Full text of Review (Federal Reserve Bank of Dallas) : June 1970

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

business
•
rev.ew

june 1970

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

contents

The 1970's: Decade for plastics
Part 3: Styrenes .........................

3

The fertilizer industry
faces the road back .... ... . . . .......... .... '

9

District highlights .......... . ............... 14

The

1.970 ~s:

Decade for plastics

Part 3: Styrenes
The plastics industry enters the new decade
Cautiously but with optimism. Looking back on
the 1960's, plastics producers see a decade of
dramatic growth, with plastics gaining widespread acceptance in an ever-expanding range
of markets. They also see the 1960's marred
by periodic and sometimes chaotic price and
profit erosion as they built larger and larger
plants in an effort to reduce costs and expand
their market positions.
The further development and expansion of
the industry in the coming decade will depend
largely on the future of three families of resins:
Polyethylene, vinyls, and styrenes. The prodUction and marketing of the first two were
covered in previous Business Review articles.
This final ·article centers on conditions in the
StYrene market and the outlook for that market.
Consumption of styrene plastics tripled in
the last decade, matching the rate of growth for
the plastics industry as a whole. And with the
Three major thermopla tics
aCcounted for over two-thirds of
llla tics production ill 1969

"""

PLASTICS

-

100.0 %

-....

THERMO SETS

THERMOPLASTICS

....

80 .3%

19.7 %

~

POLYETHYLENE

VINY LS

STY RENES

31.3 %

20 .7%

18 .8 %

""-

SOURCE : U.S . Tariff Commi s s ion .

OTHER
9.5 °~

steady increase in new applications for this important group of plastics, sales are expected
to continue their rapid growth over the next
decade, pushing annual consumption to 6.2
billion pounds by 1980. That will be almost
twice the volume projected for. 1970.
This growth will directly influence the economy of the Southwest. Styrene production,
based (like the production of all plastics) on
hydrocarbon processing, depends heavily 011
the petroleum and natural gas facilities of Texas
and Louisiana for most of its raw materials.
Furthermore, 11 of the nation's 14 plants producing styrene monomer, the major ingredient
in styrene plastics, are located in these two
states. Together, these 11 southwestern plants
account for almost four-fiftl1s of the styrene
monomer production.

The styrene industry
The styrene family includes several important members, each willi unique properties and
applications and all with high potentials for
further market growth. Because of their differences, each is considered a separate market
within the plastics industry.
The oldest member is polystyrene, a tough ,
inexpensive plastic that has long been a favorite of molders making such items as thin-wall
containers, air-conditioners, radio and television cabinets, small housewares, and toys.
Expanded by gas, it has about half the density
of cork. In this form, known commercially as
"styrofoam," the plastic is used as an insulating material, in construction and in the manufacture of such items as drinking cups, buckets,
and iceboxes.

business review/june 1970

3

Newer styrene plastics are also rapidly gaining market acceptance. Styrene can be made
even tougher and more rigid than polystyrene
when combined with acrylonitrile to make
styrene-acrylonitrile (called SAN) or when
combined with acrylonitrile and butadiene to
form acrylonitrile-butadiene-styrene (ABS). In
these combinations, styrene is suitable for uses
requiring very high impact strength, such as in
automotive instrument panels and even front
grilles, in small appliances, furniture, drainpipes, telephone casings, luggage, boats, and
football helmets.
Styrene is also combined with butadiene to
form styrene-butadiene copolymers, which are
elastic. The largest selling elastomers, in fact,
are copolymers of 24 percent styrene and 76
percent butadiene. This combination accounted
for about half of all synthetic rubbers produced
last year. Styrene-butadiene copolymers that
are at least half styrene are classified as plasSales of styrene-type plastics
expected to almost double by 1980
BILLIONS OF POUN OS

r-

D

::::::::::::::

ACTUAL

~

6

PROJECTED

:~: : : : : :

~:j:tti:
::::::=:=:=:::

3

..............
...............
:.:.:.:.:.:.:.
..............
.:.:.:.:.:.:.:.

-

::=:=:=:=:=::::
..............
:::::::::::::::
.:.:.:.:.:.:.:.
...............
..............
:.:.:.:.:.:.:.:
.:.:.:.:.:.:.:.
...............
:::::::::::::::
...............
:.:.:.:.:.:.:.:
...............
.:.:.:.:.:.:.:.

o
1960

1965

1970

SOURCES : Standard & Poor 's .

U. S. Tariff Comm is s ion .

4

1975

1980

tics and used in treating and coating textiles
and paper.

Polystyrene
Polystyrene is by far the largest selling styrene resin. Production of this plastic reached
2.1 billion pounds last year. At that level, it
accounted for two-thirds of all styrene polymer
production.
To make polystyrene, ethylene and benzene
(products derived primarily from petroleum
but also from natural gas and coal tar) are
first combined to form styrene monomer. ThiS
liquid monomer is then polymerized into a
fairly brittle solid. To increase the impact
strength of the polymer, polybutadiene is often
added. The gain in strength is made at the eXpense of other properties, however.
Within broad limits, properties of polystyrene can be balanced to fit the requirements
of particular end uses. Polystyrene is used almost straight, for example, in food containers
and in other products where a fairly clear plastic is needed but only moderate impact strength
is required. In the production of polystyrene for
use in appliances and in other applicatio~S
where toughness is needed but transparency IS
not, the resin is modified by the addition of
synthetic rubber. About half the polystyrene
produced last year was modified by adding
poly butadiene, one of the synthetic rubbers.
Unlike most plastics markets _ where economies of scale have brought drastic swings in
rates of capacity utilization as new plants were
built - the supply-demand balance for polystyrene has been fairly stable in recent years .
The average polystyrene plant has an annual
capacity of only 85 million pounds, or about 3
percent of the industry's total capacity. Ev eJl
when U.S. Steel enters the polystyrene market
later this year with one of the larger plants.one with an annual capacity of 200 miJiJ oJ1
pounds-it will increase industry capacity only
about 7.5 percent.

Packaging took more than a third
of the polystyrene sold in 1969 ...
MISCELLANEOUS AND EXPORTS
LIGHTING FIXTURES
CONSTR UCTION
HOME FURN ISHINGS

... while ales of ABS and SAN
went to a variety of applications ...

12 %
5 Vo
5%
6%

29 %

MISCELLANEOUS AND EXPORTS

TOyS AND NOVELTIES

10 %

4%
7%

LUGGAGE
SHOE HEELS

HOU SEWARES

10%

8%

TOYS AND NOVELTIES

APPLI ANCES

15%

10%

TELEPHONES AND
BUSIN ESS MACH IN ES

10 %

DRAIN , WASTE , AND VENT PIPES

15%

APPLIANCES

17 %

AUTOMOTIVES

PACKAG ING

37 %

SOURCE : Chemic a l a nd Engin ee ring News .

The near-term outlook for polystyrene is
Very favorable. Total capacity will average
about 2.7 billion pounds this year. With production expected to reach 2.4 billion pounds,
the capacity utilization rate will average 89 percent. And with capacity scheduled to increase
With dema'nd , producers expect to operate at
about 90 percent of capacity through at least
19 72 . Reflecting the firm market conditions,
POlystyrene prices have moved upward in the
first half of this year.

411S and SAN
Both ABS and SAN are still youngsters in
the Styrene family . Only in the last ten years
has either resin been marketed extensively.
Nevertheless, they accounted for almost a fifth
of the styrene-type plastics produced last year,
~nd their importance in the family is increasIng rapidly, Where polystyrene production exPanded about 12 percent last year, production
of ABS and SAN increased 20 percent.

SOURCE : Chemical a nd Engineering New s.

plants have annual capacities in excess of 100
million pounds, or more than 12 percent of
total industry capacity.
Production of ABS and SAN totaled 559
million pounds last year, or about 83 percent
of the 675 million pounds of capacity available. With capacity now totaling 800 million
pounds - 18.5 percent larger t11 ah last year
- demand for ABS and SAN will have to in. . . and rno t tYl'ene-butadiene
wa used in treating paper and textile
MISCELLANEOUS AND EXPORTS

6%

EMULSION PAINT

9%

TEXTILE AND PAPER TREATING

85 %

t' As with most of the newer plastics, produc-

lloU of ABS and SAN has not reached a volume
arge enough to prevent fairly broad swings in
the balance between supply and demand when
new plants go on stream, The newest ABS

SOURCE : Ch emica l and En gi neeri ng N ew s.

business review/june 1970

crease as fast this year as last for any noticeable improvement to be made in capacity
utilization. The slump in the auto industry,
which provides ABS and SAN producers their
largest market, may keep sales of these plastics from increasing as fast as in 1969. If so,
the rate of capacity utilization may be only
about 80 percent this year.
The outlook remains optimistic for the long
run, however. Use of ABS in automobiles, for
example, is expected to increase from 90 million pounds in 1969 to 270 million pounds in
1975. General Motors, Ford, and American
Motors have their own injection-molding facilities for making plastic auto parts, and Chrysler
has acquired several plastic-processing firms.

