Full text of Review (Federal Reserve Bank of Dallas) : May 1965
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business • review may 1965 FEDERAL RESERVE BANK OF DA lL LAS This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) contents the texas dairy industry 3 district highlights .... ... ................... 10 the texas dai,·y industry The dairy industry of Texas has undergone s~lbstantial adjustments and is presently a highly commercialized endeavor in each of the stages involved in getting dairy products from th~ farm to the consumer. The production of mrlk has evolved from a small, part-time dairy ~n~erprise on many farms to a highly specialized f Cllry operation on a much smaller number of .arms. Likewise, the number of firms engaged In the processing and distribution of milk has also been reduced. Although the volume of milk prOdUced on farms in Texas has decreased, the vOlume of milk marketed from farms and through processing and distributing firms has shOWn an increase. This increase primarily results from a reduction in the on-farm use of milk and a shift from retailing of milk by farmers. d T~e changes that have occurred in the proII UChon and marketing of dairy products reect the response of the industry in adapting ~ethods and techniques of operation to fulfill e demands brought about by a changing ~arket structure. This article will discuss some ~ the .more important changes in the produclon, dIstribution and utilization of dairy prodUct . , s In Texas during the past two decades. trends in production f Milk production in Texas in 1964 was oneOUrth smaller than in 1945. During the 20Year . 4 1 ~e~lod, total output decreased from about I' bllhon pounds to 3.0 billion pounds. A rg oa e part of the decline in milk production C9curred in the years immediately following I d . t 45·,unng the past 10 years, production has lended to be relatively stable. Despite the OWer total production, a larger supply of milk has been available to consumers because of a reduction in the on-farm use of milk. Twenty years ago, about 40 percent of the milk was used on the farm where it was produced, in contrast to about 6 percent at the present time. In addition, some milk and milk products supplying Texas markets come from out-ofstate sources. For example, some of tlle Federal milk marketing areas serving Texas consumers include producing counties in Oklahoma and New Mexico. Also, some processors draw milk regularly from midwestern points, and such processed products as butter and cheese manufactured in other sections of the country are available to Texas consumers. Precise data are not available regarding ilie extent of milk and dairy product imports into ilie State, but these supplies probably constitute an important marginal amount. During the drought period several years ago, ilie inflow was considerable because production within Texas declined as a result of poor pasture conditions. During the period when the proportion of milk produced on farms and sold to consumers was rising, there was a change in the proportion of milk reaching the consumer through the various channels of distribution. Of ilie total milk produced in Texas in 1945, 7 percent was sold directly to the consumer by the farmer in the form of fluid milk and cream. By 1964, this percentage had declined to less tllan 2 percent, as increased amounts of total production were channeled through plants and dealers. Milk churned on farms for butter constitutes a negligible use of milk, even though as much as 15 percent has been used for this purpose in the past. The smaller number of calves on dairy business review / may 1965 3 farms has also reduced the on-farm use and provided larger amounts for commercial sale. Moreover, the larger urban but smaller farm population has served to curtail on-farm milk consumption and boost commercial sales. The total quantity of milk and milk products demanded has increased as a result of population gains and higher incomes. The increase in demand has been tempered, however, by a downtrend in the per capita consumption of dairy products, partly reflecting greater consumer acceptance of some items of nonmilk origin. To meet the challenge of supplying greater quantities of milk on regular schedules has required changes in assembly, processing, and distribution. Dairymen have found it advantageous to specialize in production and permit other firms to provide the necessary functions for getting the milk from the farm to the consumer in the form and at the time desired. Despite declining numbers of cows, a particularly notable change has occurred in the production of milk per cow. Milk cow numbers in Texas have declined steadily in the past 20 years. In 1945, there were nearly 1.6 million head of milk cows 2 years old and over on Texas farms and ranches, representing 17 percent of all cattle. Two decades later, the number is placed at 489,000 cows, or slightly less than 5 percent of all cattle. Although milk cow numbers declined about 70 percent during the past two decades, the total output of milk decreased only 26 percent as there was an advance in production per cow. The high level of output from a relatively smaller number of cows has been attained through general improvements in Texas dairy herds. The attention being given to improved breed·· ing through artificial insemination, selection practices, and better feeding and general care is among the factors contributing to the rise in output per cow. Production per cow more than doubled in the past two decades. In 1945 the average production per cow in the State 4 was 3,040 pounds per year, while the 1964 figure is placed at 6,150 pounds. Although the doubling of output per cow during the past two decades is impressive, Texas dairymen as a group have considerable room for furt her improvement in the performance of their herds when this performance is compared with the U. S. average of 7,880 pounds per cow. The averages of many herds belonging to members of dairy herd improvement associations in Texas are double the Texas average. MILK DISPOSITION BY TEXAS FARMERS SOURCE: U. S, o.ponmenl 01 AQrlC\oIII",,. , Despite