WORLD AGRICULTURAL S ITUA TION REVI EW OF 196middot8 AND OUTLOOK FOR 1969 (Fpreign Agricultural E90nomic Report) I Dqnald Chrisler Washinampton j -DC- Economic Resefllch

Servi-ce Feb~ 1969 ~ (NAL Catll No ~2819~lA~8F)

For release February 181969

LIBiRARY RECFllEO

11111Fh I III MAR241969

Foreign Agri~ulturaL Econ~micReport No SO

middotU Sbull DEPARTMEHTOFAGRICULTURE EURDD~ARS

shy gtJ ~~ ~ RIGUrLTURAL~(j

SITUATION ~

us DEPARTMENT OF AGRICULTUR~1 ECONOMIC RESEARCH SERVICE

Washington ~5~t - 1

For release February 181969

LIBiRARY RECFllEO

11111Fh I III MAR241969

Foreign Agri~ulturaL Econ~micReport No SO

middotU Sbull DEPARTMEHTOFAGRICULTURE EURDD~ARS

shy gtJ ~~ ~ RIGUrLTURAL~(j

SITUATION ~

us DEPARTMENT OF AGRICULTUR~1 ECONOMIC RESEARCH SERVICE

Washington ~5~t - 1

~ ~~ ) i ~ ~

irbis issUeottheWorld AgricultlDlllSituation follm1l3 the for- mat developed~lastyearDiSCUsSiim-basbeen limit~d tow-grId devshyelopmeIlt$ of wide concern to U ~iagrtc1i1tllral ihterestslnlltead of separate sununariesfor eachregionand caromodltyMore detailed statements of the situation by regions wiLl be issued inM9rcn and April 1969 Separaterep(gtrts wi1l tep~esented on each of~he following regions WesternHemisphere oFI3l East and OceaniaAfrica aYd WestgtAsia WesterriEurbpe 8Tld Ea~telnEuropeSovietunion aTld M9inlaYd China ~~

This report was prepared by Donald ChrislerSituationand Outlook Specitllist in consultation with othermiddot specialists in the

L ~tmiddot -

Economic Research Service and the Foreign AgricUIural Service

~~-poundi~ Quentin M westltDirector

) Foreign Regional Analysis Division

Economic Researqh Service

__-__--_J_~-----~--

CONTl5NTS~ Page 4

bull 0 ~1lniInary bull bull bull bull bull bull bull bull bullbull ~ bull bull bull bull bull 7World Oltput on Trend Line bull i bull 8 ~us AgriculturalExtJ0rts and Price Levels bullbull

9Another-Advance in World Food Grains bull bull ~ ~ bull bull bull 13 New Technology in Asia bullbull 0 0 0 bull 0 bull 15World Dairy Slllplus bull o 0 bull bull 0 bull bull bull bull bull bull bull bull bull 17Reappraisal of the EEC Common AgriculturalPQlicy iJ ~ bull 19Large Supplies of Edible oilseeds 21 Tobacco Production at

Average Level

bull bull bull

) 23Dnport Savings in the United Kingdom bull bull bullbull 24 FeedGrain Pioauction Remains High bull 0 bull bull bull bull bull 28

bull bull IiThe Japanese Market bull bull bull bull 0 bull bull bull bull bull 29 Cotton Production Reco-ters bull bull

__---- shy---------------------~-----

3

A~iclllt~al prOducei9~~l96e iIl~leased 2to3 percent~niriqpeaseequivalenttotheloIig-termtr~ndin both developedand leisdevelopedar8asof

th~ world BecauseltofdifierencesLn pop~tiongrowtbthis trend indicates a

gradualincreaseinoutWt per person inthedevelpped colintriesbutno per

capitaincreflose in theie~sliaeYelopedW9rld~DUringthe~st de~adeEurope

the USSR~Japa~middotand Austra~alav~inade tne l~lgest per capita gains in agrishy

cpJtllraioutput

~

Worldploducticmof grain mcpanded byabo1lt 20 percentinthepa13t 3 years In l96768 Jdce led the

fdllowin~a veryslowtateofgrowthduring 1961-65

advancein~~inprod9-ctionbUt in 196869 (~s inl96~67J wheatmadethe

The bulk of the worlds wheat ~s grown IIl the developed countrieslargest gaJIr

In mostofthede~Wllile ricenteisapr1mazy euroIaiIli1lthe less developed areas

velopedwheatproducingcoimtlieisgobd weather was the majorfactor accounting

forthe196869 perfolIlance in Australia thereWas a sharp increase 1Dwheat

acreage inadqitibD to fsvorable weather

In1967~8 good weather produced a large grain crop in the less developed

countries pa~ticlllarly in Asia ~In addition high farm prices--caused by rice

shortages in 11reyious years--encouraged a modest increase in acreage and sharp

increases in the use of fertilizer and high-yieldinggrain varieties InAsia

Iarge196768 crops resulted in tempbrary self-sufficiency in some Asian bullbull

countries and iIi Itexportabl~ surplusesin others Ihiftin turn led to a deshy

cline in producer prices in some countries bull Despite lower prices there was an

iIicrease in the area planted to new-v-arietiesifor the 196869 crop in most Asian

countries

Ill any year there is a certain amoUnt of SUbstitution of one commodity ior

Ill recent years for example large quantities ofanother in world utilization Wheat were exported to Asia to make up for th~ shortage of rice In 196768 and

in the current year wMtherpatter~s and governmentpolicieshaveproducedunshy

usual changes in product substitution that complicate analysis and forecastiIig

oftrade levels forniallY coniinodities--feed grains and oilseeds inpariicular

(Approved by the OUtlook and Situatton Bgard February 7 5969)

Y unJess stated otherwise split years mean July-Junetons are metrjc and

dollars are US Exports are in terms of volumenot value unless otherwise

stated

1)lt 4

~~~f~~~~~~~8~~~~~~~~ J~~Ocl(anqpollltry and exPorts of reed wheatar~incre~sihg~ Bepa ofYihec 5ij~g1iCoftof feed grains tio EECfeed manufacturers elpec~aUY9fimporteclgratzf which~~ SllbDect tdhigh vari~bleleviesav~ri~tY6~middotche~pei-Sllstitut~sare lt

bull~ - ~ - 51- bull _ ~ ~~ - - -_- - ~

beingused iIlanimal rations ~ese subst~jut~sinclud~sultpti11qrtllocloxqOtllI9 XlentsassugarcassavachiPsa~ltpu1ses lt5~~

Q ji Measures ai)nedat reducing the Eur0~andairy sJlrpltismiddot are depressmgthe

world market for oilseedsTliesemeas~es inGludeheavilysubsidized eJq)Oltsot butter and butter gil promotioJl of butter cOIlsumptlon attheexperise ofmarga~

rine and otheryeget~ble oirproducts~ and the slbstitution of nonfstcity Inilk for011 cake and lDealin livestocl~ feeds

OtherfactorscoJllplicat1ng the trade outlook are theba1ance-ofi~YlDJ~rits measuresta)tenbyBritaih West Germany and France the currentreappraisalof agricuJturalpolic)ZgtilltheEEC~nd Japan and the US dock ~triJt~

Pressures fer imPort ~ayings intenSified ill Britain duringlg68 wsals have been made to eqgtand agricultural prbauction If implementedthese proposals could haveadverse 10ng-runin1plications for US exports of feed gfaiIis~v~rietymeats and lardbull Inthe shorter run however the outlookisc

Fo~scgtriieW~at larger UKimportsof food and feed because of the aftere~ects bfthe October 1967-June1968 epidElm~cof foot-and-mouth disease and damage to 1968 crops caused by heavy rains and ~looding

In west Germany border tax adjustments tha~favor imports and discourage exports should benefit the unitedstates and otherexporters~ Opposit~taxaCl~ justments in France should make that country more c(mpetitive in world markets

In the EEC asa whole mounting costs of agriculturalprotectionismhave precipitated a reappraisal of policy aimed at improving the efficiency Of agrb culture and disposing of agricultural surpluses Proposed short-run measUres if ilnplementedwould reduce imports of edible oilseeds andproduciis marine oils fish meal beef and perhaps grain

In Japa~ an appraisal of agricultural protectionism led the Japanese Price Stabilization Council to r~commend some relaxation of import restrictions to stabiliz~ consumer prices and force improved domestic productivity HoWever recellt US-Japanese trade negotiations show no progress on the paJt of Japan relaxihgimport restrictions

AnticipatioIlof the US~ dock strike which began last December 20 heavy foreign buying ofUS corn rice soybeans am tq6acco and some picki up in purchases of US wheat The impact on wheat would have been greater except that Japan temporarily suspended imports of US wl1eat from inidNovember tomid-January~Continuation of the US dock strike hasreduced prospects0for exprts bf mostu~S farm products

The short~term outlook for world trade in temperate-zone commodities is hot too favQrableIn the developed countries demand is stagnant fQrmostnatural fiberstobacco~ dairy products and sugar In the export growth sectors--

-

World (exc1Communlst Asia) 102 103 103 105 103 105

a ~ Developed cou~tries 103 105 105 -109 107 IJ4

Less- developed countries - 103 102 103 102 102 97

United States 102 101 103 102 103 10amp- 104 lQ4 Canada 86 -107 115 105 1)3 124 106- -109

Latin America 101 - 100 101 97 105 97 98 q 97 Western Europe 104 109 112-_ 110 III III 119 ( 120 East~rnEutope _ t 104101 106 110 110 _ 120 122 111

h USSR 102 102 95 III 104 122 117 121 ~ -Africa 31 98 104 102 104 101 99 99 - 98

West Asi~ plusmnI 98 100 103 102 101 102 106 104 South Asia2J 107101 105 104 94 89 103 i04 East Asia 104 - 107 104 108 107 lio 105106 Japan 106 109 107 109 109 110 119 119 Australia and New Zeal~~dl03_--l07_ 109 ~112~_--105__ 116 107 - 119 _

------r Preliminary --- bull _ lt y U~i1ed States Canada Europe USSR Republic of South Africa Japal

Australia and New Zealand (( - _ () 3 Excluding Repu1)lic of South Africa ~ Cyprus Iran Iraq Israel1 Jordon Lepanon Syria and TUrkey

if Ceylon India~ and Pakistan

7

i

l1llOngthefuajorceIDlnQd1ties thelrg~~t ab~oluteaecJine~ln ttitalvallle lt3n1768 were in sbrghumcqtton ~dtqbacco chinge~ in ~nttvalu~ for _jihesecommqdJtiesweleinsignificant (able 2)~~CorniriedibJ-emiddottal1bW~ ~d~

1middotmiddot~attle~iidessuffere9~ ~iarparoPinuntif ya1Ues~inl967768~~peurofceri ~~~ Ln the volume of cornetPortedi canceled theeffect of auucimiddotlowerumt _ 1 gt bull bull ~ Cr - ~ bull

Low~runitvaJue accounted foraLLof ~tbe qecline in the salu~ qt ihshye~ibIe ta11owexPOrts~ndbQth vQ1ume and Unltvatueoof cattlebidesltteIIi Un~tva1l1es ofriceC~d nonfat dry milk trended upward in 1667 anai96768 ~ bull bull bull ~ - bull f

Table

Wheat bu 1~62middot 1~2l7 179 9 ~4 middot

~ ~Wlleatfl()ur cwt 4 12 4~24 384 3 9Cornexcpt seed bu 138 147 L30- 7 -12

middotGrainsqrghuill bu1~21 128 129 6 1 Rice milled (1 cwt 727 783 849 8 8 Soybeansmiddot bu 286middot 310 2 83 8 -9

~Soybean oU meal and cake S ton 7924 8902 deg8435 12 middot Cotton upland 1-118 bale 131 22 124 3L~ 12552 middot5 I

-11 Cotton Upland underl bale 11486 101~79 -10251 1 (j5 () Tobaccof1ue-cured urlstemmed lb 79 83 ~83

Tobaccocflue9ur~d stemmed lb 111 116 11)14 4 2

middot Tillow inedible i cwt 876 774 625 -12 -19 Cattle hids nos 867 8 90 747 3 -16 Nopf~t dry milk cwt 1517 1850 2033 22 IQ

iAverage unit v~ _+57

For the first 51nonths (July-November)tgtf

196869 the toia1 value of us agricu1-tural ~Xport~ W3S 5 percent lower than for those months a yeareatlier~ The volume was about the same as in the earlier period but pdces Ofmoliltml3jor

yUnit value is derived by dividing the total value of exports by the JPolume

of expprtsUnless there are significant year-to-year changes in tl]e-~comrfosi- - ~----~ tionorqllality of a particular commodity group changes in unit 1I9J1ues -

sent changes in prices J Longersta~le dbtt~nl 18 inch arid over (ilOt shovmintab1e 2h

very short supply andgt-~it valUes increased 18 perceniin 196768 ~~

8

A~iclllt~al prOducei9~~l96e iIl~leased 2to3 percent~niriqpeaseequivalenttotheloIig-termtr~ndin both developedand leisdevelopedar8asof

th~ world BecauseltofdifierencesLn pop~tiongrowtbthis trend indicates a

gradualincreaseinoutWt per person inthedevelpped colintriesbutno per

capitaincreflose in theie~sliaeYelopedW9rld~DUringthe~st de~adeEurope

the USSR~Japa~middotand Austra~alav~inade tne l~lgest per capita gains in agrishy

cpJtllraioutput

~

Worldploducticmof grain mcpanded byabo1lt 20 percentinthepa13t 3 years In l96768 Jdce led the

fdllowin~a veryslowtateofgrowthduring 1961-65

advancein~~inprod9-ctionbUt in 196869 (~s inl96~67J wheatmadethe

The bulk of the worlds wheat ~s grown IIl the developed countrieslargest gaJIr

In mostofthede~Wllile ricenteisapr1mazy euroIaiIli1lthe less developed areas

velopedwheatproducingcoimtlieisgobd weather was the majorfactor accounting

forthe196869 perfolIlance in Australia thereWas a sharp increase 1Dwheat

acreage inadqitibD to fsvorable weather

In1967~8 good weather produced a large grain crop in the less developed

countries pa~ticlllarly in Asia ~In addition high farm prices--caused by rice

shortages in 11reyious years--encouraged a modest increase in acreage and sharp

increases in the use of fertilizer and high-yieldinggrain varieties InAsia

Iarge196768 crops resulted in tempbrary self-sufficiency in some Asian bullbull

countries and iIi Itexportabl~ surplusesin others Ihiftin turn led to a deshy

cline in producer prices in some countries bull Despite lower prices there was an

iIicrease in the area planted to new-v-arietiesifor the 196869 crop in most Asian

countries

Ill any year there is a certain amoUnt of SUbstitution of one commodity ior

Ill recent years for example large quantities ofanother in world utilization Wheat were exported to Asia to make up for th~ shortage of rice In 196768 and

in the current year wMtherpatter~s and governmentpolicieshaveproducedunshy

usual changes in product substitution that complicate analysis and forecastiIig

oftrade levels forniallY coniinodities--feed grains and oilseeds inpariicular

(Approved by the OUtlook and Situatton Bgard February 7 5969)

Y unJess stated otherwise split years mean July-Junetons are metrjc and

dollars are US Exports are in terms of volumenot value unless otherwise

stated

1)lt 4

~~~f~~~~~~~8~~~~~~~~ J~~Ocl(anqpollltry and exPorts of reed wheatar~incre~sihg~ Bepa ofYihec 5ij~g1iCoftof feed grains tio EECfeed manufacturers elpec~aUY9fimporteclgratzf which~~ SllbDect tdhigh vari~bleleviesav~ri~tY6~middotche~pei-Sllstitut~sare lt

bull~ - ~ - 51- bull _ ~ ~~ - - -_- - ~

beingused iIlanimal rations ~ese subst~jut~sinclud~sultpti11qrtllocloxqOtllI9 XlentsassugarcassavachiPsa~ltpu1ses lt5~~

Q ji Measures ai)nedat reducing the Eur0~andairy sJlrpltismiddot are depressmgthe

world market for oilseedsTliesemeas~es inGludeheavilysubsidized eJq)Oltsot butter and butter gil promotioJl of butter cOIlsumptlon attheexperise ofmarga~

rine and otheryeget~ble oirproducts~ and the slbstitution of nonfstcity Inilk for011 cake and lDealin livestocl~ feeds

OtherfactorscoJllplicat1ng the trade outlook are theba1ance-ofi~YlDJ~rits measuresta)tenbyBritaih West Germany and France the currentreappraisalof agricuJturalpolic)ZgtilltheEEC~nd Japan and the US dock ~triJt~

Pressures fer imPort ~ayings intenSified ill Britain duringlg68 wsals have been made to eqgtand agricultural prbauction If implementedthese proposals could haveadverse 10ng-runin1plications for US exports of feed gfaiIis~v~rietymeats and lardbull Inthe shorter run however the outlookisc

Fo~scgtriieW~at larger UKimportsof food and feed because of the aftere~ects bfthe October 1967-June1968 epidElm~cof foot-and-mouth disease and damage to 1968 crops caused by heavy rains and ~looding

In west Germany border tax adjustments tha~favor imports and discourage exports should benefit the unitedstates and otherexporters~ Opposit~taxaCl~ justments in France should make that country more c(mpetitive in world markets

In the EEC asa whole mounting costs of agriculturalprotectionismhave precipitated a reappraisal of policy aimed at improving the efficiency Of agrb culture and disposing of agricultural surpluses Proposed short-run measUres if ilnplementedwould reduce imports of edible oilseeds andproduciis marine oils fish meal beef and perhaps grain

In Japa~ an appraisal of agricultural protectionism led the Japanese Price Stabilization Council to r~commend some relaxation of import restrictions to stabiliz~ consumer prices and force improved domestic productivity HoWever recellt US-Japanese trade negotiations show no progress on the paJt of Japan relaxihgimport restrictions

AnticipatioIlof the US~ dock strike which began last December 20 heavy foreign buying ofUS corn rice soybeans am tq6acco and some picki up in purchases of US wheat The impact on wheat would have been greater except that Japan temporarily suspended imports of US wl1eat from inidNovember tomid-January~Continuation of the US dock strike hasreduced prospects0for exprts bf mostu~S farm products

The short~term outlook for world trade in temperate-zone commodities is hot too favQrableIn the developed countries demand is stagnant fQrmostnatural fiberstobacco~ dairy products and sugar In the export growth sectors--

-

World (exc1Communlst Asia) 102 103 103 105 103 105

a ~ Developed cou~tries 103 105 105 -109 107 IJ4

Less- developed countries - 103 102 103 102 102 97

United States 102 101 103 102 103 10amp- 104 lQ4 Canada 86 -107 115 105 1)3 124 106- -109

Latin America 101 - 100 101 97 105 97 98 q 97 Western Europe 104 109 112-_ 110 III III 119 ( 120 East~rnEutope _ t 104101 106 110 110 _ 120 122 111

h USSR 102 102 95 III 104 122 117 121 ~ -Africa 31 98 104 102 104 101 99 99 - 98

West Asi~ plusmnI 98 100 103 102 101 102 106 104 South Asia2J 107101 105 104 94 89 103 i04 East Asia 104 - 107 104 108 107 lio 105106 Japan 106 109 107 109 109 110 119 119 Australia and New Zeal~~dl03_--l07_ 109 ~112~_--105__ 116 107 - 119 _

------r Preliminary --- bull _ lt y U~i1ed States Canada Europe USSR Republic of South Africa Japal

Australia and New Zealand (( - _ () 3 Excluding Repu1)lic of South Africa ~ Cyprus Iran Iraq Israel1 Jordon Lepanon Syria and TUrkey

if Ceylon India~ and Pakistan

7

i

l1llOngthefuajorceIDlnQd1ties thelrg~~t ab~oluteaecJine~ln ttitalvallle lt3n1768 were in sbrghumcqtton ~dtqbacco chinge~ in ~nttvalu~ for _jihesecommqdJtiesweleinsignificant (able 2)~~CorniriedibJ-emiddottal1bW~ ~d~

1middotmiddot~attle~iidessuffere9~ ~iarparoPinuntif ya1Ues~inl967768~~peurofceri ~~~ Ln the volume of cornetPortedi canceled theeffect of auucimiddotlowerumt _ 1 gt bull bull ~ Cr - ~ bull

Low~runitvaJue accounted foraLLof ~tbe qecline in the salu~ qt ihshye~ibIe ta11owexPOrts~ndbQth vQ1ume and Unltvatueoof cattlebidesltteIIi Un~tva1l1es ofriceC~d nonfat dry milk trended upward in 1667 anai96768 ~ bull bull bull ~ - bull f

Table

Wheat bu 1~62middot 1~2l7 179 9 ~4 middot

~ ~Wlleatfl()ur cwt 4 12 4~24 384 3 9Cornexcpt seed bu 138 147 L30- 7 -12

middotGrainsqrghuill bu1~21 128 129 6 1 Rice milled (1 cwt 727 783 849 8 8 Soybeansmiddot bu 286middot 310 2 83 8 -9

~Soybean oU meal and cake S ton 7924 8902 deg8435 12 middot Cotton upland 1-118 bale 131 22 124 3L~ 12552 middot5 I

-11 Cotton Upland underl bale 11486 101~79 -10251 1 (j5 () Tobaccof1ue-cured urlstemmed lb 79 83 ~83

