Family Economics Review [1977, Number 1]

              HIGHLIGHTS/VVINTER 1977
ANNUAL OUTLOOK ISSUE
THE OUTLOOK FOR CLOTHING
FOOD
HOUSING
ENERGY
ENERGY AND FARM-OPERATOR HOUSEHOLDS
TR NSPORTATION AND FARM-OPERATOR HOUSEHOLDS
Oepos\tory
PROPERTY OF THE
LIBR RY
M.l\R 2 3 19"!7
University of r orth Carolina
'l~ Gre:nsboro
ARS-NE-36
Consumer and Food Economics Institute
Agricultural Research Service
U .S. DEPARTMENT OF AGRICULTURE
FAMICY ECONOMICS REVIEW is a quarterly
report on research of the Consumer and Food
Economics Institute and on information from
other sources relating to economic aspects of
family living. It is prepared primarily for home
economics agents and home economics
specialists of the Cooperative Extension
Service.
Authors are on the staff of the Consumer and Food
Economics Institute unless otherwise noted.
Editor: Katherine S. Tippett
Consumer and Food Economics Institute
Agricultural Research Service
U.S. Department of Agriculture
Federal Building
Hyattsville, Md. 20782
!
CLOTHING AND TEXTILES: SUPPLIES, PRICES, AND OUTLOOK FOR 19771
by Annette Polyzou
Clothing expenditures and prices. Consumer
expenditures for clothing and shoes averaged
$345 per person during the first three quarters
of 1976, according to preliminary figures
(table 1 ). These expenditures represented a
5.2-percent increase in per capita expenditures
over 1975. Approximately half this increase
was caused by a rise in the level of prices, and
about half resulted from increased buying-a
real increase of 2.8 percent in dollars of con­stant
value.
The price level for apparel and upkeep, as
measured by the Consumer Price Index (CPI),
averaged 3.5 percent higher during the first
three quarters of 1976 than during the same
period in 1975 (table 2). Increases among the
three apparel subgroups averaged 3.3 percent
for men's and boys' clothing, 2.6 percent for
women's and girls' clothing, and 3.5 percent
for footwear. Such increases for apparel items
were less than the 6.0-percent increase for all
items of the CPl.
The economy enjoyed a substantial growth
during the first quarter of 1976. Real gross
national product (GNP), the total output of
goods and services adjusted for inflation, grew
9.2 percent on an annual basis during this
period. This growth was largely due to a sharp
increase in consumer expenditures. Consumers'
"real" purchasing power increased substantially
during this period due to strong gains in per­sonal
income and a relatively small increase in
the price level. According to trade sources,
retail sales increased greatly during the first
1 Information in this paper is based on reports avail­able
during the period January through October 1976.
Discussion of business trends is based on trade reports
or news items in the Daily News Record, the Wall
Street Journal, Business Week, the New York Times,
and the Washington Post. Other sources include the
following: U.S. Department of Commerce, Bureau of
Economic Analysis, Survey of Current Business 56( 1 ),
Part II, and 56(8), 1976. U.S. Department of Labor,
Bureau of Labor Statistics, News (Consumer Price
Index monthly reports). U.S. Department of Agricul­ture
Economic Research Service, Cotton and Wool Sit­uati~
n, CWS-4 and CWS-7 (1976). Textile Organon
XLVII(9), September 1976.
WINTER 1977
quarter, with emphasis on durable goods and
spring apparel. Retailers responded to this large
increase in sales by rapidly building up inven­tories.
Economic growth slowed considerably dur­ing
the second quarter. Real GNP expanded 4.5
percent on an annual basis during this period,
less than half the 9.2-percent growth of the
first quarter. The CPI rose at an annual rate of
6.4 percent, which is more than double the
2.9-percent annual rate of the first quarter.
Various trade reports cited the following rea­sons
for the sluggishness of retail sales during
the second quarter:
• An increase in the price level.
• Lower income tax refunds in 1976 than in
1975.
• A slowdown in the rate of purchasing by
consumers to compensate for their fast­paced
buying during the first quarter.
• Unseasonably cool weather in many parts
of the country, which discouraged pur­chases
of such hot-weather merchandise as
summer apparel.
The second quarter revealed a shift by con­sumers
from strong buying of apparel to dura­ble
goods, according to trade sources. The big
losers during this period included many lines of
men's and women's nonsportswear apparel and
children's wear. Retailers scheduled early clear­ance
sales and took deep markdowns on regular
stock to work down the large inventories
accumulated during the first quarter.
Preliminary third-quarter figures indicated
that real GNP expanded at 4.0 percent on an
annual basis. Retail sales remained a bit slug­gish
during most of the third quarter although
there was a fairly high volume of consumer
purchases of fall apparel, especially sweaters,
three-piece tailored suits, and coordinated
sportswear for men and women. Trade reports
indicated that retailers still felt the reluctance
of consumers to purchase apparel and other
nondurables during this period. They attribut­ed
this reluctance to lack of strong fashion
3
Table 1. Annual expenditures on clothing and shoes 1
Percent of Aggregate
Per capita expenditures expenditures
Years 2
expenditures for personal Billions Billions
consumption of of
Constant Current Constant Current constant current
dollars dollars dollars dollars dollars dollars
(1972) (1972) (1972)
194 7-63 ....... 203 142 8.6 9.1 33.6 23.5
1964-65 ....... 225 169 8.0 7.9 43.4 32.7
1966-71 0 ••• 0 0. 242 214 7.6 7. 7 48.8 43.1
1972 0 •••• 0. 0 0. 264 264 7.5 7.5 55.1 55.1
1973 •••• 0 0 •• 0 . 281 291 7. 7 7.6 59.2 61.3
1974 • 0. 0. 0 •••• 278 307 7.8 7.3 58.9 65.1
1975 ••••• 0 0 •• 0 287 328 8.0 7.2 61.3 70.0
1976 3 ........ . 295 345 7.8 7.0 63.3 74.2
1Revised estimates for all years resulted from changes in definitions of personal
consumption expenditures (other than clothing and shoes) and from statistical revi­sion
of previous estimates. More detailed information can be obtained from the
U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current
Business, 56(1), Part I, 1976.
2Earlier years are grouped on basis of similarity in level of per capita expendi­tures
in 1972 dollars.
3Preliminary figures--average of estimates for first 3 quarters of 1976 (i.e.,
seasonally adjusted quarterly totals at annual rates).
Source: Department of Commerce, revised estimates. "Clothing and shoes" include
nondurable goods only.
Table 2. Annual percentage change in selected indexes of consumer prices
Consumer Price Index 1972 1973 1974 1975 1976 1
All items +3.3 +6.2 +11. 0 +9.1 +6.0
Apparel and upkeep 2 . .. ............ +2.1 +3.7 +7.4 +4.5 +3.5
Men's and boys' clothing •• 0 0 •• 0. +1. 3 +3.7 +7.9 +4.3 +3.3
Women's and girls' clothing 0. 0 0. +2.4 +3.5 +6.0 +2.4 +2.6
Footwear •••• •••• 0 •••• 0 •••• 0 0 • •• • +2.8 +4.2 +6.1 +4.4 +3.5
1Preliminary estimates--average for first 3 quarters of 1976 compared with average
for first 3 quarters of 1975.
2Also includes infant's wear, sewing materials, jewelry, and apparel upkeep
services, for which indexes are not available.
Source: Bureau of Labor Statistics.
4 FAMILY ECONOMICS REVIEW
leadership and to increased prices of fall appar­el.
Retailers continued to decrease their inven­tories
through markdowns and drastic reduc­tions
in future buying.
The seasonally adjusted wholesale price
index for textile products and apparel rose 1.4
percent during the period of June through
October. Monthly rates for the period were
0.1, 0.7, 0.!3, -0.1, and 0.4 percent, respective­ly.
These rates indicate the probability of price
increases for apparel at the retail level during
the months ahead and make less likely any
large rise in average spending on clothing in
dollars of constant value. Consumers are likely
to be quite selective in their purchases of
apparel as they seek attractive price-value
relationships.
Supplies of raw materials. Production of tex­tile
mill products fluctuated only slightly from
month to month during the first 7 months of
1976. Average production was about 36 per­cent
higher than at its depressed level during
the same period in 1975.
U.S. mill use of fibers in 1976 (based on
data for the first 9 months) is estimated at
about 54 pounds per capita, including 15.8
pounds of cotton, 0.6 pound of wool, and 37.7
pounds of manmade fibers. This compares with
1975 per capita use of 49.6 pounds, including
14.2 pounds of cotton, 0.5 pound of wool, and
34.9 pounds of manmade fibers. An apparent
trend toward natural fibers and a natural look
in clothing during 1976 has caused increased
demand for cotton and wool.
During the period of 1965 to 197 3, mill use
of all fibers on a per capita basis generally
increased from 43.9 to 59.3 pounds but was
lower in 1974 and 1975 than in 1973 (52.4
and 49.6 pounds per capita, respectively). Mill
use of cotton on a per capita basis, however,
decreased from 23.3 pounds in 1965 to an esti­mated
15.8 pounds in 1976; mill use of wool
decreased from 2.0 pounds to 0.6 pound. Mill
use of manmade fibers (which comprise the
remaining fiber use) followed the trend of total
fiber use.
The 1976 cotton crop is expected to be
nearly a fourth larger than last year's crop
despite recent deterioration in production pros­pects.
Tight supplies and reduced stocks are
expected, however, to prevail during the
1976-77 cotton season due mainly to larger
WINTER 1977
exports (at least a fourth more than for last
season).
Cotton prices rose sharply during the
1975-76 season due to increased demand for
all-cotton denim and corduroy, as well as great­er
use of cotton in blends with manmade fiber.
Most qualities of cotton are currently priced
about 25 to 30 cents per pound higher than a
year ago. Prices for mill-delivered cotton are
presently about 50 percent higher than for
manmade fiber staple.
Average U.S. mill use of cotton for the first
9 months of 1976 was approximately 20 per­cent
higher than the average mill use of cotton
during the same period in 1975. Current high
prices of cotton in relation to other fibers and
tight cotton supplies may encourage greater
substitution of manmade fiber for cotton; thus,
U.S. mill use of cotton may be moderately
smaller during the 1976-77 season.
U.S. wool production in 1976 is estimated at
10 percent below 1975 and 18 percent below
197 4. The decrease in wool production during
the past several years has been attributed to a
decrease in the number of sheep and lambs, as
well as to a decrease in the average fleece
weight. Strong wool prices resulted in a 15-per­cent
reduction in commercial slaughter of
sheep and lambs during the first half of 1976,
compared with the same period in 1975. If this
reduction in slaughter levels continues through
1977, U.S. wool production may stabilize or
possible increase.
