The CRB Commodity Yearbook 2004

THE CRB COMMODITY YEARBOOK 2004

Commodity Research Bureau

John Wiley & Sons, Inc.

THE CRB COMMODITY YEARBOOK 2004

Commodity Research Bureau

John Wiley & Sons, Inc.

Copyright © 2004 by Commodity Research Bureau. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, e-mail: [email protected]. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com. ISBN 0-471-64921-X Printed in the United States of America 10

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CRB believes that the information and opinions contained herein are reliable, but CRB does not make any warranties whatsoever, expressed or implied, and CRB assumes no liability for reliance on or use of information and opinion contained herein. Commodity Research Bureau Editorial Board Publisher Davidson C. Lowdon

Editor in Chief Christopher J. Lown

Contributing Author Richard W. Asplund

Commodity Research Bureau 330 South Wells Street, Suite 1112 Chicago, Illinois 60606-7104 USA 800.621.5271 or 312.554.8456 Fax: 312.939.4135 Website: www.crbtrader.com Email: [email protected]

TABLE OF CONTENTS PAGE

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The Commodity Price Trend CRB Indexes Major Commodity Bull Market Emerges in 2003 US Economic Surge Drives Global Economic Recovery China Breaks Out as Major Player in Global Commodity and Financial Markets Free-Trade Talks Produce Some Success but Move From Global to Regional Mad Cow Disease Arrives in North America in 2003 and Roils The Markets Futures and Options Volume Statistics, U.S. Futures and Options Volume Statistics, Worldwide Conversion Factors Yearbooks CD Instructions

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1 5 6 7 8 11 12 13 14 16 17 20 21 22 29 30 32 33 36 37 42 44 49 50 56 63 64 72 76 78 86 87 91 93 95 98 102 104 107 111 116 118 119 123 126 131 132 143 149 154 156 160

Aluminum Antimony Apples Arsenic Barley Bauxite Bismuth Broilers Butter Cadmium Canola (Rapeseed) Cassava Castor Beans Cattle and Calves Cement Cheese Chromium Coal Cobalt Cocoa Coconut Oil and Copra Coffee Coke Copper Corn Corn Oil Cotton Cottonseed and Products CRB Futures Index Currencies Diamonds Eggs Electric Power Fertilizers (Nitrogen, Phosphate & Potash) Fish Flaxseed and Linseed Oil Fruits Gas Gasoline Gold Grain Sorghum Hay Heating Oil Hides and Leather Hogs Honey Interest Rates, U.S. Interest Rates, Worldwide Iron and Steel Lard Lead Lumber and Plywood

165 166 168 172 174 176 178 179 180 184 185 186 189 191 192 196 198 203 205 210 214 218 220 223 228 230 231 233 234 239 243 248 254 262 266 272 273 275 276 278 279 283 285 288 289 290 293 295 296 300 311 314

Magnesium Manganese Meats Mercury Milk Molasses Molybdenum Nickel Oats Olive Oil Onions Oranges and Orange Juice Palm Oil Paper Peanuts and Peanut Oil Pepper Petroleum Plastics Platinum-Group Metals Pork Bellies Potatoes Rayon and Other Synthetic Fibers Rice Rubber Rye Salt Sheep and Lambs Silk Silver Soybean Meal Soybean Oil Soybeans Stock Index Futures, U.S. Stock Index Futures, Worldwide Sugar Sulfur Sunflowerseed and Oil Tall Oil Tallow and Greases Tea Tin Titanium Tobacco Tung Oil Tungsten Turkeys Uranium Vanadium Vegetables Wheat and Flour Wool Zinc

CRB Futures Market Service Fundamental Market Research Commonly known as the Blue Sheet, this weekly publication from CRB is the industry's oldest and most respected fundamental newsletter. A wealth of fundamental research and commentary not found anywhere else, this eight-page market letter covers over 35 major markets. Includes specific instructions on what to look for in each market, when to buy or go short, where to place stops, initial objectives, and much more to help make you a more profitable trader. Also featured is "Outlook on Futures," a penetrating front-page analysis of the week's most active commodity or general futuresrelated economic condition. Technical indicators, trends, patterns, and changes in the markets are identified and interpreted by experienced market analysts. When you combine fundamental and technical analysis you have the most complete picture of market activity possible. FMS is available as a weekly mailed, emailed, or online publication, and also as a daily download from the CRB DataCenter. Online and Email subscribers can view and download the weekly editions back to 1998!

For more information, visit www.crbtrader.com, or call 800-621-5271 Commodity Research Bureau • 330 South Wells Street, Suite 1112 • Chicago IL, 60606 USA Phone: 312.554.8456 or 800.621.5271 • Fax: 312.939.4135 • [email protected] • www.crbtrader.com

ACKNOWLEDGEMENTS The editors wish to thank the following for source material: Agricultural Marketing Service (AMS) Agricultural Research Service (ARS) American Bureau of Metal Statistics, Inc. (ABMS) American Forest & Paper Association (AF & PA) The American Gas Association (AGA) American Iron and Steel Institute (AISI) American Metal Market (AMM) Bureau of the Census Bureau of Economic Analysis (BEA) Bureau of Labor Statistics (BLS) Chicago Board of Trade (CBT) Chicago Mercantile Exchange (CME / IMM / IOM) Coffee, Sugar & Cocoa Exchange (CSCE) Commodity Credit Corporation (CCC) Commodity Futures Trading Commision (CFTC) The Conference Board Economic Research Service (ERS) Edison Electric Institute (EEI) E D & F Man Cocoa Ltd Farm Service Agency (FSA) Federal Reserve Bank of St. Louis Fiber Economics Bureau, Inc. Florida Department of Citrus Food and Agriculture Organization of the United Nations (FAO)

Foreign Agricultural Service (FAS) Futures Industry Association (FIA) International Cotton Advisory Committee (ICAC) International Rubber Study Group (IRSG) Johnson Matthey Kansas City Board of Trade (KCBT) Leather Industries of America MidAmerica Commodity Exchange (MidAm) Minneapolis Grain Exchange (MGE) National Agricultural Statistics Service (NASS) National Coffee Association of U.S.A., Inc. (NCA) New York Cotton Exchange (NYCE / NYFE / FINEX) New York Mercantile Exchange (NYMEX) Commodity Exchange, Inc. (COMEX) Oil World The Organisation for Economic Co-Operation and Development (OECD) Random Lengths The Silver Institute The Society of the Plastics Industry, Inc. (SPI) United Nations (UN) United States Department of Agriculture (USDA) United States Geological Survey (USGS) Wall Street Journal (WSJ) Winnipeg Commodity Exchange (WCE)

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THE COMMODITY PRICE TREND The Reuters-Commodity Research Bureau Futures Index in 2003 closed the year at 255.29, up +8.86% from the 2002 close of 234.52. The rally in the Reuters-CRB Futures Index in 2003 produced the second consecutive yearly gain, adding to the +23.04% rally seen in 2002. In the recession year of 2001, the Reuters-CRB Futures Index fell –16.34%. Four of the six Reuters-CRB Futures Price Sub-indices posted gains in 2003: Industrials (+45.31%), Precious Metals (+25.94%), Grains (+19.93%), and Energy (+11.87%). Two of the six Sub-indices posted declines: Softs (-17.53%) and Livestock (-5.26%). The decline in two of the Sum-indices in 2003 contrasted with 2002 when all six Sub-indices posted gains. The Reuters-CRB Futures Index showed weakness in early 2003 due to the war with Iraq because it produced uncertainty and a weak US economy. However, the Index recovered after the war and stabilized through July of 2003. In late-July, the Index entered a 5-month-long bull market that continued into December. That bull market was driven by (1) the sharp recovery in the US economy in the latter half of 2003 which boosted demand for industrial goods, and (2) the severe weakness in the dollar. Because the dollar index in 2003 plunged by 15%, the cost of real goods was driven higher when priced in terms of the lower US dollar. Energy The Reuters-CRB Energy Sub-index, which is comprised of Crude Oil, Heating Oil, and Natural Gas, accounts for 18% of the overall Index. The Energy Sub-index in 2003 closed +11.87%, extending the gain of +56.52 seen in 2002. Crude oil, heating oil, and natural gas all showed strong gains during the year, boosted by the recovery in the global economy in the second half of the year and by supply concerns as OPEC kept its production tight and as Iraq production lagged. Grains The Reuters-CRB Grains and Oilseeds Sub-index, which is comprised of Corn, Soybeans, and Wheat, accounts for 18% of the overall Index. The Grains and Oilseeds Subindex in 2003 closed +19.93%, adding to the +18.35% gain seen in 2002. Corn prices closed the year moderately higher at $2.53 per bushel because of the hot and dry growing season in the US which resulted in lower than expected yields. Soybeans posted a 6-year high of $8.02 per bushel late in the year because of a tight supply situation and large Chinese purchases of soybeans from the US. China in 2003 had to import more than half of the soybeans that it consumed. Wheat posted a new 1-1/4 year high of $4.09 per bushel in November due to the hot and dry weather over the summer and tight supplies.

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Industrials The Reuters-CRB Industrials Sub-index, which is comprised of Copper and Cotton, accounts for 12% of the overall Index. The Industrials Sub-index showed a sharp gain of +45.31% in 2003, adding to the +24.51% gain seen in 2002. Copper staged a very sharp rally during the year because of the recovery in the US economy and then closed the year at a 6-year high of 104.30 cents per pound. Cotton rallied sharply during the year due in part to strong export demand to China, which saw a 14% decline in its own domestic cotton crop. Livestock The Reuters-CRB Livestock Sub-index, which is comprised of Live Cattle and Live Hogs, accounts for 12% of the overall Index. The Livestock Sub-index closed –5.26% in 2003, posting another weak year after showing a +1.44% increase in 2002 and a –2.43% decline in 2001. Live cattle rallied sharply in the July-November 2003 period but then plunged by about 20% in December after the first case of mad cow disease was found in the US. Live hogs closed the year slightly higher with the rally late in the year due to hopes for improved pork demand given the concerns about beef. Precious Metals The Reuters-CRB Precious Metals Sub-index, which is comprised of Gold, Platinum, and Silver, accounts for 17% of the overall Index. The Precious Metals Sub-index rallied sharply by +25.94% in 2003, adding to the +17.13% gain seen in 2002. Gold, silver, and platinum all staged sharp rallies during the year and hit new highs in the last week of 2003 due to improved consumer demand and the weakness in the dollar. Softs The Reuters-CRB Softs Sub-index, which is comprised of Cocoa, Coffee, Orange Juice, and Sugar #11, accounts for 23% of the overall Index. The Softs Sub-index in 2003 closed sharply lower by –17.63%, nearly reversing the +20.13% gain seen in 2002. Cocoa closed the year -25% lower as the political situation stabilized in the Ivory Coast, the world’s largest producer of cocoa. Coffee closed the year at the top of its 55-70 cent trading range on tight supplies caused by a poor harvest in Brazil. Orange juice closed sharply lower on the year due to falling demand by calorie-conscious consumers and a 25% increase in Florida’s crop production. Sugar plunged during the year due to the 11th consecutive year of worldwide production surpluses.

CRB INDEXES

Monthly Reuters-CRB Futures Index Year

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

High L ow Close High L ow Close High L ow Close High L ow Close High L ow Close High L ow Close High L ow Close High L ow Close High L ow Close High L ow Close

Source: Reuters

High, Low and Close (1967=100)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

229.80 226.20 225.60 237.96 232.58 232.78 247.56 238.63 247.53 244.30 238.93 238.99 235.36 221.56 234.28 198.96 187.18 189.74 213.70 201.43 210.46 232.58 223.02 224.12 195.97 186.38 187.29 248.92 234.58 248.45

229.20 225.70 227.60 236.16 230.97 234.25 251.21 245.62 248.77 243.91 236.14 242.41 236.08 223.97 227.65 191.45 182.76 182.95 215.29 206.74 208.78 228.34 219.68 221.78 193.53 187.19 192.33 251.59 245.39 247.25

231.00 227.40 227.70 236.89 231.07 232.94 253.50 242.72 251.40 248.01 241.64 245.17 231.74 223.04 228.88 193.28 183.38 191.83 217.88 209.61 214.37 225.75 210.24 210.26 205.45 192.26 204.92 247.23 228.10 232.15

227.80 227.80 225.00 237.70 233.16 235.30 263.79 250.19 256.09 249.00 237.64 248.29 229.09 223.42 223.99 192.89 187.14 192.39 214.15 207.61 211.03 216.39 208.87 214.50 208.39 195.21 201.16 236.62 228.77 232.53

239.20 225.20 235.50 237.12 229.55 232.72 261.24 251.79 254.07 254.79 245.54 250.96 226.67 214.03 215.90 193.99 185.05 186.72 226.12 211.86 222.27 219.29 208.43 209.00 205.33 197.42 204.20 242.16 231.26 235.55

239.70 235.90 230.40 238.00 232.18 233.38 252.92 246.64 248.67 249.98 238.52 239.42 216.75 208.42 214.63 193.43 185.07 191.54 227.29 222.23 223.93 212.39 203.86 205.56 209.33 199.56 209.29 238.25 231.39 233.78

234.70 230.40 233.70 235.90 229.31 233.23 251.90 240.09 241.99 243.38 232.01 242.75 216.75 205.99 206.00 192.91 182.67 190.36 225.69 217.42 218.61 209.27 201.84 202.70 215.10 207.24 210.97 237.20 230.36 234.21

235.40 228.00 231.90 240.27 231.71 239.97 252.04 242.83 249.46 245.30 236.69 241.98 207.48 195.18 195.68 199.59 190.14 199.35 228.02 217.76 227.41 202.90 197.02 199.63 219.24 208.46 219.20 243.74 233.96 243.70

234.40 228.60 229.90 245.81 239.38 241.73 250.35 243.10 245.63 244.50 240.03 243.06 205.03 196.31 203.30 209.41 199.03 205.19 232.20 224.74 226.57 202.34 188.24 190.49 229.62 217.60 226.53 246.07 236.79 243.66

235.20 227.00 233.30 242.67 238.32 242.22 249.59 237.78 237.83 247.62 238.34 240.04 206.57 201.34 203.28 209.91 199.66 201.52 234.38 218.38 219.28 191.09 182.83 185.66 231.67 223.82 228.91 250.67 241.68 247.58

234.70 228.80 229.20 244.49 240.85 241.84 247.08 235.99 243.36 243.52 235.27 235.92 206.73 195.18 195.42 207.54 202.23 204.07 231.46 220.93 229.79 192.74 181.83 192.66 231.83 223.29 230.64 257.54 244.79 248.44

D e c.

Range

237.18 239.70 226.97 225.20 236.64 ---246.47 246.47 240.93 229.31 243.18 ---246.85 263.79 238.12 235.99 239.61 ---238.39 254.79 228.84 228.84 229.14 ---197.29 236.08 187.89 187.89 191.22 ---206.20 209.91 200.74 182.67 205.14 ---233.37 234.38 225.46 201.43 227.83 ---193.94 232.58 187.73 181.83 190.61 ---238.39 238.39 230.17 186.38 234.52 ---263.60 263.60 249.60 228.10 255.29 ----

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CRB INDEXES

8T

CRB INDEXES

9T

CRB INDEXES

10T

CRB INDEXES

11T

CRB INDEXES

12T

CRB INDEXES

13T

CRB INDEXES

14T

CRB INDEXES

15T

CRB INDEXES

16T

CRB INDEXES

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MAJOR COMMODITY BULL MARKET EMERGES IN 2003

The rally in commodity prices that began in 2001 is taking on major proportions and is now ranked as the third largest commodity rally seen in the past 4 decades. This report analyzes the reasons behind the rally and investigates the question of whether the rally will continue. The current bull market in commodity prices began in October 2001 when the Reuters-CRB Futures index posted a 4-1/2 year low of 182.83. That low was just marginally above the 7-year low of 182.67 posted in July 1999 and represented a double bottom for chart pattern followers. From the October 2001 low, the Reuters-CRB index rallied by a total of 44.2% to the 7-3/4 year high of 236.60 posted in December 2003. The current 2001-2003 rally of 44.2% is the third largest rally in percentage terms seen in the past four decades, falling behind only the 146.7% rally seen in 1971-1974 and the 82.8% rally seen in 1977-1980. The rally in commodity prices in the 1971-1980 period could actually be seen as a single rally if the consolidation period in 1974-1977 is seen as merely a pause before the rally continued in the 19771980 period. If the 1971-1980 rally in commodity prices is seen as a single rally, then the total percentage gain was 250% from the low of 96.40 in October 1971 to the high of 337.60 in November 1980. Then the current rally would be the second, rather than the third, largest rally seen in the past 4 decades. The bull market seen in commodities in the 1970s was primarily a monetary phenomenon driven by a stimulative monetary policy and a surge in inflation. The CPI in the 1970s surged to 12% in late 1974, fell back through 1977, but then surged to a peak of 14.8% in March 1980. The

surge in inflation was finally stopped by Paul Volcker who took over as Federal Reserve Chairman in 1979 and implemented a strict monetarist policy of controlling the money supply. That effort was successful in cracking the back of inflation, and the CPI fell back to hit a low of +1.1% in December 1986. Since the inflation debacle of the 1970s, the Federal Reserve has been very successful in containing inflation and has since kept the CPI mostly below 4%. In fact the CPI has averaged only +3.1% since 1983. The Fed’s success in containing inflation led to comparatively stable commodity prices in the last two decades. There have been two significant commodity rallies, but both were less than 40%. The rally in 1986-1988 totaled +38.8% and the rally in 1992-1996 totaled +33.1%. Both those rallies were less than the rally seen so far in the 2001-2003 period. The big question going forward is whether the current commodity rally will blossom into even larger dimensions. The duration of the current rally is only 26 months so far, which makes it the second shortest rally of the five largest rallies seen since 1960. That suggests that the current rally could easily last longer. The longest rally was the 1977-80 rally, which lasted more than 3 years (39 months) and was 13 months longer than the current rally. It is easy to argue that the current commodity bull market could last at least through 2004 and perhaps beyond. The driving force for the rally is the surge in world economic growth that started in mid-2003 and should continue at least through 2004. That surge in economic growth has boosted demand for basic commodities at a time when many suppliers were caught off-guard with their produc-

Commodity Bull Markets Ranked by Percentage Gain (1960-2003) ---------------------- Low ----------------------

1971-74 1977-80 2001-03 1986-88 1992-96

October 1971 August 1977 October 2001 July 1986 August 1992

Source: Commodity Research Bureau

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96.40 184.70 182.83 196.16 198.17

---------------------- High ----------------------

February 1974 November 1980 December 2003 Ju n e 1988 April 1996

237.80 337.60 263.60 272.19 263.79

Percent Rally

Rally Duration (months)

Correlation (Reuters-CRB CPI)

Avg CPI (yr-yr% )

146.7% 82.8% 44.2% 38.8% 33.1%

28 39 26 23 44

0.97 0.96 0.95 0.89 0.96

4.9% 10.2% 1.9% 3.2% 2.8%

tion levels at relatively low levels. It will take months if not years for producers to ramp supply back up to meet demand. The rally in commodity prices is also being driven by the severe weakness in the dollar against the world’s major currencies. The nearby chart shows that the dollar index, which shows the value of the dollar against a basket of foreign currencies, has plunged by more than 25% in the past 2 years. Weakness in the dollar boosts the prices of commodities because commodities have a real, intrinsic value and when the value of the dollar falls, the price of those commodities appreciates when expressed in terms of weaker dollars. The price of commodities as expressed in dollars is important because the bulk of international trade in commodities is carried out between buyers and sellers in terms of prices set in US dollars. The weak dollar is being driven primarily by the Fed’s extraordinarily easy monetary policy whereby the Fed is targeting the federal funds rate at a 4-decade low of 1.00% and is aggressively pumping reserves and dollars into the US banking system. The market is only expecting the Fed to raise its funds rate target by one-half percentage point in 2004, which would still leave the funds rate target at an extraordinarily low 1.50%. That means that the Fed’s monetary policy through 2004 is likely to remain very easy, thus contributing to ongoing dollar weakness and commodity price strength. The weak dollar is also being driven by the massive US current account deficit, which is largely the result of structural problems such as the low US savings rate and the huge US demand for imported energy, factors that are unlikely to be resolved anytime in the foreseeable future.