the decreases in the numbers of milk cows and dairy farms, the size of herd has increased, as the shift toward a more intensified dairy enterprise and improved management have resulted in a more commercialized dairy farm enterprise. The 1945 Census of Agriculture reports 11,867 dairy farms in Texas, with about 12 cows per farm . A downward adjustment in the number of farms continued during the next 15 years, and the number of dairY farms reported in the 1959 Census of Agriculture is 6,436, with slightly over 50 cows pef farm. Empirical evidence suggests that the reduction in the number of dairy farms and the expansion in the average herd size have continued. Several factors account for the decline in the total number of dairy farms and the growth in individual herd size. The market demand for larger quantities of grade A whole milk has been a particularly important factor. The ~hanges required of dairy farmers to specialize ~n the production of grade A milk have sharply Increased capital outlays. The expansion and upgrading of the herd require more careful selection and breeding of milk stock or the purchase of better-quality cows and heifers; this Upgrading of herd quality represents a major Outlay. The production of grade A milk has a!so necessitated improvements in the type and Size of the milking parlor and related facilities. .T~ meet sanitary regulations and reduce milkmg costs (especially labor costs), dairymen have installed pipeline milkers and refrigerated bUlk hOlding tanks. Of course, hand-milking Was .an early casualty of changes in dairy production. Additional investments have been made in complementary facilities and equipment, such as water and electrical systems and paved lots. Currently most dairy farms with 50 ' Or more cows may have over $50,000 invested in milk-handling equipment and facilities al on.e . In addition, the purchase of forage harvestIng equipment, provision of hay and feed storage I:uaCI'Ii'ties, and pasture and fencing im~rovements have materialIy increased the capHal outl ays of' modern dairy . farms. MILK PRODUCTION AND MILK COW NUMBERS IN TEXAS (1945 ' 100) 20 0 , .-",.-.-' 150 ,; Mil K PRODUCTION PER cow '..."., .... -., .. 100 _'fill' ~, " " ,,," __ .. _____ - . - - - - - • ..,.TOTAL MILK PROOUCTIO N ~o ........................................................ ) .................. MI LK 19 50 SOuRCE : U.S, OepOllmtni 01 AQrlcullur, . 19!55 cows The new methods and equipment have enabled dairymen to enlarge herds and , yet, employ little if any additional labor. On a national basis, the man-hours required to produce a hundredweight of milk were reduced about 60 percent in the last 20 years. The total cost of producing milk, especially grade A, has been rising but, with larger volumes, the per unit cost has been held down through the use of laborsaving equipment. The overall effect of cost increases has been partially offset through the higher prices for grade A milk and the larger proportion of the total milk supply that is used in the bottle trade . The development of commercialized dairying in Texas has resulted in a lessening in the seasonality of production. When herds were smaller and the dairy enterprise was just a sideline operation, farmers maintaining a milking herd often devoted most of their time and financial resources to the farm's major enterprises. Little emphasis was placed upon pastures and other forage needs of milking stock. The large percentage of the total production of milk from herds given such casual management provided a highly erratic supply to the market. Milk production continues to vary from month to month but is far more stable than in the past. The peak production months are usually March through May, with the lowest output coming in December and February. Climatic factors have a very decided effect upon the peak, or flush, season of milk production because of the availability of adequate forage. Pasture plants respond to the mild temperatures and high rainfall that are typical of the spring months in much of Texas. Growing conditions for pastures in the other months of the year - particularly during the winterare not as favorable as during the spring; and, as a result, milk output tends to decline. ................. . 1960 1964 Efforts have been made to moderate the swings in milk production during the year through the use of the improved management business review / may 1965 5 techniques that specialization in the dairy enterprise has fostered. Less fluctuation in output from season to season has been achieved through improvements in forage management. The planting of adapted varieties of summer grasses and forage crops and the provision of green winter crops have afforded a better feed ration. Rotational grazing and the use of fencing to boost forage utilization are widely used by today's dairymen. Better-quality hays and silage, together with more liberal feeding of concentrates, have also helped to maintain production. Wide variations in the production of milk result in problems for the entire industry. Demand for fluid milk by consumers is relatively constant. A deficit poses more problems than does a surplus because of the necessity of obtaining milk supplies outside the usual milkshed. Unless adequate milk supplies are available, processors are unable to operate at the desired plant capacity. Long transport hauls of milk from distant sources may raise the procurement cost of milk for processors, However, the rapid improvement in the Interstate Highway System and its interconnecting road network, together with the development of large-scale trucking equipment for transporting milk in bulk, has greatly expanded the area from which milk supplies can be drawn. quires that a small volume of milk be maintained in excess of normal expected use. Another development that has encouraged efforts to reduce the seasonal variation in the production of milk has been various pricing arrangements. These price plans have been devised in a way that gives incentives to produce as much milk as possible during the normally low output season. Under these pricing plans, dairymen