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Archive Document

assume content

scientific

knowledge,

reflects current

policies, or practices.

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Fo

•OREIGN AGRICULTURE r » r Vv

I

t-

1

V L

March

harvesting grain in the

15,

1976

USSR’s Kuban

Brazil’s

USSR

Soybean Outlook

Reports on

1975 Farm

Foreign Agricultural

Shortfall

Service U. S. DEPARTMENT OF AGRICULTURE



FOREIGN AGRICULTURE Vol.

X!V

March

No. 11

1976

15,

—A Major Soybean

Brazil

i

Producer— Ups Area, Output

i*

In this issue:

2

Brazil

ducer

—A Major Soybean Pro—Ups Area, Output By Joseph Somers

A Look

5

at Brazil’s

Export

In-

SOMERS

By JOSEPH

Foreign Commodity Analysis, Oilseeds Foreign Agricultural Service

centives for Soybeans

By James Truran

USSR

Report Reveals Extent of 1975 Agricultural Shortfalls By Fletcher Pope, Jr.

6

9

razil

become

has

soybean

major world

a

producer-exporter

time

short



a

in

bean

oil basis in

1975 were about 9 per-

cent below the 1970 volume.

position

Brazil’s sharply increased exports of

Had Large Tomato Harvests By Ronald Y. Uyeshiro

achieved mainly by increase in yields

soybeans have moved into traditional

and acreage.

U.S. markets in Europe and Asia.

Show

Both production and exports are ex-

Portugal,

Israel,

France

and

Japan’s Economy To Strong Recovery in ’76

10

B

relatively

pected to rise year’s crop

This week’s cover:

tons

sharply

1976.

in

This

11.3 million

forecast at

is

a

—up 16 percent from

metric tons of soybeans on 3.3 million

USSR

acres,

areas in 1975 caused the grain harvest to fall substantially short of goals. Report on Soviet crop shortfalls begins on

In 1970, Brazil harvested 1.5 million

and

in

1975 an estimated crop of

9.7 million tons

European Community East European countries.

In 1970, Brazil accounted for only 8 of combined exports (meal

last year’s.

Soviet workers use combines to harvest grain in the USSR’s Kuban. The drought that affected many agricultural

The made in the (EC) and in

greatest inroads have been

was harvested from 14.2

from

basis) to

EC

1970’s yield of 17 bushels.

Soybean oil exports during the 1975 (January-September) period were about

Butz,

L.

Secretary

Agri-

of

Richard

E.

Bell,

Assistant

Secre-

Commodity Programs L. Hume, Administrator, Foreign Agricultural Service

David

Until

recently

U.S. markets in

trade

Europe and Asia.”

shipped most of

— and

In 1976 yields will remain

Kay Owsley Patterson, Editor

competition its

j

increased

George

S. Shanklin.

necessary In the transaction of public business required by law of this Department. Use of funds for printing Foreign Agriculture has been approved by the is

Office

of

Budget through June

Management

and

1979. Yearly subscription domestic, rate: $34.35 $42.95 foreign; single copies 70 cents. Order from Superintendent of Documents, Printing Office, Government Washington, D.C. 20402. Contents of this magazine may be reprinted freely. Use of commercial and trade names does not imply approval or constitute endorsement by USDA or Foreign Agricultural

30,

rapid is

its

important

increase

new

the 16.5

tor of the

in

than

Brazil’s

soybean production major competi-

status as the

United States

kets for oilseeds

in

of soybeans

In comparison, U.S. exports of soy-

exports of soybeans and is

oil

estimated

are

almost

1

at

Service.

at

about 850,000 tons

more than

tons

However, U.S. exports of soybeans and oil on a soyin 1970.

Soybean

(oil basis) esti-

tons

million

bean exports are projected to increase by 700,000 tons to 4.5 million tons. A

crop

— 800,000

3.8

million tons above those of the

previous year. In 1976/77, Brazil’s soy-

combined

even greater, with 1975 exports

mated

crop.

a crop-year (April-March) basis,

to the Soviet

tons

Page 2

On

part of this increase

Brazil’s

new

1975 soybeans and products may for first time have been the leading Brazilian export, surpassing both sugar and coffee in trade importance.

were only 4 percent above the 1970 volume. at 13.7 million tons

in

its

the

beans and meal (meal basis) in 1975

increase

Brazil

soybean exports for the 1975/76 year

and meal (meal basis) at 5.8 million tons was nearly eight times the 1970 volume.

The



export availabilities

But with larger crops, Brazil is becoming a year-round supplier, and in

export mar-

and products.

In calendar 1975, Brazil’s combined

exports

The Secretary of Agriculture has determined that publication of this periodical

Director,

more

But

Advisory Board: Smith, Chairman; Richard A. Gordon O. Fraser, William Horbaly, Richard M. Kennedy, J. Don Looper, Larry B. Marton, Brice K. Meeker, Jimmy D. Minyard,

much

million acres.

Smith

export

each year before September, when the

same, but acreage will jump to

Beverly J. Horsley, G. H. Baker, Marcellus P. Murphy, Isabel A.

volumes were before

United States harvested Editorial Staff:

slightly

approximately equal.

into traditional

and

and

Brazil

to both countries, export

soybeans have moved

tary for International Affairs

for

|

more than 280,000 tons for the United States. However, for markets common

Brazil’s sharply

increased exports of

culture

I

had increased to 38

and 58, respectively.

.

i

j

180,000 tons

Earl

(January-September),

1975

these percentages

per acre, nearly 47 percent greater than

.

I

countries.

by

But

Yields in 1975 averaged 25 bushels

and the United States

Brazil

countries and 13 percent to East

European

million acres.

page 6 (Novosti photo).

j

percent

in

year

is

expected to

move

Union.

oil

are

exports for the 1975/76 estirpated

at

290,000

compared with only 16,000 tons 1974/75. During April-December

1975,

exports

averaged

per month as shipments

28,000

moved

tons freely

throughout the season without the

re-

Foreign Agriculture

of Government emsome previous years. This increased movement has been effects

straining

bargoes, as in

the

primarily plies

the

in

caused

domestic market, oil

stock car-

ryover from production in the 1974/75

crop year. In 1976/77, soybean

oil

exports are

under earlier arrangements, with the that adequate stocks be maintained for domestic consumption. The new arrangement appears to have prevented market disruptions and domestic shortages of vegetable oil. In February the Government announced that its export policy for soybeans and products would continue unchanged in 1976/77. The Bank of Brazil’s Office of External Trade stipulation

abilities.