Tobaccocflue9ur~d stemmed lb 111 116 11)14 4 2

middot Tillow inedible i cwt 876 774 625 -12 -19 Cattle hids nos 867 8 90 747 3 -16 Nopf~t dry milk cwt 1517 1850 2033 22 IQ

iAverage unit v~ _+57

For the first 51nonths (July-November)tgtf

196869 the toia1 value of us agricu1-tural ~Xport~ W3S 5 percent lower than for those months a yeareatlier~ The volume was about the same as in the earlier period but pdces Ofmoliltml3jor

yUnit value is derived by dividing the total value of exports by the JPolume

of expprtsUnless there are significant year-to-year changes in tl]e-~comrfosi- - ~----~ tionorqllality of a particular commodity group changes in unit 1I9J1ues -

sent changes in prices J Longersta~le dbtt~nl 18 inch arid over (ilOt shovmintab1e 2h

very short supply andgt-~it valUes increased 18 perceniin 196768 ~~

8

~~~f~~~~~~~8~~~~~~~~ J~~Ocl(anqpollltry and exPorts of reed wheatar~incre~sihg~ Bepa ofYihec 5ij~g1iCoftof feed grains tio EECfeed manufacturers elpec~aUY9fimporteclgratzf which~~ SllbDect tdhigh vari~bleleviesav~ri~tY6~middotche~pei-Sllstitut~sare lt

bull~ - ~ - 51- bull _ ~ ~~ - - -_- - ~

beingused iIlanimal rations ~ese subst~jut~sinclud~sultpti11qrtllocloxqOtllI9 XlentsassugarcassavachiPsa~ltpu1ses lt5~~

Q ji Measures ai)nedat reducing the Eur0~andairy sJlrpltismiddot are depressmgthe

world market for oilseedsTliesemeas~es inGludeheavilysubsidized eJq)Oltsot butter and butter gil promotioJl of butter cOIlsumptlon attheexperise ofmarga~

rine and otheryeget~ble oirproducts~ and the slbstitution of nonfstcity Inilk for011 cake and lDealin livestocl~ feeds

OtherfactorscoJllplicat1ng the trade outlook are theba1ance-ofi~YlDJ~rits measuresta)tenbyBritaih West Germany and France the currentreappraisalof agricuJturalpolic)ZgtilltheEEC~nd Japan and the US dock ~triJt~

Pressures fer imPort ~ayings intenSified ill Britain duringlg68 wsals have been made to eqgtand agricultural prbauction If implementedthese proposals could haveadverse 10ng-runin1plications for US exports of feed gfaiIis~v~rietymeats and lardbull Inthe shorter run however the outlookisc

Fo~scgtriieW~at larger UKimportsof food and feed because of the aftere~ects bfthe October 1967-June1968 epidElm~cof foot-and-mouth disease and damage to 1968 crops caused by heavy rains and ~looding

In west Germany border tax adjustments tha~favor imports and discourage exports should benefit the unitedstates and otherexporters~ Opposit~taxaCl~ justments in France should make that country more c(mpetitive in world markets

In the EEC asa whole mounting costs of agriculturalprotectionismhave precipitated a reappraisal of policy aimed at improving the efficiency Of agrb culture and disposing of agricultural surpluses Proposed short-run measUres if ilnplementedwould reduce imports of edible oilseeds andproduciis marine oils fish meal beef and perhaps grain

In Japa~ an appraisal of agricultural protectionism led the Japanese Price Stabilization Council to r~commend some relaxation of import restrictions to stabiliz~ consumer prices and force improved domestic productivity HoWever recellt US-Japanese trade negotiations show no progress on the paJt of Japan relaxihgimport restrictions

AnticipatioIlof the US~ dock strike which began last December 20 heavy foreign buying ofUS corn rice soybeans am tq6acco and some picki up in purchases of US wheat The impact on wheat would have been greater except that Japan temporarily suspended imports of US wl1eat from inidNovember tomid-January~Continuation of the US dock strike hasreduced prospects0for exprts bf mostu~S farm products

The short~term outlook for world trade in temperate-zone commodities is hot too favQrableIn the developed countries demand is stagnant fQrmostnatural fiberstobacco~ dairy products and sugar In the export growth sectors--

-

World (exc1Communlst Asia) 102 103 103 105 103 105

a ~ Developed cou~tries 103 105 105 -109 107 IJ4

Less- developed countries - 103 102 103 102 102 97

United States 102 101 103 102 103 10amp- 104 lQ4 Canada 86 -107 115 105 1)3 124 106- -109

Latin America 101 - 100 101 97 105 97 98 q 97 Western Europe 104 109 112-_ 110 III III 119 ( 120 East~rnEutope _ t 104101 106 110 110 _ 120 122 111

h USSR 102 102 95 III 104 122 117 121 ~ -Africa 31 98 104 102 104 101 99 99 - 98

West Asi~ plusmnI 98 100 103 102 101 102 106 104 South Asia2J 107101 105 104 94 89 103 i04 East Asia 104 - 107 104 108 107 lio 105106 Japan 106 109 107 109 109 110 119 119 Australia and New Zeal~~dl03_--l07_ 109 ~112~_--105__ 116 107 - 119 _

------r Preliminary --- bull _ lt y U~i1ed States Canada Europe USSR Republic of South Africa Japal

Australia and New Zealand (( - _ () 3 Excluding Repu1)lic of South Africa ~ Cyprus Iran Iraq Israel1 Jordon Lepanon Syria and TUrkey

if Ceylon India~ and Pakistan

7

i

l1llOngthefuajorceIDlnQd1ties thelrg~~t ab~oluteaecJine~ln ttitalvallle lt3n1768 were in sbrghumcqtton ~dtqbacco chinge~ in ~nttvalu~ for _jihesecommqdJtiesweleinsignificant (able 2)~~CorniriedibJ-emiddottal1bW~ ~d~

1middotmiddot~attle~iidessuffere9~ ~iarparoPinuntif ya1Ues~inl967768~~peurofceri ~~~ Ln the volume of cornetPortedi canceled theeffect of auucimiddotlowerumt _ 1 gt bull bull ~ Cr - ~ bull

Low~runitvaJue accounted foraLLof ~tbe qecline in the salu~ qt ihshye~ibIe ta11owexPOrts~ndbQth vQ1ume and Unltvatueoof cattlebidesltteIIi Un~tva1l1es ofriceC~d nonfat dry milk trended upward in 1667 anai96768 ~ bull bull bull ~ - bull f

Table

Wheat bu 1~62middot 1~2l7 179 9 ~4 middot

~ ~Wlleatfl()ur cwt 4 12 4~24 384 3 9Cornexcpt seed bu 138 147 L30- 7 -12

middotGrainsqrghuill bu1~21 128 129 6 1 Rice milled (1 cwt 727 783 849 8 8 Soybeansmiddot bu 286middot 310 2 83 8 -9

~Soybean oU meal and cake S ton 7924 8902 deg8435 12 middot Cotton upland 1-118 bale 131 22 124 3L~ 12552 middot5 I

-11 Cotton Upland underl bale 11486 101~79 -10251 1 (j5 () Tobaccof1ue-cured urlstemmed lb 79 83 ~83

Tobaccocflue9ur~d stemmed lb 111 116 11)14 4 2

middot Tillow inedible i cwt 876 774 625 -12 -19 Cattle hids nos 867 8 90 747 3 -16 Nopf~t dry milk cwt 1517 1850 2033 22 IQ

iAverage unit v~ _+57

For the first 51nonths (July-November)tgtf

196869 the toia1 value of us agricu1-tural ~Xport~ W3S 5 percent lower than for those months a yeareatlier~ The volume was about the same as in the earlier period but pdces Ofmoliltml3jor

yUnit value is derived by dividing the total value of exports by the JPolume

of expprtsUnless there are significant year-to-year changes in tl]e-~comrfosi- - ~----~ tionorqllality of a particular commodity group changes in unit 1I9J1ues -

sent changes in prices J Longersta~le dbtt~nl 18 inch arid over (ilOt shovmintab1e 2h

very short supply andgt-~it valUes increased 18 perceniin 196768 ~~

8

-

World (exc1Communlst Asia) 102 103 103 105 103 105

a ~ Developed cou~tries 103 105 105 -109 107 IJ4

Less- developed countries - 103 102 103 102 102 97

United States 102 101 103 102 103 10amp- 104 lQ4 Canada 86 -107 115 105 1)3 124 106- -109

Latin America 101 - 100 101 97 105 97 98 q 97 Western Europe 104 109 112-_ 110 III III 119 ( 120 East~rnEutope _ t 104101 106 110 110 _ 120 122 111

h USSR 102 102 95 III 104 122 117 121 ~ -Africa 31 98 104 102 104 101 99 99 - 98

West Asi~ plusmnI 98 100 103 102 101 102 106 104 South Asia2J 107101 105 104 94 89 103 i04 East Asia 104 - 107 104 108 107 lio 105106 Japan 106 109 107 109 109 110 119 119 Australia and New Zeal~~dl03_--l07_ 109 ~112~_--105__ 116 107 - 119 _

------r Preliminary --- bull _ lt y U~i1ed States Canada Europe USSR Republic of South Africa Japal

Australia and New Zealand (( - _ () 3 Excluding Repu1)lic of South Africa ~ Cyprus Iran Iraq Israel1 Jordon Lepanon Syria and TUrkey

if Ceylon India~ and Pakistan

7

i

l1llOngthefuajorceIDlnQd1ties thelrg~~t ab~oluteaecJine~ln ttitalvallle lt3n1768 were in sbrghumcqtton ~dtqbacco chinge~ in ~nttvalu~ for _jihesecommqdJtiesweleinsignificant (able 2)~~CorniriedibJ-emiddottal1bW~ ~d~

1middotmiddot~attle~iidessuffere9~ ~iarparoPinuntif ya1Ues~inl967768~~peurofceri ~~~ Ln the volume of cornetPortedi canceled theeffect of auucimiddotlowerumt _ 1 gt bull bull ~ Cr - ~ bull

Low~runitvaJue accounted foraLLof ~tbe qecline in the salu~ qt ihshye~ibIe ta11owexPOrts~ndbQth vQ1ume and Unltvatueoof cattlebidesltteIIi Un~tva1l1es ofriceC~d nonfat dry milk trended upward in 1667 anai96768 ~ bull bull bull ~ - bull f

Table

Wheat bu 1~62middot 1~2l7 179 9 ~4 middot

~ ~Wlleatfl()ur cwt 4 12 4~24 384 3 9Cornexcpt seed bu 138 147 L30- 7 -12

middotGrainsqrghuill bu1~21 128 129 6 1 Rice milled (1 cwt 727 783 849 8 8 Soybeansmiddot bu 286middot 310 2 83 8 -9

~Soybean oU meal and cake S ton 7924 8902 deg8435 12 middot Cotton upland 1-118 bale 131 22 124 3L~ 12552 middot5 I

-11 Cotton Upland underl bale 11486 101~79 -10251 1 (j5 () Tobaccof1ue-cured urlstemmed lb 79 83 ~83

Tobaccocflue9ur~d stemmed lb 111 116 11)14 4 2

middot Tillow inedible i cwt 876 774 625 -12 -19 Cattle hids nos 867 8 90 747 3 -16 Nopf~t dry milk cwt 1517 1850 2033 22 IQ

iAverage unit v~ _+57

For the first 51nonths (July-November)tgtf

196869 the toia1 value of us agricu1-tural ~Xport~ W3S 5 percent lower than for those months a yeareatlier~ The volume was about the same as in the earlier period but pdces Ofmoliltml3jor

yUnit value is derived by dividing the total value of exports by the JPolume

of expprtsUnless there are significant year-to-year changes in tl]e-~comrfosi- - ~----~ tionorqllality of a particular commodity group changes in unit 1I9J1ues -

sent changes in prices J Longersta~le dbtt~nl 18 inch arid over (ilOt shovmintab1e 2h

very short supply andgt-~it valUes increased 18 perceniin 196768 ~~

8

i

l1llOngthefuajorceIDlnQd1ties thelrg~~t ab~oluteaecJine~ln ttitalvallle lt3n1768 were in sbrghumcqtton ~dtqbacco chinge~ in ~nttvalu~ for _jihesecommqdJtiesweleinsignificant (able 2)~~CorniriedibJ-emiddottal1bW~ ~d~

1middotmiddot~attle~iidessuffere9~ ~iarparoPinuntif ya1Ues~inl967768~~peurofceri ~~~ Ln the volume of cornetPortedi canceled theeffect of auucimiddotlowerumt _ 1 gt bull bull ~ Cr - ~ bull

Low~runitvaJue accounted foraLLof ~tbe qecline in the salu~ qt ihshye~ibIe ta11owexPOrts~ndbQth vQ1ume and Unltvatueoof cattlebidesltteIIi Un~tva1l1es ofriceC~d nonfat dry milk trended upward in 1667 anai96768 ~ bull bull bull ~ - bull f

Table

Wheat bu 1~62middot 1~2l7 179 9 ~4 middot

~ ~Wlleatfl()ur cwt 4 12 4~24 384 3 9Cornexcpt seed bu 138 147 L30- 7 -12

middotGrainsqrghuill bu1~21 128 129 6 1 Rice milled (1 cwt 727 783 849 8 8 Soybeansmiddot bu 286middot 310 2 83 8 -9

~Soybean oU meal and cake S ton 7924 8902 deg8435 12 middot Cotton upland 1-118 bale 131 22 124 3L~ 12552 middot5 I

-11 Cotton Upland underl bale 11486 101~79 -10251 1 (j5 () Tobaccof1ue-cured urlstemmed lb 79 83 ~83

Tobaccocflue9ur~d stemmed lb 111 116 11)14 4 2

middot Tillow inedible i cwt 876 774 625 -12 -19 Cattle hids nos 867 8 90 747 3 -16 Nopf~t dry milk cwt 1517 1850 2033 22 IQ

iAverage unit v~ _+57

For the first 51nonths (July-November)tgtf

196869 the toia1 value of us agricu1-tural ~Xport~ W3S 5 percent lower than for those months a yeareatlier~ The volume was about the same as in the earlier period but pdces Ofmoliltml3jor

yUnit value is derived by dividing the total value of exports by the JPolume

of expprtsUnless there are significant year-to-year changes in tl]e-~comrfosi- - ~----~ tionorqllality of a particular commodity group changes in unit 1I9J1ues -

sent changes in prices J Longersta~le dbtt~nl 18 inch arid over (ilOt shovmintab1e 2h

very short supply andgt-~it valUes increased 18 perceniin 196768 ~~

8

middot~gtltwofidjtpr6duGtion b~f()ofigrains in1968~1forthemiddotthi~d cOllsecutive year

of-foodgrains 1961-68

0 ( bull middot 1962 1964 middot 1965 1966 middot e middotmiddot centmiddot---~-

- - Million metrictonsshy211 22r 255 247 - 285

232 243 258 245242 34 30 32 34 30

477 502 499 545 526 557

~AXmuai chtlllge T25 -3 +46 -19 +31

--~

1 1

The high level of world wl1eatproduction in the past 3 years prini~ily reflects Larger harVests in the Soviet Union average annual pimiddotoquctioirinthe USSR was 75 million tonsduririg 1Q66-68 compare- with 48 miliion aurin~1963-65

Although growing coriditionswerenot favorab1eiin some regions in 1968 the USSR barvested its second largest crop of wheat~ Govervrnentdomesticnrocure~ menlswere llbout13 million tons in excesscof dolnestic teeds and the USSR again

isin~~positi6nto illcreasenet e~ports (table)+h J Tpere will bean inshycrease~inexportstoEastern Europe 8-1d perhaps to the UAR and Cuba The

SovietUnionagreedto provide 16 miL~iori~QITSo6f-grain mostl~wheat to CzechoslovakieduringNovemberl968october 1969 annualshipmerits during l965-6~r~ge~ from 1ouoL3Il1ill~o~ polandh~sind~cated that it w~ll imshypor~ 9~5~Llhon t()nsmore SovJetgra(ll mostly~heat Jn 196899than Jn 19euro768 bull For Sllles to corrertiblecWrency Gountries the USSR faces a highly compet~tiye~itilation The t~ti31 Wh7a-~uPPIYiri thefive majorc~mpeting countrles h~S reachedrecorpproportJonsand w()rld demandJs sluggJsh

~ gt

As Shown in taple 5th~United Statesandihefour other major exporters (Canada Australia krgentinaandFralce) havereverSed positlcms in terms Qf wheat supply during the 1960 s ~ Despite a record crop produced on an area 35 mill1fol1 acres less tha1 in 1961 the U S wheat supply is well be~6w the

~ ------

Jj The USSR haS anoptiontobtiy 4 mtl1iontbns of Canadian wheat iIi

bull 0

- -

- ~-gt

_i~~[ of the earty ilO~bulld~~IWh~at-e~ol~E dUI1ng the first balf of f -

1968 69 Wer~ about 25 percent be~~w ~be s~e period a year earlier enipc~sp~cts t3it~01akeQr ~fuqrecov~ry~nl-c~elat~er llafo~tl(J yearmiddot A~~b9tlglllq~~r

~alesJnth~fJrstqualter(JVly~SeptelUber)m8Y be explaJned by heavytorergn 1uy)ng iiJuri~tmiddotto middot avofdtbehigh~r ltWA minilllUlrrprice~ ~ffectiva July1iVIQw~r

Sales 1ntl1e aecond quarter can b~lY middotbe exPliined lgtylCgtWer middotd~roandarid bull incle~ed coinpettiion BWingirvatticipation of the )~ Slongshoremanmiddotsstdlc~1n shyDElcemqercaUs~dSigtnupicktipmiddot iu exports to EutopeC Seeding()fi~7in1gter Wheatfo-r

ltI~969hatvest was 61niIJion acresless tl1ap i~ tlePreviqusYEiax 1 bull

_ middotc

ofwheat arld~lo~ by Illa)op exporting cOWltties bullmiddot1960-6rilmiddot - -~-

------7 Year begimiingJti1yL

19601961 ~196~-1963 i964 ~965 ~1966196TY~ _ - -~-- ~-~~----~-

middot 6aYlac1a i bull 93 99 90 15 Oil8 149 14~8 middotAlll~tralia~5~O 63 48 7864 5~7middotIrO rgeritina 1924L8 28 43 79 31 aFrance 16 183027 46 4731 ffUSSR bullbull 5050 53 15 12 22-41I (USSRriettr8ie) ~ middot (+47 (+4~8) middot(+53) (-85~ t~O6)(~65) (+13)

Total 5 cOurJ~ries middot 228 254 239middot 21 28 - 26 36 3 bull1 36 40middotmiddot

middot

429 478 J+3~8 565 507 623 561 I~ middot

--jjwpe~t andllheateq~iValentof flou--r_-___ ~-~------1- -----_ -

Y Preliminary bull- JJp~usdenotes net exp~rts minus net imports

Notwithstanging aOTniil1Jon acrereduction in are and neavY rainfall and fro~ts at the begiYming of har-vesi Canad~ produced an average Y~lheat ctop

and c) Iith near-record stocks (mostly high quality- Manitoba la-rid 2 rCanada a supply of wheat is exceptional1ylarge Wet harvest weather reduced the qW1lity ) of the 1968 crop h01IElVer and most~iif the wleat graded Nos 3 and4 or leSS tlere will be no grade problem in meeting the ])ec~mberl96$~Ju1y 1969 sales cormnitment to Mainlai1d Ctlinaof 16 million tons Nos 4 and 5 Canadas exshyPQrts during 199768 were thelow~at in lUanyyearsand somereqovery islexpected inl96869mxportsfor August-~Dcember 1968 were 08 milliemtons ab6qe the

~fI1lleperiod ayeax ear1ierGgt~eVrtheless ca~adian ~to~ksWill re~aill hig~ Uil~eSS the USSR _tak~S asub3~ant~al share of Jts 4 IDJIlwn ton opt)on~MoJsture

reiBITes in West~rnCanada shouldbe exceptionally good for planting the 1969 ~ ~ --spring wheat cropmiddot ]

10

-~

reg Table 5 bull -Wneatmiddot supply in major ex~6~tingcbUritrles 196068

H gt ~

middotmiddotmiddotCoultry ~-------- I

middot ~ imiddotmiddot Canada middotmiddot Stocks 163 165 106 133 middot15imiddot foduction 141 77 151) 197 16~3 Supply 304 242 260 330 288

Australia middot ~

Stocks 8 middot5 6 6 7 4 middotmiddot~i~417 (PJooductiol 74 67 84 middot89 100 71127 ~143 SuPly 91 75 89 lt9~5 10~6 7S 131middot ~tl~1middot

Argentina -~

Stocks 12 8 2 5 22 Prduction 40 5 7 57 89 li3 Bl

~ Supply middotmiddotmiddotmiddot0 4middot~~middotmiddot 5middot2 65 59 94 135 7- lt

I- Fsmiddotlcemiddot bull ~ ~tJ~I- ~ Stocks g 19 23 17 3~2 23 20

---Jrbductibn 110 96 141 lO~2 138 148 113Supply 129 119 158 middot134 161 1158 139

Total~ middot4middot coul1tries Stocks 211 20 4 130 176 ~176 200 1~6 ~9t) Production 365 297 436 477 514(gt 457 527 449

SUflply 57middot6 50~1 566 653 6Qg 657 673 647 United Stat~s

Stoc~s 357 384 360 32~5 245 222 146 116 Production 369 lt414

~ll 6 335 297 31 2_ 349 358 357 SUpply 726 719 657 637middot ~594 580 59middot3 530

Soviet Uniol Pr9duction 463523 ~ 544 vi 400 577 +65850

_ ~ i-

Y Year beginning J~lfor United States ~anltr~rance August lforCanadf and DecemlgterIcfb~A~t~~ii~l a1d Argentina middotmiddotmiddotmiddotltL

gj Beginning with 1967 stocksa-e August 1 t gtj ~ - c _lt~~

)

- -

- ~-gt

_i~~[ of the earty ilO~bulld~~IWh~at-e~ol~E dUI1ng the first balf of f -

1968 69 Wer~ about 25 percent be~~w ~be s~e period a year earlier enipc~sp~cts t3it~01akeQr ~fuqrecov~ry~nl-c~elat~er llafo~tl(J yearmiddot A~~b9tlglllq~~r

~alesJnth~fJrstqualter(JVly~SeptelUber)m8Y be explaJned by heavytorergn 1uy)ng iiJuri~tmiddotto middot avofdtbehigh~r ltWA minilllUlrrprice~ ~ffectiva July1iVIQw~r

Sales 1ntl1e aecond quarter can b~lY middotbe exPliined lgtylCgtWer middotd~roandarid bull incle~ed coinpettiion BWingirvatticipation of the )~ Slongshoremanmiddotsstdlc~1n shyDElcemqercaUs~dSigtnupicktipmiddot iu exports to EutopeC Seeding()fi~7in1gter Wheatfo-r

ltI~969hatvest was 61niIJion acresless tl1ap i~ tlePreviqusYEiax 1 bull

_ middotc

ofwheat arld~lo~ by Illa)op exporting cOWltties bullmiddot1960-6rilmiddot - -~-

------7 Year begimiingJti1yL

19601961 ~196~-1963 i964 ~965 ~1966196TY~ _ - -~-- ~-~~----~-

middot 6aYlac1a i bull 93 99 90 15 Oil8 149 14~8 middotAlll~tralia~5~O 63 48 7864 5~7middotIrO rgeritina 1924L8 28 43 79 31 aFrance 16 183027 46 4731 ffUSSR bullbull 5050 53 15 12 22-41I (USSRriettr8ie) ~ middot (+47 (+4~8) middot(+53) (-85~ t~O6)(~65) (+13)

Total 5 cOurJ~ries middot 228 254 239middot 21 28 - 26 36 3 bull1 36 40middotmiddot

middot

429 478 J+3~8 565 507 623 561 I~ middot

--jjwpe~t andllheateq~iValentof flou--r_-___ ~-~------1- -----_ -

Y Preliminary bull- JJp~usdenotes net exp~rts minus net imports

Notwithstanging aOTniil1Jon acrereduction in are and neavY rainfall and fro~ts at the begiYming of har-vesi Canad~ produced an average Y~lheat ctop

and c) Iith near-record stocks (mostly high quality- Manitoba la-rid 2 rCanada a supply of wheat is exceptional1ylarge Wet harvest weather reduced the qW1lity ) of the 1968 crop h01IElVer and most~iif the wleat graded Nos 3 and4 or leSS tlere will be no grade problem in meeting the ])ec~mberl96$~Ju1y 1969 sales cormnitment to Mainlai1d Ctlinaof 16 million tons Nos 4 and 5 Canadas exshyPQrts during 199768 were thelow~at in lUanyyearsand somereqovery islexpected inl96869mxportsfor August-~Dcember 1968 were 08 milliemtons ab6qe the

~fI1lleperiod ayeax ear1ierGgt~eVrtheless ca~adian ~to~ksWill re~aill hig~ Uil~eSS the USSR _tak~S asub3~ant~al share of Jts 4 IDJIlwn ton opt)on~MoJsture

reiBITes in West~rnCanada shouldbe exceptionally good for planting the 1969 ~ ~ --spring wheat cropmiddot ]

10

-~

reg Table 5 bull -Wneatmiddot supply in major ex~6~tingcbUritrles 196068

