ANHANDL!

The total demand for refined products in 1950 has been
estimated recently by the Bureau of Mines at about 2,360,000,000 barrels, or nearly 6 percent higher than in 1949. After
allowing for a substantial increase in imports, production of
crude oil is expected to aggregate 2,056,000,000 barrels, 01'
about 3 percent more than in 1949. To equal this estimate, it
would be necessary for cfl.lde production in the United States
and in the District to remain at the June level for the remainder of the year. Under those circumstances, total production
in the District during 1950 would reach about 885,000,000
barrels, representing an mcrease of 54,000,000 barrels over that
in 1949 but a decrease of 99,000,000 barrels from the record
production of 1948.
A noticeable firming of prices during the past 3 months
reflects the marked improvement in the statistical position of
the industry. Price increases occurred in gasoline and fuel oils,
and there were a few scattered adjustments in crude oil prices.
W ell completions during the first 4 months of this year
totaled 5,681 in the District and 12,189 in the United States,

Other oils ....... .. ................ ... ....... . .
Total demand ...................... .. ... . ... . ... .
Motor fu el.. ..... . .... . .. , .. ............. . .... .
Residual. ... ....... .... .. .... . ........ . ...... .
Distillate .. . ... .. ... . ........ . ... .. , ....•. . ..•.
Kerosene . .... . .... .. ......................... .
All other ......... . .. . ........................ .

Ex~~o·.'.:::::::::::: :: : : ::: : : : :::::: : ::: : :: :: : :

Refined . ... . . ......... . ..................... . .
Domestio demand ............................... .
Motor fuel ............. . .. . . . . . ........ . ...... .
Residual .. . .. ... ........... . ............... , ..
Distillato... ........ . ..................... .. .. .
Kerooene. .............. .. . . . ............. .. , ..
All other . ........... . ..... . ......•....... . .. . .
SOURCE: Dureau of Mines.

Pereentago
change
3 .0
2 .2
12. 5
18 .8
10 .4
35 . 1
4 .6

5. 7
3. 0
4.1
14 .6
10 .8
2.2
- 10 . 7
- 15.4

- 21.3

7. 1
5.6
4 .2
16.2

11.1

5.0

The daily average rate of consumption of cotton at United
States mills during May was 1 percent higher than in ~he
previous month and 35 percent above the level of a year earher.
Total consumption during the first 10 months of the 1949-5 0
season, which amounted to 7,418,000 bales, was 10 percent
more than during the like period of the previous season.
DO MESTIC CONSUMPTION AND STOCKS OF COTTON
(Illlle.)
May

May

April

1050'

1040

1050t

Consumption at:
12,332
Tox.. mills .... . . . . . ... . ... .
United Btatea mills . . .. ... . . .
728,827
U. S. stooks - end of month :
In consuming establishments . . 1,620,200
Publio storage nnd compresses 6,378,721
• Four weeks ended May 27.
t Four weeks ended April 20.
I Through May 27.

O , 4 6~

580,476

12,080
711 ,511

1,276,475
5,080,004

1,750,305
7,360,348

Aug\lStltoM~
This se..onl Last sellSon
.
127,727
7,417,720

122,347
6,740,327