a relatively high level. Produced chiefly for domestic food use, U.S. peanuts are subject to acreage control and marketing quotas. The U.S. price support for 1963crop peanuts has not been announced as yet. The 1962 crop was supported at a national average level of $221.40 per ton, average grade, farmers' stock basis. Short-term outlook Total stocks of peanuts in the United States as of August 1, 1962, the beginning of the current marketing year, were 389 million pounds, farmers' stock basis. Of this, about 60 million pounds was held by the CCC which is currently offering peanuts for both domestic and export sale. With continued heavy contributions to the domestic food distribution programs in the form of peanut butter and with substantial quantities crushed for oil, stocks on August 1, 1963, probably will not vary greatly from a year earlier. The total quantity crushed, exported, diverted into peanut butter manufacture for donation, or carried over next August 1 will depend largely on CCC diversion policy. U.S. consumption of peanut oil usually is about 90 million pounds. Long-term outlook Expectations are that the United States, under normal conditions, will continue to meet its domestic requirements for peanuts. And with the support price geared to production for food use as opposed to production of oil and meal-acreage control and marketing quotas will be continued. Plans for fiscal year 1964 Plans are to publish two world summaries on production of peanuts and to provide spot reports of interest to the domestic peanut industry. Likewise, efforts will be continued to supply information on foreign supplies and trade to departmental authorities responsible for related price-support programs. World situation TUNG World tung oil production in 1962-63, estimated at 218 million pounds, declined about 8 percent from last year to the lowest level since 1954-55. This represents a drop of more than one-fourth from the high of 300 million pounds which occurred in 1957-58. Argentina's oil production from nuts harvested in 1962 will be up sharply from last year's outturn. However, greatly reduced production in the United States will overshadow these gains. Production in other major producing areas, including mainland China, for which there is no specific information on tung at hand, is expected to remain at about last year's level. Prices of tung oil which began to rise sharply in late 1960 have continued steady at a high level reflecting a tight world supply situation. The CCC holds no stocks, reflecting the fact that the support rate on 1962 crop oil at 24 cents per pound was significantly below the current market price level. Short-term outlook United States carry-in stocks of tung oil on November 1, 1962, amounted to nearly 13 million pounds, up sharply from the 8 million pounds of last year but only about one-third of the 37 million-pounds carry-in on November 1, 1960. Assuming U.S. monthly consumption continues at about 2.75 million pounds, total unsold supplies will meet more than one-third of U.S. estimated domestic utilization for 1962-63. In view of the tight world supply situation and current high-price prospects the CCC will probably not acquire any tung oil stocks in 1962-63. Prices in recent weeks have been about 40 cents per pound, basis f.o.b. New York or about 5 cents above the average price in 1961-62. Prices throughout 1963 are expected to continue strong, probably averaging about 40 cents per pound. Long-term outlook With U.S. supplies of tung oil totaling about 19 million pounds, including about 6 million pounds from domestically produced nuts, and total domestic requirements of 33 million pounds, it appears that the United States will import about 20 million pounds of tung oil in 1962–63. This compares with last year's domestic utilization of 36 million pounds and imports of 17 million pounds largely from Argentina and Paraguay. Production in Argentina in 1962-63 will be up sharply from last year but the world supply situation will remain tight because of reduced stocks and continued relatively small shipments from China. High tung oil prices resulting from reduced supplies will continue to encourage drying oil users to shift further to lower-priced substitutes as was the case in 1961-62. Plans for fiscal year 1964 To continue to report current developments to the U.S. tung oil and paint-andvarnish industries as well as continue to provide necessary information to departmental authorities involved in price-support programs. World situation VEGETABLES The 1962-63 Western European potato crop is about the same as last year's light crop, and the onion crop is also about the same as last year. In most cases the quality of both these crops is good. Winter vegetable acreage in Mexico is slightly larger than last year. Exports should be somewhat larger, partly due to increased plantings in pole tomatoes. Short-term outlook The important winter vegetable crop areas of Florida, Texas, Arizona, and