The crush

of adequate sup-

result

by the substantial

largely

1976/77, partly reflecting the anticipameal avail-

tion of reduced cottonseed

is

million

1975/76 crop year more than 5

for the

forecast

slightly

at

almost

tons,

million

1

tons

above that of the previous year. A 900,000-ton increase is projected for 1976/77, with crush at 5.9 million tons.

expected to be greater than in 1975/76,

Brazil’s

theoretical

crushing

oilseed

roughly 7 million tons, and

with exports projected at 350,000 tons.

capacity

Again, part of this increase will be a

new crushing

result of a large stock carryover.

tion could increase total oilseed crushing

some

capacity to about 7.7 million tons.

directly controls

Soybean meal exports for 1975/76 estimated

are

1976/77,

In

tons.

crease

just

at

forecast,

is

a

over

500,000-ton

in-

with meal exports

in

in

a

tons

—a

role

modification of

—up

large part

nearly

of the increase reflected

alternately

of

censes

all

still

now have

licenses,

and

in

cast to increase to

1.2 million tons in

(at

would

it

purchase,

if

million tons of soybeans at

Cr$75 per 60-kilo bag

time the equivalent of $4.32

that

per bushel) and stock them until prices

Au-

improved.

gust 1975 received in addition the crush-

improved,

subsequently

Prices

fol-

lowing sales to the Soviet Union, and

allowed to export as beans up to 10

fore-

1

from farmers

Co-

operatives received the greatest share of

soybean export

said

necessary,

a clearer

understanding of their positions.

grazing conditions. As a result, soybean meal was used as supplemental feed

is

ernment

li-

exports by each industry, the

respective industries

also has indicated

intent to aid farmers in maintaining

its

producer prices. In mid-1975, the Gov-

Government

the

ers’ rights to

Soybean meal consumption

The Government

and

issuing

the July 1975 frost that aggravated dry

until rains revived the pastures.

soybean exports, while

CACEX.

vision of

pre-

its

revoking export licenses.

Although

200,000 tons from the previous year’s level. Although cattle in Brazil are normally grass-fed, million

CACEX

soybean product export, under super-

vious

soybean meal consumption 1975/76 is estimated at a record 1

exercise

to

1975/76 of consultation and plan-

a

ning with cooperatives, exporters, and

though soybean meal is used for both poultry and swine, the bulk of the meal Brazil’s

new

continue

will

control over export sales.

the oilseed products syndicates control

crushers

exported.

(CACEX)

under construc-

role

placed at about 3.5 million tons. Al-

is

facilities

The Government assumed

million

3

is

export soybeans.

percent of their allocation of beans for

was unnecessary for the Government to purchase beans. However, the supply situation raised

Subsequently, crushers were

questions concerning the adequacy of

Prior to August 1975, crushers were

crushing.

allowed to export more soybean

oil

it

than

storage capacity.

UNITED STATES AND BRAZIL: EXPORTS OF SOYBEANS AND PRODUCTS Brazil’s exports as share

Brazil exports

United States exports

of U.S.

and

Brazil

Item

1970

1974

1975

1970

1,000

Soybeans: European Community Other Western Europe Eastern Europe Other

4,700 1,246

Total

Soybean meal: European Community Other Western Europe Eastern Europe Other Total

Soybean oil: Bangladesh People’s Republic of China Iran

Morocco Peru Tunisia

Turkey Other Total 1

MT

.

1,000

MT

1,000

MT

4,365 1,153

6,850

1970

1975

1974

(Jan.-Oct.)

(Jan.-Oct.)

1,000

MT

193 39 58

1,000

MT

1,000

MT

2,253

2,090

356

1974

1

1975 (Jan.-Oct.)

Percent 4 3

Percent

25

Per-

cent 32 36 62

138

127

116



5,870

5,282

3,839



657 2 193

121

101

0

2

3

11,954

13,940

9,473

290

2,730

3,041

2

16

24

2,494

3,134

2,110

1,379

214

118

162

791 771

127 472 366

412 27 56

1,145

123 554 490

627

30

131

860 118

14 18 9 6

27 36 44 15

40 56 65 24

3,661

4,910

3,075

525

2,021

2,519

13

29

45

— —

14 —

—7

n

12

77 32 33 26 3 510

155 20 56 24

63

489

17 10 6 198

O n n n n o n

n n n n n

56 39 19 14 29 30

n O n n n n n o

63 100 47 98 53 58 83 13

681

759

302

3

2

210

n n n n n n n n n

1,681

3

1

1

Latest period for which destination data are available, Canada. 4 Not available.

2

4

(

)

4 (

11

)

4 (

)

Includes soybean exports to the USSR.

3

30

17 0

4 (

)

41

Soybean exports are adjusted

via transshipments through

March

15,

1976

Page 3

Brazil’s current storage capacity for

bulk commodities (including sugar) estimated

about

at

35

million

is

AND DISTRIBUTION, SOYBEANS AND PRODUCTS, MARKETING YEARS BEGINNING APRIL 1, 1973-76

tons.

BRAZIL: SUPPLY

Another 2.5 million tons are to be added this year, and the goal is a total 45 million tons by 1979. Storage

bins

are

being

also

on farms, so that farmers added degree of flexibility

Product

built

have an marketing

in

Government has

Brazilian

undertaken

a

policy

of

successful,

If

Production 8 percent seed and waste Exports Estimated crush Estimated stock change

also

negotiating

would give

agreements

these

Brazil guaranteed markets.

its

ports of soybeans to the Soviet

Union

the

PRC

1974

1975

1976

.

5.00

7.50

9.72

11.30

.40

.60

.78

.90

1.79

2.86 4.05

3.80 5.04

4.50 5.90

.10

.00

2.60 .

4-

.

-

-21

+

.01

2.07 1.37

3.22

4.01

4.69

2.41

3.00

3.50

.70

.81

1.01

1.19

.46

.72

.89

1.04

.08

.02

.29

.35

Oil:

and exports of beans and oil to the People’s Republic of China (PRC) during 1975/76. The Soviet Union and

Production 17.7 percent Exports

are not traditional markets for

soybeans and products. In January, a long-term

.

Apparent domestic disappearance

to include ex-

sales

.

Meal: Production 79.5 percent Exports

Besides long-term agreements, Brazil

has expanded

1973

Soybeans:

long-term agreements with other countries.

Forecast Projection

will

their crop.

The

million metric tons)

(In

Apparent domestic disappearance

.38

Estimated stock change

.00

.55

+

.63

-

-15

.68

+

.03

.01

agreement

with Japan was proposed, involving exContlnued on page 12

Brazil’s

Soybean Yield and Acreage Leap

Largely responsible for the surge in Brazil’s soybean production are greatly increased acreage and yields. Rio Grande do Sul the largest soybean producing State





1975

accounted

54 percent of the country’s harvested area and 49 percent of production. Soybeans are double cropped with wheat, which reduces production costs and increases profits. Soybean yields in Rio Grande at 22-23 bushels per acre have not increased as rapidly as in Parana and some other producing states, possibly as a result of the lack of fertilizer in

for

after prolonged land use in crop production.

To

reduce

eratives

soil acidity,

(FECOTRIGO)

the Federation of

Wheat Coop-

in July

would supply lime at 1976. Farmers in Rio Grande would be the main

Government of Brazil a 40 percent discount.

of this lime. Also, the

farmers at

it

in

recipients is

offering

—65 percent above

the 1970 yield of 17.8 bushels per Rio Grande, beans are double-cropped with wheat, but wheat acreage in Parana is considerably less. Sao Paulo, the third largest soybean producing State, in acre.

As

in

1975 accounted for about 7 percent of area and production. The other producing States of Santa Catarina, Minas Gerais, Goais, and Mato Grosso have considerable potential for future expansion in soybean production because not currently of the vast areas especially in Mato Grosso



in



16 percent gain in production

primarily reflects expanded acreage to 16.5 million acres,

but less favorable growing conditions are expected to hold yields

unchanged

Some a shift

at

25 bushels per acre.

of this year’s increase in plantings resulted from

from coffee following

individual area increase

last year’s freeze.

— 19 percent—

-is

in

The

largest

Parana.