H gt ~

middotmiddotmiddotCoultry ~-------- I

middot ~ imiddotmiddot Canada middotmiddot Stocks 163 165 106 133 middot15imiddot foduction 141 77 151) 197 16~3 Supply 304 242 260 330 288

Australia middot ~

Stocks 8 middot5 6 6 7 4 middotmiddot~i~417 (PJooductiol 74 67 84 middot89 100 71127 ~143 SuPly 91 75 89 lt9~5 10~6 7S 131middot ~tl~1middot

Argentina -~

Stocks 12 8 2 5 22 Prduction 40 5 7 57 89 li3 Bl

~ Supply middotmiddotmiddotmiddot0 4middot~~middotmiddot 5middot2 65 59 94 135 7- lt

I- Fsmiddotlcemiddot bull ~ ~tJ~I- ~ Stocks g 19 23 17 3~2 23 20

---Jrbductibn 110 96 141 lO~2 138 148 113Supply 129 119 158 middot134 161 1158 139

Total~ middot4middot coul1tries Stocks 211 20 4 130 176 ~176 200 1~6 ~9t) Production 365 297 436 477 514(gt 457 527 449

SUflply 57middot6 50~1 566 653 6Qg 657 673 647 United Stat~s

Stoc~s 357 384 360 32~5 245 222 146 116 Production 369 lt414

~ll 6 335 297 31 2_ 349 358 357 SUpply 726 719 657 637middot ~594 580 59middot3 530

Soviet Uniol Pr9duction 463523 ~ 544 vi 400 577 +65850

_ ~ i-

Y Year beginning J~lfor United States ~anltr~rance August lforCanadf and DecemlgterIcfb~A~t~~ii~l a1d Argentina middotmiddotmiddotmiddotltL

gj Beginning with 1967 stocksa-e August 1 t gtj ~ - c _lt~~

)

reg Table 5 bull -Wneatmiddot supply in major ex~6~tingcbUritrles 196068

H gt ~

middotmiddotmiddotCoultry ~-------- I

middot ~ imiddotmiddot Canada middotmiddot Stocks 163 165 106 133 middot15imiddot foduction 141 77 151) 197 16~3 Supply 304 242 260 330 288

Australia middot ~

Stocks 8 middot5 6 6 7 4 middotmiddot~i~417 (PJooductiol 74 67 84 middot89 100 71127 ~143 SuPly 91 75 89 lt9~5 10~6 7S 131middot ~tl~1middot

Argentina -~

Stocks 12 8 2 5 22 Prduction 40 5 7 57 89 li3 Bl

~ Supply middotmiddotmiddotmiddot0 4middot~~middotmiddot 5middot2 65 59 94 135 7- lt

I- Fsmiddotlcemiddot bull ~ ~tJ~I- ~ Stocks g 19 23 17 3~2 23 20

---Jrbductibn 110 96 141 lO~2 138 148 113Supply 129 119 158 middot134 161 1158 139

Total~ middot4middot coul1tries Stocks 211 20 4 130 176 ~176 200 1~6 ~9t) Production 365 297 436 477 514(gt 457 527 449

SUflply 57middot6 50~1 566 653 6Qg 657 673 647 United Stat~s

Stoc~s 357 384 360 32~5 245 222 146 116 Production 369 lt414

~ll 6 335 297 31 2_ 349 358 357 SUpply 726 719 657 637middot ~594 580 59middot3 530

Soviet Uniol Pr9duction 463523 ~ 544 vi 400 577 +65850

_ ~ i-

Y Year beginning J~lfor United States ~anltr~rance August lforCanadf and DecemlgterIcfb~A~t~~ii~l a1d Argentina middotmiddotmiddotmiddotltL

gj Beginning with 1967 stocksa-e August 1 t gtj ~ - c _lt~~

)

A~sttaii~gtlanted26 million a~reS t6wheatcompared wi~h 23 nlilli()pin f997and21million bull in 1966Although the bullweather was dry prlor to middotli~vest yieldswereexcellentandthe 1968~cropexceeded thep~ev1()usrecorlttbyJ6 ~lLiQn tons~ Qnmiddot afiscaI-yearQasjs At1Stralias 1967q8eJSPort recoidwas

fair (table~)put~onan ~ustra1ianmarketing-y-earbasis(DeceIllber~November) expoxtsamountedtlt only 5 milLion tonscomparedltwith alinostB milLionihthe

lt]lr7Viousseas~rigtMu~h of tlledecprieresul1edfr9~_smal+er~middotsa~e~t() Mainlan~ bullbull rr Ch~Qa and Paklstan ~ 0Alth()ugpJustral~~recently~~o~a~2llJlL~ontQIll3to Chma f0lFebryary1969March 1970 delivery Australia ~11 have record stocks on 4

Decemberl 1969 bull

JThearea llanted to wheat in pJ~~~tna ~1ts about ~qual to the v~rY iiarge i9~7 arealmt becausmiddote oifpCorweatheltIate~ in the growing seasonthe sllallest cropsince 1962 was harvestecmiddot Becaud~ exports remained 10win196768(D~cem ber--November) stocks were above tpe level of the twopreceltjngyearsal1d sup plies are aboui~ ecj11alto those of last year~

French wheat exportsmiddot recovered sharply in 196768 outside tlie EEC FraPice s most importantniarkets were the UAR Ma~nlandChina the United bull Kingdom AlgeriaandPoland Frances 1968 wheat crop and supplyequalthe 1965 recordancr August 1968January1969 exports amounted to about 18miilion tomt~ France sold about 05 n41lion tons of wheat to the UAR for January-July

delbrery Also the EEC has requests for more than 2 million tons of wheat under the middotFoodAid Conventi6n of the lGA againstmiddot a commitment of slightly over Imillion~ If some of these requests are filled shortly Frenchexportswill be stimulated However some of Frances traditional custoIIlers have larger wheat supplies this year and there may be a further buildup in French stocks bull Furthermore Spain tas another large surplus of soft wheat about 1 milUon

tons for export (J c ~ ~~~)) _ ~ A~

Wheat i~ort requirements are lower for Japan India Pakistan alild c

North Mrica but are higher for the United Kingdom Italy and MainlariaChina Because of very wet harvesting conditions that lowered quality ofthellecord EEC crop and the smaller durum crop in Italy 21 EEC imports of hard~heat may increase However wheat quality apparently is not as low as anticipeJed bull For example recent tests in West Germany indicate that except for a high incidence of sprouting quality matches the 1967 crop Furthermore the EEC has a large carryover of quality wheat from the 1967 harvest EEC import certificates issued during August 1968-January 1969 (excluding intra-EEC trade) covered about 21 million tons of wheat annual imports usually range from 44 to 48 million tons

Following a significant rise in 1967 world rice production leveled off in 1968 A record crop was produced in the United States Production in India Pakistan and Japan about matched the high 1967 level an above-aver~ge crop

was harvested in Burma and rice production in Mainland China equaledthe 1963-67 average The early arrival of the dry season diminished the prospects for a record crop in the Philippines The U S acreage allotment for the 1969 crop is 10 percent below the 1968 allotment

21 Italys imports of durum wheat are expected to be close to 1 million tons in 196869 compared with 0 4 million in the past three years

12

----

0 Mill6nmiddotmiddotmet~ict6ris~

middotMainlflndCiina middotmiddotmiddotmiddotmiddot7~L~middot 85~Q ~-87amp~ 82~r 86~4 p 84middot0 Indb( 55~4 58~6 460457 6J~5middotmiddot 6o~os

177) 164middot middot~19middot~Omiddot 190 P8yenist~l 177 lt178

If9 160 15 bull7 l5~5 159 J8~i

~~an 140 153lngonesia 126 132 +37 Thd11aiJd U8 ll2 lLOJ35 112

8~middot 823bull 1 6~6 77middotBurmaBrazjllt 63 T6 586~a 70

bullPJliippihe~( middotmiddot3~ lt 40 41 42 +4

UnitedStates 3middot~2 33 3~~ 39 41 4~8 43 47South Vietnam 5middot~3middot 5~2

Sout1fKorea 5middot1 5~4 48 53 49 gt )

-c-VcroPSharyested i~ theNorthen~emisPhere dUring thelai~r part of-the

year together witbthose harvested in Asia from November to May arecombinedmiddot

with crops harvested ic1 theSoutl1ern Hemisphere during lhefirstpart of the

following year

us exports of rice 1Ihich reacbed a record 19 million tons (milled) in

1968 will receive increased competition from Brazil 811d perhaps BUlllla and

orIiJtland Tbailands 1ice exports fell from 1 S million ton in i967 to 1

miUion in 1968 Thaila1d anticipated increased supplies and lowered its rice

export tax in OctOber and set an export target of 15 million tons h01leverBrazil has

late-season drought has affected the si~e a~d quality of the crop

a very large supply of rice its wholesale rice prices have declinedtherice

export tax hasbeen rllluced a1dBrazil r S currency was devaluedi1n AuguSt

Japbns 1969 import requirementsfor rice will be close to zero a nearshy

record crop plus carry-in stocks of 26 million tons (milled) add up to record

supplies Importreq1llrements are down in South Vietnam but~ because of

drought lthere should bealarg9rmarket for US rice inQouth Korea

IifewTechnology in Asia~--

In Asia high-yielding variebies of Mexican wheat have spreadquft-e~rapid-

r ly~d high~Yie~ding v(Uieties of IRric~ develpamp~ in the Philippines lFe In 196768 1exJcan vanetJeswere grown 011 about 10

beglnnlng to take hol~~ percent of the Wheatarea in West and SouthAsia~ This share was schedulld to

New variep-eswere grown on less t~lanincreaseto 15-17 percent in 196869

middot 5 percent of the rice land in South and Southeastmiddot1 Asia in 196768 in 1lfgt869

this share amoUnted to 5-7 percent

13 )

~hi)S fartbe~ewYJieties~tWheatild r~~ehav~ beenCplantedbyS~tne amppound the better farmers 011 Vpebestlanltluluatlyirigat~~)andwith heavY ~PJli~ cations of fertiLizeti~4pJantPromiddotte~tioqchemiG~LS When grownundersuqh c~nditionst~y prodUCeYie~dsr~pgi~g ~rtgt1ll3A~8lOO percen~higheicth~~raoi-

t~otla+var~erLe~T~c physLqa- GO~s~r)~Ll1tl t9~rtneradoptLO~9fthe4Lg1l7 y~~ldLng vanetLesaretheavaLlab~htsr 01 calable farm lllaIagers 0 911d ~xtelsL9n ~workers ihe wrailabiltyof gqpd-lan~Particul~rlY irrigated itmd the pre- valence of p+ar+t dillease~and destljUctive insects and the adequa~ 01 grain or-riJ1g Iliilling~toragej anddistributiol1facilitiesThe econo~~) limita

tionsare graininImtprice ratios 1lndthecosts of sUbsidizing exr0rt~ domes ticconsumption orbQi1h J

1gtshy

Lmpoyentihce of thepltrSicallimitations ValieScopsiderablybYCountry regjon but adequate irIigationpartiGu1~-rly for ric3appearsto be thelllajor limitingfactor~In Indi8forexarople averylaCgeflstare of the adequately irrigated land (Itlnd wHhreli3ble water control during middotthe dry season)app~r ently is already planted to new varieties of grain~ Only those farmerS with reliable irrigation c9iafford the ~iskof the high cash costs of fertilizers andpiant protection Chemicals required by the new varieties Thus the annual increase inthe spread of these varieties in India pobablywi1l depend largely upon the annual iIlcrement plalJled for rJewirrigation facilitiei3 911 (increment equal to bplyahout 2 middotperc~nt6f thepresent grain area

- ~ bull bull I

In East Pakist911 91d Southeast Asia the lack of water control is even more serious In East Pakistan where 90 percent of Pyenistan 1 s rice is grown the frequent uncontrolled floodingoi most producing areas wil1limit thespreag of the new short-stemmed varieties in additian insects and diseaSes flourish t

in sllchanenvirOrtment In Southeast Asia the older andniost oftlie new irrigatipn systems were designed to provide a constant flow of water from the upJer to thelowerfields uSlially during the wet season resulting in loss of fertilizer and insecticides Additional modern irrigation i171 the broad river valleys of Southeast ASia will require large investments in dams ana long distribution systems

At the other extreme West Pakista~ h08 a good enviromnentforthe new varieties of wheata1d rice--reliablecon1)iol of irrigation water loW rainfall high solar energy and -few problemswfth insects 911d diseases In West Pakistan primarily a wheat-consuming area dissemination of MeXiC911 wheat varieties has been ra9ia more than 20 percent Of the wheat area was planted to these varieties in the fall of 1968 Much of the rice traditionally produced in West Pakistan

o is Basmati an extra-long grain variety that is exported at premiumprices ThminiIlULll purchaBeprice of Basmati has been raised to dis(ouragi3 a shift to other varieties~

In Turkey Mexican varieties may occupygt as much as8 percentof the wheat land int)lecurrent season These varieties are not likely to spread to more than 15 percent of the Wheat area the limits of the wheat land that is climatically adapted c~~ bull

High fax-m prices in Asia caused by shortages in previous yea-rs encourag- eO a mode~t increase in grairtacreage 911d sharp increases in the use offertil shyizer and high yielding va-rieties in 196768 Good Weather produced a large

lt

14

il

cop which resultedi-ntemporlUyself-sufficie~cyj insonieAsiaj GOun~ J

jrieslt and in an exportable surplus in others Th~3 intyrn Placeda bUrden dhlt4ying storage aqd transport facilities andled to a qe cline in Producer prlcltas fri some countries

In 196768 lar~e purchase13 otcriceathigli~pJices bY the Philipplne Rice ahd CornProd1lction Coordinating Council used up much of the Councils price suppprt fupdl The Council now nas a surplus of rice that cannot be exported bull excePtatalossand(jnsufficiei~t storag(l andfund~ to pcentoide much support for the current crop Producer prJce~have fallen~In pa~_Ls~an wholesa~ers and millers are reluctant to buyIRrJce because ~fpoor mtlltng andcookJng

chaxacteristlcs sect and paddy prices haVe fallen In addition wholesale wheat prices in PakistaIl were much lower in the faIr of 1968 than in the faU of 1967 beca~e of large supplies C

(l

cJ

World nairl Surplu I)

In Europe beef prDduction is closely tiedto milkoutput rl Thus the solution of the dairy surplus problem is more complicated-n Euxope than in the

United states Table 7 illustrates the effects of dual-purpose (meat and middotmilk) cows inEliropeversusthe effects of single-purpose cows and steers in the United states The milkbeef production rat~o in Europe is two to three times higher than in the United States and except for year-to-year fluctuations has not trended downward during the 1960s

Table 7 --Ratio of milk production to beef and veal production 1960-66

~ Country middot 1960 1961 1962 1963 1964 1965 1966middot

~ shy r-t --

- -PoUlds of milk Eer poundlound of beefv and veal-United States middotmiddot 78 76 7middot7 72 65 63 58 USSR middotmiddot 187 f216 194 166 176 186 172 EElC 193 181 172 175 189 198 186 United Kfngdom 155 143 141 130 132 146 165 Denniark 227-1 237 208 186 231 235 206middotmiddot --- ---- ----------

Several factors favor the dual-purpose cow in Europe the profitability of milk production 1~l~tive to beef production the small size of farms the types of fq~d cwa~lable and consumer preference for lean beef Relatively high guaranteed prices to support the small inefficient milk producer 21 in the face of static domestic dema1d have created a very large butter surplus in Europe (table 8) and led to highly subsidized exports of dairy products On November 1

sectjThese undesirablEi characteristic~ are being eHminated byOPlantbreeders at the Internation(l Rice Research Institute (IRRI) in the Philippines

11 Some 4 million f~rs in the EEC have dairy herds with fewer than 6 cows

15

0

8-~autter stocks october~~j96f~681 -----C~~2gt bull Q--j~_F

1965 1966middot i 1967 I bull )1gt

- Thousandmetrfb bons 2

usSR gj EECdl United states United Kingdom

middot middot ~- 390 184

73 43

520 208

i

3i~ 35

650 229

( 96 f49

~

n~a

355 89 8 v

j

GaDada Ne~0zealwid4V

-~-~ 49 31

(~9 ~36

38 29

-4~ 35 32

Ireland middot middot 17 17 22 24 Demriark (I

Australia Sweden)

c Finland Switzerlall~i

middotmiddot

11 17

15 4 6

0 g

i 15 r~4

7 1

~

9 i8

12

7 11

18 14 12 12 8

~ ~

-YC0nnnercial and govenment stocki untss ojihen9ise~~lecified-------ypecember 3ll(fuolesaleinqustrialaqlil r-etail stoc~s Wholesale and

industrial stocks for 1965 1966 and1967~llllpUfiteato174l~00 389000 and 533000 tons respectively Retail stOCSSi wElre estfinated from ruble-value figures

3 Exciiuding Italy TfjMay 31 Exporters stocks only

During the 1960 s West Germany rhatlged from a net import(~r to a net exshyporter of dairy prpducts In the ear~y]-art of the decade west GermanX imshyported about 5 percent of its dairy r~~quiremen~1L (in terms of milk) but in 1968 milk production exceeded domestjb~lemanqby~ similar ~rgin AlthoughshyWest Germanys expprts ot butter andnqnfat ~ll miUJr in 196B-increased 80 w1d 30 percent respectively stockS ofblth l~toducts also increased

l

The general problem of dairy sV7tgtlusesinthe USSR isconwpunded by an lack of storage and distribution faoili ties for fresh milk ana most of the (I

niiik is converted ihto butter Re~tat1 butterprices are p~gged very high and 1967stOcks wei-emore than double uhoseUn the EEC bull Soviet exports of butter during 195667 ranged from 25OOQto middot80000 tQns annually with no discerlllfPle trend upward ordownward During the early portion of the period exports were allliostexclusively to Eastern Eqrope Shipments to Cuba began in 1960 Shipshyments to theEEC and other non-Cqnnnunist areas which were insignificant during 1956-65alllounted tQ 13000 tons in 1966 and 22000 tons in 1967 Spme Soviet butter entering the EEC has be I211 reprocessed and exported to third countries ~

- ~- ~ -- gt -- ~ - -- gt lt -- - -- ~laquo- ~~Colllpe~iti9nfrOlllJtb(fsurplusicduhtIiesectbfC6n~ine~teLlNr9PemiddottsofmajOt

cqhC~rn tcrmiddotth~ daizrlt Lndustrl~siin NeWZeai~~dAuatriaitneUhit(i41ltjngdom atilitheUnjted states ThePllited ~inglt16111 bullbull tlie1-argest1InP9rt$r6fliatrY(p)0~ ductsgt ha~asked exportingcojlritries1iocentUrht~ejr ~heeses-lesmiddottOtheq1t markflt Ti1is voluntarYa-ir~ement~~as~q~sOEveatheprob~emand 1i~eBri~tsb Fanners UnionandMi~M9rketing0aoardshaire requestedGoyernmentintervention in the fopnof antidumping orcQuntetVailingdut~~~s~New ZeaIandssaLesmiddotof dairy products leve)edoifinl96768~espiteythat coUfltrys+argectl~r(3ncy

devaluation whichshoul4 nave made tt m6redbmpetitiveiri theUllited~Kingdom arld bther markets~ Australia didnot devalu~ andthe eXport -iTIlue 6fAuBtraliai1

)putter ~heese Imdnoneatdrymi~ dro~e(i 50 iO and 40 percentrespectiVely in 196768pec~use ofd~pref3Se~ Wo-ldpr[ces andaltiecline inproductronUS COrmnerciallr=XPb~ts of dairy products qeqlingdin 1968 for the fautth consecutive

year andtheUnited stateshMto place additional CUrbs on dairy imports in 1968 to protect the domesttrcindustry against heavi~ subsidi2ted low-pricedimshy~~~ ~

11olllJttngcosts of dairY ~urplus~shave led some cphtinentalElllopean trrestoadoptnieasJresto reduce supplies For example in 1968 Switzerland reduced~1ep~6ducerpriq~of mille and the consumer Irice ofbutter SUbSidii~d th~cullingJp~)dairyherdsandthe Shiftingfrotndairy to beef productiori raJsed the ilmportlevyolnonfat dry mllkto reduce stocks andencouragethe feedihgof whole milk fp calves and increased food-aid shipments ol dairy proshy

ducts During MaiY-o~q~cr6er 1968 butter consuuptioninSwitzerland rose 341ier centabp~e thesamepex-iod in 17production droppad 16 percent and butter stocks oldctober 1 1968 were 25-30 percent lower than on October 1 1997

J

In the llie sales of -surplus butter have been mMe at reducedplicesto 0

low income group~Jinstitutions and food processors and additional food-aid shipments of didrr products have been made Af yet these measUres bave namp~

proved as successful as those of Switzerland

R-apprai~al of the ENe Co~on Agricultural POlicy

In addition to dairy products supplies of soft wheat barley sugarpork lard poultry meat and certain fruits and vegetables have been building up the EEe countries despite subsidized exports of many of these commodities Europeans ate predicting year-end 196869 stocks of 6milliori tons of wheat 1 million tons of barl~y in the Community With liruitedprospecysforEEC exshyportslargeriquantities of soft wheat are being denatured for use a~feed reshyplacing imports of feed grains Because of high costs of grain to EmC reed0

manllracturers--especial~ imported grain which is subject to highvariable levies--a varlet of cheaper substitutes are being used inlivestockrations Since July 1968 domes1iically produced surplus sugar mar be denatured for use in feed throughout the EEC Although West German farmersappearreluctant to increase the quantity of sug~r in livestock rations farmersc~~ France and the N~therlandsaxe readi~ accepting the new formUlas In ad0~on cassava chips nonfat dty milk grain byproductS and pulses are becomingfncreasing~impQrshytant ingredients in compound feeds replacing corn and other import grains It has geen estimated that Dutch feed manllfacturers used 30 to 35 percent less corn during July-December 1968 than in thesame months of 1967

I

17

0

