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Historic, Archive Document 

Do not assume content reflects current 
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JUNE 196 7 
Vo!. 51, No. 6 

Statistical Reporting Service 
U,S. Department of Agriculture 




The Beef 
Business, 

From Herd Bull 
to T-bone, 
Grows, Changes, 
Still Leads 
as Farmers’ 
Prime 

Moneymaker 


264 - 263°—67 






BIG’UISkBEEF 

Change Comes With 
Growth as Feedfots 
Flourish and 
Consumers Shift 
Buying to the 
Better Grades 

Beef is big today, no doubt about it. 
Receipts from a record slaughter ran 
to $10.4 billion last year, making it our 
biggest cash commodity. 

To hold this No. 1 position, the in¬ 
dustry has grown steadily since World 
War II. 

Keeping pace with the thriving post¬ 
war economy and a 40-percent popula¬ 
tion boom, the volume of beef output 
has grown an average annual rate of 
over 4 percent. Last year, it reached a 
record 19.7 billion pounds, or double the 
output of 1946. 

This growth has meant changes 


within the beef industry. Consider the 
makeup of the cattle population: At the 
start of this year, only a fifth of the 
cattle inventory of 108.5 million head 
was dairy cattle, compared to about 
50 percent two decades ago. Meanwhile, 
beef cattle numbers had doubled to 
nearly 80 percent of the inventory. 

Big changes have also occurred in 
the makeup of beef produced. Steer beef 
production has about doubled since 
World War II and its proportion of the 
total has ranged mostly between 55 and 
60 percent. Heifer beef output more 
than quadrupled during the last 20 
years and its proportion of the total 
about doubled to around one-fifth in 
recent years. 

As beef cattle numbers have con¬ 
tinued to increase and dairy to decline, 
heifer calves have increasingly become 
destined for the feedlot rather than for 
veal or the milk barn. The sharp de¬ 
cline in veal output underscores this 
trend. 

Cow beef’s average volume has not 
changed much in the past 20 years. 


The Bsg One Wins 
Hands Down as 
Farm Cash Earner 

Beef is the biggest single source of 
income for U.S. farmers. Ring up the 
grand totals for the past 2 years, and 
you’ll see why. 

First, itemize nationally the cash 
receipts from marketings for 10 major 
commodities last year. Cotton lint, 
broilers, and tobacco earned over $1 
billion each. Four commodities—corn, 
soybeans, eggs, and wheat—returned 
over $2 billion apiece. But three more, 
from the livestock and livestock product 
group, led the field. Hogs accounted for 
$4 billion in receipts, dairy products for 
$5.5 billion, and cattle and calves for 
more than both the others combined: 
some $10.4 billion! 

This last sum represents better than 
40 percent of the $24.7 billion that 
farmers amassed for livestock and re¬ 
lated products in 1966, and nearly a 


quarter of the $42.9 billion they received 
for all farm products. 

Now compare these totals with the 
stubs from 2 years ago. You’ll find that 
beef had the biggest absolute growth in 
value of cash receipts. For, with the 
volume of cattle and calf marketings 
up 4 percent from 1965, and prices av¬ 
eraging better than $2 higher per hun¬ 
dredweight in 1966, cash receipts 
jumped by $1.5 billion. 

Beef thus made the biggest contri¬ 
bution to the $2.8 billion growth of 
livestock and related products, and it 
outstripped the $0.9 billion gained by 
all crops. 

Itemize the beef total once more, 
this time by State. Each one makes a 
sizable income from the sale of cattle 
and calves. Last year in fact, over half 
of them had cash receipts from cattle 
marketings of over $100 million each. 

Iowa stole the show, qualifying for 
the billion-dollar category, with $1.1 
billion. Texas, Nebraska, Kansas, and 
California followed in close order, earn¬ 
ing over $700 million each, while Illi¬ 
nois and Colorado were right around 
$500 million. 


2 







But despite this long-range plateau, 
production has seesawed from year to 
year, influenced by weather conditions, 
feed costs, and calf prices, as well as 
shifts in the rate of decline in dairy 
animals. With the increases for steer 
and heifer beef, cow beef output has 
dropped from 40 to 20 percent of the 
total. 

The key to many of the changes ex¬ 
perienced by the cattle industry lies 
in a growing consumer appetite for 
higher quality meat. Cattle producers 
have met this demand by increasing 
sharply the production of fed beef. 

To do this, they have made some dra¬ 
matic changes in the past 20 years. The 
job of raising the quality of the Nation’s 
beef output has been largely accom¬ 
plished through the feedlot. Fed beef 
output has nearly quadrupled in the 
postwar years, accounting for most of 
the gain in total beef production during 
this period. 

Twenty years ago, fed beef accounted 
for a little more than a third of the 
country’s beef output. Last year, about 
two-thirds of the beef produced was 
fed beef. 

The bulk of fed beef production in¬ 
cludes the top three grades—Prime, 
Choice, and Good. Back in 1946, U.S. 
cattlemen produced about 1.5 million 
tons of Choice and Prime grade beef, 
but last year, steak-hungry Americans 
ate over 5 million tons of these grades. 

