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ing potatoes, West Germany 

Will USSR Import 
U.S. Tobacco? 

U.S. Variety Meat Exports 






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FOREIGN AGRICULTURE 

Vol. XIII • No. 1 • Jan. 6, 1975 
In this issue: 

2 USSR Holds Potential as Im- 
porter of U.S. Tobacco 

By Hugh C. Kiger 

5 World Beef Problems Con- 
tinue— Some Hope Seen for 
Future 

By Richard J. Goodman 

6 Israel’s Citrus Outturn Steady, 
Despite Wartime Dislocations 

By Rafael N. Rosenzweig 

8 U.S. Variety Meat Export 
Trade Faces Slower But 
Steady Growth 

By Arthur F. Hausamann 
10 Tobacco Production and Trade 
in Southern Africa, Part III 

By Robert W. Johnson 

13 Argentina's Edible Oilseed 
Crop Seen Well Ahead of 
1973-74 

14 Germans Eating Fewer Pota- 
toes But Use of Products 
Climbs By Paul Hess and 

Homer F. Walters 
16 Crops and Markets 

This week’s cover: 

Potatoes are carefully sorted on 
West German farm prior to being 
marketed for fresh consumption. 
West Germans are eating fewer 
fresh potatoes, but use of potato 
products is climbing. Article begins 
on page 14. 



Earl L. Butz, Secretary of Agri- 
culture 

Clayton K. Yeutter, Assistant Secre- 
tary for International Affairs and 
Commodity Programs 
David L. Hume, Administrator, For- 
eign Agricultural Service 
Editorial Staff: 

Kay Owsley Patterson, Editor 
Patricia 0. MacPherson, Beverly 
J. Horsley, G. H. Baker, Marcel- 
lus P. Murphy, Mary Frances 
Owsley, Isabel A. Smith, Susan 
E. Atkins. 

Advisory Board: 

Richard A. Smith, Chairman; 
Gordon 0. Fraser, William Hor- 
baly, Richard M. Kennedy, J. 
Don Looper, Larry B. Marton, 
Brice K. Meeker, Jimmy D. Min- 
yard. 

The Secretary of Agriculture has deter- 
mined that publication of this periodical 
is necessary in transaction of public 
business required by law of this Depart- 
ment. Use of funds for printing Foreign 
Agriculture has been approved by the 
Office of Management and Budget (May 
14, 1974). Yearly subscription rate: 

$20.00 domestic, $25.00 foreign; single 
copies 45 cents. Order from Superin- 
tendent of Documents, Government 
Printing Office, Washington, D C. 20402. 
Contents of this magazine may be re- 
printed freely. Use of commercial and 
trade names does not imply approval or 
constitute endorsement by USDA or 
Foreign Agricultural Service. 



USSR Holds Potential as 
Importer of U.S. Tobacco 



By HUGH C. KIGER 

Foreign Commodity Analysis, Tobacco 

Foreign Agricultural Service 



A S TRADE RELATIONS with the USSR 
continue to improve, the United 
States may eventually be able to tap 
that country’s latent potential as a 
market for U.S. flue-cured and hurley 
tobaccos, while also possibly becoming 
a market for Soviet oriental tobaccos. 
Despite still-lingering obstacles to de- 
velopment of such a two-way trade, 
the basic conditions favor its eventual 
development and growth. 

The USSR, for instance, is fourth in 
world output of tobacco — and first in 
that of oriental types. But its role as 
a manufacturer and consumer of to- 
bacco products is even greater, neces- 
sitating huge imports. Thus, it also 
ranks as the world’s fourth largest im- 
porter of unmanufactured tobacco and 
the leading importer of cigarettes. 

The United States, on the other hand, 
is a major producer and No. 1 exporter 
of flue-cured and hurley tobaccos, while 
an importer of significant quantities of 
oriental types. 

Despite these mutual needs, trade 
between the two countries has tradi- 
tionally been limited to modest exports 
of U.S. cigarettes to the USSR, largely 
for sale in tourist hotels. And while the 
United States has counted European 
and Far Eastern countries as its major 
markets, the USSR has looked to East- 
ern Europe, India, and the Mediter- 
ranean tobacco producers to meet most 
of its import needs. 

However, such suppliers will be hard 
put to meet USSR demand for high- 
quality flue-cured and burley tobaccos 
should the country begin large-scale 
production of American-type blended 
cigarettes. And if the USSR shifts to 
production of such cigarettes, it will 
have less need for the oriental type, 
which dominates domestic output. 

With these factors in mind, U.S. and 
Soviet tobacco interests have been 
gradually enlarging contact, which has 
included a 1973 agreement for the ex- 
change of tobacco teams and an actual 
team visit to the USSR in September 



1973 by U.S. Government and trade 
officials. A reciprocal tobacco team is 
expected to visit the United States in 
the fall of 1975. 

Members of the U.S. team 1 toured 
major Soviet tobacco areas and con- 
ferred with the Soviet Ministries of 
Food Industry, Agriculture, and For- 
eign Trade. 

Team members visited the tobacco 
areas of Krasnodar, Sukhumi, Tbilisi, 
and Kishinev where they observed pro- 
duction, harvesting, curing, fermenta- 
tion, manufacturing, and research facili- 
ties. They found, among other things, 
that producers generally were emphasiz- 
ing yield and quality improvement of 
semi-oriental leaf, rather than acreage 
expansion. 

They also concluded that the USSR 
trend toward “standard-type” cigarette 
production — consisting of domestic leaf 
blended with imported oriental and flue- 
cured tobaccos — would continue. At 
the time, however, USSR officials had 
not decided whether to produce a high- 
quality American-blend type of ciga- 
rette — a move that would greatly en- 
hance USSR needs for U.S. tobaccos. 

The team findings indicated that the 
Soviets would continue to make large 1 
imports of flue-cured — as well as orien- 
tal- — tobacco to satisfy needs of their 
cigarette industry. For the near term, 
it did not see any of this coming from 
the United States but felt that explora- 



1 Tobacco team members in addition tc 
the author, who headed the team, and the 
then-U.S. Agricultural Attache at Moscow 
G. Stanley Brown, were: Joseph R. Wil- 
liams, Washington, D.C., Clyde Wayne 
Brunswick, N.C., L.L. Mauldin, Sylvester 
Ga„ James H. Montgomery, Gables, S.C. 
and S.T. Moore, South Hill, Va., repre 
senting Tobacco Associates Inc.; Malcoln 
B. Seawell, Raleigh, N.C., representing th< 
Leaf Tobacco Exporters Assoc.; Horaci 
Kornegay, Washington, D.C., representin; 
the Tobacco Institute; Frank Snodgrass 
Washington, D.C., representing the Burle; 
and Dark Leaf Tobacco Export Assoc, 
and J.D. Johnson, Knoxville, Tenn., repre 
senting the Burley Stabilization Corp. 



I 



min 



f»t 



Page 2 



Foreign Agricultur 




Top, a rest area in the courtyard of a tobacco factory at Tbilisi, 
Georgian Provinces, USSR. Above, Soviet semi-oriental leaf is cured 
in the sun during the day and in the shed during inclement 
weather. The Soviet Union ranks fourth in world output of tobacco, 
first as a producer of oriental types, and is the world's leading 
cigarette importer. 



tory talks had established a good basis 
for two-way tobacco trade between the 
two countries in the future. Prospects 
for such trade were, of course, greatly 
enhanced by granting to the USSR of 
most-favored-nation (MFN) tariff treat- 
ment and Ex-Im Bank credits. 

Prior to World War II, the USSR 
imported only 3 million pounds of 
! tobacco. But since then, the import 
trend has been up, as consumer demand 
.for cigarettes has risen and the Gov- 
, ernment has attempted to meet this de- 
mand by encouraging imports of orien- 
tal and flue-cured leaf for blending with 

January 6, 1975 



domestic leaf in a “standard-type” 
cigarette. 

USSR imports of leaf tobacco 
reached a peak in 1964 of 280 million 
pounds, of which Bulgaria supplied 
about 120 million of oriental and India 
supplied 65 million of flue-cured. Other 
major sources that year were Greece. 
Turkey, North Korea, Cuba. Romania, 
and Brazil. 

Then, in the late sixties, Soviet im- 
ports of leaf tobacco declined to about 
half the 1964 level, only to rebound 
again in the past 3 years. 

In 1973, the USSR imported about 



204 million pounds of leaf tobacco 
valued at about $152 million, including 
an estimated 132 million pounds of 
oriental leaf, primarily from Bulgaria, 
Greece, Turkey, and Yugoslavia. In ad- 
dition, about 73 million pounds of rela- 
tively low-priced, flue-cured leaf were 
imported mostly from India, North 
Korea, and the People’s Republic of 
China (PRC). 

Over the years, Bulgaria has always 
been the major single source of oriental 
imports by the USSR; however, Soviet 
imports from Greece, Turkey, and 
Yugoslavia have risen during the past 
few years. 

During the late fifties, the PRC was 
the major source of USSR imports of 
flue-cured leaf. Imports from China 
reached nearly 100 million pounds in 
1959 but became almost negligible in 
the sixties. Imports of flue-cured to- 
bacco from China were resumed about 
3 years ago and reached 1 8 million 
pounds in 1973. 

I n recent years, India has been a 
major source for flue-cured leaf, sup- 
plying about 69 million pounds in 1972 
and 46.5 million in 1973. 

Although the USSR is a major pro- 
ducer of cigarettes, significant quan- 
tities must be imported to satisfy the 
increasing consumer demand. 

During the past 3 years, estimated 
Soviet imports of cigarettes averaged 
about 53 billion pieces annually, almost 
triple the quantity imported 10 years 
ago. 

Bulgaria is the major supplier, ac- 
counting for 80-90 percent, or almost 
50 billion pieces annually. Most of the 
Bulgarian cigarettes imported are made 
from a blend of oriental, flue-cured, and 
light air-cured tobaccos. 

Other suppliers include India, Cuba, 
Egypt, North Korea, and the United 
States. During the past 3 years, imports 
of U.S. cigarettes have averaged over 
100 million pieces annually; they are 
sold primarily in tourist hotels. 

Cigars have been the only other 
tobacco product imported by the USSR. 
Cuba has been the sole source of these 
cigars, which have averaged 4-5 million 
pieces annually in recent years. 

Exports of leaf tobacco and cigarettes 
by the USSR have been very small. In 
recent years, small quantities of leaf 
have been exported to West Germany. 
Switzerland. Sweden, and Egypt; how- 
ever, total exports have been less than 
4-5 million pounds per year. In recent 



Page 3 



years, exports of cigarettes have aver- 
aged less than 1 billion pieces annually. 
The major export market for cigarettes 
has been Mongolia. 

Tobacco import and export functions 
in the Soviet Union are performed by 
a State trading organization called 
Raznoexport, an agency of the Ministry 
of Foreign Trade. This agency has sole 
responsibility for purchasing require- 
ments for foreign-produced leaf and 
products, and exporting USSR tobacco. 

In tobacco production, the USSR is 
exceeded only by the United States, 
the PRC, and India. The Soviet crop in 
recent years has averaged about 600 
million pounds a year, and an estimated 
85 percent of this production now con- 
sists of oriental or semi-oriental types. 
The remainder is dark air-cured types — 
about 12 percent mahorka (native dark 
leaf, mostly for pipe) and 3 percent 
cigar types. 

Twenty years ago, dark air-cured 
tobaccos accounted for more than half 
of the USSR’s total tobacco production. 
However, because of consumer prefer- 
ence for tobacco products made from 
lighter tobaccos, production of oriental 
types has been steadily increasing at the 
expense of dark air-cured tobaccos. 

O RIENTAL AND SEMI-ORIENTAL leaf 
tobaccos are produced primarily 
on the Black Sea Coast. The Krasnodar 
area is a major producing region; 
other important areas are the Crimea, 
Georgia, Armenia, and Moldavia. 

Production of tobacco in the USSR 
is under the control of the Ministry of 
Agriculture. It is grown on large col- 
lective and State farms, which are 
operated from a central headquarters or 
village. These farms normally consist 
of several thousand acres with several 
hundred acres devoted to tobacco. 

The Soviet semi-oriental types of 
tobacco have leaves much larger than 
the true oriental varieties. However, 
leaves are much smaller than those of 
U.S. flue-cured and burley. 

