provisions for the 1961 crop were announced by the middle of 1960. This early announcement is necessary so that winter wheat producers are informed prior to their planting season. However, a sizable reduction in wheat stocks was made during the 1961-62 marketing year. The food-for-peace program and a general emphasis on the Public Law 480 program in a year when world wheat supplies were below normal had the effect of attaining a record high in wheat exports which in turn resulted in a reduction on carryover stocks.

Further improvement in the stocks situation will result from the special 1962

wheat program.

Under this temporary program acreage allotments on individual farms based on the national minimum allotment of 55 million acres were mandatorily reduced by 10 percent. Growers earned land diversion payments by devoting the diverted acres to approved soil conserving uses. They also were given the opportunity to divert additional wheat acres to conserving uses and earn diversion payments. This special program authorized by new legislation recognized the necessity of positive action to correct the continued accumulation of wheat stocks which were already at burdensome levels. While reversing the trend in stocks accumulation, the program also improved farm income from wheat. This latter was accomplished through an increased support price on the more realistic production and through the acreage diversion payments. Wheat-Price-support activity and farm income

1 Commercial area only. In 1959-61 support outside commercial area was 75 percent of the U.S. average rate in effect in the commercial area. Support available only in commercial area in 1962.

2 Preliminary-Supply and disappearance data estimated on the basis of available data.

Plus 18 cents per bushel on the normal production of the acreage planted to those producers who voluntarily retire at least 20 percent of their alloted acres.

Forecast on the basis of estimated supply and disappearance in previous marketing year.

NOTE.-During an earlier period, 1956-58, acreage reserve payments were also made in the following amounts: 1956 crop, $43,000,000; 1957 crop, $230,000,000; 1958 crop, $104,000,000.

COTTON

Background

During the period 1959 and 1960, price support was offered through a "choice" program under which producers (a) could maintain their regular allotment with a higher level of price support or (b) choose the increased acreage allotment with a lower level of price support. During the period 1961 and 1962, price support was authorized by means of a loan program similar to the price-support program in 1958.

Farm price and income

The average farm price to producers has increased from an average of 30.-2 cents per pound in the 2-year period 1959-60 to an average of 32.50 cents per pound for the period August 1, 1961, through December 1, 1962, which reflects an increase of approximately 5.5 percent. Total farm income from upland cotton in 1961 and 1962 was $136.5 million per year higher than in 1959 and 1960. Production factors, supply and utilization

Production factors including acreage harvested, yield per harvested acre, and actual production have varied somewhat from year to year but not in significant degrees. Although the total U.S. supply of cotton has not varied too greatly during the 4-year period 1959-63, the total disappearance is decreasing steadily due to the ever-increasing competition from synthetics and cheaper textile imports. Also, the current uncertainty as to possible legislative changes has created a hesitant market which has further contributed to declining consumption.

Legislation-The need for legislative changes

It is now apparent that current legislation is inadequate to cope with the complexity of the problems facing the cotton industry. The President pointed up in his farm message to the Congress the need for a sound and enduring national policy for cotton. The Department has already presented its views to the Congress for corrective legislation to improve cotton's competitive position. There has been no substantial change in basic cotton legislation since the enactment of the Agricultural Act of 1958 which provided for the choice (A) and choice (B) program previously described and authorized the type of price-support program currently in effect.

Upland cotton-Price-support activity and farm income

1 During an earlier period, 1956 through 1958, acreage reserve payments were also made in the following amounts: 1956 crop, $26,000,000; 1957 crop, $152,000,000; 1958 crop, $270,000,000.

2 Through Dec. 1, 1962.

3 Preliminary, partly estimated.

4 Includes loans outstanding and inventory.

Excluding sales made in July but not recorded until August.

ALL TOBACCO

1. Burley and Flue-cured tobacco (combined) constitute more than 90 percent of all tobacco produced in the United States. The value of the burley and Finecured crops rose from $934.2 million for the 1959 crops to $1,230,200,000 for the 1962 crops.

2. The quantity of all kinds of tobacco under loan on specified dates and the value thereof are shown as follows:

June 30, 1959.
June 30, 1960.
June 30, 1961.
June 30, 1962.
Jan. 31, 1963.