With two-thirds of the beef being 
fattened off the range. Choice beef pro¬ 
duction has tripled, approaching 50 per¬ 
cent of total output in recent years. 

■—■in i ii ■ii'mwi iwwii i iwuibyi.'w t 

Research Ranch 

From bullets to beef—that’s the evo¬ 
lution about to take place on the Ne¬ 
braska prairie. 

The 35,000-acre Naval Ammunition 
Depot near Hastings is being turned 
into a meat animal research center. 

Here, USDA scientists will expand 
research on cattle, hogs, and sheep. 

One important aim will be to find 
out how to produce animals with more 
meat and less fat. 

For example, some 20 percent of to¬ 
day’s Choice beef never makes it to 
the dinner table. It’s sliced off as un¬ 
used fat. Scientists hope to learn how 
to reduce this wastage. 


The volume of good grade beef 
doubled by the late 1950’s, when its 
share of the output rose to over 27 
percent. But this proportion has since 
dropped and has remained at about 18 
percent for the past several years. 

Prime grade beef production has also 
slipped a little relative to total pro¬ 
duction. This grade accounted for about 
4 percent last year, as compared to 5-6 
percent for the 1946-48 period. 

Grades of Standard and below, which 
represented nearly half of the produc¬ 
tion right after World War II, now have 
about 30 percent of the output. 

John Larsen 
Economic Research Service 


BEEF 

PRODUCTION 

1966 

BY CLASS 




ESTIMATES EASED OH FEDERALLY INSPECTED SLAUGHTER , 
FEDERAL GRADING DATA, AND DATA ON CLASS AND AVERAGE 
HEIGHT OF CATTLE SOLD THROUGH MAJOR TERMINAL MARKETS . 







BIG’UN:BEEF 

More Eaten, 

More Produced 
Last Year 

A lot of Americans ate an extra help¬ 
ing at dinnertime last year. More likely 
than not, it was another hamburger or 
an extra bit of steak. 

U.S. beef consumption rose 4 pounds 
in 1966 to a record high, 103 pounds 
per person. The extra beef is reflected 
in the Crop Reporting Board’s 1966 
livestock slaughter figures. 

Total production of red meat in the 
48 States during 1966 was about 32.6 
billion pounds, a 3-percent increase 
over 1965. This includes commercial 
and farm slaughter. 

Much of the increase resulted from 
farmers producing heavier animals. Al¬ 
though the number of hogs slaughtered 
went down, production of pork went 
up. 

The average live weight of cattle 
slaughtered in 1966 was 1,009 pounds 
per animal, 13 pounds heavier than the 
year before. Average weight of calves 
slaughtered increased from 235 to 240 
pounds, hogs went from 239 to 242, and 
sheep and lamb slaughter averaged 102 


Depicting 

Fat Cattle: Choice steer prices at 
Chicago rose to a peak of about $29 
per 100 pounds in March of last year. 
Then they trailed off as the year wore 
on. Early this year, they were holding 
close to $25 per 100 pounds. 



pounds per animal, up 2 pounds from 
1965. 

Beef: Production rose 5 percent from 
1965 to 19.7 billion pounds. Iowa was 
the leading State with about 4 million 
head slaughtered; Nebraska and Cali¬ 
fornia had 3.4 and 3.1 million head, re¬ 
spectively. 

Veal: Veal production was 910 mil¬ 
lion pounds, down 11 percent from 1965. 
New York led in calf slaughter with 
about 900,000 slaughtered. Wisconsin 
came in second with 734,000. The total 
number of calves slaughtered declined 
12 percent from the 1965 figure. 

Pork: Production totaled 11.3 billion 
pounds, up 2 percent from the year 
before. The number slaughtered was 
down 1 percent. Iowa slaughtered the 
most hogs—16.5 million; Minnesota 
was second with 5.2 million; Illinois was 
third and Ohio fourth. 

Lamb and mutton: Production was 
about the same as in 1965-—651 million 
pounds; however, the number of sheep 
and lambs slaughtered was down 2 per¬ 
cent. California led with 1.8 million, 
Colorado was second with 1.6 million, 
and Texas was third with 1.3 million 
sheep and lambs slaughtered. 

Paul Bascom 
Statistical Reporting Service 


the Prices 

Feeder Markets: Choice feeder steer 
prices at Kansas City also peaked 
early last year. Since then, they have 
followed much the same course as fed 
cattle prices, maintaining a slight edge 
above them. 



4 












































BIG’UN:BEEF 

Western Ranch Profits Mixed for 1966 


Many western ranchers last year held 
back calves and increased the size of 
their herds. 

In the Southwest—Texas, Arizona, 
and New Mexico—future prospects en¬ 
couraged ranchers to keep rather than 
sell many potential breeding animals. 
As a result, cash receipts on representa¬ 
tive ranches were down moderately 
from 1965, but inventory gains more 
than made up the difference. 

In the Intermountain area—Utah, 
Nevada, Wyoming, Colorado, Idaho, 
and Oregon—the inventory of breeding- 
age cows and heifers at the end of 
1966 was slightly higher than at the 
beginning. 

Northern Plains ranchers—those in 
South Dakota, Montana, and Wyo¬ 
ming—again increased the number of 
breeding cattle on their ranches. 