To date, the only flue-cured and 
burley produced in the Soviet Union 
have been for experimental purposes. A 
decision has not been made to produce 
these types on a large-scale commercial 
basis. 

To cure their tobacco crop, the 
Soviets pluck oriental leaf from the 
stalk, thread it onto a string, and place 
it in the sun or. during inclement 
weather, in a shed. Then it is sorted, 
graded, and baled. 



A significant feature of tobacco 
processing in the USSR is fermentation 
- — a method of preparing leaf for manu- 
facture in about 10 days. By this meth- 
od, cured and graded tobacco is put 
in chambers with specific temperature 
and humidity levels. Soviet tobacco is 
not allowed to age or “sleep” like U.S. 
cigarette tobaccos. Most factories at- 
tempt to maintain about 6 months’ sup- 
ply in inventory. 

The major tobacco research facility 
in the USSR is the All Union Scientific 
Research Tobacco Institute at Kras- 
nodar near the Black Sea. Research 
programs at the Institute cover all 
phases of tobacco production, curing, 
fermentation, and manufacture, but the 
major objectives of the program are to 
improve production efficiency, produce 
better quality leaf, and increase yields 
per acre. 

“In tobacco products 
output, the USSR is one of 
the largest in the world 
and ranks third in world 
cigarette output — exceeded 
only by the United States 
and the People's Republic 
of China." 

When the U.S. tobacco team visited 
this Institute, the Soviet tobacco re- 
search staff appeared well trained and 
educated and had an excellent knowl- 
edge of tobacco research. 

In tobacco products output, the 
USSR is one of the largest in the world 
and ranks third in world cigarette out- 
put — exceeded only by the United 
States and the People’s Republic of 
China. Manufacturing of tobacco prod- 
ucts in the Soviet Union is under control 
of the Ministry of the Food Industry. 



The Soviet Union produces nearly 
400 billion cigarettes (including papi- 
rosy types) annually. Even though the 
trend in cigarette output has been up- 
ward it has not kept pace with the 
increasing demand for cigarettes. 

About half the cigarettes produced | 
in the USSR are the papirosy type, 
which consists of about 30 percent 
tobacco and the remaining 70 percent 
of the product is a hollow paper mouth- 
piece. 

Papirosy cigarettes supposedly origi- 
nated when most men wore long beards. I 
The long paper mouthpiece was intro- 
duced to prevent discoloration of beards 
and beard fires. Today, the papirosy 
continues to be popular in the northern 
regions where it can be smoked and 
handled even with gloves in cold 
weather. 

T he tobacco blend in the papirosy 
is similar to that in the “standard- 
type cigarette;” however, the latter is 
shorter and requires about 40 percent 
more tobacco. 

In the late fifties the papirosy ac- 
counted for about 80 percent of total 
USSR cigarette output. However, pro- 
duction of the standard-type cigarette 
has steadily increased and now ac- 
counts for 50 percent of total cigarette 
production and this trend is expected to 
continue. 

In addition, filter-tipped cigarettes 
have become increasingly popular and 
now account for 50 percent of standard- 
type cigarette production. 

Production of other types of tobacco 
products in the USSR is very limited. 
In recent years, the USSR has pro- 
duced only about 10 million cigars 
annually. Only about 3 million pounds 
are used annually for producing pipe 
tobacco and less than 2 million pounds 
for snuff. Chewing tobacco is not ir 
demand. 



USSR IMPORTS OF LEAF TOBACCO 



Country of 
origin 


1972 


1973 


Quantity 


Value 


Quantity 


Value 




Million 


Million 


Million 


Million 




pounds 


dollars 


pounds 


dollars 


India 


69.0 


41.3 


46.5 


30.2 


Greece 


15.7 


13.1 


21.6 


16.2 


Bulgaria 


81.4 


72.3 


87.5 


74.4 


Turkey 


8.6 


6.1 


11.7 


8.7 


Yugoslavia 


8.8 


9.1 


8.8 


8.3 


North Korea 


2.9 


1.4 


7.5 


3.8 


People’s Republic of China 


8.4 


4.0 


18.0 


8.5 


Other 


4.3 


2.5 


2.3 


1.5 


Total 


199.1 


149.8 


203.9 


151.6 



Page 4 



Foreign Agricultur 



World Beef Problems Continue 
—Some Hope Seen for Future 



By RICHARD J. GOODMAN 
Associate Administrator 
Foreign Agricultural Service 

B eef overproduction will continue 
to be a world problem in 1975, but 
the future holds some hope for improve- 
ment centering on the potential in for- 
eign markets, particularly Asia, and the 
possibilities inherent in grass and forage 
— an area of production that has been 
largely neglected in the United States. 

Except for the areas of African 
drought, world cattle numbers have 
been building for 6 years, and the trend 
is continuing. Beef production is al- 
ready up, but that reflects heavier 
carcass weights as well as growth in 
slaughter numbers. Cattle slaughtered in 
relation to cattle numbers is actually 
less than it has been in the past. In the 
principal producing countries, slaughter 
in 1973 dropped to just under 27 per- 
cent of inventory compared to an aver- 
age of about 31 percent during the 
1960’s. Thus, in terms of number, we 
are still getting into a beef oversupply 
situation rather than out of it, and the 
world outlook for 1975 is one of in- 
creases for red meat, despite an ex- 
pected decline in pork production. 

Numbers as of early 1975 can be 
expected to have increased beyond past 
trends, because of cattle holding actions 
in Australia, Central America, and 
Argentina as a result of limited export 
markets, unattractive prices, and good 
grazing conditions. And a return to a 
more normal slaughter rate in 1975 
would produce an increase in world 
commercial beef production of about 
7 percent. 

On the demand side, there is no indi- 
cation that the European Community. 
Canada, and Japan are prepared to 
abandon the restrictive import policies 
they put into effect this year. 

The United States failed to budge 
Canada at the diplomatic level; thus 
President Ford has imposed retaliatory 
restrictions against the import of Cana- 
dian cattle, hogs, beef, veal and pork. 

Based on a speech delivered at the meet- 
ing of the Kentucky Beef Cattle Assoc., 
Louisville, Ky., Nov. 20, 1974. 

January 6, 1975 



(See Foreign Agriculture, November 
25, 1974.) 

Whatever the outcome of these ef- 
forts, general inflation, along with high 
prices stemming from protective poli- 
cies, particularly in the European Com- 
munity, will continue to exert down- 
ward pressure on meat consumption in 
these major importing countries. In 
1975, EC requirements may be a little 
more than they have been this year. 

In Australia, the export leader in 
beef, producer prices have dropped 
sharply from last fall’s peaks. Cattle 
that were bringing over $30 a hundred 
pounds (carcass basis) last year are 
being pastured rather than sold at the 
prices of around $15 a hundred that 
have prevailed recently. Australia has 
had particularly good pasture condi- 
tions, with above-average rainfall. This 
has facilitated their holding of cattle. 

T he drastic change in the world beef 
situation in the past 18 months was 
a shock to the Australians, as to every- 
one else, and they are no doubt re- 
evaluating the situation. But while they 
are re-evaluating, the cows have to eat, 
and somewhere down the road these 
herds will be a problem for someone. 

In our own country, high feed costs 
have compounded the problems of a 
beef production system based on mar- 
keting finished cattle. Feedlot operators 
are in a tight financial position, less 
grain is being fed, and feed increasingly 
may have to come from grass and 
forage. 

The feedlot bind has sharply de- 
creased calf and feeder cattle prices. 
This has shifted pressure to the cow- 
calf operator. Ranchers who a year ago 
were getting well over $300 for light- 
weight calves have seen the price drop 
to as low as $100. 

This has led to stepped-up slaughter 
of cows and of steers off grass or silage. 
Thus far this year, more than 3 million 
nonfed steers and heifers have been 
slaughtered and that compares with 



about 400,000 for all of last year. 

In terms of domestic supply, the out- 
look is for a slaughter of over 39 mil- 
lion head of cattle and calves in 1974 
and an inventory of nearly 134 million 
head on January 1, 1975. That would 
be over 6 million more than a year 
earlier. The 1975 slaughter could reach 
43 million. This, figuring an average calf 
crop and normal live cattle imports, 
would produce a carryover inventory of 
about 138 million head for 1976 — a 
gain of about 4 million head. 

Clearly, the cattle supply is top heavy, 
and beyond anything in previous mar- 
keting experience. The weather will play 
an important role in the marketing 
movement. 

Those are the facts, and they do 
not make an appealing picture for the 
livestock industry. President Ford and 
Secretary Butz have expressed their con- 
cern and have pledged to act where they 
can to alleviate the problems. 

U.S. imports under the Meat Import 
Law this year are down — by 22 percent 
during January-October — and are esti- 
mated at 1.115 billion pounds for all 
1974. This is below the level that would 
trigger the imposition of import quotas 
under the Law. 

Should this trend be reversed to the 
trigger point in 1975, the President 
promised on October 31 in Sioux City, 
Iowa, that he would either invoke 
quotas or negotiate voluntary agree- 
ments with foreign suppliers to hold 
down imports. In that same city he 
pledged to expand buying of U.S. beef 
for the school lunch program beyond 
the 125 million pounds that already had 
been purchased as of November 13. 

T he new beef grading system that 
has been proposed should help some 
by enabling meat with less marbling 
to qualify for higher grades than at 
present. 

Actions by the Executive Branch of 
Government, which is hemmed in by 
legal restraints and legislative leverage, 
may ease the pain somewhat but they 
will not cure the ailment. There is no 
cure in sight next week or next month, 
or in the next 6 months. But there are 
some glimmerings of hope. 

Meat is becoming an increasingly 
better buy in relation to other commodi- 
ties that are staple in the diet — as any- 
one who has recently bought high- 
priced rice, or sugar, or dried beans, 
and any of a number of other food 
products can testify. 

Continued on page 15 

Page 5 



Israel’s Citrus Outturn Steady, 
Despite Wartime Dislocations 



By RAFAEL N. ROSENZWEIG 
Office of U.S. Agricultural Attache 
Tel Aviv 



I srael’s 1973-74 (October-Septem- 
ber) citrus crop, despite wartime 
shortages of labor and transportation 
difficulties, was finally tallied at 1,643,- 
000 metric tons, only marginally below 
the 1,646,900 tons produced in the 
previous crop year. 

The volume of commercially mar- 
keted fruit was higher in 1973-74 by 10 
percent — about 155,000 tons — because 
the new crop was unscathed by frost 
damage such as had injured the 1972- 
73 crop. 

Total export sales in 1973-74 
amounted to 817,000 tons — nearly half 
the total crop — and are expected to 
increase by about 13 percent in the 
1974-75 crop year. There are, however, 
no official estimates of 1974-75 pro- 
duction. 

The 1973-74 crop year was beset by 
several major obstacles, including in- 
flation, labor shortages, adverse weather, 
and transportation difficulties. The fact 
that the crop, in light of these problems, 
was harvested at all and shipped to 
domestic and overseas markets is 
viewed as a major achievement. 

A record quantity of 739,000 tons 
of fruit was processed in 1973-74 — up 
17 percent over the 1972-73 year. But 
prices paid by processors remained be- 
low growers’ cost, and a Government 
subsidy of about $7.50 per ton is to be 
paid in tbe 1974-75 year to alleviate 
some of this economical squeeze. 

Production of Shamouti oranges — 
the dominant variety — rose slightly in 
1973-74, while output of Valencias — 
next important in volume — was down 
marginally. Total orange production re- 
mained steady at about 1.2 million tons. 

The 1973-74 grapefruit crop of 389,- 
000 tons was the largest on record, but 
only 5,000 tons higher than the previ- 
ous year’s. 

The lemon outturn, in accordance 
with the biennial cycle of lemon pro- 
duction, declined sharply from 42,000 
tons in 1972-73 to 31.700 tons. 

The quality of both Shamouti oranges 



and of grapefruit declined as the sea- 
son developed, due to a heat wave in 
December and extremely heavy rains 
in January. Despite severe culling in 
packing houses, many complaints — 
especially concerning grapefruit— were 
received from overseas markets. 

An additional difficulty was the par- 
tial absence of trained workers in both 
groves and packing houses. During most 
of the season, a large segment of Israel's 
manpower was in the country’s armed 
forces, and this shortage had its influ- 
ence on the quality of work performed 
both in harvesting and packing. 