But while the commodity rally may continue in coming months, the rally is unlikely to turn into anything approaching the size of the rally seen in the 1970s when commodity prices rallied by 250% over the course of the decade. The main reason is because the Fed still has inflation firmly under control and will quickly step in with a tighter monetary policy if inflation starts to get out of hand, in contrast to the 1970s when the Fed completely lost control of the situation. During the current commodity bull market, inflation has averaged only +1.9%, which is the lowest of any of the other five bull markets in the past 4 decades (see the table at the beginning of this report). The core CPI, excluding food and energy, is currently in even better shape and fell to a 4-decade low of +1.1% in December 2003. By contrast, inflation (CPI growth) averaged +4.9% during the 1971-1974 rally and +10.2% during the 1977-1980 rally. The current low inflation rate is the key factor allowing the Fed to maintain its 1.00% funds rate target. If the inflation rate does begin to creep higher, the Fed will undoubtedly respond by slowly raising interest rates to curb economic demand and raw commodity demand. It is unthinkable that the Fed would allow inflation to approach even 6%, let alone doubledigit levels, because the Federal Reserve, and indeed the entire political class in Washington, learned their lesson about the severe economic damage that flows from high inflation rates. That suggests that there is an eventual limit to the size of the current commodity bull market. But why hasn’t the surge in raw commodity prices shown up in the prices of the services and finished goods that the CPI measures? The answer is that most companies have been absorbing the higher commodity prices as a higher cost of doing business and haven’t yet raised their prices. For example, French tire-maker Michelin SA said in late February 2004 that the 41% jump in its naturalrubber costs in 2003 was the main reason its 2003 net income declined by 45%. Companies need to keep their prices down because competition is very keen in virtually all industries, and businesses want to maintain their sales and market shares. Most businesses can afford to hold down their prices for the time being because profits have improved sharply in the past year and because the surge in labor productivity since the mid-1990s means companies have lower per-unit labor costs, giving them some room to absorb higher raw commodity input prices. However, companies will not be able to absorb commodity price gains forever, and will eventually be forced to raise prices to maintain profit margins that are acceptable to their shareholders, thus leading to upward pressure on finished goods prices and the CPI index. That is why the CPI is likely to creep higher as 2004 wears on. In fact, the pricing of the Treasury’s inflation-indexed T-note currently suggests inflation expectations of +2.3%, which is 0.4 percentage points higher than the December CPI rate of +1.9% y/y. The strong correlation between the Reuters-CRB Futures Index and the CPI during bull markets supports the thesis that the CPI will move higher in 2004. The correlation between the Reuters-CRB Futures Index and the CPI index over a rolling, or backward-looking, 24-month period has averaged 0.69 since 1960, although it fluctuates widely and even turns negative fairly often. However, during bull markets, there is a very high correlation between the Reuters-CRB Futures Index and the CPI, as seen in the

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table at the beginning of this report. The correlation during the current 2001-2003 rally is 0.95, just slightly below the 0.96 and 0.97 correlations seen during the two rallies in the 1970s. Looking within the current 2001-2002 commodity bull market, the correlation during 2002 was negative for most of the year, but in 2003 the Reuters-CRB Futures Index and the CPI index became closely synchronized and showed an increasingly strong correlation through the end of 2003. That high correlation supports the thesis that the CPI will be moving higher in 2004 as higher commodity prices have a greater effect on the CPI. Looking at the components of the commodity price rally provides important information on the reasons behind the commodity rally and whether it will continue. Four of the six Reuters/CRB Futures Price sub-indices posted gains in 2003: Industrials (+45.31%), Precious Metals (+25.94%), Grains (+19.93%), and Energy (+11.87%). Two of the six sub-indices posted declines: Softs (-17.53%) and Livestock (-5.26%). There were different reasons behind the price movement in each sector. The fact that all the sectors didn’t rise together supports the theory that the commodity bull market is not being driven by monetary policy but rather by specific circumstances in each market. Energy rallied because of increased world demand for oil combined with restrictive OPEC production. Softs (coffee, cocoa, sugar, orange juice) were weak mainly because of weaker demand and/or supply factors in each particular market. Meats closed lower because of the mad cow disease found in December. The bulk of the rally in the grain sub-index was caused by Chinese buying of soybeans and by weather problems during the summer of 2003 in the US. The rally in the industrials sub-index (which includes copper) and the precious metals sub-index was caused by the generalized factors behind the commodity rally as a whole, i.e., increased US economic growth, the weak dollar, and Chinese demand. Chinese demand, in fact, is a key reason behind the current rally in the commodity indexes. China’s economy grew at a 9.1% GDP growth rate in 2003 and sucked in a huge amount of raw materials to fuel its growth. Chinese demand has been a key factor behind the rallies in such commodities as copper, nickel, steel, lumber, and many other raw materials for the manufacturing and construction sectors. For example, in the copper market, JP Morgan estimates that China now accounts for 19.6% of global copper

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demand versus only 14.7% for the US, which is a radical shift from just several years ago when the US consumed roughly 50% more copper than China. Chinese demand has helped drive copper prices to a new 8-year high in February 2004, which represents more than a doubling of copper prices since the low in 2001. Nickel prices have nearly doubled since mid-2003 and are at 14-year highs. Hot-rolled steel prices have rallied by roughly 80% in the past year. Platinum is at an all-time high. Lumber prices have nearly doubled in the past year. In the scrap steel markets, US steel consumers, who are being squeezed by sharply higher steel prices, are pressuring Washington for export restrictions on scrap steel because so much is being shipped out to the Far East to meet Chinese demand for steel. The fact that the third largest commodity bull market in four decades is in progress suggests that we are in the midst of fundamental global changes. The rally is due in part to business-cycle factors such as a US economic recovery and a weak dollar. However, there are fundamental structural factors behind the rally, primarily the globalization of commodity demand and the surge in emerging countries. Socialist economics has been relegated to the dustbin of history and it is now clear that the only way forward is through market-driven capitalism. The yoke of economic oppression is being thrown off by literally billions of people. Countries such as China and India, with more than a billion people each, are having a greater impact on the global economy every year. With the massive pent-up demand for basic consumer and industrial products in those countries, there will be a substantial and long-term increase in the demand for raw commodities to produce those goods. It seems a foregone conclusion that there will be substantial demand for raw commodities in the coming years, and that producers will be unable to respond quickly with higher supply. It also seems a sure bet that the Fed will not act quickly to curb the commodity price rally because the rally is not producing a generalized breakout in the CPI (inflation) and because the Fed is trying to promote healing in the US labor market. That suggests that as long as there are no major global external shocks (e.g., financial collapses or wars), the commodity rally will continue and perhaps reach even larger proportions. Richard W. Asplund, CRB Chief Economist, February 2004.

US ECONOMIC SURGE DRIVES GLOBAL ECONOMIC RECOVERY World economic growth improved to +3.2% in 2003, up from +3.0% in 2002 and the 11-year low of +2.4% seen in 2001, according to statistics from the IMF. Stronger world economic growth in 2003 was mainly due to the sharp upward rebound in the US economy, which helped pull the rest of the world out of the 2000-2003 slump. However, there were independent sources of strength as well, such as the +9.1% growth rate in China and the +3.2% GDP growth rate in Japan. Japan finally appears to be turning around after the dismal +1.4% average annual GDP growth rate seen since 1990. The UK was also a source of strength with a 2003 GDP growth rate of +5.3% through Q3. However, the Euro-Zone lagged behind with a growth rate of only +0.6% in 2003 and expectations for meager growth of +1.8% in 2004. The German economy in 2003 in fact showed a decline of –0.1% and is expected to see a poor growth rate of +1.7% in 2004. The French economy showed a decline of –0.4% in Q2 and –0.3% in Q3 (year-on-year).

On balance, world economic growth is expected to improve significantly in 2004. The IMF is forecasting world growth at +4.1%, which would be a 4-year high. World growth in 2004 will benefit from expansionary monetary policies throughout the world and pent-up demand after the 2000-03 slowdown. There are factors that will likely limit world economic growth in 2004, such as high energy prices and the weak dollar which is depressing exports outside the US. However, the world economy is expected to shake off these negative factors to put in the best GDP performance in 4 years.

US economic optimism grows – Optimism on the US economy prevailed as 2003 ended. The US economy rebounded sharply higher in the second half of 2003 after the war with Iraq concluded in April. The US economy finally began firing on all cylinders after the shocks from the technology and stock market bust in 2000 and the 9/11 terrorist attack of September 11, 2001. The US economy was temporarily on the mend in 2002 but then the impending war with Iraq in 2003 delayed the recovery. But as 2003 ended, all signs were pointing upward with US economic growth surging, with the US labor market slowly improving, with commodity prices rising, and with world economic growth also on the mend. US GDP Overview – The US economy weakened in late 2002 because of the impending war with Iraq with GDP growth in Q4-2002 at a 2-year low of +1.3%. However, the US economy then began to improve in Q1-2003 to +2.0% and then to +3.1% after the war with Iraq ended in April. The US economy then soared by +8.2% in Q3, which was the strongest quarterly growth rate since 1984. The US economy remained strong at +4.1% in Q4. The upward rebound in the US economy seen in the second half of 2003 marked the end of the economic bust that started in mid-2000 when the US stock market bubble burst. The US economy was in an official recession in the March-November 2001 period, according to the National Bureau of Economic Research, the official arbiter for dating US recessions. That 8-month recession was slightly shorter than the average recession seen since World War II. Despite the recession, US GDP in 2001 was still positive at +0.5%, but down sharply from +3.7% in 2000 and +4.5% in 1999. In 2002, the economy recovered to a modest growth rate of +2.2% and then improved further to +3.1% in 2003. Looking ahead, market participants are generally looking for the US economy to grow in the +4.0 to +4.5% area in 2004, which would be moderately above the +3.7% average growth rate seen in the 1992-2000 expansion period.

Fed policy – The Fed’s extremely accommodative monetary policy was a key factor behind the upward rebound in the US economy in 2003. The Fed came into 2003 with an extremely low federal funds target of 1.25% and then the Fed cut the rate by another 25 basis points to 1.00% on June 25, 2003. The funds rate target then stayed at that level through the remainder of 2003, which was the lowest level for the funds rate target in 40 years.

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The Fed implemented such an accommodative monetary policy because it was concerned about the US economy and the possibility of deflation. The Fed was clearly aware of the damage that deflation did to the Japanese economy throughout the 1990’s. The Fed was basically willing to do whatever it took to get the US economy back on track to healthy growth. There was even talk early in the year that the Fed might have to take extraordinary measures such as massive bond purchases to stimulate the economy since the funds rate was already near zero at 1%. However, by the end of 2003 with the economy rebounding, the Fed was moving toward a more neutral monetary policy. At the last FOMC meeting of 2003, the Fed kept its language that rates would remain low for a “considerable period” but the Fed adopted a nearly symmetrical view towards inflation which was viewed at the time as the Fed’s first step toward a tighter policy bias. As 2003 ended, the marketplace was expecting the Fed to raise the funds rate target by 25 basis points by summer 2004 and by another 25 basis points by autumn 2004. Fiscal Policy – Another key factor behind the surge in the US economy in the latter half of 2003 was the Bush tax cuts, which created a very stimulative fiscal policy. During the 2003 fiscal year (which ended September 30, 2003), the Bush tax cuts put an extra $117 billion of cash into taxpayers’ pockets, according to the Congressional Budget Office. The tax cut stimulus will continue into 2004 with some $120 billion in tax cuts in fiscal 2004. Although consumers typically spend only about one-third of their tax cuts (with the rest going to savings and debt payoffs), the tax cuts nevertheless represented an important shot in the arm for the economy in 2003.

Labor market – There was a great deal of talk during 2003 about a “jobless recovery” since the economy showed positive GDP growth during every quarter in 2003 and yet the US labor market worsened in early 2003 and only began to show a mild recovery in the latter half of the year. The US unemployment rate peaked in June 2003 at a 10year high of 6.4%. The unemployment rate then slowly tailed off through the end of 2003 and fell to 5.7% by December 2003. Still, that showed a much worse unemployment situation than the remarkable 34-year low of 3.8% posted just several years ago in April 2000. The payroll data also displayed the dismal US labor market seen during 2003. The US economy lost a net 53,000 jobs in 2003, following a loss of 563,000 jobs in 2002 and 1.782 million jobs in 2001. For the entire labor market recession, which began in earnest in April 2001, the US economy lost a net 2.464 million jobs through December

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2003 based on the establishment survey payroll data. The dismal US labor market seen in the 2000-2003 period undercut the overall economy by slashing personal income and by dampening consumer spirits. Businesses during the 2000-2003 period cut their labor forces as far as they could in order to minimize their expenses, repair their profit margins, and keep their risks down in the event of another external shock to the economy such as the 9/11 terrorist attack. Still, as 2003 ended, the US labor market was showing some signs of life. Payroll jobs rose in the last four months of the year and businesses were under pressure to hire more workers due to the sharp upturn in the US economy.

Inflation – The US consumer price index (CPI) peaked in early 2003 at a 2-1/4 year high of +3.0%, but then eased to a 14-month low of +1.8% by November 2003. That was only 0.7 points above the cyclical trough of +1.1% posted in 2002, which was the lowest CPI growth rate since 1965. The CPI was pushed higher in 2003 by strong energy prices, which surged in early 2003 in the run-up to the US-Iraq war and then rallied further later in 2003 as OPEC kept production levels tight and as the world economy started to recover. Excluding the impact of strong energy prices, the “core” CPI statistics (i.e., excluding the volatile energy and food categories) illustrated the trends toward disinflation. The core CPI fell steadily through 2002 and 2003 from the 8year high of 2.8% seen in December 2001 to the 40-year low of +1.1% seen in November and December 2003, the lowest level for core US inflation since 1963. The low US inflation rate was due to a combination of factors, including tepid economic demand, aggressive competition from overseas producers, downward pressure on US wages with the weak labor market, and a general psychology among US businesses of trying to hold the line on price hikes to boost sales. While the core PPI was still pointing downward as 2003 ended, the general consensus is that US inflation was close to hitting bottom and would likely turn slightly higher in 2004 in response to the stronger US and global economy. Productivity – The US economy in 2003 continued to show extraordinary levels of productivity. Non-farm productivity in Q3-2003 hit a 2-year high of 9.5%, which was only 0.2 points below the 20-year high of +9.7% posted in Q1-2002. The 12-quarter moving average for productivity in Q3-2003 rose to a 30-year high of +4.2%, going all the way back to 1973 when economists generally agree that US productivity showed a permanent downward shift. But since 1995, US productivity has shown a permanent upward shift,

which is thought to be the result of major technological improvements in information, communication and transportation systems. The permanent upward shift in US productivity means that more output is being produced for a given hour of employee labor. That has very favorable consequences for the US economy, including higher wages for employees, higher profits for businesses, and a firewall against inflation for the Fed. The high level of productivity also means that the Fed can allow a higher US GDP growth rate without worrying about the US economy overheating and producing an inflation surge. US Sector Analysis – Through the 2000-2003 economic slump, the US consumer was the hero that helped support the overall US economy and prevent a more serious recession from developing. The US housing sector was also a major contributor to economic growth during the 20002003 economic slump as low mortgage rates helped fuel a housing boom. The consumer and housing sectors were able to offset the sharp decline in business spending seen in 20002003 and weak overseas demand for US exports. But as 2003 ended, all the US economic sectors were looking strong and the US economy was firing on all cylinders. Consumer Spending – US consumer spending is critical to the US economy since it accounts for about two-thirds of the economy. US personal consumption came into 2003 on a weak note at +2.5% in Q1-2003 but then soared to a 13-year high of +6.9% by Q3, which was the strongest level since 1986. US consumer spending was driven by pent-up demand following the war with Iraq and by improved consumer confidence due to the stronger economy in the latter half of 2003 and the improvement in the US labor market. US consumer spending in 2003 was boosted by two key factors: (1) the ongoing mortgage refinancing boom into early 2003, and (2) by the Bush tax cuts. The refinancing boom of 2002 and early 2003 allowed consumers to cut their mortgage costs, thus putting more dollars to spend into their pocketbooks. Likewise, the Bush tax cuts in fiscal 2003 gave consumers an additional $117 billion of cash to either spend or save, thus providing another powerful stimulant to consumer spending. As 2003 ended, the Conference Board’s US consumer confidence index was at 91.7 in December, just mildly below the 15-month high of 92.5 seen in November. That was sharply higher than the 10-year trough of 61.4 seen during March at the height of the US-Iraq war. Still, US consumer confidence in 2004 has a long way to go before recovering to the 120-140 range seen in the late 1990s. US consumer confidence at the end of 2003 continued to be undercut by

the poor US labor market and concerns about job security. Housing – The US housing sector provided strong support for the overall US economy during the 2000-2003 US economic slump. The US housing sector was driven primarily by low mortgage rates. The 30-year fixed mortgage rate fell to a 4-decade low of 5.21% in June 2003. Even though mortgage rates rose during the latter half of 2003, the 30year mortgage rate closed 2003 at 5.81%, which was lower than the rates seen at any time during the 1970s through 1990s. The low level of mortgage rates provided a powerful inducement to consumers to either buy a home for the first time or to trade up to a more expensive home. Existing and new home sales both hit record highs in late 2003. Existing home sales ended 2003 moderately below the record high of 6.68 million units posted in September. New home sales ended 2003 moderately below the record high of 1.200 million posted in June 2003. Housing starts in December posted a 19-year high of 2.088 million units. The boom in the US housing sector had significant carryover implications for the rest of the US economy since there is a strong multiplier effect as home purchasers stock their homes with new appliances and furnishings and renovate older homes. Although the US housing sector is likely to cool somewhat in 2004 if interest rates rise as expected, mortgage rates are still likely to be historically low and the US housing sector is still likely to be a major contributor to the US economy in 2004.

Manufacturing – The US manufacturing sector finally came alive by the end of 2003 after a long period of weakness from late 2000 to early 2003. Although the service sector increasingly dominates the US economy, the US goods manufacturing sector is still a critical sector that accounts for about one-seventh of the US economy. The sharp up-

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ward rebound in the US manufacturing sector towards the end of 2003 was best seen by the rally in the Institute of Supply Management (ISM) manufacturing index in December to a 20-year high of 63.4. The 17.2 point rally in the ISM index to the December 20-year high from the 2-year trough of 46.2 seen in April 2003 illustrated the much-improved fortunes for the US manufacturing sector. In November, US industrial production improved to +2.3% yearon-year, which was a 3-year high. The improvement in US industry production was partially the result of a very tight inventory situation. That meant that once demand emerged, businesses had to order new products quickly because their inventory buffers were already very low. The business inventories-to-sales ratio in December was at a record low of 1.34 months. Despite the improvement in output from the US manufacturing sector, the job situation in the US manufacturing sector remained dismal through the end of 2003. Payrolls through December 2003 fell for 41 straight months, going back to the last increase which was seen in July 2000. Over that time frame, a total of 3.014 million jobs were lost in the US manufacturing sector. There were cyclical factors behind those job losses, but in fact there were also permanent, structural factors during that period as US companies shifted production offshore and as the US imported cheaper manufactured products from overseas. The majority of those 3 million jobs will never come back to the US manufacturing sector. Still, the job situation in the US manufacturing sector should slowly improve in 2004 as the US manufacturing sector slowly regains some of its health.

Business Investment – US business investment fell off a cliff in late 2000 and early 2001 after the stock market bubble burst in mid-2000. US businesses slashed new investment spending in order to conserve cash and to hunker down for the recession that officially started in 2001. But business investment spending hit bottom in 2001, and has been on a steady upward recovery track ever since. In fact by Q3-2003, business investment in equipment and software recovered sharply to a 3-year high of +17.6% from the trough of –16.4% seen in Q2-2001. That helped worked off excess capacities that plagued the high-tech sector following the stock market bubble. The outlook for US business investment looks fairly strong given that many businesses have cut production capacity to the bone and now need to ramp up production in order to meet demand. However, US businesses will remain cautious in 2004 and are not likely to boost production capacity much past a 3-6 month forecast horizon since

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there is still concern about the possibility of another external shock and since there is still some reluctance to believe that the economic surge will last. US Trade – Global demand for US exports slowly improved in 2003, finishing the year at a 3-year high of +7.1% y/y. That was a dramatic improvement from the trough of –15.7% export growth seen in late 2001. The stronger demand for US exports provided a strong boost to the overall US economy. At the same time, US import growth was even stronger than export growth since the US economy was stronger than those of its overseas trading partners during 2003. Import demand during 2003 ranged from +18% early in 2003 to +10% late in the year. The cyclical imbalance caused by the strength of imports relative to exports produced a record high US trade deficit of $489 billion for 2003, or an average deficit of $40.8 billion per month. However, the US trade deficit was also due to the fundamental long-term factors of massive US demand for imported energy and by the weak US savings rate which creates the need to import foreign capital (which is the flip-side of the US trade and current account deficits).

The US current account deficit in 2003 hit record highs, leading to an overall deficit for the year near $550 billion. The fact that the US current account amounts to a record 5% of US GDP presents a severe macroeconomic problem for the US. The US must import about $1.5 billion in foreign capital every calendar day in order to support the US current account imbalance. To the extent that foreigners are reluctant to invest that much capital in dollar-denominated assets, the dollar must fall in order to make those investments cheaper and more attractive to foreign investors. As 2003 ended, the US dollar remained under severe downward pressure and there continued to be talk about the remote possibility of a run on US assets. The OECD in its November 2003 Economic Outlook projected that the US current account deficit would remain very high in 2004 at 5.1% of GDP, posing a continued challenge for the US dollar and for US macroeconomic policy. Richard W. Asplund, CRB Chief Economist, February 2004.

CHINA BREAKS OUT AS MAJOR PLAYER IN GLOBAL COMMODITY AND FINANCIAL MARKETS It is difficult for Americans, with our relatively stable and comfortable political economy, to comprehend the scale of the changes occurring in China. China is on a remarkable growth path after its leaders in the late 1970s decided to throw off the burden of socialist economics and adopt an aggressive market-driven and export-driven growth model. This has led to a massive scale of economic growth in China, to the extent where two Goldman Sachs economists have predicted that the Chinese economy in 25 years will surpass that of the US. In fact, China is currently creating much of the ongoing rally in commodity prices and has become an increasingly important player in the global financial markets as well. This report will investigate the extent of China’s growing influence in the global commodity and financial markets. China’s demand potential is massive China has 1.287 billion people, according to the latest CIA World Factbook data, a population that is roughly 1 billion more than the US population of 290 million. China’s population, combined with its strong economic growth since the late 1970s, has pushed its $1.24 trillion economy into position as the sixth largest in the world, but still it is only 12% of the size of the US economy. However, these figures are understated because they ignore the fact that China has a severely undervalued currency, which makes the simple conversion of the size of its economy into dollars at the fixed currency rate deceptive. The more accurate way to convert the size of the Chinese economy into dollars is to use “purchasing-power parity”, which uses a currency rate based on equalized product prices rather than the fixed currency rate to convert the Chinese economy into dollar terms. When one uses the purchasing-power parity method of comparing China’s economy to the rest of the world, China’s economy is the second largest economy in the world next to the US. The CIA World Factbook, using purchasing-power parity, places the size of China’s GDP output in 2002 at $5.989 trillion, well ahead of Japan’s $3.651 trillion economy and Germany’s $2.16 trillion economy. Based on this method, China’s economy is 57% of the US GDP, which is $10.45 trillion. Despite the large size of China’s overall economy, however, its per-capita GDP was only $5,000 in 2003, as reported in the CIA World Factbook using purchasing-power parity. That is less than one-seventh of the US’s per capita GDP of $37,600. The $32,600 per-capita difference between Chinese and US GDP adds up to a total of nearly $42 trillion when multiplied by China’s population. That means that it would take an additional $42 trillion of GDP output for the average Chinese citizen to catch up to the living standard of the average US citizen. That is roughly four times the size of yearly US GDP output. But whatever numbers are used, there is a massive amount of economic demand in China that is waiting to be tapped. To repeat, it would take $42 trillion worth of GDP output (or four times the US economy) just to bring China up to current American living standards, and that does not include future population growth or any attempt to exceed

current US living standards. That demand includes all types of housing and personal property, such as cars, appliances, clothes, electronics etc, that Chinese consumers would undoubtedly like to acquire. Much of this demand will eventually come from the rural poor who are now moving into China’s cities in massive numbers. Chinese President and Communist party leader Hu Jintao, the successor in 2003 to former President Jiang Zemin, announced a “people first” program that includes bettering the lives of some 800 million rural residents. Part of the government’s plan is to transfer between 300 million and 500 million rural residents into cities by 2020. If the government’s goal is taken at face value of moving 300 million people into cities in the next 16 years, the lower end of its target range, that would involve nearly 19 million people per year. That is the equivalent of building more than two cities the size of metropolitan New York City every year. That is the source of the huge domestic demand for China’s construction industry and for the raw commodities that feed the construction industry such as lumber, concrete, steel, copper, plastic, etc. But the source of China’s economic growth is not coming from just internal domestic demand. In fact, much of China’s growth is coming from exports because China consciously adopted the export-driven method of economic development that has proven to be so successful in countries such as Japan and the Asian Tigers. China is aggressively developing its export industries in order to employ its citizens and pull its overall economy up by its bootstraps. As a result, China’s demand for raw commodities is due to domestic demand but also to its export industries. Chinese Economy Expected to Maintain Strong Growth The Chinese economy in 2003 grew by +9.1%, well above its average growth rate of +7.5% seen in the 1998-2002 period. The Chinese government expects GDP growth of more than +7% in 2004. The Chinese GDP growth rate in 2003 of +9.1% far outstripped that of any of the G7 countries of +5.6% in the UK, +4.3% in the US, +2.1% in Canada, +0.9% in Japan, and +0.6% in the Euro-Zone.