Here’s a brief roundup of 1966 for 
western ranches: 

Southwest —After an uncertain start, 
range conditions in the area improved 
considerably. Fall market weights were 
slightly higher than in 1965. Calf prices 
were the highest received since 1959. 

For Southwestern sheep ranches, the 
price received per pound of wool aver¬ 
aged about 7 cents higher than in 1965, 
but Government incentive payments 
averaged lower, limiting the total rise 
in prices received to about 2 percent. 

Intermountain — Range conditions 
gradually deteriorated during the 
grazing season and averaged well below 
those of the past few years. 

Calf crops were off a little from 1965, 


REPRESENTATIVE WESTERN 
RANCHES: 


Net Incomes for 

1965-66 



1965 

1966 

Southwest: 

Cattle 

$6,146 

$7,293 

Sheep 

9,312 

11,778 

Intermountain area: 

Cattle 

8,811 

9,982 

Sheep 

18,158 

17,872 

Northern Plains: 

Cattle 

7,599 

7,549 

Sheep 

14,695 

13,217 


despite slightly larger breeding herds 
and a lower death rate of calves. 

However, prices received for calves 
increased 16 percent over 1965 and 
averaged $26.20 per 100 pounds. 

Prices received per pound of wool 
averaged about 7 percent above 1965. 

Northern Plains —Excellent range 
conditions for cattle early in the year 
gave way to drought starting in June. 
However, spring calving conditions 
were good and calving rates favorable. 
The drought caused lower livestock 
marketing weights. 

Prices received, the highest since 
1962, were 11 percent above 1965. 

Worsening range conditions for sheep 
hurt, despite an excellent lamb crop 
and the best wool prices in recent years 
for the area. 

Wylie D. Goodsell 
Economic Research Service 

Exports, Imports 

On May 1 this year, a U.S. food re¬ 
tailer buying a dressed beef carcass in 
Chicago would likely have paid about 
$37-$38 per 100 pounds for it. But a 
British retailer buying a like carcass 
in London the same day would have 
paid only about $35. 

This comparison about tells the story 
of why the United States exports no 
more beef than it does. It’s worth more 
sold here. 

The story is essentially the same for 
other red meats. Still, the meat export 
market—and the big potential—does 
involve a sizable chunk of trade in hard 
dollars. 

Last year, for example, the United 
States exported about $419 million 
worth of meat byproducts, $48 million 
of meats, and $16 million of live ani¬ 
mals. This was a slight increase from 
1965’s totals of about $405 million for 
meat byproducts, $47 million for meat, 
and almost $19 million for live animals. 

On the import side in 1966, beef and 
veal equaled 5.8 percent of U.S. produc¬ 
tion. This was above 1965’s level of 4.8 
percent but well below the 1963 record 
of 9.7 percent. 


5 




BSG’UN:BEEF 


Would a Feedlot 
Work on Your 
Cow-Calf Spread? 

Here’s an 
Example 



Most farming in the Southern Plains 
Region of Texas and Oklahoma is 
specialized—cotton, grain, or range 
livestock. A look at the feasibility of 
adding a cattle-feeding enterprise to a 
cattle ranch operation points out the 
reason for this. The big bottleneck is 
feed. 

With average yields, as many as 2.5 
acres of dry cropland would be required 
to furnish enough grain and silage to 
feed one steer 180 days; 1.7 acres to 
feed a cow in the feedlot 365 days; and j 
0.2 of an acre to feed a cow during the j 
winter in a feedlot. 

On the basis of the estimated feed 
requirements and assuming no pur¬ 
chases of grain and roughage, just over 
half the ranches in the Southern Plains 1 
Region have sufficient cropland to pro- j 
duce feed for only 100 steers or less for 
a 180-day feeding period. Only 1 in 10 
has enough cropland to produce feed 
for 500 steers. And only 1 in 25 enough j 
for 1,000 steers. 

Thus, to operate feedlot enterprises ' 
at anywhere near the level of minimum I 
unit costs, these ranches would have to ! 
buy additional feed. 

This in turn would call for increased 
capital investment for equipment to 
handle and store the feed. As a result, ! 
the feeding operation would be pushed 
out of the supplementary income cate- j 
gory since it would be competing with 1 
other ranch enterprises. 

Setup Might Work 

There are, however, some situations 
in which the feedlot enterprise could 
be added profitably under favorable 
price-cost relationships. A stocker- 
feeder program might be added to a i 
range cow-calf program, providing i 
sufficient sorghum stubble and wheat 
grazing are available. A cow-calf feed- 
lot operation may be a way of increas- j, 
ing ranch size when additional land ji 
is unavailable. 

Basically, though, the farming and j 
ranching in the Southern Plains Region j 
remains specialized. There are five ma- j 
jor types of commercial farms com- j 
prising 87 percent of the total com- < 
mercial farms in this region. Of the j 
five, 34 percent are cotton; 16 percent, j 
cash-grain; 19 percent, livestock 
ranches; 22 percent, livestock; and 9 
percent, general farms. 