In August 1975, the Brazilian Coffee Institute announced program of financial aid to coffee producers to grow such crops as soybeans, peanuts, rice, com, wheat, and sunflowers between the rows of the coffee trees that were damaged by frost. An increase in soybean area was expected in Sao Paulo,

However, any major expansion of production

but

many growers

in these

apparently have since decided to shift

and corn.

In Rio Grande, the increase in area

is

percent, but the increase for Santa Catarina,

Goais, and

Mato Grosso combined

is

forecast at 10

Minas Gerais,

expected to be as

high as 58 percent.

However, despite the combined increase states, the absolute

in

these four

increase in production will be mainly

two largest producing states. Parana and Rio Grande were hit by wet

a result of increases in the

Early

this year,

weather. Flooding has been reported in Parana, but does not appear to be serious. Although there has been some replanting of soybeans in Parana, harvesting nevertheless

was expected weather

productive use.

Page 4

transport.

This year’s anticipated

to rice

Parana, the second largest producing State, in 1975 accounted for 31 percent of soybean area and 36 percent of production. Yields in 1975 averaged 29.4 bushels per acre

ment of adequate

a

1975 announced that below-market prices, beginning

fertilizer to

areas must necessarily await clearing of land and develop-

in

to

begin

in

February.

Excessively

Rio Grande has caused some planting

delayed to the

latter part of

to

wet be

January.

Foreign Agriculture

A Look

Bank

Central

a

Export

at Brazil’s

permitting

resolution

loans at an 8 percent interest rate.

And

crushers benefit from a drawback sys-

Soybeans

Incentives for

tem that exempts import duties for machinery destined for production of exports.

ICM

and

Trade Operations Division Foreign Agricultural Service

gram

to

of

ports

tax incentives suggest a pro-

encourage production and exprocessed goods over raw-

The export

material exports.

beans

With the increased world vegetable

soybean

interest

the

in

—and with United —

oil situation

second largest exporter of

the

Brazil

after the

oil

States

look at Brazil’s export

pro-

incentive

gram and how it affects soybean products seems appropriate.

B

razil’s soybean incentives most often

form of exemptions from

are in the

one or more taxes or favorable credit terms and encourage shipment of proc-

—such soybean —over exports of the

essed products

and

oil

as

meal raw

actual

the soybeans within Brazil.

of soybean

oil

ICM

all.

tax at

Incentives available. Brazilian

documents,

other information

trade

show the

by two important taxes soybeans exports.

exports

One

in

Govand

data,

cally,

and ICM credit schemes also favor soybean oil sales. Beans and meal both receive no tax credits, while the Minister of Finance allows 7 percent IPI and ICM tax credits for oil shipments. These credits may be used to offset any other IPI and ICM tax liabilities the exporting firm has from any type of action whatsoever. If the exporter can not write off his

role played

encouraging

the Industrial-

the 14 percent

The other structure

bean

ized Products (IPI) tax, a value-added

obtained

at cash.

on processing that ranges

When

tax

Soybean

considerably

is

ICM

IPI-ICM tax on soy-

the credit provided

exports.

oil

tax.

aspect of the

The

rate

is

established

only and

is

treated as

if

there were an

manu-

IPI tax paid. (Note: Exports of

factured goods, which are subject to the

IPI tax, would automatically receive a

Thus, the export price for soy

as a final

under be



circumstances

Brazilian

the

be

will

for the purpose of calculating the credit

credit.)

resort in the case of IPI credits restrictive

is



however,

cheaper when sold in the export market since the domestic price will include

same conglomerate,

transferred to suppliers, or

Government

oil

could be reduced by 14 percent with

no

loss in profits to the exporter.

he effect of the tax credit could be from a 14 percent reduction oil prices. The 7 percent ICM por-

T

different

up to 60 percent for some products. Another is the ICM tax, a value-added State sales tax ranging up to 14 percent on domestic sales and 13 percent on products of soybean exports. Sales enjoy varying levels of exemptions from these taxes in both the domestic and

wants to extend the credit incentive to

export markets, plus certain related tax

only.

credits.

Soy products benefit from other incentives. For instance, pretax profits earned from the export of soybean oil are exempted from the income tax liability, whereas pretax profits from sales of soybean meal and soybeans are subject to the full corporate tax rate of 30 percent. Soybean oil and soymeal since

untaxed

have had available a special export financing scheme, authorized under

eign sales to domestic sales of oils

As

the table shows, the IPI tax

is

not

applied on soybean products. Soybeans,

“raw material,” are not subject to the tax, while meal and bulk oil sales as a

have a tax rate of zero.

The value-added is

levied

in

soybeans and

the oil

state sales tax,

ICM,

domestic market on only.

The

actual in-

cidence of this tax varies from state

processed

a

agricultural

product

in

not

tion of the credit could be used to off-

normally benefiting from the incentives because the IPI tax rate is “0” or “not

ICM tax on meal exand meal are joint final

percent

set the 5

ports since oil

taxable,” the Ministry of Finance issues

products for a crusher. A crusher could, however, avoid the 5 percent tax on meal exports by selling meal in the

an ordinance creating an IPI tax for the

the

more expensive than

percent

5

oil,

year, transferred to other estab-

of the

to

included)

taxes

(all

domestic price of meal.

the

credits with domestic sales, the excess

lishments

price

price for

equal

while meal exports should be, theoreti-

IPI

fiscal

roughly

be

will

domestic

are not subject to the

certain

federal

And

can be carried over to the following

materials.

ernment

The IPI

Effects of export incentives.

JAMES TRURAN

By

purpose of calculating the credit

domestic

market.

(Currently

market absorbs roughly 25 percent of the soybean meal prodomestic

the

duced.)

The income tax exemption applies toward export earnings from soybean oil only and thus provides an incentive for firms to increase the ratio of for-

1971

to

maximum

levels

up

authorized by the Continued on page 12

and region to region. Soybean meal, on the other hand, is exempt from ICM taxes in the domestic market as an incentive for increased usage within

to state

BRAZIL'S

AND ICM TAXES ON DOMESTIC AND EXPORT SALES OF SOY PRODUCTS [In

Brazil.

Product

The incidence of export

sales

is

the

cent tax rate

when

ports are taxed

percent,

ICM

considerably

Beans are subject to the

March

IPI

at

full

exported.

tax

1976

ICM

tax

on

Export credit ICM) (IPI

tax

+

:

different.

13 per-

Meal ex-

a lower rate

of 5

which encourages crushing of

15,

IPI

percent]

Soybeans Soybean meal Soybean oil 1

Not applicable.

H

2

(*)

0

0

0

0 2

Depends on

3

2

0

State.

3

up up

On bulk

to

14

to 14

12.5

()

5

(')

0

14

sales.

Page 5

USSR

Report Reveals Extent Of 1975 Agricultural Shortfalls

about equal to the average of the

as

ninth

Thus,

5-year plan.

mated 23 million crop would be the

esti-

vegetable

on

third largest

exceeded only by the

ord,

an

at

the

tons,

rec-

1973 and

1974 crops.

The

By FLETCHER POPE, JR. Foreign Demand and Competition Division Economic Research Service

very

feed supplies from the

limited

1975

unfavorable

resulted

1976, in livestock herds

— and poultry numbers

T

he effects of

production, the poor 1975 grain crop

was 28 percent less than the mediocre 1974 harvest and 37 percent below the

prising

record 1973 harvest.

