for liberalization in those countries where markets for U.S. eggs appear to exist. Promotion in cooperation with the U.S. industry will be continued at trade fairs and international conventions. World situation World poultry meat production in 1962 continued the upward trend of recent years, as production of meat-type chickens continued to receive major attention in the highly industrialized countries, especially in Western Europe. In North America, total output was down slightly from the record level of 1961. This was the first decline in this area since 1955. Broiler production was about the same as in 1961 but the 1962 turkey crop was down about 15 percent in the United States and 8 percent in Canada. World trade in poultry meat during the first half of 1962 was at a new record high, as demand in West Germany, the leading import market, remained strong and exports from major suppliers moved in unprecedented volume. On August 1, 1962, the European Economic Community adopted new poultry trade regulations which raised import levies and established gate (minimum import) prices for poultry products imported into the Common Market. The total of the new levies increased import charges against U.S. poultry meat from about 4.5 to 12.5 cents per pound. The immediate effect of the new regulations was to increase the price of poultry meat to consumers. Higher prices will tend to slow down the rate of increase in poultry meat consumption in the area. Short-term outlook U.S. exports of poultry meat continued to gain during 1962 mainly because of the very high level of trade maintained during the first half of the year. Total exports during calendar year 1962 will reach an estimated 275 million pounds, a gain of 11 percent over the high level of 1961. This rate of increase, however, compared with increases in the 2 previous years represent a very modest gain. Nearly all of the increase in exports in 1962 was again attributable to larger shipments to West Germany, the major export market. An important factor contributing to the high level of shipments to West Germany in the first half of 1962 was the desire on the part of importers to accumulate large stocks in anticipation of the higher levies and prices which went into effect during the second half of the year. A continuing high level of economic activity in Western Germany will tend to insure a strong demand for poultry meat. However, the higher duties now in effect on third country imports into the EEC and the resultant higher prices, will exert a restraining influence on consumption. In addition to exports to the established markets during 1962. U.S. poultry also found additional outlets in Japan, Austria, Spain, and Italy. Also, small quantities of poultry meat were included in Public Law 480, title I sales agreements signed with the United Arab Republic, Pakistan and the Republic of the Congo. However, the principal destinations for U.S. frozen poultry were again West Germany, Switzerland, the Netherlands, Hong Kong, Canada and the Caribbean area. Long-term outlook In spite of the intense interest evidenced in expanding poultry production in most foreign countries during recent years, worldwide demand for poultry meat has increased faster than supplies. For this reason, in most countries outside the United States, poultry meat is still relatively high priced and per capita consumption, even in most of the highly developed countries of Western Europe, is only about one-third the rates of consumption in the United States and Canada. Although there is some evidence in 1962 that production in a few countries, particularly West Germany, Denmark and the Netherlands, will increase substantially, there is still ample opportunity for expanding trade. However, the trend in U.S. exports during the next few years will, to a large measure, be determined by policies pursued by the Common Market. If these countries continue to impose the high duties on third country imports and reduce internal duties as presently planned, the United States will likely experience a declining volume of trade with these countries. Plans for fiscal year 1964 Continued efforts toward programing poultry under titles I and IV of Public Law 480 will take place in fiscal year 1964. Participation in trade fairs in Europe, Africa, and Asia will continue. Competition studies with particular reference to the Common Market will be stressed and results reported to the U.S. poultry industry. Market development activities in cooperation with the U.S. industry will continue in Western Europe and new projects will be initiated in the expanding markets of the Far East. World situation MILK World milk production in 1962 was estimated to have reached 687 bilie pounds, an increase of about 1 percent over last year. Moderate increases in production were made by most of the major producing countries. U.S. production was 126.5 billion pounds, up 1.1 billion over 1961. Moderate gains in North America, Australia, and New Zealand more than offset minor declines in Dete mark, France, and Italy. Output of nonfat dry milk continued