selling a larger volume of milk during the normally low period, relative to other producers, are permitted to sell a greater proportion of their milk at the higher grade A fluid price during periods when milk supplies are normally in excess of fluid milk needs. major production areas Dairy farms are located in all areas of Texas, but, according to the 1959 Census of Agriculture, six major regions account for almost 70 percent of the dollar value of milk sold. Some shifting of milk production is taking place to adjust for changes in crop production. Cotton production has been discontinued in many areas of east Texas and reduced severely in the Blacklands area. The Blacklands area and adjacent counties are also located close to some of the larger metropolitan centers. In the case of surplus milk supplies, milk not needed for fluid milk may be diverted into manufactured dairy products. However, a continual surplus of any sizable magnitude leads . to a need for adjustment in production. A dairy farmer could not continue producing grade A milk for a prolonged period if a substantial proportion of this production were sold at the lower prices paid for milk used for manufacturing purposes. The heaviest concentration of dairY farms, as well as the largest volume of milk sales, is jJl the northeastern section of Texas. The dairying enterprise in this section of the State haS achieved particular importance in the last tWO decades. Hopkins County, the leading milkproducing county in Texas, is in the northeastern area. Other major milk-producing regions include areas in the north-central, upper coastal, and south-central parts of the State. The largest dairy farms in Texas are found ill the Panhandle and western sections. The consumer's consumption pattern has some minor day-to-day variability, especially as related to weekends and holidays. Therefore, this fluctuation in the quantity demanded re- The climatic factors of the western part of the State are considerably different from those of the eastern areas. The requirements for providing pastures and forage crops are largely 6 FEDERAL MILK MARKETING AREAS OF TEXAS ~ I!31l NORTH TEXAS SAN ANTONIO CENTRAL WEST TEXASAUSTIN-WACO CORPUS CHRISTI TEXAS PANHANDLEREO RIVER VALLEY LUBBOCK-PLAINVIEW RIO GRANDE VALLEY- $3.55 per hundredweight in 1945 to $5.10 per hundredweight in 1964. Since raw milk is one of the more perishable agricultural commodities, pricing becomes highly important. For this reason, a method was needed to give some measure of stability to prices in order to assure that adequate supplies of milk would be available and that the movement of milk to the consumer would be more orderly. prices and cash receipts Federal milk marketing orders comprise one method of arriving at monthly prices to be paid producers for their milk. An order covers a specified area, and only those producers who produce milk in the area are subject to the provisions of the particular order. The order is entered into by producers only after being voted into effect by a majority. An administrator appointed by the Secretary of Agriculture is responsible to the Secretary for fulfilling the provisions of the specific order. The price so derived is determined by a formula. The factors considered in arriving at a minimum monthly price vary among orders but are based upon economic data. Thus, milk is priced on a monthly, rather than a day-to-day, basis, as is the case with most other farm commodities. b The average monthly price of milk received / Texas dairy farmers shows an inverse reI aelonship to production. This pattern is to be Xpected, since the supply of fluid milk varies COn ·d th Sl erably more than aggregate demand at ~ consumer level. The low point in milk Prices pa·d t f . .h h· h 1 0 armers tends to be m June, Wit pl~ est prices in January. The yearly average nee of all milk sold by farmers ranged from The Federal milk marketing orders in Texas are relatively new, with the first order being initiated in north Texas in 1951. Since that time, the number of orders in force has grown to nine. The total number of Texas producers selling milk under Federal orders in 1964 was 3,581. These producers marketed nearly threefourths of the grade A milk sold, and the value of the milk delivered to plants and dealers was ~ ~ !JZ:::j Iiillll!jj ~ III * -INCLUDES SOME CONTIGUOUS COUNTIES OUTSIDE THE STATE. ~et through irrigation, and the highly specialIzed e . f I qUlpment needed to make effective use ~ and resources under irrigation limits divers ilIed farming operations. The housing needs are ab so greater In . western sectIOns . of the State ecause of the more extreme temperature ~anges. For maximum usage of the resources, a t~:ger herd. is needed. Moreover, the fact that Population over much of the area is sparce enCOurages the concentration of production near the larger cities. business review / may 1965 7 over $100 million, or about 70 percent of the value of all milk marketed in the State last year. Cash receipts from dairy marketings have been somewhat erratic from year to year, but total cash receipts increased from $88 million in 1945 to almost $147 million in 1964. The percentage contribution of daity cash receipts to total receipts from farm marketings is about 6 percent, and this proportion has decreased only 1 percentage point in 20 years. processing and distribution The adjustments taking place on dairy farms in Texas have also resulted in some revolutionary changes in processing and distribution. These changes have been made to keep the various enterprises in adjustment with the demands placed on the industry. The past two decades have brought significant shifts in the number of plants processing and distributing milk products. There are fewer but larger plants today, and each plant has become more diversified. While the production of milk has become a more specialized endeavor, the plants that process, manufacture, and distribute milk products have tended toward the handling of multiple products. The larger milk processing and distributing firms appear to have gained substantial advantages in plant operations. The combining