There were no significant changes in 
the citrus bearing areas during 1973- 
74. New plantings were about equal to 
trees taken out of production — the same 
equilibrium that has been evident for 
about 5 years. 

It is unlikely, however, that this situa- 
tion can continue, as about 22 percent 
of all citrus groves were planted more 
than 26 years ago and only about 15 
percent were planted after 1964. Many 
of the older groves that are near urban 
and suburban areas are now being up- 
rooted for economic reasons such as 
urban expansion. 

A lso, very few plantations pay their 
cultivation costs beyond their 35th 
year. As the older and larger areas are 
taken out of production, replacement 
becomes a problem since neither water 
resources nor suitable land are available 
in unlimited supply. 

Stationary irrigation of citrus is be- 
coming more popular, due to mounting 
costs of labor. For the same reason, 
both mechanical picking and ripping 
(picking of fruit without shears) is be- 
ing tried. In the 1973-74 season, the 
shortage of trained workers made it 
impossible to continue these changes at 
a rapid pace. 

Israel’s inflation as measured by the 
index of agricultural input prices in- 
creased between April 1973 and March 
1974 by 39.2 percent. By August 1974, 




the increase since April 1973 had 
reached a staggering 67.4 percent. 

At the same time, returns on fruit 
sold remained almost constant on a 
quantity basis. In real terms, this trend 
means, of course, that citrus producers 
experienced a considerable loss of in- 
come. This misfortune followed a sea- 
son in which producers had already seen 
10 percent of the crop eroded because 
of adverse weather. 

As a result of this economic distress, 
requests for more Government assist- 
ance are increasing. In February 1974 
— approximately in mid-season — the ex- 
port incentive was increased slightly to 
I £1.42 for each US$1, f.o.b. value (at 
current exchange rates, I£=US$0.15). 

A further increase in July put the 
premium at I £ 1 .84. These increases 
are, however, merely intended to com- 
pensate exporters for indirect taxes, 
which were increased at about the same 
time. 

The total increase in returns from ex- 
ports subject to the larger export 
premium — which applies in full only 
to the 1974-75 season — is 13.1 percent. 

In the fall of 1974 a $7.5 million 
loan fund was made available to citrus 
farmers. Terms are repayment in 3 
years at 7 percent preferred interest, 
unlinked to the cost-of-living index. 

At present, normal terms on the free 



Page 6 



Foreign Agriculture 




market would be an interest rate of 28 
percent or higher, while institutional 
terms would mean a linking of both 
capital and about 7 percent interest to 
the cost-of-living index. 

A further measure of assistance ap- 
plying to the current season is the new 
Government subsidy of about $7.50 
per ton for fruit delivered to citrus 
processors. 

Total exports recovered from the 
1972-73 low of 755,000 tons caused by 
frost and reached 817,000 tons in the 

! 1973-74 season. 

j A ll of the increase was in oranges; 

r\ the volume of grapefruit exports 
I ! was down somewhat. Domestic fresh 
■ i sales declined again, but processing hit 
■ a record high of 739,000 tons — a gain 
s of more than 100,000 tons over the 
• 1972-73 year and about 45 percent 
| of the total crop as compared with 38.8 
5 1 percent in the previous year. 

Despite the wartime labor shortage 
4 and transport problems, Israel con- 
11 tinued in the 1973-74 year to supply 
y its markets for fresh fruit almost on 
t. ! schedule. Both the United Kingdom 
n I and West Germany increased their pur- 
is ' chases of Shamouti oranges, and Israel 
3 ; regained its share of the Dutch market, 
t.j which had slipped a year earlier. 

A strong market position was main- 
:e 

|l January 6, 1975 

re 

L 



Young irrigated citrus groves in Israel, 
typical of rural groves replacing 
older ones in urban and suburban areas. 

tained in the Scandinavian countries, 
especially in Finland, where imports of 
Israeli citrus amounted to more than 
23 pounds per capita. Exports to Swit- 
zerland declined. 

The Citrus Marketing Board notes 
that the success in Finland is related to 
an efficient publicity campaign. The 
Swiss agent of the Board, on the other 
hand, has complained about the small 
size of the promotion budget for that 
country. TV advertising is employed 
in both countries. 

Exports to Italy declined, due — ac- 
cording to the Board — to the economic 
crisis in that country. Sales to Eastern 
Europe remained at the previous year’s 
levels. 

Among the smaller markets, Japan 
became more important. During the 
1973-74 season, 6,600 tons of citrus 
fruit— mostly grapefruit — were shipped 
there, compared with 4,100 tons in 

1972- 73. One shipment was necessarily 
routed via Gilbraltar and South Africa, 
due to war conditions. 

Shipments to the United States and 
Canada declined again. The cost of 
moving a crate of citrus fruit from an 
Israeli port to a Philadelphia warehouse 
is about $2.90, and it is not clear why 
these exports are maintained. The aver- 
age shipping cost of all citrus exports 
in 1973-74 was about 83 cents per 
crate of about 45 pounds. 

The decline in sales from 78,400 tons 
in 1972-73 to 72,400 tons in 1973-74 
was in all forms of citrus fruit expect 
grapefruit, which increased. The de- 
crease may be due in part to military 
mobilization although domestic sales 
actually have been trending down 
for the past 6 years — from 62 pounds 
per capita in 1966 to 48 pounds in 

1973- 74. 

Export prices, f.o.b. and expressed 
in U.S. dollars, increased to a very 
limited degree in 1973-74, compared 
with 1972-73 — a development due in 
part to the declining value of the U.K. 
pound sterling. In terms of Israeli cur- 
rency, the average price rise was 5.5 
percent — the result of the higher ex- 
port premium. 

Prices of fresh fruit locally increased 
36 percent, but since this increase ap- 
plies to only 4 percent of the total crop, 
its effect on the total citrus market is 
marginal. A large percentage of the 



crop was processed, and the average 
price per ton of citrus fruit to the pro- 
ducer in 1973-74 was only 1.1 percent 
higher than in 1972-73. 

Production in Gaza in the 1972-73 
season showed a marked increase over 
the previous year at 205,000 tons, and 
a first estimate of the 1973-74 crop 
indicates a further increase in the quan- 
tity harvested there. 

T he frost that destroyed 10 per- 
cent of the Israeli crop caused only 
marginal damage in Gaza. More than 
half the Gaza citrus output is in Valen- 
cias, which ripen earlier than the fruit 
in Israel and could, therefore cause 
competition with later Israeli Shamouti 
oranges. 

Outturns on the West Bank increased 
23 percent in 1972-73, due entirely to 
young plantations in the Qualqilya and 
Tulkarem areas. Most of the production 
is in Shamouti oranges, with lemons 
playing a more important part than in 
Israel. Grapefruit production is mar- 
ginal. Most of the West Bank produc- 
tion is sold locally. The economic im- 
portance of West Bank production is 
small, but is increasing. 

Israel’s citrus processing has in- 
creased steadily in the past 5 years- — 
from 325,000 tons in the 1969-70 year 
to 739,100 tons in 1973-74. More than 
95 percent of the processed products 
is exported. 

Most processed fruit goes into con- 
centrates or single-strength juice, which 
is then exported in bulk for further 
processing. In many cases, the product 
loses its identity and bears only the 
name of the drink or jam manufacturer 
in the importing country. 

The most important finished citrus 
product exported is grapefruit slices. 
About 30,000 tons of fresh grapefruit 
are processed into slices, and the prod- 
uct has a large institutional market, 
especially in the United Kingdom. Ex- 
port of canned grapefruit slices 
amounted to 20,500 tons in calendar 
1973, with an f.o.b. value of almost 
$8 million. 

While the Citrus Marketing Board 
holds a monopoly in the sale of fresh 
citrus fruit — it is illegal to sell more 
than 100 pieces of fruit outside Board 
market arrangement — there is no 
counterpart organization for Israel’s 
processed citrus products. 

Larger processers export directly, 
while a number of smaller processors 
Continued on page 20 



Page 7 



U.S. Variety Meat Export Trade 
Faces Slower But Steady Growth 



By ARTHUR F. HAUSAMANN 
Foreign Commodity Analysis, 
Livestock and Livestock Products 
Foreign Agricultural Service 



E xports of U.S. variety meat, 
which in the 1960’s nearly doubled 
in volume and more than doubled in 
value, now face a period of slower but 
steady growth. 

World marketing patterns in variety 
meat trade are shifting in response to 
the world oversupply of meat and ac- 
companying slack demand. Supplies of 
carcass meat as well as variety meat 
are up in all major meat-producing and 
importing countries. 

The European Community in 1973 
took 70 percent of the volume and 78 
percent of the value of U.S. variety 
meat exports. 

Exports in calendar 1974 probably 
will reach a new record of more than 
300,000 pounds or about 40 percent 
of total world trade in variety meat. 

Exports to the EC, Japan, and 
Canada were down, but exports to 
Mexico and other developed countries 
were up sharply. 

A reduced level of cattle slaughter 
in Argentina in 1971 and a consequent 
smaller volume of variety meat exports 
resulted in a sharp increase in exports 
of U.S. variety meat in that year. 

Argentine production recovered in 
1972 and U.S. exports declined, al- 
though to a point still well above that 
reached in any year prior to 1971. In 
1973, the level of U.S. exports jumped 
again — this time because of reduced 
European variety meat production and 
higher prices of red meat. 

In calendar 1975, exportable supplies 
of U.S. variety meat are expected to 
be down slightly, with about 7 percent 
more beef offal, 13 percent less pork 
offal, and smaller supplies of sheep 
offal. The main competitors in the beef 
variety meat market — Australia and 
Argentina — are expected to produce 
more beef, so that lower beef offal 
prices are anticipated. 

Although U.S. variety meat exports 
increased from 159 million pounds in 
1963 to 282 million pounds in 1973, 



further increases may be in jeopardy if 
EC meat inspection regulations are not 
modified. 

In the EC, the third-country meat 
import regulations could cause prob- 
lems in the future. Currently, West 
Germany is applying a literal interpreta- 
tion of these regulations. On December 
15, 1973, the West German Govern- 
ment banned the importation of all red 
meat from the United States because 
U.S. plants did not comply with EC 
regulations. 

The West German action could lead 
to a loss of about 1 1 percent of the 
total U.S. variety meat export market. 
Other countries take the position that 
their own regulations are adequate, and 
that it is unnecessary to invoke the more 
rigid conditions of the EC regulations. 
West Germany thus far, however, has 
declined to relax the prohibition. 

T he major U.S. competitors in world 
variety meat trade are Australia. 
New Zealand, and Argentina. However, 
the combined volume of exports from 
these countries is only slightly more 
than the total volume shipped by the 
United States. 

Australia and New Zealand have a 
slightly larger share of the U.K. market 
than the United States because of the 
U.K. Commonwealth preference provi- 
sion, which is now being phased out. 

The United States has had the largest 
share of the markets in France, West 
Germany, and the Netherlands. Ship- 
ments from Australia and New Zealand 
to these countries are nil. 

Argentina ships most of its variety 
meat to Italy and France. The United 
States has been unable to enter the 
Italian market since 1969 because of 
the ban there on imports of meat from 
animals that have been fed growth 
hormones. 

World trade in variety meat has in- 
creased at about the same rate as red 
meat production. Red meat trade has 



shown a faster rate of growth because 
it is more responsive to increases in in- 
come. The average price of variety 
meat exports has usually followed aver- 
age wholesale beef prices. 

Variety meat — also known as fancy 
meat or offal — is defined as the part of 
the animal used for human or animal 
consumption but not part of the dressed 
carcass. Products usually included are 
hearts, kidneys, tongues, tripe, livers, 
and tails. 

Consumption of variety meat in the 
United States represents a smaller share 
of total meat consumption than in Eu- 
rope. However, in terms of actual per 
capita consumption, the total is about 
the same. 

The United States exports 9-11 per- 
cent of its total variety meat produc- 
tion, with the remainder consumed 
domestically. Of the other animal by- 
products, exports of hides account for 
about 38 percent of domestic produc- 
tion, while exports of tallow and grease 
account for about 44 percent. The 
United States is the world’s largest ex- 
porter of hides, tallow, and variety 
meat. 

U.S. variety meat exports are divided 
into several different tariff classifica- 
tions. The most important is beef 
tongues, which account for about 25 
percent of exports by volume and about 
40 percent in value. 

