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M O N T H

LY

V

8 * \

ST. LOUIS

L O U IS V IL L E

ewew
/

DISTRICT

~LITTLE R OLC K y '

M EM P H IS

F E D E R A L RESERVE BANK
OF ST. LOUIS

• P . O . B O X 4 4 2 • S T . L O U IS 6 6 , MO.

Page

The Federal Funds Market

Business and Financial Developments

The Agricultural Situation




8

This issue released on April 26

The Federal Funds Market
T h e FEDERAL FUNDS MARKET consists of
the borrowing and lending, primarily by member
banks, and usually for a single day, of deposit bal­
ances at the Federal Reserve Banks. (Bankers and
other participants in the market through custom refer
to such transactions as buying and selling.) Activity
in Federal funds takes place within the broader
framework of the money market which consists of
the supply and demand for “money” and close sub­
stitutes used by banks to maintain their liquidity posi­
tions. Banks use the Federal funds market to obtain
an immediate credit with their balances held at the
Federal Reserve. Operations in Federal funds re­
presents one alternative for banks in adjusting to
temporary changes in their reserve position.1

Functioning of the Federal Funds Market
The market in Federal funds is primarily an inter­
bank market with about 90 per cent of the activity
conducted by commercial banks throughout the coun­
try. This market is truly national in scope with banks
in any financial center dealing with banks in any
other center. The apex of the market is in the large
New York City banks. The largest flows of funds are
among New York City banks and between the New
York City banks and banks in other centers. The
activities of Government security dealers are also cen­
tered in New York City.
The growth in the Federal funds market has had
the effect of drawing together various financial in­
stitutions, and enabling individual banks to adjust
more easily to random fluctuations in pressures on
their reserve positions. The Federal funds market
enables the banking system to utilize a larger share of
total reserves by minimizing the need for excess
reserves.

Alternative Methods of Adjusting Reserve
Positions
Banks have several alternatives for adjusting to
short-run changes in their reserve positions. Banks
wishing to add to their reserves at the Federal Re­
serve may draw on other cash balances, borrow from
Reserve Banks, sell short-run Government securities,
or borrow Federal funds. Banks which find them­
selves with a temporary excess of reserves may repay
1 For a more extensive study of this subject see, Board of Govern­
ors of the Federal Reserve System, The Federal Funds Market —
A Study by a Federal Reserve System Committee, Washington,
D. C., May 1959.

Page 2




indebtedness, buy short-term securities, or lend in
the Federal funds market.
Trading in the Federal funds market has several
advantages over the other methods of adjusting to
temporary changes in reserve positions. For the lend­
ing bank, the only feasible alternative frequently is
to allow excess reserves to remain with the Federal
Reserve and thereby forego any return on that money.
Since banks are profit-maximizing institutions attempts
will generally be made to put this money to work.
For the borrowing bank the Federal funds rate may
be below the discount rate and thus offer a cost ad­
vantage. Even if there is no cost advantage, borrow­
ing in the Federal funds market is a good alternative
to borrowing from the Federal Reserve because of a
desire to maintain contacts in the money market and
to remain free of indebtedness to the Reserve Bank.
Also, many bankers would rather borrow from another
commercial bank that has excess reserves, giving the
interest payment to this bank.
There are several factors which preclude a great
many banks from trading in the Federal funds mar­
ket. Since it is not economical to deal in small
amounts, the normal unit of trading is $1 million. For
most banks then, excesses and deficiencies of re­
serves are generally too small to be traded. The
legal restrictions on member bank lending and bor­
rowing pertain to Federal funds transactions and
therefore present an additional impediment to small
banks operating in this market.2
The advantages in using the discount privilege are
that an exact sum can be borrowed and there is no
legal limit as to the amount of the transaction. Fur­
thermore, for member banks that borrow only oc­
casionally the amounts are readily and easily avail­
able. Most banks which are active in the funds mar­
ket resort at times to the discount window particu­
larly when the supply of Federal funds does not match
the demand, or if the morning estimates of their re­
serve positions prove to be incorrect.3 Borrowing
2 Unsecured lending of Federal funds to any one borrower may
not exceed 10 per cent of the lending .bank’s capital and surplus.
The amount borrowed may not exceed the borrowing bank’s
capital stock. The use of the Federal funds market is, therefore,
confined to larger banks.
3 The amount of reserves needed to meet the requirements at the
close of the day are based on the day’s deposits at the opening of
business. Hence, required reserves are generally known in the
morning and banks have rough estimates of what their reserve
balance will be for the day by late morning. Banks borrow and
lend on the basis of these early estimates. Since these estimates
are not always correct, the anomaly has existed of a bank both
borrowing and lending Federal funds or lending Federal funds
and discounting at the Federal Reserve the same day.