U.S. farm prices of wool have moved upward
since mid-1975 due to greater demand and
smaller domestic supplies. Prices are expected
to increase moderately during the next few
months.
U.S. mill use of raw apparel wool for the
first 8 months of 1976 was 25 percent higher
than during the same period in 1975. Domestic
demand (mill use plus import-balance) between
January and August of 1976 was approximate­ly
51 percent higher than during the same
period a year earlier. Such a strong increase in
demand reflects the fashion trend towards the
natural look and the renewed interest in wool
as a natural fiber for use in sweaters and men's
vested suits. The outlook for wool during the
1976-77 period includes strong demand, result­ing
in relatively high mill use and imports of
wool textiles. Consumers are likely to see more
wool and wool blends in the market.
5
Shipments of manmade fibers by U.S. pro­ducers
during the first 8 months of 1976 were
approximately 16 percent higher than in the
same period in 1975, according to the Septem­ber
1976 issue of TEXTILE ORGANON.
According to trade reports, demand for
polyester filament was very weak during 1976
because of the shift in apparel styles from knit
fabrics towards the natural look of woven or
spun fabrics. Polyester filament producers
made sharp production cutbacks during most
of 1976 while numerous double-knit textile
plants closed as a result of the slack in the
polyester filament market. Filament prices
dropped steadily during 1976. DuPont, the lar­gest
producer of polyester filament, steadily
cut the price of polyester feeder yarn from a
high of 87 cents per pound during the early
part of the year to 50 cents per pound in Octo­ber.
Trade sources expect that further price
decreases may be averted during the latter part
of 1976 as a result of sharp production
cutbacks.
As of October 27, 1976, trade reports indi­cate
the following trends. The price of poly-ester
staple is expected to increase as a result of
increased demand for the fiber by domestic
mills. Mills are expected to switch production
from 50/50 to 65/35 polyester-cotton blends
for bedsheets and printcloth because of high
price and scarce supplies of cotton. There may
also be a shifting from all-cotton to low-blend
polyester-cotton for a substantial portion of
the denim market, primarily for improved per­formance.
By increasing the price of polyester
staple, polyester producers hope to recover the
losses incurred by polyester filament.
A price increase for rayon also is anticipated
because of increased demand for rayon by mills
seeking to replace relatively expensive cotton
with cheaper rayon staple. Prices for acrylic
staple, which increased in recent months, may
continue to do so for the remainder of 1976.
Acrylic simulates the natural-fiber look of wool
and is benefiting from the strong market for
sweaters. According to fiber producers, the
above price increases of polyester staple, rayon,
and acrylic are necessary in view of increasing
costs of raw materials and production.
RETIREMENT OF VIRGINIA BRITTON
Virginia Britton, known to most FAMILY
ECONOMICS REVIEW readers for her work
on clothing budgets and the annual outlook for
clothing and textiles, retired on October 12,
1976, after 17 years of service with USDA.
Dr. Britton worked with every major nation­wide
expenditures survey, beginning with the
Consumer Purchases Study of 1935-36. She
taught at Pennsylvania State University, Uni­versity
of Akron, Kent State University, and
the University of Maryland. She authored
many papers and research reports and a college
textbook on personal finance.
THE OUTLOOK FO~JI FOOD SUPPLIES AND PRICES 1
by James R. Donald'
The current food situation is highlighted by:
Large supplies due to fairly good crop harvests
1 This article is condensed from a paper given at the
National Agricultural Outlook Conference in Novem­ber
1976, at Washington, D.C. The complete paper
may be ordered from the Consumer and Food Eco­nomics
Institute (see inside cover page of this issue of
Family Economics Review for address).
2 Deputy Outlook and Situation Officer, Economic
Research Service, U.S. Department of Agriculture.
6
and heavy output of livestock and poultry pro­ducts;
relatively strong demand both here and
abroad; and marketing costs that are rising in
line with general inflation in the U.S. economy.
All this adds up to the relative stability we saw
in retail food prices in 1976. The 1977 outlook
is for continued generous food supplies. Prices
will be fairly stable at the start of the year but
will increase in the spring if beef supplies tight­en
as expected.
FAMILY ECONOMICS REVIEW
Prices and Consumption During 1976
The combination of the farm price of food
and marketing costs determines the price of
food to consumers. There are several ways to
measure food prices or costs. USDA computes
the retail cost, as well as the farm value and
farm-retail price spread, for a market basket for
farm foods; based on data from the Bureau of
Labor Statistics (BLS). BLS includes a measure
of retail food prices in its Consumer Price
Index. Food accounts for about one-fourth of
this index. The food index, itself, includes two
components: Food consumed at home or pur­chased
in grocery stores accounts for most of
the total. with food consumed away from
home accounting for about one-fifth. The
food-at-home component is weighted slightly
more toward livestock products than crop
foods.
With food supplies outpacing demand, farm
food commodity prices have been easing since
the summer of 1975 due to a decline in farm
value, a measure of returns to farmers for food
products. The farm value of the market basket
of farm food commodities averaged nearly
4 percent below 1975. Livestock-related
foods-particularly meat animals-showed the
greatest decline. Crop-related foods generally
were under less downward price pressure.
Although the farm value of the food market
basket has declined in 1976, the retail cost of
the basket of farm foods averaged slightly high­er.
A rise of about 5 percent in the farm-retail
spread accounted for the small rise in the retail
cost of domestically produced foods. While the
spread widened in 1976 because of higher mar­keting
costs, largely reflecting wage settlements
and higher packaging and transportation costs,
the increase is only about half the 1975
advance. Among major foods, price spreads
increased the most for those commodities
showing the sharpest price declines at the farm,
including beef, pork, and bread.
If consumers purchased only domestically
produced farm foods from grocery stores, they
would have paid about 114 percent more for
food in 1976 than a year ago. However, con­sumers
also buy imported foods, such as coffee
and fishery products. Taking these purchases
into account, we push up average retail food
prices by slightly more than 1 percentage
point-to an average increase of nearly 2% per­cent
for all food consumed at home.
WINTER 1977
Finally, consumers do not purchase their
total food needs in grocery stores. That is, they
eat away from home in places like restaurants
and pay for the services of someone else to
prepare and serve meals. Taking this into
account tacks nearly another percentage point
onto the food price increase for 1976.
All told, taking into account farm-produced
foods, imported foods, fishery products, and
meals eaten away from home, the prices con­sumers
pay for food averaged around 3 percent
more in 1976 than in 1975. Still, this was
sharply below 1975's 8% percent increase and
was the lowest annual rate of increase since
1971.
With record-large food supplies and higher
consumer incomes, U.S. per capita food con­sumption
for all of 1976 was up a little over
2 percent from 1975 and was nearly equal the
record high of 1972. Consumption of crop
foods, where 1976 supplies were supplemented
by large carryovers from 1975 crops, was up
slightly over 1 percent, while animal product
use was about 3 percent higher. The combina­tion
of 2 percent larger consumption and 3 per­cent
higher prices meant a rise of about 7 per­cent
in consumer expenditures for food. Food
spending, however, did not match the rise in
disposable personal income; so the percentage
of income spent for food averaged slightly less
than the 17.1 percent in 1975.
Food Outlook for 1977
Large food supplies will continue to slow the
rise in food prices during the first half of 1977.
At the same time, demand expansion and rising
marketing costs will put upward pressure on
food prices. On balance, a retail fooq price
increase of· about 3 percent is in prospect for
the first half of 1977. However, the seasonal
pattern of food price movements may shift as
1977 unfolds, mostly due to a reduction in
beef supplies by next spring.
During the first quarter of 1977, a price
increase of 2 or 3 percent is expected over a
year earlier, mainly reflecting increasing prices
for coffee, some produce items, and higher
marketing costs and restaurant meals. By next
spring, food price increases may be a little
sharper if the economy is strong and beef out­put
declines as expected. Prospective higher
farm prices, coupled with marketing costs 5 to
6 percent above the spring of 1976, may lead
7
to food price increases averaging 3 or 4 percent
above last spring.
Crop supplies and livestock product output
during the first half of 1977 generally depend
on plans and actions already taken by pro­ducers.
The second half of this year is less cer­tain.
On the crop side, farm prices this winter
and next spring, along with growing and har­vesting
conditions, will greatly influence crop
supplies during the summer and fall of 1977.
Relatively favorable crop prices are indicated if
demand continues as strong as expected, and
these prices should lead to large 1977 plant­ings,
particularly for soybeans.
Prospective 1977 crop developments also
will influence production plans for livestock
and poultry. Output of animal products should
remain large in the second half of 1977, espe­cially
if supplies and prices of feed are favor­able
to livestock and poultry producers.
Cattle are a key to the outlook. If fed cattle
prices improve this winter and next spring as
expected, cattlemen will likely increase place­ments
on food and reduce the number of ani­mals
going to slaughter directly off grass during
the first half. This points to a little larger beef
production in the second half. Coupled with
continued relatively large pork, poultry, and
milk output, animal product supplies will con­tinue
at a high level, although below the level
of the second half of 1976.
On balance, 1977 looks like a year of fairly
generous food supplies for consumers, with
another year of only moderately rising retail
food prices.
The Long-Term Outlook
Since 1973 most of the increase in retail
food prices can be attributed to increased mar­keting
costs, including transportation, pack­aging,
andlaborcosts.
As we move into the future , both the level
of food prices and year-to-year changes will
depend heavily on factors related to general
price inflation, food production both here and
abroad, productivity throughout the sectors of
the food system, food demand, and govern­ment
policy.
The impact of these factors on retail food
prices will be reflected through marketing costs
and farm prices. Marketing costs have become
increasingly tied to inflation, or the overall cost
of living, and this is likely to remain true in the
8
future. If upward cost pressures continue as
expected in the economy, marketing costs will
rise. For example, about one-half of total food
marketing costs are accounted for by labor,
and, currently, wage contracts of at least one­sixth
of food industry employees include cost­of-
living adjustment clauses that are tied to the
CPI for all items (1 ). 3 Also, wages of nonunion
and management employees usually follow
changes in collective bargaining agreements.
Transportation and packaging costs, the next
two largest components of food marketing
charges, will be responsive to rising energy
requirements and generally higher operating
costs.
On the production side, the world has the
potential to produce adequate food supplies.
Questions center around the level o{ farm
prices needed by producers to cover the cost of
producing food and the impact of weather,
disease, and pests on the food supply. In the
United States, farmers have the capability to
produce sufficient food fot current domestic
and export needs, but uncertainty centers
around production costs and product prices
needed by U.S. producers to expand produc­tion
to meet growing food markets.
Developments in the 1970's suggest the pos­sibility
of a continued high level of exports and
considerable year-to-year variability because of
changing conditions abroad.