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Remarkably, China has been able to sustain its average GDP growth rate over the last six years without significant inflation. China’s inflation rate averaged near zero in the 6 years through mid-2003, but then started climbing in late 2003 to reach a 6-1/2 year high of +3.2% year-on-year in January 2004.

The strong Chinese GDP growth rate of +9.1% in 2003, combined with the rise in the CPI to the 6-1/2 year high of +3.2%, has led to fears that the Chinese economy is overheating. The money supply is growing at a torrid rate of +18% due in part to China’s effort to suppress the value of the yuan by aggressively buying dollars and pumping yuan into China’s banking system. Chinese authorities in late 2003 and early 2004 took some action to try to cool their economy by announcing that banks should limit lending growth to just +16% rather than the +21% growth seen in 2003. In addition, the government started refusing permits for new production facilities in some industries such as aluminum and cellular phones, and restricting lending in certain industries such as property and construction. But it is not clear whether this will be successful in curbing lending. Chinese authorities are very reluctant to raise interest rates to cool credit growth and thus slow the economy because that would put additional upward pressure on the yuan and hurt its export industries. Chinese authorities have so far put off an interest rate hike, but it appears likely that an interest rate hike will have to come in 2004 along with additional restrictions on lending. In short, Chinese authorities are doing a high-wire act as they try to foster strong economic growth in their country and boost employment without causing a bubble that will eventually collapse into a recession. The country is already seeing not only macroeconomic imbalances, but is also experiencing shortages in raw materials such as coal, oil, and steel. In addition, there has been a surge in industrial accidents and there are serious environmental problems. Nevertheless, China is expected to muddle through its various economic and social problems and maintain a strong GDP growth rate through 2004. Chinese trade surges As China pursues its export-led development model, its foreign trade has surged. As seen in the nearby chart, exports have quintupled in the past decade. Foreign trade now accounts for more than one-half of China’s GDP, compared with only about 23% of GDP in the US and 21% in

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Japan. In fact, in 2003 China eclipsed Japan to become the third largest trading nation in the world behind only the US and Germany.

China became a full member of the world’s trading system in December 2001 when it became a full member of the World Trade Organization (WTO). That gave China preferential trading status with the world’s key economies but also obligated China to cut its trade and tariff barriers.

With the surge in exports, China’s trade surplus has also grown in the past decade, as seen in the nearby chart. However, the Chinese trade surplus reached a peak in 1998 and has been more moderate since then. The reason behind the decline in the trade surplus was a surge in import growth, which has actually exceeded export growth. In 2003, Chinese exports grew about +33% while imports grew even faster by +39%. Thus while China is often excoriated by US politicians for its emphasis on exports, the data shows that China is also a huge importer as well.

China has also become a major exporter of plastic products, as seen in the nearby chart. This has led to China becoming a major importer of raw plastic and also of petroleum to be used as a source of domestically produced raw plastic. US trade deficit with China has grown but so have exports to China

China is heavily dependent on raw material imports to feed its domestic economy and its export industries. However, China also has many assembly plants that import parts and partially finished goods and then use cheap labor to assemble and export the final product. These assembly parts are in such industries as textiles, electronics, and machinery. As seen in the nearby charts, China’s exports of electrical and mechanical products, and new technology products, have grown rapidly in the past two years to record highs.

The US trade deficit with China has been steadily growing in the past decade, as seen in the nearby chart. This is due to the fact that US imports from China have been growing much faster than US exports to China in terms of absolute dollar amounts. US imports from China increased by $27 billion (a 22% increase) to $152 billion in 2003 from $125 billion in 2002. Meanwhile, US exports to China rose by $6 billion (+28%) to $28 billion in 2003 from $22 billion in 2002. The fact that US imports rose faster than exports in absolute dollar terms pushed the US trade deficit with China up by 20% in 2003 to $124 billion from $103 billion in 2002.

China has also become a major exporter of textile products, which has turned China into a major importer of cotton, prices for which rallied 47% in 2003. Chinese buying of cotton is expected to be especially heavy in 2004 since the US Department of Agriculture is forecasting that China’s domestic cotton crop will drop by 14% in 2004.

The growth in the US trade deficit with China has made China the new bogeyman for Washington’s politicians, much like Japan was back in the 1980s. Populist US politicians are claiming that China is using unfair trade practices and a cheap currency to steal both jobs and export opportunities from the US. However, US consumers are in fact benefiting from this trade with China since they are able to buyer cheaper goods and thus save money to buy other goods. Also lost in the political rhetoric about the threat posed by Chinese imports is the fact that US exports to China have more than tripled over the past decade. China is now the US’s fastest growing export destination, with US ex-

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ports to China rising 28% in 2003 from 2002. China is a particularly aggressive buyer of some US farm products like soybeans and, in fact, the US in 2003 actually ran a trade surplus with China in agriculture goods. China is also a key source of demand for goods exported from its trading partners in Asia. China accounts for more than one-third of the increase in total exports by countries such as Japan, South Korea, Australia and Taiwan. In order to curb the US trade deficit with China, the Bush Administration has been putting pressure on China to revalue its currency higher. This is because of complaints by US exporters that China is artificially depressing the value of its currency in order to keep its export prices cheap. The Chinese government has kept the yuan pegged at 8.28 yuan per dollar since 1995. In fact, the Chinese currency is severely undervalued as measured by the Economist magazine’s “Big Mac Index.” In a light-hearted, but surprisingly effective way, the Economist uses McDonald’s Big Mac as a benchmark product to apply the purchasing-power parity (PPP) theory to see whether currencies are over or under valued. The basic idea of purchasing-power parity is that goods should be similarly priced in different nations if their currencies are fairly aligned. The January issue of the Economist found that the cheapest comparable hamburger in China is $1.23, compared with the average price of $2.80 for a Big Mac in the US. The Economist says that suggests the Chinese yuan is undervalued against the dollar by a whopping 56%. Chinese authorities have been doing everything they can to resist an upward revaluation in the yuan because that might dent Chinese exports and also might cause problems within the Chinese banking system. However, there is little doubt that Chinese authorities will have to make at least a small upward adjustment in the yuan in coming quarters. Chinese demand for raw commodities is surging Chinese demand for raw commodities has been a key factor driving the sharp rally seen in commodity prices in the 2001-2003 period. China cannot produce all the raw commodities it needs to feed both its domestic and export industries, and thus Chinese imports of raw materials have surged in recent years. This has put sharp upward pressure on the global prices of those commodities. Several examples of how Chinese demand has pushed up commodity prices follow.

Steel – China is the world’s largest steel consumer. China’s National Bureau of Statistics reported that China’s steel consumption in 2003 was 260 million tons, which accounts for 36% of the world’s total consumption of 720 million tons. China has been unable to produce all that steel domestically and as a result its imports of iron ore and rolled steel have risen dramatically. Specifically, Chinese imports of iron ore, which is the main ingredient in steel, has grown by more than 60% in the past two years. Chinese imports of rolled steel have tripled in the past two years. Chinese steel consumption stems in large part from its fast-growing construction and auto industries. The number of Chinese-built autos and trucks is expected to soar to 6 million vehicles in 2005, up 33% from 2000. In response to the Chinese demand and the increased world demand, steel prices spiked upward in February 2004 by 30-50% from just a month earlier. In fact, US steel companies that use scrap steel as their raw material have been feeling severe pain as scrap steel prices soar. The price of scrap steel has more than doubled to $350 per ton from the $100-150 per ton a year earlier. US exports of steel scrap in 2003 rose 21% from 2002 to 12 million metric tons, according to the US Geological Survey. China has been buying up US scrap steel for use in its steel making plants, thus creating shortages and putting an upward squeeze on steel prices.

Copper – Copper provides an excellent proxy for industrial commodity demand in general, because it is a key metal used in the construction, electrical, manufacturing, and auto industries. For example, the average US singlefamily home contains about 400 pounds of copper in wiring and pipes, and an auto has about 50 pounds of copper, according to the Copper Development Association. As a re-

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sult, with China’s fast-growing construction and auto industries, among others, copper is in heavy demand in China. Copper consumption in China soared by an estimated 20% in 2003 and China consumed about 20% of the world’s copper in 2003. Chinese copper imports, as the nearby chart shows, have risen by 250% in the past three years. Chile is a major copper producer and its central bank reports that copper exports to China in January 2004 rose 37% year-onyear while exports to the US fell 54%, providing dramatic evidence of how copper exports from Chile are being diverted from the US to China. China’s aggressive buying has been a key reason behind the fact that copper prices have nearly doubled in the past year to hit a new 8-year high.

thus crowding out other world oil consumers. The source of the increasing demand for crude oil in China is for auto and truck gasoline, factories, raw material for the petrochemical and plastics industries, and electricity production. In the auto sector, for example, the number of autos in China is expected to quintuple to 100 million within the next decade, according to the Development Research Center, a Chinese research group, which would be about half of the autos in the US. Chinese demand for gasoline is likely to quintuple as well within the next decade. China’s heavy consumption of crude oil, combined with its own lackluster domestic production, has forced China out into the world oil markets to try to find new supplies. China has been trying to secure oil fields for its national oil companies, but has mostly been buying crude oil on the world oil markets, thus driving up prices. In fact, Chinese demand was a key factor keeping oil prices high through 2003. Coal is another key commodity in China because China relies on coal for 70% of its electricity production. China consumed about 1.5 billion tons of coal in 2003, accounting for more than 30% of world consumption. China has been experiencing serious electricity shortages in many parts of the country and its demand for coal for electricity production will grow in coming years.

Aluminum - Another key raw material for the construction and auto industries is aluminum. The nearby chart shows how Chinese aluminum imports have roughly doubled in the past two years. Aluminum prices in the past year have rallied to current levels near $1,700 per metric ton from about $1,400 per metric ton a year earlier, representing a rally of about 20%.

Energy – With its booming economy, China surpassed Japan in 2003 as the world’s second largest oil consumer. China’s consumption of 5.4 million barrels per day falls behind only the US’s consumption of 20.2 million barrels per day. To meet its needs, China’s oil imports in 2003 rose roughly 30% from the previous year to 2 million barrels per day. Chinese oil imports now account for more than a third of its total consumption. Moreover, China’s oil imports will double to 4 million barrels per day by 2010 and grow to 85% of its total consumption by 2030, according to the International Energy Agency (IEA). According to Cambridge Energy Associates, China’s share of total world oil consumption will grow to 9% by 2010 from the current level of 7%,

Soybeans – China is also a major player in the agricultural markets with its need to feed 1.3 billion people. China grows only about one-half the soybeans it needs and must therefore import more than half of its soybean consumption from overseas. China is expected to import a record 808 million bushels of soybeans in 2004, which would be more than double its 2003 imports, according to a recent estimate from the US Department of Agriculture. Chinese buying was a major factor pushing soybean prices higher in 2003 as China imported $5.4 billion worth of soybeans according to Chinese government statistics. Commodity Exchanges – A key sign of China’s growing importance in the world commodities markets is the growing trading volume on China’s commodity futures exchanges. China had about 60 futures exchanges in the early 1990s but Chinese regulators became concerned about rampant speculation and forced the merger or closure of most of its commodity exchanges into the current three exchanges. Volume at China’s three futures exchanges hit a record high of $1.3 trillion in 2003, which compares favorably to the $2 trillion volume at the London Metals Exchange in 2003. The Shanghai Futures Exchange currently trades copper and plans to roll out a contract for fuel oil in the near

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future. The Dalian commodity exchange trades soybeans and plans to roll out a corn contract. The Zhengzhou commodity exchange trades cotton and plans to roll out a lowquality wheat contract. The Chinese futures exchanges are also planning to roll out futures contracts for sugar, rice, crude oil, and stock indices once the China Securities Regulatory Commission grants its permission. The Chinese government has moved very slowly in allowing the futures market to develop. Chinese nationals are not allowed to trade on foreign futures markets without a special hedging permit, and foreigners are generally not allowed to trade on Chinese exchanges. The Chicago Board of Trade (CBOT) and Dalian commodity exchange on November 15, 2003, signed an information-sharing agreement with a view toward developing products together. Both exchanges currently have soybean contracts. The CBOT entered the agreement with the Dalian as a means to gain a foothold in China when regulators start to ease up on trading restrictions. With China’s massive trade in raw commodities, the local futures markets are likely to grow quickly for both hedging and speculative purposes, once regulators can ensure controlled growth and fair markets. Chinese Stocks Offer Opportunities and Risks The Chinese stock market is a tale of two markets — stocks traded outside China and stocks traded inside China. There are about 1,200 Chinese stocks listed on China’s two mainland stock exchanges, the Shanghai Stock Exchange and the Shenzhen Stock Exchange. Stocks traded inside China are represented in the nearby chart by the Shanghai Composite Index, which is comprised of A and B shares of Chinese companies listed on the Shanghai Stock Exchange. Stocks traded outside China are represented in the same chart by the Hang Seng China Enterprises Index, which is comprised by 32 mainland state-owned Chinese companies (H-Shares) listed on the Hong Kong Stock Exchange. The indices are plotted with a common percentage index scale with January 1995 set at 100. Stocks that trade inside China did well during the late 1990s and into early 2001 as seen by the rally in the Shang-

hai Composite Index. However, their performance since then has been poor, with a 21% loss in 2001 and an 18% loss in 2002. The losses in 2001 and 2002 have yet to be overcome by the 10% rally in 2003 and the 12% rally in January/February 2004. By contrast, the Hang Seng China Enterprises index, representing stocks listed outside mainland China, fared

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poorly in the late 1990s, traded sideways through 2002, but then rallied sharply by 152% in 2003. The index by early 2004 had more than doubled from the level seen at the beginning of 2003. The recent strong performance of the Hang Seng China Enterprises Index is representative of other Chinese stock benchmarks that trade outside China, such as US mutual funds that invest in Chinese stocks and the American Depository Receipts (ADRs) of Chinese companies that trade on the New York Stock Exchange. The domestic Chinese stock market has been hurt by a number of factors. The key factor is overhang from the fact that the Chinese government owns about two-thirds of the total stock in listed shares, representing about $300 billion in non-tradable shares. The markets are fearful of a bloodbath if the government starts to try to sell its shares into the marketplace. In addition, stocks listed inside China are not subject to strict rules on accounting, transparency, disclosure, and corporate governance, thus increasing the risks of those stocks. Moreover, there are concerns about spillover effects into the stock market from the poor health of China’s largest banks and brokerage firms. China also has yet to develop an educated investor class of individuals who have the money to invest in stocks. The Chinese government has taken some steps to try to attract foreign investment into China’s stock market in order to support prices. Prior to 2002, foreign investors were only allowed to buy B-shares in Chinese companies. Ashares, which generally trade at a higher premium, were reserved for Chinese investors. However, the Chinese government started a program in late 2002 called the Qualified Financial Institutional Investor (QFII) program that allowed 10 large global investment banks to buy A-shares and then resell those shares to global institutional investors. This program has brought some $800 million of new investment into China’s domestic stock market in the past year, about one-half of the authorized amount. However, the domestic Chinese stock market still suffers from difficult problems that will only be solved with dramatic reform measures from the government. Despite the problems on China’s domestic stock exchanges, global investors are eager to invest in China’s future with its huge population and strong economic growth. The solution for most investors has been to invest in Chinese companies that are listed on exchanges in Hong Kong or New York or to invest in China-focused mutual funds. Investors poured $475 million in new investment into Chinafocused mutual funds in 2003, funds that produced an average return for the year of +63%, according to mutual fund tracker Lipper Inc. Another way to play China is to buy the stocks of global companies that are benefiting with their trade with China or to invest in Asia-Pacific or Emerging Growth mutual funds that have large exposure to China. The sharp rally in Chinese stocks seen in the past year has led to concerns that the rally has overreached and that valuations have become much too high. Valuations on Ashare stocks in China are very high at 30 times trailing earnings. Speculative excess can also be seen by the fact that the closed-end investment company, The China Fund Inc., which trades on the New York Stock Exchange with the symbol of CHN and invests in small and mid-sized Chinese stocks, traded with a share price of 25% to 50% more than the value of its underlying portfolio in early 2004, showing that investors are bidding the closed-end fund up higher than its intrinsic value.

While there are questions about whether now is the time to invest in Chinese stocks, there is little doubt that some Chinese companies and other global companies selling into China will be big winners in coming years as they take advantage of the huge demand that is emerging in China. Chinese influence in debt markets grows with huge foreign exchange reserves

only Japan, which has $673.5 billion. If fact, Asia as a whole now holds $1.94 trillion of the world’s reserves of just over $3 trillion. This has prompted Asian central banks to purchase about two-thirds of the US government debt issued over the past 2 years. The nearby chart shows how foreign entities, primarily foreign central banks, have bought nearly $1 trillion in US Treasury T-bonds and T-notes just since January 1995 and how those purchases picked up sharply in 2002 and 2003 as the US budget deficit soared and Treasury debt sales increased.

China’s foreign exchange reserves have nearly tripled in the past several years to recent levels over $400 billion, giving China some serious clout in the US Treasury security market. There are concerns in the US that China can threaten to stop purchasing Treasury securities, or threaten to sell the Treasury securities it already owns, thus pushing up the key US government’s financing costs and a key US benchmark interest rate. How did China acquire these reserves? China is running a trade surplus of about 250 billion yuan or US$30

billion. Because China has a non-convertible currency, the government requires exporters to turn their dollars and other foreign currencies over to the central bank to be converted into yuan at the fixed rate of 8.277 yuan per dollar. Thus, by virtue of its trade surplus and its non-convertible currency, the Chinese central bank accumulates US dollars and other foreign currency reserves denominated in euros, yen, and other global currencies. Most of the Chinese central bank’s reserves are in dollars, however, because that is the preferred unit of trade for global commerce. The Chinese central bank wants to earn interest on those dollars and the safest and most liquid place to place those dollars is in US Treasury securities. The Chinese central bank has therefore become a huge buyer of US Treasury securities, with purchases in 2003 running more than $60 billion. As the nearby chart shows, China’s foreign exchange reserves have grown dramatically and totaled $403.3 billion as of January 2004. China’s reserves grew by $160 billion just in 2003. China now has the second highest foreign exchange reserves of any nation in Asia, falling behind

China’s rapid accumulation of reserves is causing a major macroeconomic problem for the nation because the Chinese central bank typically prints new yuan in order to buy the dollars from exporters. This has led to 18% growth in the Chinese money supply. Although Chinese inflation is currently only about 3%, there are concerns that the rapid growth in the money supply will overheat the economy and cause some serious inflation problems down the road. In fact, the Chinese central bank has been trying to cut back on money supply growth and credit creation by “sterilizing” its dollar purchases with offsetting T-bill sales to banks, and by encouraging banks to restrict credit to certain industries. However, the central bank has only achieved modest success in curbing credit and China’s macroeconomic imbalances are in fact growing. The rapid growth of its foreign exchange reserves and the inflationary implications of absorbing those reserves are putting serious pressure on the Chinese central bank to revalue the yuan higher. There is speculation that the Chinese central bank in 2004 will revalue the yuan higher by up to 5% and perhaps even move to a crawling peg against a basket of currencies in 2005 in order to protect itself from dollar weakness. Revaluing the yen will eventually bring some relief to the nation’s macroeconomic imbalances. But in the meantime, China will continue to be a major buyer in the US Treasury market and will wield influence in Washington as a significant financier of the US budget deficit. Richard W. Asplund, CRB Chief Economist, February 2004.