to increase. U.S. production increased by an estimated 150 million pounds to a record 2.3 billion pounds. Present estimates indicate a moderate gain in production during 1963. World trade in nonfat dry milk and canned milk increased in 1962 as exports from the United States, New Zealand, and the Netherlands were up considerably for most items. Stocks of nonfat dry milk continued heavy in several exporting countries. Short-term outlook Indications are that 1963 will be another record year of world milk production. Output in the United States and Canada is expected to increase and conditions in Western Europe indicate a continuance of heavy production in that area. Increased production can be expected to keep prices of canned and nonfat dry milk at or near current low levels. The lower prices will probably be reflected in a moderate increase in the level of world trade for canned and nonfat dry milk. Long-term outlook The explosive growth in population, and the need for a more adequate diet in the developing countries of the world will continue to expand the demand for milk and milk products. Adoption of new production methods in the developing countries will be slow while demand will increase rapidly. Growing pressures to import dairy products from surplus producing nations may be expected. With the exception of butter, the trend in world trade for the principal dairy products can be expected to increase. In the United States, per capita consumption of milk in all forms declined from 1956 through 1961. This downward trend is expected to be resumed in 1963. A decline in consumption coupled with a continued high level of production will call for additional effort on the part of the Government and the dairy industry to move increasingly larger quantities into export markets. Plans for fiscal year 1964 Competition studies will continue to determine competitive prices necessary to move increased volumes of U.S. dairy products into export markets. Marketing studies in cooperation with industry will continue to promote and expand the demand for U.S. dairy products abroad. Market development projects are being carried out in 17 countries. These projects will evaluate ways and means to increase demand through Government programs including Public Law 480, school lunch and special milk programs. World situation BUTTER World production in 1962 is estimated to have totaled 11.1 billion pounds, up about 3 percent from 1961. Output was up in Western Europe, the largest pro ducing area. Increased milk supplies was the primary factor contributing to expansion in butter production. World trade in butter increased in 1962 with ali major exporters, with the exception of New Zealand, shipping larger quantities of butter. The United Kingdom continued to be the major importer of butter. However, the adoption of import quotas early in 1962 by the United Kingdom limited shipments to this primary market. The reduction of shipments to the United Kingdom were more than offset by increased exports to West Germany and Italy, the second and third largest markets. The adoption of quotas by the United Kingdom eliminated the last remaining major market which allowed unrestricted imports. Future increases in imports to the United Kingdom will depend largely upon the level of domestic production. In the United States, butter production increased by 4 percent from 1,487 million pounds in 1961 to 1,542 million pounds in 1962. Exports from the United States in 1962 were approximately 4.5 million pounds of butter and 4.1 million pounds of anhydrous milk fat. Most of the butter was shipped to Central and South America, while the bulk of the anhydrous milk fat went to Japan and Korea. Short-term outlook World butter production in 1963 may be expected to increase. With the elimination of the United Kingdom as a surplus disposal outlet, minor exporting countries will be forced to compete in the smaller markets or lower the domestic price to encourage increased consumption. Because of the limited export market and prospects of ample quantities from traditional suppliers, there are no immediate prospects for substantially larger commercial exports from the United States. Long-term outlook Present indications are that total supply will continue to increase faster than will effective demand. Butter stocks in the United States and Canada will continue to be heavy during 1963. Domestic prices of butter in most countries are likely to continue at levels which will not significantly expand consumption. With ample supplies available in Western Europe, Australia, and New Zealand, there is little hope for any sizable expansion of U.S. commercial exports. Plans for fiscal year 1964 Cooperation with U.S. industry to expand overseas outlets through recombining operations such as those in Iran, Thailand, and Chile will continue to be stressed. Studies of trade barriers and competitive prices will be conducted. Market development projects will evaluate methods to increase demand for butter through all available channels. World situation CHEESE World trade in cheese continued