CONSUMER BREAD PRICES

Urban consumers paid an average of 21.6 cents for a 1 pound loaf of white bread in 1963, 0.4 cents more than in 1962. For the wheat and other farm ingredients used, farmers received 3.1 cents, the same as a year earlier. This is about 141⁄2 percent of the retail price. The retail price of bread increased from 14.3 in 1950 to 21.6 cents in 1963-an increase of more than 50 percent. The 3.1 cents the farmer now receives is only slightly more than the 3 cents he received in 1950.

Dr. COCHRANE. The average price of this pound loaf of bread in 1963 was 21.6 cents. This compares with an average price in 1962 of 21.2 cents. So there was four-tenths of a cent increase in the price of a pound loaf of bread.

What the farmer gets out of this loaf of bread is a return of 3.1 cents in 1963 and that is exactly what he got in 1962. So in absolute terms, the farmer is getting the same amount in 1963 as he got in 1962.

On a percentage basis, his share has gone down very slightly. You will see where the lion's share of the retail price goes. It goes to the baker-wholesaler and the retailer; 16 cents out of the 21.6 cents goes to the retailer and the baker-wholesaler.

FARMER'S SHARE OF COTTON SHIRT

The next chart is the familiar cotton shirt. The average price of this cotton business shirt in 1963 was $4.27. That is up 3 cents since 1962.

The farmer's share in absolute terms, however, remains constant. The farmer received 28 cents in 1962 out of $4.24. He received 28 cents in 1963 out of $4.27. Most of the price goes into the handling and processing of cotton.

(The chart referred to follows:)

WHAT THE FARMER GETS FOR A COTTON BUSINESS SHIRT

A typical cotton business shirt sold for around $4.27 at retail, in 1963, 3 cents higher than 1962. The farm value of the cotton required to make this shirt was 28 cents, about 61⁄2 percent of the retail prices. The value of the cotton in the shirt is the same as a year earlier.

RETAIL PRICE OF CHOICE BEEF

Dr. COCHRANE. The next chart is also one we presented last year for the first time and brings out a whole series of relationships which I think will be of interest to the committee. This is the retail price of choice beef for 1963.

In 1963 the farmer or rancher received an average of 22 cents a pound for a beef steer on the hoof. In terms of an average of 450 pounds of dressed weight from a 1,000-pound steer, his return was 45 cents a pound. This was about 6 cents less than he got in 1962.

On the other hand, the retail price of all cuts of beef averaged 81 cents, only slightly more than 1 cent below 1962. The prices making up the 81-cent average ranged from $1.30 for the 35 pounds of T-bone, club, and porterhouse in the 450 pounds of total dressed weight to the 52 cents for hamburger that accounted for 140 pounds.

Between the 45 cents received at the farm and the 81 cents received in the retail store, was a marketing spread of 36 cents. This was 5 cents greater than the spread in 1962. It reflects a lag between farm and retail prices of beef; and was the reverse of the 1962 situation when the price at the farm rose 5 cents a pound, the retail price rose 3 cents, and the marketing spread declined 2 cents a pound.

Mr. WHITTEN. Is that beef from Argentina, Australia, or the United States?

Dr. COCHRANE. This is the U.S. price. The price the farmer received for this grade of choice beef on the hoof is 22 cents a pound in 1963. This compares with 25 cents a pound in 1962.

This is a hypothetical 1,000-pound steer that we are talking about here, and that steer cuts out to yield 450 pounds of meat.

On the basis of the 22 cents per pound received for the live weight, and certain return for byproducts, the farmer receives 45 cents a pound for the meat produced. It costs 36 cents to move that pound of meat through the slaughtering establishments and through all the wholesale and retail distribution channels, so that the average consumer paid 81 cents-45 plus 36-for meat out of this choice steer in 1963.

The consumer, however, probably didn't pay 81 cents for any single pound of meat because she bought specific cuts of beef. This steer yields 140 pounds of hamburger which sold, on the average, for 52 cents a pound. It yields 45 pounds of rib roast which sold, on the average, for 84 cents a pound. It yields 85 pounds of chuck roast which sold, on the average, for 64 cents a pound. And at the opposite extreme, it yields 35 pounds of T-bone, club and porterhouse steak, which sold at $1.30 a pound. When you weight these pounds and prices together, that gives an average price of 81 cents that the consumer spent for a pound of beef from a choice steer in 1963.

This is down a little from 1962. The comparable figure for 1962 is

82.4 cents.

EXPORTS OF FARM PRODUCTS

Dr. COCHRANE. The next series of charts deals with our farm export situation. The first gives us a picture of what has happened to farm exports through time by principal categories of sale. Our categories are the familiar ones: exports under specified Government programs, commercial exports with assistance and commercial exports without assistance.

*TRADE ASSISTANCE AND DEVELOPMENT ACT, P. L. 480, AND MUTUAL SECURITY ACT, 665.

