1064 



GENERAL FARM PROGRAM 



1934-38 period to the ceiling price of 39 cents in 1942. Production by States for 

 recent years follows: 



Tung nuts 



1 Includes small quantities of tung nuts produced in Texas. 



In order to control the distribution and use of tung oil, CCC purchased the 

 entire domestic production from the crops of 1942 and 1943. However, even 

 during these years of short supply, the Government declined to promulgate any 

 program for exapnsion in tung acreage, on the ground that although there was 

 immediate need for tung oil, the justification for a long-range program of expan- 

 sion of the industry had not been established. 



The Department activities and statements in many letters urged and lent 

 assistance to a maximum production on available acreage. In view of the length 

 of time between the planting of tung trees and the time of bearing, it was felt that 

 the most practical approach would be to maximize the production from available 

 acreage. Under the agricultural conservation program, an amount not in excess 

 of $5 per acre on tung orchards, excluding old, nonbearing orchards, could be 

 earned by carrying out certain cultural production practices designated and ap- 

 proved by the Agricultural Adjustment Administration. Also, the Selective 

 Service gave consideration to tung oil in their occupational deferments for opera- 

 tors and workers on tung farms. 



Increased production from the 1944 and 1945 tung nut crops caused CCC to 

 discontinue the previous policy of buying the entire annual supply of oil. How- 

 ever, in order to assure maximum production from existing acreage, the first price- 

 support programs were carried out in these years. The 1944 crop program 

 provided for a support price of 36 cents per pound, f. o. b. mill. The 1945 crop 

 program provided for a net price of 30 cents per pound but no oil was offered to 

 CCC, since market prices still held to the 39-cent level. 



In 1946 representatives of the industry requested a price-support program 

 but withdrew their request when CCC indicated that a price of more than 30 

 cents per pound could not be justified, since the industry representatives believed 

 that such an announcement would tend to lower the market. Market prices 

 throughout 1946 remained at 39 cents per pound until the ceiling was terminated 

 in October, and then advanced to 39.5 cents in January 1947. 



In March 1947 the market price of tung oil was 38.8 cents per pound, but 

 dropped rapidly to 29.2 cents in May. The industry requested price support in 

 anticipation of a bumper domestic crop and increased competition from Chinese 

 tung oil. CCC approved a program at the rate of 25 cents per pound, f. o. b, 

 processing plant. The 1947 crop of tung nuts was supported by means of a 

 contract with processors who agreed to pay producers not less than $72 per ton 

 of tung nuts, basis 20-percent oil content. Premiums and discounts were provided 

 for tung nuts containing more or less than 20 percent oil. Crushers who agreed 

 to pay producers not less than this base price could sell tung oil to the Commodity 

 Credit Corporation at 25 cents per pound, f. o. b. processing plant. Only 6 of 

 the 14 processors signed this contract with Commodity Credit Corporation. In 

 addition, tung-nut producers who had their tung nuts crushed on a toll basis 

 could sell tung oil to the Commodity Credit Corporation on the same basis as 

 processors. Twenty-two producers signed this form of contract with the Com- 

 modity Credit Corporation. Prices fell rapidly during the latter half of 1947 and* 

 the spring of 1948 to less than the support price, and CCC purchased approxi- 

 matelv half of the total domestic production, with losses to CCC now indicated 

 at $325,000 to $330,000. 



As indicated above, only 6 of the 14 processors signed the processor contract. 

 These are as follows: Goodyear Yellow Pine Co., Picayune, Miss.; Ozone Tung 

 Cooperative, Covington, La.; La Row Investment Co., Picayune, Miss.; Wade 

 Tung Oil Co., Richton, Miss.; Cairo Tung Mill, Cairo, Ga.; General Tung Oil 

 Corp., Lament, Fla. Two other processors deemed it inadvisable to sign the 