its gradual upward trend through 1962. Output of cheese increased moderately in 1962 as demand continued strong and prices in major markets remained relatively stable during the year. The United Kingdom and West Germany are the major importers of cheese. Both countries increased imports of cheese in 1962. In the United States, cheese production in 1962 declined by about 3 percent from last year to 1,580 million pounds. However, cheese consumption increased by about 7 percent to a new high of 9.3 pounds per capita. Increased consumption was, in large part, due to donations of Government stocks carried over from 1961, to welfare and the national school lunch program. Approximately 163 million pounds of American cheese was donated during the year. Short-term outlook During the last few years, there has been a definite upward trend in world cheese production. During 1961, U.S. domestic prices for cheese held close to support levels and purchases for price support purposes continued at about the same level as in the previous year. U.S. exports of cheese in 1962 amounted to approximately 6.5 million pounds. Total commercial trade in cheese in 1963 is expected to continue at about the level of 1961. Long-term outlook Population growth combined with rising per capita income in most of the developed countries is expected to result in a further expansion in world trade in cheese. This trend will benefit those countries which are traditional exporters with established markets and products tailored to meet consumers' preferences in these markets. Principal exporting nations include the Netherlands, New Zealand, Denmark, and Switzerland. Besides the two major markets, the United Kingdom and West Germany, countries with expanding incomes can be expected to increase their imports of cheese, an example being Japan where imports of cheese increased from 1 million pounds in 1959 to 7 million pounds in 1961. Plans for fiscal year 1964 In cooperation with U.S. industry, surveys are planned in the Far East and South America to investigate inquiries regarding U.S. cheese imports. Findings resulting from these surveys may indicate possibilities for the establishment of dollar markets for U.S. cheese in such countries as the Philippines and Venezuela and prospects for expansion of the market in Japan. World situation FATS AND OILS World production of fats and oils in 1963 will be about the same as a year earlier. This forecast is based on fractional declines expected in vegetable and marine oils, a slightly larger outturn of palm and industrial oils, and a continued expansion of animal fats. As to effect on world trade, the most significant production change from the 1962 level will occur in the important edible vegetable oil group. A continued rise in U.S. soybean oil production will likely be offset by sharply lower olive oil output in the Mediterranean area. Short-term outlook U.S. exports of soybean and cottonseed oils in 1962-63 are expected to approach 2.2 billion pounds, compared with the previous high of 1.8 billion shipped last year. Most of the increased movement will be soybean oil, while cottonseed oil exports will continue at about 500 million pounds. Oil exports for dollars will increase considerably but not as much as exports under the food for peace programs. Long-term outlook U.S. exports of edible oils are expected to rise sharply over the next 5 years mainly because of expanding food for peace programs. Consumption levels are small in many Asian countries and there are major possibilities for oil use in connection with work projects, school feeding and donation projects. Population growth and rising demand, reflecting increasing incomes, in a country such as India are putting upward pressure on their prices because production is not expanding at a comparable rate. Some increase in program exports to other areas of the world is likely. Exports for dollars are likely to increase only moderately because the major dollar market, Western Europe, has a high per capita consumption of fats and oils; any increase is likely to mainly reflect population growth. Plans for fiscal year 1964 To continue to keep U.S. industry informed as to opportunities in foreign markets and about competitive problems; and to continue efforts to promote consumption of edible oils in various foreign countries. World situation OILSEED MEALS World demand for high protein feeds has been increasing sharply in recent years and a further rise is likely in 1963. The expanding economies of Western Europe, Japan, and Canada are permitting their people to upgrade their diet through greater consumption of livestock products. In addition, recognition of the value of improved feeding practices has been reflected in greater consump tion of oilseed meals, particularly soybean meal. With the exception of sharply expanding exportable supplies of fish meal, mainly from Peru, importing countries have to turn mainly to the United States for larger supplies of high protein feeds. Short-term outlook U.S. exports of oilseed meals in the 1962-63 marketing year are not