~~~r~~f~~~~~~i~~~~~~~f~O~l~~~4~~~~~~ut~~~~kbullmiddotmiddotmiddotJl tl1eJ~t bull y~~~rjh~middotan~1~d~t~1es middotr~q1lleclmiddots1l1n~r~h~sO~middotP9~~tirymiddot eCP~ts~Q bullSwitz3rl~d instttutedeyenport p~ents 9n lard shipments to 1~e Unitltd Kingdommiddot~dlt~dedmiddot~ther restrictions to iIDports of dairy productsmiddot Yugoslavia has

bullmiddotbullmiddot1fhreateh~di~taJla1bryt~iffs~lIinst EECJlllPotts becar1se of

r~the~~gr6tmiddoty~gosiavineat bull Jimited ~ccesS to ~~lt -- - -~- ~-- - ~ I~ i968j$~i1necost6f suppoptihgEECdaiyprodUcts ilJc1uding price siJl)pQi~sandeXport~ubsi~ies LseJq)ectedtQappro~ch $800 millfon(in(Ll1qingmiddotJ170Iilillio~finarigea5iirect)y byniemper cmiddot01mtries) The costopounds~ppottpoundorther5orrull()di~ies~-primatilygrail1 ~sugaandfa1sanqoils--iSlikelytobullre~ch$l4hillionbull If policies ar~not(hanged it has beenestimat~d thatfiAancing thepOllIlloiAgdCUl-eurourIUPoliGY (CAP) ~~llapproach $3billioqin1970 bull ~ bull

Alarmed by the mOUnting costsopound protectionism the REC Commission a1dC01lnci1curr~nt1yarereapp~~ising theCA In October Commission VicePresidentManslrltsubmittedproposals aimed at improving the efficiency Of VEEC agifcultureand reducing dependence on price policy Mansho1tpointedputthe large discr~panCy oetweenthe mounting costs of support ($22 billionin196869) ~1dthesmallEECrund available for reducing the number of small andineificient farrnS (liinit~d to $285 million annually) bull In December~ theCommission submitted~plan based on Mansho1tsproposa1s to the EECpouncilfor considerationn

The Commission recommended a programfor structUral reform to be acc~m-plished by 198o inc11)ding latge-scaledivers1on of la1dand labor from agrishyculture and a substantia1increase in ~ricultura1 investment bull However the specific propoals toimpiement thisdiversion suggest that only marginll1 landwould be t~en out of production a1d that only the most inefficient producerswou1dbdiscouraged Thus the upwad trend in production probably would notbe slowed and substitution of domestic products for imports might increase

The Commission s short~run proposals include

1 Small reductions in thr~ort prices fO soft wheat barley ryeoilseeds afldsugar be~ts The p~esentpice level for corn durum and ricewould be retllined Sugarproduction quotas would be lowered 5 percent for196970 bull

2 ]]aXiitiori of -

edible yegetab1e a1d marine oi1s tod~ter margaine consumption a1d encouragethe useoi butter

3 Taxation o1oi1 cake and meala1d payment of premiUlns for cullingdairy herds to discoUragedairy~r()duction Thecurr~~tsllpport price for milkwould remain unchanged the butter price would be reduced and the pricaofnonfat dry milk would be rilised Feeding of nonfat dry milk wouJ-d be subsidizeltito offSet the price increase and improve its competitive position relative tooil cake and meaL

14 Pavment of subsidies forfatteningofbeei cattle

18

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

----

0 Mill6nmiddotmiddotmet~ict6ris~

middotMainlflndCiina middotmiddotmiddotmiddotmiddot7~L~middot 85~Q ~-87amp~ 82~r 86~4 p 84middot0 Indb( 55~4 58~6 460457 6J~5middotmiddot 6o~os

177) 164middot middot~19middot~Omiddot 190 P8yenist~l 177 lt178

If9 160 15 bull7 l5~5 159 J8~i

~~an 140 153lngonesia 126 132 +37 Thd11aiJd U8 ll2 lLOJ35 112

8~middot 823bull 1 6~6 77middotBurmaBrazjllt 63 T6 586~a 70

bullPJliippihe~( middotmiddot3~ lt 40 41 42 +4

UnitedStates 3middot~2 33 3~~ 39 41 4~8 43 47South Vietnam 5middot~3middot 5~2

Sout1fKorea 5middot1 5~4 48 53 49 gt )

-c-VcroPSharyested i~ theNorthen~emisPhere dUring thelai~r part of-the

year together witbthose harvested in Asia from November to May arecombinedmiddot

with crops harvested ic1 theSoutl1ern Hemisphere during lhefirstpart of the

following year

us exports of rice 1Ihich reacbed a record 19 million tons (milled) in

1968 will receive increased competition from Brazil 811d perhaps BUlllla and

orIiJtland Tbailands 1ice exports fell from 1 S million ton in i967 to 1

miUion in 1968 Thaila1d anticipated increased supplies and lowered its rice

export tax in OctOber and set an export target of 15 million tons h01leverBrazil has

late-season drought has affected the si~e a~d quality of the crop

a very large supply of rice its wholesale rice prices have declinedtherice

export tax hasbeen rllluced a1dBrazil r S currency was devaluedi1n AuguSt

Japbns 1969 import requirementsfor rice will be close to zero a nearshy

record crop plus carry-in stocks of 26 million tons (milled) add up to record

supplies Importreq1llrements are down in South Vietnam but~ because of

drought lthere should bealarg9rmarket for US rice inQouth Korea

IifewTechnology in Asia~--

In Asia high-yielding variebies of Mexican wheat have spreadquft-e~rapid-

r ly~d high~Yie~ding v(Uieties of IRric~ develpamp~ in the Philippines lFe In 196768 1exJcan vanetJeswere grown 011 about 10

beglnnlng to take hol~~ percent of the Wheatarea in West and SouthAsia~ This share was schedulld to

New variep-eswere grown on less t~lanincreaseto 15-17 percent in 196869

middot 5 percent of the rice land in South and Southeastmiddot1 Asia in 196768 in 1lfgt869

this share amoUnted to 5-7 percent

13 )

~hi)S fartbe~ewYJieties~tWheatild r~~ehav~ beenCplantedbyS~tne amppound the better farmers 011 Vpebestlanltluluatlyirigat~~)andwith heavY ~PJli~ cations of fertiLizeti~4pJantPromiddotte~tioqchemiG~LS When grownundersuqh c~nditionst~y prodUCeYie~dsr~pgi~g ~rtgt1ll3A~8lOO percen~higheicth~~raoi-

t~otla+var~erLe~T~c physLqa- GO~s~r)~Ll1tl t9~rtneradoptLO~9fthe4Lg1l7 y~~ldLng vanetLesaretheavaLlab~htsr 01 calable farm lllaIagers 0 911d ~xtelsL9n ~workers ihe wrailabiltyof gqpd-lan~Particul~rlY irrigated itmd the pre- valence of p+ar+t dillease~and destljUctive insects and the adequa~ 01 grain or-riJ1g Iliilling~toragej anddistributiol1facilitiesThe econo~~) limita

tionsare graininImtprice ratios 1lndthecosts of sUbsidizing exr0rt~ domes ticconsumption orbQi1h J

1gtshy

Lmpoyentihce of thepltrSicallimitations ValieScopsiderablybYCountry regjon but adequate irIigationpartiGu1~-rly for ric3appearsto be thelllajor limitingfactor~In Indi8forexarople averylaCgeflstare of the adequately irrigated land (Itlnd wHhreli3ble water control during middotthe dry season)app~r ently is already planted to new varieties of grain~ Only those farmerS with reliable irrigation c9iafford the ~iskof the high cash costs of fertilizers andpiant protection Chemicals required by the new varieties Thus the annual increase inthe spread of these varieties in India pobablywi1l depend largely upon the annual iIlcrement plalJled for rJewirrigation facilitiei3 911 (increment equal to bplyahout 2 middotperc~nt6f thepresent grain area

- ~ bull bull I

In East Pakist911 91d Southeast Asia the lack of water control is even more serious In East Pakistan where 90 percent of Pyenistan 1 s rice is grown the frequent uncontrolled floodingoi most producing areas wil1limit thespreag of the new short-stemmed varieties in additian insects and diseaSes flourish t

in sllchanenvirOrtment In Southeast Asia the older andniost oftlie new irrigatipn systems were designed to provide a constant flow of water from the upJer to thelowerfields uSlially during the wet season resulting in loss of fertilizer and insecticides Additional modern irrigation i171 the broad river valleys of Southeast ASia will require large investments in dams ana long distribution systems

At the other extreme West Pakista~ h08 a good enviromnentforthe new varieties of wheata1d rice--reliablecon1)iol of irrigation water loW rainfall high solar energy and -few problemswfth insects 911d diseases In West Pakistan primarily a wheat-consuming area dissemination of MeXiC911 wheat varieties has been ra9ia more than 20 percent Of the wheat area was planted to these varieties in the fall of 1968 Much of the rice traditionally produced in West Pakistan

o is Basmati an extra-long grain variety that is exported at premiumprices ThminiIlULll purchaBeprice of Basmati has been raised to dis(ouragi3 a shift to other varieties~

In Turkey Mexican varieties may occupygt as much as8 percentof the wheat land int)lecurrent season These varieties are not likely to spread to more than 15 percent of the Wheat area the limits of the wheat land that is climatically adapted c~~ bull

High fax-m prices in Asia caused by shortages in previous yea-rs encourag- eO a mode~t increase in grairtacreage 911d sharp increases in the use offertil shyizer and high yielding va-rieties in 196768 Good Weather produced a large

lt

14

il

cop which resultedi-ntemporlUyself-sufficie~cyj insonieAsiaj GOun~ J

jrieslt and in an exportable surplus in others Th~3 intyrn Placeda bUrden dhlt4ying storage aqd transport facilities andled to a qe cline in Producer prlcltas fri some countries

In 196768 lar~e purchase13 otcriceathigli~pJices bY the Philipplne Rice ahd CornProd1lction Coordinating Council used up much of the Councils price suppprt fupdl The Council now nas a surplus of rice that cannot be exported bull excePtatalossand(jnsufficiei~t storag(l andfund~ to pcentoide much support for the current crop Producer prJce~have fallen~In pa~_Ls~an wholesa~ers and millers are reluctant to buyIRrJce because ~fpoor mtlltng andcookJng

chaxacteristlcs sect and paddy prices haVe fallen In addition wholesale wheat prices in PakistaIl were much lower in the faIr of 1968 than in the faU of 1967 beca~e of large supplies C

(l

cJ

World nairl Surplu I)

In Europe beef prDduction is closely tiedto milkoutput rl Thus the solution of the dairy surplus problem is more complicated-n Euxope than in the

United states Table 7 illustrates the effects of dual-purpose (meat and middotmilk) cows inEliropeversusthe effects of single-purpose cows and steers in the United states The milkbeef production rat~o in Europe is two to three times higher than in the United States and except for year-to-year fluctuations has not trended downward during the 1960s

Table 7 --Ratio of milk production to beef and veal production 1960-66

~ Country middot 1960 1961 1962 1963 1964 1965 1966middot

~ shy r-t --

- -PoUlds of milk Eer poundlound of beefv and veal-United States middotmiddot 78 76 7middot7 72 65 63 58 USSR middotmiddot 187 f216 194 166 176 186 172 EElC 193 181 172 175 189 198 186 United Kfngdom 155 143 141 130 132 146 165 Denniark 227-1 237 208 186 231 235 206middotmiddot --- ---- ----------

Several factors favor the dual-purpose cow in Europe the profitability of milk production 1~l~tive to beef production the small size of farms the types of fq~d cwa~lable and consumer preference for lean beef Relatively high guaranteed prices to support the small inefficient milk producer 21 in the face of static domestic dema1d have created a very large butter surplus in Europe (table 8) and led to highly subsidized exports of dairy products On November 1

sectjThese undesirablEi characteristic~ are being eHminated byOPlantbreeders at the Internation(l Rice Research Institute (IRRI) in the Philippines

11 Some 4 million f~rs in the EEC have dairy herds with fewer than 6 cows

15

0

8-~autter stocks october~~j96f~681 -----C~~2gt bull Q--j~_F

1965 1966middot i 1967 I bull )1gt

- Thousandmetrfb bons 2

usSR gj EECdl United states United Kingdom

middot middot ~- 390 184

73 43

520 208

i

3i~ 35

650 229

( 96 f49

~

n~a

355 89 8 v

j

GaDada Ne~0zealwid4V

-~-~ 49 31

(~9 ~36

38 29

-4~ 35 32

Ireland middot middot 17 17 22 24 Demriark (I

Australia Sweden)

c Finland Switzerlall~i

middotmiddot

11 17

15 4 6

0 g

i 15 r~4

7 1

~

9 i8

12

7 11

18 14 12 12 8

~ ~

-YC0nnnercial and govenment stocki untss ojihen9ise~~lecified-------ypecember 3ll(fuolesaleinqustrialaqlil r-etail stoc~s Wholesale and

industrial stocks for 1965 1966 and1967~llllpUfiteato174l~00 389000 and 533000 tons respectively Retail stOCSSi wElre estfinated from ruble-value figures

3 Exciiuding Italy TfjMay 31 Exporters stocks only

During the 1960 s West Germany rhatlged from a net import(~r to a net exshyporter of dairy prpducts In the ear~y]-art of the decade west GermanX imshyported about 5 percent of its dairy r~~quiremen~1L (in terms of milk) but in 1968 milk production exceeded domestjb~lemanqby~ similar ~rgin AlthoughshyWest Germanys expprts ot butter andnqnfat ~ll miUJr in 196B-increased 80 w1d 30 percent respectively stockS ofblth l~toducts also increased

l

The general problem of dairy sV7tgtlusesinthe USSR isconwpunded by an lack of storage and distribution faoili ties for fresh milk ana most of the (I

niiik is converted ihto butter Re~tat1 butterprices are p~gged very high and 1967stOcks wei-emore than double uhoseUn the EEC bull Soviet exports of butter during 195667 ranged from 25OOQto middot80000 tQns annually with no discerlllfPle trend upward ordownward During the early portion of the period exports were allliostexclusively to Eastern Eqrope Shipments to Cuba began in 1960 Shipshyments to theEEC and other non-Cqnnnunist areas which were insignificant during 1956-65alllounted tQ 13000 tons in 1966 and 22000 tons in 1967 Spme Soviet butter entering the EEC has be I211 reprocessed and exported to third countries ~

- ~- ~ -- gt -- ~ - -- gt lt -- - -- ~laquo- ~~Colllpe~iti9nfrOlllJtb(fsurplusicduhtIiesectbfC6n~ine~teLlNr9PemiddottsofmajOt

cqhC~rn tcrmiddotth~ daizrlt Lndustrl~siin NeWZeai~~dAuatriaitneUhit(i41ltjngdom atilitheUnjted states ThePllited ~inglt16111 bullbull tlie1-argest1InP9rt$r6fliatrY(p)0~ ductsgt ha~asked exportingcojlritries1iocentUrht~ejr ~heeses-lesmiddottOtheq1t markflt Ti1is voluntarYa-ir~ement~~as~q~sOEveatheprob~emand 1i~eBri~tsb Fanners UnionandMi~M9rketing0aoardshaire requestedGoyernmentintervention in the fopnof antidumping orcQuntetVailingdut~~~s~New ZeaIandssaLesmiddotof dairy products leve)edoifinl96768~espiteythat coUfltrys+argectl~r(3ncy

devaluation whichshoul4 nave made tt m6redbmpetitiveiri theUllited~Kingdom arld bther markets~ Australia didnot devalu~ andthe eXport -iTIlue 6fAuBtraliai1

)putter ~heese Imdnoneatdrymi~ dro~e(i 50 iO and 40 percentrespectiVely in 196768pec~use ofd~pref3Se~ Wo-ldpr[ces andaltiecline inproductronUS COrmnerciallr=XPb~ts of dairy products qeqlingdin 1968 for the fautth consecutive

year andtheUnited stateshMto place additional CUrbs on dairy imports in 1968 to protect the domesttrcindustry against heavi~ subsidi2ted low-pricedimshy~~~ ~

11olllJttngcosts of dairY ~urplus~shave led some cphtinentalElllopean trrestoadoptnieasJresto reduce supplies For example in 1968 Switzerland reduced~1ep~6ducerpriq~of mille and the consumer Irice ofbutter SUbSidii~d th~cullingJp~)dairyherdsandthe Shiftingfrotndairy to beef productiori raJsed the ilmportlevyolnonfat dry mllkto reduce stocks andencouragethe feedihgof whole milk fp calves and increased food-aid shipments ol dairy proshy

ducts During MaiY-o~q~cr6er 1968 butter consuuptioninSwitzerland rose 341ier centabp~e thesamepex-iod in 17production droppad 16 percent and butter stocks oldctober 1 1968 were 25-30 percent lower than on October 1 1997

J

In the llie sales of -surplus butter have been mMe at reducedplicesto 0

low income group~Jinstitutions and food processors and additional food-aid shipments of didrr products have been made Af yet these measUres bave namp~

proved as successful as those of Switzerland

R-apprai~al of the ENe Co~on Agricultural POlicy

In addition to dairy products supplies of soft wheat barley sugarpork lard poultry meat and certain fruits and vegetables have been building up the EEe countries despite subsidized exports of many of these commodities Europeans ate predicting year-end 196869 stocks of 6milliori tons of wheat 1 million tons of barl~y in the Community With liruitedprospecysforEEC exshyportslargeriquantities of soft wheat are being denatured for use a~feed reshyplacing imports of feed grains Because of high costs of grain to EmC reed0

manllracturers--especial~ imported grain which is subject to highvariable levies--a varlet of cheaper substitutes are being used inlivestockrations Since July 1968 domes1iically produced surplus sugar mar be denatured for use in feed throughout the EEC Although West German farmersappearreluctant to increase the quantity of sug~r in livestock rations farmersc~~ France and the N~therlandsaxe readi~ accepting the new formUlas In ad0~on cassava chips nonfat dty milk grain byproductS and pulses are becomingfncreasing~impQrshytant ingredients in compound feeds replacing corn and other import grains It has geen estimated that Dutch feed manllfacturers used 30 to 35 percent less corn during July-December 1968 than in thesame months of 1967

