WEST EURGEEAN DEMAND FGR
UNH'ED SYATES FEED GRAINS

Thesis for the Degree cf Ph. D.
MEHIGAN STATE UNIVERSITY
flames Wiiton iGravas
1964

masts

This is to certifg that the

thesis entitled

WEST EUROPEAN DEMAND
FOR

UNITED STATES FEED GRAINS
presented by

James Wilton Graves

has been accepted towards fulfillment
of the requirements for

Ph.D. degree in Agricultural Economics

r C 7
1' 44/14/151“ ’7{ , J.&/’\LLL.¢6*1/L/

Major professor

Date March 1, 1964

 

0-169

LIBRARY

Michigan State
University

 

ABSTRACT
WEST EUROPEAN DEMAND FOR UNITED STATES FEED GRAINS

by James Wilton Graves

Body of Abstract

Feed grains were produced in increasing quantities in United States
during most of the period from 1950 to 1961. Utilization failed to main-
tain pace with production resulting in growing carryover levels. Feed
grain surpluses in storage rose from 1.5 million tons in 1950 to more than
46 million tons in 1961. A revision of the domestic feed grain program
in 1961 allowed some reduction in carryovers, however considerable concern
over the size of the surplus is still evident.

One proposed solution to the United States surplus problem is to sell
all surplus products overseas. The purpose of this thesis was to evaluate
the potential foreign market for United States feed grains. Since Western
Europe has consistently been the major dollar market for agricultural
exports, it was decided to limit the study to this one area. The data used
in projecting the West European demand for United States feed grains were
obtained from secondary sources entirely; the most reliable being from the
Food and Agriculture Organization of the United Nations. Discrepancies
were often found between these and other published data. Only limited
information was available concerning the utilization of feed grains in
Western Europe. More data have been published in the past year, however,

and information on foreign markets is becoming more reliable with time.

James Wilton Graves

In analyzing the factors influencing foreign demand for United States
exports, an analytical model was developed. This model was presented in
graphic form to bring out more clearly the effects of trade poliCies,
foreign competition9and surplus levels, Such a model aided considerably
in analyzing the empirical data and weighting the variables used in pro-
jecting the trends.

West European feed grain production and disappearance levels were
projected to the periods of 1964-66 and 1969-71 in this thesis. It was
estimated that the three-year average production level of 48 million metric
tons during 1959~61 would increase to approximately 55 million metric tons
by 1964-66 and 63 million metric tons by 1969-71. Following similar medium
level projections of disappearance, it was estimated that the three-year
average disappearance level of 63.6 million metric tons in 1959-61 would
increase to 74 million metric tons by 1964u66 and 84 million metric tons
by 1969-71. A range of high and low level eStimates for these periods was
based upon different sets of growth and policy assumptions, These projec-
tions indicated that West European feed grain import levels might reach
from 13 tc 26 million metric tons by 1964-66 with the greatest likelihood
being in range of from 18 to 21 million metric tons- This range of imports
was projected to be from 10 to 35 million metric tons with the most likely
levels ranging from 19 to 26 million metric tons by 1969e71. Such projec-
tions were of little help in determining the portion of West European
imports which might be supplied by United States. It was concluded, however,
that United States exports to Western Europe would not increase sufficiently
to solve the domestic surplus problem, although they would likely show a

steady expansion given favorable trade policies.

WEST EUROPEAN DEMAND
FOR

UNITED STATES FEED GRAINS

James Wilton Graves

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Agricultural Economics

1964

u

ACKNOWLEDGEMENTS

Credit for aSSistance in the completion of this thesis is due many
persons. It is impossible to list all individuals who contributed but
I would like to express my gratitude to a few.

Sincere appreciation is extended to Professor Vernon L. Sorenson,
Chairman of the Thesis Committee, for his encouragement and patience
during the long period of incubation. His aid in reviewing earlier drafts
contributed immeasurably to revisions and rewritings performed in absentia.
The comments and suggestions given by Professor James T. Bonnen are also
gratefully acknowledged. I am indebted to the Department of Agricultural
Economics for financial and other assistance during my graduate study at
Michigan State University.

A final note of gratitude is expressed for the patience of my wife
and two sons who exhibited extreme confidence in the face of discouraging

delays.

—ii-

TABLE OF CONTENTS

Page

LIST OF TABLES ............. .. ........................................ .. v

LIST OF FIGURES...................................................... vii

Chapter

I. THE FEED GRAIN SURPLUS PROBLEM............... ........... ...... 1

The Problem ........ ................................... ......... 1

Feed grain surpluses ....................................... 3

Objectives.................... ............................. 6

Method of analysis and previous research ................... 7

Historical Changes in Feed Grain Supply and Utilization....... 8

Livestock feed.. .................. .. ....................... 11

Feed grain exports ....................... . ................. 12

II. UTILIZATION, PRODUCTION, AND TRADE..... ....................... 16

Feed Grain Demand ................................ . ............ l6

Demand for food ................................... ......... l7

Demand for beverages. industrial uses, and seed ..... . ...... 18

Demand for livestock feed ........................ . ..... .... 18

Factors Influencing Feed Grain Demands .............. . ......... l9

Utilization, Production, and Trade Statistics ................. 22

World trade ............................................... . 24

III, WEST EUROPEAN FEED GRAIN PRODUCTION AND UTILIZATION... ........ BO

West European Area ............................................ 30

Feed grain utilization in Western Europe ................... 31

West European feed grain production ....... . .......... r ..... .. 41

National Grain Policies in Western Europe ..................... 46

Policies influencing utilization ........................... 46

Policies influencing domestic production ................... 49

IV. THE FEED GRAIN TRADE STRUCTURE OF WESTERN EUROPE.... .......... 55

Construction of a Theoretical Framework ................. . ..... 55

West European Trade in Feed Grains ............................ 65
United States share of the West European feed

grain market ............................................... 7O

Analyses and Projections ...................................... 74

Production trends and projections .......... .. ............. . 78

Producing areas ............ . .......................... ...... 81

Trend in yields...... ...................................... 85

Trends and projections of consumption data....... .......... 88

Projections of production and disappearance compared ....... 98

—iii—

TABLE or CONTENTS (continued)

Chapter Page
V. EXTENSIONS AND IMPLICATIONS OF THE ANALYSIS.................. 102

Alternative Projections of Import Levels..................... 103
United States share of West European feed grain
imports.. ..... ............................................ 113
Price and trade policy influences in Western Europe....... 116
Implications for United States Policy........................ 120
Summary and Conclusions...................................... 123

BIBLIOGPLAPHY 000000000000000000 0000000000000.0000000600006000...0.00.127

_iv_

LIST OF TABLES

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III—3

III—4

United States Feed Grain Supply and Utilization By
Year 1950fi :r 196W 6 .............................. 2

Historical Changes in Feed Grain Supply and Utilization
in United States, Five— Year Averages 1926-30,1936—40,
1946- 50, and 1956- 60 ...... ..,......o. ...... ............... 9

Domestic Utilization of Feed Grains By Type of Use in
Selected Countries, Averages for Years 1955/56 Through
1957//58L;¢¢00)J003‘ sssssss . sssssssss o ooooooooo a ooooooooo 000003 23

World Production of Feed Grains By Type and Source,

Average for 1952—57 and By Year From 1958/59 Through

lgézl/IEJBUJOO' JJJJJJJJJJJJJJJJ » OOOOOOOO a a JV. Just ooooooooooo 0.000 25
World Trade in Feed Grains, By Six Major Sources and By
Destinations July 1, 1962 Through June 30, 1963..- ..... .... 27

Source and Destination of World Feed Grain Trade, Selected
Five-year Averages and 1962/63 ...... .7 ....... , .............. 28

Feed Grain Utilization in Eleven West European Countries
Average for Three—year Period 1955/56 Through 1957/58..... 34

Livestock Numbers in European OECD Countries By Class,
Prewar Average and By Year, 1947 Through 196l.-........... 37

Production of Livestock Products in European OECD
Countries, Indices By Fiscal Year 1947/48 Through
1961/62 ......... . 3 .1 aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa o r oooooo o 38

Production of Feed Grain in European OECD Countries By
Type of Grain and Indices, for Prewar and By Year
1947/48 Through 1961/62... ...... ,.,....... ...... . ........... . 42

Production of Feed Grains in European OECD Countries,
Prewar Average and By Year 1947/48 Through 1961/62 ...... .. 43

Feed Grain Imports into Western Europe, Total and From
United States, Prewar Average and By Year 1947/48
Through 1962/63........,......,-,................... ...... 67

Feed Grain Imports into Western Europe From Four
Countries..., ......................... ..... ............. .. 69

Net Imports of Feed Grains into Western Europe and

a 64

Percentages of Each Grain Prewar Average a: i
’5' OOOOOOOOOOOO .300 72

Year19z//'4W7 . ro I 194 2/63.;,,

TABLES (continued)

Page

Total Feed Grain Exports from United States to Western
Europe and Percentages of Each Grain By Year, 1947/48
Through 1962/63 and Averages for 1934-38, 1947-51,
1952—56 and 1957-61........................................ 73

Feed Grain Production in Western Europe (Barley, Cats, and
Corn), Averages for 1947-51 and 1957—61.....,.....,........ 89

Per Capita Supply of Livestock Products in Western Europe
Averages for 1948—52 and 1959.............................. 91

Meat Production from Indigenous Animals in Western Europe,
AlferageSIlorlglyg-‘jlg"“11959.............................. Q/‘2

National Incomes. Populations, and Average Per Capita Income
in Western Europe, 1949 and 1959........................... 94

Projections of Disappearance and Production of Feed Grain
for 1964—66 and 1969—71 in Western Europe. ..... ............ 99

Feed Grain Production and Utilization Trends in Western
Europe and the European Economic Community from 1947—49

Through 1960—62........... ...... ........................... 105

Projections of Production, Disappearance, and Import Levels
of Feed Grains in Western Europe for 1964-66 and 1969—71... 107

“9'1...

Page

d lGrains in United St ates
AbuW;~AlflT)lOL-SJOQOOJSOOO 5

NeSJ ELL; Cpea . Area 61515: Eastern. EDI-Opes;oosoaoaoosooooooooaooo 3.2

-ypot'e3ic-r Demard a 4 Supply Curves for Feed Grains in
WC‘SL‘JL.'. Ena‘I‘Opeoooassoc-:onoooaoooon.))53000000030330tooooaa 58

fi’ooone ’ca‘ Oifer Curves for United St es Feed Grain

4.
A. J
.4 .-.-- 13.: 60
sax; Wdrlf’us arLceSnCVJOQJ'IoaoI‘IJJOOQOOOQGOJOOOOOOOOO

icai Domestic Demand a-d Supply Curves and an
Import Offer Cr: e for :eed Gr *

- a
'-JDJ500.3000000003003303th3 \)4-

An import Demand Cr"ve Derived from Pvpotheoieel Domestic
. _ F

.13.? 01;”. .. 6..
:‘i.J Ives 0000»)JJJO30OJOOOOIOSOOOOOOOOOJOO .1.

An import Iemand Curve rogezner Wish a S pply C‘rre from

a d o .
n" 4 « 'r - -. x. \r‘y‘ W ‘f; 4-. 62
L Chive L' 111g Q LA. })4 1 e- D -: e o o . J J -‘ c c c‘: c: u o o c o o 0' c o s n o a a o o O o o s a o a a o s o

and Corn ir Western Europe........ 80

y.

FeeJ brain Yielcs and Producigr Area in Western Europe....... 82

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Peril-11263.07 S 'ZI.p"-3101‘i if: Europe: a a n .3 o o o a n a J a a o o a a a ) o i c J o o o o a 8

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FCpxia‘ilOf- al’d 1.53018 1:). YJeSL err. ELL: Opeaosnaaosssinooaooo

Trends of Disappearance and Production of Feed Grains in

e)“)ODOOJOJOJJJ-IJOOQJDJOOGJJOJOODOOJDGOOOOOJOlO‘O

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United Stat s Exports of Feed Grains to Western trope,
Itweewyear Moxing Average and Percent Share of the
ijrke‘7éo.)130anemoooauoo.‘(too-:aaaaooadIO‘JJoo-JOOSIJO00.000.000.114

CHAPTER I
THE FEED GRAIN SURPLUS PROBLEM

Surplus stocks of feed grains have presented a perplexing problem
to economists and policy makers in the United States for more than a
decade. Throughout the 1950's, the feed grains of corn? grain sorghum,
oats. and barley were produced in increasing quantities. Since the
total utilization of these feed grains failed to keep pace with produc—
tion, carryover levels continued to increase from 1952 to 1961. The
quantity of feed grains in storage under price support programs rose
from 9 million tons in 1952 to nearly 75 million tons by 1961. Through-
out the same period stocks on hand in commercial storage remained at
approXimately 10 million tons, giVing a total carryover going into the

1961 crop year of nearly 85 million tons (Table 1—1).
The Problem

A new feed grain program went into effect in 1961, and as a result
of voluntary acreage reduction, total production fell by 15 million tons
from the previous year 3 high. This decline continued during the 1962
crop year? and stocks on hand at the beginning of the 1963 marketing
year were predicted to be 61 million tons, 11 million tons less than the
carryover into 1962- In spite of this abrupt change in the direction of
feed grain carryover levels. the federal programs do not pretend to have
solved the basic problem of supply and demand balance in the feed grain-
livestock economy. Federally controlled price and production programs

-1-

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-9-
can offer temporary relief but at a high cost to taxpayers. The basic
imbalances still remain unless major adjustments are made. The difference
between imports plus production, and total utilization is the amount

that is added to stocks each year. This difference was between four

and ten million tons each year during the entire period from 1952/53

until 1961/62 (See Table I—l). In September of 1961, carryover stocks
were ten million tons larger than those of a year earlier. However,
reduced production during 1961 (15 million tons less than the previous
year) helped bring the 1962 level of surplus stocks down by 13 million

tons-

Feed Grain Surpluses

ConSiderable difficulty is encountered in defining the exact quan-
tity of feed grains that can be termed surplus. It would not be con-
sidered deSirable to enter any crop marketing year without some stocks
from the preceding year on hand- Only the quantity in excess of this
deSiraole carryover level can be realistically called surplus. The
problem then becomes one of determining the desirable level of carry-
over to maintain. In order to provide some protection against crop
failure and wartime shortages, it has been estimated that at least one
quarter of a year‘s domestic and export requirements needs to be carried
over into .he next marketing year.l/ This carryover level is presented

in Table 1—1 under the heading "Desirable Carryover". The difference

 

l/ James T. Bonnen, "How Large is the Surplus of Farm Products",
_Q2a;t§;ly;fiullejgg, Michigan Agricultural Experiment Station; Vol. 40,
iWo. 49 (East Lanaing; May. 1958)9 pp. 921-923; M.R, Benedict; "Current
nbalance of Supply and Demand for Farm Products". Policy for Commer-
ASIEEELEBIE» Joint Economic Committee Print, (85th Congress, 1st.

p.99: and, Karl Fox and O.V. Wells, Reserve Levels for
rggfirodgggs, Senate Document No. 130, (82nd Congress, 2nd

, pp. 4—7.

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_4_
between the beginning stocks on hand and the desirable carryover from
1950/51 through 1963/64 is shown as surplus in the right column. Figure
1-1 shows the increases in the size of the surpluses of feed grains that
occurred from 1954 through 1961. Should the downward trend in beginning
carryover since 1961 continue at the same rate as it has in 1962 and 1963,
by 1965 or 1966 the entire quantity of surplus feed grains would be elim—
inated- Such a projection requires an assumption that production will
remain 10 to 15 million tons less than utilization. and that the general
increase in utilization will continue.

Undoubtedly the one factor that has had the greatest influence in
the Size of the surplus has been the price support and acreage control
programs. Higher support prices tend to increase production and reduce
utilization. A stricter acreage control program or a widely accepted
acreage reduction program such as initiated in 1961 would tend to reduce
total feed grain production. In order to understand the reasons for the
buildup of surpluses. it is necessary to examine the relationships be-
tween price supports and production control programs. At the price sup—
port levels eXisting from 1954/55 through 1961/62, feed grain surpluses
built up rapidly. Price support and production control conditions ex—
isting in the late 1950's encouraged overproduction and brought about
the large quantities of surplus grain in government loan. An eventual
elimination of price supports or tightening of production controls could
cause feed grain surpluses to disappear, but the adjustment period would
be difficult for both farmers and the federal administration.

Even though price supports declined from 1954 through 1960, the
quantities of feed grains placed under the support program continued
to expand. The increase in carryover levels were caused by the use

of new technology combined with ineffective production controls, and

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FIGURE I—l

TOTAL SUPPLY AND UTILIZATION OF FEED GRAINS 1N UNITED STATES
1950 TO 1963 SHOWING SURPLUS STOCK ACCUMULATICNS

-5-
drastic action would have been required to counteract this trend.§/
The present patterns of feed grain production and utilization can be
more easily understood by examining the changes that have occurred during
the past 30 years. An understanding of these changes presents an in—

sight into future adjustments that may occur.

Objectives

 

Three major objectives instigated the development of this thesis.
'The first objective was to examine the forces which effect demand and
supply relations in feed grains and cause surpluses or shortages. These
forces differ throughout various countries and must be considered in
the context of economic development and foreign policy.

The second objective was to present a framework of analysis for
use in projecting subsequent demand and supply relationships. It was
felt that if a geometrical model could be successfully developed to
graphically portray the effects of demand and supply forces, projections
could be attempted from extensions of current trends.

The third objective was to present projections of the West European
demand for United States feed grain exports for a period in the immedi-
ate future and for a more distant future period. Although institutional
relationships exert a major influence on the foreign market for feed
grains, it was felt that economic undercurrents and physical demand
and supply limitations present a foundation upon which foreign policy

could best be based. By projecting high and low levels of demand and

 

g/ Geoffrey Shepherd, Appraisal of the Federal Feed—Grains Programs,
North Central Regional Publication No. 128, (Ames: January, 1962), pp,
355-360.

 

-7-
supply relationships and pointing out the policy implications, alterna—

tive future projected levels could be compared.

Method of Analysis and Previous Research

This study of West European demand for United States feed grains
first examines the components of feed grain utilization and production.
The main factors influencing demand and supply are briefly reviewed and,
where possible, compared quantitatively. Due to the weaknesses of avail-
able data, a graphical analysis is developed for use in projecting post-
war trends. Projections for two periods, 1964—66 and 1969-71 are presented
at high, medium, and low levels of West European utilization and produc-
tion. The wide range encompassed by these projections is then analyzed
with regards to policy implications.

At the time this study was originated, very little previous research
had been published concerning West European demand for specific agri—
cultural products. Consistent and reliable data of that area's imports,
production, and utilization of feed grains were unavailable. Information
obtained from publications of the Food and Agriculture Organization of
the United Nations appears to be the most acceptable of any published
during the 1950’s. In attempting to use USDA reports and data published
by the Bureau of the Census, considerable difficulty was encountered.
Consistency of year—to—year feed grain exports from United States to
Western Europe was not satisfactorily obtained from these data due in
part to the methods of sampling shipments used by the Bureau of the
Census and the lag in reporting some shipments. These same problems
were encountered by Benedict, Bauer, and Hollerman in their development
of tables showing destinations of United States farm exports and are

discussed in the supplement to Farm Surpluses: U.S. Burden or World

 

3/
Asset?4

 

During the first three years of the 1960*8, the United States De-
partment of Agriculture (USDA) has published many studies of the foreign
market for United States agricultural exports. A selected sample of
the results of their studies pertaining to the West European area is
presented in the bibliography of this thesis. A review of these studies,
as well as others pertinent to the problem, would serve little purpose
here. References are made throughout this thesis to previous studies
where a reView of such work would aid in a more comprehensive analysis
of particular points.

Today‘s problems of feed grain surpluses did not come about in
just a few years. Imbalances have been present for years and the cum—
ulation of this excess supply have left United States with a burdensome
problem which will not be solved immediately, A better understanding
of the nature of the present surplus problem can be obtained by exam-
ining the changes in supply and utilization which have occurred during

the middle years of the twentieth century.
Historical Changes in Feed Grain Supply and Utilization

Between 1925 and 1960 a large expansion in the supply and utili-
zation of feed grains occurred. Table I~2 shows five—year averages of
feed grain supply and utilization levels over those four decades. Carry-

over levels, while fairly large during the second World War (between

11 and 23 million tons), did not really become a problem until after

the Korean War. In the period 1946-50, the Commodity Credit Corporation

 

I
3/ M,R. Benedict, E.K. Bauer, and M.S. Hollerman, Destinations of
U;§£_FarmaE§pg§t§_and Sources of U.S. Agricultural Imports, (Division
of Agricultural Sciences, UniverSity of California, 1962), p. 89.

 

 

-91

TABLE I~2

HISTIRICAL CHANGES IN FEED GRAIN SUPPLY AND UTILIZATION IN UNITED STATES,
FIVE—YEAR AVERAGES 192e~30, 1936-40, 1946u50, AND 1956-60

 

w *—- ,—_._-_._,_..'. .—- .———————._--_ -——- ——._ _.——

 

.a- —— v—lx- --.- -m ~n-sx-s-n-o-

 

Period 1926-30 1936-40 1946—50 1956-60

Supply (a) »~ ~ — "Million Short Tons~—~~~
Carryover (Total) 8-1 14:5 18.7 58.6
(Government) (b) (d) (4.3) (7.3) (49.8)
Production 86.0 3,0 110.8 140.2
Imports (c) .1 .9 ,5 ,7
Total 94,2 98,4 129.9 199.5

Utilization

Livestock Feed 76.7 70.1 90.2 108.7
Food, Industry, Seed 8.5 9 6 12 8 12.8
Exports (c) 1-7 1 8 4.8 11.1
Total 86t9 81.4 107 7 132,6
Animal units fed annually (Mil ) 153 4 147.2 160.6 164 6

Feed grains fed per animal unit (Ton) 0,50 0.48 0.56 0.66

 

-.- .‘_ —, num-

) Year beginning October 1 for corn and grain sorghum, and
July 1 for oats and barley.

Under loan or owned. by CCC,

Includes grain equ1valent of products.

Less than 50 000 tons,

Notes: (

(
(
(

Source: Computed from Table 15, E§§Q_§EIE§31225 Economic Research Service,
(U.S,D.A.: September, 1962), p, 28, and Grain and Feed Statistggs
Through_1961, Economic Research Service (U.S.D,A.: Revised June,
1962), Statistical Bulletin No. 159; Table 1, pp. 3n5.

