3. Common Market major outlet for dollar sales.-In 1962, as a group, the six members of the Common Market bought about $1.2 billion of U.S. agricultural commodities out of total U.S. dollar exports of $3.5 billion. Indicating this is a rapidly growing market, our agricultural sales to the six countries in fiscal year 1962 were 35 percent greater than in fiscal year 1958 (chart No. 3). During the 1958-62 period, our feed grain and soybean shipments to the Common Market have more than doubled. From 10 million pounds in calendar year 1958, our shipments of poultry, mainly to West Germany and the Netherlands, rose to 160 million pounds in calendar year 1961.

$ MIL.

U. S. Agricultural Trade With Present
and Potential Members of EEC

2,500

2,000

1,500

1,000

500

O

LLLLL

1957

U. S. DEPARNMENT OF AGRICULTURE

'58

'59

O EUROPEAN ECONOMIC COMMUNITY.

(CHART NO. 3)

'60

4. Production from 1 out of 5 acres was exported.-The ratio of agricultural exports to cash receipts from farm marketing, which has been increasing in recent years, reached 15 percent in fiscal year 1962. This represented the output of approximately 60 million acres of U.S. cropland. Exports in 1962 required financing, inland transportation, storage, and ocean transportation for 45 million long tons of cargo-enough farm products to fill over 1 million freight cars or 4,500 cargo ships. In moving these exports, an average of 12 ships weighed anchor each day.

5. Export market benefits many U.S. farmers.-U.S. exports of some farm commodities comprise important segments of domestic output. Selected commodities show export shares in fiscal year 1962 ranging from 7 percent for flaxseed to 58 percent for wheat, as indicated in the following table.

U.S. agricultural exports in fiscal year 1962 compared with 1961 production [Figures except percent in millions]

6. Shipments of wheat and grain equivalent of flour increase.-Exports totaled a record 716 million bushels in 1962 compared with 661 million a year ago (chart No. 4). Increases occurred in both commercial sales for dollars and shipments under Government-financed programs. Shipments amounting to over 7 million bushels moved for the first time under title IV (long-term dollar credit sales) of Public Law 480. Increases occurred in foreign currency sales under title I, barter transactions under title III, and in donations under titles II and III of Public Law 480. Total wheat and flour exports to Brazil, the Netherlands, Yugoslavia, Turkey, and Chile increased substantially. Major reductions were in exports to Italy, Poland, and India.

7. Soybean exports set new record.-Soybean exports in 1962 totaled 147 million bushes, breaking the previous record of 143 million in 1961. Higher prices advanced value by 8 percent. Exports were relatively slow during the first part of 1962 because of limited supplies available for export and the anticipation of lower priced beans from the record 1961 harvest. In recent years, many of the industralized countries purchased soybeans in lieu of vegetable oils in order to obtain byproduct protein meal for livestock feeding. Other developments that have tended to encourage exports of soybeans in recent years included the record level of U.S. production and relatively small quantities of beans available for export from Communist China. Also, foreign exportable supplies have not been able to keep pace with demand. U.S. exports increased from about 20 percent of world trade in 1950-54 to 30 percent in 1958. It is estimated that the U.S. share will rise to about 33 percent in 1962. 8. Exports of cottonseed and soybean oils reaches new highs.-Including title III, Public Law 480 donations, sales totaled 1,458 million pounds in fiscal year 1962, 14 percent above actual exports of 1,276 million a year previous. During 1962, about 60 percent of the vegetable oil exports moved under specified Government programs, particularly titles I and III of Public Law 480.

9. Feed grain exports set new record.-Excluding products, sales in 1962 totaled 14 million metric tons, a new record compared with 11 million a year earlier. The gain was brought about largely by heavy corn exports since January. Exports of feed grains prior to that month were below the levels of a year earlier. Exports of oats, grain sorghums, and barley were smaller in 1961-62 compared with the previous year. Shipments to Canada, West Germany, the United Kingdom, Japan, and United Arab Republic-Egypt gained substantially. More corn was shipped to Canada to supplement reduced feed supplies resulting from the 1961 drought. The United Kingdom substituted corn imports for other grains in 1961-62. Smaller exportable supplies in other major producing countries also encourage purchases from the United States. Exports of feed grains to Japan and Western Europe were stimulated by expanding livestock production and continued rapid industrial advances there. Cattle numbers in Western Europe rose to 85 million head in 1961 from an average of 73 million in 1951-55. Annual increases averaged 3 percent in the past 3 years. Cattle numbers in Japan increased 3.4 million head, or 19 percent, since 1951-55. In recent years annual increases in Japan averaged 6 percent. 10. Volume of tobacco exports sets new record.-Exports of unmanufactured tobacco in 1962 totaled 520 million pounds, export weight, slightly above last year's 504 million (chart No. 5). Exports in recent years have been relatively stable. The annual 3-percent rise in foreign tobacco use has been met mainly by increased foreign production, chiefly in Rhodesia-Nyasaland, Greece, and Turkey. Exports have been maintained at a fairly high level because of continued rising use of tobacco in foreign countries and availability of high-quality leaf in the United States. Higher prices last year advanced export value to a new record.

11. Vegetables and vegetable preparations show some gain.-Exports of these commodities totaled $136 million compared with $127 million in 1961. Exports were marked by major shifts in dried beans, white potatoes, and canned vegetables. Bean exports fell considerably, reflecting larger crops in Mexico and other Latin American countries and apparently large canned stocks in Western Europe. The gain in white potatoes reflected the substantial increase in the 1961 harvest in the United States and lower production in Western Europe. Exports of canned vegetables have increased principally to Western Europe, reflecting advancing standards of living and the gradual relaxation of trade barriers.