6 








Based on Information Available May 31, 1967 
RECORD WHEAT OUTPUT 

Wheat production in 1967 is expected to set a new record 
of around 1.5 billion bushels. The total supply for the com¬ 
ing year could be somewhat larger than the 1,848 million 
bushels available in the current year. Late May prospects for 
the 1967—68 marketing year (beginning July 1) point to a 
continued high level of wheat disappearance but with a pos¬ 
sible slight to moderate increase in carryover by the summer 
of 1968. Domestic disappearance in 1967—68 may be at least 
as large as the 700 million bushels in prospect for 1966—67 
and, if wheat feeding were to expand, could be even larger. 

LAG IN EXPORTS? 

Prospects for commercial exports of wheat in 1967—68 
appear less favorable because of the increased supplies indi¬ 
cated in other exporting countries and possibly better crops 
in some importing countries. Some increase is expected in 
exports under the Food for Freedom Program. Total U.S. 
exports of wheat in 1967—68 could vary between 700 and 
775 million bushels. 

WHEAT PRICE MOVEMENTS 

Wheat prices continued well above the price support loan 
in mid-May and, except for soft red winter, they were above 
year-earlier levels. Prices during the 1967 harvest period 
may decline somewhat more than the 5-to-10 cents per 
bushel decline experienced at harvest in 1964 and 1965, 
particularly if the indicated record U.S. crop is attained and 
world wheat prospects continue favorable. 


7 






























Here’s a math teaser for you. How 
big is the corn crop going to be? 

In arriving at an answer, contact 
only one in every 100 farmers who must 
be picked purely at random. Make your 
estimate reliable enough for you and 
your neighbors to use in making key 
farming plans. Also, update the figure 
each month during the growing season. 

No fair getting help from your State 
crop reporting people. They’re associ¬ 
ated with the Statistical Reporting 
Service, which estimates production 
through a highly developed sampling 
technique, some refined statistical the¬ 
ories, and the cooperation of thousands 
of farmers. 

THE SRS 

SAMPLING 

IDEA 

To estimate 
a national total, 


In plain terms, the method of making 
production estimates for some major 
commodities could begin by hypotheti¬ 
cally tossing all the Nation’s farms into 
a very large hat. 

Have a blindfolded person draw out 
names. Interview these farmers about 
land use, crops, livestock, and other 
facets of their operation. The primary 
concern is that each and every farm 
have an equal chance to be selected. 

Such a process is termed probability 
sampling. The idea is the basis for 
the enumerative and objective yield 
surveys conducted by SRS as a backup 
for the mail questionnaire system. 

Let’s look at the process: Say the 
Nation has 3 million farms evenly dis¬ 
tributed among 3,000 counties—1,000 
farms for each. Estimating com out¬ 
put by using a 10-percent probability 
sample would mean pulling 100 farm 
names from the fictional hat for each 
county. 

In each county, the 100 farmers are 
asked the number of acres of corn 
growing on their land, if any. From a 
total of 300,000 answers nationally, a 
figure is derived, then multiplied by 
10 because of the l-for-10 sampling 
basis. 

Certainly, the SRS role in probability 
sampling is much more complicated 
than our example implies. But the prin¬ 
ciple is largely the same, and it works. 


divide the country 
into thousands of 
small, known, segments, 


8 









Accuracy can be judged by a known 
margin of error. For the June Enumera- 
tive Survey, which helps estimate out¬ 
put of some major crops, sampling er¬ 
rors have averaged about 1 to 2 percent 
for U.S. totals. 

A 1-percent sampling error means 
that chances are about 2 out of 3 that 
the sample figure is within 1 percent 
of the estimate that would have been 
derived if the same procedures had 
been used to survey all farms rather 
than a few. 

Instead of putting names in a hat, 
SRS uses maps and aerial photos. Each 
State is divided into segments along 
county, township, or other boundaries, 
or according to land use, or intensity 
of farming. These segments are then 
broken down into still smaller units. 

A sampling of segments—a certain 
number for the Nation, area, and 
State—is selected by chance. Farm¬ 
land within the chosen segments is 
enumerated by a part-time SRS worker 
who interviews farmers. 

This adds up to a lot of sampling and 
detail work. But the combination of 
many samplings of very small segments 
of farmland, together with scientific 
methods of choosing the samples, and 
strict procedures for getting data from 
the samples, pays off in improved ac¬ 
curacy. 

In the June Enumerative Survey, for 
example, about 17,000 segments of land 
are involved. To get data on them, part- 
time interviewers might call on 100,000 
farmers. The total land area on which 
data are provided figures out to only 


then minutely and 
precisely examine a few, 
chosen mostly at random. 


about six-tenths of 1 percent of all U.S. 
farmland. 

For the objective yield survey, quite 
small plots in some of the corn, cotton, 
wheat, and soybean fields that were 
in the enumerative survey are ex¬ 
amined monthly during the growing 
season. Crop counts and measurements 
are handled by the same workers who 
had done the enumerating. 

Last year there were objective yield 
plots in 3,300 sample cornfields in 29 
States, 2,600 cottonfields in 14 States, 
1,850 winter wheatfields in 15 States, 
and 1,200 soybean fields in 11 States. 

Minute examination is possible on 
the sample plots because they’re so 
small: a two-row section 15 feet long 
for corn, three drill rows 24 y 4 inches 
long for wheat, a two-row section 3 feet 
long for soybeans, and a double-row 
section 10 feet long for cotton. 