The total quantity of food that U.S. farms
will supply, and at what prices, is related to
production costs and the productivity of
resources used by farmers. Upward cost pres­sures
are likely to continue in the farm sector,
especially for inputs related to energy, labor,
and environmental quality. Among other
inputs, a key question centers around the cost
of feed. For example, feed cost rises would
increase the cost of finished cattle and could
result in the cattle industry's becoming more
dependent on roughages, and thus tend to
reduce productivity gains in feeding (2).
For both crops and livestock, there is further
potential for substituting capital for other
inputs, such as labor, and continuing output
gains from adoption of available technology
(3). However, total farm productivity has slow­ed
in recent years. Annual gains of 1 to l 1/ 2
3 Numbers in parenthesis refer to References at the
end of this article.
FAMILY ECONOMICS REVIEW
percent to 1985 are projected by the Economi;
Research Service, and realization of these gains
assumes that yields will be subject to "the aver­age
weather conditions that prevailed during
1950-72" (4).
The projected rate of productivity gain pro­bably
will not fully offset the impact on pro­duction
of rising costs since these costs may
rise more in line with prices for chemicals, fer­tilizers,
and energy. Even if productivity gains
hold per unit food production costs and farm
prices constant, expanding demand will likely
exert upward pressure on farm prices in some
years.
The worldwide demand for food products
likely will continue to expand with rising world
population and increasing per capita incomes.
It is generally agreed that the United States can
remain a competitive- producer of food com­modities
in relation to other countries. This
rmplies that the United States can maintain a
significant share of world food trade, with a
continued strong export demand for U.S. food
products. However, world trade expansion
could slow as countries abroad strive for great­er
self-sufficiency in food production. In this
case, the rate of U.S. export growth may not
match that of recent years.
U.S. per capita food consumption may con­tinue
to be relatively stable or may increase
slightly, the use of processed foods and fresh
meats continuing to show the fastest gain. This
suggests little, if any, change in the farm value
as a percentage of retail cost because of these
shifts since farmers' small share of processed
foods likely will be offset by their large share
for meat.
Retail food prices-and especially year-to­year
variations in prices-also could be affected
by government policy. Governments can
influence both farm and retail food prices
through farm programs or retail price stabiliza­tion
programs. Governments generally use
indirect methods to moderate the impact of
changes in food supplies and demand on farm
retail food prices, such as the recent U.S. grain
trade arrangements with several countries.4
Reserve food stocks represent another indirect
method, either through stocks owned and held
by the government or through privately owned
and held stocks with assistance from the gov­ernment.
Actions may be related to interna­tional
trade, including export embargoes, taxes
and subsidies, adjusting tariffs and quotas on
imports, trade arrangements, and commodity
agreements.
In looking ahead, most indications point to a
desire of countries to assure their producers
reasonable incomes and to assure their consum­ers
adequate food supplies, whether through
domestic production or trade. In either case,
these indications point to closer economic ties
among countries and perhaps relaxation of
trade barriers, particularly to meet production
deficits.
4 The United States has grain arrangements or agree­ments
with 5 importing countries, including the Soviet
Union, Taiwan, Japan, Poland, and lsrael. These
arrangements generally cover 3 to 5 years, beginning in
1976, and were made to help assure U.S. farmers of
markets, while helping protect both U.S. producers and
consumers from large variations in prices.
References
(1)
(2)
Barr, T. N., and Blanciforti, L. A. Forecast­ing
retail food prices: A look at the
future and an appraisal of controls and
input costs. Paper presented at the
Annual Conference of the Western Eco­nomics
Association, San Francisco, Ca.,
June 1976.
Allen, G. C. Feed utilization for beef pro­duction.
Feed Situation. U.S. Dept.
Agr., Economic Research Service, Rpt.
No. FdS 262, pp. 16-20, September
1976.
WINTER 1977
(3)
(4)
Farrell, K. R. Structure and organization
of agriculture, 1980-85. Paper presented
at the National Farm Marketing Confer­ence
of the National Agricultural Mar­keting
Association, Minneapolis, Mn.,
May 1976.
Smith, A. G. Commodity production and
utilization projections to 1985. Agricul­ture
The Third Century. U.S. Dept.
Agr., Economic Research Service, Rpt.
No. 2, 4 pp., July 1976.
9
OUTLOOK FOR HOUSING AND MORTGAGE MARKETS 1
by Marshall A. Kaplan 2
Before dwelling on the housing market in
detail, let me give you the underlying economic
and financial assumptions behind my housing
forecast. I am assuming that the current weak­ness
in the economy will probably come to an
end soon, although the economy is not likely
to pick up strongly for some time ahead. The
pickup in the economy by itself would not
likely cause much of a rise in interest rates
except that the prospects for inflation do not
seem good to me.
The rise in the Consumer Price Index has
been close to a 6 percent per annum figure over
the last 6 months, and the behavior of whole­sale
prices has been even worse. This has
occurred despite large declines in the prices of
most meats and poultry, which inevitably are
bound to level off and turn around. Skipping
over the many other factors involved in making
a price forecast, I merely express my belief that
we may be experiencing increases in the Con­sumer
Price Index close to 6 percent per
annum in 1977.
Such an inflation outlook will tend to push
up interest rates more rapidlv than the outlook
for economic growth, by itself, suggests. This is
because interest rates contain a substantial
inflationary premium and are going to be sensi­tive
to changes in prices. As a result, I expect
that the 3-month Treasury Bill rate, which is
currently about 4.9 percent, could rise above
6 percent toward the end of 1977. Since short­term
interest rates are the major factor in
determining the flow of funds into savings and
loan associations (S&L 's) and general housing
credit availability, this suggests a financial cli­mate
in 1977 that is not as good as what we
currently have.
1 This article is condensed from a paper given at the
National Agricultural Outlook Conference in Novem­ber
1976, at Washington, D.C. The complete paper
may be ordered from the Consumer and Food Eco­nomics
Institute (see inside cover page of this ;ssu<'! of
Family Economics Reivew for address).
2 Director, Special Studies Division, Oftk ;co-nomic
Research, Federal Home Loan Bank Bolli,
10
Nonetheless, the flow of funds into S&L's in
1976 has been exceptional, and it would be
surprising if this flow could be duplicated in
1977. Savings flows could well reach a record
$51 billion in 1976, to which we have to add
$38 billion from loan repayments as a further
source of funds for mortgage money. Since I
don't expect any real sharp runup in interest
rates during most of 1977' savings flows could
still be quite substantial for S&L's even though
they might be down from the 1976 record.
Interest rates on new mortgage loan commit­ments
have come down somewhat recently so
that we will be going into 1977 with mortgage
interest rate levels that are favorable by recent
historical standards. In terms of mortgage inter­est
rates, the early part of 1977 may well be a
good period for home buyers, but as the year
progresses mortgage interest rates are likely to
creep up again.
Let me turn now to the internal dynamics of
the housing market split into its two major cat­egories-
single-family housing and apartments.
I will not touch on mobile homes, despite their
importance to the housing market, because I
lack the kind of data on mobile homes neces­sary
for a careful analysis of the prospects for
this segment of the housing market.
Single-Family Housing
My forecast for the number of single-family
starts (new housing units) for 1977 is 1.2 to
1.3 million. This number represents a 50,000
to 150,000 unit increase over the 1976 esti­mate
of 1.15 million single-family starts.
I do not believe that single-family starts in
1977 can exceed the record level of 1972
because the 1972 starts were aided by two fac­tors
that are not present in today's housing
market. One was a boom mentality among
builders that led them to add a large number of
housing units to their unsold inventory in
anticipation of future sales. There is not much
speculative building of this type going on
today. The other was the very large number of
federally subsidized single-family units started
FAMILY ECONOMICS REVIEW
in 1972 under the Section 235 program.3 In
1977 we will be getting an increasing number
of units under the revised Section 235 pro­gram,
but the number of units will still be
much smaller than in the early 1970's and the
revised program involves a shallower subsidy
than the original program.
An important aspect of the single-family
market that is likely to persist into 1977 is the
increasing share consisting of units that are not
on the market for sale. These units are being
constructed to order for the owner and some
are being constructed by the owner himself. An
unusally large number of single-family starts
are currently in nonpermit issuing areas, which
are generally rural or are at least beyond cur­rent
suburban areas. These units do not get
into the sales statistics and may explain why
single-family starts this year have improved
much more than official statistics on new home
sales indicate. Thus, the ratio of single-family
starts to sales during the first 9 months of 1976
was 1.82 compared with a ratio of 1.64 in
1975.
A major obstacle to a single-family housing
boom rather than merely a good year is that
housing costs remain a serious deterrent to the
ability of builders to construct homes suitable
to first-time home purchasers. According to
census statistics, the median price of homes
sold in September 1976 was $45,200. This
represents a 14-percent increase over the same
month in 1975. There has been a large regional
divergence in the rise in new home prices, with
the rise greatest in the West and North Central
States, more modest in the Southern States,
and least in the Northeastern States. The sharp
rise in prices has occurred despite the attempt
of builders to economize on the use of expen­sive
land and to eliminate certain frills that
used to be standard on homes.
Many factors have contributed to the recent
steep rise in new home prices. Perhaps the
major one has been the increase in the cost of
3 Section 235 of the 1968 Housing Act provides for
direct homeownership subsidies to families unable to
purchase a home on the private market. Under the pro­gram,
eligible families pay a set percentage of their
income for mortgage payments, and the Government
pays a subsidy directly to the mortgage lender to make
up the differences between the families' contribution
and actual mortgage payment requirements.
WINTER 1977
developed land, where environmental and zon­ing
factors have tended to hold down the sup­ply.
Over the past year, lumber and plywood
prices have risen much more sharply than we
would have expected based on the only modest
increase in housing starts.
Let me put the escalation of housing prices
in historical perspective. It is true that home
prices have been outrunning family income in
recent years so that the ratio of the median
family income was up to 2.86 in 1975 compar­ed
with 2.39 in 1970. However, the median
sales prices in the early 1970's were held down
by the low prices on heavily subsidized Section
235 houses. The ratio of house prices to family
income in 1975 was about the same as during
the 1960's. It is only in the last year that this
ratio may be above the historical norm.
In my opinion, it is not so much the price of
new homes th.at has been a deterrent to home
sales but the sharp rises in the operating cost of
homes as reflected in much higher utility bills,
real estate tax payments, home insurance pay­ments,
and the cost of maintaining a house. In
fact, in light of these factors, it is amazing that
the single-family market has been as strong as it
has been in 1976. It appears that households
are willing to allocate a larger percentage of
their budget for housing. Undoubtedly, the sin­gle-
family housing market has been stimulated
because of the high rate of household forma­tion,
the continued strong attachment of the
average household to home ownership, and the
increasing number of households in which both
spouses work.