January

drought

1975

published

results

Moscow

in the

1

severe,

during

fulfillment

Shortages of

press.

moisture were

soil

al-

growing

season

Volga

the

in

Region, the southern part of the Urals

A

In view of smaller

record 2 million tons of rice were

harvested in 1975 but data on production

of

other

individual

such

grains,

Region, and the western part of Ka-

as

wheat and corn, were not included

zakhstan.

in

the report.

Continued hot, dry weather during the spring and summer caused this drought to intensify and to spread westward over the most important agricul-

did not indicate the

regions

in

USSR the New

European

the

and eastward over much of Lands area in northern Kazakhstan and

In

procured by the

The 1975 tained

addition,

report

the

amount of Government.

grain

plan-fulfillment report con-

effects

are

re-

some crops and reduced

reported for

numbers of certain types of but also in the omission of

sugarbeet crop was not pub-

livestock,

some data

T

he 1975 cotton crop was

rate

which, according to the

is

discounted),

Moscow

press,

was “12 percent more than the average of the eighth 5-year plan (1966-70).” level

of production

was

6 percent less than that in 1974 and 8 percent below the record set in 1973.

1975

year

of

the

performance

(the

5-year

plan

ninth

exceeded by only 3-4 percent 1970 production level (the last

period) the

year of the eighth 5-year-plan period), or less than

1

percent growth per year.

However, average

agricultural output

during 1971-75 exceeded that for the

record

a

earlier

that this increase oc-

During 1975, privately owned cattle numbers decreased by more than 1 million, about equally divided between cows and other cattle. But cattle herds in the socialized sector

(collective

and other State

farms

enterprises)

at

1976 were

million head larger than

3

2.5 million

more

cattle

other than cows.

These data would suggest that the

(The 1975 harvest was

herd through the winter, even though

ered in

1974.

adversely affected by a shortage of

ir-

freezing

rainy,

was com-

drought in the southeastern part

of European

USSR

and only 5 million tons of sunflowerseeds were harvested. Thus, the 1975 sunflowerseed crop was about equal to the poor 1972 crop but

was about

a fourth less than the

amount

harvested in 1974 and only about two-

amount planned for 1975. was the only crop for which a production figure was given in the 1975 report that was not included thirds of the

Fiber

flax

1974 plan-fulfillment report. The 1975 fiber flax crop of 487,000 tons was almost a fifth larger than the poor 1974 crop. Production of potatoes and vegetables in 1975 showed mixed results. in

are largely on maintenance feed

rations.

Heavy

the

of cows and would seem to view of the tight

culling

particularly other cattle

have been

Sunflowers were severely affected by the

they

logical in

feed situation.

However, rather than being kept on maintenance rations for the entire winter, many of these cattle perhaps have been

kept

during the

first

order that they help

on

full

feed

rations

part of the winter in

may be

slaughtered to

maintain the supply of meat to

consumers during the early part of

this

year.

numbers on January 1, 1976, were a fifth smaller (14.5 million fewer head) than a year earlier. Decreases during 1975 occurred in both the socialized and private sectors.

H

dg

Percentagewise, the decrease in the

was only about half of

per year.

tons exceeded that of a year earlier by

absolute

a tenth, mainly because the 1974 crop was small. The 1975 potato crop, however, was almost equal to the 1971-75 average. Vegetable production was described

counted for only a tenth of the total decrease in hog numbers during 1975.

1975 140 million tons, more than a third or about 75 million tons less than planned and the smallest since the 1965 harvest, which

The

Page 6

Soviets reported that the

crop

totaled

only

!

agricul-

The 1975 potato crop

grain

i

the beginning of

1966-70 by 13 percent, or an average of about 2.5 percent growth period

i

and

Soviets are attempting to carry the cattle

pleted.)

such

in

a half-

tons smaller than the

Gross agricultural production in 1975 had a reported value of 90 billion rubles (officially, 1 ruble=$1.30;

last

a

at

rec-

million

harvesting

the

were

million head larger than

ord 8.4 million tons (unginned) gath-

before

fact,

1976,

sur-

numbers on

a year earlier, including a half-million

lished.

weather

In

1,

is

it

i

,

size of the

reports.

The 1975

cattle

i

curred in cattle other than cows.

State

and

this

total

— about 2 year — and

tural

water

published

are

unofficially,

regions during 1975, that

level

The

rigation

usually

that

many

more cows and

of this drought

not only in the small harvests

flected

in

production data on only three

of the four major industrial crops.

western Siberia.

The

(Table 1).

agriculture are clearly reflected

the

ready present at the beginning of the

tural

1,

cattle

In comparison with recent levels of

February

1975

—except

on

plan

in

totaled only 121 million tons.

season

amounts of hay, haylage, silage, and straw than were stored in 1974 and poor pasture growth

spread

Soviet

wide-

crop

by January

decreases

in

almost

at

88.5 million

private sector that

in

the

socialized

sector,

but

in

terms the private sector ac-

Heaviest

slaughtering

hogs— —occurred

of

least in the socialized sector

at

during the third quarter of 1975, augForeign Agriculture

— menting overall meat supplies for con-

:

sumption during the



More than 4

were present

goats

January

1,

latter part of 1975.

million fewer sheep and in Soviet flocks

on

1976, than a year earlier.

Decreases also occurred in both social-

and privately owned sheep and However, the drop in the private sector was almost double the 1.5-million-head slump in the socialized sector and was almost equal to a tenth of the ized

goats.

Bit

number of sheep and

total

s !':|

goats in the

private sector.

Soviet plan-fulfillment reports

'Ilf

J'

contain data on poultry numbers.

l

M

How-

from the Soviets

received

under the U.S.-USSR agricultural agreeas with the concentrate-consuming hogs poultry numbers

ment show that

ao I

*

data

ever,

00

do not





l

were also reduced during the last half of 1975 at least in the socialized sec-

>



These data show that the 369 million head of poultry on collective and State farms on January 1, 1976, were tor.

8

percent fewer than a year earlier.

As with '

r

numbers

hogs,

the

in the private

was not as large as

drop in poultry sector probably

in

the socialized

try

Thus an overall decrease in poulnumbers of roughly 5 percent dur-

ing

1975 seems reasonable.

sector. 1

The data on

and procurement of do not clearly rethe impact of the drought (Table products

livestock flect

2), to

in the plan-fulfillment report

production

mainly because these data pertain

1975

as a

whole and the

effects of the

drought on livestock production largely confined to the

were

second half of

[he year.

For the whole year, only milk proshowed a decline when compared with that in 1974 and then it duction



was

only

However, milk 1975 were down rather sharply. Although collective and State farms had 2 percent more cows, milk production in October/ November 1975 was down 4 percent, compared yields per

percent.

1

cow

in late

with that of a year earlier.

Meat production in 1975 was 600,000 tons, or 4 percent more than in 1974, mainly because of the heavy slaughter of hogs and poultry during the third quarter of 1975.

As

a

result

production

on

of this slaughter,

meat

and State farms during July-September 1975 was 16 percent or 616,000 tons more than during the corresponding period in collective

1974.

15.

October/November 1976

1975,

The adverse

however, production on these farms was 14 percent or 440,000 tons

less

than

in

the previous year, clearly reflecting the

impact of the drought and the heavy

is

first

Under

these conditions,

is

it

surpris-

expected

The culture

than the increase in production.