Q»

Q 0 or

 

-10-
(000) did not obtain significant quantities of feed grains until 1949
(15 million tons). Imports of feed grains (mostly oats) have remained
negligible relative to production throughout the periods studied. Pro-
duction on the other hand, has increased from an average of 86 million
tons in 1926—30 to a 140 million ton average in the period 1956-60.
Even more significant is the fact that production increased from 119.3
million tons in 1956/57 to 155 million tons in 1960/61 (Table 1—1).
During the three earlier five-year periods shown in Table 1-2, there
had been no definite trend of annually increasing production as was
seen between 1956 and 1960. The total supply of feed grains for the
period 1956—60 averaged more than twice the supply of the period 30
years earlier.

Expansion in utilization has not been as rapid as in production,
however. From 1936—40 to 1956-60, total utilization increased by only
51 million tons while total supply increased by more than 100 million
tons (Table 1-2). The greatest absolute increase in utilization has
been for livestock feed. Quantities fed to livestock increased from
an average of 70 million tons in 1936-40 to 109 million tons in 1956—60.
Increases in feeding rates and livestock numbers during that period
more than offset the declines in feed consumed by horses. Uses of feed
grains for seed, industrial purposes, and food have Shown a steady,
but relatively small, rise. Any increases in the use of feed grains
for seed would be expected to be followed by increased production and
greater carryovers, Unless economically profitable uses of feed grains
for industry are discovered, there is not much optimism for increasing
utilization through this outlet. There is also very little likelihood

that increases will occur in the consumption of feed grains as food.

-11-
The dietary trend toward more meat and less cereal products will very
likely continue rather than be reversed, Therefore, the only reasonable
conclusion is that domestic increases in feed grain utilization will

come about through increased uses of livestock feed.é/

Livestock Feed

 

A comparison of the changes in quantities of feed grains fed per
animal unit as shown in Table I-2 indicates a trend toward increasing
consumption per animal since 1936-40. From 1936—40 to 1946-50, animal
units fed annually increased by nine percent while feed grains consumed
by livestock increased 29 percent. Between 1946-50 and 1956—60, animal
units increased by only two percent while feed grains fed to livestock
increased by 20 percent. If this relationship continues to hold in the
future, a 5 percent increase in animal units on feed would be expected
to consume more than a 5 percent increase in feed grains. In order
to increase feed grain consumption sufficiently to absorb the amount
of surplus in 1962/63, an extremely large increase in animal units on
feed would be necessary. The average surplus between 1956-60 was 25.5
million tons, (computed from Table I-l), meaning consumption by livestock
would have had to increase by 23 percent to absorb the total surplus
as livestock feed. Such an increase in feed grain consumption by live-
stock could be accomplished by a less than 23 percent increase in live-
stock numbers only if the feeding rates continued to increase also.

The rate of feed grain consumed per animal unit rose to .72 ton in 1961/62

 

A/Wheeler McMillen, "New Uses and New Crops”, Policy for Commercial
Agriggljuge, (Joint Economic Committee Print, 85th Congress, lst. Sess.
November 27, 1957), pp. 612~627.

_12_
and 1962/63. Although feeding rates may increase slightly, further
increases in grain consumed by livestock will undoubtedly be influenced
more by changes in livestock numbers than by increases in the amount

of feed consumed per animal UHlt.

Feed Grain Exports

 

The final item listed under "Utilization” in Table 1-2 is exports.
Even though the total quantity of feed grains exported is less than ten
percent of total utilization, the expansion in exports has been quite
remarkable during the 1950‘s, Exports of feed grains increased by more
than five hundred percent between 1926—30 and 1956—60. This is almost
as great a relative increase as the increase that occurred in carryover
stocks over the same time span. In 1962/63, 16.3 million tons of feed
grains were exported, a slightly larger quantity than the total amount
used domestically for seed, industry, and food. Should such increases
in feed grain exports continue during the next few decades, the problem
of excess production would no longer exist. It is the goal of this
thesis to eramine one occasionally suggested solution to the surplus
problemnmthat of expanding the exports of feed grains suffiCiently in
the major dollar market area to reduce carryovers to a desirable level.
In recent history, Western Europe has been the most important cash market
for United States feed grains. The role which this market may play in
the future is examined carefully in the following chapters.

There have been differing views of future opportunities for United
States feed grain exports. Total feed grain exports had more than tripled
from 1953 to 1961, but this increase does not truly indicate a shift

of such magnitude in foreign demand. For example, during the fiscal

-13-
year 1961/62, 9.7 million dollars of export payments were made on feed
grains.2/ Government programs were most influential in the exporting
of feed grains during the decade of the fifties. When export subsidies
are in effect, the conditions of sale must be carefully evaluated to
accurately interpret the foreign demand for feed grains. The programs
under which these grains were exported must be examined as well as the
prices paid and terms of payment.

In order to analyze trends and projections of the exports of feed
grains it is necessary to carefully examine the major factors which
influence foreign demand. Foreign demand is used here to mean the re-
lationship between the quantity that will be purchased from this country
by all foreign nations and the corresponding price at any given time
and place. Due to the complex nature of foreign trade data, this demand
relationship for feed grains cannot be obtained directly from available
statistics, Even though quantities traded may be reported regularly,
variations in grades, prices, terms of trade, and exchange ratios make
demand relationships difficult to determine. An estimated 71.2 percent
of the corn exported in the fiscal year 1958/59 was sold at a price
reduction, and over 90 percent was sold with some assistance from govern-
ment prcgr ms. The export price quoted by the United States government
is obtained from diViding the estimated value by the total amount ex—
ported. Such a price is not representative of the cost involved to
foreign countries and 18 of little use in determining effective foreign
demand. If any nation can import feed grains at reduced prices, as a

donation, or in trade for some of their own exports, it seems unlikely

 

Eleanor N. DeBiOIS and Robert L. Tontz, "Export Payment Assistance
Agricultural Exports", Foreign Agricultural Trade of the United
( conomic Research Serv1ce, U.S.D.A : June, 1963), p. 21.

 

v

-14_
it wculd pXYCKaSB as much for actual hard currency as if it had to buy
all their feed grain imports at world market prices.

Government assistance to export trade is administered under several
programs. Public Law 480 (P L. 480) is mainly concerned with increasing
exports of surplus conmodities held in storage by CCC. The Agricultural
A:t of 1949 authorized donations of surplus agricultural commodities
to foreign people in need, Recent amendments have authorized further
donations to prevent or reduce domestic storage wastes. The Mutual
h‘ity Act of 1954(Public Law 665) authorized mutual security programs
for agricultural commodities under its Section 402. In most cases, the
feed grauqsexported under these programs have been sold for foreign
currenc;es. In addition to these programs, the United States govern-
ment assists the exports of feed grains by extending credit to some

urchaSing nations and by selling at less than domestic market prices

‘0

or paying exporters in cash or in kind to export surplus commodities.
It is difficult to determine the effect of these government programs

on the long term adjustments of the foreign demand for United States
feed grains- Foreign countries look upon these programs as of temporary
duration and not to be counted on in future growth plans. Importing
nations heritate to plan on obtaining feed grains under these programs
in the future, and instead turn to building up their own production.

we major areas importing feed grains are Western Europe (noncom-
munist naticns), Japan, Canada, Mexico, Israel, South Korea, Poland,
and India. Exports from United States to Western Europe and Japan have
been increasing in recent years while those to Canada have fallen.

The majority of the feed grains exported to Israel, Korea, Poland, and

India have been under P-L. 480 programs and not sold for hard currency.

united states, Argentina, Canada, and Australia together export more'than

-15-

three—fourths of all feed grains exported in the non—communist world.
Competition for world markets has become more intense in recent years
and problems of product promotion and market expansion have developed.

Following this brief background concerning the large feed grain
surplus and difficulties of analyzing foreign market potential, Chapter
II presents a review of the variables influencing levels of feed grain
utilization and production throughout the world. These variables differ
between countries of the world, and the relationship between alternative

uses is shown for both the developed and underdeveloped areas.

CHAPTER II
UTILIZATION, PRODUCTION, AND TRADE

Total quantities of feed grains utilized in different countries
throughout the world are influenced by many factors. Feed grains are
used for food and seed, in beverages, industrial products, and livestock
feed in varying degrees of importance in nearly every country. Grains
principally fed to livestock in this country are a main item in the
human diets of underdeveloped areas. In world trade, corn, oats,
barley,and sorghum grains together with millets and mixed grains are
classified as coarse grains in contrast to the bread grains; wheat and
rye. This chapter will examine the world demand and supply of coarse

(or feed) grains and recent patterns of trade for these products.
Feed Grain Demand

Variables which influence the demand for coarse grains for use as
food differ from those which influence their demand for feed. Quanti-
ties of coarse grains used for these two purposes far exceed quantities
demanded for all other uses. As a country‘s economic development pro-
gresses, adjustments in human diets occur influencing the flow of grains
away from human food and into livestock feed. These changes are examined
briefly in the following review of feed grain uses throughout the world.
It is the purpose of this section to show how the major proportion
of grain usage shifts from human to livestock consumption with advances

in economic development.

—16—

-17-

Demand for Food

 

Feed grains are consumed as meal, flour, flakes, and baking ingre-
dients in human food. Relatively large quantities are prepared for
human consumption in farm households of many economically undeveloped
countries, More than half of the feed grains utilized in India, Pakistan,
and the Republic of South Africa are consumed as food directly on the
farms where it is produced and very little is prepared commercially.l/
The majority of the agrarian population of these countries has little
knowledge of bread grains or more desirable diets and therefore little
incentive to change their present consumption practices. Shifts to
higher protein diets cannot be anticipated in these countries without
major changes in income and education levels.

In contrast, those countries with relatively well-developed economies
use only small amounts of feed grains for human consumption. In countries
such as Israel, Canada, United States, and those of Western Europe, less
than lO percent of the total disappearance is consumed as food. Human
diets in these countries are composed of bread grains rather than feed
grains, and only small amounts go into human consumption to satisfy
certain tasces and customs. Demand for breakfast cereals, lours, and
margarines using feed grains is relatively stable, changing more with
population than with income or price changes. Increases in population
will increase the demand for feed grains for food only in low income
areas, however, and as incomes rise, demand will tend to decline. In

countries with developed economies there appears to be very little

-/ ”Domestic Utilization of Coarse Grains", Monthly Bulletin of
Agglgulopga;_~gpnomgcs and Statistics, No. 10, Vol. VIII, (FAO, Rome:

October, 959),

 

 

-18-
opportunity for increasing the consumption of feed grains as human food

since this would require a reversal of trends in tastes and preferences.

Demand for Beverages, Industrial Uses, and Seed

A;

Feed grains are utilized in the manufacture of beverages and in
certain industrial uses only to a minor extent throughout the world.
In the United States, corn is used for alcohol, distilled spirits, been
and industrial products. Barley is an important input in the brewing
industry in most countries, however. Sorghum grain usage is similar
to corn for beverages and industrial products, Oats are very seldom
utilized for either beverages or industry. In less developed economies,
only a small amount of feed grains is used in beverages or industry and
this will very likely remain true in the immediate future, The volume
of feed grains used for seed depends primarily on the specific kind of
grain grown, Barley and oats require higher seeding rates than do corn
and sorghum grains- Production practices, yields, and total acres planted
also influence the demand of these grains for seed, As domestic feed
grain production expands, the demand for seed also expands, but this is
generally satisfied from home production, not imports. In many countries
the total utilization of feed grains in the form of beverages, industrial

uses, and seed comprises less than twenty percent of total disappearance.

 

By far the greatest use of feed grains in the world is for feed for
livestock (including poultry), Throughout most of North America and

Western Europe, three-fourths or more of total consumption goes into

\A
Q
'n
\ D
J

livestock fe :ding rates for livestock are generally higher in

-19-
countries with well—developed economies than in less developed areas.
Individual grains are fairly interchangeable in feeding livestock.
The only major exception to this generalization is the feeding of draft
animals. Oats, more often than other grains, are fed to horses and
the continuing decline in numbers of draft animals has reduced the demand
for oats in United States, Western Europe, and other developed countries.
Hogs are the greatest consumers of feed grains throughout the world
and can utilize all types of grains relatively efficiently. In addi-
tion to utilizing feed grains, hogs and cattle consume some rye; while
wheat is fed to poultry in many countries. Potatoes form an important
source of feed for livestock in many European countries, especially
during years of low grain yields. Bread grains and potatoes act as
substitutes for feed grains to some extent in livestock feeds in the
more highly developed economies. Since 1955, world feed grain consump-
tion has increased, mainly due to increases influenced by rising stand-
ards of living. As a standard of living rises, diets tend to shift
from feed grains to bread grains and to livestock products such as meat,
dairy products, and eggs. The small quantities not used for human con-

sumption disappear into feed consumed by livestock.
Factors Influencing Feed Grain Demands

In order to project demands for feed grains into the future it
is necessary to consider the various factors which affect a particular
consuming area. Consumption of feed grains as food will likely be re-
stricted to undeveloped areas with low income and high population rates.
The small quantities of feed grains used for food, beverages, and in-

dustrial purposes in highly developed economies are not greatly influenced

-29-

by incomes or prices and these volumes are relatively unimportant in
total consumption. Of course, discoveries of new industrial uses for
feed grains may create new demands, but it does not appear likely that
these new demands will become important in the near future. It is also
evident that the demand for feed grains as food depends directly upon
the population Size and inversely upon the per capita income and avail-
ability of bread grains, Hence, it is generally accepted that advance-
ments in education or income levels, standards of living, and food
technology will not have any significant positive affect on the demands
for feed

Increases in the consumption of livestock products in the future
will exert the greatest influence on the demands for feed grains. A
shift from cereal to meat type diets greatly increases the need for
feed grains since the calories required for livestock maintenance must
be obtained from the grains before being converted to food nutrients.
The major factcrs influencing the demand for livestock products are
per capita incomes, prices of these products, and eating habits, In
countries where the standard of living is increasing along with the
population, the demand for livestock products and, consequently, feed
grains is likely to increase, Many areas of the world will likely exw
periehce such increased demand in the future, In Western Europe, de—
mand expanSion for livestock products has occurred consistently since
World War II, The per capita consumption of livestock products in
Western Europe has increased along with the population and there seems
to be no reason to expect an abrupt change in this trend,

In order to attempt a prediction of future consumption of feed

grains, the economy of the area in question must be analyzed. Variables

_21-

such as income levels, dietary customs, religions, prejudices, relative
prices of livestock products and feed grains, population potentials,
and other forces affecting the standard of livrng must be identified
and studied. If the demand for livestock products can be projected and
if the major use of feed grains is for livestock feed, a projection of
the demand for feed grains can be obtained. The demand for feed grains
is thus obtained or "derived" from an analysis of the demand for live—
stock productsi

Unfortunately,not all fluctuations in the demand for livestock

1

-roducts are reflected by changes in demand for feed grains. Short-time
shifts in the demand for livestock products may be absorbed within the
marketing channels and have little affect on feed grains. Permanent

shift" in demand due to changes in standards of liVing, disposable consumer
incomes, and populations do have important effects on the demand for
livestock products and are influential in the changes in demand for
feed grains, In addition to a consumer demand for livestock products,
there are other factors which influence the demand for feed grains for
use as livestock feed. Some of these are the availability of substi-
tutes for feed grains, the state of feeding technology, and the infor-
mation available to producers, Substitutes for feed grains vary in
different areas of the world but might be thought of as food grains,
pasture, forage and Silage, and potatoes- The state of knowledge of
priducers influences their reaction to changes in supplies of livestock

feeds and demand for livestock products. As producers become better

of efficient feeding methods and new technology, their demand

Fl
f3
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C)
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f!
(I)
:44

the may change. The present state of economic development,

H)
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H)
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(D

Q 4
0‘2
X
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the type of information services available, transportation facilities,

-22-

and the eXisting level of technology all affect feeding practices, and
as a result, the demand for feed grains,

An area with a highly developed economy will have a much different
demand for livestcck products, a different choice of substitutes for
feed grains,and a different level of feeding knowledge than an economic-
ally undeveloped area Any changes in these factors will lead to dif-
ferent repercuSSions on the demand for feed grains in different economies,
ObVicusly, there is a great difference between indicating a tendency
and direction of a change in demand and predicting the amount of the
changa. While it is poss1ble to theorize that, given certain assumptions,
an increased demand for livestock products will eventually cause an
increased demand for feed grains, it is quite a different problem to
predict the prices and quantity that would satisfy equilibrium conditions
in future feed grain markets. This problem will be further examined

in the fcllcwing chapters,

Utilization, Production, and Trade Statistics

Table Ti-i compares the major uses of feed grains for twenty different
countries. Column one shows the average annual quantities of all feed

ach of the different countries during the period

U
H
S1)
F1
:5
U)
0
\ P)
‘3
(Jr
X
:3
(D
C2.
’ _J
(‘7‘

l- 1955 to June 30, 1958. During that period, United States
consumed nearly ten times the amount consumed in any other country listed
in this table. columns two through six list the percentages of the

clumn cne that are used for the various purposes. In

"J

quantities in
three ccuhtries, the waste and loss estimates were not reported while
in United States it was included under "feed for animals", The figures

for Pakistan combine percentages of feed grains used for food, beverages,

t‘./

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_24_
and industrial uses, However, it is logical to assume that the break-
down for Pakistan would be similar to that in India, and a large portion
of the 68 percent was used for human food. Countries marked by an as-
terisk are located in Western Europe and all except Portugal utilize the
majority of the feed grains consumed for livestock feed.
A few of the more accurate estimates of the non-communist world

production of feed grains are presented in Table II—2. The totals in

this table include corn, barley, oats, sorghum grains, millets,and mixed

U)

mall grains usually produced for livestock feed. The world total prod-
uction has been influenced to a conSiderable extent by annual fluctuations
of United States corn production. The first four nations; Argentina,
Australia, Canada, and United States are the major exporters of feed
grains but not, in all cases, the major producers. It should be noted
that in Table II-2 production is measured in metric tons (2204.62 pounds)
while the unit of measurement in Table I—l was the short ton (2000 pounds).
The production of millets and mixed grains in United States is relatively
small and does not influence the totals significantly. In Europe and

other areas, some domestically produced and consumed small grains are

not accurately reported and estimates of the production of mixed grains

may not he very reliable.

Esrld_Treje

Before examining the West European market for United States feed
grains in detail, it is beneficial to examine the trade relationships
of consuming and producing areas of the world with reSpect to feed grains.

In Table II—?, it can be seen that United States dominates exports of

feed grains and Western Europe dominates imports, United States exported

WORLD PROD

 

.__-—- L- .—.--—. .—.-. -—.—

-.-uu u. ——.—. ._ ..

UT
I

TABLE II-2

l952—57 AND BY lEAP

958/59 ‘HBOU r9 62/63

‘

CT‘TION 0F FEED CPAINS BY TYPE AND SOURCE
AVERAGE FOR
FRCM l:

 

6-4 _-.-..-

 

(1:

L//

Grain Type
Curt lQQ.
Earlev A6.
Oats A:
strghuu & Mi llets 3’
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dc roe of Production

Otne; Producers
T L _ _ '-‘V
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Fa: Eduffi,’ ?2

2Miners , 20
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Ma or Exporters «

AS 0 of Total 53

’8‘- — —.—u.-. _ .Q- —_ .—— ~.———-—.- sun..— —_ u...-— .p.

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hstos' -/ Crop Years. United States JulyC, une; Canada. August/July;
Aroentina and Australia, De ce9hci/November

E? Provisional Estimates.
g/ Excluding Mainland China North Kirea, North Viet-Nam.
d// Extl,dirg Eastern Trading Area

So roe: Monrh;i [ v_E; QQegg§_gf_ Avril+ ral Econwnit 3_‘§igm§ja;gs;}§§1 Volume
VIII, N6. 2 and i2, voi ix, Ni. 7/3, Vol. l0, N6. 2, 7/8, V61. ll,
No 2, and Volt l2r No. 2, o and 9, (FAO, Rome)

14.8 million metric tons of feed grains in the year from July I, 1962

to June 30, 1963. This was one-half of the 27.3 million metric tons
exported by all countries. Western Europe dominated the import market
even more than United States dominated exports. In that same marketing
year, Western Europe imported slightly more than 73 percent of world
imports. Almost 65 percent of all United States feed grain exports went
to Western EurOpe and 9.5 of the l7.9 million tons of West European net
imports came from United States. Although a total of 20.4 million tons
were imported by Western Europe,oountries in this area exported 2.5
million tons giVing a total of 17.9 million tons of net imports.

As can be seen from Table II—3, Argentina, Canada, Australia, France,
and the Republic of South Africa were the major feed grain exporting
countries other than United States. An analysis of specific grains
shows Argentina has traditionally been an important exporter of corn,
and Canada and Australia have exported oats and barley. In 1962/63,
France exported most of its surplus barley and corn to other West Euro-
pean countries,

Major importing countries outside Western Europe were Canada, Japan,
and United States, Table II—A contains five-year averages of feed grain
exports, by specified exporting country and by type of grain, to major
importing areas, The three five-year periods include a period just
prior to World War II, from l934/35 through 1938/39, a period just after
the war, from 1947/48 through l95l/52, and a more recent period from
1957/58 through l96l/62. This table shows that Western Europe has ob-
tained most of her barley from United States and Canada throughout this
period however, there has been a shift from Canada to United States

as the main source of Western Europe‘s oats since World War II.

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_29_

In the more recent fivemyear period, the Republic of South Africa has
emerged as an important source of corn for Western Europe. Sorghum and
millets import and export data are not complete for the prewar period,
but the average of the five-year period from 1957/53 through 1961/62
shows the importance of United States exports to West European markets.

Importing countries utilize feed grain imports mainly for livestock
feed. Imports are influenced by the number and type of livestock pro-
duced, the amount cf home grown feeds and substitutes available, and
the relative returns to livestock production. Some of the factors in-

fluencin the demand for imports appear to be the relative prices and

00

costs from different sources, the availability and acceptability of cur—
rencies or barter goods, trade agreements, and import quotas. The im-
portance of each of these factors varies between countries and through
time. Similar influences effect eXporting countries' decisions concerning
the courtries to which they export feed grains. These influences and
their effects on trade will be considered in turn in the following chapters.
This chapter has presented a broad picture of the utilization and
production of feed grains along with trade relationships- The following
chapter will further analyze these patterns with reference to United States
trade with Western Europe since World War IT. Information concerning
trade between these two areas has been more accurate and complete than
between other areas. In Chapter IV the cause and effect relationships
brought out in this chapter are develOped with reSpect to Western Europe

and the feed grain balance in that area Since World War II.