In 1973, U.S. beef tongue exports 
accounted for 57 percent of total com- 
mercial production. Since 1964, beef 
tongue exports have accounted for 47- 
75 percent of domestic commercial pro- 
duction. 

Beef liver is the second most im- 
portant export category. Liver accounts 
for 14 percent of both volume and 
value of exports, and liver exports ac- 
count for about 13 percent of domestic 
production. 

Pork liver exports account for about 
1 8 percent of variety meat export vol- 
ume, about 15 percent of export value, 
and exports account for 20 percent of 
domestic production. 

These three products account for 
about 57 percent of U.S. export volume 
in variety meat and about 70 percent 
of value. Other beef variety meat prod- 
ucts account for 18 percent of volume 
and about 14 percent of value. Other 
pork variety meat products account 
for about 18 percent of volume and 
10 percent of value. Smaller shares are 
accounted for by sheep and veal variety 
meat. 



Page 8 



Foreign Agriculture 



. 

Quality of variety meat products 
| shipped from the United States stands 
well in competition with the products 
of other supplier countries. U.S. prod- 
ucts are considered good buys at attrac- 
tive prices. Most foreign buyers are 
shopping primarily for low-priced prod- 
ucts, and are not interested in fancy 
packaging. 

U.S. meat inspection regulations have 
helped to standardize the quality of 
variety meat products. Also, because of 
relatively low domestic demand for 
Variety meat, U.S. exporters can assure 
overseas buyers of consistently ample 
availabilities at prices that are fully 
competitive in world trade. 

In order to assure receipt of accept- 
able products, foreign importers require 
as part of the sales contract the USDA 
inspection number showing the plant 
in which the product was processed. 
The plant number is required on the 
container as well. Importers know from 
experience which plants produce the de- 
sired quality of meat. 

Most variety meat products exported 
from the United States to Europe are 
in fresh, chilled, or frozen form, and 
are used in food manufacturing. Im- 
ported edible meat offal is regarded in 
Europe mainly as raw material for the 
food processing industrry. 

Import duties on variety meat prod- 
ucts are lower than those for other meat 
broducts. Also, most meat duties have 
aeen bound under GATT (General 
Agreement on Tariffs and Trade). 

In the Community, the duty on car- 
bass beef is 20 percent plus a levy, 
while prepared beef and offal products 
ire dutiable at 26 percent. Variety meat 
'ates, however, are only 14 percent on 
iver and 12 percent on other products. 

France is the largest importer of U.S. 
Variety meat. U.S. exports to France 
lccounted for 28 percent of total U.S. 
/ariety meat export volume in 1973, 
ind 35 percent of value. Beef tongues 
ire the most important U.S. variety 
(neat product exported to France, ac- 
:ounting for $25 million of the total 
543.7 million worth of these exports. 

The United States has about 40 per- 
:ent of the French market for imported 
leef tongues, down from about 45 per- 
cent in 1971. Argentina is the other 
najor supplier, but its 1972 and 1973 
exports were less than half the U.S. 
/olume of this product. 

Beef livers are the second most im- 
portant U.S. variety meat export to 
^rance, accounting for $10.3 million 



or about 24 percent of the total. The 
U.S. share of the beef liver market was 
65 percent in 1973 — down from 84 
percent in 1971 because of the resur- 
gence in Argentina’s exports. Argentina 
now has about 20 percent of the 
market. 

The United States has about 56 per- 
cent of the French pork liver import 
market and about 40 percent of the 
pork kidney market. U.S. exports of 
these products to France increased 
sharply from less than 10 million 
pounds in 1960 to 50 million pounds 
in 1964. Since then, however, exports 
have increased at a slower rate. 

T he united kingdom is the second 
most important U.S. variety meat 
market. In 1973, the United Kingdom 
accounted for 53.6 million pounds of 
variety meat products valued at $23.2 
million — about 19 percent of total ex- 
ports both by volume and in value. The 
United Kingdom imports practically the 
entire supply of exports of U.S. lamb 
kidneys, despite the strong trade posi- 
tions held by Australia and New Zea- 
land as the largest export suppliers of 
edible sheep meat offal. 

The variety meat products imported 
by the United Kingdom from the 
United States differ from those imported 
by France. A large portion of the 
ELK. imports are used in the manu- 
facture of pet food. 

In France, however, 72 percent of the 
volume and 80 percent of the value of 
variety meat imported from the United 
States is beef tongue and liver. 

In the United Kingdom, only 30 per- 



cent of the volume and 42 percent of 
the value are in beef tongues and livers. 
The United Kingdom has banned im- 
ports of U.S. pork products because of 
hog cholera. 

The four next most important mar- 
kets for U.S. variety meat are Mexico, 
West Germany, the Netherlands, and 
Belgium. Before West Germany banned 
U.S. variety meat, trade had grown to 
a value of about $13 million per year, 
about 90 percent of which was in pork 
liver. 

Trade with the Netherlands has in- 
creased sharply in value to more than 
$11 million in the past few years, but 
volume has declined. Most of the U.S. 
variety meat exports to the Netherlands 
are in beef tongues and beef and pork 
livers. 

Belgium’s imports of U.S. variety 
meat were valued at about $8 million 
in 1973. 

U.S. exports of variety meat to 
Mexico have increased from less than 
5 million pounds prior to 1965 to 34.5 
million pounds, valued at $6.4 million, 
in 1973. Of this volume, 66 percent 
was in pork and 20 percent was in beef 
products. 

U.S. markets for variety meat in 
Japan and Israel are growing. Japanese 
purchases are heaviest in beef tongues 
and beef livers; Israel is an increasingly 
important customer for beef livers. 

Growth of markets in areas other 
than Western Europe is forecast to be 
slow but steady. As meat and poultry 
consumption expands with better living 
standards, variety meat will share in the 
market expansion. 



U.S. EXPORT OF VARIETY MEAT 



Destination 


Average 

1961-65 


1968 


1969 


1970 


1971 


1972 


1973 1 




Mil. lb 


Mil. lb 


Mil. lb 


Mil. lb 


Mil. lb 


Mil. lb 


Mil. lb 


France 


. 35.1 


61.7 


70.0 


64.6 


81.2 


88.3 


78.8 


United Kingdom 


39.4 


47.5 


49.0 


45.1 


44.4 


45.9 


53.6 


Netherlands .... 


. 37.4 


31.6 


28.2 


29.6 


30.8 


23.0 


25.6 


West Germany 


35.8 


23.9 


26.5 


35.7 


52.8 


30.7 


30.8 


Mexico 


4.6 


20.4 


23.9 


27.8 


21.7 


20.2 


34.5 


Belgium-Luxembourg 3.8 


7.1 


9.2 


9.5 


11.4 


13.6 


13.0 


Japan . 


.8 


7.5 


8.6 


2.7 


1.3 


4.0 


11.8 


Canada 


2.5 


6.0 


7.0 


8.5 


10.7 


10.1 


10.6 


Sweden 


4.0 


6.1 


2.9 


2.4 


.7 


— 


.1 


Israel 


1.3 


3.0 


2.9 


3.8 


4.3 


5.2 


6.0 


Flong Kong . . . 


1.4 


.2 


2.6 


1.5 


.9 


.4 


.4 


Jamaica 


.4 


1.7 


1.6 


1.7 


2.2 


2.8 


3.3 


Finland 


.1 


.5 


.9 


.4 


.2 


— 


2 


Switzerland . 


1.1 


.8 


.8 


.7 


.7 


.4 


1.3 


Spain 


.6 


.3 


.8 


.1 


.1 


1.1 


.1 


Other 


4.2 


6.9 


4.9 


5.4 


14.1 


8.4 


12.0 


Total 


172.5 


225.2 


239.8 


239.5 


277.5 


254.1 


281.9 



1 Preliminary. 2 Less than 50,000 lb. 



lanuary 6, 1975 



Page 9 



Tobacco Production and Trade 
in Southern Africa parts 

South Africa, Angola Up Tobacco 
Output— Mozambique’s May Rise 



By ROBERT W. JOHNSON 

Foreign Commodity Analysis, Tobacco 

Foreign Agricultural Service 

O F THE THREE COUNTRIES making 
up the southernmost regions of 
Africa — South Africa, Angola, and 
Mozambique— the first two are ex- 
pected to increase tobacco output and 
exports somewhat, the latter may, or 
may not. 

Angola and Mozambique are Portu- 
guese Overseas Provinces but may be- 
come independent. Independence would 
bring a mixed bag of tobacco problems 
that will have to be solved by the in- 
dustry. New production policies will 
probably be evolved and will undoubt- 
edly have some effect on output. Trade 
ties with Portugal will be weakened, 
necessitating development of new mar- 
kets or strengthening existing ones. 

The Republic of South Africa is the 
only tobacco producer in southern 
Africa whose output is solidly based on 
irrigation, with 95 percent coming 
from watered land. Thus, it is the only 
one in the region with production meth- 
ods distinctly different from the area’s 
other producers. 

The Republic of South Africa is tra- 
ditionally among the top three tobacco 
producers, exporters, and importers of 
the 11-nat'on African group, some of 
which were discussed in previous arti- 
cles. 1 In 1973 it stood first as a leaf 
importer and third as a producer and 
exporter; it also ranks high among 
these countries as an importer and ex- 
porter of tobacco products. In that year, 
product imports amounted to about 
$12 million, while exports were some 
$1 million. The United States supplies 
only a minimal amount of the Repub- 
lic’s leaf and product imports. 



' See Foreign Agriculture, Dec. 23 and 
30, 1974, for articles dealing with Rho- 
desia, Malawi, Zambia, Tanzania, the 
Malagasy Republic, Zaire, Uganda, and 
Kenya. 

Page 10 



South Africa’s annual tobacco output 
averaged 60.5 million pounds in 1960- 
64, increasing by 7 million pounds to 
an average of 67.3 million between 
1965 and 1969, while exports rose by 
6.5 million pounds to an average of 
20.7 million pounds. Imports increased 
by 9 million pounds to 13.6 million. In 
1973, South Africa produced 68 million 
pounds, exported 24 million, and im- 
ported 30 million. 

About 60 percent of production is 
flue-cured, 30 percent dark air-cured, 
and the balance light air-cured, burley, 
and oriental. About 4,800 producers 
average about 17 acres each. 

Most South African tobacco is pro- 
duced west of Pretoria in the Rusten- 
berg area. About 95 percent of the 
crop is grown on irrigated land. Com- 
peting crops are cotton, vegetables, and 
livestock. Tobacco and wheat are some- 
times rotated with each other within 
a 12-month period. 

Labor costs have been rising because 
many tobacco workers have taken ad- 
vantage of better opportunities offered 
by industry. Farm wages increased 27 
percent in 1973 and another 30 percent 
in 1974, bringing the present rate to 
about US$1.70 per day, plus housing, 
food, and medical care. 

Tobacco production in South Africa 
has been controlled by a Tobacco Board 
since 1935. This agency — composed of 
16 members representing producers, 
manufacturers, and distributors, and 
one from the Government— recom- 
mends to the Government Marketing 
Board prices to be paid by manufactur- 
ers for packed tobacco. 

After the price is set, the country’s 
nine cooperatives purchase tobacco 
from the farmers, giving them a partial 
payment at that time. The co-ops pack 
the leaf, sell it to manufacturers at the 





From top, C. Harry Germishuis, left, 
senior assistant in the Office of 
the U.S. Agricultural Attache in 
Pretoria, and an employee of the 
Rustenberg Cooperative of South 
Africa, examine 200-kilogram cases of 
flue-cured tobacco awaiting inspection 
prior to being exported to the United 
Kingdom; cigarette packing area in 
a Lourenco Marques, Mozambique 
factory; and Mozambique flue-curing 
barn. 



Foreign Agricultures 




approved price, and then divide the 
profits from the sale among the pro- 
ducers. Average payment to the pro- 
ducers was 80 U.S. cents per pound 
for the 1972-73 crop of flue-cured and 
64 cents per pound for hurley. 

No subsidy is paid by the Govern- 
ment to producers or exporters. How- 
ever, the co-ops provide a stabilization 
fund for buying and storing surplus 
tobacco. 

The Tobacco Board imports all of 
South Africa’s tobacco and authorizes 
the co-ops to act as agents in making 
exports. Imports are made to compen- 
sate for the deficit between consumption 
and domestic production less exports. 