In analyzing the single-family market, we
must take into account the majority of housing
starts that are desinged to permit existing home
buyers to purchase a better home. These buy­ers
already own an existing home and can
afford a new and more expensive home b~cause
of the large equity thllt they have already
accumulated in their present home.
The same situation is not true for first-time
home purchasers. They are finding the going
much rougher. It is likely that a higher percent­age
of them are buying existing homes, rather
than new homes, since existing homes are gen­erally
cheaper. The gap between the median
price of new and existing homes has been nar­rowing
in recent years, however. In this con­nection
I should note that we develop a distort­ed
impression of what is going on in the
11
housing market by focusing too much on
housing starts. Normally far more existing
homes are sold than new homes and, at the
present time, the ratio of existing home sales to
new home sales is even higher.
In September 1976 there was a seasonally
adjusted annual rate of 3,330,000 existing
homes sold. This compares with 734,000 new
homes sold. Another factor to remember is
that there has been a sharp increase in spending
by existing homeowners for additions to their
home or for major remodeling jobs. This means
that there is a substantial improvement in the
existing housing stock that does not get reflect­ed
if we look at housing starts. This is contrib­uting
to a more efficient utilization of the
existing housing stock.
Multifamily Housing
The apartment market has been the weakest
sector of the housing market since housing
starts began to recover in the second quarter of
1975. Apartment starts remain far below the
peak reached in the early 1970's. While almost
1 million apartment units were started in 1972,
only 234,000 units were started last year. We
have truly had a boom and bust cycle in apart­ment
construction.
However, the rate of apartment construction
in the early 1970's was fueled by considerable
overbuilding, in part due to an overwillingness
of lending institutions to provide funds availa­ble
as a result of easy credit. You have all heard
what has happened to real estate investment
trusts, which did much of the construction
lending for apartment projects. Other lending
institutions also have suffered as a result of
losses incurred on many of these new struc­tures.
The result has been to make everyone­builders
and lenders alike-rather cautious
12
about putting up new apartments, whether
rental or condominium. This caution has made
lenders scrutinize new apartment projects care­fully
and demand clear evidence of
profitability.
Construction of apartment units has been
held down by a lack of profitability in many
areas of the country. Thus, last September the
index of rents in the Consumer Price Index was
only 5.6 percent above that of a year ago. This
is quite modest when we consider the large
increase in both construction and maintenance
costs in recent years. Over a longer period of
time the rise in rents has been lagging behind
consumer prices in general.
With the low level of multifamily construc­tion
over the last several years, we should be
expecting a tightening in the rental market,
which is beginning to occur. Thus, on a season­ally
adjusted basis, 85 percent of rental multi­family
units completed in the first quarter of
1976 were rented within only 3 months. This is
a substantial improvement in market absorp­tion
over that of recent years. There has even
been a fairly good improvement in the market
absorption of condominium units coming on
the market, although the absorption rate in this
area of the apartment market is still well below
that of several years ago. There has also been a
decline in the national rental vacancy rate from
a range of 6.0 to 6.3 percent during 197 4 and
the first three quarters of 1975 to 5.7 percent
in the third quarter of 1976. I would have
expected an even larger decrease in the vacancy
rate, but it may be that the combined impact
of recession and inflation has continued to
hold down the number of those who can afford
to occupy their own apartment unit and that
demographic factors are becoming relatively
more favorable for single-family housing.
FAMILY ECONOMICS REVIEW
OUTLOOK FOR ENERGY 1
by Jerry Ann Penno2
Supplies and Prices
U.S. production of oil peaked in 1970 and
has since been declining. Our consumption of
foreign oil, on the other hand, has risen from
36 percent before the embargo of 1973 to 40
percent in 1976. The bill for these imports
climbed from $3 billion in 1970 to $27 billion
in 1975 and was expected to reach $34 billion
in 1976-an amount equal to $160 for every
man, woman, and child in this Nation! Increas­ed
oil prices could mean unemployment, reduc­ed
consumer spending, and slower economic
growth; and these prices could add as much as
2 cents per gallon to the pump price of
gasoline.
The outlook · for natural gas, the energy
source used by over 50 percent of the industri­al
sector and by over half of residences for
home heating, is not much better. Production
of natural gas has <;l.eclined by 13 percent since
1973. Proved reserves reported for 1975 are at
the lowest figure in 24 years. In many parts of
the country, shortages of gas have forced gas
companies to place a moratorium on new or
additional gas service. ·This is most unfortunate
at a time when the economy is recovering and
housing construction is up. As a result, con­sumers
in many places have had to tum to
more expensive fuels, such as electricity.
The overall economic impact of these chron­ic
gas shortages will depend on the weather, the
capability of the curtailed users to switch to
alternative fuels, and the ability of gas com­panies
and other large consumers to avail them­selves
of measures to purchase emergency sup­plies
of natural gas. Depending on the severity
of these factors, there is always the threat of
production slowdowns or shutdowns. In addi­tion,
if a given industry is able to continue pro­duction
by switching to an alternative fuel, the
1 This article is condensed from a paper given at the
National Agricultural Outlook Conference in Novem­ber
1976, at Washington, D.C. The complete paper
may be ordered from the Consumer and Food Eco­nomics
Institute (see inside cover page of this issue of
Family Economics Review for address).
2 Director, Office of Consumer Affairs/Special Im­pact,
Federal Energy Administration.
WINTER 1977
higher costs of conversion to these fuels will be
passed along in higher costs of products to the
consumer.
Our coal reserves account for 90 percent of
U.S. energy reserves-around three times the
energy contained in Middle East oil reserves.
Yet, because oil and gas prices were so low in
the past and because environmental legislation
has made it difficult to mine and bum coal as a
fuel source, coal has accounted for only a small
portion of our energy use, a large percentage of
which is used by utilities. Increased use of coal
will require new technology to mine it, to
transport it, and to burn it with minimum
harm to the environment. Costs associated with
increased production and pollution devices will
increase the final cost of coal to utilities. These
costs, of course, will result in increased electric
bills.
Legislation and Programs to Conserve Energy
To help secure the Nation in the event of an
embargo, legislation proposed during 1976
authorizes the building of a strategic petroleum
reserve of at least 150 million barrels of petro­leum
by 1978 and up to a billion barrels by
1982. Legislation also authorizes establishment
of standby measures to deal with any severe
emergency that may arise. The United States is
working with other nations to develop inter­national
cooperative contingency plans.
To help increase domestic supplies of oil,
new legislation authorizes the full development
of four Naval Petroleum Reserves in the United
States. Price controls of crude oil will be gradu­ally
lifted and will be completely phased out
by 1979 to aid oil producers with the costs of
exploration and drilling. To aid consumers who
have already been hurt by high oil prices and
overall inflation, prices will rise gradually so as
not to cause severe economic strain.
To increase energy conservation and reduce
energy growth from 3.4 to 2.5 percent per year
is one of the main goals of U.S. energy policy.
Many conservation measures taken to achieve
this reduction will directly affect consumers by
helping them to save energy and, therefore,
dollars. As industries find better ways to con­serve
energy used in production, their savings
13
hopefully will be reflected in lower costs for
products and services.
Appliance manufacturers are now required
to provide energy efficiency information on
the labels of major appliances. This informa­tion
will help consumers make comparative
judgments on initial cost versus operation costs
of appliances. A program to educate consumers
on the use of energy labels is now being prepar­ed
and will be ready for implementation after
basic decisions on the exact content of the
labels are made. The Federal Energy Adminis­tration
is working with the industry to set over­all
goals for better appliance efficiency.
Auto manufacturers are now producing cars
and lightweight trucks that achieve improved
gas mileage. Mandatory fuel economy stand­ards
require an average of 18 miles per gallon
by 1978 and 20 miles per gallon by 1980.
These standards will result in better designed
cars, more efficient engines, and savings for
consumers. Auto dealers are also required to
make available the "1977 Gas Mileage Guide
for New Car Buyers" in their showrooms. This
new guide, which is a joint effort of the Feder­al
Energy Administration and the Environ­men
tal Protection Agency, divides automobiles
into different size classes according to their
interior measurements, which are considered to
be more meaningful to consumers than the tra­ditional
exterior measurements. The guide also
shows the gasoline mileage achieved under test
conditions. All this information should help
buyers of new cars to better compare the fuel
economy of similar sized vehicles.
In addition, all new 1977 and later model
cars and light trucks will carry a label disclosing
the fuel economy, the average fuel cost of
operating the vehicle, and the range of fuel
economies of the cars in its class.
New programs leading to energy savings for
homeowners also are being developed as a
result oi legislative action. The Secretary of the
Department of Housing and Urban Develop­~
ent ~ust develop standards for energy effi­Clency
m new residential and commercial build­ings
within 3 years. States are required to
adopt thermal building standards within 1 year.
~onst~ction costs as they relate to energy sav­mgs
will be considered in developing all stand­ards.
The new homes should save consumers
many dollars in their fuel bills.
14
Although the initial cost of solar-space heat­ing
and hot-water systems is expensive, these
systems offer substantial economic benefits
over their lifetimes to residential users. Their
advantages, which become evident when con­sidering
lifetime costs, are not obvious to the
potential consumer, however. Because these
devices are new, the resale market has not yet
had the opportunity to reflect their life-cycle
value in resale prices. Doubt over future resale
values sometimes influences lending institu­tions.
Lack of experience and lack of standards
also make obtaining warranties difficult. To
help remedy this situation, Congress has passed
new legislation that authorizes $2.5 million for
the Federal Energy Administration (FEA) in
fiscal year 1977 to develop a national strategy
to help commercialize solar energy. Mass pro­duction
and increased markets for solar heating
and cooling systems are needed to make the
systems more reasonably priced and conse­quently
more popular with consumers.
To help consumers get answers to their ques­tions
regarding solar energy, The Energy
Research and Development Administration and
the Department of Housing and Urban Devel­opment
have contracted with the Franklin
Institute to operate the National Solar Heating
and Cooling Information Center. Consumers
anywhere in the United States who want infor­mation
can call toll free (800) 573-2929 and
speak to staff at the center.
Aid to Consumers
Families with low and fixed incomes have
suffered the most from high fuel prices. After
cutting back their energy use as far as possible,
they have sometimes had to choose between
heating their homes and other necessities
including food. Their homes are often the least
likely to be well insulated, and they cannot
afford to remedy the situation.
The Weatherization Assistance Program that
was recently legislated by Congress to help
solve this problem will help low-income per­sons
by insulating over a million residences of
low and fixed-income people. FEA will make
grants to States, which may in turn allocate the
funds among local governments and communi­ty
action agencies to administer the program.
All .low-income households will be eligible to
recelVe weatherization assistance. Which resi-
FAMILY ECONOMICS REVIEW
dences to insulate will be determined by the
State or local agency administering the pro­gram.