CHAPTER III
WEST EUROPEAN FEED GRAIN PRODUCTION AND UTILIZATION

Some idea of the complex nature of problems concerning an analysis
of feed grain demand, supply9 and trade relationships throughout the world
has been brought out in the previous chaptersg The purpose of this chap—
ter is to examine the relationships present in the West European feed
grain demand and supply patterns“ This examination will serve as a back-
ground for the development of an empirical model and the projections to
follow” Immediately after World War II9 Western Europe went through a
period of recovery and major adjustments were made, especially in agri—
cultureo As a result? little help is gained from an examination of the
feed grain relationships prior to 1947 except as a comparison between

the prewar and postwar period.
West European Area

Western Europe has been the major destination of feed grain exports
from United States since World War IIO In the five year period from
July I, 1954 to July I, 19599 an average of 73 percent of United States
feed grain exports were shipped to that area; Any fluctuation in import
demand from this one area would have an important influence on total
'United States exports. Changes in either demand or supply that are
riot counterbalanced by corresponding changes in domestic conditions
jiifluence an area's demand for imports or their "feed grain gap"a "Feed

ggrain gap" is used here to mean the divergence between the quantity

-30-

,

31

utilized and the quantity produced domestically» A positive gap indicates
net imports or a reduction in carryover stocks while a negative gap in-
dicates net exports or increased carryovers of feed grains.

At

(+-

h

(D

outset it is necessary to define the area considered as
Western Europe in this study. The concept of the West European area
has changed from strictly g ographical to a non-communistic collection
of countries to the east and southeast of Russia and her satelliteso
Western Europe‘s boundaries encompass the following countries according
nited Nations definition: Austria; Belgium—Luxembourg, Denmark9
Finlanr, France, Western Germany, Greece5 Iceland, Ireland, Italy9 Nether—
lands) Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom,
and rugosiaVia, Turkey plus all but two of these nations (Finland and
YugoslaVia) comprise the European countries of the Organization for
Economic COOperation and Development——(the OECD countries, originally
organized as the Organization for European Economic Cooperation). Geo-

graphically, Western Europe would include all countries in the U,Nv

CL

efin tion except Greece and Yugoslaviac These differences in identi-

}_4

vw

ication raise prctiems in the use of historical data because the West

H)

European area of one time may not be conSistent with the West European
area of another time In this study, an attempt is made to consistently
use data from the West Eu opean area of United Nations definition (Figure
III—1), Trade has been freer within this area and data more complete

than from the rest of the European nations since World War II.

Feed Cr in Utigi'gtion in Western Eurppe

- -..——...’

Im

 

 

O
I

Feed grains are used mainly for livestock feed in Western Europe,

‘d other areas with well developed economies, Portugal is the major

m
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t...
c.
>

-32-

celand

Finland

N.I.

 

Atlantic “fiwg Eastern
Ocean \ J Euro 8
o \I
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5

FIGURE III~l

WEST EUROPEAN AREA AND EASTERN EUROPE

-33-
exception, using less than 60 percent of its coarse grain in the form
of livestock feed, During the period from 1956 to 1958, the relatively
small quantity of coarse grain that Portugal consumed was almost equally
divided between human and livestock consumption (See Table III-1). Major
coarse grain consuming nations during that period were France, the United
Kingdom, West Germany, and Italy, In these countries nearly 80 percent

on is for livestock feed. As is shown in Table

*4.

of the total utilizat
III—l, the four largest consumers of feed grains together accounted for
near y SO percent of the total domestic disappearances in eleven West
European countries. Pigs and poultry were the main consumers of feed
grains in France and West Germany, but in the United Kingdom more grain
was consumed by cattle than by hogs, Detailed information is unavailable
concerning Italian feed grain utilization,

The per capita consumption of animal products fell drastically in
Western Europe during World War II and remained low for several years
after the war was over. Since 1948/49, however, consumption levels of
meat, fats and Oils, eggs, cheese, and milk have all risen until they
are now well above prewar levels. Increased per capita income and a

desire for higher protein diets have created even greater demands for

FJ

ivestock products than existed prior to World War II, On the other
hand, the consumption of feed grains as human food has fallen since
1949/49, indicating a dietary shift throughout the area, The ravages

of war brought heavy lessee t: livestock breeding herds, and human diets
were restricted to grain and root crepso Following World War II, con-
Siderable effort was made to rebuild livestock herdso Nearly all animals
and pcrltry available were used for breeding purposes, It was not until

l955/56 that meat consumption reached the level existing before the war°

-34-

TABLE III-l

FEED GRAIN UTILIZATION IN ELEVEN WEST EUROPEAN COUNTRIES
AVERAGE FOR THREE-YEAR PERIOD 1955/56 THROUGH 1957/58

 

 

 

 

Feed for Total Domestic Feed for Human
Animals Utilization Animals Consumption

Thousand Metric Tons-- -«~--Percent~—~r
Austria 1046 1359 77 5
Finland 668 1093 61 7
France* 7919 9024 88 O
Germany, Western* 5985 8073 74 4
Ireland 716 1018 70 4
Italy* 3558 4836 74 19
Netherlands 2494 2801 89 7
Hui—"day, 502 593 85 5
Portugal 286 674 42 48
Switzerland 507 580 87 8
United Kingdom* 6877 8957 77 5
Total of 11 30,558 39,008 78
Total of 4
major consumers 24,339 30,890 79
Four major
consumers as -~~--Percent -------
% cf ll so 79
Note: * m Major feed grain consuming countries in Western Europe.

Szuzce: Mpnthlngulletin of Agricultural Economics and Statistics,
Vol, VIII, No. 10, (FAQ, Rome: October, 1959), Table I,
717.

pp, 15-

 

-35-
Since then the per capita consumption of meat has continued to increase.
Other livestock products have shown the same trend although the exact
year when they reached and passed prewar levels is not the same in each

‘

case, The adjustments in feed grain utilization for human food mentioned
above have not been accompanied by as great a change in livestock feeding
rates, Feeding practices have changed rather slowly throughout most of
Western Europe and some countries such as Portugal and Spain have a long
way to go before the productivity of their livestock economy compares

with that of Western Germany and the United Kingdom.l/ To many farmers,

unavailable and modern scientific feeding principles

:3
"_J
LP

formal educatir
are unknown, DGSDlt‘ this lack of education, there has been an increased
use of feed grains and a better balance in the feeding diets in many
West European countries, Commercially prepared feed consumption has
increased in countries such as Ireland, Sweden, Switzerland, France,

and Western sermany replacing on—the—farm preparations. These few
changes in feeihrgnmxods hflueteen of minor importance relative to total
livestock feeding operations in Western Europe, however. The major in-
fluence on demands for feed grains has been brought about by increases

in livestock numoers since the World War II.

Changes in the use of feed grain substitutes also have influenced
the amounts used for livestock feed. Root crops, especially potatoes,
have been generally used as substitutes for grain in the diets of cattle
and swine. An estimate of the quantities of potatoes used for feed in
the ‘ECD countries shows that the prewar average increased from 22 to
nearly 27 million metric tons during the period from 1953 to 1957.

Feed grains used in livestock feed also increased from 3l to 38 million

m““__ w... -_. —-m_._._ .—.-._—_—-—

l“ . .
-/ ErghLems of Animal Feeding_in Europe, (FAO, Rome, June, 1955).

 

-35-
metric tons over this period. Other livestock feeds used in this area
include sugar beets and fish and oil by—products. but are of little
importance relative to potatoes. Grass and hay still remain the basic
components of cattle rations in Western European countries9 and while
not perfect substitu as for grain, their production has influenced the
demand for feed grains.

Feed grain utilization is influenced to a considerable extent by
the demand for livestock products such as meat9 dairy products, and eggs.
Both production and consumption of these products have increased consis-
tently since World War II. An increase in the demand for meat could be
satisfied either by reducing livestock numbers for immediate consumption
or by building the Size of herds and increasing meat production over a
longer time period, It is evident from Tables III-2 and III-3 that OECD
countries built up their herd size before increasing the output of live-
stock products. The numbers of cattle reached prewar levels by 1949,
but as can be seen in Table III~3r total production of beef and veal
did not reach the prewar level until 1351/52. Even though there were
as many milk cows on farms in 1948 as there were prior to World War II,
milk production did not reach prewar levels until 1950. Undoubtedly9
this lag was due to the difficulty of developing productive dairy herds
after the devastations of the war. A different situation occurred in
poultry and egg production. It can be noted from Table III-3 that egg
production surpassed )TEWET levels by l949/50y but poultry numbers did
not reach prewar levels until 1951 as shown in Table Ill—2. The rapid
rise in egg production was possible because of the nature of poultry
pTCdUCtlTH. Poultry flocks can be increased rapidly and in Western

Europe greater specialization in egg production after the war encouraged

 

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-39-
the development of productive laying flocks.

From 1943 to lgol the population of draft animals declined in Western
Europe. This reduction occurred mainly because of the adjustment from
animal to tractor power and the trend toward more mechanized farming.

The decline in demand for draft animal feed was far outweighed by the
incr,ased demand for feed for other livestock. Other changes such as
reduced later requirements, less intensive farming methods, increased
use of fertilizers, larger produCing units, and improved yields also
occurred during this period and have been associated to some degree with

the increas

(D

d use of tractors. These changes and their effects are
examined more cldsely in Chapter IV.

An indication of the demand for feed grains in Western Europe can
be obtained from a measure of the output of livestock products. Such
a measure, theoretically, could be approximated by developing an index
of livestock production- The right column of Table III—3 presents an
index of the production of total livestock products from 1947/48 through
lgél/oz. A SBYleS difficulty arising from the use of this index as an
indicator of feed grain demand is due to the lag between the time when
feed grains are COLSwfled and when the final products are sold. Using

9

an index or total production of livestock products as an indicator of

changes in demand for feed grains implies the assumption that the composi-

L)

._- x f‘ ‘- - . .‘H . £'
LLOIL Ol ichbl-cx,n J.’

(

ed remains relatively the same, and increased output
is due to increased input alone, Another assumption which is implied

in the use of such an index is that the relationship between different
components of the index remains the same throughout the period studied.
This last assumption raises a sericus question as to the validity of

such an index through a time where growth in all livestock production

-4Q_
does not remain in a proportional balance.

A much more sensitive indicator of feed grain demand might be developed
from an index of livestock numbers on feed, prOViding that the index is
constructed so as to give representative weights to different classes
of livestock. however, this type of an index would require an assumption
that technology and feeding practices were unchanged throughout the time
period considered and only the changes in numbers influenced demand;
If all countries in Western Europe maintained their relative position
in total livestock numbers, an assumption of constant technology and
practices might be reasonable. Yet, the production of certain classes
of livestock in some countries increased as much as 300 percent (as was
the case for pigs in Denmark, the United Kingdom, Netherlands, and West
Germany); while during the same period (1947-57) production in other
countries (Italy, for example) declined. It is very likely that the
feeding practices during the period of increasing swine production (from
l947 to 1957) did not remain the same in all countries although accurate
information on feeding practices is unavailable at the present time.
Perhaps an accurate indicator of feed grain demand could be constructed
only by weighting each class of livestock differently and also weighting
the livestock produced in each country by some indicator of feeding rates.
Obviously, developing an index of demand for feed grains based on live-
stock numbers throughout a diversified area is not a simple task. At
present there is not sufficient information available to permit a compu-
tation of realistic weights to apply to different classes of livestock
in order to compute a feeding unit for each of the various countries
of Western Europel

The preceding analysis indicates some of the difficulties involved

in creating an index of llVVStOCk numbers which would be an accurate

-41-
indicator of the demand for feed grains for livestock feed in Western
Europe. Some of these difficulties can be avoided by examining a trend
of per capita consumption of livestock products to obtain an indication
of the changes that are taking place. An analysis of such a trend and

its projection is presented in the following chapter.

West European Feed Grain Production

 

Import levels of feed grains are influenced by changes in domestic
supply as well as changes in demand. The West European area had recovered
from the wartime disruption of grain production by 1951 and has produced
grains in generally increasing quantities since then. Considerable varia-
tion has occurred in the production of different types of grains, however.
Production of barley reached prewar levels by 1948 while total corn pro-
ducthxlremained below prewar levels until l951. The total production
of oats has been less than prewar levels for all except two years since
the war. Total feed grain production for European OECD countries is
shown in Table III-4 by type of grain. The indices at the bottom of
the table show relative changes for each grain and for the total production
relative to the prewar period 1934-38. The "Total" column includes mixed
grain production in addition to barley, oats, and corn. Barley production
has increased continually since World War II and by 1960/61 nearly two
and one half times the prewar level was produced in European OECD countries.
Corn production has not risen as rapidly but has increased fairly consis-
tently since 1947/48. A projection of these trends and their implications
for import demand are discussed in Chapter IV.

Throughout different countries in the West European area there has
been a wide variation from country to country in the rates of increases

in feed grain production levels. As is shown in Table III-4, total pro-

Total

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-44-
d-otTQIincreased from a 33 million ton prewar average to 50 million tons
by lQoO/ol. A slight reduction in 196l/62 reduced the total to 49.4
million tons, but total production remained fifty percent greater than
the prewar average. In the United Kingdom, total production increased
by two hundred and fifty percent from the prewar period to 1961/62; while
in Spain it remained relatively unchanged (Table III-5). Other West
European OECD countries have increased production over prewar levels
but not as rapidly as the United Kingdom. The eight OECD countries
listed in Table Ill—5 produced 88 percent of the feed grains grown in
all l7 European OECD countries In 1961/62. Yugoslavia, the only West
European country not a member of OECD, increased its feed grain produc-
tion slightly ince prewar levels but with considerable year-to—year
variation.

The expansion of feed grain production was brought about by increases
in both planting areas and yields. In the European OECD countries, the
acreage planted to feed grains increased from an estimated prewar average
of 17.9 to 19.5 million hectares by 1953-57.2/ Between 1952 and 1957
the area producing all cereals (including wheat and rye) increased approx-
imately 4 percent in France and 3 percent in other Western European

-/
countries.i7 The greatest increase in planting acreage occurred in
Yugoslavia and Turkey with an ll percent increase (mostly in feed grains)
for YugoslaVIa and 23 percent increase for Turkey.

Grain yields also increased rapidly after the war in OEEC countries.
Yields of barley rose 30 percent from 16 to nearly 21 quintals per hectare.

Oats and corn yields increased approximately 16 to 18 percent respectively

 

,)
5/ Agricultural and Food Statistics, OEEC Statistical Bulletin, (Paris,
7959), p. 3.

 

’2

4/ F.C. Schlomer, ”Developments in World Grain Production by Type of
Grain and Region, lUSl—57 and Outlook", Monthly Bulletin of Agricultural
Economics apd Statistics, Vol. VIII, No. 3,(FAO, Rome: March,1959),Table 3, p.7.

 

-45-

from the prewar period to l953~57. During the period 1952 to 1957, the
yield of all cereals in Western Europe rose approximately 18% percent
(from 16.8 to 19.9 quintals per hectare).§/ Corn yields increased by
47 percent in France and 21 percent in both Italy and the United Kingdom
from the prewar average to 1952-57 average. The major cause for the
rise in production was due to increased yields rather than increased
acreages planted to feed grains. Future yields are expected to rise as
a result of new technology in feed grain production and wider application
of known {reduction increasing methods. It has been estimated that
the yearly increase in West European feed grain yields will average about
0.8 to 0.9 percent above the early 1960 period. This increase will range
from less than 0.7 percent in some countries to 1.4 percent in France.§/

Acreages planted to feed grains are not expected to increase greatly
in Western Europe unless government programs are developed which encourage
major acreage shifts from other crops. It is technically possible to
readjust present bread grain producing areas and shift new areas into
feed grain production, but it does not appear likely that such shifts
will be economical in the near future under current price relationships.
The soil type and climate throughout much of Western Europe tend to
impose a limit upon the land area which can be economically productive

in feed grains Whether or not such adjustments will be economical in

the future depends to a large extent upon the farm programs which become
effective in the West European area. The types of programs presently

in effect are discussed in the following section.

 

-46-

National Grain Policies in Western Europe

Economic motivations are not the only factors that influence the
utilization and production of feed grains. A lack of technological
knowledge and a low level of education in combination with a value
system suspicions of change tend to reduce the effects of price fluctu-
ations on consumption and production practices. Utilization and prod-

uction are also influenced by specific government grain policies in

diffe erent coiir tries. Each government in the West European area has a

U)
r r V
OJ
(3

ific set cf regulations and policies aimed at increasing livestock
prrwduCIi on and the standards of living in general. Methods used include
import tariffs or quotas, price supports, subsidies on particular farm
inputs farm improvement aid, and marketing mechanisms to improve returns
to producers.9 The approach used to analyze this complex problem will
be to first examine those lelCIGS which are aimed at increasing the
utilization of feed grains. Then the major governmental programs de-
signed to increase feed grain production will be reviewed. Obviously,
it is impossible to present a complete analySIs of all national policies
influenCing feed grain utilization and production in Western Europe in
this thesis; hot the najor ramifications will be discussed. If the Common

Market does implement a common agricultural policy, the problem of analyz-

ing the influence of this policy will be made much easier.

PCT :19” Tri‘ heir - Itiii ation

l

 

G vernmertal poIICies influenCir ng the disappearance or utilization

- .‘_—-- a. v— .o———.. .. .——..- —-——.—— u—.—-——-——_.—-

 

b
~/ Jenn 0. Co ppock, fiprth Atlantic Policy: The_Aericu1tural Gap.
(New Yo k: Tn mrt.eth Century Fund, 1963), pp. 33—35.

_47-
of feed grains can be diVIded into three categories: (1) subsidies to
livestock producers, (2) regulations influencing grain handling and feed
mixing, and (3) import controls. Methods of subsidizing livestock produc-
tion are accomplished in some countries by paying refunds directly to
producers. In Belgium, for example, refunds are determined from the
quantities produced on the farm and quantities of grains bought by in—
diVIdual producers. Another method of subSidizing producers occurs in
Norway where a bonus is paid to farmers who feed grains to livestock.
Such policies also increase the future demand for feed grains by in-
creasing livestock production and causing farmers to increase the use of
grrins in their feeding programs. Livestock production is indirectly
subsidized in some countries such as Austria where corn is sold at prices
below import costs. By equalizing feed grain prices through government
controls, corn is supplied at prices below the competitive level. Costs
of produCing livestock are reduced and corn utilization is increased
through programs of this type- Returns to livestock producers are in-
creased in many countries by protective policies insulating domestic
producers from foreign competition. According to estimates of the Ec-
onomic Commission for Europe, Denmark was the only country with competi—
tive prices for livestock products, and many nations including the United
Kingdom, West Germany; and Italy had protection ranging upward from 20
percent on most domestically produced livestock products.Z/ The long-
run impact of subSidies is difficult to determine> but continued expansion
in livestock production will mean an increase in the long—run demand

for imported feed grains if they remain unavailable from domestic production.

 

4 Economic Commission for Europe, Eponomic Survey of Europe_ig
19§Q~ (Geneva) 1961), Chapter 3.

 

_49_

Many governments in Western Europe have controls and regulations
on practices of mixing livestock feeds. In addition to standardizing
mixing practices, such pclic1es may have secondary effects of stabiliz-
ing the mixed feed trade and increasing consumer confidence in the pro—
ducts. Requirements concerning labeling and accurate weighing are also
being imposed- Over time this may aid the livestock producers in be-
coming better informed concerning the advantages of using commercially
prepared mixed feeds.

Import ccnrrols in general have prevented effective expansion of
the demand for feed grainsin many countries. Quantity restrictions on
imports of feed grains reduces available supplies and causes higher

on.rols on bread grain imports have indirect effects on feed

*(3
H
H
(i
(D
in
O

‘o
s
+

grain prices. Limitations on the quantities of bread grains imported
reduce available supplies and contribute toward increased prices of all

domestic grains. As a result, the feeding of bread grains in livestock
rations is restricted and livestock producers resort to feeding the

cheaper feed grairs. Therefore, restrictions on imports of bread grains

the impoits of feed grains if these are not restricted also.

’3
90
c (4
‘1
H
:5
C‘ I
L1
(D
Q)
U!
(D

West European governments have endeavored to increase the produc-
tion of livestock by reducing production costs and increasing prices
through the elimination or severe curtailment of foreign competition.

In some cases considerable success has been attained. Future demands

if}

or impcrted feed grains will depend to a large extent upon two major

’4)
H

actors. Tirst, the level of livestock production will determine, to

an important extent, the domestic demand for feed grains. Second, the

on import levels of feed grains will determine the

(D
U
C’
*5
H
‘i
+
’3
H
n

imposed r,“

balance reached between quantities imported and those produced domestically.

-49-
On the other hand, the fu+ure level that domestic grain production is

able to attain will influence import poliCies to some extent and import
demand even more.

gfluencing Domestic Production

Policies influencing the production of grains in Western Europe

are closely rela+ed to those concerned with their utilization.

Agricul~
tural policies effecting feed production differ as widely from country
to count

I ’I
; l

ry as do policies effecting consumption.
gall existing p:.

A complete analysis of
icies wculd be too complex to be of value in this thesis.

Plowever, governmental policies directly influencing production can be

cljgvided into three general categories based upon the approach used.
CI‘}i<sse categories are:

(1) price support pOliCiess (2) research and edu-
<::£El_tion pOllF1€59 and (3) other related policies.

at

Governmertal actions of many types might have indirect effects upon
.if‘esereed grain production. but only those policies which are directly aimed

.. ..
Lll‘

influencing the production of feed grains will be discussed here.
<DJ—éEa_'t:lOHal farm progra

S'Vtisr a

o influencing the profitability of producing bread
é§;:1:fi’€EilnS are generally followed by shifts in feed grain production. Any
F:’<::> :l-icies which reduce the risks or change the returns to farmers also

IT)“%Ei—:S7 influence prod

uction methods and effect feed grain production levels
Gag period.