Styrene-butadiene
After years of relatively slow growth, the
styrene-butadiene copolymer market has been
expanding rapidly for several years. Production
has increased 40 percent in the past two years,
for example, or slightly more than in the previous seven years. Last year was particularly
good, with production increasing 25 percent to
a total of 405 million pounds. This increase
allowed producers to use 92 percent of their
440 million pounds of capacity. And producers
expect further rapid growth. Forecasts show
production with an average annual growth rate
of 15 percent for 1970-75.
In contrast to most other styrenes, which
have a variety of uses, styrene-butadiene copolymer is a highly specialized plastic with only
a few end uses. About 85 percent of its production last year was used in treating textiles
and paper, and most of the rest was used in
emulsion paints.

Styrene producers
Polystyrene, like other large-volume thermoplastics, is produced primarily by large, diversified chemical and petroleum companies,
many of which are also significant producers

6

of other plastics. Five of the six leading polystyrene producers - Amoco, Dow, Monsanto,
Sinclair-Koppers, and Union Carbide - also
manufacture polyethylene. But because efficiency does not require that polystyrene plants
be as large as polyethylene plants, many small,
specialized producers are able to compete successfully in the polystyrene industry. Southern
Petrochemicals, for example, successfully entered the polystyrene market last year with a
plant near Houston having an annual capacity
of 40 million pounds, or less than 2 percent
of the year's total production.
Probably the greatest problem facing small
producers - and the greatest obstacle to entry
into the polystyrene industry - is the backward vertical integration of large producers
into styrene monomer. Eight of the nine leading polystyrene producers have captive sources
of styrene monomer, while none of tlle other
six producers have their own supply. Wicll
monomer accounting for about 70 percent of
the cost of producing polystyrene, a company
can realize significant cost savings by producing its own, provided it can build a monomer
plant of efficient size and operate it close to full
capacity. A company producing large amounts
of polystyrene can operate a monomer plant
to support its polystyrene production, but because a small producer cannot, it has to buY
monomer on the open market.
Several of the leading polystyrene producers
have moved into the production of ABS and
SAN. Of the eight companies making theSe
resins, five also produce polystyrene. And of
these five, four are among the five largest polystyrene producers. Participation in the polystyrene industry is no prerequisite for success
in other styrene plastics, however. The twO
companies leading in ABS and SAN capacitYi
Uniroyal and the ~arbon Chemical Divisi~n °t
Borg-Warner (whIch together account fOl hal
the industry's capacity) - do not produce
polystyrene.

Large chemical and petroleum companies
dominate the polystyrene industry,
and most make their own styrene monomer

Producer
Amoco Chemicals (Standard
Oil of Indiana) .. . .... . .... .. ... . ... .

ANNUAL CAPACITY,
beginning of 1970
(Millions of pounds)

Plant
location

Polystyrene

Torrance, California . .
Joliet, Illinois ......... . ..... • ..
Willow Springs, Illinois .......... .
Leominster, Massachusetts . . ... .
Medina, Ohio
.. . . . .. . .. . .. .

170
(combined total)

Styrene monomer

Texas City, Texas .. . .. . . . ... . .. .

800

BASF . . . .. .. .. . .. . . . . ... . .. . . . . .. .. .

Jamesburg, New Jersey . ........ .

80

Cosden Oil & Chemical .. . . . •... . •... • •.

Carville, Louisiana
Big Spring, Texas . ............. .

145

Dart Industries .... . ....•.. . . . ....• . . .

Dow Chemical

. .. . .... ...... . . . .. ... .

Santa Ana, California .. . . ...•. . ..
Joliet, Illinois . ............. . •..
Holyoke, Massachusetts .. . . • •. . .
Ludlow, Massachusetts . ...

140
(combined total)

Torrance, California
Allyn's Point, Connecticut .
Midland, Michigan ....... .
Hanging Rock, Ohio .. . . .. .

700
(combined total)

Freeport, Texas
Faster Grant

' 250
100

350

..

550

Peru, Illinois .. . . ... . ...... . . . .
Leominster, Massachusetts .... . .

190
(combined total)

Baton Rouge, Louisiana .... .. . . . .

240

Hammond Plastics

Oxford, Massachusetts . . . .. .. .. .

25

Howard Industries . . . .. • . . .. . ... . .. . . .

Hicksville, New York .....• . . .. . .

15

Monsanto . ... .. . ... .. . . .. . . . ... . . .. .

Long Beach, California ....... . . . .
Springfield, Massachusetts . . . . . . .
Addyston, Ohio ...... . . . .

375
(combined total)

Texas City, Texas .. . .... .
Richardson Co.

. .. .. .. .. ... . .. . . . • . ..

Shell Chemical . .... ... .... . . . . .. . : . . .

800

West Haven, Connecticut .
Torrance, California

50

. . . . .. . . . .. .

Wallingford, Connecticut ... . ... . .
Marietta, Oh~ ... . .. . ...... . .. .
Sinclair.Koppers

240
80
(combined total)

Kobuta, Pennsylvania . .. . ... . . . .
Houston, Texas ......... . .... . .

300

SOlar Chemical ., . ... .. . . . . . . . • .. .. .• .

Leominster, Massachusetts . .. . . .

60

SOUthern Petrochemicals ... . ... .. . .' . . .

Houston, Texas ..... . .... ..... .

40

\Jnion Carbide

Bound Brook, New Jersey .... . .. .
Marietta, Ohio . ..... . ... . ..... .

430

llO

170
(combined total)

Seadrift, Texas ...... . •. . .......
ALL PRODUCERS

300
2,540

4,170

'---------------------------------------------------------------------------------One.half of 500.mi li ion.pound monomer plant owned jointly by Cosden and Borg·Warner.
1

SOURCE: Chemical and Engineering News.

business review / julie 1970

7

Several polystyrene producers
also turn out ABS and SAN
Producer and
plant location
Dart Industries
Joliet, Illinois ... . .............. . .
Dow Chemica l
Midland, Michigan . ... . .. . . .. .•...
B. F. Goodrich
Loui sville, Kentucky . . . . . . . . . . . . . . .
Akron, Ohio . . . . . . . . . . . . . . . . . . . . . .
Marbon Chemical (Borg·Warner)
Ottawa, Illinois . . . . . . . . . . . . . . . . . . .
Washington, West Virginia. .
Monsanto
Addyston, Ohio . .. . .. . ... .
Sinclair·Koppers
Kobuta, Pennsylvania . ....
Union Carbide
Bound Brook, New Jersey ...
Uniroyal
Baton Rouge, Louisiana ... . .... • ...
Scotts Bluff, Louisiana .....•.......

Manufacturer of synthetic rubber
active in styrene-butadiene copolymer

Annual capacity,
beginning of 1970
(Millions of pounds)
40
100
30
(combined total)
200
(combined tota l)
190

10
30
200
(combined total)

ALL PRODUCERS . ..... . ..... . . .

800

SOURCE: Chemical and Engineering News.