Under the program, $55 million is
authorized for fiscal year 1977, $65 million for
fiscal year 1978, and $80 million for fiscal year
1979. At least 90 percent of the funds must be
spent on such weatherization materials as ceil­ing
insulation, caulking, weather stipping, and
storm wfndows, rather than on administrative
costs.
The high cost of utility bills, of course, has
been an increasing concern, if not the major
energy concern, of all consumers. Besides the
high cost of fuel that has been passed on to
consumers in their bills, the cost of construc­tion
of new plants, as well as the daily costs of
management, has increased with inflation.
These costs often are reflected in a higher rate
base. The utility companies also are having
problems because of the higher costs. They are
required by law to deliver electricity on
demand but find it increasingly difficult to
raise the capital necessary to construct new
plants needed to generate electricity during
high demand periods.
FEA has funded a number of utility rate
demonstrations to find solutions to these prob­lems
that will be equitable for both consumers
and utilities. 3 The majority of these projects
are testing the pros and cons of peakload prie-
3 A report on these demonstrations is available from
the Federal Energy Administration, Washington, D.C.
20461.
WINTER 1977
ing. Peakload pricing would provide households
with an opportunity to save money on their
utility bills by changing consumption patterns
of electricity. Conceivably, families who do
their dishes and laundry at offpeak hours-late
at night or early in the morning-could save
money.
Another demonstration program is testing
the pros and cons of a lifeline rate. This rate
would charge consumers who qualify and who
use a certain minimum amount of energy a
special low rate. Those who use more than the
minimum would be charged at an increasing
rate for that which is used above the minimum.
Present rate structures usually charge less for
electricity used above a certain amount. The
lifeline rate could be an aid to low-income con­sumers
who usually use less electricity and who
are having an especially hard time paying their
utility bills.
At the Federal level, the Federal Energy
Administration has been actively working to
develop consumer information and has produc­ed
three films especially for use with consumer
audiences. "When the Circuit Breaks," 271
/2
minutes, explains the reasons for the energy
problem and some resource development and
conservation measures needed to solve it.
"Don't Cut Us Off," 16 minutes, shows what
four American communities have done to ease
the energy budget problems of low-income and
elderly citizens. "Up the Power Curve," 10
minutes, gives energy conservation tips that all
people can practice. These movies are available
for free from Modern Talking Pictures, New
Hyde Park, N.Y. 11040.
15
ENERGY EXPENDITURES AND APPLIANCE OWNERSHIP
OF FARM-OPERATOR HOUSEHOLDS
by Marilyn Doss Ruffin
Energy has been a growing concern in the
budget of many families. Information about
farm family spending for energy for family liv­ing
purposes and ownership and purchase of
major energy-consuming appliances by farm
families was collected by the U.S. Department
of Agriculture as part of the 197 3 nationwide
Survey of Farm-Operator Family Living
Expenditures. 1 Special tabulation of that part
of the survey is presented here, along with rele­vant
information from the 1970 Census and
the 1973-74 Surveys of Purchases and Owner­ship
of the U.S. Department of Commerce and
from the 1972-73 Survey of Consumer
Expenditures of the U.S. Department of Labor.
Household Energy Expenditures
Farm families have heavy expenditures for
household energy. Nearly all farm-operator
households reported expenditures for one or
more fuel and utility categories, compared with
90 percent of all U.S. households. The average
expenditure for farm operator households was
about a fifth higher than the expenditure for
all U.S. households (table 1).2 Compared with
all U.S. households, a higher percentage of
farm-operator households had expenditures for
electricity, for bottled and tank gas, for fuel oil
and kerosene, and for coal and wood. Fewer
farm households reported expenditures for
utility (piped) gas.
Expenditures for Major Equipment
Farm families had substantial expenditures
for inventories of major appliances. Although
net farm income in 1973 was double that of
1 For more information on the survey see U.S.
Department of Agriculture, Statistical Reporting Ser­vice,
Farm-Operator Family Expenditures for 1973,
SpSy6(9-75 ), September 197 5.
'Unless otherwise stated, expenditures for "all
households" are derived from U.S. Department of
Labor, Bureau of Labor Statistics, Consumer Expendi­ture
Survey Series: Interview Survey, 1972 and 19 73,
Rpt. 45 5-2, 197 6, table 1 b.
16
1972, appliance expenditures per household
averaged about the same. In 1973 the percent­age
of farm-operator households who reported
purchases of major appliances for their own use
was about 33 percent higher than that of all
U.S. households ( 42 and 32 percent, respective­ly);
the average expenditure per farm-operator
household was about 50 percent higher than
the average for all U.S. households. 3 Converse­ly,
average spending by survey households for
laundry and drycleaning services was less for
farm families ($40 compared with $79).
Among farm-operator households who
reported purchasing major equipment in 1973
for use by the household, three-tenths spent
under $200; four-tenths spent $200 or more,
but less than $500; and three-tenths spent
$500 or more. Except for families at the lowest
income levels, average expenditure rose with
income (table 2). Why average expenditure was
so high for families with income w1der $5,000
is not clear. It may be that these families start­ed
the survey year with a lower inventory of
owned appliances and were forced to do some
"catching up." Some likely were acquiring for
the first time such appliances as automatic
washers or vacuum cleaners or perhaps clothes
dryers-appliances that, while not necessities
like the stove and refrigerator, do add greatly
to the convenience of housekeeping. An addi­tional
factor to consider is how well the report­ed
after-tax income for 1973 reflected the
family's usual annual income and level of
living.
When families were classified by age of head,
mean expenditure for families reporting an
expenditure was highest when the head was
under 25 and lowest when the head was 65 or
over. The younger group were probably build­ing
inventory, while the older households may
have passed their peak inventory level and may
have been replacing only as necessary.
3 Expenditures reported in this sentence exclude pur­chases
of television sets and range hoods to make (arm
family data comparable with U.S. household data re­ported
by the Bureau of Labor Statistics.
FAMILY ECONOMICS REVIEW
~
~ l':l
::0
......
~
-..J
-..J
......
-..J
Table 1. Fuel and utili ty expenditures , farm-operator households and all U.S . households, 1973
Farm- operator households I All U.S. households
Expenditure item
Average
Percent of
Average
expenditure expendit ure Percent of
for households households for households households
reporting reporting reporting reporting
expenditure expenditure expenditure expenditure
Dollars Dollars
Electricity ................ . 231 96 213 77
Gas (in mains) .... . ........ . 186 9 173 45
Combined gas and electric .. . 404 2 308 15
Bottled or tank gas ........ . 237 49 164 10
Fuel oil and kerosene ...... . 257 35 278 20
Coal and wood .............. . 131 11 -- ci)
Other fuels . ............... . 10 4 48 10
Total 2 . . .................. 473 3 99 405 4 90
1Included with "other fuels."
2In addition, 26 percent of farm-operator households produced fuel on the farm, with an average
value of $136 per household reporting.
3Based on households reporting any expenditure for utilities and public services .
4Based on households reporting any expenditure for fuels and utilities.
Sources: Derived from U.S. Department of Agriculture, Statistical Reporting Service, Farm- Operator
Family Expenditures for 1973, SpSy6(9-75), September 1975, tables 5 and 6; and U.S. Department of
Labor, Bureau of Labor Statistics, Consumer Expenditure Survey Series: Interview Survey~ 1972 and
1973, Report 455-24 1976, table lb .
Ownership and Purchase of
Major Equipment
While most U.S. households (both farm and
nonfarm) had the use of several major appli­ances
in their homes, a larger percentage of all
U.S. households, rather than farm-operator
households, reported having appliances they
did not own. Most of these nonowned appli­ances
were probably included in rental housing
units. One-fourth of all U.S. households had
available for their use a range they did not
own, one-fifth had available a nonowned refrig­erator,
and a few (less than 5 percent for any
given appliance) had nonowned freezers, wash­ers,
dryers, or dishwashers available (table 3) .
By comparison, less than 1 percent of the
farm-operator families reported having in the
household a given appliance that was not own­ed.
For major appliances where comparison is
possible, a larger percentage of farm-operator
households reported ownership than did all
Table 2. Expenditures in 1973 for purchase of major household equipment,
farm-operator households!
Population
All farm-operator
households ...•........
Income after taxes
Under $5,000 ........ .
$5,000 to 7,499 ..... .
$7, 500 to 9,999 ..... .
$10,000 to 14,999 ... .
$15,000 to 19,999 ... .
$20,000 and over .... .
Age of head
Under 25 ............ .
25-34 ............... .
35-44 ............... .
45-54 ............... .
55-64 . . . . ........... .
65 and over ......... .
Average
expenditure
Dollars
200
196
178
177
209
203
250
275
186
217
212
192
168
Percent Average exp.
reporting for households
expenditure reporting exp.
Dollars
so 397
48 412
49 366
49 362
53 396
so 404
56 443
54 513
so 376
52 417
51 418
51 374
46 364
1Expenditures in 1973 for purchase of new and used major equipment for
use by household. Includes cooking stove, refrigerator, freezer, dish­washer,
washer, dryer, garbage d ~sp oser, range hood, electric floor care
equipment, sewing machine, television, window air-conditioning unit.
Includes installation charges, if any. Based on year-of-acquisition
concept.
Source: Special tabulation by U.S. Department of Agriculture, Agricultural
Research Service, Consumer and Food Economics Institute, of unpublished
data from the 1973 Farm Family Living Expenditure Survey, USDA, Statistical
Reporting Service.
18 FAMILY ECONOMICS REVIEW
Table 3.
outside
Ownership and availability of 1 t d · ·
metropo l itan areas · and owne ~~ e~ ef maJor appllances by all U.S. households and households
' rs 1P Y a~m-operator households in January 1974 and purchases
Appliance
dur1ng 1973
All U.S. households.
Appliance in housing
unit, 1973-74 average
Farm-operator
households
Available I Owned
Households outside
metropolitan areas.!
Appliance in housing
unit, 1973-74 average
Available I Owned
Owned I Purchased
Jan. 1974 1973 2
Cooking stove .......... . .
Electric ... .. . ..... . .. .
Refrigerator .......... . . .
1 . .. . . ...... . .. ... .. .. .
2 or more . . .. . ........ .
Freezer .. . .. . ........... .
1 ...... . . . ............ .
2 or more .... .. ....... .
Dishwasher
Built- in
Portable
Garbage disposer ..... . .. .
Washing machine . ....... . .
Automatic . .... ....... . .
Semi-automatic ........ .
Washer-dryer comb .... . .
Other . . ....... . ...... . .
Clothes dryer .... . . . . ... .
Electric .............. .
Gas .. . ... .. ........... .
Electric floor care equip .
Vacuum cleaner . . ...... .