YEAR ENDING JUNE 30.

DEPARTMENT OF AGRICULTURE

30-080-64-pt. 1--22

1965

NEG. ERS 822-63 (10) ECONOMIC RES ARCH SERVICE

EXPORTS OF FARM PRODUCTS

The value of U.S. farm exports in fiscal 1963 was $5.1 billion, almost the same as the record high level of fiscal 1962.

Total commercial sales for dollars at $3.6 were 2 percent higher than in fiscal 1962. To compete in world markets for some major products, such as wheat and cotton, the Commodity Credit Corporation has made export payments in cash or in kind or sold stocks at domestic market prices. Commercial exports with assistance were $0.7 billion, 35 percent below a year earlier. On the other hand, commercial exports without assistance increased by 21 percent and totaled $2.9. Reduced exports of cotton and the fact that U.S. feed grains and rye were competitive in world markets during the year and required no export payment assistance are the principal reasons for the reduction in assisted commercial exports. The increase in unassisted commercial exports primarily involves increased exports of oilseeds and products plus the termination of export payments and larger exports of feed grains.

Exports under specified Government programs (foreign currency sales, donations, barter and long-term supply and dollar credit sales under Public Law 480 and the Act for International Development) were $1.5 billion, 7 percent lower than a year earlier. About two-thirds of the exports under specified Government programs benefited from price assistance.

The value of exports may reach $6 billion for the fiscal year 1964, now that a large quantity of wheat is moving to the Soviet bloc. The export outlook is particularly favorable for wheat, cotton, soybeans, dairy products, and vegetable oils.

Most of the export gain in fiscal 1964 will be in dollar sales which may be as much as $4.2 billion and account for over 70 percent of total U.S. agricultural exports. Exports under Government financial programs are also expected to exceed the $1.5 billion in 1962-63.

U.S. agricultural exports are estimated at $2,379 million during the 5 months July to November 1963. This gain involves substantial increases in the exports of wheat and flour, cotton, corn, soybeans, tobacco, vegetables, animal fats, and dairy products. Export values for hides and skins, oats, barley, and cottonseed oil were down.

Dr. COCHRANE. The first thing I would call to your attention is that between fiscal 1962 and 1963 exports held just about constant at around $5.1 billion. Exports of farm products in fiscal 1964 are increasing significantly. We expect the total value to be in the neighborhood of $6 billion.

There was a rather significant change in the composition of farm exports in fiscal 1963. You will note that commercial exports, without assistance, increased rather greatly in fiscal 1963, while commercial exports, with assistance, decreased. Commercial exports, without assistance, increased 21 percent in 1963. This grows out of several factors. First, our exports of both soybeans and feed grains, neither of which were subsidized in 1963, increased significantly.

Secondly, feed grains were in the category of subsidized exports in 1962 and they weren't in this category in 1963.

So you have feed grains moving out of the "with assistance" category into the "without assistance" category. Because of an increase in feed grain exports and because of the shift in categories, we get a rather significant increase in the exports of farm products without assistance.

But certainly, I would say that the direction there looks very good and I hope that we can keep those commercial exports without assistance climbing.

EXPORTS OF FARM PRODUCTS IN RELATION TO FARM SALES

Dr. COCHRANE. This chart describes exports of farm products as a percentage of farm sales by commodities. We observe a very familiar phenomenon, that wheat and flour exports are 60 percent of farm sales. Rice exports are 58 percent of farm sales. Without exports, these two commodities would truly be in trouble.

Soybeans, which were in fourth place in 1962, have moved up to third place. Now 45 percent of our farm sales of soybeans move in export. That compares with 34 percent of farm sales of soybeans that moved in export in 1962. And so on down the list. The export market is clearly very important for a great number of commodities. Hopefully we can get exports of cotton up to a higher percentage of total sales.

EXPORTS COMPARED WITH FARM SALES FOR CROPS AND WITH PRODUCTION FOR LARD AND TALLOW.
DATA ARE FOR FISCAL YEAR 1962-63.

U. S DEPARTMENT OF AGRICULTURE

NEG. ERS 816-63 (10) ECONOMIC RESEARCH SERVICE

EXPORTS OF FARM PRODUCTS AS PERCENT OF FARM SALES

Exports provide an important outlet for many U.S. farm products and the Nation obtains substantial earnings from exports of farm products.

Exports of soybeans (including oil) took 45 percent of farm sales in fiscal 1963, up sharply from the 34 percent in 1962. Exports as a percentage of farm sales for rice at 58 percent, sorghum grain at 27 percent, and corn at 24 percent were also up some. Exports as a percentage of farm sales for cotton and barley at 23 percent, tallow at 37 percent, and tobacco at 21 percent were down from a year earlier.

Exports of wheat and flour were a little lower, relative to farm sales, than a year earlier. However, exports still accounted for 60 percent of farm sales. This was the highest percentage for any major farm commodity.