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FREE-TRADE TALKS PRODUCE SOME SUCCESS BUT MOVE FROM GLOBAL TO REGIONAL Summary – Free trade is one of the cornerstones of the global market economy. Yet the current round of global trade talks, the Doha Round, is at a standstill due to the intractable problem of agriculture subsidies. The US, frustrated by an attack on its agriculture subsidies and by the difficulty of negotiating in the WTO multilateral platform, has instead turned its attention to negotiating a series of regional and bilateral trade agreements. The breakdown of the Doha Round in November 2003 was a big disappointment for those hoping for an extra boost to global GDP in coming years from a successful global trade agreement. Yet all is not lost, and the pressure on the US and EU to curb their agriculture subsidies may yet produce progress in coming years and a better free trade round if and when it finally concludes. Benefits of free trade Economic doctrine teaches that free trade benefits all parties involved by allowing the most efficient producers to produce goods and services that they are best in producing, thus boosting overall GDP output and allowing global consumers to benefit from low prices and good quality for the goods and services that they purchase. Imposing barriers to trade at the borders of nations results in inefficiencies and distortions, thus lowering output and raising prices. In fact, the benefits of free trade can be substantial. The World Trade Organization (WTO), for example, estimates that the 1994 Uruguay Round trade deal boosted world income by somewhere between $109 billion and $510 billion, depending on different assumptions. The WTO also cites economists as estimating that a one-third cut in current barriers to trade in agriculture, manufacturing, and services would boost the world economy by $613 billion, which is equivalent to adding an economy the size of Canada to the world economy. The costs of protectionism The cost of trade barriers can be substantial to consumers in the form of higher prices. The WTO estimates, for example, that European agricultural protectionism results in the average European family of four paying $1,500 per year more in food costs. US consumers may not notice that their sugar is over-priced, but US consumers pay an extra $3 billion per year for sugar, according to the WTO, because of US government policies in protecting the US sugar industry from global competition. Sugar prices in the US are near 20 cents per pound versus 7 cents elsewhere in the world. High US sugar prices decimated the US candy industry, a big consumer of sugar, and resulted in the loss of 7,500-10,000 jobs in the US, according to the Sugar Users Association. In another example, trade restrictions in the textile industry cost UK consumers an estimated 500 million pounds-sterling more for their clothing and about CD$780 million more for Canadian consumers, according to the WTO. Despite theoretical agreement on the overall benefits of free trade, there are concerns about the local dislocations that occur as production moves to more efficient locales,

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since that usually results in lost jobs. Lost jobs are a much more visible manifestation of free trade than the diffused benefits of higher overall GDP output and lower prices for consumers. Concerns about lost jobs often lead to calls for protectionism, which some politicians are only too happy to accommodate. Protectionist rhetoric sometimes wins more votes that promoting the benefits of free trade. Yet, protectionism causes insidious damage to an economy by raising prices and undercutting exports. The most notorious example of a disastrous protectionist policy was the Smoot-Hawley Tariff of 1930 passed by the US Congress, which caused US trade to plunge and is widely blamed as a key factor that worsened the impact of the Great Depression. The Smoot-Hawley debacle traced its roots to promises by Herbert Hoover during the 1928 presidential election to help farmers who had seen tough times in the 1920s. That mistake provides an important and enduring lesson about the costs of bowing to agricultural protectionism. Federal Reserve Chairman Greenspan, in testimony before Congress in March 2004, warned Congress not to succumb to recent signs that “creeping protectionism” was taking hold in Washington. Mr. Greenspan noted that capitalism involves the process of “creative destruction,” a term coined by famed economist Joseph A. Schumpeter. Mr. Greenspan admitted that global competition can be “disruptive” but he said that on balance the US has greatly prospered by being open and flexible. Mr. Greenspan testified, “Time and again through our history, we have discovered that attempting to merely preserve the comfortable features of the present, rather than reaching for new levels of prosperity, is a sure path to stagnation.” The current mishmash we call the world trading system reflects the conflicted views on the benefits of free trade. Many nations want free trade to boost their exports, but not when it comes to protecting themselves from imports. These countries want to protect their favored local industries, which provide jobs for their people and political support for their politicians, even if those industries are highly inefficient and consumers in their country could buy the same or better quality products from overseas at a lower cost. The governments in those countries keep protecting these favored local industries even though their consumers pay higher prices, and even though other industries in their country might benefit if they entered free trade agreements that gave their other industries better access to foreign markets. Adopting free trade requires political leadership and faith in the ability of a nation to adapt. The movement to global free trade only moves forward in fits and starts, with each major step forward only coming after long and difficult negotiations and compromises. Yet, there does continue to be progress toward a freer global trading system. Bush administration plays the reluctant free trader The Bush Administration has aggressively pursued free trade talks on a multitude of fronts, including within the WTO, within the Americas, and with a number of different countries in bilateral talks. The Bush Administration has

had a number of successes, including the Central American Free Trade Agreement, and bilateral agreements with Australia and other nations. Nevertheless, the Bush Administration has been criticized for playing politics with trade and for coddling selected US industries such as steel, sugar, cotton, and others. The Bush Administration soon after coming into office succumbed to pressure from the steel industry for tariff protection from foreign competitors. In an ill-conceived bow to protectionist political pressures, the Bush Administration and Congress in 2002 approved steel tariffs ranging from 8% to 30%, covering roughly 80% of steel products produced in the US. However, the Bush Administration was finally forced to lift the steel tariffs in December 2003 when the WTO ruled that the tariffs were illegal and authorized Europe and Asian nations to impose retaliatory tariffs against the US. Rather than challenge the authority of the WTO and take a hit on retaliatory tariffs on other US exporting industries, the Bush Administration backed down and repealed the steel tariffs. The timing was fortuitous because just two months later, steel consumers (as opposed to steel producers) were in Washington screaming about high steel prices, something the Bush steel tariffs actually promoted in the previous year. The steel tariff debacle provided another lesson highlighting the harmful overall effect of tariffs and reinforcing the benefits of letting the marketplace do its job by allowing buyers and sellers of products and services to mediate supply, demand and prices without undue interference from the government. In another protectionist move, the Bush Administration in November 2003 placed limits of the imports of Chinese-made knit fabric, dressing gowns, and bras, by invoking the highly questionable tactic of using a safeguard clause in WTO regulations to protect against a sudden surge in imports. The Bush Administration was roundly criticized by free trade observers for that unilateral action against China, which is at odds with the spirit of WTO rules. The Bush Administration has also engaged in other trade spats with China. Most recently, the Bush Administration in mid-March 2004 said that the US would file the first formal trade case against China at the WTO charging that China imposes an discriminatory tax on imported semiconductors. If the Bush Administration goes ahead with its plans, that would be the first formal trade case against China since China joined the WTO in 2001.

Growth in global trade outpaces GDP growth Despite difficult free talks and various trade spats, world trade on the whole has moved forward at an impressive rate. In the past 50 years, world trade has grown by an average of +6% per year, faster than GDP growth. The chart above shows how world trade has grown faster than GDP growth on average since 1980. Increased world trade has been sparked by lower trade barriers and technological improvements in global commerce in transportation, communications, information, and finance. The chart above also shows that world trade is highly dependent on the business cycle, rising in good economic times and falling in bad times. During the global economic slump in late 2000 to early 2003, world trade growth fell sharply. However, the IMF estimates that world trade in 2004 will improve to +5.5%, faster than projected world GDP growth of +4.1%. Development of the world trading system The current world trading system was built after World War II with the development of the General Agreement on Tariffs and Trade (GATT). GATT provided the fundamental rules and negotiating platform to promote free trade. The GATT Uruguay Round in 1986-94 then succeeded in creating the World Trade Organization (WTO) in 1995, which has now taken over responsibility for world trade. Membership in WTO is voluntary, but upon joining, a nation agrees to abide by WTO trading rules. The WTO has nearly 150 member nations and accounts for 97% of world trade. The WTO key functions are as follows (see www.wto.org): • • • • • •

Administering trade agreements Acting as a forum for trade negotiations Settling trade disputes Reviewing national trade policies Technical assistance and training for developing nations Cooperating with other international organizations

Being a member of the WTO carries benefits such as lower-cost access to the markets of other members. But being a member also carries responsibilities such as lowering tariffs and other trade barriers. The most visible recent member was China who joined the WTO in 2001. China’s trade has soared in the past several years, in part because of its WTO membership and its full integration into the world trading system. Prospects for the Doha Round The Doha Round is the current round of global trade talks that began in November 2001 at the fourth WTO Ministerial Conference in Doha, Qatar. The stated deadline for the Doha Round is January 1, 2005. The Doha Round is focused on lowering trade barriers in agriculture, textiles, and services. The World Bank has estimated that a successful Doha Round could raise global GDP by more than $500 billion per year by 2015 and that 60% of that gain would go to poor countries. The Doha Round is currently at a standstill and the prospects look bleak for an agreement before the deadline in less than 10 months. The Doha Round broke down at the

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WTO ministerial meeting in Cancun, Mexico in September 2003 after an impasse between the poor nations and the rich nations. The trouble started when the proposal by the EU and the US on cutting agricultural support was far less than other key parties expected when the Doha Round began. The EU, for example, planned to keep in place its agricultural export subsidies, one of the worst types of trade protection. Support by developed nations to their farmers has been estimated to be running at $300 billion per year for the past 15 years. The protection of farmers in the developed countries means that there is excess production dumped on the world markets, thus depressing the world prices of agricultural products and forcing farmers in developing countries out of business. US support of the cotton industry is particularly egregious with the US government providing some $4 billion of subsidies to the cotton industry each year. The government subsidies have caused overproduction of cotton in the US, which is in turn dumped on world markets and depresses cotton prices. Weak cotton prices through early 2002 decimated cotton farmers in developing nations and infuriated African nations that depend on cotton exports as one of their primary sources of exports and foreign exchange. Cotton is only one example of how US taxpayer dollars are used to support the US agricultural industry and cause collateral damage outside the US. The US government spends an estimated $19 billion per year in total on farm subsidies. Agricultural subsidies in Europe are even larger than in the US. Under the EU’s common agricultural policy (CAP), the EU props up local agricultural prices to keep inefficient farmers in business and the excess production is then dumped on the world markets, driving even efficient producers overseas out of business because of artificially low world prices. The EU also imposes tariffs on agricultural imports to keep lower priced agricultural products out of the EU. In response to the paltry offer by the EU and the US on agriculture in the Doha Round talks, an alliance formed of emerging countries called the G21, led by Brazil, China, and India. The G21 group, which represents half the world’s population and two-thirds of the world’s farmers, demanded much more aggressive action by the EU and US on cutting agricultural protection. Yet the G21 offered little in exchange for big cuts in US and EU agricultural subsidies and most of the G21 countries wanted to keep intact their own agricultural trade protections. The EU and US responded to the G21 challenge by playing hardball on agriculture and other issues, and the Cancun ministerial meeting then quickly broke down in acrimony. In an effort to get the ball rolling again, US Trade Representative Robert Zoellick in January 2004 sent letters to all the member nations of the WTO expressing his desire to restart global trade talks and convene another ministerial meeting later in 2004. The US made clear that it would put more pressure on the EU to reform its CAP agricultural support policies. Yet progress on restarting the global trade talks will be difficult. Following up on its attack on US and EU agricultural subsidies, Brazil brought a legal challenge against the US at the WTO for its cotton subsidies. A decision is expected by spring. WTO members are now free to bring legal action at the WTO on farm issues now that the so-called peace period has ended whereby nations involved in the Uruguay

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Round agreed not to bring trade actions on agriculture until after 2003. Some nations such as Brazil believe that they are better off trying to have the WTO declare US and EU agriculture subsidies illegal, rather than trying to twist arms at the bargaining table. The breakdown of the Doha ministerial talks in Cancun in September raised larger questions about whether a global trade agreement can ever be reached under the WTO negotiating platform. A global trade agreement at the WTO must be reached by consensus and any single nation, or groups of nations, can basically torpedo the entire process. There are a few smaller nations that are more interested in grandstanding for their local political constituents than in seriously negotiating toward another world trade agreement. US Trade Representative Robert Zoellick has referred to several “won’t do” nations who he says are good at making demands but are poor at creating compromises. US strategy switches to bilateral and regional trade agreements After the Cancun debacle, the US moved toward a policy of focusing on bilateral and regional trade agreements, rather than a global agreement through the WTO. These agreements are easier for the US to negotiate and difficult issues such as agriculture can simply be left out of the agreement. In addition, if the US can negotiate enough bilateral and regional agreements, then eventually these trade blocs might be cobbled together into a global agreement. This is a clearly inferior approach to an all-encompassing world trade agreement, but at least nations are still making progress at lowering trade barriers, making compromise easier when it comes time to negotiate a grand global agreement.

Free trade talks in the Americas reach impasse Soon after the WTO talks broke down in September, the Bush Administration turned its attention to the “Free Trade Area of the Americas” (FTAA) trade negotiations ahead of the ministerial meeting that took place in late November 2003 in Miami. The FTAA initiative was formally launched nine years ago and seeks to combine 34 countries in the western hemisphere (North, Central and South America) into a free trade zone encompassing 800 million people. However, the same problems that torpedoed the WTO talks in Cancun quickly threatened the FTAA talks. In particular, Brazil made the same demands for the US to slash

its agricultural subsidies in return for considering extending free trade into services and protections for intellectual property. Brazil is a large agricultural producer and wants freer access to US markets. At present, for example, Brazil can’t sell raw beef to the US because of presumptive health reasons and Brazil’s sugar exports face quotas and tariffs as high as 200%. For its part, the US refused to negotiate in FTAA on agriculture except within the context of global negotiations also involving Europe and Japan. The US didn’t want to make concessions on agriculture in the FTAA without extracting concessions from the EU, Japan and other nations on agriculture as well. In order to avoid another embarrassing collapse at the Miami talks, the FTAA group agreed to water down the FTAA framework by adopting a two-tiered approach whereby members could agree to core requirements but opt out of more controversial free-trade issues. This has been referred to “FTAA-lite” or an “a la carte” approach to an FTAA trade agreement. FTAA negotiators held high-level talks in early February to discuss what should be in the core requirements. While the talks are progressing, any FTAA-lite agreement would clearly be much less than members had earlier hoped and there is no assurance that even an FTAA-lite can be finished by the deadline in early 2005.

NAFTA reaches 10th birthday Cafta is being viewed as an extension of the North American Free Trade Agreement (NAFTA), the 10-year-old free trade agreement among the US, Canada, and Mexico. NAFTA has generally been considered a success, although it has not lived up to some of the highest expectations when it was signed.

Central American Free Trade Agreement (Cafta) is reached in December After the FTAA meeting in Miami, the US turned its attention to regional and bilateral trade talks within the Americas. On December 17, 2003, the US announced the “Central American Free Trade Agreement,” or Cafta, involving El Salvador, Guatemala, Honduras, and Nicaragua. The Cafta group was later expanded to include Costa Rico in late January and the Dominican Republican in mid-March 2004. The Cafta region includes about $30 billion worth of two-way trade with the US, i.e., $16.03 billion worth of US imports from the region and $14.09 billion of US exports to the region. President Bush has signaled that he will sign Cafta, allowing Congress to vote on the pact by the August recess. However, passage may be difficult given that 2004 is an election year when free trade and job losses are political hot potatoes. Aside from the framework of FTAA and Cafta, the US and Chile in 2003 completed a trade agreement that went into effect on January 1, 2004. The US is also pursuing a separate bilateral trade agreement with Panama. As the US was wrapping up Cafta, Brazil made its own moves within South America, seeking to band together with other South American countries to boost their bargaining position with the US in the FTAA talks. South America already has its own free trade zone called Mercosur, which includes Brazil, Argentina, Uruguay, and Paraguay. Associate members include Chile and Bolivia. Brazil is now seeking to bring Peru and Venezuela into Mercosur. Maneuvering between the US and Brazil will be a key to the success of the FTAA talks and indeed to the Doha Round. The marketplace will therefore be carefully watching how US and Brazilian trade relations play out in coming months.

Trade among the US, Canada, and Mexico has grown dramatically in the past 10 years, driven in part by the NAFTA free trade zone. US exports to Canada over the past 10 years have grown by 70% and US exports to Mexico have grown by nearly 250%. At the same time, Canadian exports to the US have nearly doubled, and Mexican exports to the US have more than tripled. The US trade deficits with Canada and Mexico have also grown sharply over the past decade, but that has been the case with US trade with all major trading partners. NAFTA has had a “miniscule” net effect on jobs in the US, according to a report by Carnegie Endowment for International Peace, negating the fears fostered by H. Ross Perot in the 1992 presidential election who said NAFTA would cause “a giant sucking sound” of US jobs moving to Mexico. For the US, the benefits from NAFTA mainly come from US consumers being able to purchase goods more cheaply and from increasing US export business to Mexico and Canada. Also, US-based companies can operate more efficiently within North America by having access to tarifffree movement of goods and services through the Mexican and Canadian borders. There is controversy about how well Mexico has fared under NAFTA, but there is general agreement that Mexico is better off with NAFTA than without. Mexico has deepseated problems and a free trade agreement by itself has

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not been enough to pull Mexico out of poverty. In addition, Mexico is now losing ground to China in the competition for low-wage jobs. Yet, Mexico is not turning against trade. On the contrary, Mexico and Japan in early March 2004 agreed on the framework of a free trade agreement. US reaches bilateral agreements with Australia and Morocco The US has been pursuing bilateral trade agreements with a variety of countries outside the big trading blocs. Congress in 2003 approved bilateral trade agreements with Chile and Singapore. US trade negotiators in March 2004 completed a free-trade agreement with Morocco, which now goes to Congress. US negotiators are currently pursuing bilateral trade agreements with Thailand, Bahrain, and four countries in southern Africa. The US already has bilateral free trade pacts in place with Jordan and Israel. The US and Australia in February 2004 reached a free trade agreement. While Australia only has 20 million people, Australia is America’s ninth largest trading partner with $28 billion in two-way trade. The agreement was note-

worthy since Australia is only the second industrialized nation next to Canada to open its markets to the US and the US expects to significantly boost the export of manufactured goods to Australia. However, the US-Australian trade agreement left in place US protection of sugar and Australian subsidies of pharmaceuticals. European Union expansion means larger free trade zone The European Union is by definition a free-trade zone, and it is growing in size. The European Union, with its

economic and political integration, was established with the ratification of the Maastricht Treaty in 1993. The EU currently consists of 15 nations and will expand to 25 nations in May 2004. A sub-set of the EU, the Euro-Zone nations, have gone further than free trade and have adopted a common currency, the euro. This is an even greater stimulus to free trade because it eliminates the uncertainties and inefficiencies associated with currency fluctuations. Asia negotiates its own free trade agreements Asian nations are also making a push for regional and bilateral trade agreements. As mentioned earlier, Japan in early 2004 reached a free trade agreement with Mexico, which it views as a foot-hold into the US and Canada. Japan also has a trade agreement with Singapore and is pushing for trade agreements with other nations. The nations of southeastern Asia, or ASEAN, entered into a free trade agreement back in 1992 that remains in progress and is due to be fully implemented by 2020. The nations in the ASEAN Free Trade Agreement include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. The ASEAN region has a population of about 500 million, combined GDP of $737 billion, and total trade of $720 billion. China is aggressively seeking free trade talks on a variety of fronts. China and ASEAN have agreed to negotiate a free trade agreement. A free trade agreement between China and ASEAN would include 1.7 billion people and $1.2 trillion in two-way trade. China is currently in talks with Australia about the feasibility of negotiating a free trade agreement. On the Indian subcontinent, seven nations in January 2004 entered into the South Asian Free Trade Agreement (Safta). Under Safta, the nations agreed to cut their interregional tariffs beginning on January 1, 2006, to between 0% and 5% over the next decade. The nations in Safta include erstwhile enemies India and Pakistan, along with Bangladesh, Bhutan, the Maldives, Nepal, and Sri Lanka. The seven nations in the group, which is called the South Asia Association of Regional Cooperation, account for some 1.5 billion people, many of whom live in poverty. Looking forward There will undoubtedly be further progress on free trade through the remainder of 2004. The US will be pushing for progress in the Doha Round and on the FTAA talks. There will also likely be progress on additional regional and bilateral trade agreements. Progress in 2004 may be slowed, however, by the fact that 2004 is an election year in the US and that free trade and job exports are hot political issues. Nevertheless, world trade negotiators will continue plugging along with the knowledge that free trade is a way to boost world GDP and improve the quality of life for millions of people. Richard W. Asplund, CRB Chief Economist, March 2004

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MAD COW DISEASE ARRIVES IN NORTH AMERICA IN 2003 AND ROILS THE MARKETS Summary – Mad cow disease, long a problem in Britain, arrived in Canada in March 2003 and in the US in December 2003. Although only one mad cow has been confirmed in the US so far, the fact that mad cow disease has breeched the US border means that the US can no longer consider itself immune from the mad cow problem. The discovery of the mad cow in Washington state resulted in a plunge in cattle prices and the shutdown of US beef exports to more than 50 countries, causing serious disruptions and financial losses in the US beef industry. The US government has so far responded to the problem by trying to reassure the public about the safety of US beef and taking some limited regulatory measures. At this point, however, the US government is not sure how widespread any mad cow problem may be in the US, and it would not be surprising if the government finds additional cases of mad cow with its more aggressive testing program. What is mad cow disease? Bovine spongiform encephalopathy (BSE) is commonly known as “mad cow” disease because the disease affects the central nervous system and eats away a cow’s brain, causing the cow to act erratically before finally dying. BSE is caused by misfolded proteins called prions, which become infectious and accumulate in neural tissues, thus causing a fatal, degenerative, neurological disease. The disease is usually spread to other cattle by eating contaminated tissues. Tests have shown that the misfolded prions can survive all usual sterilization measures including boiling, cooking, radiation, and the high-pressure steam used on surgical instruments. BSE was first diagnosed in 1986 in Great Britain. The exact origins of BSE are still not known, but it is thought to have started when cattle were given feed that was contaminated with scrapie-infected sheep meat-and-bone meal. Scrapie is a prion disease in sheep that is similar to BSE in cattle. The first cases of transmission of mad cow disease to humans emerged in 1995 when two teenagers in the UK were diagnosed with a variant of the rare disorder known as Cruetzfeldt-Jacob disease (CJD). CJD is known to occur spontaneously in elderly humans, but the type of CJD found in patients that develop the disease from eating BSE-contaminated meat is a variant of spontaneous CJD and is referred to as vCJD. Mad cow disease arrives in Canada in May 2003 In May 2003, veterinary officials in Alberta confirmed that an 8-year-old cow tested positive for BSE. After the animal displayed typical signs of BSE at the slaughter house, the meat from that cow was declared unfit for human consumption and was kept from other meat bound for packing plants and stores, and the rendered byproduct was not mixed with byproduct from other cows. Nevertheless, the US, Japan, South Korea, Australia, and other countries temporarily banned imports of Canadian beef. Three months later in August 2003, the US eased a ban on most types of processed Canadian beef, accounting for about 40%

of the total value of Canadian beef and cattle sales to the US, but still banned live cattle imports. The single case of mad cow disease cost the Canadian beef industry dearly. It is estimated that Canada’s beef industry lost $2.5 billion in the six months after its mad cow case was discovered and the Canadian cattle market is likely to stay depressed for the next several years. A surplus of milk currently exists in Canada because dairy cows cannot be exported due to the US ban on Canadian live cattle, thus putting downward pressure on Canadian milk prices and harming Canadian dairy farmers. The US Department of Agriculture (USDA) is currently considering whether to allow certain classes of live Canadian cattle and other ruminants to be imported into the US for the first time since May 20, 2003. A decision is expected sometime in April. Because of this, Canadian ranchers are holding onto more of their cattle, awaiting the removal of the ban, instead of sending them to processing plants. If the Canadian live cattle ban is lifted, it could add to the already-large US surplus of beef. It is perhaps surprising to note that Canada’s first brush with mad cow disease actually occurred more than a decade ago. In December 1993, a cow imported from Britain in 1987 was found to have BSE. Canada’s agriculture department (Agriculture Canada) decided to destroy the animal carcass and its 5 herd mates and additional measures were taken immediately to deal with any risk that Canadian cattle might have been affected. Although the disease is not contagious within a herd, other members of the herd may also contract the disease since they eat the same feed. Moreover, if the neural tissues, such as brain and spinal cord, of previously infected cows make it into the feed chain, then other cows could contract the disease. Despite the 1993 case of mad cow disease, Canadian officials did not impose a ban on the use of rendered cattle material in cattle feed until 1997. After the 1993 incident, the Canadian government destroyed any cow imported from Britain between 1982 and 1990 to reduce the risk of further cases. In total, 363 animals were destroyed, including any offspring of the cattle, and their owners compensated. Mad cow disease strikes the US Mad cow disease struck the US on December 22, 2003, when US officials announced that a four-year-old Holstein cow from a diary farm in Mabton, Washington, tested positive for bovine spongiform encephalopathy (BSE). The cow was considered a “downer” because it was unable to walk, and the Moses Lake plant, following federally mandated procedures, removed the brain and spinal cord for further testing and kept it apart from the meat. The Holstein was slaughtered along with 20 other head of cattle at a Moses Lake, Washington, meatpacking plant and quickly turned into hamburger that was distributed to retailers in eight states and one territory: Alaska, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington state. A day after the confirmation of BSE, the USDA ordered a recall of all of the 10,410 pounds of meat made at the plant on the day the infected cow was slaugh-

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tered. Unfortunately, by then much of the meat had already been consumed by humans.