Electric broom .... . ... .
Shampooer-polisher .... .
Other ............. .... .
Sewing machine .......... .
Window air-cond. unit 3 .. .
Reverse cycle 4 .••••.•••
Not reverse cycle . ... . .
Television . .. . .. .. ... . .. .
Black and white ... .... .
Color .... ............. .
98.4 75.4
98.8 80.3
32.9 32.6
27.1 23.1
72.3 69.4
51.9 49.4
31.9
96.4
59.0
Peraent of households
98.6 86.6
98.9 89.6
45.7 45.2
19.8 18.9
77 . 5 75.8
53.1 52.0
30.0
95.8
54.2
99.1
65.4
98.4
84.4
14.0
85.5
71.3
14.2
27.1
14.8
12.4
6.3
91.8
69.3
4.7
.9
20.2
66.2
58.2
8.2
87.0
85.4
6.0
9. 7
1.9
85.9
28.9
12.3
17.0
96.6
64.8
52.4
9.3
6.1
8.7
7.4
4.4
2.0
2.5
.9
10.0
8.2
0.4
.3
1.4
6.3
5.4
.9
10.6
9.1
. 9
. 7
.3
4.9
3.4
1.5
1.9
6.1
10.5
10utside standard metropolitan statistical areas (SMSA's).
2Hous eholds counted as having purchased an item include those who purchased as gifts or rented the
item as well as those who purchased for household use. Based on year-of-obligation concept.
3Includes units installed in wall of structure.
4A reverse-cycle unit is one which is capable of both cooling and heating.
Source: Ownership and availability for all U.S. households and for households outside metropolitan
areas is from the U.S. Department of Commerce fall 1973 and fall 1974 Surveys of Purchases and Owner­ship
(SOPO). Reported figures are the average of the two surveys as reported in SeZeated Data from
the 1973 and 1974 Surveys of Purahases and Ownership, Bureau of Census, U.S. Department of Commerce,
July 1976. Ownership by farm-operator households was obtained through special tabulation by U.S.
Department of Agriculture, Agricultural Research Service, Consumer and Food Economics Institute, of
unpublished data from the 1973 Farm Family Living Expenditure Survey, USDA, Statistical Reporting
Service. Percentage of households purchasing is from USDA, SRS, Farm- Operator FamiZy Expenditures for
1973, SpSy6(9-75), September 1975, t able 6.
WINTER 1977 19
U.S. households or households outside metro­politan
areas. About four-fifths of the farm
population lived outside metropolitan areas in
1974, constituting about one-tenth of the non­metropolitan
population.4
The percentage of farm-operator households
owning selected major equipment items is pre­sented
in table 3. Owned items include those
purchased by the household for its own use,
those included in the purchase of the home,
and those received as gifts. Households counted
as having purchased an item include those who
purchased as gifts or rented the item as well as
those who purchased for use by the household.
Ownership and availability of major appliances
by all U.S. households and by households out­side
metropolitan areas, as reported in the Sur­vey
of Purchases and Ownership of the U.S.
Department of Commerce, are also presented
in table 3.
More than four-fifths of the farm households
reported owning a food freezer, compared with
one-third of all U.S. households (Survey of Pur­chases
and Ownership, 1973-74 average) and
slightly less than one-half of all nonmetropoli­tan
households. Nine-tenths of the farm house­holds
owned washing machines, compared with
about three-fourths of both nonmetropolitan
households and all U.S. households. Two-thirds
of the farm households owned clothes dryers;
this compares with about one-half of all U.S.
households and one-half of all nonmetropolitan
households. Dishwashers were owned by about
equal proportions of farm households as all
households. Comparative information was not
available for garbage disposals, floor-care equip­ment,
or sewing machines.
Data from 1970 and 1973 to 1974 indicate
that water heaters, cooking stoves, and clothes
dryers used in farm homes are electric models
more often than those used in all U.S. house­holds.
Although information was not collected
4 "Outside metropolitan," "nonmetropolitan," and
"outside SMSA (Standard Metropolitan Statistical
Area)" are used interchangeably. An SMSA is a county
or group of contiguous counties containing at least one
city of 50,000 inhabitants or more, or "twin cities"
with a combined population of at least 50,000. Con·
tiguous counties are included in an SMSA if, according
to certain criteria, they are socially and economically
integrated with the central city. In New England
States, SMSA's consist of towns and cities instead of
counties. Each SMSA must include at least one central
city.
20
in the Farm Family Living Survey or the Sur­veys
of Purchases and Ownership on water
heaters, information from the 1970 Census of
Housing provides a comparison between farm
households and all U.S. households. In 1970,
while only one-fourth of all housing units in
the United States had electric water heaters,
more than one-half of all occupied farms used
electricity for heating water. More farm house­holds
used electricity for cooking, more used
bottled or tank gas, and fewer used utility gas.
In the Farm Family Living Survey, two-thirds
of the households owned an electric cooking
stove in January 1974, and two-thirds of stove
purchases in 1973 were electric. Almost nine­tenths
of the farm-operator households owning
a clothes dryer had an electric model; similarly,
almost nine-tenths of their purchases were
electric.
Implications for Energy Information
About one-half of the farm-operator house­holds
reported purchasing a major kitchen,
laundry' or floor-care appliance; a television
set; or a room air-conditioner in 197 3. High
percentages purchased freezers and refrigera­tors,
appliances that are major energy consum­ers,
and for which energy consumption varies
widely among models. It seems likely that each
year many farm families are making decisions
in selecting appliances and could make use of
information on relative energy efficiencies. The
1973 survey indicates that spending by young
farm families may be quite high. Young fami­lies,
of course, have little experience in decid­ing
which appliances to buy and would seem to
have most need for guidance in selecting
energy-efficient models.
Most farm-operator households reported
owning a food freezer; some owned two or
more. Freezers are high consumers of electrical
energy. Management practices in their use and
care and in their location in the house can
make a difference in the cost of operation. This
would appear to be another fruitful area for
guidance.
. With a substantial proportion of farm
households having electric water heaters, nine­tenths
having washing machines, and over one­fourth
having dishwashers (according to the
most recent surveys), careful selection and use
of these items, as well as care in other uses of
hot water, could have an energy-saving impact.
FAMILY ECONOMICS REVIEW
TRANSPORTATION AND FARM-OPERATOR HOUSEHOLDS
by Connie M. Hoerman
Private transportation is a major budget item
for farm-operator households. Farm house­holds
must rely on private transportation
because they usually have limit~d access to
such transportation alternatives as public trans­portation
and carpools. In 1973, expenditures
for transportation by farm-operator households
accounted for almost 18 percent of total fami­ly
living expenditures and ranked third behind
housing and food. In 1955, however, transpor­tation
expenditures accounted for only 11 per­cent,
and ranked fourth behind housing, food,
and clothing (table 1).
An increase in the number of vehicles owned
by farm-operator households and changes in
household size and income may account for
the jump in the percentage of expenditures for
transportation. For example, according to Cen­sus
figures, between 1960 and 1970 the per­centage
of farm households owning at least one
car increased from 77 to 87, and the percent­age
owning two or more cars increased from 16
to 27. Higher incomes and decreased family
size during this period probably made this
increased vehicle ownership possible. Between
1955 and 1973 the net income per farm
increased from $2,429 to $11,727. Family size
of farm-operator households decreased from
3.8 to 3.5.
The jump in expenditures for transportation
between 1955 and 1973 is especially meaning­ful
in that it occurred during a period in which
prices paid by farmers for autos and auto sup­plies
increased less than prices paid for all items
used for family living (51 and 58 percent,
respectively, according to the Statistical
Reporting Service of the USDA). Moreover,
most of the data on expenditures in 1973 were
collected too early to reflect the large increases
in gasoline prices, which began at the end of
1973. The continuing increases in prices for
transportation-related items may change or
may already have changed the percentage of
expenditures that farm-operator households
need to allocate to transportation.
Data on expenditure patterns of farm-opera­tor
households are from the 1973 Farm Family
Living Expenditure Survey. Basic data from
WINTER 1977
this survey were presented at the Agricultural
Outlook Conference in November of 1975.1
This paper presents a special analysis of trans­portation
expenditures of farm-operator house­holds.
Data from 2,621 households are includ­ed
in the analysis. The dollar figures reflect the
amount of the household's expense attributa­ble
to family living after any percentage from
farm or business operation had been deducted.
Vehicle Ownership and Miles Driven
Farm-operator households are more likely to
own vehicles and also tend to own more vehi­cles
than is common for all U.S. households.
(Vehicles include cars, trucks, campers, and
other vehicles owned for at least half the year.)
Whereas 96 percent of farm-operator house­holds
owned at least one vehicle in 1973,
according to data from the Bureau of Census,
only 83 percent of all U.S. households did so
that year. The percentage of farm households
owning three or more vehicles was 17 percent,
while that of the general population was only
9 percent (table 2).
Among farm-operator households, those
with low incomes were the most likely not to
own a vehicle or to own just one, while house­holds
with high incomes frequently owned two
or more vehicles (table 3). Off-farm income
was related to the number of vehicles owned
by the households in much the same way as
income after taxes was related. (Off-farm
income is a before-tax figure that i.ncludes
income other than farm income, such as wages,
salaries, and other transitory sources.) Whereas
only about one-tenth of households with low
off-farm income owned three or more vehicles,
three-tenths of households with high off-farm
income owned that many.
The number of vehicles owned per house­hold
increased as the number of full-time earn­ers
increased. Whereas 7 percent of the house­holds
having no full-time earners owned three
' Published reports from this survey are available
from the Crop Reporting Board, Statistical Reporting
Service, USDA, Washington, D.C. 20250.
21
Table 1. Distribution of family living expenditures for farm-operator
households, 1955 and 1973
Expenditure group
Total ................... .
Housing ............... .
Food .................. .
Transportation ........ .
Clothing .............. .
Medical care .......... .
Other 1 .......•......•.•
1973
100.0
28.7
21.7
17.6
7.0
6.7
18.3
Percent
1955
100.0
28.1
25.2
11.4
13.0
7.3
15.0
1Includes personal care; tobacco and alcoholic beverages; reading, sub­scriptions,
memberships and other recreation; education; miscellaneous;
personal insurance; and cash gifts and contributions.
Source: Farm-Operator Family Living Expenditures for 1973. USDA, SRS,
September 1975, p. 8.
Table 2. Household ownership of vehicles, 1973
Type Ownership Farm-operators 1 United States
Number - - - - - Per cent - - - - -
All vehicles 0 3.7 16.9
1 47.6 40.1
2 31.7 33.7
3 or more 17.0 9.3
Cars 0 11.2 18.5
1 62.0 47.6
2 21.4 28.4
3 or more 5.4 5.5
Trucks 0 70.9 86.5
1 or more 29.1 13.5
1Number of vehicles owned by farm-operator households excludes vehicles
used entirely for farm business and those owned by the household for less
than half the year.