Correction of Footnote 2 , Page 2 , re:

"Federal Funds Market''

Such legal restrictions are fixed by the statutes of the authority
chartering the "bank. A national bank may not lend an amount greater than
10 per cent of its combined capital and surplus to any one borrower. Neither
may it become obligated for borrowed money in an amount greater than 100 per
cent of its capital plus 50 per cent of its surplus. Both rules are subject
to exceptions not generally relevant to Federal funds transactions. Practi­
cally all state statutes impose some similar "one borrower" limitation upon
state banks, but not all place a restriction upon the amount of money a
state bank may borrow.

from the Federal Reserve is the ultimate source of
credit for member banks.

accurately changes in the daily reserve position of
money banks.

For very short-term adjustments dealing in the se­
curities market is usually an undesirable alternative
for two reasons: 1) fluctuations in the price of securi­
ties may result in losses, and 2) the transaction cost
involved in buying and selling securities is higher
than for Federal funds. For these reasons banks do
not generally resort to the securities market to offset
temporary changes in their reserve position. In
addition, during extended periods of monetary re­
straint, the stock of short-term securities may become
depleted at some banks.

Development of the Federal Funds Market

Determinants of the Federal Funds Rate
Since borrowing from the Reserve Bank is an alter­
native to borrowing in the Federal funds market, the
discount rate usually sets the upper limit of the Fed­
eral funds rate. There is presumably no lower limit
on the Federal funds rate, but at very low rates the
supply of funds dries up since banks will not invest
in this market if returns are not sufficient to justify
the time in negotiating a transaction. Between these
limits the rate will fluctuate depending upon the dis­
tribution of excess reserves, Federal Reserve open
market activity, Treasury activity in the securities
market, and other money market forces.

A banking system composed of a large number of
independent banks contributed to the development of
the Federal funds market. An excess or deficiency in
a member bank’s reserve account, represents a cost,
either in the form of non-earning asset or a penalty
imposed by the Federal Reserve. If banks had
branches throughout the country, a large part of
these imbalances would be adjusted internally.
The Federal funds market developed spontaneous­
ly, having its origin in New York City during the
early 1920’s. Markets developed in other financial
centers during this period, but were of less significance
than the New York market. Only a limited amount of
trading in Federal funds occurred between banks in
different financial centers.
The Federal funds market dried up during the
1930’s for two reasons: 1) most transactions were
large overnight, unsecured loans, and bank solvency
became a real problem during this period; 2) a large
majority of banks found themselves with excess re­
serves with the result that the demand for Federal
funds fell, and the rate declined to Vi-to-Vs of one per
cent. At this rate many banks felt that revenues in­
volved in such activities did not justify dealing in
this market.
During World War II, and until the Federal Reserve-Treasury “accord” of 1951, banks made most of
their reserve adjustments in the Treasury bill market
rather than in the Federal funds market. The Fed­
eral Reserve stood ready to purchase or sell all Treas-

The impact of the current Treasury bill rate on
the Federal funds rate is less direct. In the very
short run the bill rate may have little relationship to
the funds rate because transactions in bills are not
usually a suitable alternative for daily reserve adjust­
ments. If, however, a wide dis­
D a ily Rates on Federal Funds a n d Discount Rate
crepancy in the rates exists over
Jan u ary 4 through A pril 14,1960
a prolonged period, the substitu­
P
e
r
C
e
n
t
B u s in e s s D a y s
tion of the one for the other
tends to bring the rates closer
together.
D isc >u n t R a te
The Federal funds rate indi­
...
........ I
cates the supply and demand
1 Ilf” I.
condition for one-day funds.
'
Tj
If
It
f
However, there are certain limi­
tations on using this rate as an
indication of conditions in the
money market. During periods
of tight credit, when there is
appreciable borrowing from the
L E G E N D - F e d e r a l F u n d s R a te s
Federal Reserve, the Federal
funds rate is apt to remain at
In d ic a t e s N o F lu c t u a t io n in th e R a te o n T h a t D a y
the discount rate. In times of
H ig h
|
|
credit ease the Federal funds
E ffe c tiv e - Th e R a te a t W h ic h t h e L a r g e s t V o l u m e o f T r a n s a c t i o n s W e r e C o r i d u c t e d
Low
j
|
rate will fluctuate below the dis­
J a n u a ry
F e b ru a ry
M a rc h
A p r il
count rate and will reflect more




Per C en t

..