Here is the total number of acres used 
in the objective yield survey for these 
crops: 15 acres of corn, 7 acres of cot¬ 
ton, 3 acres of soybeans, and one-half 
acre of wheat. 

Because of the scientific basis of the 
surveys, accurate information is ob¬ 
tained despite the seemingly tiny 
amount of land area examined. 

Modern sampling techniques are 
necessary because of the vast changes 
taking place in farming operations, the 
growing specialization of farms, and the 
adjustments in marketing procedures. 

Because of these changes, the mail 
questionnaire, used so successfully for 
years and still the most relied-upon 
method, often can no longer alone pro¬ 
duce a representative sample of re¬ 
sponses from farmers. The mail survey 
supplies excellent information neces¬ 
sary for a complete estimate. But the 
enumerative and objective yield systems 
are becoming increasingly important 
supplements. 



9 


SPUD SAGA: 

From the 
Exotic Incas 
to the 
French Fry 

Potato crops around Boise or Bangor 
can affect prospects for many farmers, 
processors, retailers, and homemakers 
from Seattle to Sarasota. The produc¬ 
tion and marketing of the versatile spud 
has indeed become complex, affecting 
all U.S. regions in some way or other. 

But, that shouldn’t be so surprising, 
because the potato is a longtime product 
of the Americas. Its very name is de¬ 
rived from the American Indian 
“Batatas.” Although it has crisscrossed 
both major oceans many times in the 
last five centuries, the potato, most 
botanists agree, was cultivated first by 
the Incas up in the Peruvian-Bolivian 
altiplano. 

The potato belongs to an exotic bo¬ 
tanical family that includes another 
important native American crop, to¬ 


bacco. Other relatives are the tomato, 
the eggplant, and the petunia. 

The Andean Indians, who discovered 
they could store potatoes out of season, 
may have hit on the earliest conven¬ 
ience food. 

Even today their collateral descend¬ 
ants, the Quechuans, similarly subsist 
mainly on freshly harvested or stored 
potatoes. 

By comparison, the U.S. potato in¬ 
dustry obviously has made striking ad¬ 
vances. Today, it is an important part 
of the economy. A highly specialized 
industry, commercial potato production 
requires large investment, not only in 
acreage but also in equipment and tech¬ 
nical training. 

U.S. potato production centers mostly 
in Idaho, Maine, California, North Da¬ 
kota, and Minnesota. But every State 
produces some potatoes, and potatoes 
are harvested somewhere in the United 
States every month of the year. 

The main potato-producing areas 
grow specialized crops, ranging from 
mealier varieties suitable for baking 
to those more suitable for boiling or 
frying. 


POTATO ECONOMICS 


Potato output last year was record 
high. Production hit 301 million 
hundredweight, up 10 million from 
1965. 

But total disappearance last fall 
also was up. So, despite record pro¬ 
duction, storage holdings on January 
1 totaled 124.9 million hundred¬ 
weight, about the same as the year 
before. 

Despite little change in supply, 
early winter markets were strong 
and prices much higher than a year 
ago. 

U.S. prices to growers averaged 
$2.36 per hundredweight in February 
1967, up from $2.17 a year earlier. 
Part of the reason was the prospect 
of continued heavy losses in stored 
Idaho potatoes, where a harvest¬ 
time freeze severely damaged the 
crop. Another reason for higher 
prices could have been the reckoning 
that the rest of the season would fol¬ 


low much the same course as in re¬ 
cent years—intensive processing and 
rapid disappearance. 

But, if disappearance in Idaho 
was heavy, it was certainly off 
sharply in the Midwest and East, 
where storage conditions were bet¬ 
ter than in the West and harsh 
weather slowed movement. 

Other price factors were the con¬ 
siderable supply of potatoes from 
Canada and weaker processor 
demand. 

U.S. processors, faced with record- 
high finished-product inventories 
and abundant supplies of raw po¬ 
tatoes still under contract, reacted 
by cutting back their production. 

So prices dropped sharply in late 
winter. And the average $1.72 to 
growers in April was a third below a 
year earlier, the lowest monthly price 
since the fall of 1963. 


10 








Techniques of potato production also 
have advanced rapidly. No longer is the 
potato laboriously hand-plugged into 
individual potato hills or ridges, and 
painstakingly harvested potato by po¬ 
tato. Instead, automatic equipment on 
a tractor-drawn vehicle presets the cut 
seed. Using such equipment, a farmer 
can plant 50 acres a day, or more. 

A host of harvesting equipment also 
is available. The kind the farmer uses 
depends on the size of his operation, 
local topography, characteristics of his 
fields and soil, his labor supply, and 
his market. Mechanical equipment is 
used for harvesting some 80 to 95 per¬ 
cent of the crop in important areas 
where conditions are suitable. 

Thanks partly to mechanization, 
U.S. potato output per acre has climbed 
fairly steadily in the postwar years. 
Yields averaging about 145-150 hun¬ 
dredweight in the early 1950’s have re¬ 
cently passed the 200 hundredweight 
level. 

Production, though variable because 
of weather and the periodic wide 
swings in prices, also has trended up¬ 
ward—from about 210 million hundred¬ 
weight in the early 1950’s to above 290 
million in the last few years. 