Ownership of styrene monomer capacity,
though beneficial, is not as crucial to success
in ABS and SAN as in polystyrene. This is because styrene monomer is only one of the raw
materials going into ABS and SAN production.
Styrene makes up approximately 60 percent of
the inputs to ABS and 75 percent of the inputs to SAN.
Most of the leading tire manufacturers are
producers of styrene-butadiene copolymer. In
fact, all but four of the 13 companies making
styrene-butadiene copolymer are also significant producers of styrene-butadiene rubber.
Many of the copolymer plants are adjacent to
synthetic rubber facilities and draw on the
same sources for raw materials.
Vertical integration back into styrene monomer is even less important for a producer's
success in styrene-butadiene than in ABS and
SAN. Only three styrene-butadiene producers
own styrene monomer facilities, and two of
them also make polystyrene. In fact, these two

8

Annu a l capacity,
beginning of 1970
(Millions of pound~

Producer and
pl ant location
Am eric a n Min eral Spirits
La Mirada, Californi a . . . . .. . .
Ch arlotte, North Carolin a . . . . . . . . • . .
Borden
Illiopolis, Illinoi s . . , ....... . .. .. . . .
Geismar, Loui siana . . , . ......... . .
Leominster, M assac hu setts ... .. ,..
Dewey & Almy (W. R. Grace)
Owensboro, Kentucky .,.. . . . ......
Acton, M assac husetts .,., .. ,. . ....
Dow Ch emica l
Pittsb urg, California ............ .
Allyn 'S Point, Connecticut , . , . . . . . ,
Dalton, Georgia
. . . . . . . ...
~idland, Michiga n ......... . ... .. .
ree port, Texas . .. .......•... . ...
Firestone Tire & Rubber
Pottstown, Penn sylvani a
GAF
Chatta nooga, Tenn essee ... . . .. . ...
General Tire & Rubb er
MdOgadOre , Ohio .................
O essa , T exas .. . . ,..... . .. ......
Goodyear Tire & Rubber
Akron, Ohio . . . . . . . . . . . . . . . . . . . . . .
M arbon Chemical (Borg.Wa rner)
Was hington, West Virgini a . . . . .
Sincl air·Koppers
Kobuta, Penn sylvania
Southwest Polymers
Bay port, Texas ..... .
,.
Standard Brands Chemical Industries
Ch eswold , Delawa re
Kensington, Geo rgi a ' : : : : : : : : : : : : :.
Uniroya l
Baton Rouge, Loui sia na . . . .

18
(combined total)
15
(combined total)
10
(combined total)
160
(combined total)

12
30
20
(combin ed total)
20
5
48
12
50
(combined total)

ALL PRODUCERS . . . . . . . . . . . . . . .

40
440

---------------------------------------SOURCE: Ch emical and Engineering News.
-- Dow Chemical and Sinclair-Koppers _ are
the only polystyrene producers th at have diversified into all types of styrene plastics.
The outlook for styrenes, like the outlook fof
polyethylene and vinyls, is for another decade
of dramatic expansion. The success of producers will depend largely on their orderlY response to this growth. With more and more useS
being found for plastics in a seemingly endleSS
variety of markets, the 1970's may indeed set
the stage for an Age of Synthetics.
WILLIAM

H.

KELLY

The fe,·tilize,· i"dust,·y
faces tl,e ,·oad back
The fertilizer industry, having overestimated
its potential market, overbuilt in the 1960's.
Although demand for plant nutrients increased
rapidly, production capacity increased even
faster. Now, with a sizable imbalance between
Supply and demand, the industry faces the long
- and maybe slow - road back to stability.
There remains a considerable potential for
greater use of fertilizer in the decade ahead,
but the rate of growth is apt to be slower than
in the 1960's. Over 16 million tons of plant nutrients were used in this country last year. This
amount, which was more than twice the consumption in 1959, represented an average annual increase of almost 8 percent. Estimates by
the Tennessee Valley Authority show the country using 25 million tons a year by 1980. This
increase, however, represents an average annua l
increase of about 5 percent for the 1970's.

Sources of excess capacity
Excess capacity in both production and distribution facilities - often representing large
investments by new companies in the industry
- has created a disequilibrium in the supplydemand relationships of all three basic plant
nUtrients: nitrogen, phosphate, and potash.
Some experts estimate that for fertilizer consumption to have kept up with the increase in
capacity, it would have had to expand at a
compound annual rate of 15 to 20 percent
throughout the 1960's. Since it did not (conSUmption, in fact, increased slightly less than 1
~ercent in 1969) and cannot be expected to
lncrease at anything like that rate in the 1970's,
the near-term outlook is for a combination of
sUrpluses, incomplete plant utilization, and
some shutdown of less competitive facilities.

Nitrogen. Although use of nitrogen has increased faster than use of the other two primary
nutrients, consumption last year still amounted
to less than 7 million tons. The rapid increase
in demand for anhydrous ammonia slowed,
while demand for aqua ammonia actually declined. Plant capacity continued to expand,
however, at a rate expected by the TVA to
bring total ammonia capacity close to 20 million tons by 1972. Slower growth rates were
also evident in the use of solid ammonium
nitrate, urea, and nitrogen solutions.
While production of urea and ammonium
sulfate continued to rise, supported by foreign
sales, production of other major nitrogen fertilizers fell. Output of ammonium nitrate
dropped 400,000 tons in 1968, and output of
nitrogen solutions slipped 200,000 tons. Capacity for the production of ammonium nitrate,
according to TV A, is nevertheless expected to
continue its rise, though at a slower rate. Urea
capacity is expected to reach 4.7 million tons
by 1972, almost twice the capacity in 1967.
Phosphate. Consumption of phosphate fertilizer has been leveling off, showing an increase of only 3.5 percent in 1968 and 4.7
percent in 1969. The result has been sizable inventories of phosphate and a marked slowing
in the development of reserves. Although exploration continues, here and abroad, the capacity of American mines is not expected to
increase until demand begins to catch up.
Capacity in the United States is estimated at
more than twice the 4.7 million tons of phosphate fertilizer used in 1969.
Potash. Consumption of potash in the United
States totaled almost 4 million tons last year.

business review/julie 1970

9

That was a 2.6-percent gain over 1968. But
production still exceeded demand. Potash production in the United States has been declining
since it reached a high of 3.3 million tons in
1966. Output has been on the rise in Canada,
however, bringing total North American production in 1968 to about 5.6 million tons, or a
third of the world's total. Annual U.S. capacity
is expected to remain at about 3.4 million tons.
But according to TVA estimates, Canadian
capacity could go over 8 million tons by 1972,
bringing the North American total to more than
11 million tons.

junction with refineries, began building units
with daily capacities in excess of 1,000 tons,
compared with many existing plants of 50 to
150 tons. By the end of the decade, 24 oil and
gas companies owned 36 plants accounting for
40 percent of the nation's anhydrous ammonia
capacity. Faced with this new competition,
companies already in the industry expanded
their facilities, adding further to the increase.
Domestic use of nitrogen outpaces
consumption of other primary nutrients
MILLIONS OF SHORT TONS

The net effect for the 1969-70 season is an
expected rise in domestic supplies of plant nutrients to a record 16.8 million tons. This increase-a gain of 11 percent over the 1968-69
season-will be due primarily to increased inlports and loss of foreign sales. Estimates by
the Department of Agriculture show domestic
production of nitrogen only about 4 percent
higher than last year. But with some increase
in imports and a sharp reduction in exports,
domestic supplies will probably approach 7.9
million tons, a year-to-year gain of 13 percent.
Phosphate production is expected to drop 4
percent. But with imports probably up 18 percent and exports down 45 percent, the domestic
supply could total well over 4.5 million tons
this year, or 6 percent more than last year.
Production of potash will be 9 percent less
than last year. This cutback will be more than
offset, however, by a 35-percent increase in
imports and a 6-percent decline in exports,
leaving supplies totaling over 4.4 million tons,
or about 12 percent more than in 1968-69.

Development of the glut
Imbalances in the production of nitrogenous
fertilizer ingredients came with technological
changes that soon overshadowed market considerations. Petroleum processors, attracted to
the fertilizer industry by the low operating
costs of running large ammonia plants in con-

10

8

6

4

2

o
1970 e s timat e d .
SOURCES : T e nn essee Vall o y Auth o rity .
U. S. Departm e nt of Agri c ulture .

Meanwhile, the development of new pota sb
fields in Canada and phosphate mines in North
Carolina and northern Florida further extended
the availability of other basic ferti lizers. Several oil companies, seeking diversification int.O
other basic nutrients, reached beyond their nItrogenous operations to compete with mining
companies. Again, the result was a drive toWard
large-scale operations.

Much of this increased capacity was built on
the expectation that a large market could be
developed overseas. But foreign demand remained weak and several countries increased
their own production of plant nutrients, entering into competition with American producers
both in other countries and in the United States.

Few of the new producers considered vertical integration in the beginning, choosing
instead to sell their ammonia to smaller companies mixing the nutrients for resale to retailers. Only recently have producers established
outlets to increase their marketing efficiency
and reduce costs of getting fertilizer to the farm.

Government decisions also had an important bearing on sales, both foreign and domestic. Government aid for purchases of fertilizer
for other countries was less than expected, and
changes in Government falID programs affected
the fertilizer industry in several ways. The
amount of fertilizer farmers buy is closely related to the prices they expect to receive for
their products. Since reductions in the acreage
actually planted to crops tend to reduce demand for fertilizer, the amount farmers use is
also related to Government land retirement
and crop diversion programs.