Aiqthcnish

{)11.

many Western European nations have price supports on certain

iié \ . . . . . r .
(E;'EE“ grains, the efiects of such poliCies in the 1930's were not as

EZZ-if'eeat as those in United States.
m ,
9 :33 in ,

V‘

_‘
1 I. (u).

9‘

For example, France. West Germany.

tne United kingdom have had price supports. but the support
W 1 . ,
‘“~€3\7el was generally below free market prices.

During the 1950's, the

—23—
prices for feec grains were favorable to production, and support prices
d not provide strong incentives to increase feed grain production.
With the development and approval of a common agricultural policy
for the Eiropean Economic Community in January 1962, support levels for
feed grains took on a new importance. The wide variations of feed grain
nrices between Common Market countries have led to considerable anxiety
on the part of exporting nations concerning the ultimate price levels
to be set. It has already been noted that feed grain production could
be expanded considerably by the shifting of acreages from other crops
(gas was the case in 1956/57) and increasing yields. High prices
-chnild tend to encou a;e more rapid expansion in feed grain production
_:.11 Western Europe and reduce the demand for imports. A secondary effect
c:>1f‘ .high grain prices would be the raising of prices of livestock products
éa;ri.ci. the corresponding pressures to slow down expansion in their comsump—
t1:i_ c:>11. If the final policy in the Common Market does lead to these re—
531_2M;1; fits, it would tend to mitigate improvements in future standards of
1-T1—"k7*i;ing and perhaps even reverse the trend toward increased consumption
~94- _Livestock products.
Policies designed to increase the education of producers and improve

L ' q . z —. . 1 .- c
‘”5:3 (~l; ariroicg; 3n the i950‘s had an important impact upon present yields

(air-‘0 :. . . ,. a
" <¥e< may also be quite influential in the future. Many countries have
n .2») *. - i . . . ’
‘ k—':1_cnaliy supported researcn programs and prOVide extenSion serVices
t a A) —‘ .- , a
\' :t armers In Denmark, France. and the United Kingdom such programs

I
L1=E= ~:,__ -. , H _ , , . . .
V 6?? directly benefited :eed grain producers. Such poliCies likely in—

1‘ (:251sod the integration and specialization of production as well as ex»

Y
s5 $33. I’ 1 . ~ i ,, - - ~ ~
‘ ~«~i.ieu tre adoption of new tccnnology. In the 196085 research programs
‘1 ‘W‘ ‘ "1 . . . . .- ,
r“ 1 i. cantinue to bring about further increases in yields. Of course.

-51-

it is impos isle to accurately predict any government's future actions,

but prcg r ms designel to support and strengthen research and education

will undoubtedly be inc liided in future policies of the West European area.

Domestic policies directly influencing feed grain production in

addition to the se mentioned above include programs faCilitating farm

wbtai ining credit and subsidizing agricultural inputs.

improvements, 3 .
Denu Italy. and Spain all have programs designed to ease the credit

.rain producers and permit long term loans for farm improve—
ccuntries have made fertilizer available below cost and

znany subsidize tractor fuels. French farmers even receive a 15 percent

:511b sidy of the cost of agricultural equipment. fi/ Such programs appear

t;<> have had only a slight influence on feed grain production although

‘tikjeeir combined effect is difficult to determine. If incomes in the

aziéggzricultural sector of these countries fall relative to incomes in other

53.632‘Q‘EOTS such programs may become more important in the future. On the

cl»*t;.171er hand) if agricultural incomes and especially dietary levels maintain

53- Essteady growth. there will be less incentive to force increased livestock

PDfIT‘ <:: d cticn, and governmental poliCies in that direction may be relaxed.
I“

1*21 <33. presentl ask of information concerning livestock production and feed

if? H , .y. .
237;. £53.1n conditions in ma West European countries tends to make predictions

C)
if:‘ future policies extremely hazardous.

Of more immediate concern to nations trading with countries in

G. c

i
3‘1, ;\- . . . . . . .
‘\~' C: tern Europe r e the combined and indiVidual foreign trade poliCies

i_ ‘I— .1, ,.. ‘ . ' g
‘.1. eiiect. In2i niai ly West EurOpean countries had relatively liberal

EE’“43—l “cres con rur-fi grain imports following World War II. These policies

C”)

1*) . , . . . .
EEL‘JIB become s'mewnat more restrictive and particular concern is eVident

g).

\

—.--- .—. .‘ac- . -A-..—.

~M
-——. .‘_ ...._... __....._ .nu‘ .

Cu... P. 57.,

. -..

R /' , . \ 1
e. Jenn C, CoppOCK, 9p;

-52-
over the combined policies of the Common Market. Restrictions on imports

of livestock products had greater influence than restrictions on grain

imports in the 1950

Q
u

. In generalS foreign trade policies protect domes-
tic grain production by limiting competition» In_the 1950's9 these re—
strictions were applied to imports of wheat to a greater extent than to
feed grains" However; quotas limit the quantities of feed grains imported
in several West European countries and in Turkey feed grain exports have
been subsidized. These policies assure favorable prices to producers
and perhaps have been influential in maintaining domestic prices above
'the support levels discussed previouslyi

As individual nations, the West European countries have had restricted
k35Lrgaining power in internationa: tzadeu However, joined together in
aa. (:onmcn market, their combined actions have had considerably more effect
(:24f1 trade negotiations with outside countries. The European Common Market
t~fEEl :3 formed in 1957 by Belgium? France? West Germany, Italy, Luxembourg9

— -

aairil (ii the Netherlancs under the title of the European Economic Community

( QEZZ;IEZ(fli The stated objective of the EEC was to reduce trade barriers

c>.e53='1:;~ween members and strengthen their economic stability. The ultimate
Common Market influences on feed grain utilization and con-

~¢§.

iiiiicult to predict, but some general implications can be

f
A
P
I\
1’3
L
L\
I“

As internal trade restrictions are reduced or eliminated between

1T, _ - . i ,, ., , 2
IEEZ<__1 countries, feed grain production will very likely shift to greater

(\I -—‘ - - a - . ~ - -
D‘I““'(Ei(filalizatlfh in areas of higher economic advantage, However, if stand-
a3.- -_ . . .. .
'r- \3.53 of liVing continue to increase and people demand more meat and higher

1:):r‘ i , u . i _ . 2
*- - C“!t;ein diets, a shiit in the demand curve for livestOCk products is to
W: I) «1L3

€3xpectedt Answers to the question of where livestock products and

-53-

feed grains for European consumption will be produced become of extreme

concern to surplus producing areas such as United States. In EEC countries,

tr e variable levy and gate price system protects domestic producers from

.. . . CI ,/ ' . ‘
foreign competition.4’ Under such a policy, imports are admitted only

at a price above supported domestic prices. Together with import discrim-

ination and preferential treatment policies, the variable levies and gate

price systems comprise the major nontariff barriers applied to feed grain

imports in Western Europe. This variable levy or equalization fee effec-

74'insulates the EEC from all external competition, since neither

ssubsidies nor normally low world prices can influence prices within the

(3cnnmon Market. Imwort discrimination and preferential trade agreements

‘bquth certain countries tend to give preferred exporting countries a

loger share of the Common Market feed grain market than less favored

LZ.E3

€32:<:g30rters.

Adjustments in the location of livestock and grain production will

(3 <::£r:1e about slowly due to the many immobilities involved. West European

C1 <:)*1;2;ntries will probably continue to produce a large share of their own

:L ii. “‘or'estock products since these products in general are relatively perish-

~ €>and expensive to transport. Feed grain production in this area is

._l

a (—1)

Ei-—L__Tfr1<:st certain to increase as a result of the increasing yields. Yields

xu'ji‘ ::1‘:1

iii

ely increase both in the presently lower yielding areas where

c:1 . . .
jLI"aren’t technfl» :ng and education are relatively backward and also in

x.)

51:I:‘ _ . . . . . .
Eiseas where yields are already above average. Government poliCies will

EL‘17* . . . . ..
r“‘1l'€3upt to bring about economic growth and oeveIOpment with or without

E3. ”\ .fi. .
\~—<fimpletely uniiied Western Europe. It may be some time before Common

 

\\~

0/ . . . . . .
4/ Ec:onomic Research Ser rVice in Cooperation with Foreign Agricultural

‘3’631?\fice:, Africultiral Pr Mtec ion by Nontariff Trade Barriers, USDA, ERS-

-.t_'i_.

C31?eeign bi, (Wa.hiwgton, September, 1963)-

-54-
Market trade policies will be designed to encourage the importation of
a larger share of feed grains and then only when pressures of demand make
such policies acceptable. However, other West European countries outside
of the Common Market may maintain their individual trade agreements and
remain strong markets for United States feed grain exports.

This chapter has been devoted to a brief examination of West European
utilization, production,and trade of feed grains in recent years, Govern-
mental policies and programs which directly influence this area‘s demand
and supnly conditions have also been reviewed. It was noted that both
‘Lhe production and utilization of feed grains have shown continued ex-

;Jansion since 1947. While limitations in grain producing areas may be
zreaached in this area, no such limitations can be expected concerning
4L 1;:s utilization as long as livestock production continues to expand.
CZ‘IWiee effects of governmental policies concerning grain production and
Iii‘t:.:Llization are extremely difficult to measure but undoubtedly will play
gauzr1_ important part in the future, Unless answers to questions concerning
th'EEE :sat Eurcpean domestic and foreign policies are obtained, predictions

..—‘

CJ-JZ— future production and utilization levels become rather hazardous.
'9? 41— *;,hcut a framework of analysis, such information can contribute little
-’ <::>*u~rard developing sound pfOJBCthDS of the potential value of the West
:EZ"~3L.17*opean area as a market for United States feed grains, Chapter IV

_) 1‘. . . . .
I‘ ~— €Easents a conceptual framework and an empirical analySis for a prOJection

C)‘_\ '\ . v '
3; future feed grain imports into this area,

CHAPTER IV

THE FEED GRAIN TRADE STRUCTURE OF WESTERN EUROPE

An important portion of the feed grains utilized in Western Europe

Hi
U)

not obtained from domestic production but from importso From 16 to
’2 percent of the yearly disappearance in OECD countries has been im-
pmrted annually since 1947; It is the purpose of this chapter to in—
wrestiga e this trend after first developing a theoretical trade model
earrd to project estimates of future changes in the demand and supply of
lf‘eaed grains in Western Europe“ Traditional concepts of demand and supply
éahlrwe supplemented in this analysis by trade theory and dominant firm
‘£a_riiaalysiso These concepts contribute to the development of a model which

iE:_EEe‘:1ps explain the basis for fitting trend lines to post World War II

LEEFEB- t;a and developing projections forward to the years 1965 and 19700
Construction of a Theoretical Framework

Several different approaches could be followed in examining the
it"?f"éELde structure of feed grains in an importing country. International
it; :57“Fa.de theory with the concepts of terms of trade, balance of payments?
EBLfrTI nil comparative advantage could be applied to feed grain trade between
S: I~3237‘plus and defiCit areaso It is questionable whether a functional
Ir1‘<3>< rel involving all of these relationships could be developed and used.
; present state of international trade theory has not been advanced
tL'CD ‘the point where satisfactory answers are available to questions of
Cliffilaricso T”

his type of approach would leave nearly as many questions

-55-

-55-

Ema sw red as it wruid ap“w r an: would iot allow adjustments to to made

should conditions change.

Studies of the history of production, consumption, and trade in
feed grains have approached the problem at the opposite extreme. Analysts
examined and used empirical data in these studies to project indicated
trends for short periods into the future.l/ While this type of work
is quite valuable in compiling data which are badly needed, such analyses

do not measure or explain the effects of different variables on each

other. Projections are often based on indications of future supply and

(demand situations and assumptions (frequently implied but not stated)

tfliat certain present conditions will remain unchanged. Projections

Eifld predictions normally are given only over short ranges of time be—

<::51use the assumptions employed cannot realistically be applied to long

IT‘IJLD periods.

One of the main objectives of this study is to examine and evaluate

‘t:;]b2.e most important variables influencing West European demand for United

:53 ‘tLvates feed grains. In doing this, it is useful to appropriate some of

'11'3E71.e methods of the above two approaches. A complete investigation of

_t:'33:“ade theory and the concepts involved is not practical for a study of
1:Iii'lis type. On the other hand, a study based entirely on empirical data

I‘“”<:>‘uld present an inadequate foundation upon which to examine the effects

(:E’JET' individual variables or predict long run future trends. A theoretical

3rr5~ Z del in which many variables are assumed fixed presents a reasonably

5:3 CDIlid foundation for an analysis of empirical data and projections of

\

 

1/ Studies previously noted by the Food and Agriculture Organization
C;Vf‘ the United Nations are examples. See especially ”Grains: World Trade

j~11. 1939/o0", Monthly Bulletin of Agricultural Economics and Statistics,
V <31. 10, No. i,(er, Rome: January, 1961), pp. io—i3.

-57-

trends into future periods. Such a model requires assumption varying
widely from actual conditions, yet as some of the assumptions are relaxed,
the resulting adjustments become more representative of real world situa-
tions. Many restrictive crioinal assumptions are required before it
is possible to examine the large number of complications which influence
imports of feed grains

A simplified theoretical demand and supply relationship indicates
graphically some of the more important forces which motivate international
trade in feed grains. As a starting pOint, an assumed demand and supply

as might exist in Western EurOpe is shown in Figure IV—l.

O)
>4
(2-
:34

I'elationship
jllfthough the actual demand and supply curves for this area have not been
Cieetermined empirically, it is hypothesized that both of these curves are
:f'eellatively inelastic. The time period is assumed to be one crop year
Jf‘c:x1r both the demand and supply curves, since a period of that length
t~r<:>1izld include a complete cycle for many of the short-run fluctuations
L~r}21 :L_ch effect consumption and production decisions. At price PE the
Ci.<t>;:iixestic market is in equilibrium with a quantity q being offered for
i.a31_.fli e and accepted by buyers. The supply curve shows the amounts offered
Ei‘fiié *various prices and is made up of the amount produced domestically
<371~4~-3:“1ng the current crrp year plus the carryover from the previous year's
E§£43 iiibynly. The demand curve indicates the quantity demanded at different
IDIIT‘ ¥;L.<;es for use as livestocx feed, human food, industrial uses, and seed.
If pr res were to be artificially set at levels below PE without
EiliZing shifts in either demand or supply curves, shortages would
4‘ Fintlilpatfid- In order to reach an equilibrium at a price below PE
i: I’Laure ’"~l without shifting domestic demand or supply relationships,

‘91}Urhiios wotld have to be obtained from foreign sources. Feed grain

  

 

 

Price
SUPply
PE “_ ' _ “
. Demand
0 5
q Quantity

FIGURE IV-l
HYPLTHETICAL DEMAND AND SUPPLY CURVES FOR FEED GRAIRS
IN WESTERN EUROPE
impirts sold on the market at prices below PE would replace part of

tre suapiies obtained from domestic production, and increased quantities

>r4

wou d be consumed. Quantities imported at prices below PE can be vis—
ualized from a theoretical analysis of foreign offer curves and domestic
demand and supply relationships.

Western Europe has several alternative foreign sources of feed
grains, but historically has obtained nearly one-half of her net imports
from Un.ted States. In spite of this fact, the quantities obtained from
Uuied.Siates in recent years as compared to the amount of surplus grains
in storey: have been relatively small. At the end of the 1959 crop year,
the United States feed grain carryover was 74.7 million short tons (67.8
ruilli n netr;c tons). Exports from United States to Western Europe

tat same period totaled 8 5 million metric tons or only 11.4

-
CIIJIII‘

.ff‘

IJEErcent vf the carryover. If approximately one—half of the carryover
JPES considered as surplus, Western Europe might have increased her im—

53‘4Vrfi“ ~f reed Grains from United States fourfold and still not eliminate

-59-
the surplus, In other words, United States could offer Western Europe
more than four times the amount sold at that price before the surplus
stocks of feed grains were eliminated. An "offer" curve of feed grain
exports from United States is therefore assumed to be horizontal to
an importing nation or area for a wide range in quantity beyond the
amount normally taken. This means that any one area could import as
large a quantity of feed grains as it desired (within limits) from
ImitaiStenaswithou: materially influencing the sale price.

An offer curve facing a nation which purchases feed grains from
United States appears as F—F' in Figure IV—2. The exact price which
an importer must pay for feed grains depends upon domestic market prices
in United States as well as export subsidies, insurance and freight
costs,and tariffs imposed by the importing nation. In Figure IV-2,
assume P is the domestic market price for feed grains of a specified

quality at any one time and place. A lower price of P1 is indicative

of the F O.P. price at port of shipment assuming a large United States
subsioy on feed grain exports- If the price to the importer includes,

in addition to the cost of the grain, all insurance and freight costs
(c.i 1.) plus any import tariffs, his price would be the import price

P.. Any net change due to shifts in tariffs, subsidies, or freight rates
would shift the import price. Increases in tariffs or freight rates

Cd? decreases in subs dies would have the effect of moving the import

§3T73se upward from Pg. Decreases in tariffs or freight rates or increases

If United States were the only feed grain exporter, import demand

(-5113, be indicated by combining domestic demand and supply curves with

 

 

-50-

 

 

 

Price
1» r F'
P1 F1 F1'

 

 

Quantity Offered

PIGURE IV-2
HYPOTNETICAL OFFER CURVES FOR UNITED STATES FEED GRAIN
EXPORTS AT VARIOUS PRICES
the United States export offer curve adjusted to import price levels.
Eigure IV-3 shows the conventional demand—supply relationship on the
right side of the graph, while on the left the previous export offer
curve is shown measured in the opposite direction. Prices and quantities
of feed grains are meaningful only if the term "feed grains" refers to
a particular composrtion of corn, oats, barley, and sorghum grains.

Therefore, for the purpose of analysis, it will be assumed that the

relationship of the four grains remains constant throughout price and
quantity changes and that a unit of ”feed grains" contains the same
compos1tion of the individual grains. In Figure IV—3, a price PE and
tiuantity Q would be in equilibrium only if no feed grains were imported.
Eiy importing grains priced at P1 from United States, equilibrium is
i'eaached at a price of P1 when the quantity OQj is produced domestically
isrpl the quantity Q1Q2 is imported. Through trade, the quantity utilized
1»T1 the importing c01ntry would be increased from OQ to OQ2 and the price

T”‘€3<1|nnml from}3 to P .
E l

 

-61-

Price

 

 

 

 

Quantity
FIGURE IV—3

hYPOTHETICAL DOMESTIC DEMAND AND SUPPLY CURVES AND AN
IMPORT OFFER CURVE FOR FEED GRAINS

A curve can be drawn indicating the quantity that will be desired
from other sources given the domestic demand and supply relationships
of Figures IV-l and IV—3. This import demand curve, ID PE is shown on
the left half of Figure lV—A below. ID PE indicates the total amount

that would be desired from all other sources at various prices from O

 

 

to PE“ The import demand curve is derived from domestic demand and

Price
S
I

PE

I D / // D
0
Quantity

FIGURE IV—A

AN IMPORT DEMAND CURVE DERIVED FROM HYPOTRETICAL
DOMESTIC DEMAND AND SUPPLY CURVES

 

Price

 

 

 

 

Pe
P x F'
' I
' I
" l 1
DA| : ID
I l
O ' l
ql q2

Quantity
FIGURE IV-5

AN IMPORT DENAVD CURVE TOGETHER WITH A SUPPLY CURVE
FROM COMPETINC SUPPLIERS

supply curves by computing the horizontal distance between the two curves
at prices below the equilibrium price. The horizontal axis measures
quantity, increasing in both directions from the center,as in Figure

IV-j. The area beneath the intersection of the demand and supply curve

(/1

equal to the area under the curve ID PE on the left of Figure IV—A.
If feed grains are available from countries other than United

States, adjustments in the diagram can be made to show this relation—
ship. In Figure lV-S, the offer curve from United States is represented
as a horizontal line FF'. An importing area has a demand for feed grain
imports as indicated by the import demand curve ID ID' (transposed from
.Figure IV-A). inc price and quantity of grains that another exporting
czourtry will sell to the importing area is indicated by the offer curve

53 C '. This exporting country A, is assumed to not have surplus supplies
£9113, therefore, will offer larger quantities only at higher prices.

fill inmmqtlng country would theoretically obtain feed grains at as low

£1 IJIESG as possrbla, so buy from country A until the quantity Oq1 was

L 7? , chased, causing the import price to rise to P. Since the import

price from country A is above P for any quantity in excess of O 9 the

Q1
importing country would obtain quantity Q1 q2 from United States at
price P. Any increase in Un ted States export price of feed grains
would reduce the quantities demanded from United States by importing
countries} and other exporting countries wi*h prices above P may enter
the market. Due to the large volume of surplus grain in United States,
this country has the effect of a ”dominant firm" upon the world market
for feed grains.

To summarizes the amount of feed grains that will be demanded
from United Stat s depends upon the United States offer price and the
offer prices from other exporting countries. Assuming any other natizi
exporting feed grains does not change its offer curve as the offer price
from United States is changed, the amount that an importing country
will purchase from United States can be determined under various price
conditions, The quantity demanded from United States can be determined
from the horizontal distance between the offer curve from another ex-
pcrting naticn SA SA', and the import demand curve ID ID' at various
United States price levels, as indicated in Figure IV-S.

Instead cf showing this demand as the difference between two curves,
it can be shown as a kinked demand curve Pe K ID' as in Figure IV-é.
The kink at K occurs at the price level above which any exporting coun-

‘tries other than United States would offer feed grains for export.

Ciirve PG K l.‘ is derived from Figure lV—Ss by plotting the horizontal

Cii_stahce under curves SA SA' and ID ID! against the price axis. There-

fficxre, the area under curves SA SA' and ID ID' at prices below P8 is

€?C7‘Ial tn the area under curve P K I '. The demand curve P K I ' in
e D e D

.‘,

I; 1 {lure lU-é indicates the quantity of feed grains that an importing

 

-64-

Price

(D

 

 

 

Quantity
FIGURE IV-b
A HIPOTUETICAL IMPORT DEMAND CURVE FOR UNITED STATES FEED GRAINS

‘untry would be willing to purchase from United States at various United

0 l

O

tates offer prices below price Pe. At United States prices above P8

(1’)

the importing country would obtain all imports from exporting country
A at price Pe. If other feed grain exporting countries should enter
the market with offer curves below the offer curve SA SA' of country
A in Figure IV—S, the demand curve Pe K ID' would need to be adjusted
downward to compensate for the additional competition facing United States.
In this analysis, it must be assumed that other grain exporting countries
do not adjust their offer curves to compensate for changes in the United
States offer price.