The level of use also has varied with 
the supply, but the kind of use has 
changed remarkably. We’re in the era 
of the french fry and the potato chip. 
Markets for prepared foods, greatly in¬ 
creasing in the postwar years, have 
sparked important gains in potato 
processing, especially for quick-freez¬ 
ing, flaking, dehydrating, and canning. 

The increased supplies of convenience 
forms of potatoes have led to important 
changes in the average American’s use 
of potatoes. In the last decade or so 
he has eaten close to 105-110 pounds 
annually—more and more of the total 
in processed products. 

Nearly 90 percent of the potatoes con¬ 
sumed in 1956 were bought in fresh 
form. Chips accounted for most of the 
rest, because freezers and dehydrators 
really were just getting underway. 

But, within the decade, average use 
per person of canned, dehydrated, and 
frozen potatoes rose markedly. Last 
year such use accounted for more than 
one-fifth of the total, while chips took 
about one-sixth. On the other hand, 
use of fresh potatoes was down to 75 
percent of the total. 


POTATOES USED FOR 
PROCESSED FOOD ITEMS 


80 

60 

40 

20 

0 


CWT* -- 

1 



1 

H 

- 

CANNED 

Tofai 

11 

1 

- 

.yaffil H ^ P ^ A 



J 

- ! 


: P S r s H O E S T R1N 

11 

J 

1 

-j 




1956 1958 1960 1962 1964 1966 1968 

CROP YEAR 

* FRESH-WEIGHT EQUIVALENT*. 


U. S. DEPARTMENT OF AGRICULTURE 


NEG. C&MS 175-66(5) CONSUMER AND MARKETING SERVICE 


11 



























































Gap Between Prospective, Actual Plantings 
Found Fairly Narrow for the Feed Grains 


A comparison of prospective plant¬ 
ings for feed grains, as indicated by 
farmers in March with actual acreages 
planted for the years 1955-86, reveals 
that farmers generally follow their 
plans fairly closely. 

Actual acreages planted were much 
nearer the prospective plantings for 
corn, oats, and barley than they were 
for sorghums. There was a general 
tendency for farmers to plant a little 
less than indicated by the prospective 
plantings report. 

For each of the grains, actual plant¬ 
ings in about two-thirds of the years 
fell below the March 1 prospective acre¬ 
ages; acreages planted in about a third 
of the years were practically the same 
as indicated or above. 

Factors such as weather or economic 
conditions, Government farm programs 
and the impact of the March 1 inten¬ 
tions report itself can influence the pro¬ 
ducers’ plans up to the time of seeding. 

For the four feed grains combined, 
the range in plantings as a percentage 
of prospective acreages was fairly nar¬ 
row. Actual planting ranged from 96 to 
102 percent of actual plantings (exclud¬ 
ing 1961 when the feed grain program 
wasn’t announced until late in March). 
The change in the actual acreage 
planted was in the same direction as the 
change indicated by the Prospective 
Plantings Reports in 11 of the 12 years. 

In 7 of the 12 years, farmers planted 
a little less corn than their March 1 
plans indicated. In 1 year they planted 
more than indicated in March and in 
4 years about the same. 

With the exception of 1961, the actual 
corn acreages planted ranged from 95 
to 102 percent of the prospective plant¬ 
ings. The change in the acreage of com 
planted from the preceding year was 
in the same direction as indicated by 
the Prospective Plantings Reports in 
10 of the 12 years compared. 

The Prospective Plantings Reports 
indicate the actual acreage to be 
planted to sorghums with much less ac¬ 
curacy than for the other three feed 
grains. The acreage planted to sor¬ 
ghums (excluding 1961) ranged from 89 
to 113 percent of the prospective acre¬ 
age. The wider range for sorghums ap¬ 
parently was due principally to greater 


variability in weather at planting time 
in the southwestern area of the country 
where most of the sorghums are grown. 
Sorghums are frequently planted on 
abandoned wheat acreage, which also 
makes for some uncertainty in the acre¬ 
age that will be available for planting 
sorghums. 

The acreage actually planted to sor¬ 
ghums was below the prospective acre¬ 
age in 8 years and above it in 4 years. 

The prospective acreages of oats and 
barley made about the same variation 
from actual plantings as was the case 
for com. 

Malcolm Clough 
Economic Research Service 

DUST IS BIG HEADACHE 
FOR FEED MILLERS 

One way to control dust is to sweep it 
under the rug. 

This time-honored method, however, j 
is not adequate for feed mills and grain 
elevators, where dust collection quickly 
brings on financial headaches. 

Millers who are good housekeepers 
recognize dust not only as a potential 
hazard inside a building but also as 
an air pollutant outside. 

Inside control of dust in feed mills 
is a must if for no other reason than to 
prevent an explosion. Almost any par¬ 
ticles of dust can cause an explosion if 
they are fine enough, concentrated 
enough, and properly mixed with oxy¬ 
gen and ignited by a flame or spark. 

Good inside dust control also: 

—Cuts down labor costs for cleaning. 

—Reduces deterioration and wear of 
bearings and other machinery parts. 