Source: Farm data from Farm Family Living Expenditure Survey, special
analysis by USDA, CFEI, Fall 1976. U.S. data from unpublished data from
the 1973 Survey of Purchases and Ownership, U.S. Department of Commerce,
Bureau of the Census, July 1976.
22 FAMILY ECONOMICS REVIEW
or more vehicles, the percentage of households
having two earners was four times as high.
Households headed by persons aged 35 to 44
owned the most vehicles. Those headed by per­sons
less than 35 years· old almost always own­ed
at least one vehicle, although most had not
yet accumulated a fleet of three or more vehi­cles
as had many of the older households.
There wa8 a sharp decline in vehicle ownership
for the 65-and-over age group, although less
than 10 percent of these households were with-out
a vehicle. ·
Of the households who owned no motor
vehicles during the year, 67 percent were older
persons who lived alone or with one other per-son,
and 30 percent were husband and wife
households with one or more children present.
Despite the fact that most of the farm-opera­tor
households in the survey probably lived
some distance from a town or city, these
households did not drive more miles per year
than is typical in this country. The average
number of total miles driven in 1973 was
16,620 for all vehicles not used exclusively for
business per farm-operator household.
Although no national figures are available for
that year, the fall 1974 Survey of Purchases
and Ownership by the Bureau of the Census
reported the average number of miles driven by
all vehicles per U.S. household was 16,800.
Table 3. Vehicle ownership of farm-operator households by selected
household characteristics
Characteristics
Money income after taxes
Less than $5,000 ............
$5,000 to 9,999 .............
$10,000 to 14,999 ...........
$15,000 and over ........ ....
Afte of head of household
Less than 35 ................
35 to 44 ....................
45 to 54 ................. .. .
55 to 64 ....................
65 and over .................
Full-time earners
0 ...........................
1 ...........................
2 ...........................
All farm-operator households ..
0
8.9
2.8
1.1
2.1
2.3
1.8
2.6
3.4
9.5
8.7
3.2
2.3
3.7
Number of vehicles owned
1 2
Percent
63.6 20.9
52.4 31.5
39.5 36.9
31.0 38.9
53.7 31.8
35.5 36.4
39.1 35.3
48.8 34.1
67.8 16.8
65.1 19.5
50.9 31. 7
30.6 38.3
47.6 31. 7
3 or
more
6.7
13.3
22.6
28.0
12.2
26.3
23.0
13.6
5.8
6.7
14.2
28.8
17.0
Source: Farm Family Living Expenditure Survey, speci~l analysis by CFEI,
Agricultural Research Service, U.S. Department of Agr1culture, Fall 1976.
WINTER 1977
23
The average annual number of miles driven
per car in 1973 was 10,304 for the farm house­holds
and about 9,990 miles for all U .8. house­holds.
The average mileage per car for farm
households was directly proportional to the
household's income. The average car mileage
was 8,110 miles for households with money
income after taxes of less than $5,000, compar­ed
with 11,846 miles for those with income
over $15,000.
Transportation Expenditures
The largest part of the farm household's
transportation dollar (table 4) went for the
purchase of autos (37 percent), followed by
fuel to operate autos and trucks (23 percent),
and vehicle insurance (10 percent).
The average household expenditure for vehi­cles
purchased in 1973 by farm-operator house­holds
was $956, which is greater than the
national figure of $761 per household reported
Table 4. Average expenditures per household for transportation-related items
Item
All transportation ................... .
Purchase of autos and other vehicles
Autos ............................ .
Trucks ........................... .
Motorcycles and scooters ......... .
Campers .......................... .
Other ............................ .
Renting and leasing of vehicles .... .
Vehicle operating expenses ......... .
Fuel to operate autos and trucks ..
Lubrications, autos and trucks ....
Fuel and lubrications; other
vehicles ........................ .
Tags and fees .................... .
Vehicle insurance ................ .
Finance charges .................. .
Other ............................ .
Vehicle maintenance; repair expenses
Tires and tubes .................. .
Batteries ........................ .
Air conditioning and accessories ..
Service and repair work .......... .
Other ............................ .
Transportation used on trips ....... .
Public transportation cost ......... .
Transportation to and from school
for someone attending school away
from home ......................... .
Dollars
Percent
of total
1,638.82 100.0
755.94 46.1
600.13 36.6
88.35 5.4
20.83 1.3
20.36 1.2
26.27 1.6
2.69 0.2
656.18 40.0
378.48 23.1
33.19 2.0
7.23 0.4
39.76 2.4
168.08 10.3
24.41 1.5
5.03 0.3
193.15 11.8
83.15 5.1
9.55 0.6
4.66 0.3
77.45 4.7
18.34 1.1
22.83 1.4
4.31 0.3
3. 72 0.2
Source: Farm-Operator Family Living Expenditures for 1973. USDA,
Statistical Reporting Service, September 1975, pp. 34-36.
24 FAMILY ECONOMICS REVIEW
by the Census Bureau for that year. Since the
survey year was not a typical one for farmers
because the net farm income was double the
amount from the previous year, this may well
have affected their spending patterns.
The percentage of cars purchased new in
197 3 by farm-operator households was 33 per­cent,
compared with 41 percent for all U.S.
households. 2 The average price paid by farm
households for a new car in 1973 was $3,590,
whereas it was less ($3,490) for the entire
United States. For used cars the average prices
were $1,418 for the farm households and
2 D'ata on all U.S. households are from motor vehicle
manufacturers or from U.S. Bureau of the Census.
$1,287 for the general population. All these
prices reflect the net cost after an allowance
had been made for any trade-in.
Purposes of Trips
The biggest difference between the purposes
of trips made by farmers and farm managers
and those of all U.S. drivers was in the category
·of earning a living (table 5). Although the per­centage
of all trips related to earning a living
was almost the same for both groups, the
breakdown between home-to-work trips and
related business trips was very different. The
lower percentage of trips farmers made to work
and back was balanced by the greater percent­age
of trips related to their business.
Table 5. Automobile trips by purpose of trip
Purpose of trip
Earning a living ................. .
Home-to-work ................... .
Related business ............... .
Family business .................. .
Shopping ....................... .
Medical and dental ............. .
Other ..................... · · · · · ·
Civic, educational, and religious .
Social and recreational .......... ·
Visiting friends and relatives ..
Pleasure driving ............... .
Vacations ............... · · · · · · · ·
Other ............... · · · · · · · · · · · ·
Other ............... · · · · · · · · · · · · · ·
loata insufficient for analysis.
Farmers and
farm managers
All
U.S. drivers
Percent
36.1 36.2
24.0 31.9
12.1 4.3
34.8 31.0
13.8 15.2
3.7 1.8
17.3 14.0
7.2 9.3
20.8 22.4
8.0 8.9
1.3 1.4
(1) 0.1
11.5 12.0
1.1 1.1
Source: Pu rposes o f Automob.l le Trips and Travel. U.. S. D'de partment ozf
Transportation, Federal Highway Administration. Nat~on~~ e Persona
Transportation Study, Report No. 10, p. 69, May 1974.
WINTER 1977
25
The lower percentages of trips made by
farmers and farm managers for shopping; civic,
educational, and religious activities; and visiting
friends and relatives, may be due to the fact
that these trips require more miles of travel for
farmers and farm operators than they do for
other drivers (tables 5 and 6). Farmers and
farm managers have to travel twice the distance
of all drivers to conduct such family business as
shopping and visiting the doctor. Trips that
involve earning a living are approximately
3 miles less for farmers. Overall, farmers and
farm managers average 2 miles more per trip
than do all drivers.
Since trips made by farmers are generally
longer in mileage and since farm households
travel about the same number of miles per year
as all households, then it follows that farm
households are likely to make fewer trips than
are common for all households.
Table 6. Average length of trio by major purpose of trio
Purpose of trip
Earning a living ................. .
Fami ly business .................. .
Civic, educational, and religious .
Social and recreational .......... .
Total
Farmers and
farm managers
7.3
11.2
5.7
17.0
10.9
Mi les
All
U.S. drivers
10.2
5.6
4.7
13.1
8.9
Source: Purposes of Automobile Trips and Travel. U.S. Department of
Transportation, Federal Highway Administration. Nationwide Personal
Transpor tation Study~ Report No. 10, p. 71, May 1974.
References
Motor Vehicle Manufacturers Association.
1975 Automobile Facts and Figures. Michi­gan.
1975.
U.S. Departm~nt of Agriculture, Economic
Research Service. State Farm Income Sta­tistics,
Supplement to SB-557. Washington,
D.C. 1976.
---Statistical Reporting Service. Farm­Operator
Family Living Expenditures for
1973. SpSy6(9-75) Washington, D.C. 1975.
---Agricultural Statistics, 1957 to 1975.
26
Prices paid by farmers. Washington, D.C.
1957 to 1975.
U.S. Department of Commerce, Bureau of the
Census. Consumer Buying Indicators.
Special report on household ownership of
cars, homes, and selected household dura­bles:
1970, 1969, and 1960. 5 pp. Washing­ton,
D.C. 1970.
---Unpublished data from the 197 3 Sur­vey
of Purchases and Ownership. Washing­ton,
D.C. 1976.
U.S. Department of Transportation, Federal
Highway Administration. Nationwide Per­sonal
Transportation Study. Purposes of
automobile trips and travel. Rpt. No. 10,
pp. 69, 71. Washington, D.C. 1974.
FAMILY ECONOMICS REVIEW
SOME NEW USDA PUBLICATIONS
(Please give your ZIP code in your return address when you order these.)
The following are for sale by the Superintendent of Documents, U.S. Government Printing
Office, Washington, D.C. 20402:
• RX FOR WOUNDED TREES. AlB 387. February 1976. $1.35.
• HANDBOOK OF AGRICULTURAL CHARTS. AH 504. October 1976. $2.35.
• A PLANNING GUIDE FOR FOOD SERVICE IN CHILD CARE CENTERS. FNS 64.
Revised April 1976. 55 cents.
• ADVISING PEOPLE ABOUT COOPERATIVES. PA 1147. May 1976. 45 cents.
Single copies of the following are available free from the U.S. Department of Agriculture. Please
address your request to the office indicated.
From Food and Nutrition Service, Food Stamp Division, Washington, D.C. 20250:
• CHARACTERISTICS OF FOOD STAMP HOUSEHOLDS SEPTEMBER 1975. FNS 160.
May 1976.
From Economic Research Service, Division of Information, Washington, D.C. 20250:
• FARM POPULATION ESTIMATES FOR 1975. AER 352. October 1976.