Year

3. Legislation during 1959, 1960, 1961, and 1962 included:

Price support.-Changed method of determining support level from 90 percent of parity to (a) use of 1959 level for 1960, and (b) for 1961 and thereafter using the 1959 level adjusted by the ratio of (1) the average of the parity index (which measures cost rates of things farmers buy) for the 3 preceding years to (2) the 1959 parity index (86th Cong.).

History acreage preservation.-Preserved (for history purposes) unplanted allotment acreage as though planted, under certain conditions (86th Cong.). Lease and transfer of allotments.-1962 allotments (except burley) could be leased and transferred between farms in same county, subject to regulations. The 1963 allotments (except burley and cigar-filler and binder) can likewise be leased and transferred (87th Cong.).

4. Acreage reserve payments.

During an earlier period, 1956–58, acreage reserve payments were made in the following amounts:

1956_. 1957.

1958

Million

$6.2

17.8

26.3

5. Summary statements for burley and Flue-cured tobacco. Brief summary statements for burley and Flue-cured tobacco, together with data tables thereof, follow:

FLUE-CURED TOBACCO

The 1962 Flue-cured crop constitutes more than 60 percent of all tobacco produced in the United States in 1962. The 1962 Flue-cured and burley crops combined constituted more than 90 percent of all tobacco produced in the United States. A few things, reflected by the following 4-year table are:

Crop value.-Increased about 34 percent.
Total supply.—Kept in line.

Loan stocks.-Decreased about 41 percent.

loan stocks decreased about 32 percent. Disappearance.-Increased.

Amount of money represented by

Flue-cured tobacco-1959, 1960, 1961, and 1962 crops. Marketing year begins

July 1

BURLEY TOBACCO

The 1962 burley crop combined with the 1962 Flue-cured crop constitutes more than 90 percent of all tobacco produced in the United States in 1962. A few things, reflected by the following 4-year table are:

Crop value.-Increased about 28 percent.

Total supply.-Kept in line.

Loan stocks.-Decreased about 86 percent. Amount of money represented by loan stocks decreased about 83 percent. Disappearance.-Increased.

In 1961, the national average support level for peanuts was increased to $221 per ton from $201.24 for the 1960 crop. Effective support was increased even more because a $9 per ton charge for storage, inspection, etc., that had in previous years been deducted in computing the loan advance, was eliminated. Thus effective support was increased about $30 per ton or 15 percent over the preceeding year. The support level was maintained at $221.40 for the 1962 crop. One consequence of the increase in support was a sharp increase in farm income. The farm value of the 1962 peanut crop was reported at $200.5 million or 32 percent above the comparable value in 1959 and more than 12 percent above 1960.

Peanuts not required for commercial edible and associated uses can be readily sold for crushing into oil or meal in this country, or for export. Because peanut oil constitutes a relatively small part of the vegetable oil market, the diversion of peanuts to oil use does not affect adversely other commodity programs. The value of peanuts diverted to crushing or export usually is somewhat more than one-half of the CCC loan value. Because of this ready market, burdensome stocks of peanuts are not accumulated in CCC inventories, but ample stocks are maintained to assure consumers an ample supply in event there is a short crop.

1 During an earlier year, 1956, acreage reserve payments were also made in the amount of $600,000. 2 Partly estimated.

Estimated.

4 Includes loans outstanding and inventory, but not peanut butter.

RICE

Farm income from rice has risen from $246.3 million for the 1959 crop to an estimated $323.7 million for the 1962 crop. The level of price support has been increased from $4.38 per hundredweight on the 1959 crop to $4.71 for the 1961 and 1962 crops. In the meantime, stocks of rice fell from approximately 15.7 million hundredweight at the beginning of the 1959 crop marketing year to 5.3 million hundredweight at the beginning of the 1962 crop marketing year. CCC's stocks fell from 8.6 million hundredweight from August 1, 1959, to about one-fourth of a million hundred weight on August 1, 1962. CCC's investment in rice dropped from $61.4 million in 1959 to $2.2 million at the beginning of the 1962 crop marketing year.