—Minimizes the chance that costly, 
potent microingredients so important 
in mixed feeds may be lost into the 
atmosphere. 

—Upgrades working conditions and 
thus attracts high-grade labor. 

—Prevents contamination of mixed 
feeds by drug-containing dusts. 

Outside dust control is a serious prob¬ 
lem for many feed mills located within 
town limits. 

In some areas, stringent antipollu¬ 
tion laws require all air discharged 
from feed mills to be filtered. 


12 




How Much 

Insurance 
on Buildings 
is Enough? 

It’s a wise farmer who can keep up 
with the insurance values of the physi¬ 
cal property on his farm. 

Farmers as a whole today are obtain¬ 
ing more and more insurance, but some 
may still not be fully protected on their 
increased investments. 

New machinery, improvements to 
buildings, and inflation have almost 
doubled insurable farm property values 
since World War II. 

Yet average depreciation of farm 
capital is high. From 1960 to 1965 it 
was $4.5 billion per year. From 1940 
to 1945 it averaged $1.2 billion. And 
many farmers simply aren’t reducing 
insurance coverage fast enough on some 
assets declining in value. 

Part of the problem is obsolescence 
caused by technological improvements. 
As new models of farm machinery 
come out, the value of older models de¬ 
clines somewhat the way the value of 
last year’s car does. 

Other causes of depreciation are 
changes in use, wear and tear, deterio¬ 
ration and inadequacy of equipment. 

Since some property values go up 
while others fall, the farmer who thinks 
he is fully insured may find instead that 
he is paying for more protection than 
he is ever likely to get. And both the 
farmer and the insurance man at times 
are at fault. 

When a policy is written, the value 
of the property may often be overesti¬ 
mated. The farmer accepts this, think¬ 
ing he is getting more coverage. 

In reality, since the policy probably 
pays off only on the “actual cash value’’ 
at the time of the loss, the same cover¬ 
age could have been obtained for less. 

Similarly, when insurance comes due, 
usually every 3 years, both farmer and 
insurance man tend simply to renew 
the policy rather than reevaluate the 
property on the basis of appreciation or 
depreciation. 

Coverage often depends on the indi¬ 
vidual insurance man. Some will not 
insist that insurance be reduced on 
obsolete buildings, feeling that it might 
make for hard feelings with the owner. 


Other agents don’t like to refuse in¬ 
surance, especially to customers of long 
standing. 

A more reliable method is basing 
evaluation on the usefulness of the 
physical property. 

A barn built 30 years ago, for ex¬ 
ample, with about 10 years of remaining 
useful life, is being used to store ma¬ 
chinery. It cost $2,500 to build, but 
would cost $8,000 to replace today. 

If the barn were destroyed, however, 
the owner would probably replace it 
with a pole-frame shed costing $3,000 
with a 30-year life and an annual rate 
of depreciation of $100 a year. 

The utility value of the existing barn 
for its remaining 10 years would be 
no more than the utility value of the 
cheaper shed for the same period. 

Thus, the insurance value of the barn 
would be 10 years multiplied by the 
$100 annual depreciation rate of the 
shed, or $1,000. 

Utility, however, is only one way of 
valuing obsolete buildings for insurance 
purposes. Earning capacity, current 
cost of rebuilding, and sales or market 
value are others. 


Homework 

Here’s one equation for determin¬ 
ing the utility value of an existing 
building: 


where: 

Vu = Utility value of existing 
building. 

Cu = Cost of a new building. 

N ■*= Length of life of new build¬ 
ing in years. 

k = Remaining years of life of 
existing building. 

Using figures from the example 
given in the accompanying article, 
the equation looks like this: 

_ $3,000 x 10 

$1 ’ 000 =- 30 — 

Therefore, the utility value of the 
existing building is $3,000 (cost of 
new building) multiplied by 10 
(years remaining of old building) 
divided by 30 (years of life of new 
building), or $1,000. 

Now try it on your old barn, ga¬ 
rage, or toolshed. 


13 





MEET THE STATE STATISTICIAN 



“East is East,” they say, but the twain 
did meet in 1963, when W. J. Fluke 
became statistician in charge of the 
New Jersey crop reporting service. 

Nearly a native westerner, Fluke 
spent his youth and many years of his 
career in Oregon. Today, surveying the 
farmlands and wooded hills of the Gar¬ 
den State might remind him of the 
family farm and the forests back home. 

A ready understanding of a new area 
of the country is natural for Jerry 
Fluke. As he recently observed, “My 
service with USDA has spanned the 
continent, and over 25 years . . .” But 
even that remark doesn’t reveal the full 
odyssey of Jerry Fluke. 

He was born in 1914. Where? Not the 
West or East, but about halfway and a 
bit to the north—in Winnipeg, Canada. 
Before he was 6, though, Jerry’s fam¬ 
ily had moved west to British Columbia, 
and then south to Oregon. 

They bought a fruit farm in Tigard 
near Portland. Jerry grew up there, 
then attended Oregon Agricultural Col¬ 
lege (now Oregon State University), 
and graduated in 1936 with a B.S. de¬ 
gree in agricultural economics. 

With the start of his career in the 
Department of Agriculture, the odyssey 
resumed. 