Cattle prices initially plunge Cattle prices quickly plunged once the news emerged that mad cow disease was found in the cow in Washington state. More than 50 countries, including Japan, South Korea, and Mexico, all top US beef importers, banned imports of US beef following the December 2003 announcement, threatening an export trade valued at up to $3.8 billion per year. In the matter of a week, February live cattle futures prices plunged by nearly 20 cents per pound or more than 20%. The cattle futures markets were locked limit down for several consecutive sessions. The BSE announcement had collateral effects in markets other than cattle and beef prices. Corn, a staple in the cattle diet, dropped due to fears that a large-scale slaughter of US cattle might be necessary, thus reducing the need for corn feed. At the same time, soybean prices were boosted by expectations that further restrictions on the use of cattle byproducts in the feed for other animals would boost the need for soybeans to add protein to animal feed. Prices were supported for beef-alternatives such as pork and poultry. The shares of publicly traded companies that process beef or own restaurants with beef as a mainstay, such as McDonald’s Corp., dropped as well. Companies and manufacturers of large farm equipment also saw stock prices fall. Companies that process alternatives to beef or sell diagnostic tests to detect BSE saw a gain in their stocks. Meat processing and packaging plants, such as Tyson Foods (with 49% of its business in beef), Cargill Inc., and Swift foods, began laying off workers and reducing the hours and shifts of thousands of workers. Up to 50,000 jobs in various related industries are in jeopardy if the import bans remain in place.

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Despite the initial panic, cattle prices by March 2004 were able recover more than one-third of their initial losses, as seen in the nearby nearest-futures chart of live cattle. The partial recovery in prices was due mainly to the fact that US consumers, who buy about 90% of the beef produced in the US, have maintained their strong consumption demand for US beef. With USDA assurances that US beef is safe to eat and promises for more extensive testing at processing plants this year, consumers are showing confidence in the government’s ability to police the food supply and are continuing to buy beef, thus preventing a melt-down in the US beef industry. Most of the 2.6 billion pounds of US beef that was marked for export will remain here, but the supply glut of beef hasn’t necessarily translated into substantially lower retail beef prices in stores and restaurants. Last year’s record prices for US beef were largely offset by grocers and restaurants that didn’t fully pass along their higher beef costs to consumers and therefore may not be inclined to pass along their savings this year. The US beef industry in 2003 enjoyed a sharp rally in cattle prices, thus providing a price buffer once mad cow disease hit. One of the main reasons for the rally in US cattle prices in 2003 was the discovery of mad cow disease in Alberta, Canada, in May 2003, which prompted the US to ban all imports of Canadian cattle, shrinking US supplies of beef. The US was a big importer of Canadian beef, importing some 1.7 million Canadian cattle in 2002, most of which ended up at meatpackers. Cattle prices in 2003 were also boosted by drought in some areas of the Midwest and Great Plains, which forced US ranchers to shrink the size of their herds due to thinning pastures and underweight cattle. Moreover, consumer demand increased in 2003 for beef due to low-carb, high protein diet trends. How can the US recover from its first mad cow episode? Efforts to recover from mad cow disease in the US fall into several categories. Progress in these areas may eventually convince Japan and other countries to drop their import ban on US cattle, and for US consumers to be fully confident in the safety of the beef supply. So far, only Mexico has eased its ban on US beef, allowing in certain types of processed beef. Tracking system – US investigators determined that the mad cow found Washington state was born in Alberta, Canada, in April 1997, where it most likely ate contaminated feed before being sold 2 years later to a US dairy farm along with a group of 80 other dairy cattle. US federal officials were able to locate and identify only 27 of the 80 cows from the group due to the lack of a national cattle-identification system, as is used in Canada. The USDA has been dragging its feed on considering the possibility of a national cattle-identification system due to the price tag and opposition from the cattle industry. Yet a tracking system would allow quick identification of any future mad cows, the likely source of their infection, and their herd mates. Slaughter-house rules – Since the mad cow discovery, the USDA has decided to ban cattle that are unable to walk from the food supply. The USDA has also banned for human food the most infectious parts of cattle by requiring the removal of brains, spinal cords, and intestines from older cows at slaughter. This will provide at least a first line of

defense that the sickest cows won’t make it into the US food chain. Feed restrictions – Immediately after the discovery of mad cow in December 2003, the US Food and Drug Administration (FDA), which has responsibility for regulating animal feed and pet food, banned the use of cow blood as a milk-supplement for calves. This was due to the fact that studies have suggested that blood may also be infectious. The FDA is currently leaning toward banning the use of ruminant blood and blood products, as well as poultry litter, which could contain currently banned cattle proteins, and human “plate waste,” which consists of food discarded after human use in restaurants. Ruminants are animals such as cows and sheep whose stomachs include four chambers. In 1997, the FDA banned the use of ruminant proteins in feed for other ruminants. The US government has not adopted a blanket ban on the use of cattle or ruminant by-products in the feed for all livestock and pets. Through BSE-contaminated pet food, cats have proven to be susceptible to a feline-version of BSE. There are clearly risks in BSE-type diseases jumping from animal to animal and to humans, and for the diseases to mutate in the process. As mentioned earlier, BSE is thought to have developed when cattle were fed feed contaminated with scrapie-infected sheep remains, meaning scrapie may have transmutated into BSE. Because of the possibility of transmutations, the safest course of action would be to simply have a total ban on the use of cattle byproducts in the feed for any type of animal. So far, the FDA has stated that they want a better handle on the BSE risk situation before it considers any further feed restrictions. Testing – Prior to the outbreak of mad cow disease in the US, the US government was testing 20,000 cows out of the 35 million cows slaughtered each year (i.e., 1 out of every 1,700, or 0.06 of one percent). Immediately after the mad cow discovery, the USDA boosted its target testing number to 40,000 cows displaying the basic symptoms of BSE at slaughterhouses. Recently, the USDA announced a new, one-time plan to test more than 221,000 cattle beginning on June 1, 2004 and lasting 12 to 18 months. The tests will target the cattle that exhibit coordination problems, have died for unknown reasons, or show symptoms of nervous system disorders. The USDA estimates that this group totals 446,000, or 1.3% of the US cattle slaughtered each year. In addition, 40,000 cattle over 30 months old that appear healthy at the time of slaughter will also be tested. This one-time testing program is not designed to ensure that US beef is BSE-free, but to simply determine the statistical prevalence of the disease in the US. This is far short of Japan’s demands that testing be done on all US cattle. Japan requires BSE testing for every cow slaughtered in its country, but that is easier for Japan since Japan slaughters only 1.3 million cattle per year versus 35 million in the US. Since the US is not likely to expand testing to all cattle anytime soon, Japan has indicated that it may settle for allowing the import of cattle that have been tested for BSE. To help with the magnitude of new tests, the USDA plans to certify a network of state and university laboratories to handle mad cow testing. However, the USDA continues to ban testing by outside private laboratories. The USDA has expressed concern that any false positives might cause cattle prices to crash, upset overseas customers, and cause additional US consumer concern about beef safety. How-

ever, critics charge that the USDA is simply trying to preserve its bureaucratic turf and is moving too slowly. Several US companies have expressed their desire to test every cow that goes through their meat-packing plants, but the USDA has gone as far as to warn that anyone testing without its approval could face criminal charges. Consumer awareness – Although danger to the public of contracting variant Creutzfeldt-Jacob disease through mad cow disease is low, consumers can decrease their risks even further by avoiding any material that comes from the head as well as any meat that is taken from close to the spinal column or that contains bone that is part of the spinal cord (e.g., like T-bone). Experts also note that there may be risks in pizza toppings, taco fillings, hot dogs, salami, bologna and other products that contain ground beef and beef from machinery that squeezes out bits of meat that cling to the spinal column and other bones. The FDA also reminds the public that cooking meat will not kill mad cow disease if the meat is infected. UK experience with mad cow The UK is ground zero for the mad cow problem, meaning the UK provides important lessons for the US on what to expect from the disease. The UK outbreak occurred because calves in the UK were fed BSE-contaminated cattle meat-and-bone meal as a source of protein. The UK mad cow epidemic peaked in 1993, and in a decade’s time, caused the eventual destruction of 3.7 million British cattle. Before the infected herds were slaughtered and the outbreak was curbed, approximately 750,000 infected British cows entered the human food chain as hamburgers, sausages, and other meat products. In 1996, Great Britain banned the most infective portions of a cow, brain and spinal cord material, from the human food supply in order to prevent further animal-to-human transmission of mad cow disease. It also banned the use of meat-and-bone meal in animal feed. Britain is still in the final stages of its multiyear BSE epidemic, with 147 animals confirmed infected with mad cow disease in 2003. To date, a total of 139 Britons have died of variant Creutzfeldt-Jacob disease. The disease seems to have peaked and is possibly on the decline with 28 deaths reported in 2000, 17 deaths in 2002, and 18 deaths in 2003. The number of British vCJD cases could increase once again in the future because it is not clear whether the disease incubates in some people longer than in others. Recently, it was reported that a British man died from vCJD after receiving a blood transfusion from an infected donor who also died of vCJD. On the brighter side, the loss of human life was much less than early predictions that up to 500,000 deaths could occur. The British beef industry sustained billions of dollars of losses as countries around the world banned imports of all British beef and beef products. The US banned British beef in 1989 and has not yet lifted its ban. However, the UK beef industry is slowly recovering. UK consumers are becoming more confident about beef safety and Britain’s McDonald’s franchises, Burger Kings, and steakhouses are back to doing brisk business. In July 2003, Great Britain’s Food Standards Agency recommended that the government lift a ban preventing cattle older than 30 months from entering the food chain. The ban had been ordered because BSE tends to show in older cows and the incubation period

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is believed to be 2 to 8 years. As a precaution, the agency has recommended that all older cows must first test negative for BSE before they can be sold as beef, a practice currently followed by other European countries. Mad cow disease may emerge again in the US Although only one mad cow has so far been found in the US, the scope of any mad cow problem in the US is presently unknown because so few cows are tested for BSE in the US. The mad cow that was found in Washington State

was found more by accident than by any statistically accurate testing program since the US at that time only tested 0.06 of one percent of cows slaughtered in a year. The new testing program will be an improvement but it will take up to a year to determine the scope of any mad cow problem in the US. The markets need to be on guard that the steppedup testing program may find additional cases of mad cow disease in the US. Richard W. Asplund, CRB Chief Economist, March 2004

Volume U.S. U .S. Futures Volume H ighlights 2003 in C omparison w ith 2002 2003 R an k 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

2003 C ontracts % Eurodollars (3-month), C ME 208,771,164 33.38% E-Mini S&P 500 I ndex, C ME 161,176,639 25.77% T-Notes (10-year), C BT 146,745,281 23.46% T-Notes (5-year), C BT 73,746,445 11.79% E-Mini NASDAQ 100, C ME 67,888,938 10.86% T-Bonds (30-year), C BT 63,521,507 10.16% C rude Oil, NYMEX 45,436,931 7.27% S&P 500 I ndex, C ME 20,175,462 3.23% C orn, C BT 19,118,715 3.06% Natural Gas, NYMEX 19,037,118 3.04% Soybeans, C BT 17,545,714 2.81% Gold (100 oz.), C OMEX Div. of NYMEX 12,235,689 1.96% Heating Oil #2, NYMEX 11,581,670 1.85% Euro FX, C ME 11,193,922 1.79% Unleaded R egular Gas, NYMEX 11,172,050 1.79% Mini ($5) Dow Jones I ndustrial I ndex, C BT 10,859,690 1.74% Federal Funds (30-day), C BT 8,271,726 1.32% Soybean Meal, C BT 8,158,445 1.30% TR AKR S C ommodity, C ME 7,424,763 1.19% Soybean Oil, C BT 7,417,340 1.19% Sugar #11, NYBOT 7,140,724 1.14% Wheat, C BT 6,967,416 1.11% Japanese Yen, C ME 6,085,209 0.97% TR AKR S Gold, C ME 6,065,013 0.97% Live C attle, C ME 4,436,089 0.71% NASDAQ 100, C ME 4,421,221 0.71% Dow Jones I ndustrial I ndex, C BOT 4,416,302 0.71% T-Notes (2-year), C BT 4,415,906 0.71% C anadian Dollar, C ME 4,219,618 0.67% Silver (5,000 oz), C OMEX Div. of NYMEX 4,111,190 0.66% E-Mini R ussell 2000 I ndex, C ME 3,878,935 0.62% Swiss Franc, C ME 3,596,658 0.58% C offee C , NYBOT 3,211,031 0.51% High Grade C opper, C OMEX Div. of NYMEX 3,089,270 0.49% C otton #2, NYBOT 3,035,992 0.49% Wheat, KC BT 2,632,033 0.42% British Pound, C ME 2,595,155 0.41% TR AKR S Select 50 I ndex, C ME 2,436,069 0.39% Henry Hub Swap, NYMEX 2,356,600 0.38% Lean Hogs, C ME 2,164,155 0.35% C ocoa, NYBOT 2,128,206 0.34% Mexican Peso, C ME 2,123,623 0.34% LMC TR AKR S I ndex, C ME 1,803,316 0.29% Australian Dollar, C ME 1,609,289 0.26% E-Mini S&P 400 I ndex, C ME 1,417,513 0.23% TR AKR S Euro C urrency I ndex, C ME 1,196,525 0.19% LI BOR (1-month), C ME 1,138,358 0.18% Wheat, MGE 1,066,489 0.17% I nterest R ate Swap (10-year), C BT 1,038,777 0.17% TR AKR S I ndex, C ME 994,756 0.16% Top 50 C ontracts 1,027,270,647 C ontracts Below the Top 50 15,698,017 1.51% T OT AL 1,042,968,664 100.00% * For 2002 Top 50 contracts totaled 842,704,977 including 5 contracts that are not among 2003's Top 50.

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Top 50 C ontracts Traded in 2003

2002 C ontracts 202,080,832 115,741,691 95,786,299 50,512,085 54,491,180 56,082,284 45,679,468 23,699,667 18,132,447 24,357,792 14,475,100 9,018,183 10,695,202 6,986,600 10,979,736 2,224,757 6,285,789 7,174,507

% 32.31% 18.51% 15.32% 8.08% 8.71% 8.97% 7.30% 3.79% 2.90% 3.89% 2.31% 1.44% 1.71% 1.12% 1.76% 0.36% 1.01% 1.15%

2002 R an k 1 2 3 6 5 4 7 9 10 8 11 14 13 16 12 36 20 15

6,816,483 6,173,756 6,872,891 4,394,982

1.09% 0.99% 1.10% 0.70%

18 21 17 24

3,851,736 4,903,287 6,485,501 3,203,855 3,134,963 3,135,564 859,885 2,830,738 2,718,508 2,807,286 2,327,960 2,738,536 2,166,469 4,614,721

0.62% 0.78% 1.04% 0.51% 0.50% 0.50% 0.14% 0.45% 0.43% 0.45% 0.37% 0.44% 0.35% 0.74%

25 22 19 26 28 27 45 29 32 30 35 31 37 23

1,931,260 2,079,980 1,354,256 2,697,494 1,049,220

0.31% 0.33% 0.22% 0.43% 0.17%

39 38 40 33 43

1,110,934 1,199,149 661,527 2,469,467 838,994,027 * 12,316,360 851,310,387

0.18% 0.19% 0.11% 0.39%

42 41 48 34

1.45% 100.00%

VOLUME U.S. U.S. Futures Volume Highlights 2003 in Comparison w ith 2002 2003 2003 2002 RANK EXCHANGE CONTRACTS % CONTRACTS 1 Chicago Mercantile Exchange (CME) 530,989,007 50.91% 444,537,987 2 Chicago Board of Trade (CBT) 373,669,290 35.83% 276,316,047 3 New York Mercantile Exchange (NYMEX)** 111,789,658 10.72% 107,359,719 4 New York Board of Trade (NYBOT)* 18,822,048 1.80% 16,272,144 5 Kansas City Board of Trade (KCBT) 2,634,424 0.25% 2,755,949 6 OneChicago 1,619,194 0.16% 184,081 7 BrokerTec Futures Exchange 1,356,825 0.13% 2,109,670 8 Minneapolis Grain Exchange (MGE) 1,087,020 0.10% 1,201,543 9 NASDAQ LI FFE Markets 858,900 0.08% 90,091 10 MidAmerica Commodity Exchange 142,298 0.01% 483,156 TOTAL 1,042,968,664 100.00% 851,310,387 ** I ncludes Comex Division. * I ncludes the New York Futures Exchange, New York Cotton Exchange and Coffee, Sugar and Cocoa Exchange.