Capital

The drought amount of the

also

held

increases

down realized

the in

1975 for egg and wool production, compared with those of 1974. Egg production during the first half of 1975 on which accollective and State farms



counts for over half of total egg output

—was

running 9 percent ahead of earlier, but slumped

production a year

to a 5 percent advantage during July-

USSR

in

the

during 1975 increased 4 percent.

to

continue

through

the

half of 1976.

meat procurement between 1974 and 1975 was less ing that the increase in

effect of the limited feed

from the 1975 crops on the production of most livestock products supplies

slaughter in the preceding months.

November. Total egg output

During March

Top: Gathering hay on a Soviet collective farm. Above: A herdsman on a Soviet breeding farm heads his crossbred cows across the steppe for summer grazing. Soviet cattle herds at the beginning of 1976 were 2 million head larger than a year earlier.

Soviets continued to give agrirelatively

allocation



of

high priority in the

resources

investment

during

totaled

31

1975. billion

rubles 9 percent more than in 1974 including 20.3 billion rubles invested

by the State and 10.7

billion

by

collec-

tive farms.

Capital invested by the State in agri-

was 11 percent more than in About 1 ruble out of every 5 invested in Soviet agriculture was spent on land reclamation. The amount of capital invested in land reclamation in 1975 was 15 percent more than in the previous year, and culture

1974.

Page 7

P

were

of feed phosphates. Thus, agriculture

USSR: DELIVERIES OF SELECTED

received 84 percent of the 90.2 million

AGRICULTURAL MACHINES

irrigated land totaled 1.3 mil-

tons of mineral fertilizers produced in

areas

larger

reclaimed

of

land

put into use.

Newly lion

hectares,

than

1

compared

Of

1974.

million in

with this

Union

more

the

area,

higher proportion than the 82 percent

Soviet

550,000 hectares represented irrigation of improved pastures, compared with an increase of more than 500,000 hec-

received in 1974.

tares in 1974.

culture

About

1

The

fertilizers delivered

was about

land were put into use, compared with

tion of plants in

more than 800,000 hectares in 1974. Water for livestock was provided over

tons,

areas

million

10.3

totaling

to agri-

The

9.5 million tons.

The amount of machinery crease.

chines

Deliveries in

listed

delivered

1975 continued to of

ma-

agricultural

1975

the

in-

plan-fulfill-

reclaimed land goes out of use each

ment report were generally equal to or greater than the numbers supplied to agriculture during 1974. However, de-

year.)

liveries

not represent net additions to the total

Deliveries

areas, since

mineral

of

some

of milking machines

totaled 54,000

to

fertilizers

Tractors

347,000

370, 00(

Trucks

250,000

269, 00C

Grain combines

83,000

92.00C

Beef harvesters Forage harvesters

16,000

17,00C

68,000

70,0QC

.

.

.

Soviet agriculture totaled 75.4 million

in

1975

—4,000 fewer than were

delivered in 1974.

tons in 1975, including 2.2 million tons

continued

good pace during 1975,

at a

but not more rapidly than in 1974.

to agriculture in

(These reclaimed areas, however, do

and drained

1975 Units

1975 totaled 438,000

52,000 tons or 13 percent more

than in 1974.

hectares,

9.5 million hectares in

1974.

irrigated

1974 Units

production of chemicals for the protec-

million hectares of drained

compared with

1974

quantitative increase over

mineral

in

Machine

1975, a slightly

in

Construction

of

facilities

to

pared with 13.6 million in 1974.

On

the other hand, poultry houses completed for only 18 million

were

almost

birds,

fourth

a

The pace

in construction of special-

1— USSR:

LIVESTOCK NUMBERS ON JANUARY

1,

plexes

to

completed

1974-76

1975 was

ized livestock complexes in

much

the

in 1974.

better than

fatten

1974. Corn-,

in

head of

million

1.4

swine exceeded those for

TABLE

than

less

housing for 23 million built

not livestock

house 14 million head ol were built during 1975, com-

Barns livestock

million

1.1

1974.

in

Special poultry “factories” were com-

Livestock category

1974

Total livestock: Cattle

Cows Other cattle

....

Hogs Sheep and goats

.

.

Socialized sector: Cattle

Cows Other cattle

....

Hogs Sheep and goats

.

.

1975

1976

Million

Million

106.3 41.5 64.8 70.0 148.5

109.1

41.9 67.2 72.3 151.2

81.7 27.0 54.7 56.4 116.4

84.6 27.7 56.9 58.6 119.2

Millions

111.0 41.9

1976 change from 1975 Percent

+

2 0 3

57.8 146.9

+ -20 - 3

87.6 28.2 59.4 45.6 117.7

+ 4 + 2 + 4 -22 -

69.1

1

Private sector:

24.6

Cattle

Cows Other cattle

24.5 14.2 10.3 13.7 32.0

4.5

....

Hogs Sheep and goats

0.1

13.6 .

.

32.1

than in 1974, and for 27 million ers, 1 million more than in 1974.

The

achieved

Soviets

success in

fall

4

9.7

-

4 6

12.2 29.2

-

-11 9

fall

plow-,

dry conditions. The

ing, in spite of the

report

plan-fulfillment

less,

broil-|

considerable

seeding and

states

36

that

million hectares were seeded to winter grains and 114 million hectares werei plowed for seeding this year.

The winter about

1

grain

area seeded

planned and 2 million

the

southern

USSR ing

in the fall

dry

Nevertheless,

was

more than hectares more

hectares

million

than were seeded



23.4 13.7

pleted for 9 million layers, 2 million

part

soil

of

in

European

apparently interfered with seed-

in

seeding

this last

winter wheat area. Thus, fall

in

the

northern part

of the winter grain area apparently was

TABLE

2— USSR: PRODUCTION AND PROCUREMENT 1974

Livestock product

AND

OF LIVESTOCK PRODUCTS,

1975

1974

1975

change Percent

Million metric tons

Meat (carcass weight): Production

Procurement

14.6 10.6

15.2

10.9

Milk:

Production

Procurement

91.8 55.8

90.8 56.3 Billion

Eggs: Production

Procurement

55.5 30.9

+ + — +

4 3

33.1

+ +

4

Winter grains

when

7

463

was about

in

in

fall.

the

Soviet

Union

poorer than optimum condition

they became dormant last fall because of dry weather. Also, severe cold in February probably damaged the winter grains, particularly in the south-

the

461

last fall

European USSR, where snow cover was not adequate to

eastern part of

Wool:

Page 8

plowed the previous

1

Thousand metric tons Production

The area plowed

equal to the amount planned, but was about 2 million hectares less than was

1

eggs 57.7

expanded, suggesting that the amount of winter rye sown was larger than normal.

were

0

I

of 1974.

conditions the

j

protect the plants.

Foreign Agriculture

1

whole processing averaged $62.40 and $80.20 per ton, respectively, down by an average of 6 percent from the 1974

and France Had Large T omato Harvests Portugal, Israel,

»j

*}

levels.