I

17

0

~~~r~~f~~~~~~i~~~~~~~f~O~l~~~4~~~~~~ut~~~~kbullmiddotmiddotmiddotJl tl1eJ~t bull y~~~rjh~middotan~1~d~t~1es middotr~q1lleclmiddots1l1n~r~h~sO~middotP9~~tirymiddot eCP~ts~Q bullSwitz3rl~d instttutedeyenport p~ents 9n lard shipments to 1~e Unitltd Kingdommiddot~dlt~dedmiddot~ther restrictions to iIDports of dairy productsmiddot Yugoslavia has

bullmiddotbullmiddot1fhreateh~di~taJla1bryt~iffs~lIinst EECJlllPotts becar1se of

r~the~~gr6tmiddoty~gosiavineat bull Jimited ~ccesS to ~~lt -- - -~- ~-- - ~ I~ i968j$~i1necost6f suppoptihgEECdaiyprodUcts ilJc1uding price siJl)pQi~sandeXport~ubsi~ies LseJq)ectedtQappro~ch $800 millfon(in(Ll1qingmiddotJ170Iilillio~finarigea5iirect)y byniemper cmiddot01mtries) The costopounds~ppottpoundorther5orrull()di~ies~-primatilygrail1 ~sugaandfa1sanqoils--iSlikelytobullre~ch$l4hillionbull If policies ar~not(hanged it has beenestimat~d thatfiAancing thepOllIlloiAgdCUl-eurourIUPoliGY (CAP) ~~llapproach $3billioqin1970 bull ~ bull

Alarmed by the mOUnting costsopound protectionism the REC Commission a1dC01lnci1curr~nt1yarereapp~~ising theCA In October Commission VicePresidentManslrltsubmittedproposals aimed at improving the efficiency Of VEEC agifcultureand reducing dependence on price policy Mansho1tpointedputthe large discr~panCy oetweenthe mounting costs of support ($22 billionin196869) ~1dthesmallEECrund available for reducing the number of small andineificient farrnS (liinit~d to $285 million annually) bull In December~ theCommission submitted~plan based on Mansho1tsproposa1s to the EECpouncilfor considerationn

The Commission recommended a programfor structUral reform to be acc~m-plished by 198o inc11)ding latge-scaledivers1on of la1dand labor from agrishyculture and a substantia1increase in ~ricultura1 investment bull However the specific propoals toimpiement thisdiversion suggest that only marginll1 landwould be t~en out of production a1d that only the most inefficient producerswou1dbdiscouraged Thus the upwad trend in production probably would notbe slowed and substitution of domestic products for imports might increase

The Commission s short~run proposals include

1 Small reductions in thr~ort prices fO soft wheat barley ryeoilseeds afldsugar be~ts The p~esentpice level for corn durum and ricewould be retllined Sugarproduction quotas would be lowered 5 percent for196970 bull

2 ]]aXiitiori of -

edible yegetab1e a1d marine oi1s tod~ter margaine consumption a1d encouragethe useoi butter

3 Taxation o1oi1 cake and meala1d payment of premiUlns for cullingdairy herds to discoUragedairy~r()duction Thecurr~~tsllpport price for milkwould remain unchanged the butter price would be reduced and the pricaofnonfat dry milk would be rilised Feeding of nonfat dry milk wouJ-d be subsidizeltito offSet the price increase and improve its competitive position relative tooil cake and meaL

14 Pavment of subsidies forfatteningofbeei cattle

18

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

~hi)S fartbe~ewYJieties~tWheatild r~~ehav~ beenCplantedbyS~tne amppound the better farmers 011 Vpebestlanltluluatlyirigat~~)andwith heavY ~PJli~ cations of fertiLizeti~4pJantPromiddotte~tioqchemiG~LS When grownundersuqh c~nditionst~y prodUCeYie~dsr~pgi~g ~rtgt1ll3A~8lOO percen~higheicth~~raoi-

t~otla+var~erLe~T~c physLqa- GO~s~r)~Ll1tl t9~rtneradoptLO~9fthe4Lg1l7 y~~ldLng vanetLesaretheavaLlab~htsr 01 calable farm lllaIagers 0 911d ~xtelsL9n ~workers ihe wrailabiltyof gqpd-lan~Particul~rlY irrigated itmd the pre- valence of p+ar+t dillease~and destljUctive insects and the adequa~ 01 grain or-riJ1g Iliilling~toragej anddistributiol1facilitiesThe econo~~) limita

tionsare graininImtprice ratios 1lndthecosts of sUbsidizing exr0rt~ domes ticconsumption orbQi1h J

1gtshy

Lmpoyentihce of thepltrSicallimitations ValieScopsiderablybYCountry regjon but adequate irIigationpartiGu1~-rly for ric3appearsto be thelllajor limitingfactor~In Indi8forexarople averylaCgeflstare of the adequately irrigated land (Itlnd wHhreli3ble water control during middotthe dry season)app~r ently is already planted to new varieties of grain~ Only those farmerS with reliable irrigation c9iafford the ~iskof the high cash costs of fertilizers andpiant protection Chemicals required by the new varieties Thus the annual increase inthe spread of these varieties in India pobablywi1l depend largely upon the annual iIlcrement plalJled for rJewirrigation facilitiei3 911 (increment equal to bplyahout 2 middotperc~nt6f thepresent grain area

- ~ bull bull I

In East Pakist911 91d Southeast Asia the lack of water control is even more serious In East Pakistan where 90 percent of Pyenistan 1 s rice is grown the frequent uncontrolled floodingoi most producing areas wil1limit thespreag of the new short-stemmed varieties in additian insects and diseaSes flourish t

in sllchanenvirOrtment In Southeast Asia the older andniost oftlie new irrigatipn systems were designed to provide a constant flow of water from the upJer to thelowerfields uSlially during the wet season resulting in loss of fertilizer and insecticides Additional modern irrigation i171 the broad river valleys of Southeast ASia will require large investments in dams ana long distribution systems

At the other extreme West Pakista~ h08 a good enviromnentforthe new varieties of wheata1d rice--reliablecon1)iol of irrigation water loW rainfall high solar energy and -few problemswfth insects 911d diseases In West Pakistan primarily a wheat-consuming area dissemination of MeXiC911 wheat varieties has been ra9ia more than 20 percent Of the wheat area was planted to these varieties in the fall of 1968 Much of the rice traditionally produced in West Pakistan

o is Basmati an extra-long grain variety that is exported at premiumprices ThminiIlULll purchaBeprice of Basmati has been raised to dis(ouragi3 a shift to other varieties~

In Turkey Mexican varieties may occupygt as much as8 percentof the wheat land int)lecurrent season These varieties are not likely to spread to more than 15 percent of the Wheat area the limits of the wheat land that is climatically adapted c~~ bull

High fax-m prices in Asia caused by shortages in previous yea-rs encourag- eO a mode~t increase in grairtacreage 911d sharp increases in the use offertil shyizer and high yielding va-rieties in 196768 Good Weather produced a large

lt

14

il

cop which resultedi-ntemporlUyself-sufficie~cyj insonieAsiaj GOun~ J

jrieslt and in an exportable surplus in others Th~3 intyrn Placeda bUrden dhlt4ying storage aqd transport facilities andled to a qe cline in Producer prlcltas fri some countries

In 196768 lar~e purchase13 otcriceathigli~pJices bY the Philipplne Rice ahd CornProd1lction Coordinating Council used up much of the Councils price suppprt fupdl The Council now nas a surplus of rice that cannot be exported bull excePtatalossand(jnsufficiei~t storag(l andfund~ to pcentoide much support for the current crop Producer prJce~have fallen~In pa~_Ls~an wholesa~ers and millers are reluctant to buyIRrJce because ~fpoor mtlltng andcookJng

chaxacteristlcs sect and paddy prices haVe fallen In addition wholesale wheat prices in PakistaIl were much lower in the faIr of 1968 than in the faU of 1967 beca~e of large supplies C

(l

cJ

World nairl Surplu I)

In Europe beef prDduction is closely tiedto milkoutput rl Thus the solution of the dairy surplus problem is more complicated-n Euxope than in the

United states Table 7 illustrates the effects of dual-purpose (meat and middotmilk) cows inEliropeversusthe effects of single-purpose cows and steers in the United states The milkbeef production rat~o in Europe is two to three times higher than in the United States and except for year-to-year fluctuations has not trended downward during the 1960s

Table 7 --Ratio of milk production to beef and veal production 1960-66

~ Country middot 1960 1961 1962 1963 1964 1965 1966middot

~ shy r-t --

- -PoUlds of milk Eer poundlound of beefv and veal-United States middotmiddot 78 76 7middot7 72 65 63 58 USSR middotmiddot 187 f216 194 166 176 186 172 EElC 193 181 172 175 189 198 186 United Kfngdom 155 143 141 130 132 146 165 Denniark 227-1 237 208 186 231 235 206middotmiddot --- ---- ----------

Several factors favor the dual-purpose cow in Europe the profitability of milk production 1~l~tive to beef production the small size of farms the types of fq~d cwa~lable and consumer preference for lean beef Relatively high guaranteed prices to support the small inefficient milk producer 21 in the face of static domestic dema1d have created a very large butter surplus in Europe (table 8) and led to highly subsidized exports of dairy products On November 1

sectjThese undesirablEi characteristic~ are being eHminated byOPlantbreeders at the Internation(l Rice Research Institute (IRRI) in the Philippines

11 Some 4 million f~rs in the EEC have dairy herds with fewer than 6 cows

15

0

8-~autter stocks october~~j96f~681 -----C~~2gt bull Q--j~_F

1965 1966middot i 1967 I bull )1gt

- Thousandmetrfb bons 2

usSR gj EECdl United states United Kingdom

middot middot ~- 390 184

73 43

520 208

i

3i~ 35

650 229

( 96 f49

~

n~a

355 89 8 v

j

GaDada Ne~0zealwid4V

-~-~ 49 31

(~9 ~36

38 29

-4~ 35 32

Ireland middot middot 17 17 22 24 Demriark (I

Australia Sweden)

c Finland Switzerlall~i

middotmiddot

11 17

15 4 6

0 g

i 15 r~4

7 1

~

9 i8

12

7 11

18 14 12 12 8

~ ~

-YC0nnnercial and govenment stocki untss ojihen9ise~~lecified-------ypecember 3ll(fuolesaleinqustrialaqlil r-etail stoc~s Wholesale and

industrial stocks for 1965 1966 and1967~llllpUfiteato174l~00 389000 and 533000 tons respectively Retail stOCSSi wElre estfinated from ruble-value figures

3 Exciiuding Italy TfjMay 31 Exporters stocks only

During the 1960 s West Germany rhatlged from a net import(~r to a net exshyporter of dairy prpducts In the ear~y]-art of the decade west GermanX imshyported about 5 percent of its dairy r~~quiremen~1L (in terms of milk) but in 1968 milk production exceeded domestjb~lemanqby~ similar ~rgin AlthoughshyWest Germanys expprts ot butter andnqnfat ~ll miUJr in 196B-increased 80 w1d 30 percent respectively stockS ofblth l~toducts also increased

l

The general problem of dairy sV7tgtlusesinthe USSR isconwpunded by an lack of storage and distribution faoili ties for fresh milk ana most of the (I

niiik is converted ihto butter Re~tat1 butterprices are p~gged very high and 1967stOcks wei-emore than double uhoseUn the EEC bull Soviet exports of butter during 195667 ranged from 25OOQto middot80000 tQns annually with no discerlllfPle trend upward ordownward During the early portion of the period exports were allliostexclusively to Eastern Eqrope Shipments to Cuba began in 1960 Shipshyments to theEEC and other non-Cqnnnunist areas which were insignificant during 1956-65alllounted tQ 13000 tons in 1966 and 22000 tons in 1967 Spme Soviet butter entering the EEC has be I211 reprocessed and exported to third countries ~

- ~- ~ -- gt -- ~ - -- gt lt -- - -- ~laquo- ~~Colllpe~iti9nfrOlllJtb(fsurplusicduhtIiesectbfC6n~ine~teLlNr9PemiddottsofmajOt

cqhC~rn tcrmiddotth~ daizrlt Lndustrl~siin NeWZeai~~dAuatriaitneUhit(i41ltjngdom atilitheUnjted states ThePllited ~inglt16111 bullbull tlie1-argest1InP9rt$r6fliatrY(p)0~ ductsgt ha~asked exportingcojlritries1iocentUrht~ejr ~heeses-lesmiddottOtheq1t markflt Ti1is voluntarYa-ir~ement~~as~q~sOEveatheprob~emand 1i~eBri~tsb Fanners UnionandMi~M9rketing0aoardshaire requestedGoyernmentintervention in the fopnof antidumping orcQuntetVailingdut~~~s~New ZeaIandssaLesmiddotof dairy products leve)edoifinl96768~espiteythat coUfltrys+argectl~r(3ncy

devaluation whichshoul4 nave made tt m6redbmpetitiveiri theUllited~Kingdom arld bther markets~ Australia didnot devalu~ andthe eXport -iTIlue 6fAuBtraliai1

)putter ~heese Imdnoneatdrymi~ dro~e(i 50 iO and 40 percentrespectiVely in 196768pec~use ofd~pref3Se~ Wo-ldpr[ces andaltiecline inproductronUS COrmnerciallr=XPb~ts of dairy products qeqlingdin 1968 for the fautth consecutive

year andtheUnited stateshMto place additional CUrbs on dairy imports in 1968 to protect the domesttrcindustry against heavi~ subsidi2ted low-pricedimshy~~~ ~

11olllJttngcosts of dairY ~urplus~shave led some cphtinentalElllopean trrestoadoptnieasJresto reduce supplies For example in 1968 Switzerland reduced~1ep~6ducerpriq~of mille and the consumer Irice ofbutter SUbSidii~d th~cullingJp~)dairyherdsandthe Shiftingfrotndairy to beef productiori raJsed the ilmportlevyolnonfat dry mllkto reduce stocks andencouragethe feedihgof whole milk fp calves and increased food-aid shipments ol dairy proshy

ducts During MaiY-o~q~cr6er 1968 butter consuuptioninSwitzerland rose 341ier centabp~e thesamepex-iod in 17production droppad 16 percent and butter stocks oldctober 1 1968 were 25-30 percent lower than on October 1 1997

J

In the llie sales of -surplus butter have been mMe at reducedplicesto 0

low income group~Jinstitutions and food processors and additional food-aid shipments of didrr products have been made Af yet these measUres bave namp~

proved as successful as those of Switzerland

R-apprai~al of the ENe Co~on Agricultural POlicy

In addition to dairy products supplies of soft wheat barley sugarpork lard poultry meat and certain fruits and vegetables have been building up the EEe countries despite subsidized exports of many of these commodities Europeans ate predicting year-end 196869 stocks of 6milliori tons of wheat 1 million tons of barl~y in the Community With liruitedprospecysforEEC exshyportslargeriquantities of soft wheat are being denatured for use a~feed reshyplacing imports of feed grains Because of high costs of grain to EmC reed0

manllracturers--especial~ imported grain which is subject to highvariable levies--a varlet of cheaper substitutes are being used inlivestockrations Since July 1968 domes1iically produced surplus sugar mar be denatured for use in feed throughout the EEC Although West German farmersappearreluctant to increase the quantity of sug~r in livestock rations farmersc~~ France and the N~therlandsaxe readi~ accepting the new formUlas In ad0~on cassava chips nonfat dty milk grain byproductS and pulses are becomingfncreasing~impQrshytant ingredients in compound feeds replacing corn and other import grains It has geen estimated that Dutch feed manllfacturers used 30 to 35 percent less corn during July-December 1968 than in thesame months of 1967

I

17

0

~~~r~~f~~~~~~i~~~~~~~f~O~l~~~4~~~~~~ut~~~~kbullmiddotmiddotmiddotJl tl1eJ~t bull y~~~rjh~middotan~1~d~t~1es middotr~q1lleclmiddots1l1n~r~h~sO~middotP9~~tirymiddot eCP~ts~Q bullSwitz3rl~d instttutedeyenport p~ents 9n lard shipments to 1~e Unitltd Kingdommiddot~dlt~dedmiddot~ther restrictions to iIDports of dairy productsmiddot Yugoslavia has

bullmiddotbullmiddot1fhreateh~di~taJla1bryt~iffs~lIinst EECJlllPotts becar1se of

r~the~~gr6tmiddoty~gosiavineat bull Jimited ~ccesS to ~~lt -- - -~- ~-- - ~ I~ i968j$~i1necost6f suppoptihgEECdaiyprodUcts ilJc1uding price siJl)pQi~sandeXport~ubsi~ies LseJq)ectedtQappro~ch $800 millfon(in(Ll1qingmiddotJ170Iilillio~finarigea5iirect)y byniemper cmiddot01mtries) The costopounds~ppottpoundorther5orrull()di~ies~-primatilygrail1 ~sugaandfa1sanqoils--iSlikelytobullre~ch$l4hillionbull If policies ar~not(hanged it has beenestimat~d thatfiAancing thepOllIlloiAgdCUl-eurourIUPoliGY (CAP) ~~llapproach $3billioqin1970 bull ~ bull

Alarmed by the mOUnting costsopound protectionism the REC Commission a1dC01lnci1curr~nt1yarereapp~~ising theCA In October Commission VicePresidentManslrltsubmittedproposals aimed at improving the efficiency Of VEEC agifcultureand reducing dependence on price policy Mansho1tpointedputthe large discr~panCy oetweenthe mounting costs of support ($22 billionin196869) ~1dthesmallEECrund available for reducing the number of small andineificient farrnS (liinit~d to $285 million annually) bull In December~ theCommission submitted~plan based on Mansho1tsproposa1s to the EECpouncilfor considerationn

The Commission recommended a programfor structUral reform to be acc~m-plished by 198o inc11)ding latge-scaledivers1on of la1dand labor from agrishyculture and a substantia1increase in ~ricultura1 investment bull However the specific propoals toimpiement thisdiversion suggest that only marginll1 landwould be t~en out of production a1d that only the most inefficient producerswou1dbdiscouraged Thus the upwad trend in production probably would notbe slowed and substitution of domestic products for imports might increase

The Commission s short~run proposals include

1 Small reductions in thr~ort prices fO soft wheat barley ryeoilseeds afldsugar be~ts The p~esentpice level for corn durum and ricewould be retllined Sugarproduction quotas would be lowered 5 percent for196970 bull

2 ]]aXiitiori of -

edible yegetab1e a1d marine oi1s tod~ter margaine consumption a1d encouragethe useoi butter

3 Taxation o1oi1 cake and meala1d payment of premiUlns for cullingdairy herds to discoUragedairy~r()duction Thecurr~~tsllpport price for milkwould remain unchanged the butter price would be reduced and the pricaofnonfat dry milk would be rilised Feeding of nonfat dry milk wouJ-d be subsidizeltito offSet the price increase and improve its competitive position relative tooil cake and meaL

14 Pavment of subsidies forfatteningofbeei cattle

18

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

il

cop which resultedi-ntemporlUyself-sufficie~cyj insonieAsiaj GOun~ J

jrieslt and in an exportable surplus in others Th~3 intyrn Placeda bUrden dhlt4ying storage aqd transport facilities andled to a qe cline in Producer prlcltas fri some countries

In 196768 lar~e purchase13 otcriceathigli~pJices bY the Philipplne Rice ahd CornProd1lction Coordinating Council used up much of the Councils price suppprt fupdl The Council now nas a surplus of rice that cannot be exported bull excePtatalossand(jnsufficiei~t storag(l andfund~ to pcentoide much support for the current crop Producer prJce~have fallen~In pa~_Ls~an wholesa~ers and millers are reluctant to buyIRrJce because ~fpoor mtlltng andcookJng

chaxacteristlcs sect and paddy prices haVe fallen In addition wholesale wheat prices in PakistaIl were much lower in the faIr of 1968 than in the faU of 1967 beca~e of large supplies C

(l

cJ

World nairl Surplu I)

In Europe beef prDduction is closely tiedto milkoutput rl Thus the solution of the dairy surplus problem is more complicated-n Euxope than in the

United states Table 7 illustrates the effects of dual-purpose (meat and middotmilk) cows inEliropeversusthe effects of single-purpose cows and steers in the United states The milkbeef production rat~o in Europe is two to three times higher than in the United States and except for year-to-year fluctuations has not trended downward during the 1960s

Table 7 --Ratio of milk production to beef and veal production 1960-66

~ Country middot 1960 1961 1962 1963 1964 1965 1966middot

~ shy r-t --

- -PoUlds of milk Eer poundlound of beefv and veal-United States middotmiddot 78 76 7middot7 72 65 63 58 USSR middotmiddot 187 f216 194 166 176 186 172 EElC 193 181 172 175 189 198 186 United Kfngdom 155 143 141 130 132 146 165 Denniark 227-1 237 208 186 231 235 206middotmiddot --- ---- ----------