California were hit by several damaging freezes during December 1962 and January 1963. Supplies of vegetables for fresh market probably will be moderately smaller this winter than last. The demand for U.S. onions in Western Europe has been good; however, due to the dock workers strike, U.S. suppliers have not been able to take full advantage of Western European demand. Export of U.S. potatoes to Western Europe should be slightly larger than last year, but total U.S. potato exports probably will be near the level of last year. It is likely that the value of vegetable exports will be slightly larger than last year. Long-term outlook It is expected that the upward trend in exports of fresh vegetables to Canada will continue, and that shipments of both fresh and processed vegetables to Western European countries will increase with a major part of the increase in processed vegetables. U.S. imports of winter vegetables are likely to continue the upward trend, with Mexico shipping the major quantity. There are wide fluctuations in the volume of imports from year to year, as the quantity of imports is largely dependent on the level of prices prevailing in the U.S. market. Plans for fiscal year 1964 International meetings of producers of vegetables in Canada, Mexico, and the United States will be held with representatives from FAS attending. Continued emphasis will be placed on expanding export markets for processed vegetable items. Efforts will be continued to develop Western European outlets for certain winter and spring vegetables from U.S. Gulf Coast States. World situation DRIED FRUIT World supplies of raisins and prunes are each above average this season and near average for dried apricots. However, this season's supplies of each are about the same as last season's. World prices are appreciably lower for each than last season with the exception of U.S. raisin and dried apricot prices which are sharply higher due to smaller production. Short-term outlook In consequence of the supply and price situation, U.S. exports of raisins in 1962-63 will be drastically reduced, and may amount to about half as much as the 65,400 short tons shipped in 1961-62. U.S. prune exports, on the other hand, should fully equal, if not exceed the 44,150 tons shipped last season, mainly because U.S. prices are several cents per pound lower this season than last and U.S. supplies are somewhat heavier. The 1962-63 season exports of U.S. dried apricots will probably be smaller than in the past two seasons because U.S. prices are up while competitors' prices are down. Long-term outlook Raisin and prune production are expected to expand in the United States and competing countries. Both acreage and yield per acre have been increasing. Striking raisin-grape increases have occurred in Greece as well as lesser but substantial increases in Iran and Turkey. A dramatic expansion of prune acre age is occurring in France. Improvements in foreign processing methods as well as packing and grading are taking place and may develop even more rapidly in coming years. It is questionable whether foreign markets will grow as fast as production, particularly in the case of prunes. Preferential tariffs in the EEC for French prunes, Greek raisins, and possibly Turkish raisins before long, will have an adverse effect on American producers' returns. Plans for fiscal year 1964 Reports will be published on prospective competition from the French prune industry, Yugoslav prune industry, and Turkish raisin industry. Market development projects for raisins and prunes will be continued in western European countries and Japan. As U.S. supplies increase these projects may be expanded. U.S. dried fruits will be exhibited at trade fairs. There will be increasing scrutiny of EEC policies and programs affecting dried fruit and preparations will be made for negotiations under the Trade Expansion Act. World situation CITRUS FRUIT Unprecedented frost damage in the United States and Spain has reduced 1962-63 world supplies of fresh fruits and juices and will keep prices at high levels this season. Damage to trees in the United States may result in below normal citrus supplies in 1964. While this will be a temporary reduction in world supplies it will give foreign competitors some opportunity to take over European markets usually supplied with U.S. citrus and citrus products. Our enforced absence from foreign markets may increase the export problems of the U.S. citrus industry. Short-term outlook In the 1962-63 season short U.S. supplies of fresh citrus and citrus juice will severely limit our opportunities to take advantage of exceptional export opportunities in Europe. U.S. exports of essential oil of orange and lemon may be sustained but exports of all other items will be lower. U.S. shortages may encourage foreign competitors to market larger quantities of orange, lemon and lime juice in the United States. U.S. imports of fresh oranges and grapefruit may