12. Record set for exports of fruits and fruit preparation.-Sales in 1962 totaled $282 million compared with $254 million in 1961. Exports in 1962 were stimulated by the small deciduous crop and further relaxation of trade restrictions in Western Europe. Substantial export gains occurred in fresh apples, and canned fruits, with smaller increases for raisins, prunes, fresh oranges, and fruit juices. Larger U.S. production of apples and oranges coupled with lower prices aided exports.

13. Sales increased for animal and animal products.-Exports in 1962 totaled $627 million compared with $613 million a year ago. Gains in tallow, variety meats, and poultry meat were offset by declines in exports of lard and other products. Smaller lard exports reflected the loss of the Cuban market and increased European production. Exports of hides and skins and dairy products were substantially unchanged in value from a year earlier.

14. Poultry exports increase.-During the first 5 months of 1962, total foreign shipments of fresh and frozen poultry totaled almost $30 million, a 66-percent increase over the same period in 1961. Largely contributing to this increase were expanded shipments to our primary market, the Republic of Germany. U.S. exports of frozen chicken and turkey to Germany during the January-May 1962 period were 73.6 million pounds, compared with 30 million pounds shipped during the first 5 months of 1961. Increased exports to the Netherlands in 1962 more than compensated for the slight reduction in Swiss poultry imports from the United States.

In late 1961, the Italian Government issued a license for the import of poultry from the dollar area; $200,000 worth of poultry (largely turkeys) were imported from the United States for the Christmas season. Demand was so strong for this poultry that a second dollar license for $250,000 worth of poultry was issued for imports during 1962.

15. Agricultural exports more than double supplementary partially com petitive) agricultural imports.-Supplementary imports consisting of products most nearly like those produced by U.S. agriculture-totaled $2,052 million in fiscal year 1962. The ratio of agricultural exports to supplementary imports was 2.5 to 1. In other words, exports were more than double imports of like commodities. The supplementary products gained 13 percent in value in fiscal year 1962. The gain consisted mainly of animals and animal products, principally dutiable cattle beef and veal, apparel wool, and hides and skins. Imports of dutiable cattle were encouraged by droughts in Canada and Mexico and beef and veal by continued strong demand for prepared meat products in the United States.

INTERNATIONAL AGRICULTURAL AFFAIRS

1. Intensified efforts to eliminate restrictions against U.S. agricultural ezports. During 1962 FAS continued its efforts to insure that the agricultural policies and programs adopted by the European Economic Community (EEC) give due recognition to the interest of nonmember countries. USDA and other U.S. Government officials continued high level representations with foreign government officials in Rome, Paris, Brussels, The Hague, and Bonn. An intense study was made of the EEC regulations concerning the common agricultural policy adopted by the EEC as soon as these regulations were released on January 14, 1962. Problems concerning U.S. agricultural exports to EEC countries, more sharply defined since the adoption of the regulations, are currently being studied, discussed, and negotiated to insure a continued export market for the U.S. commodities involved.

The fiscal year was also marked by intense activity in the field of trade policy. Included among the major activities were these:

(1) conclusion of the fifth round of tariff negotiations under the GATT (General Agreement on Tariffs and Trade),

(2) significant progress in the definition of outstanding issues of trade with the EEC in agricultural commodities,

(3) further relaxation of nontariff trade barriers against U.S. exports of specific farm products in specific markets.

Taking these events in order, of major importance was the conclusion of the fifth round of tariff negotiations under the GATT. This involved:

(1) An examination in the light of certain GATT provisions of the Common External Tariff fixed by the EEC. For a wide range of agricultural commodities, agreement was reached with EEC that the CXT was no higher, on the whole, than the tariff rates prevailing in individual member states prior to the formation of the Community.

In addition, an exchange of tariff concessions was also negotiated with EEC. Together, these two phases of the deal with the Common Market resulted in a trade agreement which fixed tariff rates on agricultural items of a 1960 U.S. export value of about $790 million.

(2) The United States also concluded tariff negotiations with 14 countries other than the EEC at the same conference. Agricultural concessions obtained by the United States from these countries covered items with a trade value of $66 million, based on 1960 U.S. exports.

As to the commodities involved in the common agricultural policy of the EEC, it was possible only to keep open the door to further negotiations when more is known about several unknowns specified in a "Joint Declaration" issued by the two sides at the conclusion of the tariff conference. In this sense, progress was measured in a postponement of EEC measures and decisions which would not have been in the best interests of maintaining U.S. agricultural exports.

(3) Progress in securing liberalization during 1962 of trade in specified agricultural commodities in specific markets is shown by the following examples (see also chart No. 6) :

Australia: Effective January 2, 1962, certain vegetable oils, seeds, and nuts were removed from import control.

Austria: Austrian authorities announced on January 2, 1962, that the import restrictions on the following commodities had been lifted: Cheese and curd; roasted malt; mixtures of hydrogenated oils; certain infant foods; frozen vegetables; and fruit, prepared or preserved in airtight containers.

Belgium: The following agricultural commodities were liberalized effective January 1, 1962: Unrendered pig fat, fresh or smoked; milk and cream, fresh. not concentrated or sweetened; milk and cream preserved, concentrated, or sweetened in liquid form or paste with or without added sugar; butter; other