Before the major expansion of the industry
in the 1960's, most plants were small and most
producers limited their markets to areas 200 or
300 miles from their plants. As a result, managers could keep up with conditions in tlleir
markets. But with the construction of large
plants and the rapid expansion of market areas,
management was removed from direct knowledge of conditions in its market. And because
conditions in the fertilizer market vary enormously from area to area, production planning
became difficult. The market is highly seasonal,
for example, Witll most of the sales coming in
the spring, usually in March and April. If these
months are wet or spring comes late, sales can
be drastically reduced, as some companies report was the case in 1969.

More important in the future, however, may
be any developments changing overseas markets, as iIIu~trated in part by the large domestic supply expected in the 1969-70 season.
This oversupply results primarily from increased imports and a lack of export demand.
Construction of fertilizer plants overseas indiCates that other countries plan to import not
only less fertilizer but also fewer agricultural
Products, and a cutback in foreign demand for
A.merican farm products tends to lower domestic demand for fertilizer.

tack of market planning
Disequilibrium in the industry stems partly
from technological developments that allowed
large-scale production at costs low enough to
attract companies into the industry without
adequate market planning. With an abundance
of feedstocks flowing as by-products of their
~efining operations and new techniques becomIng available in ammonia production, several
large oil and gas companies hurried into conStrUction of ammonia plants in the midsixties.

Increased market research
As producers try to cope with the growing
problem of oversupply, they have undertaken
considerable research, individually and as an
industry, into both tlle state of tlle industry and
the conditions of its markets. To handle one
of its most pressing problems - how to gauge
the extent of the supply situation - the industry turned to its National Plant Food Institute
in 1968 to set up an index providing statistical
information on fertilizer. Working from data
supplied by participating companies tl1l'0ugh
an independent statistical organization that
keeps individual company information confidential, the institute began compiling a monthly
index of fertilizer production, inventory, and
disappearance.
Also to help the industry strike a balance in
its operations, the institute is planning to com-

lJl.£siness review/iu,lIe 1970

11

FERTILIZER CONSUMPTION IN
THE SOUTHWEST AND UNITED STATES
(As of June 30)
In tons'
Area
Arizona

.. . . . . . . . . .

Louisiana

. ... . ..
..... . , . .
Texas .. .. . .. , .. ..
Southwest ... . ...
United States ...
New Mexico

Oklahoma

1969

1968

277,681

259,101

503,525

524,520

Percent
change

2,285,454

1,889,650

7
-4
-1
5
21

3,722,120

3,304,605

13

38,947,818

38,743,020

95,086

96,530

560,374

534,804

1 Consists of commercial mixtures, primary and secondary
nutrients, and micronutrients; excludes liming materials.
SOURCE: U.S. Department of Agriculture.

pile an industry-wide profit and loss statement
and balance sheet. Again, an independent organization, in this case an accounting firm, will
gather financial data and compile a monthly
statement to the industry. The statement will
include information on income and expenses,
assets, retail sales, and such other data as credit
arrangements. To further assist the industry,
the institute is planning similar reports on the
transportation of fertilizer.
Other efforts at gathering information, while
less organized, have also been made in recent
years, with individual companies undertaking
research on consumption, market practices, and
profits. Fundamental data on fertilizer are compiled by the Department of Agriculture and
Tennessee Valley Authority. Even with these
data, however, companies have some difficulty
in developing short-term estimates of consumption, because of such variables as weather,
and long-term estimates are complicated by
changes in Government policies and shifts in
market conditions overseas.
By conducting their market research through
field interviews, companies are gaining a better grasp of their distribution and marketing
problems. Out of this research have come, for
example, analyses of the costs of various metllods of moving fertilizer to the farm. Cost

12

studies have been especially prom1smg, since
the price a farmer pays for fertilizer must include transportation and distribution costs. Any
reduction of tllese costs improves the possibilities for increased earnings, for the farmer
and the industry.
Companies are also trying to establish a base
price for fertilizer that will allow them to recover all the costs of manufacture and distribUtion and still leave a reasonable margin of earnings. Such a pricing system will be necessary in
the long run. As long as returns are higher
than variable expenses, companies can operate
for a while. Eventually, however, they will have
to realize returns high enough to cover thefixed costs of plant and equipment as well.

Efforts to develop markets
Since conditions requisite to a stable indUStry include balance between supply and demand, the stability of the industry in the long
run depends on development of markets to
match production capabilities. Although the
industry neglected the development of market
potentials while it concentrated on developing
technical capability, it has recently turned attention to programs designed to promote the
use of fertilizer.
Tllis represents a major change in direction,
since much of the industry's problem has been
a tendency to take current demand for granted.
Because much of the additional capacity was
built to meet an overestimated export demand,
many producers have recently devoted considerable effort to the development of foreign
markets. But perhaps more important in the
long run, they have also begun to seek neW approaches to the further development of domeStic markets.
Several development programs have been
undertaken, with varying degrees of succeSs.
Some producers, for example, have started upgrad ing their products by adding secondary
nutrients, such as iron, copper, manganese,

zinc, and molybdenum, and by turning out
high-analysis concentrates with lower application costs. Others have started producing slowrelease fertilizers that become active in stages,
thereby affording farmers a wholly new kind of
fertilizer with new levels of use.
Other companies have turned attention to
land that is not ordinarily fertilized, such as
parks, roadways, and forests. One important
possibility for the additional use of fertilizer is
on pastures and forage crops, especially in the
South. Because of the high rainfall and long
growing season, areas throughout the South
respond well to fertilization. With an increased
demand for feeder calves and the rapid spread
of cattle operations in the South, fertilizer producers are pointing out the gains southern
Stockmen can make by fertilizing their pastures.
Several demonstrations by the industry's
Texas Plant Food Educational Society show
that adequate fertilization can be highly profitable in a well-managed livestock operation.
According to these demonstrations, a stockman
~an intensify his cow-calf operation by allowIng improved pastures to substitute for additional land, producing more beef per acre with
lOwer unit costs than on unimproved pastures.

Services to customers
One of the most promising areas of develop~ent, however, has been in industry efforts to
llllprove service to its customers. Since costs to
farmers include not only the fertilizer itself but
~lso such services as delivery, spreading, blendIng, financing, soil testing, and crop manageIllent, any marketing improvements that will
redUce these charges can be expected to cut the
effective cost of fertilizing. Some of these
Charges seriously limit fertilizer sales, and for
reasons some fertilizer producers have only recently come to understand.
As farms get bigger, for exanlple, technical
managerial decisions get harder. At the
Very time when some operators are under pres-

(Illd

sure to improve productivity, their labor problems become more complicated and it becomes
harder for them to make the best use of their
own time. This - and the high cost of owning
the equipment to apply fertilizer with precision
- makes dependable service more important
to farmers than ever before.
Between 35 and 40 percent of the fertilizer
used on American farms last year was spread
under custom contracts. The proportion is almost certain to increase as application methods
become more complex and fertilizers are applied in combination with pesticides. By providing not merely fertilizer alone but also reliable services, fertilizer producers may well be
in a better position to market their products.
Some producers think they can reduce both the
direct costs of fertilizing a field and the indirect
costs of operators' time.
Fertilizer producers are also exploring the
use of credit in financing fertilizer purchases.
Because large farms now require large amounts
of capital, some fertilizer producers reason
that progressive merchandising should include
financial advice and prearranged credit - if
not from the fertilizer producer, then from some
other source.
To provide such services, sales offices are
taking on the character of farm service centers.
Some centers are owned and operated by the
fertilizer company. Others are informally franchised by companies that consider independent
dealers more efficient in meeting local needs.
Either way, the ainl is outlets geared to specialized service to local markets.

Implications for the future
The outlook for tlle industry in the 1970's is
for changes in marketing practices on a par
with the production changes of the 1960's. To
reestablish equilibrium in the industry, producers will have to encourage more use of fertilizers. And with fewer but larger farms than
a decade ago and farm operators becoming

business review/june 1970

13

still more sophisticated in the pursuit of profits,
fertilizer producers will operate in markets
characterized by far more discrimination in
purchase decisions.
The result is apt to be a continuing effort
to gain back the kind of familiarity with local

markets producers had before their plant capacities outgrew local demand . Such efforts will
reflect needs to integrate vast production capabilities and to decentralize sales forces so they
can concentrate more on local conditions.
CARL

G.

ANDERSON, JR.