Most of the Republic’s exports are 
to the United Kingdom under the Com- 
monwealth preference agreement. How- 
ever, this privilege will be phased out 
by 1977 as the United Kingdom adopts 
the European Community’s Common 
External Tariff. 

Imports are mostly from Rhodesia 
and Malawi, both of which have trade 
agreements with South Africa. Leaf 
from these two countries enters duty 
free, although imports from other 
sources are subject to a tax of 53 U.S. 
cents per pound. Cigarette manufactur- 
ers decide from what sources to import 
leaf after the Tobacco Board has set 
the quantity and maximum import 
price. 

In 1973, South Africa’s cigarette 
consumption was 18.6 billion pieces and 
has been increasing at an annual rate 
of about 2 percent for the past 3 years. 
Cigarettes retail for the equivalent of 
45 U.S. cents per pack of 20 for the 
most popular brands. 

Mozambique produces about 1 1 mil- 
lion pounds of tobacco, exports about 
4 million, and imports about 500,000. 
Portugal has been the largest customer 
for Mozambique exports and Rhodesia 
supplies most of its imports. About 
10-15 percent of domestic cigarette 
production is exported, mostly to 
Angola. 

T obacco production has grown 
rapidly from an annual average of 
about 2 million pounds during the early 
1950’s to an average of about 1 1 million 
during the past 3 years. 

About half of the crop is flue-cured; 
burley accounts for most of the balance. 
Most flue-cured and burley are mar- 
keted through cooperatives, which nego- 
tiate prices with manufacturers. The 
average price paid for the 1973-74 

Page 11 




"... South Africa is 
traditionally among 
the top three tobacco 
producers , exporters , 
and importers of the 
11 -nation African group." 

crop was 82 U.S. cents per pound 
(packed weight) for both flue-cured 
and hurley — a somewhat unrealistic 
price in view of the real value of the 
currency. 

There is no Government established 
minimum price for the flue-cured and 
burley but there is for dark tobacco, 
which sells for about 33 U.S. cents per 
pound (1973-74 crop at official ex- 
change rate of US$1 = M. Ec25). 
Crops that compete with flue-cured and 
burley are corn, rice, cotton, cattle, 
cashews, and irrigated soybeans. 

Exports reached 1.1 million pounds 
in 1958 and 2.4 million in 1960. They 
stayed at a level of about 2 million 
pounds during the 1960’s, were 2.9 
million in 1971, and 6 million in 1972. 
As a result of a poorer crop and larger 
domestic utilization in 1973, exports 
are estimated at only 4 million pounds. 

The Government limits imports to 15 
percent of the previous year’s utiliza- 
tion. More may be imported if Mo- 
zambique production is insufficient to 
supply the domestic market. 

Most imports are flue-cured tobacco 
from Rhodesia at an average price of 



about 59 U.S. cents per pound — about 
the same as Mozambique’s export price. 
In addition, importers must pay a duty 
of 6 percent ad valorem plus a 7-per- 
cent customs clearance tax. 

Mozambique cigarette production was 
2.5 billion pieces in 1971, fell slightly 
to 2.48 billion in 1972 as exports 
dropped, and increased to 2.75 billion 
in 1973. 

Cigarette imports are effectively pro- 
hibited by a duty of about 20 U.S. cents 
per pack of 20 plus the 7-percent ad 
valorem customs clearance tax. 

There are three firms producing 
Mozambique cigarettes, prices of which 
are controlled by the Government. Dark 
cigarettes have 65 percent of the market 
and light cigarettes 35 percent. 

The most popular dark cigarettes sell 
for the equivalent of 16 U.S. cents per 
pack of 20. The favorite light brand is 
an all flue-cured cigarette selling for 
the equivalent of 36 U.S. cents per 20. 
Filter cigarettes currently make up 40 
percent of the market. 

Angola produces an average of about 
13 million pounds of tobacco a year, 
exports 8 million pounds, and imports 
about a half million. 

Production has increased rapidly in 
recent years from an average of 5.6 
million pounds in 1960-64 to 12.9 mil- 
lion pounds in 1973, and may go to 
15.2 million in 1974. Flue-cured out- 
put has accounted for most of this in- 
crease. rising from an average of 
750,000 pounds in 1960-64 to 4.2 mil- 



lion in 1972-74. Burley — although 
representing a small percentage of the 
total — went from practically nothing 
in 1960-64 to an average of 311,000 
pounds in 1972-74. 

Fire- and dark air-cured production 
has remained relatively stable at 
around 3-4 million pounds. Flue-cured 
and burley production has expanded 
as the result of incentives from both 
Government and private firms. The 
outlook is for continued expansion if 
private growers are allowed to remain 
relatively free of Government controls. 

Exports have also increased from 
an average 2.4 million pounds in 1960- 
64 to an average of 8 million in 1971- 
73. Most exports are to Portugal though 
the United Kingdom. Spain, and Ire- 
land are also fairly important markets. 

Angola imported an average of 
462,000 pounds of leaf tobacco in 
1970-72. Most of these imports were 
from Mozambique and the United 
States. Imports of tobacco products 
averaged 838,000 pounds during this 
period. Virtually all of these were from 
Mozambique. 

" Independence would 
bring [Angola and 
Mozambique] a mixed bag 
of tobacco problems 
that would have to be 
solved by the industry." 



SOUTHERN AFRICA: TOBACCO PRODUCTION AND TRADE FOR SELECTED COUNTRIES 

[In 1,000 pounds] 



Average 

Country 1960-64 1965-69 1971 1972 1973 1974 



Production: 1 

South Africa, Rep. of 60,480 67,300 75,838 71,516 68,321 58,995 

Angola 5,644 13,215 8,113 10,838 12,941 15,212 

Mozambique 5,093 6,236 10,653 11,508 11,003 6,614 

Other 2 306,365 288,777 250,039 302,364 272,402 316,935 



Total 377,582 375,528 344,643 396,226 364,667 397,756 



Exports: 

South Africa, Rep. of 14,208 20,711 20,044 22,601 24,342 

Angola 2,389 5,610 4,164 4,363 15,088 

Mozambique 1,854 2,462 2,935 6,122 4,000 

Other 2 232,020 176,722 155,956 203,814 173,347 



Total 250,471 205,505 183,099 236,900 216,777 



Imports: 

South Africa, Rep. of 4,634 13,634 13,123 25,214 29,669 

Angola 465 566 626 419 340 

Mozambique 996 800 500 500 500 

Other 2 6,943 15,799 22,146 19,105 20,174 



Total 13,038 30,799 36,395 45,238 50,683 



'Year of harvest. 2 Rhodesia, Malawi, Zambia, Zaire, Malagasy Republic, Tanzania, Kenya, and Uganda. 



Page 12 



Foreign Agriculture 



Argentina's Edible Oilseed Crop 
Seen Well Ahead of 1973-74 



A rgentina’s 1974-75 production of 
edible oilseeds is expected to ex- 
ceed 1973-74 output by 13 percent, as 
a result of a 4 percent increase in acre- 
age and improved yields. But outturns 
of inedible oilseeds are expected to be 
about 4 percent below those of 1973-74, 
because the increase in flaxseed produc- 
tion will not be sufficient to offset the 
substantial decline of 47 percent in tung 
nut production. 

Edible oil exports are expected to 
be up 13 percent in 1975 as a result 
of larger shipments of peanut oil. How- 
ever, if production of soybeans and 
exports of soybean oil exceed 1974 
totals by 10-15 percent — as forecast in 
some quarters — total edible oil exports 
in 1975 will exceed those of 1974 by a 
strong 18 percent. 

Exports of inedible oil in 1975 are 
expected to exceed 1974 levels by 
about one-third, as a result of the larger 
flaxseed crop and exports of tung oil 
from the large 1973-74 crop, which will 
not move out until 1975. 

(Argentina’s crop period for sun- 
flowerseed is March-June; flaxseed, 
November-January; soybeans, April- 
June; peanuts, March-May; and cotton- 
seed, February-July.) 

The 4 percent reduction in the total 
area planted to edible oilseeds in 1973- 
74 was more than offset by higher 
yields, primarily in sunflowerseed out- 
turns. Total edible oilseed production 
exceeded that of a year earlier by 3 
percent. 

The substantial increase in produc- 
tion of tung nuts in 1973-74 more than 
offset a 10 percent decline in produc- 
tion of flaxseed, and output of all inedi- 
ble oils was 22 percent above that of 
the previous year. 

Exports of edible oils in 1974 are 
estimated at 158,000 tons, up only 
marginally from those of 1973, but the 
composition changed significantly as 
shipments of soybean oil moved up 
dramatically and sunflowerseed oil 
dropped to an insignificant level. 

Inedible oil exports in 1974 are esti- 
mated at 84,000 tons, a drop of 24 
percent from the previous year and the 
result of a delay in crushing the 1973- 
74 tung nut crop. 



Shipments of oilseed cake and meal 
in 1974 are estimated at 785,000 metric 
tons, up 24 percent from those of 1973 
and reflecting increased shipments of 
soybean meal. 

Edible oil consumption in 1974 is 
estimated at 382,000 tons, 15 percent 
higher than in 1973, with sunflower- 
seed oil accounting for 92 percent of 
the total. 

Domestic consumption of oilseed 
cake and meal in 1974 is expected to 
exceed that of the previous year by 
about 26 percent, with soybean meal 
accounting for 51 percent and sun- 
flowerseed 27 percent of total utiliza- 
tion. This advance resulted from 
stepped-up production of broilers in 
1974. 

Stocks of both soybeans and sun- 
flowerseed on August 1, 1974, were up 
significantly from those of a year earlier, 
but oil stocks were at relatively low 
levels. 

Present prices of all edible oils are 
well above those of a year ago, with 
increases ranging from $45 per ton for 
sunflowerseed oil to $470 per ton for 
soybean oil. 

In 1974, the Government set maxi- 
mum percentages for export of oilseed 
cake and meal to assure adequate sup- 
plies for domestic consumption. The 
Government also reduced export reten- 
tion taxes on soybean oil and most 
oilseed byproducts in order to acceler- 
ate exports of these products, which 
were below the authorized amounts. 

The support price for the 1974-75 
flaxseed crop was set 53 percent higher 
than for the previous crop, while the 
support price for sunflowerseed was in- 
creased 7 percent. 

Except for excessive rainfall in the 
most important cotton producing zones 
and drought conditions during the nut 
formation season for peanuts, oilseed 
crops in 1973-74 developed under rel- 
atively favorable conditions. 

The 4 percent reduction in the area 
planted to edible oilseeds in 1973-74 
was more than offset by higher yields 
— particularly of sunflowerseeds — and 
total edible oilseed production exceeded 
that of the previous year by 3 percent. 

The 19 percent decrease in area 



planted to flaxseed was partially offset 
by an improvement in yields, and flax- 
seed production was off by 10 percent 
from that in 1972-73. An increase in 
the collection rate for tung nuts re- 
sulted in a significant rise in production, 
and inedible oilseed production in 1974- 
75 exceeded that of a year earlier by 
22 percent. 

The National Grain Board had pur- 
chased 933,935 tons of sunflowerseed 
and 204,707 tons of soybeans from the 
1973-74 crop, as of October 31, 1974. 
The Board also, as of September 27, 
had sold through tenders 42,703 tons 
of soybeans. 

To assure adequate domestic supplies 
of oilseed products, the Government 
sets maximum percentages of meal for 
export. On March 22, 1974, the pro- 
portions for export were at 75 percent 
for sunflowerseed meal and 67 percent 
for peanut meal. On May 28, 1974, the 
proportions for export of cottonseed 
meal and soybean meal were set at 27 
percent and 45 percent, respectively. 

Since September 3, 1974, exporters 
of soybean, cottonseed, peanut, olive, 
linseed, and other blended edible oils 
have been required to present export 
declarations to the Government show- 
ing quantity, price, destination, and 
shipping date. 

- — Based on report from 

Office of U.S. Agricultural Attache 
Buenos A res 



CAP Prices Discussed 

In his recent book, More Power to 
the Market — Economic Policies With- 
out Illusions, West German Economic 
Minister Dr. Hans Friderichs suggests 
that a combination of fixed prices and 
direct subsidies to farmers would be 
the best way to assure continuation 
of the Common Agricultural Policy 
(CAP) without its becoming a growing 
source of friction within the European 
Community. 