JERRY 

FLUKE 

Lincoln, Nebr., was his first base in 
1939. Sterner responsibilities later dic¬ 
tated a move to Europe, where Jerry 
served as an artillery officer during the 
war. 

Back home, literally, in 1945, he re¬ 
sumed his career as a statistician, in the 
Portland office of the crop reporting 
service. During 1956, he was instrumen¬ 
tal in producing the first statistical bul¬ 
letin of the Northwest wheat project 
on supply and distribution of the re¬ 
gion’s principal crop. 

Beginning in 1957, Jerry spent 4 years 
by the Potomac, where his knowledge of 
Oregon’s varied field and seed crops 
was vital to the field crop estimation 
program. The next assignment, in the 
Indiana crop reporting service, lasted 
until 1963, when the most recent move 
brought him to New Jersey. 

The variety encompassed by this 
State is ideally tailored for a man of 
such broad background. The farmers of 
New Jersey are innovators, who pro¬ 
duced our first U.S. Commissioner of 
Agriculture, and began an early co¬ 
existence with heavy industries and 
large cities. Today, a bountiful crop of 
agricultural statistics insures a brisk 
pace in Fluke’s office. 

The results are gratifying. Two- 
thirds of the land in this seventh-rank¬ 
ing industrial State is still devoted to 
agricultural, recreational, and forest 
uses. The farmland has the highest 
cash receipts per acre in the Nation. 

The Fluke family reflects a diversity 
of agricultural and professional inter- j 
ests. Betsy, Jerry’s wife, has a degree in 
home economics from Oregon State 
University, and used to work for the 
Oregon crop reporting service. 

The Flukes have a daughter, Kath¬ 
leen, in high school. And two sons have 
already begun to carry on the family , 
odyssey. Bill, a Marine stationed in 
North Carolina, will again take up his 1 
studies this fall at Duke University. 
Bob attends Shippensburg State Col¬ 
lege in Pennsylvania. 


14 






In This Issue 


S SAM STAT SAYS 
“Check My Data” 
A brief roundup 


b Highlights from a report on last year’s field and 
seed crops: rice production rose by over 11 per¬ 
cent; wheat output remained at 1.3 billion bushels, 
hut the gain in average price was 28 cents; the 
volume of soybeans raised for beans was 931 mil¬ 
lion bushels, or 10 percent more than in 1965. 
b Celery was planted on 12,100 acres in Florida 
and California this season. B All varieties of 
grapes grown last year amounted to 3.7 million 
tons, down 14 percent from the previous year. 
e Farmers fed their cows an average of 37.8 
pounds of grains and other concentrates for each 
hundredweight of milk produced last year, 3.7 
pounds more than the 1960—64 average. H Last 
year’s pear harvest, weighing nearly 750,000 tons, 
was about 50 percent larger than in 1965, and the 
biggest in 10 years. 


Page 


Beef Changes_ 2 

More Beef_ 4 

Ranch Profits_ 5 

SR.S Sampling_ 8 

Spud Saga_10 

Planting Plans_12 

Insure Buildings_13 


AM Articles May Be 
Reprinted Without Permission 
Editor: Ben Blankenship 


Cost-Price 

Squeeze 

Tightens 

Cash income to farmers 
for 1967 is expected to ap¬ 
proach the record highs 
set last year, despite pros¬ 
pects for a continued 
squeeze between higher 
production expenses and 
lower prices. 

Realized gross income 
(from farming will likely 
I equal last year’s record of 
$49.5 billion, given average 
I weather and continued 
[strong demand for farm 
[products. 


With a larger volume of 
farm marketings offset¬ 
ting lower prices, cash 
receipts will probably 
change little from the 
$42.9 billion estimated for 
1966. An additional $6.6 
billion is expected again 
from non-money income 
and direct Government 
payments. 

Despite the high level of 
gross income in prospect, 
a decline of perhaps 5 
percent, or more, is in¬ 
dicated from the realized 
net farm income of 1966, 
a near-record $16.3 billion. 
Thus, even with a con¬ 
tinuing decline in the 
number of farms, average 
per-farm income from 


farming this year may be 
down some from last 
year’s record of $5,024. 

The decline in realized 
net income from farming 
stems from a projected 
rise in production ex¬ 
penses. Prices paid by 
farmers and overhead 
costs will be up, leading to 
an increase of around 
$1 billion. 

Disposable personal in¬ 
come from all sources, 
however, may change little 
from the 1966 record high, 
with continued high levels 
of employment in pros¬ 
pect, as well as further 
increases in nonfarm 
income. 


The Agricultural Situa- 
\ tion is sent free to crop, 
livestock, and price report¬ 
ers in connection with their 
reporting work. 


The Agricultural Situation is a monthly publication of 
the Statistical Reporting Service, United States De¬ 
partment of Agriculture, Washington, D.C. 20250. The 
printing of this publication has been approved by the 
Bureau of the Budget (March 12, 1964). Single copy 
5 cents, subscription price 50 cents a year, foreign $1, 
payable in check or money order to the Superintendent 
of Documents, U.S. Government Printing Office, Wash¬ 
ington, D.C. 20402. 


15 


U.S. GOVERNMENT PRINTING OFFICE: 1967 
















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