Campania, prices averaged $60.92 $99.60 per ton, respectively, 25 percent lower than those of 1974. BeIn

and

By RONALD Y. UYESHIRO foreign Commodity Analysis, Fruits and Vegetables Foreign Agricultural Service

cause

of high carryover and lower domestic consumption of canned whole tomatoes, the 1975 exportable quantity

:

roduction of tomatoes for processing during 1975 was greater than n 1974 in Portugal, Israel, and France, Dut lower in Italy and Greece. Portugal’s 1975 crop of processing tomatoes was placed at 770,000 metric tons, up 9 percent from 1974’s. Grower prices for the 1975 crop were held at the 1974 level of the equivalent of $49.10 and $41.60 per on for first- and second-quality toma-

P

toes, respectively.

Although the 1975 crop of processtomatoes was larger than in 1974, eutput of tomato paste was estimated ing

133,000 tons,

at

down

1974’s by 2 percent.

:'resh-to-processed

cause luring

h ia

Die

Ii



>j,

a[

supply of tomato paste in

total

1975

is

1974’s

at 179,200 tons,, up by 32 percent. Of this quantity, about 150,000 tons are expected to be exported, ahead of last year’s by 69 percent. Expected carryover from the 1975 season is estimated lit 28,600 tons, a decline of 38 percent ifrom the 1974 level. |

|to

be shipped to

new markets such

USSR, East European African countries. The time

purchased

USSR

30,000

as

and

countries,

for the

tons



of 170,000 tons increases

of

100,

slightly

is

Exports of paste

1974’s.

percent above levels of a

estimated at 91,000 tons,

year earlier. About 50 percent of this production is expected to be exported.

cent from those of 1974.

France’s 1975 processing tomato crop

percent.

levels, respectively.

placed

Because

French

larger than

in

1975 are

down

12 per-

In recent years, Italian export markets have

was estimated at 279,000 tons, up 22 percent from 1974’s. Price received by growers for the 1975 crop was established at about $80.90 per ton, near the 1974 level. Preliminary production 1975 of tomato concentrates (28 percent solids) and other tomato products was placed at 33,000 tons each, up by 18 percent and down by 7 percent from the 1974

market

undergone a change. The

has

become more

EC

important

while the United States, Mideast, and

become

the developing countries have

because

so

less

of

from

competition

Greece, Turkey, Morocco, and Tunisia.

Even

the Italian share of the

so,

EC

market has shrunk. Greece’s 1975 harvested area totaled 20,500 hectares, up from 1974’s by 14 Total at

1975

was which

production

1,150,000

tons,

of

tomato

250.000 tons were unharvested because

products are higher than those of most

of poor marketing prospects. Another

of

prices

other producers in

100.000 tons were channeled to the

area, the

fresh market, leaving a net of 800,000

the Mediterranean French industry is faced with

marketing problems. This situation has slowed exports and maintained imports



—Respite

from ItalyFrench 1975 pack.

particularly

larger

To

placed

Sizable exports of paste are expected

first

0|

conversion ratio be-

wider use of bulk hauling

ifrom

jit

ijj

a poor

many tomatoes were damaged movement from field to plant as

result of

The

eii

to

equipment.

)»•

lift

from

72, and 35

This lower out-

was attributed mainly

put

a

slightly

respectively

tons,

alleviate this

the

problem, the Gov-

ernment has provided assistance in the form of export subsidies and grants for

The subsidy

stocks.

for

exports

tined for third countries except

des-

Canada

and the United States is reported at an equivalent of $189.90 per ton for tomato concentrates and about $1 per gallon for tomato juice. These subsidies reportedly are

still

not sufficient to

world markets.

1975

Italy’s

planted

acreage

from the 1974

down by

14 percent

level.

The established 1975 price paid to growers by processors was the equiva$41 per ton, the same as

lent ot

previous

year.

in the

The Government paid

tomato growers about $20.60 per ton for

About

unharvested tomatoes.

the

96 percent of the 1975 fresh tomato tonnage destined for processing was packed as tomato paste, which totaled 1

15.000 tons of finished product

by 10 percent from the 1974

—down

level.

make

the French industry competitive in the

of

tons for processing,

was

D

emand for tomato

products

in the

international market has softened

considerably, causing market problems

major exporters. Consequently,

paste.

estimated at 109,211 hectares, smaller

for the

1975 production of processing tomatoes was placed at 157,000 tons, up by 91 percent from that of

by 4 percent than that of the previous

carryover stocks of tomato paste from

year. Total fresh production

the 1974 crop were estimated at 40,000

1974. Only 90 percent was harvested

1974’s.

Israel’s

at

3.35 million tons,

is

placed

8 percent below

tons at the start of the 1975 season.

(ll l

jj

because of depressed

demand

for final

About 600,000 tons were un-

harvested in

1975, largely because of

The volume of paste exports for 100,000 1974 totaled 62,640 tons, near the 1973

jj

products.

Grower

prices

for

the

1975

crop

Paste exports for 1975 are fore-

disputes between growers and processors

level.

over regulated prices and rainy condi-

cast at

tions during this period.

cent heading to the

60,000 tons, with about 75 per-

B

ranged from the equivalent of $74.65

EC

market.

n

to

$84.50

per

ton,

with

an

average

II

equivalent $67.60 per ton,

up 16

per-

rf

from the year-earlier level. product mix was dominated by tomato juice, canned tomatoes, and paste, at 50,000, 10,000, and 5,000 cent

e

Israel’s

^ £

few Government-owned plants paid the higher grower prices agreed to in July 1975, while most of the industry paid lower prices than in 1974. In Emilia, these lower prices for tomatoes destined for paste and canned

Only

Because of the dim marketing

a

tion,

that

the

situa-

Government has announced

1976 output

is

to

be limited to

tons of paste. This limitation is

expected to be achieved through a

production area allocation scheme.

0

March i

15,

1976

Page 9

— :

AGRICULTURAL SITUATION

\pan’s $478 billion

J

tional product in

from the

IN ’76

economy (estimated value of

gross na-

1975) appears to be recovering steadily

of

effects

A KEY

SHOW

JAPAN’S ECONOMY TO

STRONG RECOVERY

IN

both

inflation

expected to show strong recovery

The country’s balance

and recession,

in the

and

is

second half of 1976.

of trade improved considerably in

1975 as the value of exports held virtually unchanged despite the worldwide recession and the value of imports



declined nearly 7 percent.

Value of agricultural imports from the United States dropped about 10 percent in 1975, with some decline in quantity (feedgrain, soybeans, and cotton) as well as reduced prices (wheat, soybeans, and tobacco). The value of pork imports from the United States increased to more than $100

compared with $11 million in 1974. Based on Japanese customs data, the value of imports from

million,

the United States in 1975, at $11.6 bililon,

c.i.f.,

value of exports to the United States ($11.1 for the

first

time

in 8 years.

exceeded the

billion,

However, on a global basis, the f.o.b., compared with

import value of about $57.8

Japan’s

processing

oilseed

sustained

losses

in

1975 estimated at more than $200 million, largely because of purchases of beans at high prices and subsequent decline in oil and meal prices. However, the livestock industry is showing signs of improvement,

meal

The

market.

depressed Textile

which should add strength

market,

nonetheless,

to the

may remain

1976.

in

imports of textiles

was expected. Large have caused the industry to request Govemphasis

on

self-sufficiency

is

and the poultry and swine industries are expected some extent from the cutback of 1975, but total meat production probably will be only slightly greater this year than last because the increases in poultry and pork will be largely neutralized by lower beef production. For key commodities, here is the outlook for production and trade in 1976: Cotton: Consumption declined sharply again in 1975 as the 1976,

failed to materialize.