expected to differ greatly from the record quantity of 1.1 million tons established a year earlier. While the total export demand for U.S. meals is likely to increase substantially, a larger percentage of the total probably will go abroad as the meal content of the soybean rather than as meal. Last year, the U.S. exporter of soybean meal was able to effectively compete with the soybean exporter be cause Europe, the major importing area, had large stocks of vegetable oils on hand and, consequently, was not particularly interested in purchasing oil in the form of soybeans. Because oil stocks in Europe apparently have been reduced substantially, the European processor of soybeans in 1963 will be able to find a home for the oil produced from imported soybeans and is in a better position to compete with the European importer of meal. Long-term outlook The long-term outlook for U.S. exports of oilseed meals is promising. This reflects the expected continuation in the upward trend in production and demand for animal products in the major importing countries, continued develop ment of mixed feed industries (which will particularly benefit soybean meal) and continuing improvement in feeding practices. While most countries prefer to import oilseeds rather than oilseed products, the demand for oilseed meal as such is likely to be good. For example, there will be no duty on oilseed meal (or oilseeds) in the Common Market. This suggests that while the Common Market countries prefer to import oilseeds they have come to the conclusion that they will need much more than can be obtained from imported oilseeds. Plans for fiscal year 1964 To continue to keep U.S. industry informed as to opportunities in foreign markets and about competitive problems, and to continue efforts to promote consumption of oilseed meals in various foreign countries. World situation SOYBEANS The United States and Communist China produce over 90 percent of the world's soybeans and export nearly 100 percent of the soybeans that move in world trade. Exports from Communist China reached a peak of about 60 million bushels in calendar year 1959. By 1962, continuing food shortages and natural calamities to agricultural production had reduced soybean exports to 12 million bushels, and little change is expected in 1963. A larger share of China's small exports, however, are going to Japan thus making less available for the major importing market of Western Europe. Exports of soybeans from Communist China to Japan declined from 8 million bushels in 1955 to zero in 1959 but since then have expanded sharply to 6 million bushels in 1962. Some small further rise is expected in 1963. Short-term outlook U.S. exports of soybeans in 1962-63 marketing year are expected to reach a new high of 175 million bushels compared with last year's record level of 153 million bushels. About two-thirds of the increase will go to Western Europe offsetting Europe's reduced availabilities of Chinese beans as well as the increasing demand for soybean meal in that market because of rising livestock numbers as well as improved feeding practices requiring high protein feeds. Long-term outlook The United States will continue to expand its share of world trade in oilseeds and oilseed products. U.S. exports of soybeans over the next 5 years are expected to increase sharply. This will reflect the inability of other countries to proportionately increase exportable supplies, as well as rising demand for these products in importing countries. It is possible that Asia, which at present is a major source of exportable supplies, may become a net importer. Population is rising rapidly and per capita consumption is low. Hence, increasing quantities are likely to be consumed at home. World prices will to some extent determine the level of production in other countries. To the degree that large U.S. supplies move into world channels at prices which are relatively low, the inducement to other countries to produce for export will tend to be minimized. In Europe strong demand for meal to support growing livestock production as well as a desire to utilize crushing capacity and fully employ labor will encourage imports of oilseeds, particularly soybeans. The high meal content of soybeans will tend to give it a competitive advantage over other oilseeds of lower meal content. The soybean is a major source of protein in the Japanese diet and use of soybean meal in animal feed is expanding. A large expansion in exports to Japan is expected over the next few years, because of the mid-1961 removal of import quotas on U.S. soybeans, which will only be partly offset by Japan's increasing purchases of Chinese soybeans. Plans for fiscal year 1964 To continue to keep U.S. industry informed as to apportunities in foreign markets and about competitive problems; and to continue efforts to promote consumption of soybeans in various foreign countries. World situation FLAXSEED World production of flaxseed in 1962 is estimated at 131 million bushels. This is 12 percent larger than the reduced outturn of 1961 and virtually the same as |