Many complications arise when the theoretical framework presented

alsove s applied to any one importing area. In the first place, demand

Ljfzited States feed grains at the present time. The increasing avail-

L)

Elkflllijn’awd_accuracy of information concerning the production and con—

f51-4471r,;.ti:::xn cf feed grains throughout the world indicates possibilities

A

-55-
of developing demand and supply relationships in the future. A second
complication arises over the difficulty of determining the prices at
which United States feed grains are sold in foreign markets. Import
restrictions greatly influence the market price for United States grains
in almost all foreign markets, although the acceptance of payments in
foreign currencies may counteract these restrictions to some extent.

Even though it may be impossible to develop an empirical verifi-
cation of the relations shown in the previous theoretical analysis,
there is sufficient evidence to locate a point on the demand and supply
curves for each year. Quantities imported from other countries at var—
ious prices along with the quantities imported from United States also
indicate the location of the United States offer curve and the import
demand curve.

It is possible to compare the historical evidence of production,
consumption, and trade in feed grains for the area of Western Europe
and, in light of trends and governmental policies, estimate future
conditions and implications. A review of data concerning trade and a
comparison of these data with the theoretical model presented above

will present a basis for predicting future changes.
West European Trade in Feed Grains

During the past one hundred years Western Europe has been consider—
BJSIy inVclyed in world feed grain trade. Prior to World War II OECD
<3€3untries imported an average of 27 percent of the feed grains they
(3(DIISNhed, more than a quarter of their domestic disappearances. Since
7 r

4— 9 47 the pe“C-ntage of feed grains obtained through imports has been

‘I'CRIJEH‘than tefore the war; but ranged from 16 to 22 percent of the

 

-55-
amount consumed. West European countries imported a net of 10.7 million
metric tons per year, on the average, during the prewar period from 1934
to 1938. Such a high level was not again reached until the fiscal year
1958/59, when net imports of feed grains for Western Europe rose to 14.3
million metric tons. Although imports of feed grains into Western Europe
have been above prewar averages since 1955/56, exports from country to
country within that area have also been above prewar averages. West
European influence on world feed grain trade was discussed in Chapter
II and five—year averages shown in Table II—A.

Table IV—l shows West European feed grain imports by commodity for
each year beginning July I, from 1947/48 through 1962/63 and for a five—
year prewar average. Since the fiscal year is used in FAO trade reports
and also coincides fairly closely with the crop years of most feed grains,
it will be used in this thesis and designated by a slanted line separ—
ating the two years, unless otherwise specified. Five countries: United
States, Argentina, Australia, Canada, and the Republic of South Africa
have been the major sources of West European feed grain imports. In
recent years Syria, Tunisia, Morocco, British East Africa, the Federation
of Rhodesia and Nyassaland, and the Sudan have also exported feed grains
to Western Europe. Internal grain trade between the individual countries
in Western Europe is included in the total import and export figures.

Exqoorts originate from France, Denmark, Netherlands, the United Kingdom,
arhd Yugoslavia and go to other West European countries. Data on destin—
aflixons of feed grains exported from Western Europe indicate that between

791 sand 95 percent do not leave the West European area. In 1960/61 France
‘BJCIDCDrted l,750 thousand metric tons of barley and maize (five times the

a‘7‘5—917‘1-1tge for the three previous years). Ninety—four percent of these

 

 

 

FEED QRAIN iuirwva 1110 wriitvi El ““E 70 AL AN» 1+ 01:38; 771‘87
7" r.n Ar Aswan R Arr " mAr 1»;' 19501 1 *’ ’“
'7’ 1 11~13 .‘11. :cmAL TOTAL NET
a MILLETS EXPORTS IMPORTS
----------------------- -Thousa;d Metric Tons~»~«--~-u»~-—-—~-~—-
Prewar Avg.
(1934- 38) 2330 700 8330 201 1 561 833 16,28
July-iIine
1947/48 1640 590 3700 176 6106 786 5320
1948/49 1720 950 4440 410 7520 549 6971
1949/50 2670 760 453 551 8511 515 7996
1950/51 2100 577 3800 82 7291 296 6995
9 1/52 3110 840 4250 1396 9596 855 8741
1952/5 3750 525 3400 902 8577 615 7962
1953/54 3715 820 4020 349 8904 701 8203
1954/55 4090 765 4570 765 10190 557 9633
1955/56 4210 909 4595 1915 11620 1130 10490
1956/57 5275 1117 5035 1050 12475 215010325
1957/58 46;0 116, 5400 1170 1237 5 2000 10375
1958/59 4750 13‘ 7000 2360 15420 1165 14255
1959/60 4700 1340 8790 2785 17615 1830 15785
1960/61 3985 1065 8950 2015 16015 2645 13375
1961/62 4700 1110 11160 2510 19480 3480 16010
1962/63 3840 1:60 13050 2250 204 00 2460 17940
IEEQBI§_EBQM_§NIIED_§IATE§ PERCENT OF
Prewar A78 AEI_IMEQBIE
(1934-38) 169 2 439 e/ 610 6
Jul v- Tune
u7/48 207 239 554 1000 19
1448/49 168 275 173 ..I 2178 31
1949/50 178 162 2084 581 3006 38
1950/51 171 48 2174 1067 3460 49
1951/52 120 22 167” 1070 2889 33
1972 53 82 10 2529 31 2652 33
1953/5 4 4 -_ 1877 150 2031 25
1924,55 4/10 127 1532 766 2865 30
1755/56 1561 366 2700 1647 627 60
1956/57 464 45 2559 683 4052 39
1957/58 1203 360 2711 795 5068 49
1958/59 1741 424 3731 1960 .856 54
1959/13 1608 559 4201 2155 8523 54
1930/61 1017 385 4697 1627 7726 58
1961/62 1238 186 6580 1561 9565 60
1962/63 864 329 6692 1693 9515 53

TABLE IV—l

 

 

 

g/Surghum and Mrllets

1)

Notes:

Source:

 

Data unavailable.

data based on calendar year prior to 1954/55

2) -- Less than 500 metric tons.

 

World Grain Trade Statistics,

 

Grain Exports by Source and Destinatigg,

1949/50—1954/55 and
(FAO, Rome).

55/56~1962/63,

I" (3
.—O )-

exports went to other West European countries, The following year (1961/62)
French barley and maize exports rose to over 2 million metric tons; with
75 percent going to other West European countries. Yugoslavia, the only
other net feed grain exporter in Western Europe, exported 294 out of

337 thousand metric tons (76 percent) in l9oO/6l to West European countries.
For the West European area, total imports minus total exports (net im—
ports) nearly equal the total imports of feed grains from outside sources.
Historically, these net imports present a realistic estimate of the "feed
grain gap", a term used here to mean the volume of feed grains demanded
within Western Europe and not supplied domesticallyo Total feed grain
trade from United States to Western Europe has increased since 1947/48,
though not in equal amounts for each graino Exports of barley increased
nearly fivefold while exports of oats less than doubled between 1947/48
and 1962/63“ Corn trade from United States to Western Europe expanded
more than any other feed grain since 1947/48 with an increase of 6.1
million metric tons. In recent years corn imports have come more from
United States and the Republic of South Africa than from Argentinao
Argentina had supplied nearly 70 percent of Western Europe's imports

of corn prior to World War II, but feed grain trade between Western

Europe and Argentina has declined since the ware Despite the fact that

it was not until 1958/59 that net feed grain imports surpassed prewar
averages in Western Europe, United States supplied more every year since
1947/48 than prior to the war. The column entitled Percent of Net Im-
ports in Table IV—1 indicates the United States share of all of the

feed grains that Western Europe imported° Since 1948/49, United States
has supplied at least 30 percent, and in 1955/56 and 1961/62 60 percent,

of the net feed grain imports going into Western Europeo In Table lV—2,

,i - _ _«»@em O<bV mo my» :msong QnVM WM
wwV m awmgh Qawuo mfipcb mum mm\Qmmfl awfoguV Om\®qwfi (:Va)m:V‘q m wcm aanth:Mimmw©mw, -

a m.@.+.%muu - l Iii- .-|lll-5.,4.l!!l-.|
mxop oappma 00m camp mmmq ea AL magmaam>.s; wean .0

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mm wmmv bHHH fiwm
bm ©®mfi Qwo 0%

mm Hmam Nmm V
mm mfiam CON 0%

 

 

II 1 I II I ... ..I
I .I V‘-.. 'I‘- .9... III. .9! .1... lll'ttrullllfiI-IIIIIVIII-IQI'III‘I'IIII'

ed amm ofla oqqm mOH
om qu mnw_ can
mm nag coma 4V»
wV mam ¢¢n( xVa
Vn

 

~d
M
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.70.
other major scurces of feed grains for Western Europe are shown along

1th their total as a percentage of all West Euro opean net importer

.

ini ed V ates Share or the West European Feed Grain Market

‘he existence of the ”share of the market” concept influences
world trade as it does domestic marlcet relitionsrips Exporting coun—
tries that have historically supplied a large percentage of the world
xpor rts of a re rtaj n conrmodity, consider that a portion or share of the
world market is rightfully theirs in the future. It has been the stated
policy of ths United States g'vernmert to attempt to continue to supply
HOlld a*‘“c»ltV al Imarkets in proportion to its rightful share“ The
Forei gn Agricult dfil Service in a report on Agricultural Exports under
Government Programs sta Ved, ”In general, the CCC export priCing policy
reflects the desire tom Ma ntai_n the United States' fair share of estab—
lished export markets and to expand U.Si exports in undeveloped and
2/

new marKet areas "-‘ The surplus feed grain problem existing in United

Stamps at the neginrn ng of the l9oO s ives lhlS country the opportunity

03

to supply feed grains to world? .'J ' nearly any set level of prices.

Price adit.1n<an are made under the argument that United States is

attcmptirg to maintain its fair share of the world market Other feed
grain rxporting countries do not have such great quantities of surplus

grains and may not be able to maintain their share of imports into

We tVrn

(f)

Europe should their produLLtivity decline cr domestic demand

increas: sizeab y A new Trade Expansion Act was Signed into law in

 

mcnt oi Agriculture, Foreign Agricultural Service,
A Xportzs u itier ~3“ernpent Programs1 Eis cal Years 195i
througr -953-59, tor<vgn Aeri culture Circular, FATP lo-bO, {Washing—

‘I‘

L:

 

—7l—-

October 1962, enabling the United States president or his representatives
to negotiate trade agreements with considerably more freedom than previ—
ouzl . It seems likely that United States will use this authority to
maintain and if possible expand its share of thv world feed grain market.

Not only has the volume of feed grains imported into Western Europe
fluctuated widely in recent years, but the proportionate tonnages by
commodity have also changed, Table IV—3 shows the net imports of feed
grains into Western EurOpe for the prewar 1934-39 average and for the
years from 1947/48 through 1962/63a As a proportion of the net imports
of all grains, it can be seen that barley increased after World War II
to a high of Al percent in 1952/53 then decreased to 12 percent by 1962/63o
Net imports of oats rose relative to the net imports of all feed grains
immediately after the war then fell and have remained between 5 and 9
percent since 1948/49o Corn imports fell relative to the net imports
of all feed grains after the war and continued to fall until 1951/52,
During the following ten years, the net imports of corn increased to
more than two—thirds of the totalo Imports of sorghum and millets in—
creased relative to other feed grains from 2 percent of prewar averages
to 16 percent in 1951/52V Sorghum and millet net imports fell during
the next two years but have increased since 1953/54, ranging between
12 and 17 percent of all net feed grain imports in the past 5 years°

A comparison of the relative percentages of the individual feed
grains shipped to Western EurOpe from United States is shown in Table
lV—Ao On the average, more than 75 percent of all feed grains imported
from United States was composed of corn and sorghum grains between 1957/58
and 1961/62. Prior to World War II, the small quantities obtained from

United States consisted of 72 percent corn and 28 percent barleyo Imme—

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6 AND 1957— 61

 

 

 

ZF‘ 1934u38,19L7—)1,1952—“
10131 _
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Feed Grain Exports 'E-
from UHLtOd States Ba

Corn

Sorghum

 

to flvstwrn “‘FJUQ &Millets
JLly-Juue Thou and Metric Tons — — — — Percent - — - —
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1949/50 KUMH 6 5 69 19
1960/31 %;%Q 5 1 63 31
1951/22 '349 4 1 53 37
a _ - fl / , .. fl, ,' , 7_ ., _V ,
avg. 19L//43—1'b1/)2 2500 9 9 b? 17
1932;33 2652 3 -- 95 1
1433/54 2 31 -— —- 92 7
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6 through 1962/63, (FAG,

-74-

diately after World War II, oat exports from United States to Western
Europe increased, and by 1947/43 oats made up 24 percent of all feed
grain shipments. Since 1947/48. the quantities of oats have declined
relative to other feed grains. In 1953/54 less than 500 metric tons
were shipped from United States to Western EurOpe, and since then oats
have made up less than 10 percent of the feed grain trade. Data on
United States sorghum grain exports to Western Europe are una"ailable
for years prior to 1949/50. but undoubtedly a fairly large portion of
all sorghum imports into Western Europe came from United States.
averages for the five-year period 1957661 are shown in Table IU—A
to indicate the proportion of each grain relative to the average of all
feed grains exported from United States to Western Europe. Using this
average as a basis, it might be assumed that United States feed grain
exports to Western Europe should be defined as approximately 18 percent
barley. 5 percent cats. 56 percent corn. and 21 percent sorghum grains.
However, exports of corn have risen faster than other grains during the
early 1960's and future feed grains exported to Western Europe may very
likely be made up of approximately 60 percent corn. A more realistic
assumption of the overall composition of feed grains shipped from United
States to Western Europe in the near future might be 15 percent barley,
5 percent oats, 60 percent corn, and 20 percent grain sorghum. Year—to—
year fluctuations in the proportions of each grain shipped make any
projections of the composition of United States feed grain exports to

Western Europe extremely difficult.
Analyses and Projections

The demand for feed grain imports has been shown to be based upon

-75-

the annual domestic demand and supply curves in the model developed for
an importing area previously in this chapter. Imposed upon these curves
was an offer curve depicting alternative sources of feed grains and in-
dicating the size of the feed grain gap. Where detailed and accurate
historical data are available in sufficient quantities such as in United
States, it has been possible to apply refined statistical techniques to
project trends to future periods.2/

For areas where the data are sketchy and subject to wide errors,
it is sometimes adviseable to use another method of analysis. Under
these conditions, linear projections of historical trends may provide
useful information upon which to base policy decisions concerned with
present and future developments. Programs which increase consumption.
divert production, or influence foreign trade have far—reaching effects
on agriculture. The bases for decisions concerning these programs all
too often are founded upon inaccurate information, or perhaps even worse,
no information at all. Even where statistical data are limited and
subject to large errors, it is possible to obtain useful estimates
of future potentials. Cf course, it is always desirable to have as
much complete and accurate information as possible before making policy
decisions, but when such decisions must be made, it is important to
have all available information evaluated and analyzed. An attempt is
made in the following sections to analyze the most consistent data for

Western Europe that is presently available.

 

2/ Kenneth W. Meinken, The Demand and Price Structure for Cats.
Barley and Grain Sorghums, U.S. Department of Agriculture, Technical
Bulletin No. 1080, (Washington: 1953), and Richard J. Foote, John W.
Klein and Malcolm Clough, The Demand and Price Structure for Corn and
Total Feed Concentrates, U.So Department of Agriculture, Technical
Bu11~tin No. 1001, (Washington: 1957).

 

 

 

 

-75-

The following projections of historical trends may lack some of
the sophistication of regression lines or least squares projections,
but they do present a logical interpretation of available data. These
estimates give as realistic a set of projections of current trends as
is possible with presently available information. If the assumptions
upon which they are based become widely divergent from actuality, the
projections could be expected to deviate widely from future occurrences.
It is clearly evident that conditions influencing production of feed grains,
demand for meat, income levels, and political relationships are changing
rapidly in Western Europe. Therefore, any one set of assumptions which
appears close to reality in 1963, may prove to be highly unrealistic
in a few years.

In an attempt to encompass the range of changes which may occur,

TT

Chapter : expands the projections by presenting three sets of assumptions
for both domestic production and disappearance levels of feed grains for
the averages of the years 1964—66 and 1969—71. These future years are
selected to coincide with years for which other projections have been
made. Three-year averages of those two periods allow some smoothing
out of changes due to weather and extreme climatic conditions which may
occur. Even if extreme conditions occur outside of the range encompassed
by these projections, it is relatively simple to adjust the analysis
to take the unforeseen event into consideration.

Specifically, the following five assumptions are presented as being
a foundation upon which to expand the basic analysis.
1. The time period over which data are analyzed is a representative

period and the predominant influences will continue in the future.

2. External influences such as weather conditions and treaty commitments

_77-
occurring in the future will be balanced by other offsetting factors
and not effect the results of the projections.

3. The data being analyzed are reliable and representative of historical
conditions, Future data will be at least as good if not better than
data collected in the past.

4. Th

(D

area under study (Western Europe) will not change in size or

form of government bevond the specific assumptions made in the anal~

5. Wars, inflations, depressions, or major disasters will not occur.
hsse assumptions are not violated by the changes that have occurred
Since l947 in Western Europe. The data on production and consumption
follow a fairly conSistent pattern and a projection of the present trends
might be expected to give reasonable results with the accuracy decreasing
as pr0jections are extended further in the future. There has not been
a wide divergence from year to year, although weather has caused some
fluctuations in yields and areas.

Time is not used for the purpose of explaining the changes that
have occurred in the produ tion and consumption of feed grains even
though it is the variable over which the changes are shown. These changes
can be partially explained by the influences of new technology, govern-
ment controls, postwar recovery, rising incomes and standards of livings,
and price fluctuations. Data are not available KC measure all of these
variables ncr will they be available in the near future. The problems
of compiling data for the various countries within Western Europe with
their varied cultural patterns and degrees of economic development are
extremely complex. Therefore, the analysis will not attempt to explain

cause and effect relationships in a statistical sense, but to project

-73-

from trends that have been ns rved to occur in the recent history of
the area. The aim of this analysis is to present reasonable and reliable
estimates of future events, even though these results may not be test—
able in an a priori sense.

Where the observations have maintained a constant increase, a straight-
line trend can be eaSily developed. This appears to be the case for
much of the data analyzed in this studV. Perhaps over a longer time
period the trend would not be a straight line but a curved line or even
a erken line separating different periods. For projections into the
future periods under consideration, an assumption of constant changes
will be used. A non—linear trend is difficult to determine over a short
period since several different forms of a curvilinear function may fit
the small number of observations. Unless the data indicate a strong
tendency to follow a curved line, a straight-line trend may give more
reliable future results, even though a curvilinear function gives a

better fit for the current period.

Production Trends and Projections

 

Feed grain production is reviewed for the area of Western EurOpe
in Chapter III. Production data for the late 1940's and years since
are periodically reported by F.A 0. These data also periodically are
revised, but undoubtedly they are as accurate as any that are available
cver the period since 1947. Since F.A.O. reporting methods are relatively
consistent from year to year, a trend may correctly emphasize the year-
to-year fluctuations even thongh a bias may exist for the actual quanti-
ties produced in any one year. By aggregating the data for each country

into a total for Western Europe, possibly some of the inconsistencies

for individual countries will tend to compensate for each other. However,
the reverse may be true and aggregation could introduce greater inaccura-
cies than are present for individual countries. Since there is no way
to check the data except by other United Nations? reports, it is not
possible to determine the effects of aggregation.

The production trend for feed grains in Western Europe approximates
a straight line during the period from 1947/48 to 1962/63 as shown in
Figure IV—7. A substantial increase in output has occurred since 1947/48
when a total of 28 million metric tons of barley, oats, and corn were
produced- By 1959/60 total production had risen to slightly more than
47 million metric tons. Even though production had increased by almost
20 million metric tons, there was considerable variation in rates of
increase between the individual grains during that period. 0at production
increased until 1953/54, but has declined every year since then except
for l956/57. In the winter of l955/56 Western Europe experienced a hard
freeze which killed large areas of wheat, especially in France. These
areas were planted to barley and oats the following Spring, shifting
an additional two million hectares to feed grains. As a result, the
barley and cat harvest in 1956/57 reached thirty—five million metric
tons, five million metric tons above the level reached the previous
year. Barley and corn production as shown in Figure IV—7 have gener-
ally increased throughout the entire period. While year—to~year data
tend to fluctuate because of weather and other short run influences,
a three—year moving average evens out these fluctuations and makes the
trend more obvious. These averages are plotted in Figure IV—7 as a
dotted line and indicate a close approximation to the straight~line

trend.

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Producing Areas

 

Further understanding of trends in production can be obtained by
examining trends in producing areas and average yields. The total area
in feed grain production has increased slightly since 1947/48, but the
change has been slow and unsteady as shown in Figure IV—8. In 1947/48,
20.2 million hectares (approximately 49.9 million acres) were harvested;
but, other than the previously mentioned increase that occurred in 1956/57,
changes since then have been slow. The shift that occurred in 1956/57
indicates to some extent the substitutability of wheat areas for barley
and oats. It is anticipated that wheat production will soon approach
the level of consumption.é/ As further increases in wheat yields occur,
there is a strong possibility that more land will be shifted from wheat
to feed grain production in Northwestern Europe. Producing areas in
Southwestern Europe are not as productive as those to the north where
climate is more favorable, and increases in southwestern feed grain
producing areas due to shifts from wheat are less likely to occur.

If new drought-resistant varieties of feed grains should be developed
or irrigation should become more widespread, there would be greater
areas of land in feed grain production even in Southwestern Europe.

With the present state of information available concerning soil
conditions, irrigation potentials, or crop varieties being developed,
it is not possible to determine with any high degree of confidence the
potential adjustments that might occur between bread grain and feed
grain producing areas. These adjustments will depend in part upon the

D

gLuWQL in yields, ooth of bread grains and feed grains. Further increases

 

-——.-‘-—-—

'/

1 / a . a c n. [‘7

1' FAO Agricultural Commodities—Proiections for 19/0,(FAO, Rome:
1962), pp. II—2, 11-3.