An

industry-

wide agreement brought about a 40 percent cut in cotton yarn production, which helped to reduce yarn stocks to more

Raw

levels.

cotton

imports in

1975 were 692,000 metric

tons,

compared with nearly 800,000 tons in 1974. The U.S. share was about 207,000 tons (32 percent), down from 303,000 tons (38 percent) in

1974.

textile inventory position means that the expand production fairly quickly when consumers expand their purchases. Consumers have increased savings and postponed purchases for nearly 2 years, so demand

The reduced

industry

will

178,000 on the san

!

date a year earlier, but the average size of herds increase

from 9.8 head in 1974 to 11.2 head in 1975. Because of expanded use of butter for reconstituting pu poses, stocks have been depleted and 1976 should see increast imports of butter



possibly 15,000 tons. In 1975, butter

amounted to 3,000 tons. Poultry numbers on February

ir

ports

birds

— 145,743,000

year-earlier total)

from the

1,

1975, were 233, 403, 0(

drop of 3.7 percent from tl and 87,659,000 broilers (down 1.5 perce layers

(a

year-earlier level).

m ports |

of eggs increased dramatically in 1975.

The volun

equivalent of about 1.35 million eggs was imported in drie

cover the shortfall in domestic productioi

to

Imports are expected to have been built

much

to

level off

during 1976, since stock

higher levels than in previous year:

Oilseeds and products: Area planted to soybeans in 197 was 7 percent smaller than that planted in 1974, despit higher price supports and continuation of the incentive' payment program. The producer price for 1976 probabl

exceed the equivalent of $20 per bushel, but productio than the 126,000 tons produced in 1975

food

to recover to

manageable

of dairy farms declined

1975, from

1,

was strong during the first part c oil as meal demand remaine stagnant. However, later in the year demand for oil weakene and interest in meal strengthened so that imports of meal ar

Fruit and vegetable production will continue to expand in

demand

The number

160.000 on February

Demand

for

soybean

1975 and resulted

could exceed domestic consumption.

in



date a year earlier.

likely will total less

expected to result in only slight increases in production of wheat, barley, and soybeans. However rice production again

expected upturn

1.787.000 head, including 910,000 milk cows, as of Februa 1975 an increase of 2 percent over numbers on the san

1,

as

to limit imports.

continued

1

United States are expected to increase to about 250,000 tor Dairy and poultry: Dairy cows and heifers on farms totali

will

demand has not expanded

ernment action Japan’s

oil

and other textile products could expand rapid Cotton imports are forecast to expand in 1976 about percent to 700,000 tons, based on the anticipated recove in the second half of calendar 1976, more than offsetting continued weak demand in the first half. Imports from t for apparel

and frozen form

billion, c.i.f.

industry

FARM MARKET OR COMPETITOR

U.S.

f.o.b.)

value of exports was about $55.8 billion, total

5

now

in

oil

imports of

being considered.

Imports of soybeans

1976 are forecast

calendar 1975 were estimated below 1974’s level, but imports

in

3.2 million tons, slightly

to increase to 2.3 million tons.

Rapeseed production in 1975 amounted to 7,300 tons down 20 percent from the 1974 level. Peanut output wa 70,500 tons (unshelled), 22 percent below the 1974 total. production of vegetable

Total

oils

(edible

and inedible

declined 6 percent in 1975 to 990,000 tons. Consumption o edible oil declined about 5 percent, reflecting the genera

consumer spending. Imports of all vegetable oils 1975 were 240,000 tons, a 28 percent increase over th<

cut in

ii

previous year’s

total.

Imports of U.S. soybean oil in 1975 were about 11,000 tons while total palm oil imports at 11,000 tons were slightly belov those of 1974. However, imports of palm oil are expected t<

expand

to

130,000 tons

in

Fruits and vegetables:

1976. Reflecting difficulties with surplu

area planted to mikans declined 2 percent ii 169,000 hectares, continuing the decline begun it 1974. Area in mature trees increased 4 percent to 140,00(

production,

1975

to

hectares.

i Page 10

Foreign Agriculture

»

iExcellent weather and below-target results of the thinning rogram (Japan’s version of a citrus marketing order) combined to produce a record crop of 3,639,000 tons. A further ecline in

Trade

I)

WiUarp

mikan area

lemon

in

during

imports

1975.

Grapefruit

were down because of the market situation, b'aribbean fruit fly difficulties, and fungicide problems. altinports

also

lemon

etail

summer fruit at

astier

nd other pr

were

prices

erratic

in

late

spring-early

1975, rising as high as the equivalent of $1.50

times because of imports turned back at the ports

tight

Kyodo Kaju

quantitative restrictions.

(a

quasi-

lovernmental juice marketing company) began marketing a

it

liikan-valencia juice blend in

tfi

Besides being the largest supplier of Japan’s citrus imports,

United States also

ie

Imonds (5,282

Japan’s leading supplier of raisins

is

from the United

17,191 tons imported

States in 1975), sweet

tons), fresh grapes (1,292 tons),

prunes (744

fresh strawberries (318 tons), orange juice (595 kilo-

iwjjms), Itilters), not'

January 1976, after nearly 3

of delay.

isars

Of

grape juice (445

id fresh papaya (1,460 tons).

from the United

oclfuit

lemon

kiloliters),

juice (466 kiloliters),

Imports of fresh deciduous

States are prohibited

by plant quaran-

major cause of the decline 1975 imports of fresh and frozen vegetables. Imports of spill any vegetables (e.g., carrots, potatoes, sweet potatoes, matoes, cabbage, broccoli, and cauliflower) are prohibited I)]

a

y plant quarantine regulations.

Foodgraim: Rice area 0

|tcellent

1975 increased only

in

weather resulted

jjiaddy), 7 percent

in

slightly,

but

production of 16.4 million tons

more than The 5-year

amount

the

called for in the

580,000 .government plan. rice diversion program ended Jlith the 1975 crop. However, the 1976 budget includes a ogram to encourage other crops on paddy land, Rice stocks are expected to expand sharply in 1975/76 to J)out 2,180,000 tons (milled) on October 31, compared with j

million tons of barley,

tons.

12.8 million

1974. Im-

in

1974

above the

slightly

The

level.

U.S. share declined further to 57 percent from 65 percent in

Canada

1974. Imports from South Africa and

corn

of

price

1975

in

increased.

from the

declined

when

equivalent of about $170 per ton to $144 in July,

became apparent crop.

rates

that the United States

were

in

in the

would harvest

it

a large

USSR made sizable purchases, the price November was $154 per ton. Ocean freight

After the

$10-$ 15 per ton range most of the year

.

mixed feed prices were reduced by about $27 per ton on April 1 and $17 per ton on July 1. However, as world grain prices moved up, feed prices were increased by the equivalent of $20 per ton November 1. The average mixed feed price in January was about $243 per ton, compared with $267 in January 1975. On February 1, mixed feed prices were reduced $12 per ton. If the economy shows strong recovery and the livestock Reflecting declining import prices,

industry

is

confident of future profits, feedgrain imports could

expand substantially in 1976. Livestock and products: 1975 was a turnaround year for the Japanese livestock industry. Declining feed costs and

quantum jumps

tine regulations.

Weak consumer demand was

at

of grain sorghum, both sharply below the 1974 levels, and 1.5

moved up and

difficulties.