Several factors favor the dual-purpose cow in Europe the profitability of milk production 1~l~tive to beef production the small size of farms the types of fq~d cwa~lable and consumer preference for lean beef Relatively high guaranteed prices to support the small inefficient milk producer 21 in the face of static domestic dema1d have created a very large butter surplus in Europe (table 8) and led to highly subsidized exports of dairy products On November 1

sectjThese undesirablEi characteristic~ are being eHminated byOPlantbreeders at the Internation(l Rice Research Institute (IRRI) in the Philippines

11 Some 4 million f~rs in the EEC have dairy herds with fewer than 6 cows

15

0

8-~autter stocks october~~j96f~681 -----C~~2gt bull Q--j~_F

1965 1966middot i 1967 I bull )1gt

- Thousandmetrfb bons 2

usSR gj EECdl United states United Kingdom

middot middot ~- 390 184

73 43

520 208

i

3i~ 35

650 229

( 96 f49

~

n~a

355 89 8 v

j

GaDada Ne~0zealwid4V

-~-~ 49 31

(~9 ~36

38 29

-4~ 35 32

Ireland middot middot 17 17 22 24 Demriark (I

Australia Sweden)

c Finland Switzerlall~i

middotmiddot

11 17

15 4 6

0 g

i 15 r~4

7 1

~

9 i8

12

7 11

18 14 12 12 8

~ ~

-YC0nnnercial and govenment stocki untss ojihen9ise~~lecified-------ypecember 3ll(fuolesaleinqustrialaqlil r-etail stoc~s Wholesale and

industrial stocks for 1965 1966 and1967~llllpUfiteato174l~00 389000 and 533000 tons respectively Retail stOCSSi wElre estfinated from ruble-value figures

3 Exciiuding Italy TfjMay 31 Exporters stocks only

During the 1960 s West Germany rhatlged from a net import(~r to a net exshyporter of dairy prpducts In the ear~y]-art of the decade west GermanX imshyported about 5 percent of its dairy r~~quiremen~1L (in terms of milk) but in 1968 milk production exceeded domestjb~lemanqby~ similar ~rgin AlthoughshyWest Germanys expprts ot butter andnqnfat ~ll miUJr in 196B-increased 80 w1d 30 percent respectively stockS ofblth l~toducts also increased

l

The general problem of dairy sV7tgtlusesinthe USSR isconwpunded by an lack of storage and distribution faoili ties for fresh milk ana most of the (I

niiik is converted ihto butter Re~tat1 butterprices are p~gged very high and 1967stOcks wei-emore than double uhoseUn the EEC bull Soviet exports of butter during 195667 ranged from 25OOQto middot80000 tQns annually with no discerlllfPle trend upward ordownward During the early portion of the period exports were allliostexclusively to Eastern Eqrope Shipments to Cuba began in 1960 Shipshyments to theEEC and other non-Cqnnnunist areas which were insignificant during 1956-65alllounted tQ 13000 tons in 1966 and 22000 tons in 1967 Spme Soviet butter entering the EEC has be I211 reprocessed and exported to third countries ~

- ~- ~ -- gt -- ~ - -- gt lt -- - -- ~laquo- ~~Colllpe~iti9nfrOlllJtb(fsurplusicduhtIiesectbfC6n~ine~teLlNr9PemiddottsofmajOt

cqhC~rn tcrmiddotth~ daizrlt Lndustrl~siin NeWZeai~~dAuatriaitneUhit(i41ltjngdom atilitheUnjted states ThePllited ~inglt16111 bullbull tlie1-argest1InP9rt$r6fliatrY(p)0~ ductsgt ha~asked exportingcojlritries1iocentUrht~ejr ~heeses-lesmiddottOtheq1t markflt Ti1is voluntarYa-ir~ement~~as~q~sOEveatheprob~emand 1i~eBri~tsb Fanners UnionandMi~M9rketing0aoardshaire requestedGoyernmentintervention in the fopnof antidumping orcQuntetVailingdut~~~s~New ZeaIandssaLesmiddotof dairy products leve)edoifinl96768~espiteythat coUfltrys+argectl~r(3ncy

devaluation whichshoul4 nave made tt m6redbmpetitiveiri theUllited~Kingdom arld bther markets~ Australia didnot devalu~ andthe eXport -iTIlue 6fAuBtraliai1

)putter ~heese Imdnoneatdrymi~ dro~e(i 50 iO and 40 percentrespectiVely in 196768pec~use ofd~pref3Se~ Wo-ldpr[ces andaltiecline inproductronUS COrmnerciallr=XPb~ts of dairy products qeqlingdin 1968 for the fautth consecutive

year andtheUnited stateshMto place additional CUrbs on dairy imports in 1968 to protect the domesttrcindustry against heavi~ subsidi2ted low-pricedimshy~~~ ~

11olllJttngcosts of dairY ~urplus~shave led some cphtinentalElllopean trrestoadoptnieasJresto reduce supplies For example in 1968 Switzerland reduced~1ep~6ducerpriq~of mille and the consumer Irice ofbutter SUbSidii~d th~cullingJp~)dairyherdsandthe Shiftingfrotndairy to beef productiori raJsed the ilmportlevyolnonfat dry mllkto reduce stocks andencouragethe feedihgof whole milk fp calves and increased food-aid shipments ol dairy proshy

ducts During MaiY-o~q~cr6er 1968 butter consuuptioninSwitzerland rose 341ier centabp~e thesamepex-iod in 17production droppad 16 percent and butter stocks oldctober 1 1968 were 25-30 percent lower than on October 1 1997

J

In the llie sales of -surplus butter have been mMe at reducedplicesto 0

low income group~Jinstitutions and food processors and additional food-aid shipments of didrr products have been made Af yet these measUres bave namp~

proved as successful as those of Switzerland

R-apprai~al of the ENe Co~on Agricultural POlicy

In addition to dairy products supplies of soft wheat barley sugarpork lard poultry meat and certain fruits and vegetables have been building up the EEe countries despite subsidized exports of many of these commodities Europeans ate predicting year-end 196869 stocks of 6milliori tons of wheat 1 million tons of barl~y in the Community With liruitedprospecysforEEC exshyportslargeriquantities of soft wheat are being denatured for use a~feed reshyplacing imports of feed grains Because of high costs of grain to EmC reed0

manllracturers--especial~ imported grain which is subject to highvariable levies--a varlet of cheaper substitutes are being used inlivestockrations Since July 1968 domes1iically produced surplus sugar mar be denatured for use in feed throughout the EEC Although West German farmersappearreluctant to increase the quantity of sug~r in livestock rations farmersc~~ France and the N~therlandsaxe readi~ accepting the new formUlas In ad0~on cassava chips nonfat dty milk grain byproductS and pulses are becomingfncreasing~impQrshytant ingredients in compound feeds replacing corn and other import grains It has geen estimated that Dutch feed manllfacturers used 30 to 35 percent less corn during July-December 1968 than in thesame months of 1967

I

17

0

~~~r~~f~~~~~~i~~~~~~~f~O~l~~~4~~~~~~ut~~~~kbullmiddotmiddotmiddotJl tl1eJ~t bull y~~~rjh~middotan~1~d~t~1es middotr~q1lleclmiddots1l1n~r~h~sO~middotP9~~tirymiddot eCP~ts~Q bullSwitz3rl~d instttutedeyenport p~ents 9n lard shipments to 1~e Unitltd Kingdommiddot~dlt~dedmiddot~ther restrictions to iIDports of dairy productsmiddot Yugoslavia has

bullmiddotbullmiddot1fhreateh~di~taJla1bryt~iffs~lIinst EECJlllPotts becar1se of

r~the~~gr6tmiddoty~gosiavineat bull Jimited ~ccesS to ~~lt -- - -~- ~-- - ~ I~ i968j$~i1necost6f suppoptihgEECdaiyprodUcts ilJc1uding price siJl)pQi~sandeXport~ubsi~ies LseJq)ectedtQappro~ch $800 millfon(in(Ll1qingmiddotJ170Iilillio~finarigea5iirect)y byniemper cmiddot01mtries) The costopounds~ppottpoundorther5orrull()di~ies~-primatilygrail1 ~sugaandfa1sanqoils--iSlikelytobullre~ch$l4hillionbull If policies ar~not(hanged it has beenestimat~d thatfiAancing thepOllIlloiAgdCUl-eurourIUPoliGY (CAP) ~~llapproach $3billioqin1970 bull ~ bull

Alarmed by the mOUnting costsopound protectionism the REC Commission a1dC01lnci1curr~nt1yarereapp~~ising theCA In October Commission VicePresidentManslrltsubmittedproposals aimed at improving the efficiency Of VEEC agifcultureand reducing dependence on price policy Mansho1tpointedputthe large discr~panCy oetweenthe mounting costs of support ($22 billionin196869) ~1dthesmallEECrund available for reducing the number of small andineificient farrnS (liinit~d to $285 million annually) bull In December~ theCommission submitted~plan based on Mansho1tsproposa1s to the EECpouncilfor considerationn

The Commission recommended a programfor structUral reform to be acc~m-plished by 198o inc11)ding latge-scaledivers1on of la1dand labor from agrishyculture and a substantia1increase in ~ricultura1 investment bull However the specific propoals toimpiement thisdiversion suggest that only marginll1 landwould be t~en out of production a1d that only the most inefficient producerswou1dbdiscouraged Thus the upwad trend in production probably would notbe slowed and substitution of domestic products for imports might increase

The Commission s short~run proposals include

1 Small reductions in thr~ort prices fO soft wheat barley ryeoilseeds afldsugar be~ts The p~esentpice level for corn durum and ricewould be retllined Sugarproduction quotas would be lowered 5 percent for196970 bull

2 ]]aXiitiori of -

edible yegetab1e a1d marine oi1s tod~ter margaine consumption a1d encouragethe useoi butter

3 Taxation o1oi1 cake and meala1d payment of premiUlns for cullingdairy herds to discoUragedairy~r()duction Thecurr~~tsllpport price for milkwould remain unchanged the butter price would be reduced and the pricaofnonfat dry milk would be rilised Feeding of nonfat dry milk wouJ-d be subsidizeltito offSet the price increase and improve its competitive position relative tooil cake and meaL

14 Pavment of subsidies forfatteningofbeei cattle

18

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

0

8-~autter stocks october~~j96f~681 -----C~~2gt bull Q--j~_F

1965 1966middot i 1967 I bull )1gt

- Thousandmetrfb bons 2

usSR gj EECdl United states United Kingdom

middot middot ~- 390 184

73 43

520 208

i

3i~ 35

650 229

( 96 f49

~

n~a

355 89 8 v

j

GaDada Ne~0zealwid4V

-~-~ 49 31

(~9 ~36

38 29

-4~ 35 32

Ireland middot middot 17 17 22 24 Demriark (I

Australia Sweden)

c Finland Switzerlall~i

middotmiddot

11 17

15 4 6

0 g

i 15 r~4

7 1

~

9 i8

12

7 11

18 14 12 12 8

~ ~

-YC0nnnercial and govenment stocki untss ojihen9ise~~lecified-------ypecember 3ll(fuolesaleinqustrialaqlil r-etail stoc~s Wholesale and

industrial stocks for 1965 1966 and1967~llllpUfiteato174l~00 389000 and 533000 tons respectively Retail stOCSSi wElre estfinated from ruble-value figures

3 Exciiuding Italy TfjMay 31 Exporters stocks only

During the 1960 s West Germany rhatlged from a net import(~r to a net exshyporter of dairy prpducts In the ear~y]-art of the decade west GermanX imshyported about 5 percent of its dairy r~~quiremen~1L (in terms of milk) but in 1968 milk production exceeded domestjb~lemanqby~ similar ~rgin AlthoughshyWest Germanys expprts ot butter andnqnfat ~ll miUJr in 196B-increased 80 w1d 30 percent respectively stockS ofblth l~toducts also increased

l

The general problem of dairy sV7tgtlusesinthe USSR isconwpunded by an lack of storage and distribution faoili ties for fresh milk ana most of the (I

niiik is converted ihto butter Re~tat1 butterprices are p~gged very high and 1967stOcks wei-emore than double uhoseUn the EEC bull Soviet exports of butter during 195667 ranged from 25OOQto middot80000 tQns annually with no discerlllfPle trend upward ordownward During the early portion of the period exports were allliostexclusively to Eastern Eqrope Shipments to Cuba began in 1960 Shipshyments to theEEC and other non-Cqnnnunist areas which were insignificant during 1956-65alllounted tQ 13000 tons in 1966 and 22000 tons in 1967 Spme Soviet butter entering the EEC has be I211 reprocessed and exported to third countries ~

- ~- ~ -- gt -- ~ - -- gt lt -- - -- ~laquo- ~~Colllpe~iti9nfrOlllJtb(fsurplusicduhtIiesectbfC6n~ine~teLlNr9PemiddottsofmajOt

cqhC~rn tcrmiddotth~ daizrlt Lndustrl~siin NeWZeai~~dAuatriaitneUhit(i41ltjngdom atilitheUnjted states ThePllited ~inglt16111 bullbull tlie1-argest1InP9rt$r6fliatrY(p)0~ ductsgt ha~asked exportingcojlritries1iocentUrht~ejr ~heeses-lesmiddottOtheq1t markflt Ti1is voluntarYa-ir~ement~~as~q~sOEveatheprob~emand 1i~eBri~tsb Fanners UnionandMi~M9rketing0aoardshaire requestedGoyernmentintervention in the fopnof antidumping orcQuntetVailingdut~~~s~New ZeaIandssaLesmiddotof dairy products leve)edoifinl96768~espiteythat coUfltrys+argectl~r(3ncy

devaluation whichshoul4 nave made tt m6redbmpetitiveiri theUllited~Kingdom arld bther markets~ Australia didnot devalu~ andthe eXport -iTIlue 6fAuBtraliai1

)putter ~heese Imdnoneatdrymi~ dro~e(i 50 iO and 40 percentrespectiVely in 196768pec~use ofd~pref3Se~ Wo-ldpr[ces andaltiecline inproductronUS COrmnerciallr=XPb~ts of dairy products qeqlingdin 1968 for the fautth consecutive

year andtheUnited stateshMto place additional CUrbs on dairy imports in 1968 to protect the domesttrcindustry against heavi~ subsidi2ted low-pricedimshy~~~ ~

11olllJttngcosts of dairY ~urplus~shave led some cphtinentalElllopean trrestoadoptnieasJresto reduce supplies For example in 1968 Switzerland reduced~1ep~6ducerpriq~of mille and the consumer Irice ofbutter SUbSidii~d th~cullingJp~)dairyherdsandthe Shiftingfrotndairy to beef productiori raJsed the ilmportlevyolnonfat dry mllkto reduce stocks andencouragethe feedihgof whole milk fp calves and increased food-aid shipments ol dairy proshy

ducts During MaiY-o~q~cr6er 1968 butter consuuptioninSwitzerland rose 341ier centabp~e thesamepex-iod in 17production droppad 16 percent and butter stocks oldctober 1 1968 were 25-30 percent lower than on October 1 1997

J

In the llie sales of -surplus butter have been mMe at reducedplicesto 0

low income group~Jinstitutions and food processors and additional food-aid shipments of didrr products have been made Af yet these measUres bave namp~

proved as successful as those of Switzerland

R-apprai~al of the ENe Co~on Agricultural POlicy

In addition to dairy products supplies of soft wheat barley sugarpork lard poultry meat and certain fruits and vegetables have been building up the EEe countries despite subsidized exports of many of these commodities Europeans ate predicting year-end 196869 stocks of 6milliori tons of wheat 1 million tons of barl~y in the Community With liruitedprospecysforEEC exshyportslargeriquantities of soft wheat are being denatured for use a~feed reshyplacing imports of feed grains Because of high costs of grain to EmC reed0

manllracturers--especial~ imported grain which is subject to highvariable levies--a varlet of cheaper substitutes are being used inlivestockrations Since July 1968 domes1iically produced surplus sugar mar be denatured for use in feed throughout the EEC Although West German farmersappearreluctant to increase the quantity of sug~r in livestock rations farmersc~~ France and the N~therlandsaxe readi~ accepting the new formUlas In ad0~on cassava chips nonfat dty milk grain byproductS and pulses are becomingfncreasing~impQrshytant ingredients in compound feeds replacing corn and other import grains It has geen estimated that Dutch feed manllfacturers used 30 to 35 percent less corn during July-December 1968 than in thesame months of 1967

I

17

0

~~~r~~f~~~~~~i~~~~~~~f~O~l~~~4~~~~~~ut~~~~kbullmiddotmiddotmiddotJl tl1eJ~t bull y~~~rjh~middotan~1~d~t~1es middotr~q1lleclmiddots1l1n~r~h~sO~middotP9~~tirymiddot eCP~ts~Q bullSwitz3rl~d instttutedeyenport p~ents 9n lard shipments to 1~e Unitltd Kingdommiddot~dlt~dedmiddot~ther restrictions to iIDports of dairy productsmiddot Yugoslavia has

bullmiddotbullmiddot1fhreateh~di~taJla1bryt~iffs~lIinst EECJlllPotts becar1se of

r~the~~gr6tmiddoty~gosiavineat bull Jimited ~ccesS to ~~lt -- - -~- ~-- - ~ I~ i968j$~i1necost6f suppoptihgEECdaiyprodUcts ilJc1uding price siJl)pQi~sandeXport~ubsi~ies LseJq)ectedtQappro~ch $800 millfon(in(Ll1qingmiddotJ170Iilillio~finarigea5iirect)y byniemper cmiddot01mtries) The costopounds~ppottpoundorther5orrull()di~ies~-primatilygrail1 ~sugaandfa1sanqoils--iSlikelytobullre~ch$l4hillionbull If policies ar~not(hanged it has beenestimat~d thatfiAancing thepOllIlloiAgdCUl-eurourIUPoliGY (CAP) ~~llapproach $3billioqin1970 bull ~ bull

Alarmed by the mOUnting costsopound protectionism the REC Commission a1dC01lnci1curr~nt1yarereapp~~ising theCA In October Commission VicePresidentManslrltsubmittedproposals aimed at improving the efficiency Of VEEC agifcultureand reducing dependence on price policy Mansho1tpointedputthe large discr~panCy oetweenthe mounting costs of support ($22 billionin196869) ~1dthesmallEECrund available for reducing the number of small andineificient farrnS (liinit~d to $285 million annually) bull In December~ theCommission submitted~plan based on Mansho1tsproposa1s to the EECpouncilfor considerationn

The Commission recommended a programfor structUral reform to be acc~m-plished by 198o inc11)ding latge-scaledivers1on of la1dand labor from agrishyculture and a substantia1increase in ~ricultura1 investment bull However the specific propoals toimpiement thisdiversion suggest that only marginll1 landwould be t~en out of production a1d that only the most inefficient producerswou1dbdiscouraged Thus the upwad trend in production probably would notbe slowed and substitution of domestic products for imports might increase

The Commission s short~run proposals include

1 Small reductions in thr~ort prices fO soft wheat barley ryeoilseeds afldsugar be~ts The p~esentpice level for corn durum and ricewould be retllined Sugarproduction quotas would be lowered 5 percent for196970 bull

2 ]]aXiitiori of -

edible yegetab1e a1d marine oi1s tod~ter margaine consumption a1d encouragethe useoi butter

3 Taxation o1oi1 cake and meala1d payment of premiUlns for cullingdairy herds to discoUragedairy~r()duction Thecurr~~tsllpport price for milkwould remain unchanged the butter price would be reduced and the pricaofnonfat dry milk would be rilised Feeding of nonfat dry milk wouJ-d be subsidizeltito offSet the price increase and improve its competitive position relative tooil cake and meaL

14 Pavment of subsidies forfatteningofbeei cattle

18

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

- ~- ~ -- gt -- ~ - -- gt lt -- - -- ~laquo- ~~Colllpe~iti9nfrOlllJtb(fsurplusicduhtIiesectbfC6n~ine~teLlNr9PemiddottsofmajOt

cqhC~rn tcrmiddotth~ daizrlt Lndustrl~siin NeWZeai~~dAuatriaitneUhit(i41ltjngdom atilitheUnjted states ThePllited ~inglt16111 bullbull tlie1-argest1InP9rt$r6fliatrY(p)0~ ductsgt ha~asked exportingcojlritries1iocentUrht~ejr ~heeses-lesmiddottOtheq1t markflt Ti1is voluntarYa-ir~ement~~as~q~sOEveatheprob~emand 1i~eBri~tsb Fanners UnionandMi~M9rketing0aoardshaire requestedGoyernmentintervention in the fopnof antidumping orcQuntetVailingdut~~~s~New ZeaIandssaLesmiddotof dairy products leve)edoifinl96768~espiteythat coUfltrys+argectl~r(3ncy

devaluation whichshoul4 nave made tt m6redbmpetitiveiri theUllited~Kingdom arld bther markets~ Australia didnot devalu~ andthe eXport -iTIlue 6fAuBtraliai1

)putter ~heese Imdnoneatdrymi~ dro~e(i 50 iO and 40 percentrespectiVely in 196768pec~use ofd~pref3Se~ Wo-ldpr[ces andaltiecline inproductronUS COrmnerciallr=XPb~ts of dairy products qeqlingdin 1968 for the fautth consecutive

year andtheUnited stateshMto place additional CUrbs on dairy imports in 1968 to protect the domesttrcindustry against heavi~ subsidi2ted low-pricedimshy~~~ ~