 

 

 

 

 

l
I
/’
1" / |
Quintals l /
Per Hectare I ,/ I
Yield ,J /
25 1‘ a / 1
y. 0
o /’ I
( — . .
2) Million
’ Hectares
- Area
_ l
l
1— 0 /
c 96 ‘ ’ I, “ ' - ’ I
15 u, /// , 22.- million /r / _122
Hectares 1956,57 ./ l
"' /
P I
l .
10 -- “ 21
I
~*20
l l L I 1 1 1 1 I l 1 1 I l I I 1 1 1 1 1
U”) Q ( \1 \‘I’ KO 0'.) O N Li\ C)
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O\ . (3\ 0\ tr» (7» O\ O\ O\ 0\
r4 ti r”! r—{ r-‘i H H :‘I H r4
Year Beginning July 1
FICUPE IV—8
FEED GRAIN YIELDS AND PRODUCING AREA IN WESTERN EUROPE

in wheat yields will allow greater production on fewer hectares, thereby
releasing more land to feed grains. Grain prices received by producers
influence land adjustments also. The presently available information
on the level of future grain prices in Western Europe indicates that
Common Market feed grain prices may be at least 60 percent higher than
in the United States. Policies effecting grain prices are tied directly
to policies related to the production of pork, poultry, and eggs.

Within each country the total number of hectares devoted to the
production of barley, oats, and corn is influenced in varying amounts
by governmental policy decisions. The results of these decisions are
imposed upon individual producers by higher or lower price supports,
land area or marketing controls, and changes in research and educational
efforts. Even though an assumption of rational action by West European
governments to prevent surplus accumulations of wheat may be rather un—
realistic, it is included in this analysis as a basis for projections
of areas producing feed grains. It is also assumed that economic pressures
will continue to cause increasing amounts of land areas to be placed
in non—agricultural use, such as roads, housing developments, and red—
reation for the steadily increasing population. In France, where an
estimated 2.6 million hectares (6.4 million acres) of land is now lying
idle or in grass, substantial new areas could be put into feed grain
production. Elsewhere in Western EurOpe, the develOpment of new feed
grain producing areas will occur slowly since undeveloped land is scarce.
In some of the drier areas of Spain and Italy, irrigation would allow
a considerable increase in production if it should become economical.
Present water scarcity in these areas will likely continue, however,

unless major technological advances are made in irrigation methods or

/

new sources of water are discovered.§/

Considering the changes that have occurred in total producing areas
and in line with the above assumptions concerning potential adjustments,
it is anticipated that the number of hectares producing feed grains will
increase somewhat, while the area producing wheat will decline during
the 1960's. A projection of current trends into the future indicates
that, by 1965, an estimated 21.5 million hectares of barley, oats, and
corn will be harvested. By 1970 the area in feed grains is projected
to be approximately 22.0 million hectares. The average area in barley,
oats, and corn production was estimated at 21.0 million hectares (5.2
million acres) during the period 1957~6l. The four crop years from 1958/59
through 1961/62 have shown an increase in producing area of .4 million
hectares per year, but tnis rate is about twice as rapid as during the
previous ten years. A late, wet spring in 1961 caused farmers to shift
some land from wheat to corn and barley production. As a result, 21.6
million hectares were planted to feed grains in 1961/62. It is antici-
pated that the increase in area over the next decade will be less than
one percent a year. Deviations from the historic trend in the 1950's
ranged as high as 1.4 million hectares or 7 percent for the year 1956/57.
For all other years the area has been within 5 percent of the trend
line shown in Figure IV—8. This trend line is obtained by connecting
the average area harvested during the five-year period from July 1, 1947
through June 30, 1952 to the average for the five—year period 1957—61.
Year-to-year variations in feed grain producing area is much greater

than average annual increases.

 

2/ P. Lamartine Yates, Food, Land and Manpower in Western Europe»
(London: Macmillan & Co. Ltd., 1960), Chap. 5, pp. 99-131-

Trend in Yields

 

Yields have increased more rapidly than has the area planted to
feed grains in Western Europe. Between 1947/48 and 1961/62, average
yields increased from 14 to almost 24 quintals per hectare.é/ As a
comparison during the same period, the average yields of barley, oats
and corn in United States rose from 15.6 to nearly 27 quintals per hec-
tare. Barley and corn yields each increased from slightly less than 15
to more than 25 quintals per hectare between 1947/48 and 1960/61. The
yields of oats increased from 13.3 to 20 quintals per hectare in Western
Europe during the same period. Increased use of fertilizer, development
of newer and better varieties of feed grains, and improved control of
insects and disease have all contributed to increased yie1ds.Z/ Figure
IV—9 shows the trend in fertilizer consumption from 1947 to 1959. Aver-
age annual consumption of fertilizer during 1947-49 very closely approx-
imated the amount consumed in 1938, an indication that, in one sense,
by 1948 Western Europe had recovered from World War II. (New technologies
will undoubtedly continue to be used in the future, increasing fertilizer
use and further contributing to increases in feed grain yields.

A special supplement to the 1962 FAO Commodity Review suggests
that the greater increases for yields of wheat in the fifties occurred

in countries where yields were already high.§/ This same relationship

 

é/ A corn yield of 20 quintals per hectare would be equivalent to
31.4 bushels per acre. 0ne quintal equals 100 kilograms or 0.1 metric
tons and one hectare equals 2.471 acres.

Z/ FAO, Problems of Animal Feeding in Europe, (FAO, Rome: June,
1955), pp. 28—34; and OECD, Fertilizers in Europe: Production, Consump—
tion, Prices, and Trade, (OECD, Paris: 11th Study, 1959-62)-

6 FAO Agricultural Commodities-Projections for 1970, (FAO,Rome:
1962) , pp. A-29, A—31.

 

   

 

 

Million
lieta ic ,/
Tons /
13 t
y,
12 -
11 —
10 r
9 P
Total Nitrogen, Phosphoric Asid,
8 ” + and Potash Consumed
1.
7 -
6 -
5 1.
1 1 1 1 1 L 1 J J L 1 1 I L 1 1 1 1 I
r~~ 0 or \r \o no Q m.
\r U\ Ln :x a" u‘\ J 43‘
O\ O\ 0\ O\ o~ 0\ (r O\
.4 r1 r4 :4 hi r4 r4 r1

Year Beginning July 1
Source: FAO Production Yearbook

FIGURE IV—9
IERiiLiLER CONSUMPTION IN EUROPE
might be expected to hold for yields of barley, oats, and corn also.
Farmers in general are becoming better informed concerning effiCient
production methods, and in many Wes.f European areas, small farms are

b

(D

ing consolidated into larger producing units.

To project yields into future time periods, assumptions concerning
the rates of technological acceptance and limits to productivity are
necessary. It is fairly eVident that the yields of feed grains in gen—

_ - O _
eral have not yet approached their upper limits 4/ For example, in

 

/
9 4 . . : .
“/ F. C. Schiimer, ”An International Comparison of Trends in Cereal
Yields During 1920—55, and Outlook - I and II” Monthly Bulletin of Agrl:
cultural Economics and Statistics (FAO, Rome) Vol. V, Nos” 11(November,

weff \

1956) p. 13; and 12,1stvm~cr, l, ‘, p ,

-37-
1961 barley yields for all of Western Europe averaged 24 quintals per
hectare. In individual countries,yie1ds ranged from 13 quintals per
.aro in Spain to 36 quintals per hectare in Denmark. Even though
all countries may not attain the yield levels of Denmark, it is reason—
a-le to assume that some progress will be made in many countries. Oat

and corn yields also have varied widely from country to country in West-

(“'3
H

' n Europe. For oats, yields varied from 9 to 35 quintals per hectare;
while for corn, yields ranged from 11 to 26 quintals per hectare in

difserent West European countries in 1961. The assumption is made here

that the individual governments of Western Europe will continue their
attempts to increase the yields of feed grains and invest increasing
amounts in research and education for producers. feed grain yields in
general are expected to continue their upward trend, though new develop—
meits may shift the trend of increasing yields among the different grains.
Projecting the trends that occurred in the fifties, yields of feed grains
would reach 25.5 quintals per hectare for 1970. These projections are
shown in Figure IV—8 by a line connecting the average yields of the
period 1947-51 to the average yields of the period 1957—61 and extended
to the years 1965 and 1970.

Area projections multiplied by yield projections give projections
of the total quantities produced. These figures are 55 million metric
tons for 1965 and approximately 63 million metric tons for 1970. Project—
ing trends in production gives a similar result since yields were obtained
from the quotient of production divided by area. Of course, if both
yield and area trends are in fact linear, the trend of production would
he curvilinear upward. It seems more likely that the trend in feed

grain producing area will not be linear in the future, but increase at

a decreasing rate until an upper limit is reached. The production trend
may very well remain linear, however, with increasing yields throughout
the 1960's. By analyzing producing areas and yields separately, it
becomes clear which of these factors was more influential in bringing
about the increases in production. Feed grain production increased by
45 percent from 1947-51 to 19 7—61 in Western Europe; but 86 percent
of this increase was due to increased yie1ds while only 14 percent of
the in rease occurred from shifts in grain producing areas (Table IV—5).
Even in United States, where fairly complete and accurate data
on production are available, it is not unusual for variations between
preliminary estimates and final tabulations to be as high as 5 percent.
It is possible, therefore, that larger errors in data will occur where
methods of collection are often not as advanced. In Western Europe the
yearly production data have deviated from the trend line by as much as
9 percent for some individual years. If the trend projections could
be assumed to be that accurate in the future, production could be expected
to be within five or six million metric tons of the actual figures. A
10 percent error in estimates of production levels is quite possible for
Western Europe, but as information gathering improves, these errors will
be reduced. Table IV—5 summarizes the projections presented here and
the changes that have occurred in West European feed grain production,
areas, and yields during the fifteen—year period from 1947/48 through
1961/62 by comparing averages for the first five years with averages for

the last five years.

Trends and Projections of Consumption Data

 

The preceding analysis of production trends and projections has

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been based upon comparatively complete data over a fifteen-year period.
Similar data are not available concerning the uses for these feed grains
during this time period. At present there is no accurate information
on how reed grain has been used, how much was consumed by different
livestock in individual Western European countries, or what prices were
paid for this grain1

Data on availabilities are compiled from feed grain production
reports and net import figures. Availability figures include the total
quantity produced, the amount in storage, and the amount imported into
the area. Table ill-l in Chapter III presented information from a survey
of selected countries in the United Nations during the period 1955-1957
but did not include information on all West European countries1 This
survey indicated that 77 percent of feed grain consumption is for animal
feed. Ey substituting Spain for Turkey and adding Belgium, Luxembourg,
Denmark, Greece, Sweden, and Yugoslavia, the area would be equivalent
to that for Western Europe and undoubtedly the percentage.would be below
the 77 percent figure. As Western Europe becomes even more advanced,
a smaller proportion of feed grains will be used for human food and a
larger proportion for livestock feed1

If the assumption is made that wastes and losses are relatively
small and that changes in storage levels balance out over a period of
several years, then the remaining quantities used for livestock feed,
human food, industry, and seed would closely approximate the amount
available. The most important determinant of changes in the amount
used will be changes in the demand for livestock feed. As was shown
in Chapter Ill, rising standards of living exert pressures on dietary

changes to include more livestock products1 These pressures in turn

-91..
TABLE lV—6

PER CAPITA SUPPLY OF LIVESTOCK PRODUCTS IN WESTERN EUROPE
AVERAGES FOR 1948-52 AND 1959

 

 

 

 

 

 

Average Percent
943~37 1;~v ' increase
Produgt
Kilgggams Per Capita Percent
Meat 33.34 48.03 44
Eggs 7.44 10.23 38
Milk
Fat 4.61 5.50 19
Protein 5.21 6.02 16
Total 50.60 69.78 38
Computed from tables in FAO Production Zearbggk, 1960 and earlier.

are felt by increases in demand for livestock feed. A projection of
trends of livestock production, human population growth, and incomes
indicates possible levels that feed grain consumption may attain in
the future.

All trends of the 1950‘s point toward a rising consumption rate
for livestock products in Western Europe in the 1960's. Table IV—6
shows the per capita supply of livestock products in the form of meat,
eggs, and milk which was produced on the average during the period l948~
1952 and ten years later in 1959. It will be noted that the per capita
supply of meat increased 38 percent. Part of this increase occurred
because in the beginning period, 1948—1952, Europeans faced rationing
and price controls and could not obtain all of the livestock products
they desired. Producers were holding back sales and increasing numbers

in animal herds and poultry flocks to supply future demands.

-92-

TABLE IV—7

MEAT PRODUCTION FROM INDIGENOUS ANIMALS IN WESTERN EUROPE
AVERAGES FOR 1948-52 AND 1959

 

 

 

 

Average Percent

1948-52 1959 Increase
Meat Type Thousand Metric Tons Carcass Weight Percent
Beef and Veal 3,502 5,142 47
Pork 3,585 6,029 68
Mutton and Lamb 537 748 39
Poultry 610 798 31
Horse 203 277 36
Total 8,437 12,994 54

 

Computed from tables in FAO Production Yearbook, 1960 and earlier.

Table IV—7 indicates the sources of increases in meat production over
a ten-year period from 1948—52 through 1959. During that period, pork
production increased most rapidly while the production of horsemeat in-
creased only slightly. Total meat production increased by 54 percent in
Western Europe over that ten—year period, or slightly over 5 percent a
year.

Incomes have increased consistently from the early 1950's, allowing
consumers to buy more of what they desired. Populations of West European
countries rose steadily since World War II adding to income pressures to
further increase demands for livestock products. Figure IV—10 shows pop-
ulation and income trends for Western Europe during the period 1949 to
1959 with an estimated population for 1963.

The trend toward increasing consumption of livestock products may

level.off in the future, but it seems unlikely that this will occur any

193-

  

Per Capita
Income
(U.S. Dollars)
- 700
1 650
Million
Persons — 600
340 ' ‘ 550
Population
320 r ‘ 500
300 h ‘ 450

 

 

 

1957 ~
1959 —
1961 ~
1963 -
1965 t

1949 r
1951 -
1953 r
1955 ‘

Year Beginning July 1

FIGURE IV—10

POlULATICN AND INCOME IN WESTERN EUROPE

time soon, The growth in population and rising per capita incomes

will continue to increase demands for livestock products in Western
Europe if present trends continue. The national and per capita incomes
for Western Europe are shown in Table IV-8 for 1949 and ten years later.
In the compilation of these data, estimates and conversions were made

to present national incomes of the Western European nations in a common
unit, the United States dollar. These figures may contain some errors
because the iational .ncome figures were incomplete in some cases and

in others the conversion rates had to be estimated from a wide variation

-94_
TABLE IV-8

NATIONAL INCOMES, POPULATIONS, AND AVERAGE PER CAPITA INCOME
IN WESTERN EUROPE 1949 AND 1959

 

 

Year Percent

 

1949 1959 Increase
National Incomes (million dollars) 129,410 227,542 75.8
Populations (thousands) 297,560 320,415 7.7
Average Per Capita Income (dollars
per person) 435 710 63.2

 

Source: Computed from National and Per Capita Incomes, Seventy Countries -
1949, Statistical Office of the United Nations, October, 1950, and
the United Nations Bulletins: International Financial Statistics
and Monthly Bulletin of Statistics.

 

in the 1Lnuai ~gonungc rufan. a‘ is cashmed LQaK the data for Western
Trrope as a whole present 1 sound indication of the growth and develop—
mrit {Tut occurred during the iiities.

Whether or not the same rate of growth will continue during the
sixties is open to conjecture. but reliable sources tend to agree that
the countries in Western Europe will continue their economic develop—
ment and growth119/ The growth and development that does occur may
be especially significant in the presently less developed countries
such as Spain where expansion might occur rapidly given greater sta-

. . ii/ . .
bfljiy'in government policy.-—’ Progress toward full integration and

 

io’
“/ See for example the report published by the Economic Research

Service and the Foreign Agricultural Service, United Kingdom, Projected
Level of Demand, Supply, and Imports of Farm Products in 1965 and 1975,
U.S. Department of Agriculture, (Washington: January, 1962), pp. 6-11.

ll ”New Moves in Europe", Report on Western Europe, The Chase
Manhattan Bank, (New York: February—March, 1962).

 

“.95..
the economic union of Western Europe has been slow and difficult, but
it is quite possible that by 1970 the Common Market may include ten to
fifteen countries. If the assumption is made that the effects of govern-
ment policy will be to encourage growth and development, high income
and demand projections can be considered as one likely outcome of European
integration. The assumption of government policies directed toward
expanded growth and development will be followed in this chapter. In
Chapter V some of the influences of various other governmental policies
will be investigated. Linear projections of per capita incomes into
the years of 1965 and 1970 will be used to show growth trends.

Table IV—8 shows that per capita incomes have increased in Western
Europe by 63 percent in the ten—year period from 1949 to 1959. A con—
tinued increase of the same relative magnitude would raise per capita
incomes to $875 by 1965 and to $1012 in 1970. As per capita incomes
rise in Western Europe, the demand for grains for human consumption
will decline, releasing more of these products for animal feed. 0n
the other hand, the tendency will be toward increased consumption of
foods such as lamb, poultry, veal, butter, bacon. and beef. This same
type of shift in diets has occurred historically in United States with
increasing levels of per capita income. The implications of such changes
in diets has been discussed in Chapter III.

A projection of the meat production trends of the 1950's into the
1930‘s is based on these premises of dietary shifts and rising per capita
incomes. It is assumed that beef, veal, and poultry production will in—
crease at a faster rate as the next decade progresses. The production
of pork will tend to increase at a slightly slower pace than it did in

the recent past, while horsemeat production will decline. The feeding

-96—
of horse: for draft purposes will lso fall as the use of tractors increases.
Alier together, these assumptions suggest that total meat production will
continue to increase at about the same rate of 500 thousand metric tons per
year as during the past ten years. If the rate.of increase, as shown in
Table IV-7,continued in the 1960's, by 1965 production would approach 16
million metric tons. Total meat production, projected to 1970, would reach
approximately 18.5 million metric tons at this rate.

The poultry industry in Western Europe has been growing at the rate
of 14 percent per year in recent years.lg/ Since a high proportion of the
feed intake of poultry is from feed grains, continued growth of this in-
dustry will require increasing amounts of feed grains. Increasing numbers
of beef cattle and pigs also require greater amounts of feed grains. Po—
tatoes are still an important portion of the feed of these livestock but
the volume of potatoes used for livestock feed has not increased as rapidly
as has the volume of feed grains. Using estimates for OECD countries, an
average of 24.7 million metric tons of potatoes were fed to livestock in
the period 1952/53 to 1955/56.ll/ This quantity increased 7 percent in
four years to 26.3 million metric tons in the period 1956/57 to 1959/60.
It would appear that as more feed grains are’consumed and feeding technol-
c¢1Cd and marketing methods improve, the use of potatoes for livestock
feed may continue to increase only slightly.

Feed grain consumption by livestock has increased at a much more
rapid rate than potato consumption. In the period 1948-52 approximately

40 million metric tons of feed grains disappeared annually. If the

 

'4/ "1'9

a; urains: Recent Trends in Utilization". Monthly Bulletin of
Agricultural Economics and Statistics,Volume 11, No. 5, (FAO, Rome:
May, 1962). p. 8.

 

 

li/ Agriculture, (OECD, Paris: 1961), Table 5.

 

a .-eriticm1 15

of thi

s disappearance was used for

livestock feed, about 30 million metric tons would have been fed to

on the during tho

metric tons per yerr in i959/60 weu
”‘0‘ '1 ’ r-r~-‘ (‘1‘V a ' —-\,-

pcilCQ of 9 y€alb cr aiwnst 7 per

it was shown that meat {reducticn

nine—year pericd or ar

*4

slink

1tly less than the

-— - «w.
,T

l- .1 Cb

took
potatoes

’\ S . ’ ' , g“.
efficiencies

are

V
e produce

1717011111 (1 ‘C

4' 1 ,-
(\A1‘ J :‘1

Q

4.;-
5

1

no

1’1

:n f

L R -
Y‘ I?! IJ .L 1.;le

Ah C1177)
U \o .A .J 11L-..

pg

51 ..- -
.L {? \5 (:

connection. The capita

food has

As production increases, a slight:

but this change has been negligible
total quantity used for human food,

xnduction and the

d

~Vr“\ ‘.’
1~blflplu

se years. An increase to 48 million

be a 60 percent increase over a

increase In Table lV—7

per year.

increased by 54 percent over the
is

This rate

in consumption of

to the substitution of

:1

the poultry industry.

fl

1’81

L911] t‘ x l

, ationship between all

0
\..

total amount of

The trend of livestock population

proportion of poultry and fewer

of livestock

r‘.
V

is ex;e ted to continue

eed grain disappearance that has

Sible future

po

ains used for purposes

1
,.‘ - 4., 1.4 -.
k_.é_._ _ 1" {£11,311

1956 and

each other in this

consumption of for human

the population has increased.

\

uantity i used for seed,

U)

Tl

W
J.

ccmpared to total disappearance. e

1" 1:1 1;;

seed, and industrial purposes has

- ‘fc.--
remained be w:CL 1c and i ‘;c: retric tons in Western burope in
. , . ., . - s ,_ it ~ , _ . .. . , - r - _ ._ 1

ILL/“vii o , , a- u‘ . iirs‘- V‘- \J. i, ) ii ,1 - .li; _ fl Li L :11 .s *1 33M d bdfl L)“ abo .LULLLleQ

.~ 1" . , -~ rm \ L“ \ _ r‘ ~ 1 «r ‘1
CA “W... - s. ‘ r ‘3‘ , - we}; L\J{.n_)'.;. 1;}; sit)“ C); .‘ JO. ordiDS r.

n V _.

olive «yak, locd grain disappearance : western Ldrope has increased

1., ._ _ ~ - r" h _‘ . '1 9 M a: , _ \-; 4- i __. .v ‘ '- V 'r,
of an a»ciage cf 4 tiii on me* lo cOflD p6; year, If this same rate
’~ "u ‘- ~ m 7 N‘ — J 7- - y, t ‘, ~ ’/\"\ w ~ ' -~,‘ v.1 r’ r y a" w s 3 -' T - , L v7. ' ‘
continied ot-;:g the 1’2) s approximately )4 million metric tons would

million m

H ‘- A ~. .. 4 , 1 H "7 ' t 45 t . .u r- i c 1 , Va 7 i ‘ .V
purpose .n 'a/o/-e nadir; toe ix miirion meti
. ' a - . _ , _.- 4 , -. 4.” L a .‘i -. -, 7. '1
oth I uses lflflflnfi . n: w .n:,ai:;apq@%iian‘ea '873;
t ,. . _ ‘ r‘ ’ r t _ g) t ' ‘ .. r .. -. , 4 a t ,. . ' .'
Jedi-S in * 'I'UJ and ink; If. . _'_ 4]., V'I’J Lit: ..'L -1 c “.-I;-:; in 1.). U
. Mx. V, -" -d ._ »._ ', r. “1 a.'. 4 f f
n;o sufiicientiy reliatre to alien e;timaoes o
4'? 1 1 + r- P“ 3 WW" r313 ~ ~ ‘L 5* v" 4‘ ": ”W .1 ‘“ 'v x ml ' “'v ' O "f “
c6 ” :2 cc UL ihlet, VJ -. -;.‘. 1:1 'Cl .y la: 5‘; at :i r_ v cw C.

etric tons used for this

J- . - ,-. v- v ., "O
is -ons per 3ear ior

to million m tric

74
. The
future

disappearance

In Chapter V

 

a range of disappearance refs 5 wxil be investigated and compared to the
si;g:e LCFW actisr' f;:u-es frangn;fisd herer
Er: ‘ <: 3 3.13.. 3 .12.: _ i :1 .: Jig new w: a»; C e C 1;: were}.