Dr. Friderichs notes that a number 
of measures such as cow-slaughter 
premiums and nonmarketing premiums 
were introduced in 1969 because of the 
level of surpluses, but Community milk 
target prices rose by 23 percent from 
1971-72 to 1974-75. 

EC butter surpluses were reduced 
considerably in 1973 by exports to the 
USSR at cost of about $390 million to 
the Community. 



January 6, 1975 



Page 13 



Germans Eating Fewer Potatoes 

But Use of Products Climbs 



By PAUL HESS 
Agricultural Specialist 
and HOMER F. WALTERS 
Assistant U.S. Agricultural Attache 
Bonn 



W est Germany’s traditional depen- 
dence on potatoes as a crop, food, 
and feed is declining rapidly, despite 
a strong upswing in use of potato prod- 
ucts from its thriving processing indus- 
try. To meet the booming consumer 
demand, imports of potato products 
have gained importance in recent years. 
These come largely from other Euro- 
pean Community countries such as the 
Netherlands, since imports from third 
countries are rigidly controlled by na- 
tional marketing orders. 

West Germany is likely to continue 
its tight regulations on imports of 
potato products, at least until they are 
replaced with EC-wide restrictions 
under a Common Agricultural Policy 
(CAP) for potatoes — envisaged for the 
future. Until then, domestic regulations 
will be enforced against third countries 
— including the United States — to pro- 
tect a sector that is not wholly mechan- 



ized, burdened with rising labor costs, 
and plagued with declining prices, at 
least compared with other commodities 
that are CAP-protected. 

A variety of controls are imposed on 
imports of potato products. For exam- 
ple, imports of dehydrated potatoes for 
food from non-EC countries have been 
prohibited. Import regulations on potato 
food products — such as French fries, 
chips, and canned potatoes — are liberal- 
ized only for products packaged in 
sizes much larger than those normally 
used in households. As a result, West 
German imports of potato products 
from the United States are negligible, 
amounting to only about $100,000 in 
1973-74. 

The German appetite for potato 
products has sharpened significantly in 
recent years. In the early 1950’s, per 
capita consumption of processed prod- 
ucts was less than 2.2 pounds (fresh 



potato value). By the 1970’s, West 
Germans had increased their consump- 
tion dramatically to over 30 pounds per 
person. 

The volume of potatoes processed 
into food, which amounted to only 
41,000 metric tons in 1954-55, has now 
reached a level of about 900,000 tons. 
Even though the upward trend appears 
to have leveled off somewhat, the indus- 
try is confident of a further upswing 
in the future. 

Processing of potatoes into starch 
and alcohol has also increased steadily, 
competing with grains that are also 
used for these products. In 1972-73, 
half a million tons of potatoes were 
converted into alcohol — double the 
quantity used for alcohol a decade ago. 
Since a ton of potatoes is needed to 
produce about 26.4 gallons (a hecto- 
liter) of alcohol, the 500,000 hecto- 
liters of ethyl alcohol produced by the 
industry yielded a significant quantity 
of liquor. 

Between 350,000 and 400,000 tons 
of potatoes were processed into starch 
in 1972-73, compared with 210,000 tons 
in 1962-63 and 90,000 tons in 1952-53. 
Of the 68,000 tons of starch produced, 
however, about 80 percent was utilized 
in nonfood industries. 

Fresh potatoes have been a staple in 
German diets since they were intro- 
duced into Prussia by Frederick II 
(“The Great”) over 200 years ago. The 



•w 



1 ( 







ii 

li 



1 



? 

Ill 

? 



1! 

b 

, (■ 



10 

01 

eli 

of 

I* 



West German farmers 
sort potatoes, right, which 
require careful handling 
for the food market. 
Although modern 
equipment is now used 
extensively in potato 
harvesting, the older 
method of digging 
potatoes by hand is still 
seen, far right, particularly 
in part-time farming. 
Potatoes generally require 
more hand labor and are 
less profitable than 
grain or other easily 
mechanized crops — 
factors that have led to 
a decline in the popularity 
of potatoes as a crop 
in West Germany. 



Pago 14 




World Beef Problems Continue 

Continued from page 5 



Germans, together with the Irish, are 
considered Western Europe’s traditional 
consumers of potatoes. 

Although fresh potatoes are still 
important in German diets, consump- 
tion has declined sharply. In 1972-73, 
average per capita consumption of pota- 
toes dropped to 207 pounds, compared 
with 277 pounds in 1962-63 and 374 
in 1952.53. 

Changing farm practices have con- 
tributed to a decline in the popularity of 
potatoes as a crop. Increased produc- 
tion of more easily mechanized grain 
crops, as opposed to labor-intensive, less 
profitable root and row crops, has de- 
pressed plantings of potatoes during 
the past decade — a trend that has not 
yet come to an end. 

I n 1973, potatoes were grown on 
less than 1.2 million acres, against 
2.3 million in 1963 and 2.9 million in 
1953. Area planted to potatoes last 
year comprised only 6.4 percent of 
plowed land, dropping from 11.8 per- 
cent in 1963 and 14.4 percent in 1953. 
Preliminary data for 1974 call for 
another 2 percent area reduction. 

Potatoes have always been an im- 
portant feed in Germany. About half 
of the usable crop is traditionally fed 
to livestock, particularly hogs. Large 
mobile steaming units have all but 
eliminated the farm wife’s daily chore 
of boiling a kettleful of potatoes. On 
larger farms, almost all potatoes not set 
aside for marketing or seed are proc- 
essed by steaming and converted into 
nutritious ensilage. About 400,000 tons 
of potatoes annually are also dehydrated 
for feed, mostly under farmer-processor 
contracts. 

Feed use of potatoes in West Ger- 
many — about the size of Oregon — is 
16 times as high as that in the United 
States. The importance of potatoes in 
the country’s feed-livestock economy 
can be judged from the old rule that 
four units of fresh potatoes replace 
one unit of grain in feeding. Thus, in 
recent years, an additional 1.5 million 
tons of grain would have been needed 
for livestock feeding, were it not for 
the use of potatoes as feed. 

Although West Germany is a promi- 
nent producer of potatoes, imports of 
fresh potatoes are also significant. Early 
potatoes are imported from Italy and 
some other southern producing coun- 
tries; eating as well as processing pota- 
toes come mainly from the Netherlands 
and other European suppliers. 

Continued on page 20 



The increase in slaughter at lighter 
weights — of calves and nonfeds here 
and in some other countries — will re- 
duce numbers with a relatively less in- 
crease in beef production than in the 
past, and it should also ease potential 
pressure on feed supplies. 

Finally, in the current situation, 
grain prices are so high that they have 
begun to limit production of pork and 
poultry, reducing the competition for 
the consumer’s meat dollar and opening 
up more of the market for beef. 

It is a jolting commentary on the 
state of the industry when essentially 
negative factors such as these can be 
looked upon as being of some help, but 
beyond the current crisis there is cause 
for genuine optimism — for two basic 
reasons. 

First, most of the world does not eat 
much beef. The Middle East, for ex- 
ample, has a lot of money and is getting 
more, but it’s people are sheep and 
goat meat eaters. Europe eats more pork 
than beef; Asia, particularly China, is 
heavy on pork and poultry. 

The point is there is a wide scope 
in a number of these places to expand 
the market for beef. We need to get 
beef into those markets and let their 
consumers taste it. 

There is a tremendous interest in 
Asia, and the opportunity comes clear 
when you realize that the average 
Japanese consumed 8 pounds of beef 
in 1972, the average Filipino 5 pounds, 
and the Taiwanese a single pound each. 
Per capita consumption of beef in the 
United States that year amounted to 
118 pounds. 

As those countries increase their beef 
consumption, they look primarily to 
Australia, but also importantly to the 
United States. Already, they are produc- 
ing more cattle of their own. When 
Secretary Butz visited Asia last spring, 
the group toured a cooperative feedlot 
near Kyoto. Japan, with a capacity of 
4,000 head. They stopped at a feedlot 
west of Seoul, Korea, with a capacity 
of 1,000 cattle and with 750 head actu- 
ally on feed at the time. Local groups 
are working with U.S. technicians to 
increase livestock production in Taiwan 
and Thailand. 

These new feed lots will be creating 
an expanding market for beef. As de- 
mand grows, these countries will be 
looking beyond their own borders to 



meet it, because in most of them climate 
and geography — often mountainous and 
overwatered — is not conducive to large- 
scale production of beef. 

The second basic reason for optimism 
about the future lies in changes that 
are taking place in the U.S. beef indus- 
try itself. The upheavals that are tak- 
ing place in almost all of agriculture, 
here and in much of the world, seem 
to indicate a fundamental change in the 
pricing structure, marketing, and even 
technique. 

Dollar corn and two-and-a-half dollar 
soybeans are things of the past. The 
earliest relief even from the staggering 
prices of today is not in sight until at 
least late in 1975 as the grain and soy- 
bean harvests begin. 

This situation is forcing shorter feed- 
ing and increased use of forage and 
grass. We are by force of circumstance 
breaking away from longtime feeding 
habits engendered by the piles of cheap 
grain that were available for decades in 
the past. 

Understandably, the great bulk of the 
research during this cheap grain period 
has been in corn, sorghum, and soy- 
beans. We do not really know the full 
potential of grass, or of forage — which, 
even now, is economically more pro- 
ductive in terms of yield per acre *han 
grain. 

We have more or less forgotten green 
stuff as a valuable raw material in the 
production of beef — certainly those who 
have been attacking the hamburger and 
steak as taking grain from hungry 
mouths forget that cattle are ruminants 
in that cattle alone among the three 
principal sources of meat do not have 
to have grain in order to give efficient 
production. 

Certainly, the livestock industry needs 
grain — for hogs, poultry, and cattle. 
But the troubled state of the industry 
should also stimulate the search for 
new and better ways to put beef on the 
market — ways that are less dependent 
on grain, and that would permit both 
the grain and livestock segments of 
agriculture to prosper at the same 
time. 

It seems that the most sophisticated 
agricultural plant in the world could 
devise a system in which the prosperity 
of the grain farmer is not achieved at 
the expense of the livestock producer, 
and vice versa. 



January 6, 1975 



Page 15 



CROPS AND MARKETS 



FRUIT, NUTS, AND VEGETABLES 

Taiwan Buys U.S. Apples 

The Republic of China (Taiwan) recently purchased 

150.000 cartons of apples from the Pacific Northwest States. 
This is the largest purchase during the 3 years that Taiwan 
has permitted a limited access to that market. A portion of 
the purchase has arrived in Taipei with balance enroute. 

EC Proposes Hops Subsidies 

The European Community Commsssion recently proposed 
to the EC Council the amount of subsidies to be granted EC 
producers of hops harvested in 1973. The proposed amounts 
for the following varieties of hops with the subsidies granted 
for some of those produced in 1972 in parentheses are (in 
units of account (U.A.) per hectare where one U.A. = 
U.S.$1.21): Hallertauer, 250 (250); Northern Brewer, 150 
(150); Brewers Gold, 100 (150); Record, 650 (300); Hers- 
brucker Spat, 150 (150); Huller Bitterer, 200 (150); 

Tettnanger, 200 (150); Bramling Cross, 150; Progress, 750; 
Keyworth’s Midseason, 750; Fuggles, 650; Whitbread Golding 
Variety (WGV), 750; Alliance, 750; Tutsham, 750; Strissel- 
spalt, 450 (750); and Tardif de Bourgogne. 200 (300). The 
subsidies proposed for two varieties are not available, but the 
amounts for the 1972 crops these two were: Saaz (400) and 
Spalter (300). 

Australia Reports 1974 
Canned Pineapple Production 

Preliminary indications for Australia’s 1974 canned pine- 
apple production point to a level similar or slightly below 
that of last year. The fresh fruit supply was larger with an 
increase in cannery intake of 1,000 metric tons. However, 
pineapple output did not increase significantly because wast- 
age was high as the result of the large number of fruit 
affected by black heart disease. The canned pack is estimated 
at 1,700,000 cartons, basis 24/214 ’s, compared with 1,739,000 
cases in 1973. Due to the limited supplies of papaya, canned 
tropical fruit salad production is expected to drop again to 

180.000 cartons. Marketing problems have reduced pineapple 
juice packs to 800.000 cartons. 