% 52.22% 32.46% 12.61% 1.91% 0.32% 0.02% 0.25% 0.14% 0.01% 0.06% 100.00%

2002 RANK 1 2 3 4 5 9 6 7 10 8

BrokerTec Futures Exchange (BTEX) FU TU R E 30-Year T-Bonds 10-Year T-Notes 5-Year T-Notes T otal

CONTRACT UNIT 100,000 USD 100,000 USD 100,000 USD

2003 374,115 654,800 327,910 1,356,825

2002 870,832 764,667 474,171 2,109,670

2001 36,293 35,342 17,836 89,471

2000

1999

CONTRACT UNIT 5,000 bu 1,000 bu 5,000 bu 1,000 bu 5,000 bu 5,000 bu 1,000 bu 60,000 lbs 100 tons 200,000 lbs 1,000 oz 33.2 troy oz 100,000 USD 50,000 USD 100,000 USD 50,000 USD 100,000 USD 200,000 USD 100,000 USD 100,000 USD 500,000 USD 100,000 USD 100,000 USD 100,000 USD 5,000,000 USD 10 USD x I ndex 5 USD x I ndex 100 x I ndex

2003 6,967,416 22,288 19,118,715 53,404 318,898 17,545,714 250,447 7,417,340 8,158,445 265,234 34,804 145,173 63,521,507 15,707 146,745,281 49 73,746,445 4,415,906 89,342 2,000 543 1,038,777 110,275 94,541 8,271,726 4,416,302 10,859,690 43,321 373,669,290

2002 6,872,891

2001 6,801,541

2000 6,407,531

1999 6,570,025

18,132,447

16,728,748

17,185,442

15,724,845

415,140 14,475,100

440,854 12,150,369

402,190 12,627,950

371,406 12,481,947

6,816,483 7,174,507 193,723 7,723 9,024 56,082,284 10,009 95,786,299 96 50,512,085 3,203,855 486,300

6,034,325 6,743,772 121,661 1,087 717 58,579,290 4,383 57,585,828 213 31,122,401 2,389,165 1,189,389

5,369,903 6,317,988 169,133

5,663,895 6,326,897 139,592

62,750,843

90,042,282

46,700,538

34,045,758

23,331,981 1,477,253 1,334,340

16,983,812 1,047,348

1,541 661,527 53,030 8,678 6,285,789 6,485,501 2,224,757 14,782 276,316,119

483 58,884

4,686,695 4,901,949

1,443,665 3,572,428

1,023,716 3,896,086

4,292 209,988,002

189,662,407

195,147,279

2003 2,164,155 161,329 8,544 230 191,351 137 4,436,089 704,852

2002 1,931,260 152,054 5,897 12 103,375 4,714 3,851,736 585,517

2001 2,018,339 196,359 1,374 48

2000 2,111,807 309,576 5,366

1999 2,358,096 368,309 3,354

6,513 4,279,273 616,988

4,868 3,681,512 582,279

3,839,548 650,071

Chicago Board of Trade (CBT) FU TU R E W h ea t Mini Wheat Corn Mini Corn Oats Soybeans Mini Soybeans Soybean Oil Soybean Meal Rice Mini Silver Mini Gold T-Bonds (30-year) Mini T-Bonds (30-year) T-Notes (10-year) Mini T-Notes (10-year) T-Notes (5-year) T-Notes (2-year) Agency Debt (10-year) Agency Debt (5-year) Mini Eurodollars I nterest Rate Swap (10-year) I nterest Rate Swap (5-year) Municipal Note I ndex (10-year) 30-Day Federal Funds Dow Jones I ndustrial I ndex Mini ($5) Dow Jones I ndustrial I ndex Dow Jones AI GCI I ndex T otal

Chicago Mercantile Exchange (CME) Future Lean Hogs Pork Bellies, Frozen Butter Nonfat Dry Milk Class I I I Milk Class I V Milk Live Cattle Feeder Cattle

Contract Unit 40,000 lbs 40,000 lbs 40,000 lbs 44,000 lbs 200,000 lbs 200,000 lbs 40,000 lbs 44,000 lbs

41T

VOLUME U.S. Chicago Mercantile Exchange (CME) Future Random Lumber T-Bills (90-day) Eurodollar (3-month) Euroyen EuroYen LI BOR 2-Year SWAP 5-Year SWAP 10-Year SWAP 28-Day Mexican TI I E One Month LI BOR British Pound Brazilian Real Canadian Dollar CME $ I ndex Euro FX E-Mini Euro FX Japanese Yen E-Mini Japanese Yen Mexican Peso New Zealand Dollar Norwegian Krone Russian Ruble South African Rand Swedish Krona Swiss Franc Australian Dollar Australian Dollar / Canadian Dollar Australian Dollar / Japanese Yen British Pound / Japanese Yen British Pound / Swiss Franc Canadian Dollar / Japanese Yen Swiss Franc / Japanese Yen Euro / Australian Dollar Euro / Canadian Dollar Euro / British Pound Euro / Japanese Yen Euro / Swiss Franc Nikkei 225 S&P 500 I ndex E-Mini S&P S&P 500 Barra Growth I ndex S&P 500 Barra Value I ndex S&P Financial Sector I ndex S&P Technology-Telecomm Sector I ndex S&P MidCap 400 I ndex S&P SmallCap 600 I ndex E-mini S&P SmallCap 600 I ndex Fortune E-50 I ndex NASDAQ 100 I ndex E-Mini NASDAQ 100 I ndex E-Mini NASDAQ Composite I ndex Russell 2000 I ndex E-Mini Russell 2000 I ndex Russell 1000 I ndex TRAKRS Select 50 I ndex LMC TRAKRS I ndex TRAKRS Commodity TRAKRS Euro Currency TRAKRS Gold TRAKRS I ndex HDD Weather HDD Seasonal Weather CDD Weather Euro HDD Seasonal Weather Goldman Sachs Commodity I ndex T otal

42T

(Continued)

Contract Unit 80,000 bd ft 1,000,000 USD 1,000,000 USD 1,000,000,000 JPY 100,000,000 JPY

1,200,000 MXN 3,000,000 USD 62,500 100,000 100,000 1,000 USD x I ndex 125,000 62,500 12,500,000 6,250,000 500,000 100,000 227,000 500,000 193,600 125,000 100,000 200,000 AUD 200,000 AUD 125,000 GBP 125,000 GBP 250,000 CHF 125,000 EUR 125,000 EUR 125,000 EUR 125,000 EUR 125,000 EUR 5 USD x I ndex 500 USD x I ndex 50 USD x I ndex 500 USD x I ndex 500 USD x I ndex 125 USD x I ndex 125 USD x I ndex 500 USD x I ndex 200 USD x I ndex 100 USD x I ndex 20 USD x I ndex 500 USD x I ndex 20 USD x I ndex 20 USD x I ndex 500 USD x I ndex 100 USD x I ndex 100 USD x I ndex 1 USD x I ndex 1 USD x I ndex 1 USD x I ndex 1 USD x I ndex 1 USD x I ndex 1 USD x I ndex 100 x HDD 100 x HDD 100 x CDD 100 x EHDD 250 USD x I ndex

2003 223,891 3,974 208,771,164 179,573 1,650 6,640 43,616 40,030 3,506 1,138,358 2,595,155 277 4,219,618 457 11,193,922 16,860 6,085,209 2,740 2,123,623 120,235 388 4,420 73,542 4 3,596,658 1,609,289 220 94 894 103 102 247 554 247 65,696 161,600 1,794 765,463 20,175,462 161,176,639 5,119 14,131 4,093 60 302,817 1,635 1,417,513 32 4,421,221 67,888,938 6,444 655,778 3,878,935 14,941 2,436,069 1,803,316 7,424,763 1,196,525 6,065,013 994,756 6,058 225 8,176 375 371,473 530,989,007

2002 164,423 4,619 202,080,832 231,723 2,302 5,671 13,301 7,234

2001 206,840 31,113 184,015,496 494,519 17,474

2000 221,168 16,763 108,114,998 1,079,074 7,924

1999 287,856 41,260 93,418,498 945,419 3,869

110,934 2,166,469 4 3,134,963

1,315,593 2,078,834 3,937 2,961,680

896,269 2,029,542 2,067 2,460,134

843,054 2,738,600 59,104 2,573,762

6,986,600 7,252 4,394,982 2,557 1,354,256 54,148 303

5,898,429 13,244 4,552,599 2,023 1,069,327 21,766

4,267,408 29,942 3,965,377 6,166 1,117,304 32,862

3,002,453 1,775 5,935,843 1,072 1,143,641 42,646

55,275 1 2,830,738 1,049,220 16 16 519 263

65,327

40,701

51,762

2,901,939 832,707

3,241,207 749,555

4,114,824 861,023

127 98,970 182 476,274 22,478,152 39,434,843 12,408 24,319

973 4,289 2 455,298 22,467,859 19,211,355 16,733 31,121

3,332 2,018 398 513,848 27,003,387 10,953,551 11,015 26,698

378,526

332,438

326,117

3,694 5,586,750 32,550,233

19,838 5,094,042 10,817,277

2,360,938 682,059

714,259 26,012

508,726

363,041

131

67

336

54 306 5 7,166 58,768 949 571,241 23,699,667 115,741,691 7,756 17,238 5,052 1,410 387,800 191 343,087 392 4,903,287 54,491,180 843,479 859,885 4,614,721 2,697,494

2,469,467 2,334 1,831 518,323 443,537,987

20 479,646 315,971,885

1,002,673 195,106,470

926,933 168,013,693

VOLUME U.S. Kansas City Board of Trade (KCBT) FU TU R E W h ea t Value Line I ndex T otal

CONTRACT UNIT 5,000 bu 100 USD x I ndex

2003 2,632,033 2,391 2,634,424

2002 2,738,536 17,370 2,755,949

2001 2,357,004 17,773 2,375,133

2000 2,427,950 9,954 2,446,607

1999 2,321,059 1,264 2,375,271

CONTRACT UNIT 1,000 bu 1,000 bu 1,000 bu

2003 5,580 39,555 97,163 142,298

2002 74,454 107,388 299,694 483,156

2001 52,285 118,574 281,451 582,872

2000 77,477 270,890 572,672 1,649,549

1999 132,392 291,186 651,268 2,433,894

CONTRACT UNIT 5,000 bu 5,000 bu 5,000 bu

2003 1,066,489 16,535 3,996 1,087,020

2002 1,199,149

2001 967,666

2000 955,659

1999 1,119,812

2,253 1,201,543

968,699

958,420

1,134,945

MidAmerica Commodity Exchange (MidAm) FU TU R E W h ea t Corn Soybeans T otal

Minneapolis Grain Exchange (MGE) FU TU R E W h ea t Hard Winter Wheat I ndex National Corn I ndex T otal

New York Board of Trade (NYBOT)* FU TU R E Coffee 'C' Mini Coffee Sugar #11 Sugar #14 Cocoa Cotton #2 Orange Juice Frozen Concentrate US Dollar / Canadian Dollar US Dollar / Swedish Krona US Dollar / Norwegian Krone US Dollar / Swiss Franc US Dollar / Japanese Yen US Dollar / British Pound US Dollar / Czech Koruna US Dollar / Hungarian Forint US Dollar / South African Rand Canadian Dollar / Japanese Yen Australian Dollar / US Dollar Australian Dollar / Canadian Dollar Australian Dolar / New Zealand Dollar New Zealand Dollar / US Dollar Australian Dollar / Japanese Yen British Pound / Swiss franc British Pound / Japanese Yen Swiss Franc / Japanese Yen Euro Euro / US Dollar, Small Euro / Australian Dollar Euro / Canadian Dollar Euro / Czech Koruna Euro / Hungarian Forint Euro / Japanese Yen Euro / Swedish Krona Euro / British Pound Euro / Norwegian Euro / Swiss Franc US Dollar I ndex NYSE Composite I ndex Revised NYSE Composite I ndex Russell 1000 I ndex Russell 1000 Growth I ndex Russell 1000 Value I ndex Russell 2000 I ndex Russell 3000 I ndex Reuters-CRB Futures I ndex T otal *

CONTRACT UNIT 37,500 lbs 12,500 lbs 112,000 lbs 112,000 lbs 10 metric tons 50,000 lbs 15,000 lbs 200,000 USD 200,000 USD 200,000 USD 200,000 USD 200,000 USD 125,000 GBP

100,000 USD 200,000 CAD 100,000 AUD 200,000 AUD 200,000 AUD 100,000 NZD 200,000 AUD 125,000 GBP 125,000 GBP 200,000 CHF

100,000 EUR 100,000 EUR

100,000 EUR 100,000 EUR 100,000 EUR 100,000 EUR 100,000 EUR 1,000 USD x I ndex 500 USD x I ndex 50 USD x I ndex 500 USD x I ndex

500 USD x I ndex

2003 3,211,031 332 7,140,724 133,811 2,128,206 3,035,992 652,715 2,458 12,377 11,350 26,119 43,351 40,467 527 1,120 31,272 16,440 6,061 15,104 16,357 26,395 41,468 20,503 52,145 22,193 60,926 5,365 30,466 49,890 2,774 24 346,751 49,977 117,989 29,815 133,218 563,032 34,021 7,143 677,626 836 415 10 96 23,156 18,822,048

2003 576,765 282,135 858,900

2002 2,718,508 784 6,173,756 141,017 2,079,980 2,327,960 577,757 2,581 2,983 1,178 11,159 58,583 31,956

2001 2,199,371

2000 2,134,961

1999 2,659,233

5,150,329 116,733 2,005,817 2,259,665 577,496 1,854 2,564 746 10,737 16,338 17,379

5,933,850 122,976 2,110,048 2,597,757 712,204 2,825 2,423 58 16,671 30,353 14,202

5,911,299 138,661 1,868,036 2,448,087 793,882 3,406

11,081 8,593 8,043 5,181 9,525 13,289 21,870 13,204 30,925 9,038 81,998 2,560 14,635 17,731

4,793 18,865 2,640 17,886 12,673 24,426 31,250 21,379 42,651 15,196 64,431 2,299 17,006 11,712

9,984 5,380 44,307 2,064 15,333 23,866 32,390 11,061 85,530 13,662 97,032 6,508 7,674 8,396

10,859

337,756 45,757 124,485 17,670 69,057 411,571 216,479

294,733 30,354 112,727 4,488 44,162 342,948 217,772

278,119 54,076 159,862 2,461 69,538 297,745 130,984

192,987 101,605 200,560 10,452 147,650 356,544 334,222

646,455

313,318

94,736

161,114

14,283 16,272,144

16,878 14,034,168

63,494 15,214,853

88,696 15,958,237

2002 72,897 17,194 90,091

2001

2000

1999

25,523 41,632 16,571

40,711 26,088 70,717 18,538 28,789 69,207 20,988 85,211 2,337

NASDAQ LIFFE Markets (NQLX) FU TU R E Single Stock Futures Exchange Traded Funds T otal

CONTRACT UNIT

43T

VOLUME U.S. New York Mercantile Exchange (NYMEX) COMEX Division FU TU R E Gold Silver High Grade Copper Aluminum T otal

CONTRACT UNIT 1 0 0 oz 5,000 oz 25,000 lbs 44,000 lbs

2003 12,235,689 4,111,190 3,089,270 107,490 19,543,639

2002 9,018,183 3,135,564 2,807,286 74,000 15,035,033

2001 6,785,340 2,569,198 2,856,641 43,089 12,258,659

2000 6,643,464 3,117,017 2,778,124 46,099 12,626,367

1999 9,575,788 4,157,500 2,852,962 27,978 16,645,688

CONTRACT UNIT 1 0 0 oz 5 0 oz 1,000 bbl 1,000 bbl 1,000 bbl 400 bbl 1,000 bbl 42,000 gal 10,000 MMBTU 4,000 MMBTU 1,500 tons

2003 95,613 268,305 11,581,670 11,172,050 45,436,931 277,411 30 14,710 19,037,118 115,502 1,586 142,859 2,356,600 33,785 88,826 52,996 10,245 30,221 3,963 3,649 3,526 4,872 8,235 95,595 81,074 134,632 2,260 32,580 13,418 65,843 35,901 211,397 110,812 241,769 172,313 103,343 178,591 13,132 2,750 2,355 150 7,026 375 92,246,019 111,789,658

2002 41,053 219,771 10,695,202 10,979,736 45,679,468 210,228 1,516 12,826 24,357,792 67,981 4,124

2001 25,925 205,969 9,264,472 9,223,510 37,530,568

2000 50,766 320,924 9,631,376 8,645,182 36,882,692

1999 75,394 567,268 9,200,703 8,701,216 37,860,064

49,565 10,566 16,468,355

26,075 17,875,013

37,544 19,165,096

NYMEX Division FU TU R E Palladium Platinum No. 2 Heating Oil, NY Unleaded Gasoline, NY Crude Oil E-Mini Crude Oil Brent Crude Oil Propane Natural Gas E-Mini Natural Gas Central Appalachian Coal (CAPP) PJM Monthly Henry Hub Swap WTI Crude Oil Calendar Swap NYI SO A NYI SO G NYI SO J PJM Daily PJM Weekly C oa l Columbia Gulf Onshore Basis TETCO ELA Basis ANR - Oklahoma Basis Dominion Trans - Appalachian Basis MichCon Basis WAHA Basis NGPL Louisiana Basis NGPL Mid-Continent NGPL TEX/OK Basis Northern Natural Gas Ventura Basis Northern Natural Gas Demarcation Basis Permian Basis PG&E Citygate Basis PG&E Malin Basis Sumas Basis TCO Basis Texas Eastern Zone M-3 Basis TETCO STX Basis Transco Zone 3 Basis Swap NY Harbor Heating Oil Calendar Swap Gasoline vs. Heating Oil Swap CI G Rockies NY Harbor Resid Fuel 1.0% Sulfur Swap T otal Total**

2,209

1,268 4,848 758

856 1,898 856

1,666 2,072 5,525 4,950 1,340 186 11,564 5,890 3,610 7,702

92,324,686 107,359,719

72,781,325 85,039,984

73,461,273 86,087,640

75,769,318 92,415,006

2003 1,488,573 127,424 3,197 1,619,194

2002 151,878 32,203

2001

2000

1999

1,042,968,664

851,310,387

629,212,715

491,451,073

477,919,308

PERCENT CHANGE 22.51% 35.30% 28.03% * I ncludes the New York Futures Exchange, New York Cotton Exchange and Coffee, Sugar and Cocoa Exchange. ** I ncludes Commodity Exchange, I nc.

2.83%

-5.02%

ONECHICAGO FU TU R E Single Stock Futures Exchange Traded Funds Dow Jones MicroSector I ndex T otal

CONTRACT UNIT

184,081

Total US Futures Volume TOTAL FUTURES

44T

VOLUME U.S.

Options Traded on U.S. Securities Exchanges Volume Highlights 2003 in Comparison w ith 2002 2003 RANK EXCHANGE 1 Chicago Board of Options Exchange 2 I nternational Stock Exchange 3 American Stock Exchange 4 Philadelphia Stock Exchange 5 Pacific Stock Exchange TOTAL

2003 CONTRACTS 283,946,495 244,968,190 180,074,778 112,705,597 86,152,637 907,847,697

% 31.28% 26.98% 19.84% 12.41% 9.49% 100.00%

2002 CONTRACTS 267,616,496 152,399,279 186,039,445 88,955,247 85,426,649 780,437,116

% 34.29% 19.53% 23.84% 11.40% 10.95% 100.00%

2002 RANK 1 3 2 4 5

Options Traded on U.S. Futures Exchanges Volume Highlights 2003 in Comparison w ith 2002 2003 2003 2002 RANK EXCHANGE CONTRACTS % CONTRACTS 1 Chicago Mercantile Exchange (CME) 109,220,627 49.27% 113,909,833 2 Chicago Board of Trade (CBT) 80,521,459 36.32% 67,566,482 3 New York Mercantile Exchange (NYMEX) 25,435,781 11.47% 26,384,716 4 New York Board of Trade (NYBOT) 6,010,110 2.71% 4,656,335 5 Kansas City Board of Trade (KCBT) 465,381 0.21% 570,887 6 Minneapolis Grain Exchange (MGE) 46,711 0.02% 61,226 7 MidAmerica Commodity Exchange (MidAm) 0 0.00% 97 TOTAL 221,700,069 100.00% 213,149,576 ** I ncludes Commodity Exchange, I nc. * I ncludes the New York Futures Exchange, New York Cotton Exchange and Coffee, Sugar and Cocoa Exchange.

% 53.44% 31.70% 12.38% 2.18% 0.27% 0.03% 0.00% 100.00%

2002 RANK 2 1 3 4 5 6 7

Options Volume on U.S. Futures Exchange 1999-2003 Chicago Board of Trade (CBT) Option W h ea t Corn Oats Soybeans Soybean Oil Soybean Meal Rice T-Bonds T-Notes (10-year) T-Notes (5-year) T-Notes (2-year) I nterest Rate Swap (10-year) I nterest Rate Swap (5-year) 30-Day Federal Funds Flexible US T-Bonds Flexible T-Notes (10-year) Flexible T-Notes (5-year) Dow Jones I ndustrial I ndex T otal

Contract Unit 5,000 bu 5,000 bu 5,000 bu 5,000 bu 60,000 lbs 100 tons 200,000 lbs 100,000 USD 100,000 USD 100,000 USD 200,000 USD 100,000 USD 100,000 USD 5,000,000 USD

10 USD x I ndex

2003 1,788,500 4,515,240 36,163 4,885,399 665,532 546,267 34,978 15,180,025 41,165,629 9,697,455 11,874 1,787 100 1,614,319 57,442 56,920 200 263,629 80,521,459

2002 1,773,559 5,397,748 90,780 4,227,445 659,302 404,351 35,272 15,324,548 31,741,521 7,533,556 32,468 8,453

2001 1,714,041 4,864,294 70,218 3,829,236 672,284 606,187 23,233 13,478,771 19,983,876 4,681,604 44,185

2000 1,563,557 5,135,111 52,760 3,890,510 490,666 657,709 32,955 17,267,458 10,629,021 3,733,542 3,824

1999 1,516,037 4,205,325 56,418 4,792,245 801,367 709,194 48,515 34,680,068 9,738,808 2,537,044 1,780

38,456 60,577 4,225 234,219 67,566,482

38,160 45,700 2,200 288,364 50,345,068

18,781 24,670 12,160 200,379 43,866,151

54,454 6,150 2,593 229,560 59,413,936

45T

VOLUME U.S. Chicago Mercantile Exchange (CME) Option Lean Hogs Pork Bellies, Frozen Butter Mini BFP Milk Class I I I Milk Class I V Milk Live Cattle Feeder Cattle Random Lumber Euroyen Eurodollar (3-month) One Month LI BOR British Pound Canadian Dollar Japanese Yen Mexican Peso Swiss Franc Australian Dollar CME $ I ndex Euro FX Nikkei 225 S&P 500 I ndex E-Mini S&P S&P MidCap 400 I ndex NASDAQ 100 I ndex Russell 2000 CDD Weather HDD Weather HDD Seasonal Weather CDD Seasonal Weather Goldman Sachs Commodity I ndex

Contract Unit 40,000 lbs 40,000 lbs 50,000 lbs 100,000 lbs 200,000 lbs 200,000 lbs 40,000 lbs 44,000 lbs 80,000 bd ft 100,000,000 JPY 1,000,000 USD 3,000,000 USD 62,500 100,000 12,500,000 500,000 125,000 100,000 1,000 USD x I ndex 125,000 EUR 5 USD x I ndex 500 USD x I ndex 50 USD x S&P I ndex 500 USD x I ndex 500 USD x I ndex 500 USD x I ndex 100 x CDD 100 x HDD 100 x HDDSW 100 x CDDSW 250 USD x I ndex

T otal

2003 129,227 7,991 800 1,269 79,901 41 664,291 179,347 18,139 53 100,823,779 4,191 156,569 206,862 489,123 5,050 53,766 42,495 1,000 1,187,819 8,564 4,986,456 112,864 780 50,439 4,048 230 501 3,390 150 1,492

2002 156,699 5,595 259 2,107 23,852 543 476,467 121,226 14,665 318 105,580,961 395 121,443 153,329 849,646 5,688 82,285 18,098

1,318

3,343

3,281

2,573

109,220,627

113,909,833

95,740,352

36,007,913

32,723,766

2003 1,328,081 1,690,190 497,188 2,157,441 195,541 29,532 578 3 3 1 10 2 253 776 209 13 60 1 112 3 31 3 25,320 18,912 358 1,578 61,264 734 1,913

2002 1,063,090 1,380,300 743,237 1,171,843 175,794 28,694 69 1 2

2001 799,506 1,305,470 436,295 1,025,578 170,756 15,365 932

2000 909,251 2,027,581 495,221 1,027,002 237,673 14,650 676

1999 1,369,021 2,275,704 364,450 706,589 351,763 11,654 7,137

936 685 16

1,232 1,492 0

2,228 5,200 291

867

0

2,431

1 89,791

78,053

93,912

112,052

1,449

9,905

48,245

69,990

974

891

3,306

8,868

6,010,110

4,656,335

3,857,721

4,922,626

5,519,619

929,518 4,197 5,235,388 46,355 2,573 71,991 4,602 32 281

2001 171,472 6,901 38 2,836

2000 161,931 29,712 385 263

1999 231,273 16,780 752 387

1,448 688,149 186,247 25,752 2,225 88,174,799 2,106 147,205 109,908 839,069 5,331 119,051 30,050