11olllJttngcosts of dairY ~urplus~shave led some cphtinentalElllopean trrestoadoptnieasJresto reduce supplies For example in 1968 Switzerland reduced~1ep~6ducerpriq~of mille and the consumer Irice ofbutter SUbSidii~d th~cullingJp~)dairyherdsandthe Shiftingfrotndairy to beef productiori raJsed the ilmportlevyolnonfat dry mllkto reduce stocks andencouragethe feedihgof whole milk fp calves and increased food-aid shipments ol dairy proshy

ducts During MaiY-o~q~cr6er 1968 butter consuuptioninSwitzerland rose 341ier centabp~e thesamepex-iod in 17production droppad 16 percent and butter stocks oldctober 1 1968 were 25-30 percent lower than on October 1 1997

J

In the llie sales of -surplus butter have been mMe at reducedplicesto 0

low income group~Jinstitutions and food processors and additional food-aid shipments of didrr products have been made Af yet these measUres bave namp~

proved as successful as those of Switzerland

R-apprai~al of the ENe Co~on Agricultural POlicy

In addition to dairy products supplies of soft wheat barley sugarpork lard poultry meat and certain fruits and vegetables have been building up the EEe countries despite subsidized exports of many of these commodities Europeans ate predicting year-end 196869 stocks of 6milliori tons of wheat 1 million tons of barl~y in the Community With liruitedprospecysforEEC exshyportslargeriquantities of soft wheat are being denatured for use a~feed reshyplacing imports of feed grains Because of high costs of grain to EmC reed0

manllracturers--especial~ imported grain which is subject to highvariable levies--a varlet of cheaper substitutes are being used inlivestockrations Since July 1968 domes1iically produced surplus sugar mar be denatured for use in feed throughout the EEC Although West German farmersappearreluctant to increase the quantity of sug~r in livestock rations farmersc~~ France and the N~therlandsaxe readi~ accepting the new formUlas In ad0~on cassava chips nonfat dty milk grain byproductS and pulses are becomingfncreasing~impQrshytant ingredients in compound feeds replacing corn and other import grains It has geen estimated that Dutch feed manllfacturers used 30 to 35 percent less corn during July-December 1968 than in thesame months of 1967

I

17

0

~~~r~~f~~~~~~i~~~~~~~f~O~l~~~4~~~~~~ut~~~~kbullmiddotmiddotmiddotJl tl1eJ~t bull y~~~rjh~middotan~1~d~t~1es middotr~q1lleclmiddots1l1n~r~h~sO~middotP9~~tirymiddot eCP~ts~Q bullSwitz3rl~d instttutedeyenport p~ents 9n lard shipments to 1~e Unitltd Kingdommiddot~dlt~dedmiddot~ther restrictions to iIDports of dairy productsmiddot Yugoslavia has

bullmiddotbullmiddot1fhreateh~di~taJla1bryt~iffs~lIinst EECJlllPotts becar1se of

r~the~~gr6tmiddoty~gosiavineat bull Jimited ~ccesS to ~~lt -- - -~- ~-- - ~ I~ i968j$~i1necost6f suppoptihgEECdaiyprodUcts ilJc1uding price siJl)pQi~sandeXport~ubsi~ies LseJq)ectedtQappro~ch $800 millfon(in(Ll1qingmiddotJ170Iilillio~finarigea5iirect)y byniemper cmiddot01mtries) The costopounds~ppottpoundorther5orrull()di~ies~-primatilygrail1 ~sugaandfa1sanqoils--iSlikelytobullre~ch$l4hillionbull If policies ar~not(hanged it has beenestimat~d thatfiAancing thepOllIlloiAgdCUl-eurourIUPoliGY (CAP) ~~llapproach $3billioqin1970 bull ~ bull

Alarmed by the mOUnting costsopound protectionism the REC Commission a1dC01lnci1curr~nt1yarereapp~~ising theCA In October Commission VicePresidentManslrltsubmittedproposals aimed at improving the efficiency Of VEEC agifcultureand reducing dependence on price policy Mansho1tpointedputthe large discr~panCy oetweenthe mounting costs of support ($22 billionin196869) ~1dthesmallEECrund available for reducing the number of small andineificient farrnS (liinit~d to $285 million annually) bull In December~ theCommission submitted~plan based on Mansho1tsproposa1s to the EECpouncilfor considerationn

The Commission recommended a programfor structUral reform to be acc~m-plished by 198o inc11)ding latge-scaledivers1on of la1dand labor from agrishyculture and a substantia1increase in ~ricultura1 investment bull However the specific propoals toimpiement thisdiversion suggest that only marginll1 landwould be t~en out of production a1d that only the most inefficient producerswou1dbdiscouraged Thus the upwad trend in production probably would notbe slowed and substitution of domestic products for imports might increase

The Commission s short~run proposals include

1 Small reductions in thr~ort prices fO soft wheat barley ryeoilseeds afldsugar be~ts The p~esentpice level for corn durum and ricewould be retllined Sugarproduction quotas would be lowered 5 percent for196970 bull

2 ]]aXiitiori of -

edible yegetab1e a1d marine oi1s tod~ter margaine consumption a1d encouragethe useoi butter

3 Taxation o1oi1 cake and meala1d payment of premiUlns for cullingdairy herds to discoUragedairy~r()duction Thecurr~~tsllpport price for milkwould remain unchanged the butter price would be reduced and the pricaofnonfat dry milk would be rilised Feeding of nonfat dry milk wouJ-d be subsidizeltito offSet the price increase and improve its competitive position relative tooil cake and meaL

14 Pavment of subsidies forfatteningofbeei cattle

18

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

0

~~~r~~f~~~~~~i~~~~~~~f~O~l~~~4~~~~~~ut~~~~kbullmiddotmiddotmiddotJl tl1eJ~t bull y~~~rjh~middotan~1~d~t~1es middotr~q1lleclmiddots1l1n~r~h~sO~middotP9~~tirymiddot eCP~ts~Q bullSwitz3rl~d instttutedeyenport p~ents 9n lard shipments to 1~e Unitltd Kingdommiddot~dlt~dedmiddot~ther restrictions to iIDports of dairy productsmiddot Yugoslavia has

bullmiddotbullmiddot1fhreateh~di~taJla1bryt~iffs~lIinst EECJlllPotts becar1se of

r~the~~gr6tmiddoty~gosiavineat bull Jimited ~ccesS to ~~lt -- - -~- ~-- - ~ I~ i968j$~i1necost6f suppoptihgEECdaiyprodUcts ilJc1uding price siJl)pQi~sandeXport~ubsi~ies LseJq)ectedtQappro~ch $800 millfon(in(Ll1qingmiddotJ170Iilillio~finarigea5iirect)y byniemper cmiddot01mtries) The costopounds~ppottpoundorther5orrull()di~ies~-primatilygrail1 ~sugaandfa1sanqoils--iSlikelytobullre~ch$l4hillionbull If policies ar~not(hanged it has beenestimat~d thatfiAancing thepOllIlloiAgdCUl-eurourIUPoliGY (CAP) ~~llapproach $3billioqin1970 bull ~ bull

Alarmed by the mOUnting costsopound protectionism the REC Commission a1dC01lnci1curr~nt1yarereapp~~ising theCA In October Commission VicePresidentManslrltsubmittedproposals aimed at improving the efficiency Of VEEC agifcultureand reducing dependence on price policy Mansho1tpointedputthe large discr~panCy oetweenthe mounting costs of support ($22 billionin196869) ~1dthesmallEECrund available for reducing the number of small andineificient farrnS (liinit~d to $285 million annually) bull In December~ theCommission submitted~plan based on Mansho1tsproposa1s to the EECpouncilfor considerationn

The Commission recommended a programfor structUral reform to be acc~m-plished by 198o inc11)ding latge-scaledivers1on of la1dand labor from agrishyculture and a substantia1increase in ~ricultura1 investment bull However the specific propoals toimpiement thisdiversion suggest that only marginll1 landwould be t~en out of production a1d that only the most inefficient producerswou1dbdiscouraged Thus the upwad trend in production probably would notbe slowed and substitution of domestic products for imports might increase

The Commission s short~run proposals include

1 Small reductions in thr~ort prices fO soft wheat barley ryeoilseeds afldsugar be~ts The p~esentpice level for corn durum and ricewould be retllined Sugarproduction quotas would be lowered 5 percent for196970 bull

2 ]]aXiitiori of -

edible yegetab1e a1d marine oi1s tod~ter margaine consumption a1d encouragethe useoi butter

3 Taxation o1oi1 cake and meala1d payment of premiUlns for cullingdairy herds to discoUragedairy~r()duction Thecurr~~tsllpport price for milkwould remain unchanged the butter price would be reduced and the pricaofnonfat dry milk would be rilised Feeding of nonfat dry milk wouJ-d be subsidizeltito offSet the price increase and improve its competitive position relative tooil cake and meaL

14 Pavment of subsidies forfatteningofbeei cattle

18

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

~gtfui~~tli~se propos~is if imP~nted~W()Jllcrk~dCeim~~~t~J)pound~lt(l9-fpl~r ofls~eofl a11~ poducts mi3-rjh~ oils f~Shmea1~middotand lfe~f~jTliemiddot~f~~(tQn

middotmiddotmiddot~r1i1iil-IllPortlmiddotbullbull~fl n~~~~ci~Icent~t~ i~Tb~ sW1si~middotQn beefP~9d)cti)~S~911tii~n bull itse](fltmDJatedemartd for graill middot1lttb~Sinfght )e9efset oy a~d~g~i9~middot ~n demanci frOiIl thedairy sector TheprpPOseg iiducentt1~onsinsuppbit pric~~t9t

softwheat ~ baxleyal1drc~ amount to roughly 1 percentan insignifi~aYJt am6ilIlt

c

MeasUres aimed at reduG~ng the Etlr6peatl butter surplusinclude he~vJlYmiddotmiddot middotmiddotsubsidizedexportsgtf butter and thepromotlon of butter consumption at the

expenseofmargaririeandother vegetableofJproduGts bull The~e measures-co4~red with a large wprld supply of oilseeds for edibleOilproductionhavei)1epa

depressing effect on the worldmarket for oilseeds and vegetableoiIsmiddot Ihthe Europeari market pri~es for most oilseedsatld oilS were lower ini9681han

1967 ii Ii(

Areco~dworLd crop of Soybeans Was harvested ini968 bull There WerenC3ar-j recorqharvests cJf-gt sunflowerseC3d and rapeseed alarger output of cottonseed ~da smaller peanut crop On the basis of this performanceprodmiddotllctiQ~ of edible vegetable oils in 1969 should be clo~~~ to the 1968 record ~ v

Table 9~-Worl~j production of major types of edible vegetable oils -----~-laquo

Type of oil 196~ 1963= 1964 1965 1966 - 1967 -lsii -F~e~ast _ - - ~r12Q9middot

-----~-------------------------------_- shy- -Million metric tons- shy

Soybean 373 389 396-41b~1m 484 5D5 509 Peanutmiddot 2middot59 273 284 302 ~l91 300 313 284 Sunflowerseed 2~16 235 215 283 2~81 316 346 328 Cottonseed 226 235 24h 249 245 217 223 24i R~leseed 119 108 112 152 140 158 167 1631 --j]Estimates oi-amp S-oil production i~clude-aCtUal oif produced plus the oil equivalent of exported oilseeds Estimates for otber countries are basedupon the prOduction of variousoilseeds and the estimated normal proportionscrUshshyed for oil

The US soybeal crop produced ona slightly larger adreagewith record yields was 11 percent abO-Ie the 1967 record and witblarger stocks the supply ofsybeans on September 1 19(58 was 17 percent greater thala year ~arlier US exports of sgtybeans increased in 196768 (September-AU5ust) for the seventh successive year (1able 10) Major gains were in exports to Japan and Spain Shipments to tbe EJtJIJ and Canada declined US eXports of soybean oil dropped about 10 percent and exports of meal increased about 10 percent in 196768 In Western EUrope Soyiet and East Europeal1 sunflower oil at exceptionallv low prices captured a larger share of tbe market

19

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

JL middot~~bleJO-~tlli~~o~s~ 9f~~~~~f3JlS~1~~i~37 _~~~~Y~~~b~~iri~~~gWPtti~~2-t-r-~middot

Destlril1tioti 1~5 0 lnt6middotmiddot middotmiddotmiddotlmiddotmiddotnt7middotmiddotmiddote ltj gt ~i - ~ bull 7tJ bull 1V bull 74J

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

o~MbljonblShels ~i gt

Netherl8Jld~_07 335-~3~Omiddotmiddot -_ 36~8 bullWest Germ1inY 33032~7 320 Italy 15If IS C) middotmiddoto14~8 OtherEEC 10bull 2 ~ fLO ~~middot

lli-PlEEC 92~1 YDJ 929 62~O 607 737

175274 [) 295~6 f 311 24221~7~

1~5 middot14 bull8155 bull middot 354 368 333

250-6 2Gi-6 2b6b middotmiddot to Canada aldthe Netnerlands include-large --t~ansShipmeDts toshy

primalilYEurOpean countries

~ US inspections of soybeans for ~~ort ~orthe first 4months CSep~embershy De~e(llber) of ~he current marketing year were almost 30 percent abovethemiddotsa1le

pe-riod0n1967 Howeyer the large falmiddotl shipments were partly becauseofheavy foreign purchases in anticipation of the US dock strike whichbegan in D~cembe2 Total exports for the season are likely to be somewhat above the gighleV~I0f96768 although the prolonged dock strike hru Weakene4 pr~spects

~In Tapan the demandfdI oilseeds is expected to increase durLng the cur-

rent USmarketingyea-c (Septem1gteI~Alloampust) but at a lWer rate tbanin15)6768 becaUsec~hers are experiencing difficulty in disposing of vegetable oilbull West German imports of soybeans andmealtmay increase during 196869 becaUSe bull l reducedcompetitiorrfrom fish meal In the Netherlands demMdfor soybeans 9ldmeal lsexpectedto continue to grow because of expansion in the livestock sector

FortheEElaquoJasaltwhole ~xisting 9I1d proposed measures for reducing the butter~Urplus includingthetaxtng of oils aflQ meals wtll have a Yffry negashytive effect on imports of oilseeds and products In addition highersupport prices in the Effie havestimulated the prodJction ofrapeseed which increased 31 percent in 1967 ltarid 12 pe~cent Lp 1968 NEe plantings of winter rapeseed haveincreased again for the 1969crop

Mainiand~inasexports of soybeans in 196869 areexpe~ted to~~ at about the same level as in the past4years BraHl~s exports of soybeans which 11ave been dOWn thusfar in the season (September-August) may recover sharply if-the forecast record springcropmaterializes Tnerewas a levelingoff in

bullSoviet and Eallt EtLrOPt39l s11nflowerseed production in 1968 and although exportshyable SLlppliepr~Jllainlarge some declineinexports of seed and oil is anticishypatedCanadatsrapeseed crop waSdoWl abop-t25 percentand Canadawillhave to drail heavily on stocks to hold exports at the level of the plevious season

20

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

ltmiddotTfJe~~~llt~ropiri lIidiEi-iLtheW(ldJsjla-gestproduc~r)was about-15 bullpershy ~~n~p~t9~~b~fremiddotGolrl1961deyeJart~~16~e~()tlle196367aver~e middotIbN~g~ria middottheltlarge~t eXP9rterofpe3Xlc~t~prbduction is beJievedt~ haveiIlcte~sed abo~tmiddot qQe4riftliltoV61 1967buttohavellecentnsigIlieicamp~tlybeJ(jW thegtzccord cJopbf

middotJ966 ~ ~r9ductiQninSenega~ the seconCi r~kingeXporter decliriedroU$lllYJOpercent ~~

~r

Tob~co PrOduction at AVerage Level ~-~~-~~sect~

-WOl~~ioutputOf tibaccofoUowingarecordin 1967fell slightJytp aboUt_t~el963-67average_middot Production declined in all the majorexpoICtine lt

cOuntries except Brazil the Philippines SiYJdCanadaThe ~argest d99Line~ were in the tJnited States and Rhodesiatable 11)

c T3-blell--Tobacco production by maJor producers 1963-68 -~ ~

I~Year be~nninSi -Jan~atv 1 Countr( 1963 1964 1965 1966 1967 1968Jj

(I ~---- Imiddotmiddot J)middot -MillionEounds~-

~ United States middot 2344 2228 ~f855 1887 1968 1716 Mainland Chinall 1590 1700 1720 1740 1870 1870 India middot 806 790 762 656 772 739 USSR middot 3~ 514 467 518 573 540 Japan 347 468 42Jj 435 463 450 Pakistan 221 228 242 303 392- 451 Turkey 291 428 293 362 403 355 Brazmiddotil 412 302 429 299 324 middot330Bulgaria 232 330 27- 292 256 243 Greece middot middot 284 299 276 217 254 229 Canada middotmiddot bull 201 153 169 234 213 219 Rhodesia 182 304 240 -249 206 137

middot ------------_--------- shy1Tpceliminar~Y Farm sales weight ~ The production series on Mainland China is based on fragmentary inforshy

matIon Both the absolute level and direction of change are subject to revision~

Us tobacco acreage which has decreased steadily since 1962 fell 8 pershycent in 1968 Dry weather in Virginia arid the Carolinas reduced yields and the crop was the smallest since 1957 Tobacco stocks have declined regularly from the very high level of 1965 and will drop again in 1969 US exports of tobacco in 1968 exceededthe high 1evel of 1967 (table 12) t

Trade sanctjons have caused a large buildup in RhodeSian stocks and plantings for the 1968 harvest were reducedsharply Widespread drought cut yields and the crop was only two-thirds the size of the 1967 crop Drought also effected the quality of the 1968 harvest Plantings for the 1969 crop a~pear to be in good condition

21

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

bull ~ lt

SeveralCoUrtriesthatweIesmallpr()d~Ce~S6ffllle~CUred andhtirley h~ve c middotcrapidlYexpand~dproducti()nt0taJce advantagecifth~ market czeatedby ~~~ttohs

9ga~nstRllode~ia~middot J3il3zfl is tncreaSin(itsexflo~tS()fYirginiatypefiue (iUZedmiddot tobicco tbW~st~rm Europe SOJlth KOleaandThailand have Qoubledprodtiction or flue-C1lTeds-irice the early-pa-rtbf the decademiddotands~thKoreamiddotand ireece have

introducedlttl1e ~roouction Ot budeyonmiddotalarge 3 cale -(

~xp6rtsby countrYbforigin 1963-6~ ~ bull

$ _____~Ye_ar_middot be~nninuanu~i-Y=L_middotmiddot_middot_middot~~___bull_

1L4 lIlt5middotmiddot 11L61967 ~middoti9681 __7U___ lU 7U ~ _~_ =tshy ~

I Million pourlds-United states

~

505 514 468 5~ 572 600 1 Rhod9 sia Zimlbia

Malawi 213 2sect3 Ii ( 305 Y1201 2 120middot -na middotTltrkeY middot 98 i26 152 188 - 202 2QO

Greece 137 151+ middotmiddot161 _161 191+ middot140 ~ Bulgaria 11i 179 173 159 168 160

India middot 150 158 137 79 123 134

Brazil bull 98 133 122 101 99 99 Philppines middot 55 76 59 51 50 53

Yugoslavia 38 50 51 46 42 40 Capada middot 39 52 42 ~8 43 40 Dominican Republic middot 37 56 33 26 22 15

~~---- ----------Y Forecast 1 bull

gj Estimate

PrClductiopoforientalleaf declined in Tutkey Greece Bulgariaand Yugoslavia primarily because bf unfavorable weather In Greece reduced acreage also contributed to the decline However because of large stocks particularly in Turkey and Greece world supplies of oriental remain highbull

lIil MarCh 1968 the United Kingdom--the largest marketmiddot for US tobacco increased the import duty on tobacco by5 percent and in November 1968 raised the duty an additionalmiddot 10 percent (surcharge) These twoimport-savingsmea~ sures will add the equivalent of about 6 cents per pack to the cost bfBritif3q cigarettes encouraging maI1ufacturers to reduce the tobacco content by increas ing the sizeoffilters and reducing the oiameter of cigarettes

22

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

IIllO~t savings q

tmiddot~ -- D

~iTllel1nitedkillgaomis theworlds latgestiInportergtof agricu1tur~1cent9IDln9d itiesandis tl1eihiSdlargest- marketmiddot apoundterJapan andWest GermanYmiddotf()rUS

bull farmproducts~sect It i~3 themiddotmlijorforeigp marketfor9Sbulltobacoand n1ardC-and anJmporta~tmarket~9~U~ S feedg1ains whlatoi1seed~cottQ~andvariety ~eats~~7 ~ bullbull

middot~in~196768dil~ct oexpottsofUS bull agricultural commodities Kingaollt aIiloun~edto about $400 million adec1inegf12 PercenttroIllthepte~

viousyear COritributingto this decline were a largehigh-qualitygraihcrop iri Britain~largefeed grain supplies in competing countries subsidizeclFreI1ch felaquofd wneatexporisltto the United Kingdom deva1uatiQnofthepound sterling-and concurrentdevaluations bymanyof Brij~ain strading1gt8r tners lt G

~

PresiUresforimPort savings to correct Britain sadverse balance of pay ments intetsect3Jfie~during 1968 In June the Ec~nomic Development Council-for Agricultu-e 1E1JC) established to study the importsavingroleofBritishagr~ d~ltureproposed measures to increase net agricuJturaJ output 22 percent during the next 5 Years to effect annual import savings of abqlt$530million by 197273~ This expansion wouJd include percentage increases in commodityproducshytion as follows