District highlights
There were indications on May 1 that winter
wheat production in the five states of the
Eleventh District will total 192 million bushels
this year. That would be 3 percent less than in
1969 and 12 percent less than in 1968. More
than 90 percent of the District's wheat production is in Texas and Oklahoma. Compared with
last year, production will probably be off about
1 percent in Texas and 8 percent in Oklahoma.
These declines result mainly from cutbacks
in acreage planted to wheat. Actually, prospects in May were for good yields throughout
the District. Farm and ranch activities, in fact,
were progressing with the generally favorable
weather. Livestock continued in good condition, and prospects for most major crops were
considered generally excellent.
There were 1,142,000 head of cattle and
calves on feed in Texas on May 1. Although
that was 14 percent more than on May 1, 1969,
it was 8 percent fewer than on April 1, 1970.
Placements into Texas feedlots in April totaled
190,000 head, or 17 percent fewer than a year
before and 24 percent fewer than a month
before.
There were 436,000 head of cattle on feed
in Arizona on May 1. That was 3 percent more
than a year earlier but 4 percent fewer than a

14

month earlier. At 68,000 head, placements
into Arizona feedlots were 42 percent more
than in March but 14 percent fewer than in
April 1969.
The index of prices Texas farmers and
ranchers receive for their products was 2 percent lower on April 15 than on March 15. The
index was 5 percent higher than in April 1969,
however. The all-crops price index was unchanged from the previous month but 3 percent higher than in the same month last year.
For livestock and livestock products, the indeX
was 4 percent lower than a month earlier but 5
percent higher than a year earlier.
With reductions in loans more than offsetting
increases in security holdings, total bank credit
at weekly reporting commercial banks in the
Eleventh District declined in the four weeks
ended May 13. There was also a substantial
decline in total deposits, resulting mainly froJl'l
a reduction in demand deposits.
Loans adjusted declined $143 million, whi cb
was in sharp contrast to a $140 million increase in the previous reporting period. There
was also a decline a year earlier, when loanS
adjusted dropped $88 million . Contributing t~
the decline this year were reductions of $3

million in commercial and industrial loans, $18
million in loans to financial institutions other
than banks, and $20 million in "other" loans.
Agricultural and consumer instalment loans expanded, but only negligibly.
Total investments increased $144 million,
Primarily because of increased holdings of municipals. Banks reduced their holdings of U.S.
GOvernment securities by a small amount while
increasing their holdings of short-term municiPals by $46 million and long-term municipals
by $65 million. In the comparable 1969 period,
total investments decreased $68 million.
On the liability side, demand deposits
dropped $205 million, compared with a decline
of $151 million a year before. Deposits of individuals, partnerships, and corporations declined $201 million, while deposits of the
Government dropped $53 million and interbank deposits dropped $72 million. Deposits
of states and their political subdivisions rose,
however, increasing $140 million.
Total time and savings deposits increased
$50 million, in contrast to a decline of $20
nlillion a year earlier. This increase can be
attributed primarily to gains of $33 million in
deposits of individuals, partnerships, and corPOrations and $12 million in deposits of states
and their political subdivisions. Large certifiCates of deposit increased $49 million.
Department store sales in the E leventh District for the four weeks ended May 23 were 5
Percent higher than in the corresponding period
last year. Cumulative sales through that date
\Vere 3 percent higher than a year earlier.
, Registrations of new passenger automobiles

i the major metropolitan reporting areas of

SeXas - Dallas, Fort Worth, Houston, and
an Antonio - were 16 percent higher in April
~han in March. This advance resulted primarily
roUl a 37-percent increase in Houston. Total
registrations were 5 percent lower than in April

J 969. The cumulative total for the first four
months of 1970 was 8 percent lower than in
the same period a year before.

Daily average crude oil production in the,
four producing states of the Eleventh District
totaled 6,878,200 barrels in April- 1.2 percent more than in March. This increase brought
the daily average to a level 6.7 percent higher
than in April 1969. Production in Louisiana
advanced 2.0 percent over March to a level
6.2 percent higher than a year before. New
Mexico posted a decline of 0.5 percent, which
brought production to a level 1.7 percent
higher than a year earlier. In Oklahoma, production increased 0.8 percent but was still 0.4
percent lower than in April last year. Texas
production was up 0.9 percent to a level 9.1
percent higher than a year before.
The Texas allowable was reduced from
64.5 percent of maximum efficient production
in May to 59 percent in June. This is the second consecutive reduction from the 68-percent
rate that held for the first four months of the
year. Cited as reasons for the cutback were
lower nominations and higher crude stocks,
resulting from refinery turnarounds and the
seasonal slack in demand as needs for fuel oil
fell and the summer buildup in demand for
gasoline began.
The temporary shutdown of offshore production associated with a recent oil spill has
brought several special adjustments in the
Louisiana allowable. To make up shortfalls in
production, the allowable was raised in April
from the expected rate of 48 percent to 50
percent. But as offshore production resumed,
the allowable previously announced for May
was reduced, from 50 percent to 49 percent.
The rate for June was announced at 49 percent.
The daily allowable for regulated wells in
southeastern New Mexico was cut from 75
barrels in May to 70 barrels in June. Nomina-

business review/june 1970

15

tions were up slightly over May, but at the
higher production rate, producers had to flare
too much casinghead gas. The Oklahoma allowable remained unchanged at 125 percent.
Seasonally adjusted, the Texas industrial production index dropped 0.7 percent in April, to
175.8 percent of tlle 1957-59 base. All of the
decline was in manufacturing. Petroleum refining and production of transportation equipment
slowed substantially. Only two manufacturing
groups - leather goods and primary metals showed increases. Utilities were unchanged. In
April, as in other recent months, oil activity
was a major force sustaining the index level.
Based primarily on increased oil production,
total mining output rose nearly 2.0 percent.
The total index was up 6.3 percent over
April 1969. Utilities were up 12.6 percent, and
mining was up 8.8 percent. Manufacturing also
rose, but only 4.4 percent. All the year-to-year

new
tnetnber
bank

16

increase in manufacturing was due to a gain in
the production of nondurable goods. Production of durable goods registered a slight decline.
Total nonagricultural wage and salary elllployment in the five southwestern states rose
less than seasonally expected in April to
6,352,600. Manufacturing employment showed
continued weakness, declining 0.6 percent in
contrast to an expected seasonal increase of 1.0
percent. Nonmanufacturing payrolls were up,
with all categories except transportation and
public utilities rising. Construction, trade, and
services showed the most strength.
Moderate year-to-year gains were recorded.
Manufacturing employment rose only 0.5 percent over April 1969, and nonmanufacturing
increased 4.0 percent. All categories of noOmanufacturing were up except mining, which
showed no change. Construction and finance
registered the largest gains.

The Houston Intercontinental National Bank, Houston, Texas, a newly
organized institution located in the territory served by the Houston Branch of
the Federal Reserve Bank of Dallas, opened for business May 15, 1970, as a
member of the Federal Reserve System. The new member bank has capital of
$240,000, surplus of $240,000, and undivided profits of $120,000. The officers
are: A. G. McNeese, Jr., Chairman of the Board ; Wm. B. Black, Jr., President;
R. D. Nolen, Jr., Executive Vice President; and Henry H. Efird, Vice President
and Cashier.

STATISTICAt SUPPIlEMENif
to the

SUSINESS REVIEW

June 1970

FEDERAL RESERVE BANK
OF DALLAS

CONDITION STATISTICS OF WEEI(LY REPORTING
COMMERCIAL BANKS

RESERVE POSITIONS OF MEMBER BANKS
Eleventh Federal Reserve District

Eleventh Federal Reserve District

IAveroges of daily figure s. In thou sands of dollars)

lin thousands of dollars)

-=

5 w ee ks end ed
It em

May 27,
1970

April 29,
1970

May 28,
1969'

ASSETS
Federal fund s sold and securities purchase d
Other loans and discounts, gross .... . .. . . .. .....