Page 3

ury bills at a relatively “fixed” discount rate. With
the accord, the Federal Reserve discontinued its
policy of pegging the bill rate, resulting in higher
yields and wider fluctuations. The generally higher
level of interest rates, which has prevailed since
the accord, encouraged banks to operate with less
excess reserves. This caused banks to make more fre­
quent adjustments in their reserve positions and made
trading in Federal funds more profitable. Activity
in the Federal funds market since the accord has in­
creased significantly both in volume of transactions
and in the number of participants.
Growth in the market for Federal funds has been
the result of many other factors; one was the rise of
new financial centers. Although the New York City
“money” banks remained the largest dealers in Federal
funds, banks in other financial centers became active
and important participants in the market. Growth in
the size of banks increased the number of participants
in the market for Federal funds. A few of the larger
banks in the financial centers instituted the procedure
of accommodating correspondent banks by standing
ready to buy or sell Federal funds at the market rate
and often in units of less than $1 million. This has
aided in making a daily market for Federal funds
and has brought smaller banks into the picture. (See
Table I, Transactions in Federal Funds, Selected
Periods.)
The increased importance of short-term Govern­
ment securities in the money market brought dealers
in these securities into the market for Federal funds.4
Transactions in Government securities had for a long
time been conducted to some extent in Federal funds,
but as the market for Federal funds expanded this
became a condition of sale. Since nonbanking in­
stitutions use short-term Government securities as an
4 Dealer activity in Federal funds is centered in one commercial
bank in New York City. This bank makes or receives payment
for transactions settled in Federal funds for its dealer customers
in the form of debits or credits to its reserve account at the Fed­
eral Reserve Bank of New York. The bank keeps a record on
each dealer’s account and if the debits and credits do not balance
out the dealer settles its account with the bank at regular
intervals.
The larger and more active dealers try to come out as nearly
even as possible with the clearing bank each day by buying and
selling Federal funds on the market. Dealers have extensive
contacts with banks and nonfinancial business corporations
throughout the country, and generally only a small debit or
credit is carried over by the clearing bank. The smaller dealers
rely to a much greater extent on the clearing bank, and at times
this bank will, if necessary, borrow from the Federal Reserve
Bank in order to meet dealer needs for Federal funds.
Dealers attempt to borrow Federal funds outside New York
City as bank loans to dealers by New York City banks are gen­
erally made in clearing house funds. The rate charged by the
New York City banks is also higher than the cost of financing
in other cities. The New York City banks stand ready to make
such loans at all times, and, therefore, are an important source
of dealer credit during periods of tight money.

Page 4




Table I
TRANSACTIONS IN FEDERAL FUNDS, SELECTED PERIODS
Number of participants

Period

Average daily volume
of transactions
(In millions of dollars)

1925-32 ...
1950-53 ...
1955-57 ...
First Quarter
1960E ...

Banks1

Dealers in
acceptances and
Gov’t, securities

100- 250
350- 450
800-1,100

30- 40
75-100
125-200

14
18

1,150- 1,750

250 - 350

18

10

1 Includes foreign agencies.
E—Estimated by Federal Reserve Bank of St. Louis, based on daily activity
of reporting money market banks, and Wednesday borrowings (other
than from Federal Reserve Banks) of the weekly reporting banks.
Source: Board of Governors of the Federal Reserve System, The Federal
Funds Market — A study by a Federal Reserve System Committee,
Washington, D. C., May 1959.

alternative to holding cash, these firms at times enter
the Federal funds market.
In periods of declining interest rates, dealer activity
in Federal funds has an added stimulus. With falling
yields on securities, Government security dealers are
more anxious to take a position and hence are more
active in the Federal funds market. During periods
of ease the rate on Federal funds is more likely to be
below the discount rate, tending to stimulate demand
for such funds.
The wire transfer facility of the Federal Reserve
System makes possible a more rapid transfer of funds.
Also, in 1950 an “interbank wire” was set up by com­
mercial banks and now links more than 200 banks in
60 principal cities. These developments have aided
bank use of the Federal funds market by facilitating
transactions and by enabling a more rapid dissemina­
tion of information as to the state of the market at
any given time.