of resources, labor, and capital into more efficient operations in fewer plants has proceeded at a rapid rate. The numbers of plants manufacturing dairy products in Texas have all declined, with the exception of the numbers of firms producing ice milk and nonfat dry milk. Plants manufacturing ice cream declined more than 50 percent in the past two decades, but those producing ice milk products increased materially. The present methods of assembling the raw products for ice cream and the advances in storage and transportation of the finished product lend 8 themselves to centralization of production and widening of the distribution area. The changing structure of cream production on farms and the reduced use of whole milk in the production of creamery butter have led to a decline in the number of plants manufacturing butter. More than two-thirds of the firms manufacturing creamery butter discontinued this operation in the last two decades. The numbers of condensed and nonfat dry milk plants have fluctuated somewhat but show a high degree of stability. consumption patterns The pattern of dairy product consumption has changed very noticeably in the past 20 years. When more people performed tasks requiring manual labor, a high-energy diet waS necessary. Present-day employment requires less physical energy and less fat in the diet. Consumers have made shifts in consumption patterns, and fat content appears to be a guideline. On a national basis, there have been significant decreases in per capita consumption of all high-fat dairy products except ice cream. Since 1945, per capita consumption of fluid whole milk has decreased about 17 percent, while that of cream and butter has declined almost one-third. The shift in preferences during the . same period has increased the per capita consumption of cottage cheese approximately SO percent and aided other low-fat items, such as skim milk, to maintain their position or gain slightly. The changing demand for different dairy products reflects a diet-conscious consuming public, rising incomes, and increased competition from lower-priced vegetable oils. Mellorine production originated in Texas in ] 950, when sales were authorized by the TexaS Health Department. Since that time, other states have authorized its production. The number of plants producing meIlorine has continued to grow, and Texas still leads the Na- tion in output. The increased use of milk in the bot~le trade and competition from oleomargarIne and mellorine account for part of the decrease in the volume of whole milk used in m~~ufactured dairy products. A high level of Utlltzation in the grade A market generally does not leave a large volume for manufacturing puP Poses. The number of producers of milk for manufacturing purposes declined rapidly as the grade A market was made available. outlook d ~he changes in the Texas dairy industry dUrIng .the past two decades have been quite ramabc, and further changes are likely. A g~Owing population and rising incomes suggest t at the downtrend in total milk production may be at an end and a gradual rise in output ~ay be in prospect. The most promising avenue Or increaSing production appears to lie in a C~ntinuation of the rising output per cow, since t e Texas average is considerably below the average being attained in many other states. In view 01' the heavy investment rieeded to' operate an efficient dairy enterprise, further expansion in average herd size is likely, and the volume of milk produced per dairy farm is expected to continue upward. Improvements in highways and refrigerated bulk milk transport may, however, increase competition from out-of-state milk sources. The processing and distributing of milk and other dairy products also are likely to be subject to further adaptation. Efforts are under way to produce an acceptable and economical whole milk and other products that will have a long shelf life without refrigeration. New packaging materials and different sizes of containers are being market-tested. The marketing area continues to become increasingly concentrated in and around metropolitan centers, while, at the same time, the sources of supply can be drawn from greater distances. J. C. GRADY, JR. Agricultural Economist The Fritch State Bank, Fritch, Texas, a nonmember bank located in the territory served by the Head Office of the Federal Reserve Bank of Dallas, was added to the Par List on its opening date, April 10, 1965. The officers are: Delmar D. Hartley, Chairman of the Board; Wallace Barnett, President; W. T. Battin, Vice President (Inactive); and J. H. Hodges, Cashier. new par banks The Jacinto City Bank, Jacinto City, Texas, an insured nonmember bank located in the territory served by the Houston Branch of the Federal Reserve Bank of Dallas, was added to the Par List on its opening date, April 10, 1965. The officers are: Ray McBride, Chairman of the Board; Ralph B. Lee, President; H . T. Edwards, Executive Vice President; and E. A. Noret, Cashier. The Security Bank, Spring, Texas, an insured nonmember bank located in the territory served by the Houston Branch of the Federal Reserve Bank of Dallas, was added to the Par List on its opening date, April 10, 1965. The officers are : Willie H. Whitehead, President; Chester C. Strack, Vice President and Cashier; and John P. Moody, Assistant Cashier. The Mercantile Bank of Houston, Houston, Texas, an insured nonmember bank located in the territory served by the Houston Branch of the Federal Reserve Bank of Dallas, was added to the Par List on its opening date, April 19, 1965. The officers are: Robert W. Baker, Chairman of the Board; Burney Parker, Jr., President; and James B. Park, Vice President and Cashier. business review / may 1965 9 dist,-ict highlights Member banks in the Eleventh Federal Reserve District have recorded an exceptionally strong loan demand thus far in 1965 . Loans at the weekly reporting member banks in the District showed an increase of $153.4 million from December 30, 1964, to April 28, 1965, in contrast to a decline of $92.1 million in the comparable period a year earlier. The strength in the recent period principally