also increase this season. Long-term outlook U.S. citrus and citrus products will encounter increasing competition in world markets. U.S. fresh orange exports are expected to remain at modest levels because of foreign competition in the winter season and reduced U.S. supplies in summer. Lemon exports are likely to be sustained at recent levels but Common Market determinations on the use of certain post-harvest chemicals will have an important bearing on our trade. The removal of British trade barriers against U.S. grapefruit, grapefruit sections and orange and grapefruit juice would be a major stimulus to U.S. exports. In like manner, the removal of French restrictions against U.S. orange juice and grapefruit sections would stimulate exports. Foreign food laws, regulations, and tariffs will present continuing problems to expanding citrus and citrus products markets in Europe. Plans for fiscal year 1964 The European market development project undertaken with the Florida industry will be continued but revised as indicated by the citrus supply situation. A project in the United Kingdom involving animal testing of citrus Red No. 2 is progressing, and it is hoped will bring British Government approval of the use of this citrus color in England. Promotional films and other material for later use in Europe are being developed under a project with the CaliforniaArizona citrus industry. Reports will be published on the citrus industries of Australia and New Zealand, Japan, and freeze damage to Spanish citrus. Competitive studies of Greece and Turkey are planned. Summer and winter competitive outlook circulars will be continued as will weekly foreign market information reports. Efforts will be continued to eliminate British, French and Italian restrictions against U.S. citrus and citrus products. Citrus and citrus products will be displayed at trade fairs in Cologne, Germany, and Amsterdam, Netherlands. World situation TREE NUTS The 1962-63 world supply of almonds is below average, of filberts a little above average, and of walnuts substantially above average. Compared with 1961-62, supplies of almonds are down sharply, of filberts appreciably higher, and walnuts up sharply. World almond and filbert prices are strikingly higher and walnut prices considerably lower than a year ago. Short-term outlook In view of shorter domestic supplies and strong domestic demand, U.S. almond exports are expected to decline this season and will probably be the smallest since 1958-59. Imports of almonds into United States will again be negligible due to the high foreign prices prevailing this season. Imports of filberts into United States are not expected to offer serious competition to the domestic pack this season because of high foreign prices. U.S. imports may not be much larger than in 1961-62 when they dropped sharply from earlier seasons' levels. With increased world supplies and lower prices of walnuts, particularly abroad, a larger quantity is expected to enter the United States than the unusually small volume imported in 1961-62. Imports, however, may not be as heavy as in 1960-61. U.S. export volume will probably continue to be minor, though possibly greater than in any of the past 3 seasons. Long-term outlook U.S. production of almonds and walnuts is increasing and there may be problems in finding outlets for the additional output. The situation could become particularly troublesome if import competition were to increase. Also, it may be necessary to place greater emphasis on export outlets if it appears that domestic supplies will become burdensome. Some expansion of almond production appears to be taking place in Spain, Portugal, and Iran. There is some doubt whether expansion is occurring in Italy, the world's largest producer and exporter. Filbert production is reportedly increasing abroad. Practically all of the increase would enter export channels and may engender greater import competition for United States. Foreign walnut production does not appear to be rising appreciably. Rising standards of living, particularly in Europe, should favorably affect tree nut consumption. Plans for fiscal year 1964 A survey of the Spanish almond industry will be published. An on-the-spot survey of the Italian almond industry will be made. U.S. tree nuts will continue to be displayed at trade fairs abroad. World situation CANNED DECIDUOUS FRUIT World production of canned deciduous fruits continues to increase. Not only is production trending upward in the United States, Australia, and South Africa, but the canning industries in Western Europe-particularly in Spain and the Common Market countries of Italy, France, West Germany, and Greece-are expanding. Along with this increased production, the improvement in the standard of living and liberalization of imports has brought about an increase in European imports of canned fruits resulting in a three-fold increase in consumption of canned deciduous fruit over the prewar level. The