496,025
5,917,150

408,750 } 6,509,397
5,983,676

Commercial and industrial loan s..••....•• ...•

2,909,60 1

2,927,480

3,104,493

109,783

106,784

115,749

500
36,136

500
43,067

501
40,338

1,089
398,889

1,183
392,312

542
382,395

137,338
343,355
594,1 13
11,174
9,772
732,641

135,654
365,705
596,669
9,617
9,872
731,077

139,639
397,031
580,8 17
352,103
5,850
666,735

175
632,584
2,540,349

175
663,581
2,629,679

173,303
605,152
77,403

102,424
611,131
208,134

7,1 51
1,514,551

69,585
1,516,691

11,322
1,297,205

74,892
68,028
1,066,318
682,276
86,944
421,903
5,975

69,492
69,777
1,1 00,895
711,340
85,814
422,271
8,322

148,932
86,336
1,031,881
624,404
80,353
457,634
6,307

516,502

Apr. I, 1970

May 7, 1969

760,527
709,339
51,188
754,176
6,351
50,627
-44,276

732 ,91 2
681,714
51,198
748,574
- 15,66 2
39,943
-55,605

759,848
708,529
51,319
761,901
-2,053
36,05 1
-38,104

780,976
602,650
178,326
764,382
16,594
4,784
11,810

77 1,344
592,429
178,915
751,860
19,484
6,567
12,9 17

778,291
602,895
175,396
763,963
14,328
11 ,704

1,541,503
1,31 1,989
229,514
1,518,558
22,945
55,41 1
-32,466

1,504,256
1,274,143
230,113
1,500,434
3,822
46,510
-42,688

RESERVE CITY 8ANKS
Total reserves held • ••. . .......
With Fed eral Reserve Bank • . ..
Curre ncy and coin . ..........
Re quired rese rves . . . . ... . .. .. .
Exc ess reserves •..•• .. .. .. .....
Borrowing s•. .................
Free rese rves .. ........ .. ... ..

954,073
32,384
0

153,464
598,247
84,772

5 weeks ended

0
723,204
2,497,868

48,276
0

-

4 'weeks end ed

May 6,1970

It em

382,175

under agreements to res ell ... ... • . .... ......

COUNTRY BANKS

Agriculturalloans, excluding CCC
certiflcotes of interest • •• .. ...... ...... ...

loans to brokers and deal ers for
purcha sing or carrying:

U.S. Governm ent securiti es ... .............
Othe r securities . .......... ..•.. .. .......
Oth er loans for purchasing or carrying:
U.S. Governm ent securities • • . ..•. ••.......

Other securities . • . . .......... .. . . . .. ....
loans to nonbank flnancial institutions:
Sales finance, personal Ananco, factors,
and oth er busi ness credit companies ...• .. .

Other ............................ . . ...
Real estate loan s• . ...........•...• • •......
loon s to dom estic commercial bonks.. • . ..•....
loans to foreign bonks • .....••..•.••.......
Consum er instalment loans ••• ..........•. ....
loon s to foreign governmen ts, official
institutions, central banks, internationa l
institutions •... .• ••.•••••••. .•.....••....
Other loans ••.. ........... . ...•..• . ......
Total investments .... . ...•....•••.•...•. •.. . .
Total U.S. Government securities • •• .... •.•... .

Tr.asury bills .••••••••••••••••••••• • •. . •
Treasury certificates of indebtedness • . ••• . . .
Treasury notes and U.S. Government
bonds maturing:
Within 1 year .••.•• .....•.•.•..••....
1 year to 5 years •. .•••• ... ..• .••••. . •
After 5 years . .. .. . ... ...•••...••.....
Obligations of states and political subdivisions:
Tax warrants and short-term notes and bills ..

All oth.r ...............................
Other bonds, corporate stocks, and se curities:
Certificate s representing participations in
Federal agency loons . .... .. . ... •. .....
All other (including corporate stocks) . •..... .
Cash items in process of collection . •....•. . .....
Reserves with Federal Reserve Bank •••. ....... . .
Currency and coin . .....•........ . ....... . . ..
Balances with banks in the Unite d States .... .....
Balances with bonks in foreign countrie s . .•. .....
Other assets (including investments in subsidiaries

not consalidot.d) •••..•••• ••.••.• •• • ••• •• .•

875,727
39,244
0

513,732

TOTAL ASSETS ......................... 11,730,672

---904,134

Total reserves held . .. . ........
With Fed eral Re se rve Bank • . ..
Curr ency and coin .. .. .. .....
Require d re serve s . ............
Excess reserves . ..............
Borrowing s. .. •. ..............
Free reserves. . ...............
Total rese rves held . ...........
With federa IR ese rve Bank •• . .
Currency and coin . ........ . .
Re quired reserves . ....... . ... .
Excess reserves ..... ...........
Borrowings • ..................
free rese rves. . ...............

1,538,139
1,311,42A

226,7 15
1,525,86 4
12,275
47,755
_35,480

---

CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
lin thousands of dollars)

=======================================
~

May 27,
April 29,
May 28,
_ _ __ __ _ Ite _ _ _ _ _ _ _ _ _l~ 7~0_ _ _~~7 0~_ _ _I~~
_ _m
9~
1 9~
Total gold certiAcote reserves.. ... •••• •• . . . .
Discounts for memb er banks •.. " . ••• . . . •• . .

259,887
101,085

270,478
123,585

Other discounts and advances. . . .. . . . ... . . .

5,040

5,040

U.S. Governm ent securities . • • . . . • • . . • • • . • . .
Total earning assets ••••..• .•..••.•. '" . . . •
Member bank reserve deposits...... .. ......

2,487,243
2,593,368
1,179,910
1 746729

2,393,357
2,52 1,982
1,240,413
1 7 17920

Federal Re se rve notes in actual circulation . ....

244,6 40
30,09 9
0
2 245,89 1
2'275,99 0
1'135,6 17

1'15539 0

------------------------------'-----------'------'--~
'
'

---- ---11,867,249 11,590,019
CONDITION STAT)STlCS OF ALL ·MEMBER BANKS

LIABILITIES
Total deposits ............ .. .... . . .... ... ...

9,042,932

9,107,418

Total demand deposits .. •.. .. .... . .. ... ....
Individuals, partnership s, and corporations .• • .
States and political subdivisions ...... . •• . . .
U.S. Govern ment . . .• ........••....•• .. ..
Banks in the United State s•••. .....• ... .•..
Foreign:
Governm ents, official institutions, central
bank s, international institutions • ......• .
Commercial banks. .. ...... ...•. .. ..•..
Certified and officers' ch ecks, etc .. . ........
Total time and savings d epo sits .. . , .. . .. , ... .
Ind ividuals, partnerships, and corporations:
Savings depo sits . ................. . •..
Other tim e deposits.. ........ . .........
Stotes and political subdivisions . ...........
U.S. Gove rnment (including postal savings) . ..
Banks in the United States .... ..... •• ......
Foreign:
Governments, olAcial institution s, central
banks, international in stitutions • ...•.•. .
Commercial bonks ... .... .... .. . .......
Federal funds purchased and securities sold
under agreem ents to repurchas e • ••...•. .... .
Other lia b ilities for borrowed money .• .• ... . ....
Other liabilities • •... . ........ '" . ... ... .... .
Reserves on loans . •.. ..•. .... . . . •...........
Reserves on securities ... ..•. ... .. ...... ......
Total capitol accounts . ..... ............••• •..

5,642,053
3,932,895
327,355
129,307
1,151,453

5,705,180
3,942,047
340,336
173,876
1,136,881

9,41 7,382
---5,659,082
3,870,381
389,017
159,574
1,109,15 2

3,654
23,069
74,320
3,400,879

2,729
25,719
83,592
3,402,238

2,589
25,378
10 2,991
3,758,300

918,260
1,679,164
757,455
7,193
23,247

914,233
1,668,016r
775,292
7,254
22,873r

994,735
2,043,356
672,759
11 ,858
28,102

Eleventh Federal Reserve Di strict
(In millions of dolla rs )

================================~
Apr. 29,

Mar. 25,

Apr. 39°'

11,589
2,026
3,375
1,240
264
1,162

11,456
2,029
3,230
1,3 29
255
1,1 74

11,09\
2,3533 11
1'272
'25 1
1,1 94

~==--------------------------~9~7~0------1~9~70 ----~~
1
~
Item

ASSETS
Loons and discounts, gross' • •• •• . . . • • • . . . .
U.S. Government obligations.. . . . • . • . . . • . .
Other securities................ ... .....
Reserves with Federal Reserve 8ank...... . .
Ca sh in vault..........................
Balances with banks in the Unite d States. . . .

13,220
1,350

814,890
270,622
463,907
133,25 1
13,278
991,792

855,176}
326,610
435,449
134,422
13,275
994,899

----

7,000
490
834,207
260,676
11 8,322
n.a.

959,432

Ba lance s with banks in foreig n countrl es e .. . .

11

11

Cash itoms in process of coll ection. • • • • . . . .
Other a ssets° .... .. .... .. ......... '" . .