A alyzinn prcdgc l=fi :“erfis apart from disappearance trends may
lea: to erroneous results Sinie a3" short«run imbalances between demand
and sup ]y are igncred “ha.a_'es between the forces of production and
disappearance will influence his pzice and pulle deCisions within a
ncuntry and ma; c use jovernmental prmg"ag reactions which in turn may
1L1} e co fugwrc denand and supply conditions In addition to these
-r?t Ln es wi*: n ind Visual cowntries. SlX countries in Western Europe
fre ”rifled in a strcrg conmcn market which wiLl have conSiderable effect
:1; fre;l;§ta;n r'x 34ct1‘ii arwi itiiizx“ti:n l1“ els iii the fixture, 'This
relazicvsr;p will ke (wanjned in greater detail in the following chapter,

PFKLIESHW”‘

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t"

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OF Titi-{Jn Ail} ?”(5b:7l 1311.IESlEl’J EKEHSPE

 

 

 

 

 

PFOJECtlwn PrOJection
a 1 rue . - , w //
a'uwax inc ‘h:: to :3 4—00 to 1969-71
D,vrp ‘ — - ” ' “ c Tons———~-~~-
.5 - '_ A -
T) j *‘o‘ r ‘\r s-‘f‘ r r: '47 7 ‘ / I 8
L _ jl’t‘ ‘1. Fix;\ I‘ L ’ ;\/ A t
1,;
“I
.33 Mi, C - ‘2"; [I .1 1 :2 55 63
J»: :wr r‘ i9 21
r "a ‘ ‘ ’ " " r“. ‘ ‘r’ . ',t‘ 'r ‘, ‘ - " y' , ‘ t ' -*. ’7 4‘ ‘1' ' N -, + \ i 4’ 1"
(1" [1-.‘Vli\\a_i. K: J. 1.)?) ‘1‘Eg‘(.;711 {1 I {' [‘J‘xl‘? er "\Iz Ki: ,J I l 1.)": k1 en V C'f Idlle t'hree-
,( .s - -. ~. Ff ' ‘ «v ‘“ . . t ‘I l I 7‘“ I. r .s ~ _ (
:wir H Jr): (3:2; -, xi L '3 ,l,__ _, 1 [.3935 it. c; 1‘. 1.1 LQ?1£)}J >a: afiCB fl om U7 5 9 to 1961
'._'/.-’ f1? "-..'r1| {,‘(k.‘4.‘.t,.t -- in!“ I ”:1. -: ‘1 7 In“? C6211; Hf Ton; tht’e‘lfear
.~.... /* '2) .A ..,‘.:-,. , A.“ . 4V. r.. , (L“‘ + 'r'“
(11‘! \.,/‘”.1>" *3 I. A-) 4) .31 L 1‘- ,IL 111934 it: I 31; 1. JM ‘p‘jij frOi-TI 1‘, ,‘k, v9 lab-La
r7, -. , . y. , , w c x ,7 .. ,7 .- - ‘ ...I ‘- ‘4 L
i I pi -, doc Ir I '1. I i , n; d i gaping: - at: :u and pi Ud'JL’ tion trends
n m ~.;_¢ «m ‘1 a w I .A» . , w 1 v") :m-c :w ,r .— ~ 0 }r +
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CHAPTER V

EXTENSIONS AND IMPLICATIONS OF THE ANALYSIS

The projections developed in Chapter IV for feed grains indicated
a widening gap between disappearance and production. If production of
feed grains increases at the same rate as has occurred in the 1950's
and at the same time the disappearance trend continues as projected,
imports would reach a level of 19 million metric tons in 1965 and 21
million metric tons in 1970. These projections are a linear extension
of the trends in feed grain production, utilization, and import levels
during the period from 1947 to 1960. Economic conditions or policy ac-
tions may influence trends of either production or utilization to an
extent that the average import level for the three—year periods centering
on 1965 and 1970 differs from the range projected. Farm incomes still
comprise an important segment of the national incomes in the majority
of the West European countries and therefore effect national per capita
income levels and the demand for high protein diets. In response to
demands for higher producer incomes, government programs such as price
supports and import controls, could be imposed to influence production
levels of feed grains to a considerable extent. Changes, such as land
reforms which expand farm size, uses of more Specialized and advanced
production techniques, increased research and extension work, better
marketing facilities, and improved data gathering and processing methods
are occurring in many countries. If additional countries are admitted
into the EurOpean Economic Community, these countries may also benefit

-1L2—

-103-
from improved marketing techniques and lower trade barriers as well as
more freely convertible currencies. The eventual size and power of the
EEC is, of course, unforeseeable, but it is quite enlightening to consider
the previous projections of disappearance and production levels for
feed grains under alternative assumptions of rates of development in

the EEC;
Alternative Projections of Import Levels

If the assumption is made that by l97O Western Europe has united
in one common market, the projected levels of feed grain disappearance
and production may be quite different from the levels which might arise
in a divided Western Europe. An addition of the United Kingdom, Greece,
Denmark, Spain, and Switzerland to the present six members of the EEC
would give Western Europe a very powerful organization. It is not at
all unlikely that such an organization would also include Norway, Sweden,
Finland, Ireland, Austria, Yugoslavia, Turkey, and Portugal as either
full or associate members.l/ Considering the difficulty experienced by
the United Kingdom in attempting to join the European Economic Community
in the winter of 1962, future expansion will not come readily. However,
if the EEC expands in number, it might be assumed that some of the char-
acteristics of the present growth patterns wouli be evident in the econ-
omic develoyment of new member countries. The countries comprising the
the EEC in 1962 experienced a 5 percent average annual growth in per
capita output and 4.7 percent average annual growth in meat production

since 1953. Feed grain utilization has increased from 18.6 million

 

1/ See Colin Clark, "Agricultural Economics, The Further Horizon”,
(a paper presented at the Agricultural Economics Society's meeting, 17th
July to 20th July, 1962).

-104-

metric tons in 1952/53 to 32.0 million metric tons in 1962/63; an average
annual increase of 7.2 percent of the 1952/53 level. Production of feed
grains in the EEC also has increased more rapidly than in the rest of
Western Europe. Since its formation, the EEC experienced an increase
in the production of feed grains from 18.4 million metric tons in 1957/58
to 22.4 million metric tons in 1962/63. A more appropriate indication
of the potential rates of growth in production can be obtained from
the changes in three-year moving averages, as shown in Table V-1. It
appears reasonable to assume that Western Europe in general would re-
quire at least ten years to obtain the degree of development now evi-
dent in the European Economic Community even if new countries are added
to the Common Market within a reasonable time after they make application.

The growth rates through the 1950's of the countries comprising
the European Economic Community in 1962 give some indication of the high
rate of expansion that can occur under favorable conditions. Comparing
the three-year averages in those countries during the ten-year period
1949-1951 to 1959-1961, it can be seen that production of feed grains
has increased by an average of .75 million metric tons per year. The
annual increase during the period was 4.1 percent of the average pro—
duction level. The 4.1 percent annual increase was considerably above
the 3.1 percent average for all of Western Europe that was used in the
projection developed in Chapter IV. In order to present a high growth
rate assumption for Western Europe, the average rate of increase which
has occurred in the EEC countries between 1950 and 1960 of 4.1 percent
per year is used. Applying this rate to Western Europe and multiplying
the 4.1 percent average increase by the 48 million metric ton production

during 1959—61, an annual increase of 2 million metric tons is obtained.

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-106-
The 2 million metric ton increase per year can be projected to obtain
an average annual production level of 58 million metric tons by 1964—66
and 68 million metric tons by 1969—71.(Tab1e V—2).

The same analytical approach can be used to develop an estimate
of a high utilization rate of growth. A high range for estimates of
utilization of feed grains can be obtained from an analysis of the rates
of disappearance in the EEC during the past ten years. During the period
from 1949—51 to 1959-61 the disappearance of feed grains in the countries
now integrated into the European Economic Community averaged 1.14 million
metric tons per year or 4.7 percent of the average disappearance level.
The increase in disappearance averaged 0.4 million metric tons Per year
more than the increase in production during the 1950's in the Common
Market. This 0.4 million metric tons per year indicates the growth of
net imports to feed the increasing number of livestock and poultry.

For the entire West European area, an assumption of a high pro-
duction rate with a 2.0 million metric ton increase per year is 0.5
million metric tons per year more than the average annual production
increase during the 1950's. An assumption of a 4.7 percent annual in-
crease in disappearance for Western Europe would be an annual increase
of 3.0 million metric tons per year or one million metric tons more
than the average increase during the 1950's. Projecting both the high
levels of production and disappearance would indicate an increasing
need for imports at the rate of one million metric tons per year. If
Western Europe does unite into a strong common market during the decade
of the 1960's, it would be reasonable to assume a continually growing
market for feed grains.

Using the growth rates of the European Economic Community as bases

~107-

TABLE V-2

PROJECTIONS OF PRODUCTION, DISAPPEARANCE,AND IMPORT LEVELS OF
FEED GRAINS IN WESTERN EUROPE FOR 1964-66 AND 1969—71

 

 

Production of Feed Grains
Assumptions: Based on 3—Year Average of 48.3 Million Metric Tons

 

in 1959-61
Projected Levels
Annual Increase 1964-66 1969-71
Percent ---------- Million Metric Tons —————————
High 4.1 2.0 58 68
Medium 3.1 1.5 55 63
Low 2.3 1.1 53 59

 

Disappearance of Feed Grains
Assumptions: Based on 3—Year Average of 63.6 Million Metric Tons

 

 

 

 

in 1959-61
Projected Levels
Annual Increase 1964:66 1969—71
Percent --------- Million Metric Tons —————————
High 4.7 3.0 79 94
Medium 3.1 2.0 74 84
Low 2.4 1.5 71 79
Import Levels
Assumptions of Rates of Disappearance
1964—66 Average 1969-71 Average
High Medium Low High Medium Low
Million Metric Tons Million Metric Tons
Assumptions of
Rates of High 21 16 13 26 16 11
Production Medium 24 19 16 31 21 16
Low 26 21 18 35 25 2O

 

Ccnnputed from assumptions discussed in Chapters IV and V.

—108-

for high-level growth rates of production and utilization in Western
Europe presents a reasonable upper limit to import levels that might
be expected by 1965 and 1970. Lower limits are more difficult to obtain
because of the numerous influences which could reduce either production
or disappearance to extremely low levels. An assumption was made that
extended periods of unfavorable weather would not occur and cause a
serious decline in production. Wars and the build up of international
tensions might have a depressing effect on feed grain utilization and
this possibility must be assumed away in this analysis. Depressed ecoe
nomic conditions, periods of deflation, or economic recession also would
reduce the demand for livestock products and indirectly for feed grains.

Several alternative sets of assumptions concerning low-level pro—
jections were analyzed. In contrast to the six nations in the EEC used
as a basis for high—level estimates, the trends of several of the less
advanced countries could be projected to give low—level estimates.
However, it seems unreasonable to assume that economic growth rates of
the already advanced countries such as France and West Germany would
fall to the rates of countries such as Spain and Portugal even though
some slow-down seems likely. 0n the other hand, there is strong evidence
to support the belief that the growth of Spain and Portugal will be more
rapid in the 1960‘s with the implementation of new land reform 1aws.g/

Since the high production level is 0.5 million metric tons per
year above the medium level developed in the last chapter, a low rate
of 0.5 million metric tons below the medium level could be set arbitrar—

ily. Likewise, a low utilization level of one million metric tons below

 

2/ Western European Branch, Regional Analysis Division, Economic
Research Service, USDA, The 1963 Western Europe AgriculturalgSituation,
Supplement No. 2 to the 1963 World Agricultural Situation,(Washjn;tcu:
:"-.--.'":;, 19,3, ;; l...’ .L.

—109

the medium level could be set for projections to 1965 and 1970. Upon
analysis, it is apparent that this low range falls below the average
change over any five—year period since 1947—49. Since the extension
from 1959—61 to 1964—66 is a five-year projection, it is apprOpriate
to consider five-year changes in past three—year averages. The smallest
average increase over any five-year period occurred from 1947—49 to
1952—54 for both production and disappearance. The three-year average
of feed grain production increased from 30.8 to 36.5 million metric
tons between 1948 and 1953. During the same period the level of dis-
appearance increased from 37.5 to 45.1 million metric tons per year.
The average airmal increase was 1.1 million metric tons per year for
production and 1.5 million metric tons per year for disappearance during
that five—year period. These rates are the ones selected as low ranges
for increases in production and disappearance during the 1960’s. If
the increases in disappearance should average as low as 1.5 million
metric tons per year in the future, this would be a relative increase
of 2.4 percent per year based upon the 63.8 million metric tons per
year average of 1959-61. A projected low range for production in the
future based on 1.1 million metric tons per year would be at a level
of 2.3 percent increase per year based upon the three-year average of
1959-61.

The projections for the high and low assumptions of feed grain
disappearance and production range far enough apart to include the
most reasonable variations that might occur. Both disappearance and
production changes have been greater for year-to—year changes in the
three-year moving average than the limits of the high and low projec-

tions. In order to consider apprOpriate ranges it is not necessary

~110n

to go to the complete extremes of changes in three-year averages. In-
fluences which may effect diaappearances and production relationships
in short time periods of one—to-three years cannot be anticipated com-
pletely. Weather has been mentioned as one variable which is hard to
predict, while the policies of the individual governments is another.
Price fluctuations may also cause disturbances that are unforeseen at
present. Prices of feed grains paid to producers in many West European
countries are well above the world F.O.B. quotations due to tariff re—

2/

strictions. If feed grain prices to producers should be allowed to
fall to world price levels, the production levels would also be likely
to fall after sufficient time had elapsed for producers to change to
other crops. Of course, it is extremely unlikely that feed grain prices
in Western Europe will ever be allowed to fall to the world price level.
The stated objective of maintaining home production will continue to
protect domestic feed grain producers in most West European countries.
Extremely low rates of feed grain disappearance are just as unlikely
also. Increasing consumer demand for livestock products will continue
to exert pressure on the demands for feed grains to produce those live-
‘vstock products unless domestic livestock production is replaced by im—
ports. The desire to maintain domestic livestock production will un—
doubtedly protect these producers also and restrict imports. One ex-
ample of such protection is the action by the EEC to raise import duties

4/

on chicken from 4% cents to 12é-cents a pound in July, 1962.

 

2/ FAO Commodity Policy Series, "Agricultural Commodities and the
European Common Market",(FAO, Rome: 1962), p. 21.

4/ "The Pot and the Kettle", Monthly Economic Letter, First Na—
tional City Bank of New York, (New York: April, 1063), p. 49.

-lll~

Table V—2 presents nine possible results of the high, medium, and
low range assumptions as applied to import levels for each of the years
1965 and 1970. Projected levels of feed grain imports range from 13
to 26 million metric tons by 1965 and from 10 to 35 million metric tons
by 1970. If it is assumed that high feed grain production levels will
be associated with high disappearance levels, medium production levels
associated with medium disappearance levels,and low production levels
associated with low disappearance levels, this range of imports becomes
18 to 21 million metric tons in 1965 and 19 to 26 million metric tons
in 1970. The basis for assuming this relationship between the levels
of growth in production and disappearance bears examination in greater
detail.

If the economy of Western Europe is prosperous and the consumption
of livestock products increases at a faster rate than it did in the 1950's,
there would logically be a greater demand for feed grains. An increased
quantity of feed grains can be supplied by increasing imports or increas—
ing domestic production or both. Of course, a positive shift in the demand
curve for feed grains will bring about higher domestic production only
if the supply curve is not perfectly inelastic and as long as increased
imports do not completely satisfy the increased quantity demanded at the
original prices. Shifts in the domestic supply curve of feed grains
may occur along with shifts in the demand curve and reduce price move-
ments. However. increases in production would seem a reasonable result
of increased demand as long as internationally free markets do not exist.

The situation which would bring about a reduced demand for feed
grain imports would be just the opposite of the above. If the demand

for feed grains does not increase as rapidly as the production of feed

~112~
grains, domestic production may replace some of the imports. Such a
situation seems unlikely in view of the present conditions existing in
Western Europe. During the past fifteen years, utilization has been
increasing at an average rate of .7 million metric tons per year faster
than production. In only four years between 1947 and 1961 did production
increase by as much as or more than utilization.2/ Weather played an
important part in high production levels in 1956 and 1959, and high
production in DES) and 1951 produced carry-over levels the following
years replacing some imports. Government support prices in many Western
European countries have maintained domestic feed grain prices above the
level of world prices and would seem likely to continue to do so in the
immediate future.§/ There has been an increasing domestic utilization
of feed grains in spite of this artificially high price. A decline in
consumption levels would seem very unlikely unless Western Europe ex-
perienced a general over—all decline in prosperity and consumer buying
power should fall. Even then the increasing population in Western Europe
would work against any decline in demand. Therefore, a condition of
declining import demand would seem very unlikely unless the individual
government took action (either separately or collectively) to raise im-
port duties and artificially restrict imports. A question of major con—
cern then becomes one of where Western Europe will obtain these increasing
quantities of feed grains needed to satisfy the demand for higher live-

stock production. United States has been able to maintain a growing

 

, 19 o, and 1959. the increase in production over
e"al was greater than the following yearis increase
in utilization. For all other years during this period feed grain imports
expanded from the previous year‘s level.

6
-/ Agricultural Commodities and the European Common Market, (FAO.
Rome: 1962), p. 21.

-113“
share of these markets since World War II and a close examination of
the trends in feed grain trade between United States and Western Europe

helps to point out possible future projections.
United States Share of West European Feed Grain Imports

The importance of United States feed grain exports in the total
imports of Western Europe was reviewed in Chapter IV. Table IV—l gave
evidence that United States has supplied Western Europe with at least
one—third of her net feed grain imports since 1954 and by 1958 this had
increased to one—half. An average of slightly more than 8 million metric
tons of feed grains per year for the three—year period 1958—60 has been
shipped from United States to Western Europe. Trade policies between
United States and Western Europe will have a great influence on whether
or not United States maintains this share of their export market in the
future.

The graph in Figure V—1 indicates the quantities of feed grains
that Western Europe imported from United States from 1947/48 to 1962/63.
The upper dotted line indicates the percent share of the import market
that United States has maintained during the same period. Trade levels
are measured on the left vertical axis and percent share of the market
on the right vertical axis. It is evident that wide year-to-year fluc-
tuations have occurred, both in the quantities exported from United
States and in the relative share of the market that United States main-
tained. Canada and Argentina have been the major competitors of United
States for the European market as was shown in Table IV—2. In 1947,
Argentina alone supplied 63 percent of Western Europe‘s net imports;

while in 1953, Argentina, Australia, and Canada combined supplied 50

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ow.l 2H mcoflpommopm a--- x

 

 

mopwpm rowan:
Eonm wepanH mo
pcmonom

  
  

ewe.

moflwpo comm
mo
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COMHHHE

~115~
percent of the net imports.

Projecting a trend with the wide variations in year—to—year data,
as shown in Figure V-1, would appear to be rather hazardous. However,
a three-year moving average (plotted as a broken line in Figure V—l)
reduces the year-to-year fluctuations considerably. A projection of
the nearly constant increase in the three—year averages since 1953 sug-
gests that United States might increase exports to Western Europe by
0.9 million metric tons per year. By extending this projection, it
can be seen that United States feed grain exports to Western Europe
would reach 12.8 million metric tons by 1964—66 and 17.9 million metric
tons by 1969—71. Obviously this is an extremely high projection in
light of the previous projections of total import levels. If Western
Europe were to attain the high projections of production and utilization,
United States would be supplying 65 percent of the total imports to
Western Europe by 1964-66 and 81 percent by 1969-71. Such a projection
indicates one weakness of analyzing only the recent levels of United
States exports to Western Europe.

A more realistic projection of future United States export levels
to Western Europe might be based upon the assumption that United States
would be able to supply 50 percent of the West European imports in the
future. From 1955 through 1960 United States supplied Western Europe
with an average of 53 percent of the net feed grain imports. ranging
yearly from 60 percent in 1955 to 39 percent in 1956. Fifty percent
of net imports derived from the medium projections of production and
utilization would be 9.5 million metric tons in 1965 and 11 million
metric tons in 1970. The assumption that United States will be able

to maintain a 50 percent share of the West European market is considerably

“116m
below a straight line projection of the three-year moving averages since
1952—54. The projection of the three—year moving averages is considered
the high extreme, while the second projection of a 50 percent share of
the market is a medium level projection for United States feed grain
exports to Western Europe.

A third assumption considering a low range of exports from United
States to Western Europe is based on a continued export level of 8 million
metric tons per year. By 1965 this level of exports from United States
to Western Europe would be 42 percent of the total projected imports,
and by 1970 this would be only 35 percent of the projected imports at
the medium level. Under this assumption, other feed grain exporting
countries would have increased their exports to Western Europe by approx—
imately 15 percent a year while United States merely maintained its present
level. This obviously is a situation which would be very undesirable
from United States viewpoint and undoubtedly would bring about negotia-
tions to attempt to increase the amount of feed grain exports from this
country to Western Europe. The differences between the assumptions of
high and low export levels amount to 3.5 million metric tons in 1965
and 5.5 million metric tons in 1970. It is an important concern of the
United States government to determine if exports of agricultural products
to Western Europe will increase during the coming decade. The policies
and trade agreements of this government in connection with foreign govern—

ments in the early 1960 s will determine the outcome of this issue.