Participation in Federal Funds by Eighth
District Member Banks
Within the Eighth Federal Reserve District about
25 District member banks have from time to time lent
or borrowed in the Federal funds market, and about
10 enter the funds market on a fairly regular basis.
The six largest, which account for the bulk of the
activity, are considered “money banks” and report
their daily transactions in Federal funds to the Fed­
eral Reserve. From December 1959 through February
1960 the six reporting banks accounted for 2 per cent
of the total borrowing and 3 per cent of total lending
by all reporting banks in the System. The average
share of the bank market in Federal funds accounted
for by Eighth District money banks was 2.5 per cent.
In contrast, the New York City reporting banks share
of the market during this two-month period averaged
39 per cent.

total District member bank bor­
rowing. Of the other sources of
bank borrowing during this sixmonth period, 39 per cent was
from the Federal Reserve. The
remaining 31 per cent represented
borrowing from correspondents,
Federal funds by nonreporting
banks, and borrowing from other
sources.

D aily A ve rage Borrow ings

L a te st d a t a p lo t te d : L a s t h a lf o f M a r c h

The relative importance of Eighth District banks
in the Federal funds market should be viewed with
the following points in mind: 1) the total assets of
Eighth District member banks account for only 3.5
per cent of all member bank assets, and 2) there is a
relatively large share of District banking assets in nonfinancial centers.

The Federal funds rate may fluc­
tuate from day to day and at vari­
ous times during the same day. Be­
cause the Federal funds market is
national in scope, Eighth District
member banks are not usually
placed at a disadvantage by being
far removed from New York City,
which has been the center of activ­
ity for Federal funds. Most Eighth
District transactions in Federal
funds during any one day have taken place at the
effective rate in the national market, i.e., the rate
at which the largest volume of transactions was con­
ducted.

Conclusion

Analysis of District data indicates the national
scope of the Federal funds market. From December
1959 through February 1960 the six reporting banks
traded Federal funds with banks in all other districts
and with security dealers and other institutions. The
largest proportion of the interdistrict trading was con­
ducted with banks in New York City, although a sub­
stantial amount of Federal funds was traded with
banks in the San Francisco and Chicago Districts.
Intradistrict transactions amounted to about 18 per
cent of the total volume of trading by reporting banks
in the Eighth District.

Increased activity in the Federal funds market has
taken place since 1950 primarily because of a rise in
interest rates. The development of the interbank wire
and the increased importance of financial centers out­
side New York City have contributed to the growth
of this market. The development of the Federal
funds market has provided larger banks with an addi­
tional alternative in adjusting to short-run changes
in their reserve position. The rate for Federal funds

Although Eighth District member banks account
for a relatively small share of the total trading in Fed­
eral funds, the funds market constitutes an important
source of member bank borrowing. From September
1959 through March 1960 average daily member bank
borrowing was estimated to be $77.7 million. Of this,
30 per cent was borrowed in the Federal funds mar­
ket by the six reporting money market banks. Dur­
ing an interval of several weeks, borrowing in the
Federal funds market accounted for over one half of

transactions.




is determined by the supply and demand conditions
in the money market with the discount rate generally,
but not necessarily, setting the maximum rate on such

Relative to their size, Eighth District banks are
active in the Federal funds market. These banks ac­
count for only a small portion of the total trading in
Federal funds, but such trading represents an import­
ant source of short-term borrowing. The pattern
of trading by Eighth District member banks with
banks in other parts of the country clearly points out
the national character of the Federal funds market.
Page 5

Business and Financial Developments
Industrial Production

E.

iCONOMIC activity declined from recent high
levels during March and early April. Industrial pro­
duction contracted slightly, largely because of a slack­
ening of schedules at steel and auto plants. Expen­
ditures for public and private construction were re­
duced from the February level with residential build­
ing accounting for most of the decline. Insured un­
employment in March increased, and was 10 per cent
higher than a year earlier, in part because of the bad
weather that interfered with outdoor work and even
closed factories in some places. Retail sales have
picked up since late March, however, with a marked
improvement in automobile and department store
sales. Prices of farm products and foods have risen
from the seasonal low reached in December, but
started to level off again in the first half of April.
Industrial prices have remained stable throughout
March and early April.
Interest rates on marketable securities dropped
sharply during most of March but recovered some­
what by April 19. From above 4 per cent at the
beginning of March, the rate for three-month Treas­
ury bills plummeted to 2.58 per cent during the
fourth week in March, and then rose to 3.03 per cent
by the end of the month. During early April the
rate continued to rise, reaching 3.30 per cent on
April 19. Other short-term rates, as well as rates on
Wholesale Prices
Per Cent