656 622,590 132,086 19,413 9,756 28,590,428 2,236 174,928 75,934 567,896 5,741 125,360 10,337

545,709 130,410 24,745 41,073 24,884,494 1,916 208,921 121,933 1,100,130 8,133 178,433 9,509

655,991 3,339 4,381,924 21,777 4,007 121,895 10,941

371,737 4,270 4,352,249 18,814 2,911 699,264 8,047

167,078 6,007 4,603,946 54,480 3,841 225,981 1,230

New York Board of Trade (NYBOT)** Option Coffee 'C' Sugar #11 Cocoa Cotton #2 Orange Juice Frozen Concentrate US Dollar I ndex Large Euro / US Dollar Australian Dollar / Canadian Dollar Australian Dollar / Japanese Yen Australian Dollar / New Zealand Dollar Australian Dollar / US Dollar Euro / Swedish Krona Euro / British Pound Euro / Japanese Yen British Pound / Japanese Yen New Zealand Dollar / US Dollar US Dollar / Canadian Dollar US Dollar / South African Rand US Dollar / Japanese Yen US Dollar / Norwegian Krone US Dollar / British Pound US Dollar / Swedish Krona NYSE Composite I ndex Revised NYSE Composite I ndex Russell 1000 Growth I ndex Russell 1000 Value I ndex Russell 1000 I ndex Russell 2000 I ndex Reuters-CRB Futures I ndex T o t a l **

46T

Contract Unit 37,500 lbs 112,000 lbs 10 metric tons 50,000 lbs 15,000 lbs 500 USD x I ndex 200,000 AUD 200,000 AUD 200,000 AUD 200,000 AUD 100,000 EUR 100,000 EUR 100,000 EUR 125,000 GBP 200,000 NZD 200,000 USD 100,000 USD 12,500,000 JPY 200,000 USD 125,000 GBP 200,000 USD 500 USD x I ndex 50 USD x I ndex 500 USD x I ndex 500 USD x I ndex 500 USD x I ndex 500 USD x I ndex 500 USD x I ndex

2 14 104 156 3 140 600 70

VOLUME U.S. Kansas City Board of Trade (KCBT) Option W h ea t

Contract Unit 5,000 bu

2003 465,381

2002 570,823

2001 24,311

2000 218,052

1999 143,974

465,381

570,887

24,356

218,062

146,105

2003 39,764 5,773 1,174

2002 61,086

2001 29,112

2000 41,441

1999 53,246

46,711

61,226

29,830

42,658

53,870

2003 4,310,318 560,018 47,326 2,679

2002 1,948,564 530,831 37,315

2001 1,975,019 483,386 50,826

2000 2,083,414 579,085 65,043

1999 2,815,831 725,885 160,857 642

4,920,341

2,516,710

2,509,231

2,727,542

3,703,215

2003 633 668,859 2,430 100 616,245 3,465 25 10,237,121 164,928 300 825 131 8,742,277 13,557 35,797 28,747

2002 456 602,170 747 275 721,932 1,087

2001 1,813 704,972

2000 7,065 1,385,968

1999 11,146 695,558

1,040,030

1,012,460

600,009

11,460,857 92,603 250 2,905

7,726,076

7,460,052

8,161,976

10,966,023 4,636 6,521 6,364

5,974,240

5,335,800

3,749,454

14,992 13,014

16,348 42,363

46,281 46,482

20,515,440 25,435,781

23,868,006 26,384,716

15,475,878 17,985,109

15,260,056 17,987,598

13,320,610 17,023,825

221,700,069

213,149,576

168,211,323

103,065,376

115,000,090

PERCENT CHANGE 4.01% 26.72% 63.21% * I ncludes the New York Futures Exchange, New York Cotton Exchange and Coffee, Sugar and Cocoa Exchange. ** I ncludes Commodity Exchange, I nc.

-10.38%

-9.79%

T otal

Minneapolis Grain Exchange (MGEX) Option American Spring Wheat Hard Winter Wheat I ndex National Corn I ndex

Contract Unit 5,000 bu 5,000 bu 5,000 bu

T otal

140

New York Mercantile Exchange (NYMEX)* COMEX Division Option Gold Silver High Grade Copper Aluminum

Contract Unit 1 0 0 oz 5,000 oz 25,000 lbs 44,000 lbs

T otal

NYMEX Division Option Platinum Heating Oil Heating Oil 1-month CSO Heating Oil 2-month CSO Unleaded Gasoline Unleaded Gasoline 1-month CSO Unleaded Gasoline 2-month CSO Crude Oil Crude Oil 1-month CSO Crude Oil 6-month CSO Crude Oil 12-month CSO Crude Oil APO Natural Gas Natural Gas 1-month CSO Gas-Crude Oil Spread Heating Oil-Crude Oil Spread T otal T otal *

Contract Unit 5 0 oz 42,000 gal

1,000 bbl

1,000 bbl

10,000 MMBTU 1,000 bbl 1,000 bbl

Total US Options Volume TOTAL OPTIONS

47T

Volume Worldwide Australian Stock Exchange (ASX), Australia S&P/ASX I ndex All Futures on I ndividual Equities Total Futures S&P / ASX I ndex All Options on I ndividual Equities Total Options

2003 67,769 267,630 335,399 630,900 15,988,740 16,619,640

2002

2001

2000

1999

2002 446,115 475 152,939 1,295 48,326 75 16,616 624 4,425 65,892 62,896 5,231,780

2001 475,034

2000 390,513

1999 317,722

92,365

149,795

123,442

93,904 15 4,588 83 484 42,971 67,527 5,151,572

52,552 306 8,084 2,257 1,520 95,494 53,963 7,000,335

33,764 5,115 10,432 13,424 25 155,947 5,551,918

46,241,111 964,419 3,645,863 27,953 99,900 1,392

37,626,151 6,656,112 2,216,247 33,753 67,468 33

22,235,992 8,224,534 2,440,318 80,140 17,163 42

586,143 18,571,494 981,454

1,375,846 16,524,996

5,059,141

2,126,164

8,986

602,431

370,747

13,696 16,132,798 182,673 116,199 125 95,912,579 213,130 102,904 34,689 2,720

2,605 18,636,578 10,845

983 20,208,454 0

646 11,420,923 110

170 94,175,252 156,447 58,316 12,818 1,130 1,204

80,073,865 119,512 34,114 8,137 1,041 1,533

52,797,466 283,221 35,634 42,918 4,856

2,539,353 15,910

1,129,060 89,013

661,218 58,100

0 22,461

578,467 947,759 152,174

273,888 1,211,601 139,057

116,976 1,328,215 75,685

257,870 694,483 50,741

1,098,543 5,703,209

570,739 3,696,233

458,631 3,455,810

807,153 3,133,632

2002 1,144,628

2001

2000

1999

Bolsa de Mercadorias & Futuros (BM&F), Braz il Arabica Coffee Robusta Conillon Coffee Live Cattle Feeder Cattle Sugar Crystal Cotton Corn Soybean Futures Gold Forward Gold Spot Anhydrous Fuel Alcohol Bovespa Stock I ndex Futures I NrX-50 Bovespa Mini I ndex I GP-M I nterest Rate I nterest Rate Swap I nterest Rate x Exchange Rate Swap I nterest Rate x Reference Rate Swap I nterest Rate x Price I ndex Swap (formerly I nflation) I nterest Rate x I bovespa I ndex Swap Exchange Rate Swap Price I ndex I D x US Dollar Spread Futures FRA on I D x US Dollar Spread I D x US Dollar Spread Swap I D x US Dollar MI ni Swap with reset I D x I GP-M Spread Futures I D Forward with Reset Global 2040 C-Bond US Dollar Mini US Dollar US Dollar forward points Euro Total Futures Gold on Actuals Gold Exercise US $ Denominated Arabica Coffee US $ Denominated Arabica Coffee Exercise Live Cattle Live Cattle Exercise I nterest Rate I nterest Rate (I DI ) I nterest Rate (I DI ) Exercise I nterest Rate (volatility) I DI I ndex (volatility) Fexible Bovespa Stock I ndex US Dollar on Actuals US Dollar Exercise US Dollar Volatility Flexible Currency Total Options

2003 478,544 405 113,473 9,475 40,257 172 43,902 2,917 483 98,386 49,158 6,630,407 85 1,158,155 780 57,641,625 888,957 3,520,170 5,052 666,988 435 9,778 13,200 731,544 22,823,905 234,958 1,057,259 760 50 160 35,903 16,784,939 625,382 227,097 300 113,895,061 173,142 82,728 37,423 1,143 764 42 182,183 1,772,583 155,263 9,810 1,185 1,216,418 2,148,440 130,187 30,030 949,200 6,890,541

592,342 64,868 48,568,401 474,713 3,185,443 1,628 183,647 224 1

110,943

BOVESPA, Braz il I bovespa I ndex I brX-50 I ndex All Options on I ndividual Equities Total Options

48T

2003 1,600,261 200 175,622,679 177,223,140

89,740,269 90,884,897

VOLUME WORLDWIDE Budapest Commodity Exchange (BCE), Hungary Corn F eed W h ea t Feed Barley W h ea t Black Seed Rapeseed Ammonium Nitrate US Dollar Japanese Yen EUR British Pound Czech Koruna Polish Zloty Swiss Franc EURCHF EURUSD EURJPY EURPLN GBPCHF GBPUSD USDCHF USDJPY USDPLN 3-Month BUBOR Total Futures Corn W h ea t US Dollar EUR EUR/USD Total Options

2003 12,513 711 354 6,883 1,031 24 3 1,153,307 197,763 1,602,075 62,270 3,370 3,565 188,786 111 937 373 433 27 68 86 139 719 1,540 3,237,088 888 242 21,650 414,095 15 436,890

2002 9,450 1,316 118 9,271 392

2001 15,733 2,403 433 14,987 1,101

2000 41,956 726 1,369 21,345 845

1999 48,918 48 2,518 65,823 7,351

2 389,001 179,650 698,888 4,410 8,720 1,330 32,780

17 425,125 226,639 1,840,127 15,426

67 486,860 232,844 1,306,688 42,380

470,550 101,884 596,258 17,103

63,010

38,901

72,500

3,400 1,338,846 305 150 24,250 260,850

7,585 2,612,788 511 164

2,174,480 697 19

1,588,047 1,665 3,464

285,555

11,675

859

5,649

2002 292,128

2001 1,236,405

2000 839,978

1999 1,555,939

74,800 3,761 75,150

41,722 3,084 7,064

22,536

33,527

7,064

120

1,600

1,000

1,000

150

125,689 3,100

116,176

74,790

25,106

879,049 2,286,300

456,510 1,402,378

181,031 1,814,078

2001

2000

1999

11,000

Budapest Stock Exchange (BSE), Hungary Budapest Stock I ndex (BUX) Futures 3-Month BUBOR EUR/HUF JPY/HUF CHF/HUF CZK/HUF EUR/HUF GBP/HUF PLN/HUF USD/HUF GBP/USD GBP/CHF GBP/JPY GBP/SEK EUR/CHF EUR/GBP EUR/NOK EUR/JPY EUR/PLN EUR/SEK EUR/USD USD/CHF USD/JPY USD/NOK USD/SEK CHF/JPY All Futures on I ndividual Equities Total Futures

2003 400,003 150 178,460 67,390 326,090 3,770 514,451 1,000 1,800 36,586 72,350 33,000 4,800 23,300 43,575 25,100 23,900 8,200 24,200 2,039,000 249,750 16,440 146,525 5,000 300 200 694,553 4,939,893

200 452,638 1,072,566

2003 19,287 60,000,808 14,953,398 74,973,493

2002 31,313,335 12,689,935 4,404,134 48,407,404

41,800 1,700

Dalian Commodity Exchange (DCE), China Soybeans No 1 Soybeans Soybean Meal Total Futures

49T

VOLUME WORLDWIDE EUREX, Frankfurt, Germany (formerly DTB and SOFFEX) DAX HEX 25 NEMAX 50 TecDAX DJ Global Titans 50 DJ Euro STOXX 50 DJ Euro STOXX Automobiles DJ Euro STOXX Banks DJ Euro STOXX Basic R esources DJ Euro STOXX C hemicals DJ Euro STOXX Construction DJ Euro STOXX Cyclical Goods and Services DJ Euro STOXX Energy DJ Euro STOXX Financial Services DJ Euro STOXX Food and Beverage DJ Euro STOXX Healthcare DJ Euro STOXX I ndustry Goods and Services DJ Euro STOXX I nsurance DJ Euro STOXX Media DJ Euro STOXX Non-Cyclical Goods and Services DJ Euro STOXX Media DJ Euro STOXX Technology DJ Euro STOXX Telecom DJ Euro STOXX Utilities DJ STOXX 50 DJ STOXX 600 Banks DJ STOXX 600 Healthcare DJ STOXX 600 I nsurance DJ STOXX 600 Technology DJ STOXX 600 Telecom DJ STOXX 600 Utilities Swiss Market I ndex (SMI ) Exchange Traded Funds Swiss Government Bond (C ONF) Euro-BUND Euro-BOBL 3-Month Euribor Euro-BUXL Euro-SCHATZ Total Futures DAX HEX 25 NEMAX 50 TecDAX DJ Global Titans 50 DJ Euro STOXX 50 DJ Euro STOXX Automobile DJ Euro STOXX Banks DJ Euro STOXX C hemicals DJ Euro STOXX Energy DJ Euro STOXX Financial Services DJ Euro STOXX Healthcare DJ Euro STOXX I nsurnce DJ Euro STOXX Technology DJ Euro STOXX Telecom DJ STOXX 50 DJ STOXX 600 Healthcare DJ STOXX 600 Technology DJ STOXX 600 Telecom DJ STOXX 600 Utilities Swiss Market I ndex (SMI ) Euro-BUND Euro-SCHATZ Euro-BOBL All Options on I ndividual SMI C omponent Equities All Options on Nordic Equities All Options on Dutch Equities All Options on Exchange Traded Funds All Options on French Equities All Options on German Equities All Options on I talian Equities All Options on US Equities Total Options

50T

2003 27,181,218 32,589 750,125 181,954 2,017 116,035,326 152,714 483,451 10,185 54 481 40 105,614 995 8,538 3,281 230 323,207 8,339 444 42 281,967 192,907 16,927 970,107 8,595 41,394 170 8,331 20,537 9,651 8,969,235 187,996 284,809 244,414,274 150,087,139 503,951 666 117,370,528 668,650,028 41,521,920 7,128 48,969 13,477 48 61,794,673 50,673 413,834 2 63,427 307 19 269,736 86,830 110,664 55,417 11,270 4 2 1,633 3,983,918 27,316,536 11,723,090 10,498,534 46,302,221 13,265,471 6,862,703 70,350 1,487,428 120,211,761 80,041 30,198 346,282,284

2002 19,996,503 44,524 4,704,283

2001 14,686,359

2000 11,524,330

1999 12,876,982

5,409,482

702,873

965 86,354,731 83,677 560,757

871 37,828,500

14,315,518

5,341,864

355,801

326,136

113,478

77,762 110 9,037

2,399

151,250 698

303,315 279,535 1,304 690,719 25,376 100,674

452,830 11,259 11,968

13,306 20,403

5,152 6,900

7,019,626 56,126 275,392 191,263,413 114,678,996 527,815

5,099,537

4,586,219

6,515,036

416,883 178,011,304 99,578,068 663,980

479,350 151,326,295 62,502,582 1,224,877

577,030 121,311,878 45,481,843 3,031,138

108,760,955 536,013,920 44,027,830 14 634,195

92,637,630 435,141,707 44,102,502

42,822,290 289,952,183 31,941,562

17,748,784 244,754,731 32,613,783

1,726,251

473,297

40 39,477,430 35,303 898,989

104 19,046,893

8,197,999

3,791,738

61,530

80,254

3,179,143 22,054,064 10,075,031 6,188,962 35,239,133 16,165,675 835,418

3,474,369 26,291,123 1,954,183 2,436,491 35,648,521 4,536,186

3,669,386 24,940,113 450,836 1,787,840 28,570,528 111,332

276,825

9,905

38,196 239,052,063

164,119,313

64,012 146 2,456 114,021 382,141 314,976 39,594 45,040

4,230,082 18,125,981 8,954,263 4,529,387 34,496,338 20,601,113 2,708,256 6,069 246,562 85,111,674 16,675 123,966 265,186,953

82,321 47,967

20,434

96 19,031 9,677 44,400

134,392,178

VOLUME WORLDWIDE EURONEXT, Amsterdam (Formerly EOE, AFM and AEX, Netherlands) Live Hogs (AVC) Potatoes (APC) AEX Stock I ndex (FTI ) Light AEX Stock I ndex (FTI L) FTSE Eurotop 100 I ndex (FETI ) Euro/US Dollar (FED) US Dollar/Euro (FDE) All Futures on I ndividual Equities Total Futures Euro / US Dollar (EDX) US Dollar / Euro EOE Stock I ndex Light AEX Stock I ndex (AEXL) FTSE Eurotop 100 I ndex (ETI ) All Options on I ndividual Equities Total Options

2003 1,257 40,265 5,215,465 6,639 313 1,405 1,088 32,429 5,298,861 74,279 64,045 14,120,099 131,209 1,560 59,754,703 74,145,895

2002 4,959 39,285 4,231,053 12,401 1,073 568 1,077 37,042 4,328,952 21,692 40,677 9,133,875 86,403 5,919 64,076,106 73,368,051

2001 32,437 61,184 3,317,913 8,211 253 2,346 2,234 8,387 3,437,501 29,760 39,790 6,569,129 50,241 5,210 56,348,323 63,065,039

2000 32,020 63,184 2,674,824 20,700 2,112 989 3,656 773 2,801,241 30,835 63,560 4,953,037 37,782 9,940 50,345,697 55,488,681

1999 43,051 67,663 2,925,385 12,445 292 167 1,241 3,053,182 17,398 87,249 5,527,137 38,872 11,017 40,653,520 46,500,810

2003 42,323,094 5,009,460 58,341 137,692,190 10,150,267 2,543 580,516 1,022,358 1,031,016 1,120 17,660 28,595 44,613 20,252,114 109,846 344,100 210,171 107,207 563,944 5,422 1,058 2,328,609 2,320,831 91,387 1,062,494 6,349,198 231,708,154 14,162,149 967,384 65,925 57,733,239 4,907,879 15,904 2,452 7,888 14,619,893 55,215 1,841 1,166 1,066,997 188,822 143,148 3,262 66,561 10,108,068 104,117,793

2002 34,307,727 4,976,206

2001 34,945,053 4,694,391

2000 22,606,948 4,621,559

1999 27,272,559 5,956,797

105,756,584 7,789,011 228,125 977,127 1,437,955 1,613,672 8,191 13,399 50,102 37,723 17,238,726 129,414

91,083,198 6,710,557

58,016,852 5,350,705

35,657,690 8,421,533

72,182 12,698,908 130,824

379,541 10,142,828 153,792

465,727 8,704,574 139,552

114,576 552,460 804 2,708 1,802,142 1,905,319 80,784 1,044,806 3,935,121 184,026,644 7,364,057 346,001 81,467 33,481,758 1,419,271 8,816 5,992 2,730 13,263,116 110,800

124,202 373,259 559 5,614 1,514,384 1,547,838 95,676 898,261 2,325,744 161,522,775 7,692,455 427,975 82,145 21,643,698 963,417 450 1,730 2,429 11,848,155 320,461

77,140 166,135 8,706 3,567 1,636,322 1,470,980 87,387 907,399

41,746 22,172 47,663 6,526 1,862,119 1,565,708 100,127 990,595

105,712,717 4,167,648 127,080 68,922 7,900,121 432,445

97,689,714 6,451,680 112,735 89,777 4,819,366 3,200

6,285,819 531,389

4,858,373 843,100

595,486 194,682 139,394 8,092 43,900 12,889,422 69,954,984

229,152 94,505 80,197 12,693 70,526 10,725,183 54,225,252

71,898 7,119 119,200 15,610 121,671 5,484,873 25,342,092

58,878 22,758 186,155 41,436 105,932 3,601,383 22,350,317

EURONEXT, United Kingdom (LCE merged w ith LIFFE in 1996) 3-Month Short Sterling 3-Month Euroswiss 1-Month Eonia 3-Month Euribor Long Gilt Schatz 2-Year Swapnote EUR 5-Year Swapnote EUR 10-Year Swapnote EUR 2-Year Swapnote USD 5-Year Swapnote USD 10-Year Swapnote USD Japanese Government Bond FTSE 100 I ndex FTSE Eurotop 100 I ndex FTSE Eurotop 300 I ndex FTSEurofirst 80 I ndex MSCI Euro I ndex MSCI Pan-Euro I ndex FTSE Mid 250 I ndex Barley Cocoa #7 Robusta Coffee W h ea t White Sugar All Futures on I ndividual Equities Total Futures 3-Month Short Sterling 3-Month Sterling Mid-curve 3-Month Euroswiss 3-Month Euribor 3-Month Euribor Mid Curve 2-Year Swapnote 5-Year Swapnote 10-Year Swapnote FTSE 100 I ndex (ESX) FTSE 100 I ndex (SEI ) FTSEurofirst 80 I ndex FTSEurofirst 100 I ndex FTSE 100 I ndex FLEX Cocoa US Dollar Coffee W h ea t White Sugar All Options on I ndividual Equities Total Options

686,450 1,502,104 1,967,221

51T

VOLUME WORLDWIDE EURONEXT, Brussels (Formerly BELFOX) Bel 20 I ndex Total Futures Bel 20 I ndex All Options on I ndividual Equities Total Options

2003 328,673 328,673 320,540 319,850 640,390

2002 507,229 2,653,399 747,161 450,734 1,197,895

2001 543,501 3,438,621 727,853 404,559 1,132,412

2000 780,301 30,299,351 911,275 589,218 1,503,453

1999 823,244 5,711,482 1,151,862 530,389 1,700,728

2003 214,415 560,224 774,639 74,664 74,664

2002 346,134 2,928,883 3,275,017 5,228 6,755

2001

2000

1999

2003 51 114,758 90,973 174,538 29,319,624 11,866 6 29,711,816 7,003 7,643 73,668,131 174,487,319 248,170,096