United States has shared in the expanding world market, contributing over 40 percent of the world exports of canned deciduous fruits. (U.S. exports now constitute about 10 percent of U.S. production.) The United States dominates world production of canned deciduous fruits, producing about three-fourths of the world pack. Short-term outlook The U.S. canned fruit pack in 1962-63 is the heaviest on record and prices are at the lowest level in several years. Production of canned deciduous fruit in Southern Hemisphere countries in 1962 is also large. However, U.S. canned deciduous exports, being extremely competitively priced, particularly clingstone peaches and fruit cocktail, are expected to exceed the previous record of 8.7 million cases shipped in 1961-62. The major foreign market for U.S. canned fruit is in Europe, where, except for France, imports are largely liberalized. Long-term outlook Continued increasing demand for canned deciduous fruits is anticipated on the European Continent, also additional consumption of canned fruits is expected in the United Kingdom. The extent that United States and competing non-EEC foreign producers are able to supply these increasing requirements for canned fruits will be governed by the degree of expansion of canned fruit production within the EEC, also by the terms under which the United Kingdom may join the EEC. U.S. canned fruits—with their high quality and competitive prices—should maintain their position in world markets and possibly expand if import barriers are not increased. Plans for fiscal year 1964 An expanded EEC will affect measurably the export market for U.S. canned deciduous fruits. To protect the relative position of U.S. products will require special attention in negotiations between the United Kingdom and the EEC. Also endeavors to persuade France to remove restrictions on the importation of U.S. canned deciduous fruits will be intensified. The expanding fruit-canning industries within the EEC will be watched closely, with special studies planned on the Italian and Greek industries. U.S. canned fruits will be displayed at trade fairs in Germany and the Netherlands. Market development projects designed to introduce and promote processed red cherries and cranberries and cranberry products in Western Europe will be continued. World situation FRESH DECIDUOUS FRUIT Northern Hemisphere production of deciduous fruit in 1962 was generally up from the low 1961 levels. The increase was primarily a result of the recovery of apple and pear crops to more normal production in Europe. With all countries of the Southern Hemisphere reporting slightly larger apple crops, this supply is also up. Pears, on the other hand, are reported to be down slightly in the Southern Hemisphere. Short-term outlook With the increased output of apples and pears reported in Europe, total indigenous supplies will be at about the recent years average. Also, reports indicate some loss of quality to adverse weather in certain important areas. Border openings in Europe have been generally later than last year, and import procedures imposed by France and West Germany are commercially impractical. The United States should sell a good volume of both apples and pears to the European market generally during the 1962-63 season. However, the total will be smaller than the volume exported in the 1961-62 season. Long-term outlook The development of the EEC and the evaluation of regulations governing imports from third countries continue to color the long-term outlook for U.S. exports to this important market area. Since the EEC has, to date, primarily concerned itself with internal matters and left regulation of outside imports to the individual countries, a great deal of uncertainty still remains as to the path the EEC will eventually follow. Thus, it is difficult to assess what effect the EEC will have in the long run. It is likely that high-quality U.S. fruit will continue to find a market in Europe, even inside the EEC. On the other hand, EEC agricultural policy is directed strongly toward improvement in quality and packaging. European purchasing power has continued its upward trend and the demand for quality fruit strengthens in direct proportion to the ability to buy. The volume of U.S. exports is directly related to the production level in Europe and the degree of relaxation of import controls which is obtained. Sales will be relatively high in years of low European production and smaller in years when European production is large. But the general overall level will depend on the ability to enter the market and compete. Plans of fiscal year 1964 Efforts are being intensified to obtain significant relaxation of individual country import controls, both within and outside the EEC. Developments of the EEC and its expansion to include other countries will be of prime interest and the U.S. industry will be kept informed of these developments as they affect U.S. producers and exporters. |