Fresh oranges and orange juice concentrate imports remain

asunder

250,000

at

below the 14 million imported

tons, 9 percent

The landed

am

rt

payments. Production in 1976 is forecast in 1975 are estimated

Feedgrain imports

ports included 7.4 million tons of corn and 3.7 million tons

expected over the next 2-3 years.

over the use of fungicides resulted in a

difficulties

decline

is

tive

product prices (especially for beef) im-

in

proved profitability for livestock producers. Hog inventories, 1,246,000 however, are just beginning to show signs of expansion. Beef cattle numbers are expected to expand slightly. Total red meat production in 1975 was an estimated tons, and is forecast to remain at about the same level in 1976. Beef output is expected to decline about 12 percent and pork to increase about 4.5 percent.

The beef sets

program

stabilization

controls

initiated

May

on

maintain domestic wholesale

to

maximum

1975,

The program has main-

prices within an established range.

tained prices near the

1,

beef carcass

pirce, but at great

expense to

the Japanese consumer.

Jj

The system has separate

floor

and

ceiling prices for

Wagyu

s

tons a year earlier. In spite of serve stocks to 2 million tons,

the

its

goal of building

Government was not

and dairy

When

beef.

steer

beef theoretically should be

the

ceiling

imported

price

in

is

sufficient

hi

to cause the price to decline to the ceiling price.

1976 will be reduced sharply. 1975 are estimated at 5.6 million tons, percent greater than in 1974. The U.S. share was 3 million ns or 54 percent, compared with 56 percent in 1974 id 67 percent in 1973. Stocks on December 1 were estimated tons, compared with 930,000 tons a year earlier, iports in 1976 are forecast at 5.7 million tons, with the

Virtually all beef must be imported by designated trading companies that must turn over all purchases to the Livestock Industry Promotion Corporation (LIPC) for auction or sale to designated users. LIPC notifies trading companies by

lport requirements in

Wheat imports

.S.

in

n

975,

compared with 233,000 tons

ghtly

because

of

rain

at

in

in

1974. Yields dropped

harvesttime.

Planted

area

is

from the 78,000 hectares planted 1974 and 1975 because of anticipated increases in incen-

tpected to increase in 1976

/larch 15,

1976

has not been the case.

above the

maximum

a stop-go basis



i.e.,

It

has served more to slow the

rise

Quotas have been announced on 10,000 or 20,000 tons at a time to cover price.

specific shipping periods.

tender, specifying cuts, grade, origin, delivery date, quantity,

and price of beef In

1976,

imported

share 3.2 million tons or 56 percent.

Feedgrain: Barley production declined to 221,000 tons ^

volume But this

sudden increase. Rice imports have been of glutinous rice ( mochigome ), with >out 16,00 tons coming from the United States in calendar >75. Incentive programs to expand domestic production of is type of rice in 1974 and 1975 have proven successful, and 1,140,000

Jirepared for the

1

reached,

in

to

be imported.

a significant increase

1975

is

expected.

beef will be available, and

over the volume of beef

Less domestically produced

demand

is

expected to remain

strong, despite prices that are higher than

poultry, and

some types of Based on



those for pork,

fish.

report

from Larry

F.

Thomasson, Tokyo

U.S. Agricultural Attache,

Page

11

U

DEPARTMENT OF AGRICULTURE

S.

WASHINGTON. D C 20250 POSTAGE AND FEES PAID US DEPARTMENT OF AGRICULTURE AGR lOl

PENALTY FOR PRIVATE USE *300 OFFICIAL BUSINESS

First Class

Soybeans

Brazil

Continued from page 4

Buys More

Zaire

Wheat

U.S.

port of 300,000 tons of Brazilian soy-

beans

Japan

annually.

is

cut purchases of U.S. rice drastically

and eliminated tobacco imports from

current

the United States altogether.

from

it

tion of

In 1975,

signed for

im-

70 percent of the country’s foreign exchange earnings, dropped from $1.50 to 55 cents per pound. Zaire’s

its

ports of U.S. wheat during 1975, but

would permit further diversificaits sources of soybean supplies. There have been reports that Brazil was negotiating with Poland for a longterm agreement involving soybean meal exports from Brazil. A final decision had not been made. since

more than doubled

Zaire

interested,

some

wheat worth $16.4 million $6.4 million in

Brazilian cooperatives

was the

contract with a French firm

;a

establishment

processing plant

of

a

near

new

oilseed

however, be the exclusive

ian exports of soybeans, a basic ques-

remains:

In

a

declining

market,

prices

of soybeans

products

before

soybean farmers

fall

from

and

prices are not expected to

1976, so Zaire

rise

substantially in

will

not soon have enough foreign

tion.

fell

The long-term outlook

from $416,000 in 1974 to $76,000 last year, and tobacco purchases plunged from $2.7 million to none at all. Zaire was forced to cut back drastically on imports because the price of copper, which accounts for

Despite measures to increase Brazil-

tion

imported

Zaire’s purchases of U.S. rice

is

exchange on hand to resume normal imports. Purchases of U.S. rice, leaf be tobacco, and wheat should boosted, however, by a recently issued $15 million line of credit from USDA’s Commodity Credit Corpora-

large-scale

Western Europe.

supplier of beans to this plant.

how low can

increase

flour rather than wheat, mostly

of soybeans annually to the plant. Brazil not,

first

stallation of the mill, Zaire

first

preference for supplying 300,000 tons

would

The

flour mill at Matadi. Prior to the in-

agreement provided for Brazilian stockas

tons worth

result of the first full year of

operation for Zaire’s

Bordeaux. The

holdings in the plant as well

1974.

Copper

year

last

resulting

estimated at more than $500 million.

Zaire bought 90,000 tons of U.S.

—compared with 46,000

debt

short-term

the decline in copper prices

is

for Zaire

not unencouraging. Observers note

that

wealth

Zaire’s

sources

give

it

of natural

strong

re-

economic

potential.

—Herbert H.

Steiner,

ERS

stop expanding or shift to other crops?

Many

farmers,

if

faced with declin-

from soybeans, probably would reduce planted area but would not abandon soybean production. This is particularly true where soybeans are double-cropped with wheat a tremending

returns



ous advantage that tends to favor soybean production over most other crops.

soybean farming in Brazil is more mechanized than production of other commodities, it is unbecause

Also,

likely



in

view of the investment

in soy-

bean production—that there would be a total

switch to another crop.

Brazil’s Export Incentives for Brazilian

Government.

potential

is

available

for

oil for

240 days

at 8

percent interest.

current market rate

on

a

low

in

basis

terest

rate

The

to be

a practice whereby the lendinj

around 20 percent per annum, including the monetary correction factor. There are also spe-

institution

is

is

available,

requires

a

there

appear

compensatin;

balance of a portion of the loan. Eacl

and 16 percent for other types of export

use of this credit line would have to b examined individually so as to detei mine the exact amount of benefit de

financing.

rived.

cial credit lines available at

GOVERNMENT PRINTING

OFFICE: 1976

i

centive can be quite substantial to th

crusher/ exporter. Although

the export market,

on a product-specific

interest rate

particular loan, the effects of this in

major incentive for production

of meal and

Continued from page 5

Depending on the

Preferential financing the remaining

*U.S.

Pag* 12

Soybeans

12 percent

211-407/35

1-3

Foreign Agricultui

1976
Agriculture Economic aspects Periodicals, Produce trade Periodicals
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