From Agricultural Research Service, Information Division, Room 343A, Federal Building,
Hyattsville, Md. 20782:
• SWEETENERS. CA-NE-13. May 1976.
• HOME CANNING OF FRUITS AND VEGETABLES. G 8. Revised April1976.
• REMOVING STAINS FROM FABRICS. G 62. Revised August 1976.
• STORING PERISHABLE FOODS IN THE HOME. G 78. Revised April1976.
• BAKING FOR PEOPLE WITH FOOD ALLERGIES. G 147. Revised May 1975.
• YOUR MONEY'S WORTH IN FOODS. G 183. Revised September 1976.
• FOOD FOR THE FAMILY-A COST-SAVING PLAN. G 109. May 1976.
• AUNT SAMMY'S RADIO RECIPES. G 215. August 1976.
WINTER 1977
27
SOME NEW USDA CHARTS 1
PER CAPITA CONSUMPTION
OF NUTRIENT FAT
%OF 1909-13
ro~uu~~~uu~~~uu~~~~~~~~~~~~
1910 1920 1930 1940 19ro 1960 1970 1900
5-YEAR MOVING AVERAGE
A PRELIMINARY ESTIMATE.
USDA NEG. ARS 6067· 76 (9)
SOURCES OF NUTRIENT FAT*
VEGETABLE ANIMAL
*GRAMS PER CAPITA PER DAY. APREL/MINARY.
USDA NEG. ARS 6098-76 C91
1 Black and white photographic prints or colored
slides of charts may be ordered from Photography Divi­sion,
Office of Communication, U.S. Department of
Agriculture, Washington, D.C. 20250. Slides are
30 cents each and prints are $2.70 (8" X 10" or less).
When ordering, please give negative number, title of
chart, and, if a print, the size desired.
28 FAMILY ECONOMICS REVIEW
WINTER 1977
COST OF A Wt;_EK'S FOOD
By Family Type, June 1976
DOLLARS
50
25
0
one
(1 -5 yr.) (1-5 yr.) (6-11 yr.) (12-19yr.) (15-19yr.)
ALL MEALS AT HOME OR TAKEN FROM HOME. USDA MODERA TE·COST FOOD PLAN.
USDA NEG. ARS 5791 . 76 (91
USOA
COST OF 1/3 OF A DAY'S PROTEIN
Meats and Meat Alternates, June 1976
Dry beans ==='-­Peanut
butter
Beef liver
Eggs. large
Hamburger
Chicken, fryer
Turkey
Tuna
American cheese
Beef chuck roast
Round steak
Ham. whole
Frankfurters
Pork roast
Sirloin steak
Haddock, fillet
Beef rib roast
Bologna
Bacon, sliced
1/3 OF RECOMMENDED DIETARY ALLOWANCE FOR 20 · YEAR OLD MAN.
BLS PRICES, AVERAGES FOR U.S: CITIES.
NEG. ARS 6009 • 76 (9)
29
c.>
0
~
~
t"' ...::
tzj
("}
0 z
0
8-::: ("} rn
::0
tzj
<......
tzj
~
Cost of food at home estimated for food plans at four cost levels , December 1976 , U.S. average 1
Sex-age groups
FAMILIES
Family of 2: 3
20-54 years ........... . . .
55 years and over ....... .
Family of 4:
Couple, 20-54 years and
children--
1-2 and 3-5 years ..... .
6-8 and 9-11 years .... .
INDIVIDUALS 4
Child:
7 months to 1 year . ..... .
1-2 years ............... .
3-5 years ........... . .. . .
6-8 years . . . ......... . .. .
9-11 years .............. .
Male:
12-14 years ............. .
15-19 years ........... . . .
20-54 years . ... . ....... . .
55 years and over ....... .
Female:
12-19 years ............. .
20-54 years ..... . ....... .
55 years and over ... .. .. .
Pregnant .... . ........... .
Nursing . ............ .. . . .
Thrifty
plan2
22 . 20
20.00
31.60
38.00
4.60
5.20
6.20
7.90
9.90
10.60
11.60
11.10
9.90
9.50
9.10
8.30
11. so
12.20
Cost for 1 week
Low-cost 'Moderate- I
plan cost plan
DoZZars
29.10
26.00
41.00
49.40
5.70
6.60
7.90
10.20
12.70
13.60
15.00
14.60
12 . 90
12 . 20
11.90
10 . 70
14.80
15.60
36.60
32.10
51.30
62.10
6.90
8.20
9.80
12.80
16.00
17.00
18 . 80
18.50
16.00
15.10
14.80
13.20
18.20
19.50
Liberal
plan
44 . 00
38.50
61. so
74.60
8.20
9.70
11.80
15.40
19.20
20.40
22.60
22.30
19.30
18.00
17.70
15.70
21.70
23 . 20
Cost for 1 month
Thrifty l Low-cost
plan2 olan
96.50
86.60
136.90
164.80
19.80
22.30
26.90
34.20
42.90
45.90
50.30
48.20
42.80
41.00
39.50
35.90
49.70
52.70
DoZZars
126.40
112 . so
177.70
214.30
24.50
28.70
34.10
44.20
55.20
58.80
64.80
63.30
55.80
52.70
51.60
46.50
63 . 90
67.70
'
Moderate- I
cost plan
158.70
139. so
221.90
269.30
30.00
35.30
42.30
55.50
69.50
73.70
81.30
80.00
69 .40
65.30
64.30
57.40
78.80
84.30
Liberal
plan
190.70
167.00
2 66. so
323.50
35 . 50
42.10
51.00
66.70
83.40
88.50
98 . 00
96.60
83 . 60
78.10
76.80
68 . 20
93.80
100.50
1Assumes that food for all meals and snacks is purchased at the store and prepared at home. Estimates for each
plan were computed from quantities of foods published in the Winter 1976 (thrifty plan) and Winter 1975 (low-cost,
moderate-cost, and liberal plans) issues of FamiZy Economics Review. The costs of the food plans were first esti­mated
using prices paid in 1965-66 by households from USDA's Household Food Consumption Survey with food costs at
4 selected levels . . These prices are updated by use of "Estimated Retail Food Prices by Cities" released monthly
by the Bureau of Labor Statistics.
2coupon allotment in the Food Stamp Program based on this food plan.
310 percent added for family size adjustment. See footnote 4.
4The costs given are for individuals in 4-person families. For individuals in other size families, the
following adjustments are suggested: 1-person--add 20 percent; 2-person--add 10 percent; 3-person--add 5 percent;
5-or-6-person--substract 5 percent; 7-or-more-person--subtract 10 percent.
n
Q e...n..
.Q. ,
..,
Q
Q
CJ
l..>...
:
Q s: m
CONSUMER PRICES
Consumer price index for urban wage earners and clerical workers
(1967 = 100)
Group Dec . 1976 Nov. 1976 Oct. 1976
All items ........... ... . .. .
Food ................. . .. .
Food at home . .... . .. .. .
Food away from home ... .
Housing . ... .. ... .. ...... .
Shelter .. .. ... .... .... .
Rent . .... . .. ...... .. .
Homeownership ....... .
Fuel and utilities ... . .
Fuel oil and coal ... .
Gas and electricity ..
Household furnishings
and operation .. . ..... .
Apparel and upkeep ...... .
Men's and boys' .. .. . .. .
Women's and girls' .. . . .
Footwear .... . ....... .. .
Transportation .......... .
Private ..... ... ... .... .
Public ................ .
Health and recreation ... .
Medical care .......... .
Personal care ... .. .... .
Reading and recreation
Other goods and services
174.3
181.7
179 . 3
190.9
181.6
182.4
148.3
195.0
192.0
264.5
200.9
172.3
151.8
150.7
146.9
153.4
171.4
170.7
178.0
168.0
192.3
165.2
154.4
155.9
173.8
181.1
178.9
190.0
180.7
182.1
147.5
194 .8
188.2
258 .0
195.5
171.7
151.9
150.8
147.3
153.7
171.4
170.6
177.6
167 .3
191.3
164.8
154.1
155.3
Source: U.S. Department of Labor, Bureau of Labor Statistics.
173.3
181.6
179.6
189.3
180.1
182 .0
146 .9
194.8
186 .5
253.1
193.9
170.9
150.9
150.1
146 .1
152.8
170.9
170.2
177.4
166 .1
188.9
163.9
153.5
154.4
Index of prices paid by farmers for family living items
(1967 = 100)
Dec. Nov. Oct . Dec. Nov .
Item 1976 1976 1976 1975 1975
All items 181 180 179 171 171
•••• •••••• •• 0 •••
Food 183 --- --- 184 ---
•••••••••••• 0 0 •• •• •
Clothi ng .......... ... .. --- 197 --- --- 180 170 170
Housing 183 182 182
0 ••••••••••••••• 188 173 174
Medical and health ••• • 0 191 189
Education, recreation, 155 149 148
and other • 0 ••••••• 0 ••• 156 155
Source: u.s. Department of Agriculture, Statistical Report1ng Serv1ce .
WINTER 1977
Dec. 1975
166.3
180 .7
180.9
180.0
172.2
175.0
140.6
187.8
176.1
248.7
179 .0
162.0
145 .2
144.2
142.1
145 .7
157.6
156.2
170.1
157.5
174.7
154.6
147.5
149.8
Oct.
1975
170
---
---
171
172
148
31
FAMILY FCO. '0\TlC' RE\ IEl\'
WI TFR 1 77
CONTENTS
Clothing and Textiles: Supplies Pric , and Outlook for 1977 .............. · .... · .. .
Annette Polyzou
Retirement of Virginia Britton .................. · . · · · · · · · · · · · · · · · · · · · · · · · • · · ·
The Outlook for Food Supplies and Price ..................................... .
James R. Donald
I a "
Outlook for Housing and Mortgage Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
.. Marshall A. Kaplan
Outlook for Energy
Jerry Ann Penna
.... 0 0 0 0 0 0 •••••• 0 ••••••• 0 ••• 0 •••••••••••••••••••••••• 0 •• 13
Energy Expenditures and Appliance Ownership
of Farm-Operator Households . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
· Marilyn Doss Ruffin
Transportation and Farm-Operator Households
Connie 1\1. Hoerman
•••••••• 0 ••••• 0 ••• 0 •••• 0 ••••••••••
Regular Feature
Some New USDA Publications ••• 0 •• 0. 0 0 •••• 0 ••••••••••• 0 0 •••••• 0 0 ••• 0 0 • • • •••
Some New USDA Charts
Cost of Food at Home
Consumer Prices ••••••• • • 0 •••••••••••• 0 0 • ••• 0 • • 0 . 0 •••• 0. 0 0. 0 • • • •• 0 •• 0 •• •••
21
27
2
30
31
Issued February 1977
32 FAMILY ECONOMICS REVIEW