The outlook for the 1974 export season is for a decline in 
canned pineapple shipments, to about 175.000 cartons. Ex- 
ports to the United Kingdom will be negligible, with African 
suppliers having associate membership in the European 
Community now enjoying preferential access and making 
Australian fruit uncompetitive. Larger sales to New Zealand 
and the United States will partly offset the loss of the British 
market. 

Australian exports of canned pineapple during calendar 
1973 totaled 184,359 cartons. Prices on the world market 
remained unattractive to the average Queensland producer. 
Canada and New Zealand were the major export markets. 

Page 16 



Canned tropical fruit salad exports were 24,800 cartons. Pine- 
apple juice exports totaled 76,300 cartons, somewhat higher 
than shipments in 1972. 

In 1968 the Queensland Government introduced a two- 
price pool system for processing fruit. The No. 1 pool is paid 
on the basis of domestic market returns; the No. 2 pool is 
paid on the basis of export returns. Growers plan production 
with the assurance of a reasonable return for the pre-deter- 
mined volume of fruit they are entitled to deliver to the No. 1 
pool. The upward trend in domestic consumption of canned 
pineapple continued through 1973. 

The net effect of this Government Pineapple Rationaliza- 
tion Plan has been a steady decline in pineapple produced 
for the export market, with output increasingly tailored to 
domestic market requirements. The outlook for the Australian 
pineapple industry calls for continued stability over the next 
few years. There is little prospect for increasing export sales 
of canned pineapple or pineapple products, and as a result, 
the domestic market will remain the major outlet for the 
industry. 

i i 

Spain Has Larger 
Processed Tomato Crop 

Current estimates place Spain’s 1974 processing tomato 
crop above the mid-July forecast. Acreage harvested for proc- 
essing tomatoes has reached a record high of 49,420 acres 
for 1974, up 21 percent from last year and 8 percent above 
the previous forecast. The harvest is placed at 570 000 metric 
tons, an increase of 19 percent, compared with that of last \ 
year. Quality and size of the tomatoes are good, primarily be- 
cause of favorable weather conditions. 

Expanded acreage has been centered primarily in the 
Estremadura area, the largest tomato production region, where 
acreage has almost doubled, compared with the previous year’s 
level. Implementation of mechanical harvesting is increasing, 
with about eight harvesters in operation for 1974, compared | 
with only two the previous year. Government assistance to 
growers now is limited to the procurement of inputs such as 
fuel, seeds, and certain equipment. 

A substantial increase in tomato paste output is expected, 
placing 1974 production at around 55,000 metric tons, about 
double last year’s output. Production of canned whole toma- , 
toes, at 156 000 metric tons, is up 7 percent and tomato juice 
output is estimated at 4,000 metric tons, up 33 percent from 
last year’s level. Tomato processing capacity is unchanged ( 
from that of the previous year. 

Export sales to date are substantially lower than those of a ii 
year earlier, especially to West European markets. However, 
the outlook for export sales is strong because of the smaller 1 
pack in Portugal and Italy. Government assistance for tomato o; 
product exports continues in the form of tax refunds of 12-20 It 
percent of the declared f.o.b. value. In addition, Government h 
assistance recently has been extended to provide short-term p: 
loans to finance up to 80 percent of the value of tomato prod- 

Foreign Agriculture Ji 



nets for firm orders. 

Despite increasing production costs, 1974 finished product 
prices are about the same or below price quotations during 
the end of the 1973-74 year. This price behavior is caused by 
larger supplies and slow export movement resulting from 
resistance to higher prices by foreign consumers. Paste (28-30 
percent solids) currently is quoted at about $885 per metric 
!■ ton, approximately 4 percent above the Greek base price of 
I $850 per metric ton. 

Spain’s tomato product exports for the 1973-74 season (in 
;. metric tons) were: Canned tomatoes. 61.400; paste, 18,500; 

; and juice, 1.953. The major export market for Spanish tomato 

ji products was the United Kingdom, with the United States, 

Canada, and Belgium as considerably smaller markets. 

[• 



DAIRY AND POULTRY 



EC Milk Powder for Food Aid 

The European Community Commission has proposed that 
i f one-third of the EC’s 300,000-metric-ton stock of surplus 
t skim milk powder be designated for use in helping victims 
of natural disasters. The EC reportedly will sell the 100,000 
I tons of skim milk powder to relief organizations for about 
24 cents per pound — about half the price paid by EC inter- 
vention authorities to remove the surplus from the internal 

I market. The estimated cost to the Community for the aid 
is about $52 million. 

Cuba Buys EC Broilers 

Denmark reportedly has sold an additional 6,000 metric 
tons of broilers to Cuba for delivery during the first quarter 
of 1975. No sale price was announced, but the trade reports 
that little if any profit was made on the sale. The major con- 
cern was to help clear the market of excess supplies. In 
September Denmark concluded a sale of 8,000 metric tons 
of broilers to Cuba, which was completed in December. 

OILSEEDS AND PRODUCTS 

Food Fish Quotas Set for 1975 

Fishing quotas during 1975 for food-type fish were estab- 
lished at a mid-term meeting of the North-East Atlantic Fish- 
eries Commission held in Hamburg during November 4-8. 
Total allowable catches in the North Sea in 1975 were set 
1 at 236,000 tons of cod, 275,000 tons of haddock, 189.000 
tons of whiting, 12,500 tons of sole, and 126.000 tons of 
plaice (European flounder). 

Further quotas set for sole and plaice were: In the English 
Channel, 1,400 tons of sole and 3,260 tons of plaice; in the 
Bristol Channel, 700 tons of sole and 800 tons of plaice; and 
in the Irish Sea, 1.700 tons of sole and 5.000 tons of plaice. 

Herring catches in the Irish Sea from April 1975 through 
March 1976 were limited to 25.000 tons. During the first ha f 
of 1975 catches of mackerel for industrial purposes in the 
j North Sea, Skagerrak, and Kattegat will be allowed to range 
between 2.500 and 10,000 tons for each Contracting State, in 
proportion to their respective catches during the same period 
in 1972 and 1973. 

i January 6, 1975 



The Commission postponed regulating 1975 catches of 
Arcto-Norwegian cod in the Northeast Arctic until its next 
meeting in Bergen on January 13-15. 1975. 

The Commission agreed that a closed season for herring in 
the North S:a and Skagerrak during the first half of 1975 
should be decided by each Contracting State. 

Contracting States include Belgium, Denmark, France, 
West Germany, Icel md. Ire’and. the Netherlands, Norway, 
Po'and, Portugal, Spain, Sweden, the USSR, and the United 
Kingdom. 

In attendance were representatives from the United States, 
the International Council for the Exploration of the Sea. the 
Food and Agriculture Organization, the Organization for Eco- 
nomic Cooperation and Development, and the European 
Community. 

France Harvests First Commercial Soybeans 

Soybeans were produced commercially for the first time in 
France dur'ng 1974, reports the U.S. Agricultural Attache in 
France. Despite poor weather conditions, area planted is 
estimated at 9.500 acres and output between 8,000 and 9,000 
metric tons (equal to a yield of about 33 bushels per acre). 

Plantings are projected at 250,000 acres by 1980 with 
production at a level of about 9 million bushels. However, the 
projected increase in production would be about 10 percent 
of the projected soybean meal demand for the French com- 
pound feed industry in 1980. 

World Rapeseed Production 
Unchanged in 1974 

World p r oduction of rapeseed in 1974 is estimated at 6.95 
million metric tons, equaling the 1973 outturn. Record rape- 
seed crops were harvested in the European Community, but 
1974 production in other major producing countries — includ- 
ing Canada. India, and Po’and — declined because of unfavor- 
able weather conditions. 

Rapeseed varieties low in erucic acid (LEAR) now are 
used extensive'y in Canada, Sweden. France, and West Ger- 
many. Oil obtained from LEAR varieties is preferred for 
edible use because the erucic acid, considered harmful to 
human health, has been eliminated almost entirely. More- 
over, another new rapeseed variety called double zero, because 
of its low erucic acid and g'ucosinolate content, is expected 
to be sow n in Canada in 1975. Thus, Canada’s rapeseed meal, 
low in glucosinolates. could compete more directly with soy- 
bean meal in 1975-76. 



LIVESTOCK AND PRODUCTS 



Australia To Aid Cattle Producers 

The Australian Government will seek an additional A$20 
million (US$26.2 million) to augment the resources of the 
Commonwealth Deve'opment Bank. In addition, it has been 
indicated that the Commissioner for Taxation will decide 
which cattle producers are able to demonstrate that they 
do not have the resources to meet tax obligations. 

To forestall the marketing of surplus beef now on the 
range and to maintain the national breeding herd, the addi- 
tional loans will carry medium- to long-range repayment 



Page 17 



schedules. Priority will be given to those cattle producers 
whose income is wholly or primarily derived from cattle. 

To ease short-term marketing problems for beef, a survey 
team plans to visit some of the East European countries to 
explore market opportunities for Australian beef. 

In the domestic market, a reduction in retail prices could 
encourage a significant increase in beef consumption. During 
the week of November 8, 1974, the price to the cattle pro- 
ducer was 13.75 U.S. cents per pound, live weight, (25 
cents per lb dressed weight) for slaughter-type animals. 

ll.K. Fig Subsidy Ends 

A subsidy of 50 pence (US$1.17) per 20 pounds, intro- 
duced on April 1, has been terminated because of a weaken- 
ing in the U.K. pig market. Originally designed to terminate 
in July, it had been extended for an indefinite period. The 
U.K. Minister of Agriculture announced on October 16 that 
the subsidy would be phased out by November 4. As partial 
compensation to pig producers, the guaranteed price was 
raised from £3.49 (US$8.13) per 20 pounds to a point 
not yet determined between £4.02 (US$9.37) and £4.27 
(US$9.95). With U.K. pig prices higher than those of any 
other part of the European Community, the continuation of 
the subsidy was determined by the Minister to be unnecessary. 

Reaction to this change from the National Farmers’ Union 
has been generally unfavorable. The union contends that 
market prices for pigs have resulted in little more than a 
break-even return and have done nothing to compensate pro- 
ducers for the losses of previous months. 



SUGAR AND TROPICAL PRODUCTS 



World Coffee Situation for November 

World green coffee prices during the latter part of Novem- 
ber and early December have risen above previous levels. 
Colombians posted the largest gain, selling for 81 cents spot 
on December 4, an 11 percent increase over the November 
1 price of 73 cents. Centrals increased 5 percent from early 
November levels and stood at about 60 cents on December 
4. Santos 4’s (Brazils) at 70 cents, and Ambriz BB 
(Robustas), at 56 cents, showed no change as of December 4. 

U.S. imports of green coffee during January-November 
1974 are estimated at 17.4 million bags, 14 percent less than 
the 20.2 million bags imported during the same period of 
1973. The decreased volume of imports in 1974 is partially 
the result of a drawdown in stocks from the previous high 
levels of the first 6 months of 1974. U.S. stocks of green 
coffee at the end of October were approximately 3.2 million 
bags, a 35 percent decrease from the January-June 1974 
average of 4.9 million bags. 

World Cocoa Prices, 

Consumption Decline 

World cocoa prices turned downward in November, reflect- 
ing prospects of sharply lower world cocoa consumption 
because of record high sugar and cocoa prices, together 
with the deteriorating economic outlook in major consuming 
nations. New York spot Accra cocoa bean prices averaged 
104.2 cents per pound in November, down from the record 
October average of 115.1 cents, but still remained well above 



the November 1973 level of 73.4 cents. The movement of new 
crop supplies to consuming countries, which has relieved the 
recent tight supply situation and improved prospects for the 
Brazilian crop, also has contributed to the downward trend 
in cocoa bean prices. 

The world cocoa supply-demand outlook for the 1974-75 
season now indicates a stock buildup of about 75,000 metric 
tons, following 2 consecutive years of substantial inventory 
reductions. However, retail prices of cocoa and chocolate 
items still will continue to rise during 1975, as manufacturers 
have yet to fully reflect the high costs of sugar and cocoa and 
other ingredients in product lines. 

The United States is the world’s largest importer and con- 
sumer of cocoa and chocolate products. 



GRAINS, FEEDS, PULSES, AND SEEDS 



Rotterdam Grain Prices and Levies 

Current offer prices for imported grain at Rotterdam, the 



Netherlands, compared with a week earlier and a year ago: 


Item 


Dec. 31 


Change from 
previous 
week 


A year 
ago 




Do/. 