1 9 4 7 -4 9 = 1 0 0

S e a s o n a lly A d ju s te d

Per Cent

Per Cent

Latest d ata plotted: M arch , p re lim in a ry

longer term issues, also declined during most of
March but recovered some of the decline late in the
month and in early April.
Daily average total reserves of member banks in
March were down $165 million from February on a
seasonally adjusted basis. Federal Reserve open
market operations added $40 million to total reserves,
when adjusted for seasonal fluctuations. However,
this was more than offset by other factors, chiefly by
Yields on U. S. Government Securities
Per Cent

Per Cent

W e e k l y A v e r a g e s o f D a il y F ig u re s
1 l |
1 1 |
1 l
1 1 | 1 ' 7"

Per Cent

Jr

yw
\ f

3 -5 Y e a rs

y

n g^T e rm
B on ds

a

1 1

/
/

\

rr

V

_ T r e a s u r y B ills C -M o n th s

1 ,1........I..............

i

i

1

i

i

, 1 1 1 1 1

1959
L atest d a t a plotted: M a rc h

Page 0




Latest d a ta plotted: W e e k E n d in g, A p ril 22, p re lim in a ry

1960

,J

a $180 million net decline in member bank borrow­
ing, as banks apparently sold securities in order to
reduce their indebtedness to the Federal Reserve.

Member Bank Borrowings from Reserve Banks
Monthly Averages of Daily Figures
Millions of Dollars
Millions of Dollars

The nation’s money supply (seasonally adjusted) at
the end of March appears to have been higher than
at the end of February, despite the decline in total
member bank reserves. Commercial bank credit de­
clined, however, in the month as net bank sales of
securities were only partially offset by strength in
loans. From last July through February the money
supply (adjusted for seasonal influences) contracted
1.5 per cent. According to latest data available, the
turnover of money has continued to increase support­
ing a larger volume of spending.
Turnover of Demand Deposits
R e p o r tin g C e n te r s (o u ts id e s e v e n la r g e f in a n c ia l c itie s )
A n n u al Rate

A n n u al Rate

1954

1955

Latest data plotted:

1956

1957

1958

1959

1960

M arch , p relim inary

BANK

D E B IT S 1

Feb.
1960

(In
millions)

March
1959

S ix L a rg e st C enters:

East St. Louis— National
Stock Yards, III................... . . . $ 152.8
Evansville, Ind................. .
Little Rock, Ark......................
256.1
Louisville, Ky.........................
928.8
Memphis, Tenn...................... ...
901.2
St. Louis, Mo......................... ... 2,983.2
Total— Six Largest Centers. . . ... $5,398.3

+ 16%
+ 7
+ 12
+ 4
+ 5
+ 12

+
—
+
—
+
+

2%
4
2
2
6
7

+

+

4%

9%

O th e r R e p o rtin g Centers:

Latest d a ta plotted: J a n u a r y , w h ich in c lu d e s p r e lim in a r y F e b r u a r y d a t a

Money Supply
Billions of Dollars

Billions of Dollars

+ 12%
+ 12
— 1
+ 4
+ 1
-o — 7
— 1
— 12
+ 4
+ 6
+ 5
+ 4
— 4
+ 2
+ 12

+ 5%
+22
— 7
— 6
+ 8
+ 3
+10
— 4
+ 2
+ 3
+ 9
— 1
+ 1
— 1
— 2
+ 6

Total— Other Centers.......... ... $ 698.7

+

1%

+

1%

Total— 22 Centers.............. ... $6,097.0

+

8%

+

4%

Alton, III............................... ... $
Cape Girardeau, Mo..............
El Dorado, Ark......................
Fort Smith, Ark......................
Greenville, Miss....................
Hannibal, Mo.......................
Helena, Ark.........................
Jackson, Tenn.......................
Jefferson City, Mo...................
Owensboro, Ky......................
Paducah, Ky.........................
Pine Bluff, Ark.......................
Quincy, III............................
Sedalia, Mo.........................
Springfield, Mo......................
Texarkana, Ark......................

IN D E X O F

BANK

50.1
22.8
32.8
60.4
33.2
11.6
101.9
53.9
37.7
49.2
17.1
109.9
25.0

D E B IT S —

22

CENTERS

Seasonally Adjusted {1947-1949: = 100)

T

:
1954

1955

1956

1957

Latest d a t a plotted: M a rc h , p re lim in a ry




1958

1959

1960

March
191.9

1960
Feb.
202.2

1959
March
184.5

1 Debits to demand deposit accounts of individuals, partnerships and cor­
porations and states and political subdivisions.