mirrored a $125 .3 million gain in commercial and industrial loans, but all major loan categories, with the exception of consumer-type loans, have advanced more vigorously this year than last. The strength in commercial and industrial loans this year reflects increased borrowing by all classes of business firms. The rise in loans to service-type businesses, however, has been especially notable. Thus far this year, these firms have increased their indebtedness to District member banks by $51 .5 million, contrasted with repayments of $14.5 million in the comparable period a year ago. Loans to manufacturers of nondurable goods, especially to petroleum processors and chemical and rubber firms, have also advanced sharply. Loans to trade concerns rose contraseasonally, as retail firms and wholesalers increased their borrowing, probably to finance growing inventories. The seasonally adjusted index of industrial production in Texas declined fractionally in March, as a 3.8-percent decrease in crude oil production offset a slight gain in durable goods fabrication and a 1.3-percent advance in the output of nondurable goods. Among the durable goods industries, gains in machinery, transportation equipment, and lumber and wood production were almost offset by declines in the output of primary and fabricated metal products. In the nondurable goods sector, output gains in the petroleum refining, chemical, 10 and printing and publishing industries more than outweighed production weaknesses in the food and kindred products, apparel, textiles, and paper and allied products industries. Compared with a year earlier, industrial production in Texas in March was 5 percent higher. This gain reflected broadly based advances in both the durable and the nondurable manufacturing industries, as well as an increase in mining output. Mining production in the State posted a lA-percent gain over March last year, primarily because of an advance in crude oil production. Daily average crude oil production is estimated to have declined fractionally in the DiStrict during April to a level that was 1.7 percent above the year-earlier rate. All of the decrease from March occurred in Texas, as output from fields in northern Louisiana was unchanged and production in southeastern NeW Mexico showed a slight rise. Markets for crude oil of southwestern origin continued relatively weak during April, with a number of buyers reporting troublesome surpluses stored aboyeground. Pipeline prorating was restricted, hoWever, to a few fields in northern Texas and northern Louisiana. In late April , the conservation authorities of both Texas and Louisiana announced reduced allowables in their respective states for the month of May. March nonagricultural employment in the five southwestern states advanced 0.8 percent to reach a total of 5,018,000 persons, with more than normal strength in the month-tomonth gains developing in both the manufacturing and the nonmanufacturing sectors. Tbe strongest percentage increases came from the construction and the transportation and publiC utilities industries, where employment rose 3.Z percent and 2.0 percent, respectively. The important retail and wholesale trade industries like total employment, posted an advance of' 0.8 percent during March. Southwestern nonagricultural wage and salary employment in March was 4'.5 percent more than in the same month last year and there were broadly based gains in both the manufacturing and the nonmanufacturing sectors. However, the contruction industry registered the most impressive showing, with a 12.7percent gain over a year earlier. . R.egistrations of new passenger automobiles for March established a new high in four major l11arket areas in Texas, totaling 16 percent ~ove February and 19 percent higher than in arch 1964. During the first quarter of the ~ar, combined registrations in the Dallas, Fort 1 orth, Houston, and San Antonio areas were 5 percent above the same period in 1964; OUston paced the gain with a 17-percent rise. a Di T~e seasonally adjusted index of Eleventh stnct department store sales in March at 119 ' I percent of the 1957-59 average, declined ~ 1110st 5 percent from the February record. Umulative sales during the first 3 months of 1965 - also adjusted for the change in Easter dates - were 1 percent lower than in the same months of 1964. Stimulated by heavy buying for Easter this year, sales in the 4 weeks ended April 24 were up 11 percent from the comparable period in 1964. It is likely that the adjusted index of April sales will be at an alltime high for the month. Soil moisture in the District is generally improved over a year ago. The planting of spring crops was delayed because of cold weather and wet fields, but increased field activity and more open weather have about placed seeding on a normal schedule. Range and pasture grasses have responded to the warmer weather and are now providing grazing. The calf and lamb crops are improved over last year, and livestock are generally in good condition. The indicated production of winter wheat in the five southwestern states is placed, as of April 1, at 15 percent above the 1964 output. The prospects are varied, as shown by the 21percent increase in Oklahoma and the 22-percent decrease in Arizona. Texas and New Mexico have prospective increases of 8 percent and 9 percent, respectively, but Louisiana prospects are indicated to be 7 percent lower than last year. ~------------------------------------------------------------------, hew 11le11lbe.e bahl~ The Texas National Bank of Dallas, Dal1as, Texas, a newly organized institution located in the territory served by the Head Office of the Federal Reserve Bank of Dal1as, opened for business April 16, 1965, as a member of the Federal Reserve System. The new member bank has capital of $300,000, surplus of $300,000, and undivided profits of $165,000. The officers are: Martin C. Lovvorn, Chairman of the Board and President; F. Patrick Whelan, Executive Vice President; Thomas J. Hayman, Vice President; and Wm. T. Buckner, Vice President and Cashier. business review / may 1965 11 STATISTICAL SUPPLEMEN1i to the BUSINESS REVIEW May 1965 FEDERAL RESERVE BANK OF DALLAS CONDITION STATISTICS OF WEEKLY REPORTING MEMBER BANKS IN LEADING CITIES RESERVE POSITIONS OF MEMBER BANKS Eleve nth Federal Reserve District Eleventh Federal Reserve District (Averages of daily figures. In thousand. of dollars ) (In thousands of dollars) ~ Apr. 28, 1965 Mar. 31, 1965 Ap r. 29, 1964 Net loans ................................. . Valuation roserves . ... .............. ......... Gross loans ......................... ... .... 