Cents 


Do/. 




per bu. 


per bu. 


per bu. 


Wheat: 


Canadian No. 1 CWRS-13.5. 


6.27 


+ 5 


6.26 


USSR SKS-14 


C) 


C) 


C) 


Australian FAQ 2 


C) 


C) 


(*) 


U.S. No. 2 Dark Northern 
Spring: 


14 percent 


6.18 


+ 11 


6.26 


15 percent 


6.28 


+ 9 


( l ) 


U.S. No. 2 Hard Winter: 


13.5 percent 


5.94 


+ 6 


6.30 


No. 3 Hard Amber Durum. 


7.99 


+ 2 


9.12 


Argentine 


(’) 


(') 


C) 


U.S. No. 2 Soft Red Winter. 


C) 


O 


C) 


Feedgrains: 


U.S. No. 3 Yellow corn . . . . 


4.04 


+ 6 


3.35 


Argentine Plate corn 


4.57 


+ 7 


3.71 


U.S. No. 2 sorghum 


4.11 


+ 10 


3.32 


Argentine-Granifero 


sorghum 


4.22 


+ 10 


3.30 


U.S. No. 3 Feed barley . . 


3.85 


- 2 


2.83 


Soybeans: 


U.S. No. 2 Yellow 


7.48 


-51 


6.50 


EC import levies: 


Wheat 


0 


0 


0 


Corn 


0 


0 


0 


Sorghum 


0 


0 


0 



1 Not quoted. 2 Basis c.i.f. Tilbury, England. 
NOTE: Price basis 30- to 60-day delivery. 



Sweden's Seed Import 
Needs for 1975 

Sweden’s reported 1974 forage seed production indicates 
shortfalls in supplies of red clover and Alsike clover. While 
production of these seeds was severely reduced by rains during 
harvest periods, carryover stocks of these seeds reportedly 
will cover needs. An exportable surplus of timothy seed was 
produced. 

Principal seed import requirements in 1974-75 are for 
Kentucky blue grass, fescue, and bent grass. Small quantities 



Page 18 



Foreign Agriculture 



1 of seed of other forage crops also may be imported. 

During the first 8 months of calendar 1974, Swedish 
imports of U.S. seed were (in metric tons): Bent grass, 250; 
timothy, 64; Kentucky blue grass, 53; alfalfa, 52; fescue, 34; 
and other grass seeds, 14. Total 1974 Swedish seed imports 
are estimated at 2,700 metric tons, of which 800 metric tons 
came from the United States. 

SWEDEN FORAGE SEED: 1974 PRODUCTION AND 
1975 COMMERCIAL REQUIREMENTS 



Pro- Imports 

Seed Area Yield duction required 



Metric Metric 

Hectares Kilograms tons tons 

Red clover 1,300 250 325 900 

Alsike clover 320 400 128 150 

Timothy 4,842 370 1,790 1,600 

Fescue 2,106 650 1,370 1,750 

Cooksfoot 25 400 10 50 

White clover 122 360 44 60 



Kentucky blue grass 434 530 230 750 

Rye grass 432 1,070 460 1 620 

Bent grass — — — 400 

1 Of which perennial rye grass represents 600. 

Chilean Forage Seed Output Up 

Chile’s 1973-74 production of legume and grass seeds is 
estimated at 1,200 metric tons (2,640,000 lb), an increase of 
50 percent over the preceding year’s crop. This increase re- 
portedly resulted from facilities granted to seed producers of 
the private and reformed sector of agriculture, such as credits 
and technical assistance from the Empresa Nacional de 
Semillas (ENDS). Trade reports indicate that area planted to 
pasture and legume seeds could increase in 1974-75 to 15,000 
acres, producing over 1,500 metric tons of seeds. 

Imports of pasture and legume seeds during 1974 are ex- 
pected to total 1,000 metric tons, the same level forecast for 
1975 import requirements. 

More Forage Area in Japan 

The Japanese Ministry of Agriculture and Forestry reported 
that cultivated forage crop land totaled about 2.13 million 
acres on August 1, 1974 an increase of 45,000 acres over the 
level a year earlier. Breakdown (in acres) by kinds is: Grass 
and legume crops, 1.67 million, up 4 percent; silage corn, 
189,000, down 1 percent; forage sorghums 43,490, up 13 
percent. Area planted to grass and legumes rose by 68,700 
acres — mainly in Hokkaido, Tohoku, and Kyushu — because 
of grassland improvement projects, but areas in vetch, feed 
beets, and feed turnips decreased by 19,450 acres, down 11.7 
percent. 



TOBACCO 



Austria Ups Cigarette Prices 

The Austrian National Assembly recently reached a com- 
promise decision to raise cigarette prices by an average of 13 
percent. The Tobacco Monopoly was seeking a 15 percent 
increase in addition to a 5.5 cents per pack surcharge recom- 
mended by the Ministry of Health and Environment. The 
Government’s desire to stabilize the cost-of-living index led 

January 6, 1975 



to the compromise 13 percent increase. The additional reve- 
nue will be shared by the Monopoly and health authorities. 

An initial drop in consumption followed by a gradual return 
to present consumption levels is expected. Some smokers will 
simply shift to lower priced brands. 

The United States ships Austria nearly 4 million pounds of 
leaf tobacco annually. The five brands that contain the 
majority of this tobacco are priced at the lower end of the 
price scale. Therefore, any shift to less expensive cigarettes 
could increase the demand for U.S. leaf. These five brands 
held a 53.8 percent market share in 1973. 

India Has Record 
1 974 Tobacco Crop 

Final official estimates from India place its 1974 tobacco 
crop at an alltime high of 973 million pounds. Although 19 
percent above the 1973 crop and 5 percent over the previous 
record production harvested in 1972, the crop was still short 
of the 992-million-pound Government target. The increase is 
attributed primarily to higher per acre yields, which were 
up 18 percent. Area increased less than 1 percent. 

India ranks third as a world producer of flue-cured leaf 
with the 1974 crop unofficially estimated at 310 million 
pounds. This is up 21 percent from the 1973 crop but 27 
million pounds short of the Government target for this type. 

In 1973 India exported 165 million pounds of leaf tobacco. 
Flue-cured accounted for 141 million pounds of the total and 
went primarily to the United Kingdom, the USSR, Bangla- 
desh, and Japan. The average export value of all tobacco 
exports was 49 cents per pound in 1973, up 14 percent from 
the level a year earlier. 

Malaysia Increases 
Tobacco Import Duties 

Malaysia recently announced increases in import duties 
for leaf tobacco, cigars, and cigarettes. The new rates were 
effective as of November 12, 1974. Unmanufactured tobacco 
import duties will now be $4.87 per pound, up 19 percent 
from the previous rate of $4.09. Cigars and cheroots carry a 
$8.70 per pound duty, up 25 percent from $6.96. The levy 
on cigarettes was raised 20 percent to $6.52 from $5.43. 
Approximately 5 percent of the Malaysian State revenue is 
collected from import duties and the excise taxes on tobacco 
and tobacco products. 

Malaysian imports of U.S. leaf totaled 8.9 million pounds, 
valued at $11.9 million, in 1973. The U.S. share of the 
Malaysian market was 82 percent in volume and 88 percent 
in value. The tariff increase is not expected to significantly 
affect U.S. exports of unmanufactured tobacco to Malaysia. 



Other Foreign Agriculture Publications 

• World Exports of Oilseeds, Fats, and Oils Con- 
tinue Below Trend in 1974 (FOP 10-74) 

• World Cotton Production Up Marginally in 1974- 
75 (FC 21-74) 

• U.S. Ginseng in the Far East Market (FASM-261 ) 
Single copies may be obtained free from the Foreign 

Agricultural Service, USDA, Washington, D.C. 20250. 
Rm. 5918 S.; Tel.: 202-447-7937. 



Page 19 



U.S. DEPARTMENT OF AGRICULTURE 

WASHINGTON. D. C. 20250 

PENALTY FOR PRIVATE USE. $300 
OFFICIAL BUSINESS 



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cation, please check here □ and return this 
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or TYPE the new address, including ZIP 
CODE, and return the whole sheet to: 

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FOREIGN AGRICULTURE 



POSTAGE AND FEES PAID 
U.S. DEPARTMENT OF 
AGRICULTURE 
AGR 101 




First Class 



* 



West German Use of Potato Products Climbs 

Continued from page 15 



Israel's Citrus Crop 

Continued from page 7 



WEST GERMANY: FRESH POTATO BALANCES 



Item 


1952-53 


1962-63 


1972-73 




1,000 metric 


1,000 metric 


1,000 metric 




tons 


tons 


tons 


Production 


23,854 


25,091 


15,038 


Shrinkage 


1,908 


2,007 


1,203 


Change in stocks 


0 


+ 930 


+ 187 


Imports 


139 


293 


877 


Exports 


42 


98 


120 


Total domestic use 


22,043 


22,349 


14,405 


Seed 


2,900 


2,303 


1,201 


Feed 


10,067 


12,065 


6,239 


Marketing losses 


335 


308 


267 


Industrial use 


225 


433 


899 


Food 


8,516 


7,240 


5,800 




lb 


lb 


lb 


Food use, per capita 


374 


277 


207 



WEST GERMANY: PRODUCTION OF POTATO FOOD PRODUCTS 1 

[1,000 m.t. product weight] 


Item 


1967 


1968 


1969 


1970 


1971 


1972 


1973 


Dehydrated products 


52.2 


61.3 


78.8 


88.2 


71.5 


61.5 


61.2 


Chips 


6.8 


8.7 


11.8 


14.7 


15.8 


18.1 


19.1 


Frozen products .... 


12.7 


14.4 


19.0 


23.9 


28.9 


29.9 


31.0 


Preroasted products. 


49.9 


60.7 


80.1 


94.9 


100.9 


117.3 


112.7 


Other 


4.5 


6.1 


10.9 


15.8 


30.9 


32.0 


48.5 


Total 


126.1 


151.2 


200.7 


237.6 


247.9 


258.8 


282.4 


Total as fresh equiv. . 


536.8 


665.4 


811.9 


941.6 


876.7 


863.1 


897.7 


1 In plants with more than 10 employees. 










WEST GERMANY: FOREIGN TRADE IN MAJOR POTATO PRODUCTS 








[In 1,000 metric tons] 














Imports 






Exports 




Item 




1963 




1973 


1963 




1973 


Dried potatoes 1 




0.5 




2.0 


0.1 




0.9 


Flour, granules, flakes . 




.7 




5.3 


.6 




3.8 


Potato starch 




33.2 




54.3 


.2 




10.7 


Potato food products 2 




( 3 ) 




41.9 


( 3 ) 




2.3 



1 Not further processed. 2 Includes French fries, chips, dumplings, canned pota- 
toes. 3 Not available. 



have set up the Association of Citrus 
Products and Preserves, using “Jaffa 
Gold” as their trademark. 

The competition for export markets 
that exists among Israeli processors 
is being challenged by the Citrus Prod- 
ucts Export Board, but unlike the Citrus 
Marketing Board, the CPEB has no 
legal power and serves chiefly as a semi- 
voluntary office of coordination. Efforts 
to strengthen the CPEB have thus far 
met with the resistance of the larger 
processors. The Board serves also as the 
processors’ representative to the CMB 
— the only seller of raw product to the 
processing industry. 

Citrus processors, who comprise an 
export-oriented industry, are able to 
profit from the full range of Govern- 
ment incentives directed at encourag- 
ing exports — including the maximum 
export premium (at the same rate as 
for fresh citrus), loans at preferred 
terms, and — for plants located outside 
the Tel Aviv metropolitan area — certain 
tax concessions. In addition, they ob- 
tain sugar at subsidized prices. 

Prices formerly were negotiated be- 
tween producers and processors, with 
the active cooperation of the Ministry 
of Agriculture and the Ministry of 
Commerce and Industry, but since 1972 
a formula has been devised to increase 
prices gradually in small annual incre- 
ments. But these increments have not 
kept pace with inflation and the agree- 
ment was cancelled by the CMB after 
the last of the 1973-74 crop was proc- 
essed. 



Page 20 



* U. S. GOVERNMENT PRINTING OFFICE : 1975 582-178/25 



Foreign Agriculture 



i