1,259
815

1,161
854

TOTAL ASSETse ................. ... .
14,210
1,350

TOTAL L1A8ILITIES, RESERVES, AND
CAPITAL ACCOUNTS ••• •..• •• .••• •• ... 11 ,730,672

21,741

21,499

Deman d deposits of banks . ........ . .
Other demand deposits .... . ......... : : ..
Time deposit s... ....•.. .. .. .. ........ : :

1,485
8,778
7,379

1,463
8,655
7,258

Total deposit s . ..•......... . ... ...
Borrowing s• ............ . ........... : : :

17,642
1,238
1,097
1,764

17,376
1,294
1,077
1,752

LIABILITIES AND CAPITAL ACCOUNTS

Other liobilitiese •.. •.... .. •..••.•.•...•

Total capitol accounts e . ...... . ..... . ... .

11 ,867,249

11 ,590,019

Because of format revisi ons a s of July 2,1969, earlier data are not fully comparabl e .
r - Rev ised .
n.a . Not available.

1

2,62A

ALL MEMBER 8ANKS

TOTAL LIABILITIES AND CAPITAL

8

----1 410
'679

~
1 A8S
9'053
7:6 81

18,219
1 096
'569
1,6 86

--

~~~C C O U N T~S~ ~~.~.-•~.~.~- .-. -• •- .-. -.•- .-. -..__~1,7 4=1=___-==,=9=9~___
A ~~~~- e.. . •.
2==
21 4
~
1

Be fore.July 2 ,1969 , thi s item was published on a net ba sis.
Estimated .

e-

BANK DEBITS, END-Of-MONTH DEPOSITS, AND DEPOSIT TURNOVER
(Dollar amounts in thousands, seasonally adiusted)

=

DE61TS TO DEMAND DEPOSIT ACCOUNTS'
DEMAND DEPOSITS'
Perce ntag e change

April
1970
Standard metropolitan
stati stical are a

4 months,

(Annuol ·rote

March

ba sis)

ARIZONA, Tucso n •.. .. ..••.....•...•......•.•.......
LOUISIANA, Monroe ••••..••...•••.•......•.•... .. .•
Shreve port ...... .... .... .. ............ ..
NEW MEXICO, Roswell ' ..•. . ••...••• .•..• •. ... • •...•
TEXAS, Abilene .................................... .

1970

Texarkana {Texa s· Arkan sas) .. ..... .. ...........
Tyler •••••.•••••••••.••• •• ..... • ..•• •. ...• .•
Waco .. . . .................... .. ..... .......
Wichita Falls .. ..............................

5,728,164
2,721,6 12
10,384,560
977,940
2,100,600
5,6 10,900
8,443,872
6,259,428
1,951,872
4,665,704
477,792
11 7,514,306
7,027,464
21,567,576
2,628,684
102,026,666
943,392
4,473,628
1,733,916
1,953,336
1,647,252
1,230,384
17,069,352
1,1 32,966
1,483,660
2,199,024
3,180,624
2,2 16,1 52

-4
4
7
14
5
-6
- 14
3
8
-5
9
-5
1
2
-4
6
0
3
4
-I
- 1
I
3
4
4
4
6
7

10101_28 centers •••..••..•••••••••...•.•..•••....••

$339,573,072

April
1969

0

Amarillo .. .• . ..........•..... . .. .... ... .... .

Austin .................... . . .........•......
Beaumont· Port Arthur·O rang e ...... ............
Brownsvill e-Ha rlingen-San Benito .. .. .....•... . ..

Corpus Christi . ..... ..... ...... . ..... .... .....
Corsicana 2 ••••••••••••••••••••••••••••••••••
Dalla s, .. ......... .. .......•................

EI Paso • .•.•••.•..••...•• • ....• •... . •• ......
Fort Worth ...... .... .. ... ... ..... . ..........
Galve ston-Texas City . ....................... .

Houston . ...... .. . ..........................
Lare do ...........................•... . .. ...
lubbock ........................ ...... ......
McAli en- Pharr-Edlnburg ••.•.•...•...• . .•.•• ..••
Midland •..• •• .• ••...••. ..•• •. •..•..... •.. .•
Od essa .....................................
San Angelo . . ... ...... ......................
San Antonio ......... . . . .... .................
Sherman· Denison •••••••••••••••••••••••••••••

----

$

Annual rate
of turnover

April 1970 from
April 30,
1970

9
12
36
16
10
6
-7
4
15
6
I
6
9
7
5
21
18
-8
2
6
8
8
13
17
-9
0
14
-8

17
11
39
16
5
15
1
5
14
9
5
11
9
II
14
14
12
0
4
2
14
9
12
12
-9
7
15
-4

II

12

Apri l
1970

March

1970

April
1969

$ 223 ,337
62,293
228,033
36,241
98,146
156,1 44
344,966
230,731
73,947
206,336
31,415
2,086,031
232,235
639,336
109,275
2,411 ,1 99
38,821
154,433
96,565
130,567
77,90 1
65,7 13
634,553
64,486
66,497
87,415
112,738
116,186

1970 from
1969

25.1
33.5
44.6
25.6
21.1
35.5
26.4
26 .7
26.0
23.5
15.3
55.3
30.6
33.5
24.6
41.6
24.0
29.3
17.7
14.6
20.6
16. 1
27.0
17.5
21.7
24.2
27.8
19.0

25.7
32.2
41.9
22.7
20.3
37.7
34.6
25.6
24.1
25.1
14. 1
57.6
30.6
33.5
25.7
39.2
23.6
29.0
17.0
14.7
20.6
17.9
27.0
17.0
20.5
22.8
25.6
17.8

24.4
29.3
33.0
23.7
19.0
34.8
31.4
25.7
23.5
22.4
15.2
51.5
29.5
31.9
24.7
35.7
20.9
32.1
18.6
13.6
20.2
17.5
25.0
16.0
23.1
23.5
24.0
20.6

38.1

36.2

35 .1

---$6,639,544

~ Deposits of individuals, partnerships, and corporations and of statcs and political subdivision s.
COunty basis.

GROSS DEMAND AND TIME DEPOSITS Of MEMBER BANKS
Eleventh Federal Reserve District
(Averages of daily figures. In mil lions of dollars)

BU ILD ING PERMITS
Date

Total

Reserve
city banks

1968, April .. . ...
1969, April ......
Novembe r..
December ..
1970, January . . .
Fe bruary...
March .....
April ......

9,655
10,497
10,373
10,692
10,793
10,256
10,284
10,497

4,486
4,693
4,750
4,947
4,910
4,625
4,727
4,619

VALUATION (Dollar amounts in thousands)
Percent chang e

April 1970
from

NUM6ER
4 mos .
1970

Mar.
1970

Apr.
1969

4 months,
1970 from
1969

2,8 16

$ 16,687

-52

-69

- 1

229
1,552

1,669
1,646

5,679
9,992

195
1

27
-69

146
2,257
1,405
591
265
1,312
7,337
13 1
1,792
1,464
284
11 ,5 19
200
740
193
273
278
204
4,649
232
111
755
259

78 1
1,965
9,356
853
196
2,748
24,942
260
7,548
7,095
823
41,523
364
8,5 14
346
383
143
276
9,366
525
1,585
3,615
1,6 29

2,876
19,703
33,020
3,712
1,062
11,576
115,353
1,652
34,326
27,105
2,742
138,716
1,62 4
18,467
1,184
3,513
795
4,537
32,654
4,863
4,006
12,225
3,682

344
-18
- 10
-50

152
-57
-55
- 15
-69
39
- 10
-8
-14
-26
-63
12
-26
46 1
-9
58
- 66
-45
33
14
71
224
20

-39
106
-48
-9
-77
40
13
-90
1
-24
-66
-13
-3
55
-3 1
-22
-77
154
4
120
35
96
-39

- 10

-7

4 mos.
1970

676

2,400

50
462

44
496
416
190
Brow~o~t •••••
C
svill e ....
94
384
D~lra~s Christi . .
1,935
balllso· .. ···· .
57
EI p n .......
598
Fortay; .. . . ...
448
G I orlh ••.•
80
~:IJ;t~ston ...• .
laredon ...... 2,636
70
LUbb ...... .
226
Mid i ock • .. •.•
85
Od.~snd . • . •.•
93
Po
a .......
Sa rt Arthur ....
77
48
Sa" Angelo •••
Sh:r~~tonlo . . . 1,415
78
T
.
n ......
W
ltarkana .. ..
27
oCo
230
\Vlchit~' F~il;: :
81
101 01
--~ci ti es •. ll,OOO

April
1970

~RIZONA
LOlucso n........
UISIANA
Monroe_ West
Sh Monroe •••••
IEX;;veport • •••

~bil ene .••...•
Amarillo ..... .