- -~

(primarily for feed) 50 Fresh pork 24

CBacon 84 )~I ~i

In November the ubullIf Minister of AgricuJture scaled down the EDe objectives particulaXlythosefor the expansion of grain andb~conprod)lction He also warned that unless the proposed beef increase reSulted from expansion of beef-tYlle herds rather than dual-purpose herds Britain would find itself in the same dairy-s~plus dilemma as the EEC His commodity proposals were not as specific as those of the EDCbut he did cite at 197273 import-savings target drf about $380 million intemperate-zone food and feed supplies as opposed to the

EDCtarget of $530 million (Current UK imports of temperate zone f60d and feed cOIllIllodities amount to abOut $24 billion annually)

The proposed measures to expand production threaten US farm exports parti~U1arly feed grainsvarietymeats andlard Although the Minister called theEDC grain objectives somewnat too optimistic he impliEd that UK feed grain imports are not likely to increase and may in fact decline He was in general agreement with the EDC proposals on beef and pork production proposals that would directly affect US exports of variety meats and lard

In the shorter run the outlook is tor somewhat larger British imports of temperatezone food and feed Themiddot livestock industry has not completely reshycovered from the effects of the October1967-June 1968~pidemic of foot-and

sect This ranking based on 196263-196667 data(-gt takes into account adjustshyments for transshipments of US commodities viaCanada and the Netherlands but does not take into accoUnt transshipments via West Germany and Belgium

23

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

~ bull

bullmoath ~di~ea~~~middoti~df3IittSili b~~fproducers~h~ve 1gteend~t3Courag~d bll thehighmiddot G()~X9f~eedei qafve$(l~ayyen tai~sand floodingeducedthequantityand

q~~litYi)tgtil1i1iflt)~~geJ~~1l(fmapi~croppo0~~~~in1968and cause~~a signif- gt icantde18yillthe se~d1~ofwintelgiains ~the1969 harvest

UK~~~rt~~t~iiJiDgwheatmiddotihl968169 ~y excee~thoseof 196768byamilliontonspriniBriJrbecause of the poor quality of domestic~upplies OIl

the o1Jher l1~ndjff~dgrainltirXlports willbe1itnited1gtyheavy ieeding of domestic wheat c6ntihuedg~owth~ri ~ports of Frenchfeed whea1 andheaviereee~irtg of

qjDIllestiebarleythatistoo lowinqualityfor ma1iingorexport Exports of l3ritishibarleyare expected ~oamountto only 150000 tons in 196869 compared with78euro)~OOO 1n196768i Offsettingfact0lcent tre the smaller UKmiddot middotfeedgraill Jr9gtapqthepqorquality~ofBritishforage cropsThe lJKCerea1s Authority -

gthas~stimatedthat 196869~ports offeedgrains will be 03 miUiontqns above those of 196768~ 0 h ~

FeeclGrainProductionRemainsHighr

Worl~(outputof fee~ gril~1a~t year remained at the high 1eveiQ

Qf1967 ~ CQrriproduction reached new highs11tthe EEC and Mexico andrecbtd barley crops were harvested in Canada and Denmak~

Table 13--Worldproduction offeed grains 1961-68

Commodity 1961 1962 1963 middot middot 1964 ~ 1965 1966 middot middot 1967 1968 tl-- middot middot shymiddot

o middot Million metric tons - -Corn 177 179 193 182 193 215 225 221

Ii Barley 69 78 82 87 86 95 97 101gt ~

(

middot~ts bull 49 48 45 41 43 45 46 5deg SorghUlll and millet y 31 J4 35 35 35 41 44 42

middot Total middot 326 339 355 345 357 396 41~ 414

+13 +16 ~-10+12 +39 +16 +2 )

--plusmnI-1--E-X-C-l-u-d-es~c~o~mm--un-~-middotS~t~A-s~ia----c-a-l-en-d-a-r-middot~y-ea-r~i~----~----~--~~----~---g The Uni~ed ~tates India Argentina Me2l~~o the UARLpakistan the Reshy

public of South Africa Turkey Australia and~t~pan ~

In the United Stateswhich accounts for half of world corn prod~ction toe acr~ageplanted to corn in 1968 declined to about the 1964-66 aversLge However despite heavy rains and high winds in October near~record yields were achieved and production was second only to 1967 bull Combined production ot the four inajor feed grains fell but with much larger stocks the US supply is

~ th~ largest since 1963 (table 14) j)

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

0

middot middot Country bull]962 l-filliQV inetrplusmnd t6ns lt

- -shyi ~-

Argentina lgt

1 stocks 03 05 04 o~~ 04 03 0~5 ProdliGtion 63 76 74 7~2 82 106 middot94

Supply middot 66 Sa 7S 7 86 10~9 099 France

Stocks d bull 8 13 11 12 1810 1~3 Lf 22 Production li3 105 104 140 1l~--13 3v 145 167 169

Supply 121 118 115 152 13(J~J 143 158 178 19~1 South Airica

Stocks 7 7 Ll 12 9 3 e3 7 Production i4bull7 58 59 65 47 51 55 1070

Supply 1

65 70 77 56 54 58 li4c(04 Canada stocks ~ 47 45 28 45 50 4~2 42 47 41 Production liO 76 120 127 105 12~ 140 1201 147

Supply 157 121 148 172 162 16~8 182 167 188 Thailand

Production 5 6 7 9 10 11 13 12 14 Australia

Stocksi ~l 1 2 2 4 4 4 5 2

Production 33 23 26 2middot7 28 24 37 21 36 Supply 34 24 28 29 32 28 41 26 38

Total 6 middot countries Stocks 66 71 56 73 92 6~2 63 73 102 Production 371 344 390 440 384 414 492 533 515

Supply 437 415 44~6 513 476 476 555 606 617 United States

Stocks 677 768 655 584 629 497 382 337 434 Production 1412 1276 1296 1395 1217 1428 143t() 1596 1525

Supply 2089 2044 195~1 1979 1846 1925 1812 1933 1959 cgt

IBarleyoats corn and sorghwn Y Marketing year beginning Julyl for Fr~nce August 1 for Canada and

DecembeJ 1 for Australia For the United States the marketing year for corn and sorghum begins October 1 and for oats and barley July 1 The marketing year for corn ind sorghum begins April1in Argentina and Mayl)in South Africa

trmiddotBeginning with 1967 stocks arel August 1 t 1 bull

u S exports of feed grains leveled off in 196768 pecaulse of record crops in theEEC and the United Kingdom and record supplies in the major cbmpeting countries Supplies in the EEC and in competing countries c21ntinue at record proportions but ~lport requirements are higher in Japan and Britain US~

25

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

ltA~isb9wI(int~1gtle15wot1dti~de in ~fEled grains bulllias leveled dff 1ntheshypastl years~Sollth Africamadethe greatest gain fnfeed grain trade in ~~96768middotA~thPugh sOh~hAfrioall corn prbdustionip1968dropped back to the 1966 leve1b~ginningstocks(I1aYlwerevery highandcornexports during

middotMeY~~December15amb~I~~dto 3mii110ntdnsaboutthe same as the high bull 1eyelo(sa1esduring the same period ilL1967 As of December 15 South Africa

had 05 million tonsofcommostlYYel19w corIlavai1ab1efor export before May 1969 EXpQrtsofwhite corn wereintcentrrupted in Decemberbecausedel8yed rains reduced prospects forthe 1969 harvest The corn crop was planted about 4 weeks later than usual Beceuse qf~ the spreadbetween1oW World prices~nd

domestic supp6rtpricesfor corntheSouth AfricatlMaize)30ard sustained losse1F totaling $28milHon during MayNovember 1968

_J

Year beginning JUly 1 bull bull bull bull bull ~

1960 1961 1962 1963 11964 1965 1966 1967

-

Mi11iltm metric tons - shy7shy

states 115 14middot7 154 163 181 258 214 203

Argentina ~5 35 33 37 51 37 65 41 France 19 21 1~3 33 30 28 3~8 40 SouthAfrica 10 17 23 26 8 3 6 33 Canad~l 10 1t 7 l3 10 10 11 11 Thailand 5 6 7 middot9 9 12 13 13 Australia 13 12 7 8 8 5 9 3 Mexico

1 ~-- 9 13 11 8middot 6fBrazil --- bull1 7 ~ bull 6 6 -shy

Romania 4 8 8 9 9 b~ 8 12 Yugqslayia 5 4 1 l 4 8

Total 10 countries 92 114 143 134 l21 171 99 117bull5 middot middot

middot other exporters middot 27 43 51 46 51 46 39l 36 ~ i middot [

middotWOr1dmiddottdta1 middot middot 234 304 304 35 2 366 425 424 414 in

l Argentine exports of feed grain like those of wheat middotfel1 shap1y in 196798 Most ~bf the decline was accounted for by reduced sa1esto theEEC Spain ~nd the United Kingdom Because of smaller crops current supplies are below the high level of the two preceding years and exports are not expected to increase Exports in the firstha1f of 196869 particularly those to the United Kingdom remained small The area sown for the 1969 corn 9rop was the ilargestffince World War II

1

26

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

Oa~aQiansUPpli n~whighlbut~~With cd~tries aIidstron~eir for corn relative to barleyexportsaren9t likeiyto increase Canadianexports 6f~btirley dJlling A1gtlst December were wellpe16w the 1967 ra~e ~ -

AJ

gt Mexico has astuPlusof corn and hopes to eXport ~l 5ndlliontonsj ill

19869~ ltBy the end of 1968 hoWevcentrMexiqo had solQ onlymiddotO 5 million middottons COrni and sorghum for delivery middottoJapan and ~middotA~stern EurOPe during November Danuar-yMflxican sorghum production ins~~Aificant a few years ago amounted

~tomiddot 2 Iiiilliol[tons in 1968 ~ More Mexican ~arIllersare growing sorghum instead of corn andwhet and planting more so~ghum as a second crop following wheat bull

eraZil exported 12 million tons Of corn in 1968 compared with thepreshyviouspeak of 07 lllillion iIi 1963 and 04 mil1ion in 1967 Iarge stocks reduced exPort taxes devaJ-latiolS and port improvementscontrabuted to this reco~d Bra~il s 1969 exports could agaihbe larger than normal For the coming crop soine farmers are shifting from cornto cotton or rice because of betterproducerprices

In Australi~ feed grain prodfctionin196869 matched the 196667 record andexpq-rtsshould recover fromthe low 196768 level

e rn 1968 Thailand exported 13 million tons of corn primarily to Jagm

(dnd Taiwan Thailands 1969 exPort target is 105 milliont6ns but the crop was not up to exPectations and this target is not likely to be met

Production of fe~q grains in the EEC equaled the 1967 record and carry-over stocks are larger In addition larger quantities of domestic wheat and non grain feeds are bei~ ted inEEC countries EEC import certificatesieurosUed during August 1968-January 1969 (excluding intraEECtrade) coveredonly52middot n

million tons of feed grains annual imports usually range from 15 to 18 mi1Llion In 196768 France exceeded its export target of 38 million tons (table 15) outside the EEC Frances most important markets were SwitzerlandPoJand Japanand Denmark With record feed grain supplies ald a ecord corn cron Francesexports of about 28 million tons of- feed grains during Augustl968-January 1969 were well above the rate of the previous year

outsidetheEEC the United Kingdom and8pain are the major European markets for USfeed grains The UK feed grain crop was down almostlInil shylion tons in 1968 and the qUality of forage crops is poor However imports of feed grains ar~ not likely to expand to cover the ftiU amount of the shortfall in productionbecause Britain like the EEC has large quantities of feedshyquality wheat Spajn sfeed grain production ~et a new record production of corn increaed sharply A significant reduction in Spain s imports is lifelY

Production of feed grains declined in Eastern Europe becaue of drought in the principal cornprodUcing countries Exports froIll Ronania and Yugoslavia PrObably will drop 0 abollt half bfthe 196768 level

~

27

-

- ----~------~~--- ~---- 7--- -- -- -~~~-- --- -__shy

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

InmiddotNovember bull tlleJapanesemiddotmiddotPric~ stBbili2iationq~Uficil(establisitedJ)ythe Prime Minister inFeb~rx]968)repcgtrtedmiddot that the degreeor~gricUitUratproshytection in Japan liaq riseninthe Jastde~ade~ndnowis as htghmiddotasinthemiddotmiddoti highly protectionist nations of western Europe The Cquncil recoIllIllended some relaxation ofililportrestrictio~sto stabilize consumer prices alldfoxoeim- proved farm productivityat home It also recommendeagreaterdive~sifric~tion of the source ofimports td increase price competition()smong supplyingcoUntries and to aid eGonondcdevelopmentmiddot abroad AsYet~middot the Governmentmiddothasmiddottakenno steps to implement theseproposaJs and continues to fbllowaxestrictivepoiicymiddot on agricultural imports

Japan simportsofUS agriculturalprodticts valued atiover $i billion (cif) reJllBined relatiVelyst~lgtlein 1968 for the second consecutive yeaJ but the composition ofthetotalchanged~adically Japanese imports ofUS~ corn and soybeans increasedab3ut 60 percentand20percent respectivelywhile imports of U S bull sorghum declined 25 percent Purchasesmiddotof US bull wheat in 1968 matched the high level of the previous year althoughthemiddotrate declined during July-December 1968 and imports of US cotton fellmiddot about 10 percent

The outlook continuesYfavorable for an expansionin Japans feed grain inJ ports FeedcQnsumption stimulated by a strong demandfor beef and pcgtultry meat and lower feed prices ismiddot expected to continue to trend upward during th~ remainder of 196869 Total 196869 imports of corn are expected tomiddotreach a record 53 million tons including 26 millionfrom the United states (in 196768 the United states supplied 21 million tons) 1 million from South Africa 08 million from Thailand and the remainder from Mexico Mainland China and other suppliers Becauseof unfavorable prices relative to corn the use of sorghum in mixed feeds continues to decline and Japanese imports of sorghum are forecast to drop to 23 million tons in 196869 cmparedw1th24 million in 196768 Mostoi the decline probably will be accounted for byreshyduced imports of U~S sorghum because of increased competition fromsoutl1 Africa Argentina and Australia Imports of barley for food and feed are exshypected to amount to O 7 million tons in 196869 France which supplied very littIe barley in previous years has dominated the barley market so far this year~

Stimulated by another increase in the support_price 9Japanese farmers agaitJ increased their plantings of rice and produced a crop almost equal totl1e 1967 bumper harvest With record carry-in stocks (26 IDilliontons milled) on November 11968Japan sriceimports will drop to insignificant proportions in 196869 (November-October)yennpcgtrts amounted to 475000 tons in 196667 and 250000 tons in 196768 The implications of Japans large rice supplies formiddot future wheat imports are not clear In NOVemberthe Japanese Federation of Agricultural Cooperatives recommended a reduction in wheat imports in order to increase consumption ofdomeztic rice Total wheat imports during 196869 are not likely to reach the4-mil1ion-ton levelof196768~ BecaUse of a quality

]j During 1960~66 the retail price of rice in Japan increased an average of 65 percent armual1y primarily because of increases in the support price

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

ts~ti~ Jah~ll~~e~d~aYiInpc3ftsof usbullmiddotwh~etfrommiddotniid-N6varlbeftdmid-JtlJlWU-y

yennd V~S~l1eatlb~tgro1Jn4middottbwlieatfr6inlustralia~ bull AboutlJ 60 percent Of JaISil sFrance anC

whcentatiInPOrjsd1trtpgQctqbl3r1968February 1969 came frommiddot Australia bull

Argentina are trYingliardtosellwheattoJapan~ and Japanese mills have al- ~ll

ready puJchaseqtrial Ibjs~OlIl potl1c0Utltries ThemiddotFrenchwheat competes With

rapaIles~ doplesticltwhertand U~SWesterri White wheat in terms of milling

char~cteristl~ ~aparljresullleci pUrcli~sel3 ot U3 wheatilicanuary

bull - _f _

Japan smiddotimport~()csOybe~nSWlliGhdldnot increase middotiIl 1967middot grew by 10

percent iri 1968 toP ampJl elirtmatecia4lliiIion tbJlsiillcluding2million ficIn the

united states and the remainder from Mainland Cbiria (Jap9nese purchases of

US spybeansaveraged 6i1ly 1~2milltontonsUl196l~62~) As expe6ted~Japaiis

ilnportsofrapeseedmost+y frOmiC~nadaincreased Significantly-butcontrary

toexpectationsimports ofmiddotSCWiets1lilflowerseeddeclined i

Foilowi~g a15~per~entlncrease in cotton inportsin196667 tcirebu11d

stocks in an-ticipationofhigh~r prices ~ JapansiJnports (gtfcotton leveledoff

in 196768~ rmpor~sofoU S cotton fell som~what but remainedmiddot well abovetheCCotton frolll

1965661Efvel~cIlnpOrtsifromMexico and Br~zilalso declined Australia ltDiade

Syria TurkeyPakistan and the USSR wade the largest gains ~

its first trial shipnients of cotton to Japan inDecember

()

Cotton Production Recovers

World cotton output following two low years returned)in 1968 to the

1963-65 level There wasa sharp recovery in the United States a large in

crease in Brazil a significant increase inMexico a large decline in Mainland

China and asignificant decline in India bull

~ BecauSe of sharply reduced crops in 1966 and 1967 U s cottop_ stocks on The harvestea-rureagein

August 1 1968 were at the lowest level since 1953 1

the Uni~edSt~t~s was about 25 percent larger than in 1967 and with more favorshy

able weather the crop was about 45 percent larger However because of much

smallerstoclts the US supply of cotton for 196869 (August-July) is the

lowest since the early 1950 s and there may be another moderate reduction in

stocks by Au~st 1969

Sovietproduction of cotton failed to increase for the second year in a

row and the United States regained its long-standing position as the worlds

In the UAR acreage was down and production reshylargest producer (table 16) mained low for the third sUCCessive year The extra-long-staple crop in the

UAR fell for the second year

Harvests in Mainland China and India were down from the excellent 1967

harvests Cotton production reached new highs in Pakistan and Turkey

Brazils second consecutive record ~rop grown on a larger acreageWii~-~)

increased use of fertilizer and plartt protection chemicals is indicative

that countrys potential to continue as one of the top cotton producers and exshy

Because of increased area and more favorable weatherporters of the world

Crops were smallMexicancotton production recovered to about the 1966 level bull

for the third year in Central America and Peru The Nicaraguan crop was

U

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

iI lt bull

damagedlly)velcanic a a shertage 00pound lrrig$tien water again reduced the si~e df the extra-lC)nglsiua]le crepin Peru The harvest in CelOmbia was a l~lordo

pr-oductionby majer producers0

6

1965 190 bull 1967 1 bull middot

~

II ~ shyMillionija1es ymiddot -lt ~

shymiddot IC

United States 1533 1518 1497 98 746 2082 Bra zi~ 230 210 2~50 205 270 3bull 30 middot M~xice j middot 211 240) 2~63 2~25 200 230middot

Centra1 Americri middot 110 132 123 106 104 106 middot CelOmbia 34 30middot~ 30 40 ~46 60

Jgteru bullmiddot 63 65 52 A8 46 42 Other SouthAn7eri~ middot 57 ~80 67 53 48 60

shy

-middot L

Western EurepE 92 70 74 ~84 bull 76~- 67middot lastern Eurppe middot 09 10 08 ll2 11 10 USSR 810 820 880 930 930 930

UAB 203 232 239 209 201 193Sudan 45 70 75 89 90 85 East Afl~icanJommunity middot ~54 63 70 74 64 52 Nigeria 1 i 21 20 20 24 12 20

0qhed 18 17 15 19 18 20 Other Africa 59 63 70 81 85 97

Mainland China 470 600 660 650 7~00 640 India 520 490 460 460 530 500 Pakistan 194 175 192 210 2~30 240 Turkey 115 150 150 175 180 185 Iran 53 53 65 52 53 65 Syria 70 81 83 65 58 65 other Asia and Oceania 49 54 60 64 71 75

~Werld ~ 5021 5244 5403 48~2 4771 (~156 ~

I ----------------------------~b P~eliminary y BaJesl 00pound 480 peunds netII Ce~ltlI)Onents may net add to tetals because 00pound reunding

~lt

Us cetteq exports get off to a very slo~ start in 196768 but recever~d semewhat in the latter partef the seasen tetal experts 101 the seasen were 10 percent be1ew the 196667 figure (table 17) There were large declines in US expozts to Japan canada Indenesia Yugeslavia and West Germany sales to Henlg Keng and India advanced Ameng the majer exporters enly Pakistan and

the Sudan made significant gains Fpllewing steady rises during 196465 shy196667~ Seviet and Turkish exports maintained the high level 00pound the previeus

30

1) -middot--middot-7~~

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t

year Central~erican exports remained low ~nd all Qther countrieiS enced declines ( 0 gt

Table 17bull--Cotton eJqibrts by co~try of origin1963-67 raquo ~

Year begirming August i Country

1964

gt ~ 1965 01966 1967

- - Million bales y - Ir

~

United states 420 304 483 436 USSR 200 230 240 240 Mexic9( UAR Brazil

162 156 104

21311 158

94

l39 143 191

124 117

84 lurkey CehtralAirl~rica

77 loll

92 112

105 84

104 ~B7

Sudan 47 57 68 83 Syria East African COInmunity

73 60

71 63

58

73 49 11

54 l~kistan 49 49 56 89 Peru 47 52 38 28

y Bales of 480 pounds net

US exports in the first 5 months (August-December) of the 196869 seashyson were about 20 percent below the same period a year earlier and are not expected to recover to year-earlier levels SoVietexports are not likely to increase but exportable supplies are large in Brazil Mexico Turkey and Pakista~ US exports to Hong Kong South Korea Taiwan and the Philippines are expected to increase but those to Japan ]urope and Canada are likely to decline from the 196768 level

31 1IIII

t