Price and Trade Policy Influences in Western Europe

The growth of the economies in Western Europe will have considerable

bearing upon future demands for and production of feed grains in that

“117
area. The projected levels of consumption and production developed
in the previous chapter assumed government policies would be favorable
toward both growth in feed grain consumption by livestock and expansion
of production of these grains. Judging from results of past agricul-
tural programs in United States, it is quite evident that governmental
policy does have effects on production and consumption of feed grains.
Price support policies in this country along with developments of new
production technology have encouraged growth in yields of feed grains.
This same result CA; I: igtfcipited It: Western Errcpe also. Increased
economic growth and higher per capita incomes expand the demand for
more meat type diets and consequently the demand for feed grains to
produce livestock is increased. An examination of policy implications
concerning feed grain demand and supply will help explain the projected
trends.

Western European policies related to the utilization and production
of feed grains were briefly reviewed in Chapter 111. ‘Government programs
in some countries have increased feed grain consumption and livestock
production by subsidizing livestock producers and setting controls on
grain handling and feed mixing. 0n the other hand, feed grain produc-
tion has been increased through price support programs and research and
education in many countries, High tariff levels and strict import
quotas have enabled several West European governments to maintain domes-
tic price levels above world prices.

An international condition where freely fluctuating market prices
are coupled with free world trade in feed grains is so unrealistic that
a question might be raised as to the value of even considering such a

situation. Yet, existing controls can best be analyzed as a deviation

all8~

from a free trade situation, and the effects of such controls can be
compared to the theoretical conditions that might exist if the market
were allowed to operate completely unrestrained. If existing controls
are relaxed, there would be a shift toward those conditions hypothesized
under free trade. It is quite unlikely that Western Europe would ever
experience a situation approximating free trade with the rest of the
world. Theoretically, under such conditions, the less efficient producers
would be forced into declining income positions and eventually out of
the market. Greater specialization in feed grain production would occur
in those areas having natural or manmade advantages, and as a result,
trade would increase. Feed grain prices would fluctuate with short-
iemnand long—term supply and demand changes as would livestock prices.
In addition to the short-term problems caused by these adjustments, the
vulnerability of the resulting situation makes such a change extremely
unlikely. If Western Europe became largely dependent on imports of
grains to feed the increasing number of livestock, a disruption in trade
resulting in the loss of imports would cause extreme hardships on live-
stock producers as feed grain storage levels disappeared. Vivid memories
of the war-time shortages of food make Western European producers ex-
tremely hesitant to rely heavily on imports of feed grains from foreign
areas. Therefore,it seems fairly reasonable to assume protectionistic
policies will continue to exist in Western Europe.

The integration movement in Western Europe has been brought about
largely by the European Economic Community.Z/ Prior to its formation

at the Treaty of Rome in 1957, other associations such as Benelux-—a

 

2/ Much literature is available concerning the European Economic
Community and its influence on development in the European area. Some
of these are mentioned in Chapter III and listed in the bibliography.

all9a
customs union between Belgium, Netherlands, and Luxembourg, and the
Crganization for European Economic Cooperation (recently renamed the
Organization for European Cooperation and Development)-—had influenced
the postwar redevelopment of Western Europe. The continued move to
build an integrated common market has had an important effect on the
feed grain balance in the area. The reduction of internal trade barriers
and the rapid economic growth have caused production to increase through
Specialization and increased feed grain demand. As was mentioned earlier,
negotiations concerning the United Kingdom‘s application for membership
in the EEC were terminated in January, 1963, but Norway, Ireland,and
Denmark have applied for full membership,and on November 1, 1962 Greece
became an associate member. Austria, Switzerland, Sweden, Turkey, and
Spain have applied for associate status adding to the increasing pressure
to expand the EEC. The eventual acceptance of the United Kingdom 1; 'ar
from being a certainty; but the remaining countries in the European
Free Trade Association have applied for some type of membership and
negotiations will be conducted individually with each applicant. How—

ever, many problems remain to be solved before any great expansion of

e}
to

the C can be expected.

Within the European Economic Community, the growth in gross national
product has been steady and at a percentage rate more rapid than in
United States. Between 1953 and 1960 t.e gross national product increased
45 percent in the EEC, 22 percent in the United Kingdom, and 19 percent
in United States. In absolute terms the growth rate appears more in

favor of United States since between 1953 and 1960 United States had an

a

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wiadw
growth in gross national product from 1953 to 1960 ranged from 6.2 percent
in United States to 18.4 percent in the United Kingdom and 36.5 percent
in the EEC. The per capita gross national product in the European Economic
Community is still below that in the United Kingdom. but the gap is being
closed rapidly. From 1953 to 1960. the per capita gross national product
in the United Kingdom rose $173 from $940 to $1,113, but in the EEC, it
rose 3261 during the same period from $715 to $976. In United States
the per capita gross national product was $2,314 in 1953 and rose to
$2,453 by 1960, a growth of $144 in seven years. Historically, growth
rates have generally tended to level off as nations become more advanced
and attain more highly developed economies. EJen though per capita
incomes in the EEC may never overtake those of United States, the period
of rapid growth experienced since its formation will very likely continue
through the 1960‘s and be a noteworthy influence on demands for livestock

products and indirectly for feed grains.

Implications For United States Policy

It has been implied in several places throughout this study that
the trade policy of United States in the future will be a major factor
in determining the level of feed grain exports. In order for United
States to maintain or increase its share of the feed grain imports en—
tering Western Europe, a favorable trade relationship must be maintained.
The growth potential of West European feed grain import demand has been
examined in this chapter and shown to range as high as 35 million metric
tone by 1969-71. It was also shown that United States could only obtain
a large share of this market with favorable trade arrangements between

these two areas. In the final analysis, physical limitations and potentials

aikl»
of West European feed grain demand and supply can be projected with some
degree of confidence. Even the economic tendencies can be visualized,
but with our present state of knowledge, the political reactions of nations
cannot be forecast.

The development and recovery of the West European area was sponsored
and aided to a considerable extent by V.i*u: 33.;es Lace.‘ cl} ai.e2
World War II. The European Economic Community has now become a major
force in world markets, and its internal and external policies toward
agriculture and trade will be a decisive factor in determining the level
of feed grain imports by 1969-71. Internal price policies will influence
production and disappearance levels while external trade policies will
set import levels. In order for United States feed grains to maintain
a f vorable share of this import level, trade relations must be such
that United States exports can compete with grains produced in other
exporting nations. Without favorable trade relations and active foreign
marketing programs, it seems quite likely that the expanding West European
market will turn to other sources or its feed grain imports.

In spite of the preceedinv arguments for more liberal trade relations
between United States and West European countries, it should not be as-
sumed that a complete and immediate relaxation of all United States trade

barriers would be beneficial to this country. With each concession of

L

reductions of United Stat

(D

s .ariffs granted, concessions should be ob—
tained in return to allow freer movement of United States products into
foreign markets. Skillful and effective bargaining is required to prevent
inequitable results and produce the most favorable trade climate between
these two economically developed areas.

The increased negotiating power provided by the Trade Expansion Act

of 1962 should enable United States to bargain more effectively at the so-
called "Kennedy Round" of GATT negotiations at Geneva in May 1964. Four
major points of the l962 Trade Expansion Act will give inc',;un neg ‘la urs
unpreaeaVHJLed alfifl.orify'x¢.‘lmai}e;»va :nxfl adj. St xiiiically takis Act.

1) Authorizes the President power to reduce turLFLs and Shimnlate

‘uiw o<w*: 'fe— ii VE-prfiar rm r'iarl clniiznf (’ll / l , 15%,?3
2) Provides modernized safeguards for American Industry;
3) Offers relief for American businesses which may be injured by
increased imports; and
4) Sets up the Office of the Special Representative for Trade Ne—

otions directly und r the President to coordinate the conduct

JQ
(D

of trade policy.
The General Agreement on Tariffs and Trade is a mrltilateral agreement
to which all major trading nations of the world are parties, United States,
being one of GATT s sponsors,is firmly committed to i‘; .oie ;f ‘r de p;acw

tines, This code specities no discriminati n among trading partners (most

"*3
H
w
p.)
U)
50

agreements wnticipated

favored naticn treatment and binding *arif g
that across-tbe—board taIiI‘ reductions kill be one basis of the negotia-
tions at Geneva along with non—terifx IeStIlCtlQRS, United States is pre—
Pared to offer West European countries access to her markets for industrial
products in return for reasznable terms guaranteeing access of United States

agricultural pr dizts to Wka auropean markets. The cutcome cf +hese nego—

“ ‘ 4'. ~. .-- ~-: -' “ mr-v (— '1 4"“ *A v ' *V -~ R r* Y " C-J \ ‘ ‘H ' .
CldtlQuS will play a vi 7. role in she lee of United Unatfib iced grain

une additional factor may play an impartant role in determining the
TV T—\

share of the west European fend grain market which will be supplied by

United States in the future The effectivcness of the promctional force

used to sell United States feed ra us in new markets will be a vital

to
5,..1

factor in expanding and holding these marketer Competition for customers

in the d1mestic me he: :s an accepted practice, yet promotional efforts

‘

to expand markets overseas i‘ still ineffective for many products, United
States producers and exporters need to realize that their commodities

am all ever the world and must be of equal

f4
K I
n
U
a
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H
O
(4
H»
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I"I
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r f
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L—fi
H

or better quality to remain competitive» Research is needed in the area
of promoting and advertiSing Unittd States products for foreign marketer

idling studies must be made for export

H

Packaging, grading, storing, rod ha
shipments to satisfy the tastes and preferences of particular foreign
markets It appears likely that promotion on the part of United States

. ' ' ‘ .. . - 1 , ' ‘ l
u .j ‘ ,‘ . ; nu" n ~\ 0 . . . r , I . . ~ , ... . :
'I' L’ .x,. . .( .-,.LTA pr U ’ ’v x; ....U -1. \a ~' L t.) '..- -1 _ ‘V. -_‘

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u:
D.
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0
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ti}
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feed grain producers

,2 , . V C L" h - , . f. \ I e .' - / i- E“ V x. v ,3“ 1‘. fi».\ {.9 ,<6 ' ... ’. :
'. . l l. 9...... El ,“ --- .c‘: “.A. M98 Help -l .' v: vpbé‘n I ..'.;.,_ .‘s'l.’ A J c - -- EJ._L \JI L‘E ILLC1‘Y :J n
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b‘ 14A-VJ.C} 1““; gAa-I L. I "J _ L R’s) »'-‘-...4A ‘) ~.J J ( 4 r) .1 (L;
if. . ,“_ " ~~r\ -
4.6}: .41 E? E; 1‘" “ ‘53:

C‘ :‘r‘vjr v P“. {‘r,"—“'IC' r

rJLl ill-:11] alld \olnlvluolul’ls

rrw

lhe basic purpose of this thesis was to determine the potential ex—
port markets for United States feed grains in Western Eurcpel Feed grain
'productixn: surpataxxi domes‘1r,1itilizefi mi in Unitcxifiitates enmnfiy year

the first nine of those years,pro-
duction exceeded total ufilization (dcmestic plus exports}, Even though
exports more thin doubled from 1950/51 to lgbl/éé, surpluses increased

by irriy—iivc million tons; In order to determine the opportunity of
uses for dollars in foreign markets, the West European

feed grain market was evaluated: historically, tne countries in Western

Europe have purchased the dLlUIlly if the United States feed grain exports

i”):_
and in 1960/bl, nearly three-fourths of the exports _e t ' *311e 1.

Feed grain demand in developed areas is a derived demand and primarily
dependent upon the demand for livestock products. In Western Europe, the
fairly steady increases in population and per_capita incomes have been the
major factors in bringing aeout the growth in demand for livestock products.
Livestock production as well as feed grain production has sho'n considerable
expansion in Western Europe since World War II, In order to obtain an esti-
mate of future feed grain import levels, the potential expansion in the
production of livestock and feed grains was compared, While limitations
in land area and yields will restrict future feed grain production, the
major limitation to the expansion of livestock production appears to be
the available feed supplies,

Utilization of feed grains in Western Europe has increased more rapid—
ly than has production, resulting in a droning demand for imports; Trade
policies have influenced import levels in the past and will likely be more

restrictive in the future. The policies developed within the Europe n

LT?

g to agriculture and

conomic Community during the early 1960 s relatin
trade will have a conSiderable effect upon the level of imports ultimately
attained in Western Europe, Such deciSions are of major concern to United

States feed grain producers and will determine to a large extent the size

of the United States feed

V W

grain export market, The future export market

5

‘ffect cn, but not determine

Ls

‘h;lx:rn Europx,imill have “r2:
completely, the Size of carryover levels during the 1960's,
West European feed grain production and disappearance levels were

’

in this thesis, It was

I,...'

C.
"W.
Q
P“
\o

projected to the periods of lgoA-éb _ 69—7

estimated that the three—year average production level of A8 million metric

tons during lQSQ—ol would increase to approximately 55 million metric tons

19e4~ce and 93 millian metric

1 \
1.; "7
91

dium level projections of di eta ppéurrnte

year average isappcerante leve

, T“)

Similar me-

A.
J

m1ate d the the three—

«1
, BbL-l

millicn metric tons during 1959—61

would increase to 74 million metric Tens Ty 19a4-99 and )4 million metric
tons by 1069—711 Additional high and low level estimates for these periods
were develcped, based upon different seTs of g10w_h and policy assumptionsl

These projections indicated that West E

q

might reach from 13 to 26 million metri

llkSllLOUd b;1ng in range of from 18 to
rauge 3f import; was projected to he fr

\' 'T l." +‘r~e 7 r 1‘ 7 '7"‘.-"x,' Wuxfg'fic‘ I‘hr «'11’1 '1 rrf.
‘11 .111 R. Li Tl‘JS J .Llrfiea'J'y __(” \ - LL) _, JP‘AJVA-‘:‘ J. "

1969—71, Such pro jem. 1:;ns were of litt
of West European impcrts wt:C' might ht
was ev1dent, 331w var, that ev~d in t

and low production levels, the expuLSi:

77“‘_‘___ >1~ , ~,-~1‘ ‘7 ,« -‘
hastern EuTJpQ metio nct file ient

surplus prohleny

-‘ '1 ~' 9 ‘i-"" r Y'. “'r‘V'flyt 1 ~
l (:34; (1 (:1 31d. ll (4 c; I I "1"; 216,1” i“! “-f(_‘: .1 a .L Ck. I“: A
. , , . .,. or ., I '1 x I4.
tlne per year frum 1))u/“7 to 1931,e2
tote] exporte from unite States 1

tons Per Year. oxen under TB” extremei

for lead fiftdféfi Tx<»ruirket in westerri
.," ' .‘l‘t,,.,‘.-', ,.-_,-,‘. ,,,

llCJhLL Z nu_111 n amiuric l.fll€ per :yeer.

r r. ,. ‘_ "_‘.. 3“,, _
to secure cu percent of Tnc Wes, rurope
‘14 z o ‘r‘ ‘ . (1:1. ‘ " 1' T c- x p ‘ Al 1‘: "a J ‘
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continue to build up oy 6 million

me i 11 osc

r
's’ L

13 I

71‘ - ‘ - . ._
.119 EX: I L TM:

r.
'4
.LJ

p6]?

ope an feed grain import levels

c Tons by 1964—66 with the greatest

This

n metric tons

m 19 TJ 2: million metric tons by
1e help in determining the portion
supplied by Tjnited States It

rase :f high disappearance

in ULU ed 8T9 res exports to

n
to eslve the domestic feed grain
of 8 million

During this period.

ncreesed by approximately 2 million

of import levels

urope absorb an addi-

United States Mill be fortunate

n market; but if 100 percent of

by United States, carryovers would

year under United StaTes govern—

I » x r . v~ '~ v- r i‘ , 1‘ ‘ .Hr ‘1 ~ ‘ . —: r-,-. a r l,,r~ .f 1-"- - n I a- ‘ .
T26, aC:(.:,;IdC.y 4; 11103-3 {31...} ICL.:LJL;5 .J.‘ Lab. european 186d grain pro-

lan, disappeararme, and import levels ;a.;- only he established in the

.L
, .
O
. 4
p.)

tare. Their usefulneSs is already apparent, however. By projecting

‘ - ‘~ - «4 ' qr. \ .‘ 1 ,3 '~ ~- 3 7' » 'r I» ~ ‘ 'z * “ ' r ‘ V r r 17. o ‘- ‘ r r- “ I I ' r- u
retvn. irer s wnd adjus11r~ toe pr-jecT1uns to eAisoinr Conditions it

.0
was “issihle to o fats esfiimq’es is: fu’ure pEriois With a relatively
r1 nisptriawl base period influences of prices, production, and
impzri policies vere analyzed separately from the projections and their
1

w “52d in deveioo‘nr tne ran

'1')

es for the projected

4
§
v‘
._
T
)
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t.
'——«
3+
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"i
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estimates. ouch project OAS suffered from a lack of information concern—
ing the men ols of denusiia feed grain utilization in the West European

-‘

area, as more information tecomes available, the projections can be ad—
justed and perhaps greater accuracy can be attained. An extension of this
approacn to other commod flies and to otner areas should prove of value

in developing estimates of potential mgrkets for United States agricultural

exports;

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Department of Agriculture. Economic Research Serv1ce and Foreign
A.gricultural Service. Uni ted Kin; dim: Projected Levels of
Derandk Supply and Impcrts of Farm Products in 1965 and 19251
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(FAS-M-lAB), February] 1963. '

Department of Agriculture Foreign Agricultural Service.
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Department of Agriculture, Foreign Agricultural Service;
Murray, Kenneth L. Fra_n_ce's Key Role in the Grain Sector of
3p? European Common Market. (FARulZQ), April, 19631

 

Department of Agricultur , Foreign Agricultural Serv1ce.
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Coroe irive Statizs of U. S Bread and Fe ed Grain s in the EEC

.A;ea (FAS-M 123) , Oczjber, I961.

Department of Agric u Ture. Foreign Agricultural Serv1ce,
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9 (FASmM—143), June, l963.

 

Department of Agriculture Foreign Agricultural Serv1ce.
Wehr wein Carl F. Import Restrictions on Feed Grains in +he

Unite d KingdnmJ Re lgiw Tne Netherlands West Germany and
lfiélfie (FAS"M— 96) Se tenber. l9b ,

Depar+ment of Agriculture, Foreign Agricultural Serv1ce.
Cc mmc'n Ma; ket Grain Pro,uction and Trade Statistics l950»5l
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---...- _-

 

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U. S.

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Department of Agriculture. Foreign Agricultural Service.
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Department of Agriculture. Foreign Agricultural Service. The
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Department of Agriculture Foreign Agricultural SerVice.

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and Aci‘cr‘tuit Organization of the U. N, Agricultural
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E/CN. leAS, CCP LJ'S). Rome, 1962.

 

 

 

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Regulations Coveining Their Manufacture and Sale in European
Countries "

”c—m-

T
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\0
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\7

THE}

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Food and Agriculture Organization of the U. N. The Relationship of
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.3)
if;
1:.
(:J:
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I
.1 L xix-) .

421st. Lai.:1-r u, v ,

conomics ~ Tre Further Horizon

P-‘

Cl ark, Col;n ”ALTICH‘~1 a E
Agri ultiral Ec mics Research Institute (Paper Circulated in
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Iowa State Univer51ty Press, l}59 2/2— 9i

U}
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Crcmarty, William A "An Econometric Model lir United States
Agri :i Ture", Jourral of the Aneiican STatisti s
2)

" ‘ 9“,. ' . ' “"' \ ' '
Vol. infl,ITi, 2c7, (Segue ~rer , Ifiyll. idem/n

 

 

"Domestic Utilization of Coars Grains", Monthly Bull
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U959)

Eicher, Carl K "What is at Stake ior American Agricul tiire in the
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Lansing. No. 23), (April 19(()

EilflggflllgiiEQgfln. Amos: Iowa State University Press. Vol. 14;
lie. 3, l9ol~¢£

 

 

 

 

Fiod and g; cul*u.c Orgrni,a ion JT T1e U N (h ain Exp: lIS by
S3:.' ce nd D ;;;~at;gn (l96l/SQ Through l954/55) and Wprld,
Gia'n I aade Sfatieti;§_(l955/56 Through l‘o2/oj) Rome.

 

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”drains: WOEId l ade Ln 1959/60.” M r1thV Bel
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LL Tne L N. vii ;LL No. I, (January, lleln lO—l

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Kreinen. M.E ”EurOpean Integratign ard Ane ican Tr . _
Eg3n333g_53§33y Vol. XLIX, No A? (September 1259), blS~27.
Kreinen, M,E "The Ontez—Ser;n arzd European lritegzation",
Ame Lean Effirdfiit FTVIGM. V312 5U, N0. 3. (June, 1960),37O~86L

 

 

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' Hr New EIrepr: inn.-La LJL: fLi Tnc Ijnited STa ', lne Annals
D ’ “ "I“ v ‘ ‘ .- V' 1w n ) I“
,l I ANT" it's}; Auah ”I! L: PULLI Lea' f] O--( L- Owl. ‘3 ,

”New Mw'es In Earppe” Eiflflgjmqp Western Europe The Chase Manhattan
Bank, New YerK. an I}. IFebruary~Marcn; 1962).

 

Olson, FNMNUJYV J1.. and Harris Curtis CU Jr "F:ee Trade in
‘Csrn : A Sta'izfliea; Sandy of The Prices rd Produution
' in Urea", Silfain fr urn .LS'T'QS To l_‘7+7l1;.." Quajerly
f Egan;fi;es, Vol. LXXIII, N3; 1, (February,

"mne P'T ano re KgiTie" er‘g_y_Egii_tg;ngégg; First National
Cl 'ty' Barf I: W ‘-L.I'.’7I". (AI/L Li , I TO?) , Lyi"l“vr.;l.

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SLegherd Ceqffzeii Fax at»? AiLen and NL1k1n 1a1n. 82_me Effects

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'l‘re AgriculT ural “(:l1cy lnetiLLte at North Carel1na State College,
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