4,712,225 82,938 4,795,163 4,648,285 82,887 4,731,172 4,203,534 75,3 09 4,278,843 Commercial and industrial loans .............. Agricultural loans •••••..•.•••..••.•••.•.••. 2,200,848 60,392 2,188,413 58,537 2,031,786 46,289 13,494 40,412 4,274 46,165 274 59,595 2,380 291,812 2,413 291,126 3,457 245,927 122,91 7 268,993 182,624 8,267 393,792 1,209,232 2,089,523 129,357 276,736 134,923 9,173 387,604 1,202,451 2,107,658 98,318 264,495 97,727 2,225 353,601 1,075,149 2,094,540 1,302,202 118,999 0 1,337,3 90 143,975 0 1,354,890 108,242 6,642 Other securities .•••. ••.... ......•. •. . .... . Cash items In process of collection .............. Balances with banks in the United States .. .• •. . .• Balances with banks in foreign countries • • ....... Currency and coin .•. ........ ...••••..... . . . . Reserves with Federal Reserve Bank ••......•... Other assets •...... ...•••... . . .........• •.. 178,446 618,534 386,223 787,321 723,891 457,059 3,719 69,613 487,281 304,361 176,777 625,124 391,514 770,268 771,084 514,640 3,106 63,623 544,5 10 288,883 104,567 773,747 361,692 739,650 645,645 456,034 3,611 66,209 500,193 247,534 TOTAL ASSETS ••••..••..•••.•••.••...•.. 8,847,672 8,941,789 8,217,300 Item ASSETS Loans to brokers and dealers for purchasing or carrying: U. S. Government securities ........ ........ Other securities ... .................... . . Other loans for purcha sing or carrying : U. S. Governm ent securities .•... . .......... Other securities .............. . . ..... ... . loans to nonbank flnancial institutions: Soles Anance, personal flnance, etc .......... Other ••••.••••••..••.••.•. . ••...••.... Loans to domestic commercial banks •.......... loons to foreign bonks .•... ••.... ....... . . . Real estate loons ...... ..... ...... .. ..•.... Oth~r loans ••.• •••••. ••.•• • • •.• •• . ..••... Total investments •••......•... •••. .... .... ... Total U. S. Governme nt securities .•.... . . ..... Treasury bills . .••• .. ........ ..•.. . . ... .. Treasury certlflcates of ind e bte dness .... .... Treasury notes and bond s maturing: Within 1 year •••....... •..••......... 1 to 5 years •••. •.• • •••••••••••.••..•• After 5 years •• •••• •.•..•••• ••••••.••• lIA8Il1T1ES AND CAPITAL ACCOUNTS Item 1,193,617 1,018,918 174,699 1,153,456 40,161 32,747 7,4 14 1,192,999 1,016,361 176,638 1,150, 184 42,815 32,045 10,770 1,145,564 982,370 163,194 1,104,895 40,669 23,916 16,753 - E)eventh Federal Reserve District (Avoroges of dai ly figures. In millions of dollars) GROSS DEMAND DEPOSITS Country cily bonks banks Total clly bank. Counlry bonk. 8,317 8,359 8,582 8,683 8,852 9,042 8,582 8,278 4,051 3,944 4,098 4,120 4,213 4,271 4,006 4,049 4,266 4,415 4,484 4,563 4,639 4,771 4,576 4,229 3,783 4,470 4,627 4,655 4,713 4,881 4,984 4,894 1,854 2,220 2,274 2,269 2,288 2,399 2,438 2,462 1,929 2,250 2,353 2,386 2,425 2,482 2,546 2,432 2,465 183,485 327,796 5,661 176,322 328,490 2,294 160,743 269,738 October .. . Nove mber .. December . . 1965 , January ...• Feb ruary ... March ..... 979,742 16,120 68,549 2,933,351 1,108,075 18,131 82,065 2,912,785 943,272 16,272 70,386 2,625,660 1,284,586 1,249,951 1,283,212 1,224,814 1,134,279 1,122,078 500 3,594 381,767 500 3,594 389,357 500 3,899 357,375 Capitol accounts •• . •...•.................... 10,513 2,440 202,856 174,184 747,585 8,868 2,440 214,701 155,403 730,785 5,629 1,900 174,543 161,031 705,641 TOTAL lIA81l1TIES AND CAPITAL ACCOUNTS 8,847,672 8,941,789 8,217,300 Rese rve ---CONDITION STATISTICS OF ALL MEMBER BANKS Eleventh Federa l Reserve District (In millions of dol lars) ~ lIem Mar. 31, 1965 Feb. 24, 1965 Mar. 25, 7,773 2,592 1,606 933 198 1,029 5 671 344 7,0 17 267 8 1'477 '906 181 ASSETS loans and discounts .•.... ............... U. S. Governmen t obligations ............. Other securities •......... . ... •....... . • Reserves with Fed e ral Reserve Bank •..•.. .. Cash in vault e .•.. •..... ........ .. . .... Bolances with banks in the United States... . Balances with banks in foreign countriese .... Cash items in process of collection ... ..... . Other asse tse •••....•......... '" ..• ... 7,827 2,583 1,604 910 194 1,109 5 843 452 TOTAL ASSETse •••.• •..• • . •.••••.• . • 15,527 15,151 Dem and de posits of banks ............... Other demand deposits..•........... .••. Time deposits ..... .. .. .. .. .. ..•...... .. 1,333 7,407 5,088 1, 199 7,290 s.o19 Borrowings e .. . ... .... .......... . ...... Other liabilltiese ...... ................. Total capitol cccountse .. .. ... ..... ...... Tolal deposlls •.••..••.. ••. .....•• •.. 13,828 216 195 1,288 13,508 171 188 1,284 TOTAL l1A81l1T1ES AND CAPITAL ACCOUNTS" ..•••... .. . .••..•..•.. 15,527 15,151 lIA8Il1T1ES AND CAPITAL ACCOUNTS Item Apr. 28, 1965 Mar.31, 1965 Apr. 29, 1964 Total gold certiflcote reserves ••... •.• ... • ... Discounts for memb er banks •.. . .••......... Other discounts and advances . • .... •. ..... . U. S. Government securities • . •.. . • .......... Total earning assets .••... .......•..•...... Member bank reserve deposits ............. . federal Reserve notes In actual circulation ...•. 327,471 2,210 870 1,617,212 1,620,292 853,322 1,079,324 374,857 1,770 870 1,627,078 1,629,718 908,883 1,070,710 548,593 54,572 285 1,290,768 1,345,625 847,234 963,494 ---- Re se rve Total 4,550,425 3,087,720 (In thousands of dollars) = TIME DEPOSITS Date 4,928,115 3,209,371 2 560,243 436,874 123,369 524,209 36,034 1,201 34,833 GROSS DEMAND AND TIME DEPOS ITS OF MEMBER BANKS 4,789,696 3,211,539 CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS 589,755 454,404 135,35 1 551,283 38,472 973 37,499 Tota l rese rves held ............ With Fe deral Res erve Bank .... Currency and coin ........... Require d reserves .. ........... Excess reserves .......... ..... Borrowings . ... . ... . .......... Free reserves . ...... ... ....... Total demand deposits ••••.• ••••.••• ••• • ••• •.... . ... 581,961 448,835 133,126 546,670 35,291 1,317 33,974 All MEM8ER 8ANKS 1963, March .•• •• 1964, March ••••. Bills payable, rediscounts, etc .... . . '" 585,321 545,496 39,825 580,686 4,635 22,715 -18,080 Total reserves held ............ With federal Reserve Bank .. .. Currency and coin .... ....... Required reserves ........ ..... Excess reserves •.... . ......... Borrowings .......... ...... ... Fre e reserve s..... ••........ . . 7,176,085 All olher liabilities •••••••••..•••...••..•.•.•• 603,244 561,957 41,287 598,901 4,343 31,072 -26,729 Mar. 3, 1965 COUNTRY 8ANKS 7,840,900 Individuals, partnerships, and corporations Savings deposits ••... ............ . ••. . Other time deposits .... .. .... .......••. Foreign governments and offlcial institutions, central bonks, and international institutions .• U. S. Government, including postal savings .•. States and political subdivisions ... . . ••• .... Banks in the United States, including mutual savings banks •... • •.••.. .. . ...•. Banks in foreign countries ............... .. 611,656 570,083 41,573 606,786 4,870 31,430 -26,560 Total rese rves held ...... . ..... With federal Reserve Bank .... Curr ency and coin ........... Require d reserves ....... . ..... Excess reserves . .. ............ Borrowing s........... ... ..... free reserves ................. 7,723,047 Total time and savings d eposits . •.. ..••...... 4 weeks ended RESERVE CITY 8ANKS Total deposits . . .. .. .......... .. •.... .... ... Individuals, partnerships, and corporations .... Foreign governments and offlciol institutions, central banks, and international institutions .. U. S. Government ..•• ........ .. . .... .... States and political subdivisions ... •••...... Banks in the United State s, including mutual savings banks .••.....•••..• ••.•. Banks in foreign countries ...... . ....• • . ... Certifled and off1cers' checks, etc ..... ..• . .. 4 weeks endo d Apr. 1, 196~ 5 weeks ended Apr. 7, 1965 e- Estimated. 19~ 1 ,08~ - 674 414 ~ - 1 243 7'180 4:472 1 2,89~ - 12 201 1,22 0 ~ ~ BANK DEB ITS, END-Of-MONTH DEPOSITS, AND DEPOSIT TURNOVER (Dollar amounts in thousands, seasonal ly adjusted ) ====================================================== DEBITS TO DEMAND DEPOSIT ACCO UNTS' DEMAN D DEPOSITS' Percent change Annua l rate of turnover March 1965 from March 1965 3 months. Standard metropolitan (Annual-ra te f ebruary March 1965 from March 31, March February March statistica l area bas is) 1965 1964 1964 1965 1965 1965 1964 14 -5 10 6 -7 7 197.3B3 31.433 BB.092 24.B 19.3 1B.B 22.9 lB.B 17.9 20.2 17.4 16.9 _ ~1~1~IN;;-A~~'A~~:u~ :::::s-o ~-;o-·e-·.-·:-:-:-:.-·:-:-:-::-:-:-:-::-:-:-:.-.:-:-:-::-:-:-:-::-:-:-:$:-:-~::-:~-::~:-::~-:~::~-----:-----2-:~:-----22-;----:-$--:-1~::~::-~::::-;~----:~:-;~-::~:---~~~'::..:.~---...:.~..~...:.:~:......:. NEW Shreveport.... ... ....................... 4.905.372 609.7BO 1.6B3.096 2 3 B~~~::'.~~I\·~ort ~rthur .... .. . : .. .. .. .. .. .. .. .. . Corp Che .Harling en.San Benito.............. .. 4.446.2BB 1.266.624 _~ 11 15 11 10 ~ 2~~:g~~ 174.414 22.0 :1:!!i.!Y 11 51.22B.924 463. 104 3.275,7B4 =1 1! laredo.................... . ....... .. . .... . lUb bock " .. .. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. . Midl an d " .... .. .. .. .. .. .. .. .... .. .... ... .. . 9 9 1~ 12 10 TeXAS~EX.ICO , Roswe ll ' ...... ... .... . . . ...... ... .. .. . Abilene :~~i~~I ~:·:: : :::::::::: : ::::::::::::::: : : ::: : ~o[ul;:s~t·!o n~ELL ~:m:m . 1 -3 ~ f~1:~~t~~~·:~~~~:~~~~~~~~~~~~:~~~~~~~~~~::~: 1~:HHH ~khi~:~~il;::::::::::::::: : ::::::: : ::::: : :: tm:m TYler (Texas·Arkansas ).. ........ .... .. .. .. B58.828 ~nters...... .. .................. .. ....... $ 183.626.328 T ~ Deposits .. COunt y . l~ If ~ :~ -~~ -~ " - l~~:~~~ ~~:~ ~~:~ ~g:$ ~~:~ ~f:~ ~~:~ "lmll In III 111 11~:m n:~ n~ ~~:~ 1.7B5.206 27.B40 ~ 21.B 29.2 16.7 19.7 29.4 17.3 29.0 15.7 -l~ 1~ J~:~~~ gg:m H:! l ~:g lH l ~:* ~~:~ 15 14 $6.640.631 27.9 27.7 25. 1 1~ . . 1~ If 1~ l~:~ m:m lH 1~:~ l~:~ . . . bof, in diVidua ls, pa rtners hip s, and corporation s and of sta tes and politica l subdivISion s. aSI S. DEPARTMENT STORE SALES (Percenta go change In retail value ) INDEXES OF DEPARTMENT STORE SALES March 1965 fro m Eleve nt h Federa l Reserve District (Daily ave rage sales. 1957·59 = 100 ) ~================================== 196-- Date adjusted Seasonally Unadjul te d 4' ~~~i~-·~-;-:.-::-:-:-:-:-::-:-:-:-:-::-:-:-:-:.-::-:-:-------l~~-~--------------l-~-g------- 1965danuar er.. ................ .. .... 129 ~~::::: : :::::::: :: ::::::: 223 :~~ m February Area 1965 Total Eleventh District •• . . • .. . . 26 31 26 20 23 35 28 26 26 Corpus Christi ..• • ... •• . . .. . . . Da llas .. ....... . .......... .. EI Paso ........... .. .. · · .. · • Housto n .•.... . ..••..• •• . .. . San Antoni o . • .. . .. .. . • ....• • Shreveport, La . • •. . ... . .• .. .. Waco • • .. . . . ... . • . . • . .. . • •• Other cities .. • ...•. . .• •. .. .. March 1964 3 months, 1965 from 1964 o o -4 6 -1 1 - 1 5 -4 o -8 -2 -3 -5 -3 -1 0 -8 -7 NONAGRIC ULTURAL EMPLOYMENT five Soulhweslern Sta tes INDUSTRI AL PRODUCTI ON ~~~~(S~e~a~so~n~a~lI~y~a~d~j~Us~te~d==in=d=e=x=e'=.=1=9=5=7=.5~9=====1=0=0~)============== ___Area and t. March Feb. Jan . March TeXAS_________y_P_e_ o_ f_ i_n_d e_x________l_9_6_5~ p ______l_9_65_______1_96_5_r______l_96_4_r___ Tota l indUstria l rod . uchon •. • . . . . . Manu factUri p Durable ng . . . ... •. ....... M·~ondura·bi ..... . ... . ..... . Irllng . e . . . . . . . .... . . . . U NlreD STATes· · .. ·· .. · . . ...... . TOlol indu.t . Manufa~:~~il production . ..... . . Durable ng .... . . . . ..... . . .. .