B~~t~n ........

Country
banks

Total

Reserve
cit y banks

Country
bonks

5,169
5,604
5,623
5,745
5,883
5,631
5,557
5,676

6,973
7,704
7,266
7,203
7,106
7,145
7,23 1
7,328

2,869
2,966
2,690
2,628
2,568
2,554
2,561
2,634

4,104
4,716
4,578
4,575
4,540
4,591
4,650
4,694

19
-41

April
1970

~eo

TIME DEPOSITS

GROSS DEMAND DEPOSITS

~

40,598

$ 131 ,23 1

$5 12,173

-u

-19
-57
-37
-26
64
-6
53
-25
243
-35
-73
43
-73
-30
-42
476
-48
29
- 16

VALUE Of CONSTRUCTION CONTRACTS
(In millions of dollars)
January-April
Ar ea and type

April
1970

March
1970

Fe bruary
1970

1970

1969

FIV E SOUTHWESTERN
STATES' •..•...•.•.•....
Resid ential building ...• ...
Nonreside ntial building ....
Nonbuilding construction ...
UNITED STATES .......... ..
Residential building ...• •..
Nonresidential building .. ..
Nonbuilding construction .. .

7 11
256
272
18 3
6,757
2,466
2,413
1,878

1,011
254
332
425
6,140
1,974
2,191
1,975

552
210
214
129
5,249
1,462
2,269
1,496

2,650
9 11
995
944
22,636
7,306
9.004
6,526

2,163
928
672
564
20,327
8,073r
7,673
4,426

Arizona, loui siana, New Me xico, Oklahoma, and Texas.
R
evisod.
NOTE . - De tail s may not add to totol s because af rounding .
SOURCE , F. W . Dodge, McGraw-Hili, In c.

1

r-

WINTER WHEAT PRODUCTION

CASH RECEIPTS FROM FARM MARKETINGS

(In thousands of bushels)

(Dollar a mo un ts in tho usa nds)

1970,
Area

Ma y 1

1969

1968

Arizona ••• . ... ......... .. ..

Texas ....... .. . .. ......... .

9,246
1,161
5,880
108,3 15
67,886

4,52 6
874
5,088
11 8,275
68,856

2,704
2, 11 2
7,625
122,383
84,150

Total .. ................. ..

192,488

197,619

2 18,974

louis iana .... . ............ . .
New Mexico .• . •.. ... .•••....

Oklohomo .••••. • •.. • •••••.•

=

Jan ua ry-March

ind icated

Percent
Area
1970
1969
change
------------------------~------------------Arizona ... . .. .. ..... . . . . .. .
$ 11 5,400
$ 119,000
-3
Louisia na .. ... . . .. .. .. ...•. .
108,900
111 ,700
-3
N ew Me xico . . .... .. . ... .... .
47,800
42,800
12

Oklahoma •••••.. •••• •..• ...

Tex as ... ... .... .. . .. ... . . . .

224,400
607,000

175,500
572,000

28
6

Total.....................
Uni ted States. ... .... .. . ...

$ 1,103,500
$ 10,990,400

$ 1,021,000
$ 10,003,200

10

--------------------------------------------------------------SOURCE , U.S. Departm ent of Ag ri culture .

SOURCE, U.S . Department of Agriculture.

DAILY AVERAGE PRODUCTION OF CRUDE OIL
(In thousonds of borre ls)

COTTON ACREAGE, PRODUCTION, AND VALUE OF PRODUCTION
(In thou sand s)

Percent chang e from

April
1970

Are a

FOUR SOUTHWESTERN
STATES ..... . . . ........ .
louisiana .... ........ . ..
New Mexico . ............

O kl ahoma •.••.. • .••••.•
Texas . .. .. .. . .. .. .. .. . .

Gulf Coa st • . . . ..••. •• •
West Texa s ...........

East Texas (p raper) ••..•
Panhandl e •••. '" .• •..
Rest of state .••••••••••

UNIT ED STATES ............

March
1970

March
1970

April
1969r

April
1969

Acreag e harves ted

I

Bol es produced 1

Area

6,878.2
2,492.0
359.0
618.3
3,408.9
694.7
1,616.3
207.0
82.7
808.2
9,677.8

6,796.4
2,442.4
360.7
613.5
3,379.8
677.8
1,62 1.0
185.0
84.6
811.4
9,598.0

1.2
2.0
- .5
.8
.9
2.5
-.3
11.9
-2 .3
-.4
.8

6,446.4
2,346.5
353 .0
621.0
3,125.9
624.1
1,470.5
152.9
85.0
793.4
9,232.0

6.7
6.2
1.7
-.4
9.1
11.3
9.9
35.4
-2 .7
1.9
4.8

1969

1968

1969

Ari zon a .. .. ..
Louisiana ... . .
N ew M ex ico ...

310
420
146
465
4,675

298
410
151
380
4, 125

634
483
157
279
2,862

734
545
176
264
3,525

6,016
11,075

5,364
10,160

4,4 15
10,015

5,244
10,948

Okla homa ••.•
Texa s........

Total .......
Unit ed States

=
---

Valu e of lint and see d

1968

---

1969
$

1968

80,495
61,643
22,27 1
31,234
314,542

102,39~
73,42
25,57 1
30,39 6
419,387

---$ 510,185
$ 1,210,994

1 500 pounds gross weight.

SOURCE, U.S. Department of Agriculture.

---$ 651,1 73
$1,446,513

SOURCES, American Petrole um Institute.
U.S. Bureau of Mines.
Federa l Reserve Bank of Dallas.

NONAGRICULTURAL EMPLOYMENT
INDUSTRIAL PRODUCTION
(Seasonall y adiusted indexes, 1957·59

=

Five Southweste rn Stotes'

100)

=======================================~
Perc ent change

Are a and ty p e of index

April
1970p

March
1970

February

1970

April
1969

175.8
194.5
212.9
182.3
134.5
255.2

177.0
198.2
218.4
184.8
132.2
255.2

175.6r
195.3 r
220.3
178.6r
13 2.3r
258.2r

165.4r
186.3 r
214. 1r
167.8 r
123 .6r
226.7r

170.4
170.1
168.8
171.6
135.5
23 1.5

171. 1
170.7
170.4
171.4
136.1
230.0

170.5r
170.3r
169.5r
171.3 r
134.3 r
230.2r

17 1.7
173.0r
175.7
169.6r
128.8r
216.3

Type of em ployment

TEXAS
Total in dustrial prod uction •... ..
Manufacturing ........... •. ... •

Durable . ... . ....... .. . .... . .
Nondurable •••. • .• •.• ..••.. .•
Mining .• •..... . . .. . ...... . . ..

Utilities • ..•....•. .. .. .........

UNITED STATES
Total industrial production .•.. . .
Manufacturing ............. . ...

Duroble •••••..•.• .•• •••.••..
Nondurable •• •• •• ••••.•••• • ..
Mining ••. ....... . . . ....... . ..
Utilities •..... . . .. .. . . . .... .. ..
p r -

__

Pre liminary.
Revisod .

SOURCES, Boord of Governors of th e Federal Rese rve System.
Federal Reserve Bank of Dollas.

~----N -m be-r-o-f~p-e-rs-o-n-s--------~
-u -April
March
April
Mar.
AP'9
1970p

1970

1969r

1970

196

6,352,600
1,1 65,000
5,187,600
229,500
408,200

6,315,900
1,1 72 ,300
5,143,600
229,400
40 1,500

6,148,300
1,159,000
4,989,300
229,400
387,600

0.6
- .6
.9
.0
1.7

3.3
.5

462,200
1,463,800
323 ,100
1,015,600

463 ,200
1,446,700
320,000
1,002,800

447,400
1,398,600
302,800
972,800

----------------~----~~--~~--~~~
Total nonagricultural
wage and sal ary workers . .
M anufa cturing .. .. • ......
Nonma nufacturing .. ..... .
Mining . . •. . ..... .. ...
Construction . . ...•... . .
Tran sport ation and
public utiliti es .... ... .
Trade . ..... . .. ... .. . .
Finance • . • .. ..........
Service . .......... .. . .
Government •........ ..

4.~

'3
5.

-.2
3}
1.2
~ '1
1.0
4',
1.3
2: 8
~~~~~~~~~~~ 2-5-~0~
1,~ 8 ,2 0~-- 80-,0 01 , 2- - 0--- 50 ,7 O_____4 ~
1, 2--- O
. __
1 Arizona:

p r -

~ouisjana, N ew Me xi co, O klahom a, and Texa s.

Pre lImin a ry.
Revised .

SOU RCE, Stote e mplo yme nt ogencies.