Page 7

THE AGRICULTURAL SITUATION
S p r in g CROP PLANTINGS in the nation of 337
million acres will be less than 1 per cent below 1959
levels, if planting intentions reported to the United
States Department of Agriculture are realized. Plant­
ings of com and sorghums are expected to be about
the same as last year, but oats and barley acreage may
decline. Soybean acreage may increase more than 6
per cent, approaching the record of 1958. Cotton allot­
ments have been increased to 17.5 million acres com­
pared to 17.3 million acres last year as a result of more
sign-ups under the B program.
INDICATED 1960 PLANTING OF SELECTED CROPS
IN THE UNITED STATES
WITH C O M P A RISO N S

However, it was the highest for any month since last
July. Hogs, poultry and eggs, and potatoes led the
advance. Hog prices rose 16 per cent. Egg prices rose
12 per cent, which was counter to the seasonal trend.
Irish potatoes advanced sharply to $2.65 per hundred
or about 2.5 times the price a year earlier.
Early April data received from the United States
Department of Labor indicate that farm prices have
continued upward since mid-March, but at a some­
what slower rate.
Minimum support prices announced by the De­
partment of Agriculture for major Eighth District
commodities for 1960 are as follows:
I960_______

1959_______

(Millions of Acres)

Crop

Average
1949-58

807
Corn........ .................
All Spring Wheat.........
17.8
43.5
Oats.........................
Barley........................
13.2
Rice...........................
1.9
Sorghums (All).............
18.3
1.5
Tobacco1....................
Soybeans...................
18.1
Cotton2.................................

1959

Indicated
1960

85.5
13.4
36.1
17.0
1.6
19.9
1.2
23.2
17.3

85.8
12.8
34.3
16.4
1.6
19.8
1.2
24.7
17.5

19o0 as
PerCent
of 1959
100.3
95.4
94.8
96.4
100.2
99.6
100.2
106.4
101.0

1 Acreage harvested.
2 Total allotments.

Despite a possible decline in crop acreage, produc­
tion could well exceed 1959 output. Yields rose at an
annual rate of 3.32 per cent per year compounded for
the nine years 1950-1958 inclusive. With acreage only
one-third of one per cent below the 1959 level, a gairt
in yields equivalent to the average gain for the above
period would mean a new record output of crops in
1960.
Planting prospects in the district states follow the
national pattern with the exception of cotton. Cotton
acreage in Arkansas, Mississippi, and Tennessee may
be less than last year since all the net increase in allot­
ments is in the West.

Farm Commodity Prices
Average prices received by farmers for farm com­
modities rose 3 per cent during the month ending
March 15, 1960, according to the United States De­
partment of Agriculture. The mid-March average was
still about 1.5 per cent below the March 1959 level.




Support
Price
Upland Cotton (lb.)
Choice “A " ............. $ .2897
Choice “B " .............
.2318
Cottonseed (ton)......... . 38.00
1.06
.50
.77
.90
1.52
Grain Sorghums (cwt.). ..
1.77
Wheat (bu.)................
4.36
1.85
Soybeans (bu.).............
Milk for Manufacturing
3.06
(cwt.)......................
.566

Per Cent
of
Parity
75
60
57
65
60
60
60
60
75
75
64
77
77

Support
Price
$

Per Cent
of
Parity

.3040
.2470
38.00
1.12
.50
.77
.90
1.52
1.81
4.38
1.85

80
65
57
66
60
60
60
60
77
75
64

3.06
.566

77
77

Cash Receipts
Cash receipts from farm marketings in the nation
for January 1960 were $2.7 billion, 6 per cent below
receipts in January 1959, according to preliminary es­
timates. Cash receipts from livestock products declined
about 8 per cent, reflecting lower prices for hogs and
eggs. Crop sales were down about 5 per cent, with
reduced returns from wheat, tobacco, sorghum grain,
and oranges.
Eighth District states did relatively better than the
nation. Cash receipts of $534 million in January this
year equalled the January total of last year. Increased
sales of cotton in Arkansas and Mississippi offset re­
duced tobacco sales in Kentucky and Tennessee, and
greater crop sales in Indiana and Illinois offset smaller
receipts from livestock products. In Missouri, how­
ever, where livestock products were relatively more
important, total receipts were 5 per cent lower.