~ondura·b·l · . . . .. • .... . ... • 'V\ln lng e . . . ' " ... . .... . Utillties'···· · ···· · · . . . . . ... . ~ .... ... . r_ R: rellmi nary 130.4 154 .4 15 1.4 156.6 99.0 131.0 153.0 150.8 154.6 102 .1 129.5 150.8 149.2 151.9 101.6 124.3 144.7 139.1 148.8 97.6 140 .1 141.8 144.0 139.0 11 2.4 155.5 138.9 140.5 142 .3 138.3 11 2.4 155.0 138.2 139.8 141.9 137.1 112.1 154.3 129.0 129.9 130.0 129.8 108 .8 144.8 - - - - - - - - -- - -- - -- - -- - -- SOUR eVised. . CES: Boord of G Feder I R ov ornors of the Federa l Rese rv e System. a eservo Bank of Dallas. - -- - - - -- ' Percent change N umber of persons Type of employment Total nonagricultura l wage and sa lary workers .• Manu facturing • • ...••... • Nonmanu facturing . .. ..... Mining ••... . ....... .• Construction ... . ....... Tra nsportation a nd public utilities ••.. ..• • Trade . .. • . •.. .. . .... • Finance ••.• . .....•...• Service .. . .. . ...•... . . Government ... .... . . .. Mar. 1965 from Ma rch 1965p Feb. 1965 March 1964r Feb. 1965 1964 5.018.000 878.900 4.139.100 234,700 343.300 4.978.000 874.200 4.103.800 233.800 332.800 4.803.300 845.900 3.957.400 229.600 304.700 0.8 .5 .9 .4 3.2 4.5 3.9 4.6 2.2 12.7 390.800 1.186.200 253.300 730.600 1.000.200 383.200 1.176.300 253.300 728.500 995.900 387.500 1.143.500 244.000 693.500 954.600 2.0 .8 .0 .3 .4 .9 3.7 3.8 5.3 4.8 Mar. 1 Arizona, Lo uisiana, New Mexico, O kla homa, and Texas. p Preliminary. r - Revi sed . SOU RCE: State emp loyment agencios. 3 VALUE OF CONSTRUCTION CONTRACTS WINTER WHEAT PRODUCTION (In millions 01 dollarsl (In thousands 01 bushe ls) January-March Area and type FIVE SOUTHWESTERN STATES ' •••• .••. •.••• ••. Re sidential building •.. • ..• Nonresi dential building . ... Nonbuil ding construction .. . UNITED STATES ••.••••••.• • Res idential building •.. .... Nonresidential building .... Nonbullding construction .. . March 1965 Feb. 1965 449 192 136 121 4,209 1,877 1,379 953 387 149 97 141 3,223 1,299 1,060 863 March 1964 ==============================================~~ 1965, Averag e indicated 1965 1,285 505 420 361 10,531 4,443 3,588 2,501 434 213 114 106 4,215 1,991 1,2 52 972 1964 1,239 579 361 299 10,725 4,784 3,475 2,466 Area April 1 1964 Arizona .... .... . .......... . Texa s . . .. ..... .. .......... . 1,260 1,540 3,020 117,062 66,592 1,617 1,650 2,772 96,623 61,848 1,61 1 952 4,907 93,838 61,041 Total .................... . 189,474 164,5 10 162,349 louisiana . .... .... .. .•...... New Mexico ..... ....... ... . . Oklahoma .••.. . ... ... .••... 1959-6':"'- ~~-----------------------------------------~ SOURCE : U. S. Dopartment 01 Agriculture. Arizona , Louisiana, N ew Mexico, Oklahoma, and Texas. 1 NOTE . - De tail s may not add to total s because of rounding. SOURCE : F. W. Dodge Corporation. MARKETED PRODUCTION OF NATURAL GAS ======================================~~ DAILY AVERAGE PRODUCTION OF CRUDE OIL In million s of cubic fe ot (In thou sands 01 barrels) Percent chang e from March 1965p Area ELEVENTH DiSTRiCT ••••••.• Texas .................. Gull Coa st ••••••.••.•• West Texas ........... East Te xa s (proper) ••••• Panhandl e .. , ......... Rest of State ...... .... Southeastern New Mexico .. Northern loui siana ... .. .. . OUTSIDE ELEVENTH DISTRICT UNITED STATES ........ . .. . p - 3,266.3 2,774.9 528.5 1,230.8 113.1 103.2 799.3 309.8 181.7 4,606.5 7,872.8 Fe b. 1965p 3,303.8 2,804.4 536.9 1,245.8 113.2 103.5 805 .1 309.6 189.8 4,553.1 7,856.9 March 1964 Feb . 1965 3,203 .9 2,758.6 535.2 1,235.9 124. 1 107.6 755.8 285.4 159.9 4,557.5 7,761.4 -1.1 -1.1 - 1.6 -1.2 -.1 -.2 -.7 .1 -4.3 1.2 .2 March 1964 1.9 .6 -1.3 -.4 -8.7 -4.1 5.8 8.5 13.6 Sea sonall y adiusted ind.~ (1957- 59 = 100.!...--Fourlh Fourth Third Fourth Thi rd Fourth quarter quarter qua rter quarte r quarter Area 1964 1964 1963 1964 1964 louisiana ....... New Mexico . .... Texas .......... 1,114,400 241,300 299,600 1,650,000 966,200 212,900 297,000 1,574,400 1,039,800 216,700 247,100 1,584, 100 203 128 187 119 193 126 199 121 Total ... ..... . 3,305,300 3,050,500 3,087,700 144 145 Oklahoma •• •• •• quO rtt ( 1963 ~ 190 III III 114 13l ~ SOURCES: U. S. Bureau of Mines. Fedoral Rese rve 8ank 01 Dallas. 1.1 1.4 BUILDING PERMITS Preli mina ry. SOURCES: American Petroleum Institute . =======================================~ U. S. Bure au of Min es. VALUATION (Dollar amounts in thousand~ federal Reserve Bank of Dalla s. Perc ent change March 1965 NUMBER NATIONAL PETROLEUM ACTIVITY INDICATORS (Seasonally adiusted inde xes, 1957-59 Indicator CRUDE OIL RUNS TO REFINERY STILLS (Daily ave rag e) • •• ••.•.. •••.•• DEMAND (Dail y averag e) Ga solin e ..... ..... . . .. .... . . .. .. .. . Kerosene ..• .. ..•.. .• ..•.•....•.. , . Distillate fuel oil ...... .............. . Residual fuel oil ..... .. . . . . ... .. . ... . Four refl ne d products .•. ... . ....... March 1965p Feb. 1965p March 1964 11 4 111 112 114 176 122 103 116 117 14 1 11 9 101 115 113 138 108 89 108 Gasoline ............. .. . ........ ... Kerosene . •.... .. .................. Distillate lue l 011 •• • • .•..•• •. •.. •• .... Resi dual luel oil .•. •••••. . •..• . ..•• .. Four refln ed products .••........... p - Preli minary. SOURCES: American Petroleum Institute. U. S. Bureau 01 Mines. Federal Reserve 8ank 01 Dallas. 4 1965 March 1965 ARIZONA Tucson .... .. .. LOUISIANA 785 1,820 $ 4,030 Shreve port ••. • 304 901 1,499 4,818 30 -28 17 98 140 339 280 419 2,039 494 574 10 2,319 260 104 167 149 1,329 246 197 233 440 890 737 1,113 5,249 1,260 1,679 197 5,661 627 264 381 352 3,182 626 400 927 1,746 5,177 1,308 2,827 15,554 3,906 3,433 463 28,264 4,747 1,010 1,615 353 5,525 2,310 946 3,335 9,237 12,360 6,368 7,637 41,161 15,500 12,327 1,103 73,704 11,790 4,243 2,856 1,057 13,597 6,241 3,177 -45 -51 51 -38 4 5 - 8 -21 59 7 14 42 136 -8 28 14 74 -29 -55 - 12 -4 53 -15 -26 -14 - 32 - 11 12 58 132 -6 -25 68 24 _2 _22 _35 41 8 _18 34 _4 _37 _16 _17 S 63 _A9 _27 A4 26 116 159 110 72 111 114 148 113 68 110 108 154 124 80 113 Total-19 cities .. 10,253 26,012 $85,640 9 -9 TEXAS Abilene ••••... Amarillo .. .... Austin . ....... STOCKS (End 01 month) 3 monthSI 1965 Iro~ 3 mos. Area = 100) from March 1965 Beaumont •..•• Corpus Christi.. Dallas ... .. .. . EI Pa so • ..••.. Fort Worth ••.. Galves ton .... • Houston ...... Lubbock •..•• . Midland •• .. •• Od essa ....... Port Arthur •. .• Son Antonio ... Waco . . ..... . Wichita Falls ... 3 mo s, 1965 $ 6,180 $236,691 Fe b. 1965 1964 273 44 Mar. 1~ _25 -~