GENERAL FARM PROGRAM 



1065 



processor contract. However, they did sign a producer contract which covered 

 the production of tung oil from tung nuts produced in their own groves. 



At the urging of tung-oil producers, a program supporting 1948 crop tung nuts 

 at $72 per ton and oil at not more than 25 cents per pound was considered by 

 CCC in April and May of 1948. The market price of tung oil had recovered to 

 approximately 26 cents per pound (Drummed, New York, about 23^ cents f. o. b. 

 mill) , but the industry contended that a price floor was necessary to stabilize the 

 market, as well as to balance the support being given linseed oil prices through the 

 flaxseed program. Paint and varnish manufacturers have stated that their 

 utilization of tung oil varies with the availability of competing drying oils and 

 synthetics, as well as price relationships. The Munitions Board had removed 

 tung oil from the stock-pile list, indicating that it was no longer considered a 

 strategic material in short supply. CCC was having difficulty disposing of its 

 stock of 1947 crop oil, even at a loss. On May 19, 1948, CCC rejected the pro- 

 posed program, feeling that continuing to support tung prices under current 

 conditions would only create an unrealistic market for the oil and thereby con- 

 tribute to an even greater market maladjustment in later years. 



We understand that the Munitions Board made a careful analysis of the 

 strategic requirements for tung oil, the estimated domestic production, the 

 availability of satisfactory substitutes, both in the form of other oils and as a 

 result of recent technological developments in the treating of domestic drying and 

 semidrying oils and the use in connection with alkyd resins. As a result of this 

 investigation, it was determined that although there is an essential need for tung 

 oil as a component element in protective coatings, insulation, and resins that the 

 prospective domestic supplies would be more than needed to meet our minimum 

 strategic requirements. Therefore, tung oil was eliminated from the list of 

 commodities to be stock-piled. 



The following is a tabulation of pertinent statistical data affecting the tung oil 

 industry : 



Tung oil — United States supply, disposition, and average annual price in drums, 

 Neiv York, by calendar years '; tung nuts — United States production, 1939-48 



• Compiled from reports of the Bureau of the Census and the Bureau of Agricultural Economies. 

 ' Calculated in the Fats and Oils Branch. 



3 Reported factory consumption. 



4 Unofficial; from a report prepared by Bureau of Agricultural and Industrial Chemistry. 

 'Start of domestic commercial production. 