2002 5,910 107,602 98,654 165,462 26,411,321 187,623 1,896 26,991,450 9,834 1,679 84,342,670 246,165,884 330,520,413

2001 2,965 57,159 57,664 135,655 22,923,597 887,447 2,330 42,042,673 7,554

2000 195,169 33,038 27,677 115,840 18,249,903 999,596 23,603 62,968,563 5,313

1999 2,968,774 43,193 7,158 137,244 20,973,911 437,447 103,160 35,630,883 3,332

107,251,388 178,330,328 285,592,240

84,036,775 89,434,383 173,531,463

75,652,724 68,095,743 152,453,289

2003 1,648,009 79 1,648,088 320,255 320,255

2002 2,157,347 282 2,157,629 486,581 486,729

2001 988,503 41 988,544 152,052 155,092

2000 853,872

1999 820,574

874,862 324,526 332,154

1,101,616 1,263,363 1,533,496

2001 434,163 434,163 7,722 94,911 102,633

2000 459,007 459,007 5,529 26,041 31,570

1999 995,934 1,029,369 10,277 3,838 16,503

1998 1,093,917 1,135,288 18,128 2,656 27,920

2002 21,493,486 8,156,358 450 4,155 90 180 578,925 30,233,664 146,809 61,001 207,810

2001 18,396,069 7,230,408 1,005 3,900 2,570 1,540 462,665 26,098,207 252,217 60,240 312,457

2000 17,297,974 7,115,435 50 1,465 2,555 5,440 515,305 24,938,224 452,284 100,631 552,915

1999 15,982,355 6,150,912

EURONEXT, Lisbon PSI -20 I ndex All Futures on I ndividual Equities Total Futures All Options on I ndividual Equities Total Options

EURONEXT, Paris (Formerly MATIF and MONEP, France) 3-Month Euribor W h ea t # 2 Corn Rapeseed CAC 40 Stock I ndex 10 Euro DJ Euro STOXX(SM) 50 DJ STOXX 50 Total Futures Rapeseed W h ea t CAC 40 I ndex (Long Term) All Options on I ndividual Equities* Total Options

Helsinki Exchanges (HEX), Finland (formerly the Finnish Options Market Exchange) STOX Stock Future HEXTech I ndex Total Futures All Options on I ndividual Equities (STOX) Total Options

Copenhagen Stock Exchange / The FUTOP Market, Denmark KFX Stock I ndex Total Futures KFX Stock I ndex All Options on I ndividual Equities Total Options

2002 610,908 610,908 8,440 142,702 151,142

International Petroleum Exchange (IPE), United Kingdom Crude Oil Gasoil Natural Gas - Seasons Natural Gas - Quarters Natural Gas BOM Natural Gas Daily (NBP) Natural Gas Monthly (NBP) Total Futures Crude Oil Gasoil Total Options

52T

2003 24,012,969 8,429,981 600 1,590 1,455 74,180 737,610 33,258,385 49,520 33,339 82,859

4,270 12,000 290,750 22,442,222 495,798 104,813 600,611

VOLUME WORLDWIDE Italian Derivatives Market of the Italian Stock Exchange, Italy MI B 30 I ndex Mini FI B 30 I ndex MI DEX All Futures on I ndividual Equities Total Futures MI B 30 I ndex All Options on I ndividual Equities Total Options

2003 4,263,886 2,570,238 358 468,083 7,302,565 2,505,351 7,924,078 10,429,429

2002 4,877,464 2,132,937 774 59,853 7,071,028 2,588,402 7,587,199 10,175,601

2001 4,634,329 1,400,135 743

2000 4,260,085 358,439 2,044

1999 5,094,312

6,035,207 2,716,271 8,329,533 11,045,804

4,620,568 2,843,986 5,875,138 8,719,124

5,099,456 2,236,241 1,947,931 4,184,172

2003 10,290,042 171,538 207,209 652,712 56,998 15,606,123 26,984,622 1,229 3 1,232

2002 12,777,991

2001 9,323,430

2000 1,538,507

1999 295,833

466,479 608 1,676,979 11,468,906

62,936 1,355,730 2,959,974

40,509 259,249 945,403

85 85

16,705

61,398

2003 62,204,783 62,204,783 2,837,724,953 8,159 2,837,733,112

2002 42,868,164 42,868,164 1,889,823,786 57,918 1,889,881,704

2001 31,502,184 31,502,184 823,289,608

2000 19,666,518 19,666,518 193,829,070

1999 17,200,349 17,200,349 79,936,658

823,289,608

193,829,070

79,936,658

2003 26,953,102 703,356 833,022 19,437,740 4,504,246 4,220,434 10,470,171 1,448,083 68,570,154 1,618,895 541 50 1,239,523 95,967 144,489 386,652 8,070 137,598 90,381 1,551 4,950 768 8,738 3,738,173

2002 22,330,491 895,726 173,127 16,579,090 3,411,156 3,187,275 8,100,114 1,625,470 56,303,779 877,429 379 22 888,068 50,413 67,781 300,347 14,671 74,943 32,939 1,697 6,642

2001 23,767,595 819,206

2000 25,443,980 643,659

1999 22,211,729 740,955

17,797,929 3,096,929 3,194,758 6,113,484 1,432,814 56,224,495 1,547,829 5,787

17,565,260 3,222,766 5,126,919 7,549,121 1,846,413 61,413,076 2,437,147 3,101

16,789,674 3,310,109 5,396,342 7,341,620 1,770,807 57,563,009 1,502,276 1,037

1,053,373 86,098 133,039 188,147 27,150 80,244 39,472 1,512 10,937

1,172,551 76,256 415,373 555,127 71,845 251,846 46,498 329

1,156,929 114,498 250,823 520,942 147,615 299,167 41,261

14,884 2,330,225

14,807 3,188,755

1,948 5,032,171

4,034,548

2003 1,434,713 126,289 781 116,221 11 331,445 2,009,460

2002 911,015 61,369

2001 479,799 54,914

2000 308,622 44,812

1999 388,105 28,670

287,528 822,241

366,942 720,376

436,678 853,453

5,144

Korea Futures Exchange (KFE), Korea Korea Treasury Bonds 5-Year Treasury Bond Monetary Stabilization Bond KOSDAQ 50 I ndex Gold US Dollar Total Futures Korea Treasury Bond KOSDAQ 50 I ndex Total Options

1,688 380,491 1,434,591 14,596,861 24,790 44 26,434

Korea Stock Exchange (KSE), Korea KOPSI 200 Total Futures KOPSI 200 I ndex All Options on I ndividual Equities Total Options

London Metal Exchange (LME), United Kingdom High Grade Primary Aluminum Aluminum Alloy North American Special Aluminum Alloy Copper - Grade A Standard Lead Primary Nickel Special High Grade Zinc Tin Total Futures High Grade Primary Aluminum Aluminum Alloy North American Special Aluminum Alloy Copper - Grade A Standard Lead Primary Nickel Special High Grade Zinc Tin Primary Aluminum TAPOS Copper Grade A TAPOS Lead TAPOS Nickel TAPOS NASAA TAPOS Special High Grade Zinc TAPOS Total Options

Malaysia Derivatives Exchange, Malaysia (formerly the KLCE and KLOFFE) Crude Palm Oil 3-Month KLI BOR 3-Year Malaysian Gov't Securities (FMG3) 5-Year Malaysian Gov't Securities (FMG5) 10-Year Malaysian Gov't Securities (FMG10) KLSE Composite I ndex (FKLI ) Total Futures

72,959 231,444 1,276,787

53T

VOLUME WORLDWIDE MEFF Renta Fija (RF), Spain 10-Year Notional Bond Total Futures

2003 1,382 1,382

2002 46,771 46,771

2001 290,608 290,608

2000 1,094,548 1,094,922

1999 3,614,750 3,639,648

2003 3,545,942 1,070,853 12,492,568 17,109,363 2,981,593 11,378,992 14,360,585

2002 3,896,643 724,424 12,645,186 17,267,294 2,693,086 18,701,248 24,068,192

2001 4,305,035 22,423 8,766,165 13,108,293 557,306 22,628,132 23,628,446

2000 4,183,028

1999 5,101,588

4,183,028 766,078 16,580,519 17,346,597

5,101,588 861,255 8,091,728 8,952,983

2002 1,913 14 11,811 555 385,139

2001 11,632 222 145,655 1,107

2000

1999

399,432 2 4,636 443 3,957 9,038

159,935 7,596 55,304 998

2002 81,395 220,731 11,398,544 162,077,312 4,683 38,279 173,820,944

2002 52,108 49,243 3,568,951 80,595,463 9,214

2001

2000

1999

2003 6,578,451 6,055 3,754 2,397,119 1,681,994 1,454 110 6,890 452 10,676,279 341,245 744 38,221 130,508 18,199 101,914 9,721 10,917 6,355,251 7,006,720

2002 4,789,319 6,817

2001 4,234,236

2000 4,992,957

1999 6,047,542

1,803,420 1,450,860 739 187 7,071 85 8,058,498 57,950 3,774 47,749 237,325

1,835,229 1,174,328

1,501,264 1,272,244

1,598,463 262,058

7,260,999 89,339 20,369 35,585 127,731

7,766,687 249,976 8,877 88,923 120,556

7,931,831 168,903 9,190 40,650

6,086,675 6,433,473

5,099,894 5,372,930

4,753,495 5,221,827

1,439,476 1,660,886

2003 10,781 10,557,024 25,573,756 36,141,561 1,332,417 5,607,990 6,940,407

2002

2001

2000

1999

1,641,779 8,557,332 10,199,111 314,478 2,773,524 3,088,002

750,956 435,701 1,186,657 7,596 55,304 62,900

3,156,181

2,439,089

MEFF Renta Variable (RV), Spain I BEX 35 Plus I ndex Mini I BEX 35 I ndex All Futures on I ndividual Equities Total Futures I BEX 35 Plus I ndex All Options on I ndividual Equities Total Options

Mercado a Termino de Rosario (ROFEX), Argentina W h ea t Corn Rosafe Soybean I ndex (I SR) Rosafe Corn I ndex (I MR) US Dollar (DLR) Euro (EC) Total Futures W h ea t Rosafe Soybean I ndex (I SR) Rosafe Corn I ndex (I MR) US Dollar (DLR) Total Options

2003 859 4 11,912 615 2,694,348 575 2,708,313 128 1,134 50 132,871 134,183

63,898

Mexican Derivatives Exchange (MEXDER), Mexico US Dollar I PC Stock I ndex C E T E 91 T I I E 28 M3 Bond M10 Bond Total Futures

84,274,979

Montreal Exchange (ME), Canada 3 Month Bankers Acceptance (BAX) 30-Day Overnight Repo Rate (ONX) Canadian Government Bonds (OBA) 10 Year Canadian Gov't Bond (CGB) S&P Canada 60 I ndex (SXF) Gold I ndex (SXA) Banking I ndex (SXB) I nformation Technology I ndex (SXH) Energy I ndex (SXY) Total Futures 3-Month Bankers Acceptance (OBX) 10-Year Canadian Gov't Bond (OBK,OBV,OBZ) S&P Canada 60 I ndex (SXF) i60 I ndex (XI U) Barclays iUnits S&P/TSX Capped Gold I ndex Fund Barclays iUnits S&P/TSX Capped Financials I ndex Barclays iUnits S&P/TSX Capped I T I ndex Fund Barclays iUnits S&P/TSX Capped Energy I ndex Fund All Options on I ndividual Equities Total Options

National Stock Exchange of India I nterest Rate S&P CNX Nifty I ndex All Futures on I ndividual Equities Total Futures S&P CNX Nifty I ndex All Options on I ndividual Equities Total Options

54T

VOLUME WORLDWIDE New Zealand Futures Exchange (NZFOE), New Zealand 3-Year Government Stock 10-Year Government Stock 90-Day Bank Bill NZSE-10 Captial Share Price I ndex Total Futures 90-Day Bank Bill Total Options

2003 1,101 735 484,263 21 486,120 7,130 7,130

2002 5,279 2,000 607,453 99 614,831 8,909 12,187

2001 62,521 32,319 915,225 637 1,010,852 18,320 34,932

2000 3,867 8,024 781,074 1,087 794,502 22,906 88,296

1999 2,356 2,853 816,931 1,842 825,546 11,600 36,221

2003 6,674,408 14,567,900 1,424,890 22,667,198 6,371,381 43,098,768 49,470,149

2002 5,586,173 13,331,795 1,290,181 20,208,149 4,916,726 35,795,942 40,712,668

2001 7,033,675 14,906,505 1,468,018 23,408,198 4,587,544 34,729,075 39,327,619

2000 5,371,720 11,477,162 2,144,767 18,993,709 4,167,448 30,691,587 34,874,575

1999 8,002,707 11,931,352 1,129,453 21,063,746 5,733,106 26,824,117 32,558,877

2003 436,943 764,376 1,201,319 543,090 2,079,405 2,622,495

2002 191,374 689,904 881,278 700,313 1,594,138 2,294,451

2001 302,497 521,314 837,341 662,394 2,346,339 3,008,733

2000 260,521 750,264 1,024,266 1,025,027 2,062,350 3,087,377

1999 170,950 675,240 875,530 978,014 2,580,178 3,558,192

2003 11,166,288 2,155,498 26,757,964 40,079,750

2002 5,796,300 2,355,796 4,020,987 12,173,083

2001 4,088,943 1,448,192 73,200 5,610,335

2000 2,674,016 455,206 1,000,299 4,129,521

1999 2,559,687 256,485 318,096 3,134,268

2003 18,802,104 58,353 7,098,920 6,601 1,046,326 5,455,812 2,590 2,015,211 110,529 14,598 92 745,091 549 35,356,776 13 2,074 40,274 249,087 291,448

2002 19,504,044 128,034 4,857,565 7,329 711,687 4,628,247 1,282 1,812,175 255,256 68,327 360 630,761 13,690 32,623,190 14,855 247 47,897 201,206 264,205

2001 17,684,054 111,210 4,573,348 20,023 488,489 3,902,738

2000 10,083,633 61,300 4,484,978 47,106 479,486 3,390,153

1999 8,999,879 18,725 5,429,843

2,711,826 452,559 79,246

7,149,469 326,849

6,777,548 374,198

545,189 6,575 30,606,546 47,127 228 42,899 291,052 383,316

718,353

168,829

26,804,964 57,095 299 1,107 708,498 766,999

24,480,004 234,630 1,962 8,828 1,137,716 1,383,136

2003 6,514,691 1,316,712 990,752 1,126,895 4,068 9,953,118 21,720,083 201,733 21,921,816

2002 4,132,040 1,044,058 834,920 366,790

2001 2,844,707 413,343 635,661 452,541

2000 1,339,908

1999 971,578

409,706 177,175

87,156 18,938

6,377,808 15,664,464

4,346,252 5,137

1,926,789

1,077,672

15,664,464

5,137

OM Stockholm (OMS), Sw eden I nterest Rate OMX I ndex All Futures on I ndividual Equities Total Futures OMX I ndex All Options on I ndividual Equities Total Options

Oslo Stock Exchange (OSE), Norw ay Forwards OBX Total Futures OBX All Options on I ndividual Equities Total Options

Shanghai Metal Exchange, China Copper Aluminum R u b b er Total Futures

Singapore Exchange (SGX), Singapore Eurodollar Singapore Dollar I nterest Rate Nikkei 225 I ndex Straits Times I ndex MSCI Singapore I ndex MSCI Taiwan I ndex Middle East Crude Oil Euroyen TI BOR Euroyen LI BOR 5-Year Singapore Gov't Bond 10-Year Japanese Gov't Bond Mini Japanese Gov't Bond All Futures on I ndividual Equities Total Futures Euroyen TI BOR Japanese Government Bond MSCI Taiwan I ndex Nikkei 225 I ndex Total Options

291,527 2,362,385

Taiw an Futures Exchange, Taiw an TAI EX Mini TAI EX Taiwan Stock Exchange Electronic Sector I ndex Taiwan Stock Exchange Bank & I nsurance Sector I ndex Taiwan 50 I ndex Total Futures TAI EX All Options on I ndividual Equities Total Options

55T

VOLUME WORLDWIDE South African Futures Exchange (SAFEX), Africa White Maize (WMAZ) Yellow Maize (YMAZ) WEAT SUNS SOYA All Share I ndex I ndustrial I ndex Gold Mining I ndex (GLDX) Financial I ndex (FI NI ) Government Bond I ndex (GOVI ) JB A R RESI Kruger Rand (KGRD) R 150 R 153 R 157 R 194 All Futures on I ndividual Equities Total Futures White Maize (WMAZ) Yellow Maize (YMAZ) WEAT SUNS SOYA All Share I ndex I ndustrial I ndex Financial I ndex (FI NI ) R 150 R 153 R 157 R 194 All Options on I ndividual Equities Total Options

2003 1,160,919 249,691 186,942 61,055 536 8,521,365 79,270 1,072 41,198 344 2 12,053 36,323 1,794 5,844 1,340 1,856 4,585,919 14,947,523 535,408 82,062 22,306 7,224 80 10,501,861 4,108 2,132 590 16,785 2,430 1,980 6,877,254 18,054,220

2002 918,764 290,921 86,057 60,271 464 6,975,380 480,497 6,505 146,945 668

2001 563,510 77,933 23,992 25,249

2000 245,396 57,666 9,279 5,751

1999

8,044,557 2,304,176

5,817,231 3,303,760

10,585

25,788

6,037,573 2,838,168 1,260 80,497

35,249

2,933

460

14,120

1,640 4,065 846

2,055 1,788

1,600 1,063

1,723 1,026

2,224,684 11,233,002 443,624 120,599 41,192 7,207 170 10,916,338 44,100 32,180 1,500 19,119 3,567 1,800 8,102,185 19,733,581

811,156 11,868,242 269,887 27,785 8,694 5,775

29,991 9,505,060 116,714 12,117 3,429 1,904

82,901 9,064,389

17,926,295 337,289 15,804 780 9,449

12,137,585 898,320 12,894 0 3,099

8,511,293 973,633 123,585 955 2,720

5,705,719 24,307,477

1,992,579 15,178,641

82,576 9,701,962

2002 3,761,904 29,076

2001 3,881,745 40,654

2000 3,824,860

1999 3,819,800

8,486,560 16,459,043 300 5,200,290 1,300 160 100 80

9,108,108 15,718,248

7,700,381 12,359,076

7,184,423 10,787,444

5,296,233

4,981,880

5,345,640

2,385 944 8,621

3,063 417 11,126

4,106 699 16,108

12,545 34,075,508 516,432 267,808 301,782 618,011

8,817 28,901,368 1,098,919 326,638 319,383 477,192

8,658 27,183,166 1,237,294 453,048 289,196 217,959

36,341

104,948

242,732

29,671

47,373

169,347

20 1,770,371

3 2,375,579

30 2,610,167

Sydney Futures Exchange (SFE), Australia SPI 200 & SPI Australian Dollar 30-Day I nterbank Cash Rate 90-Day Bank Bills 3-Year Treasury Bonds 3-Year I nterest Rate Swaps 10-Year Treasury Bonds 10-Year I nterest Rate Swaps d-cypha NSW Base Load Electricity d-cypha VI C Base Load Electricity d-cypha QLD Base Load Electricity d-cypha SA Base Load Electricity d-cypha NSW Peak Period Electricity d-cypha VI C Peak Period Electricity d-cypha QLD Peak Period Electricity d-cypha SA Peak Period Electricity Fine Wool Broad Wool Greasy Wool MLA/SFE Cattle All Futures on I ndividual Equities Total Futures SPI 200 & SPI 90-Day Bank Bills 3-Year Treasury Bond Overnight 3-Year Treasury Bond 3-Year Bonds I ntra-Day 10-Year Treasury Bonds 10-Year Bonds I ntra-Day Overnight 10-Year Treasury Bond d-cypha SA Peak Period Electricity d-cypha VI C Peak Period Electricity Greasy Wool Total Options

56T

2003 4,288,848 25,566 53,141 11,435,471 19,246,934 401 6,705,904 200 2,730 2,766 1,335 1,420 1,927 1,762 660 235 2,467 2,003 9,095 1,175 47,822 41,831,862 585,620 250,876 220,382 1,151,097 583,719 38,972 6,307 86,313 10 5 177 2,923,478

310 160 230 45 1,755 2,756 14,180 175 29,286 33,987,967 414,598 227,208 237,509 1,048,753 277,905 24,037 1,880 22,629

1,038 2,255,557

VOLUME WORLDWIDE Tel-Aviv Stock Exchange (TASE), Israel TA-25 I ndex Shekel-Dollar Rate Total Futures TA-25 I ndex TA-Banks I ndex Shekel-Dollar Rate Shekel-Euro Rate Total Options

2003 10,210 85 10,295 29,352,985 610 8,343,368 391,221 38,088,184

2002 32,214 67 32,281 29,425,456 3,453 11,542,803 415,712 41,387,424

2001 53,198

2000

1999

53,198 26,871,775 35,940 6,049,954 23,940 32,981,609

2002 99,397 68,542 167,939 68,903 1,090,225 1,159,145

2001 271,741 164,278 436,019 123,757 1,239,969 1,365,633

2000 431,048 227,829 658,877 205,286 0 218,099

1999 598,981 203,421 802,582 395,323 802,924 1,230,375

2002 89,136 25,586 1,828,122 212,019 2,155,796 101 97 1,819 35,470 37,487

2001 166,932 72,476 2,424,973 237,574 2,903,826 243 2,300 5,728 125,236 133,507

2000 164,981 101,216 1,858,773 266,077 2,391,565 210 6,437 6,656 63,641 76,944

1999 106,378 78,433 1,685,756 211,377 2,086,909 115 3,295 1,648 61,476 66,534

2003 6,800,360 1,248,295 47,941 190 9,091 310 47,799 2,012 18,654 8,174,652 2,118,792 32,131 4,220,638 6,371,561

2002 4,802,422 1,107,964

2001 4,400,071 769,886

2000 4,023,138 120,165

1999 5,132,332

1,869 6,773 970 280,257 3,673 21,056 6,228,037 1,070,431 6,176 3,724,760 4,801,367

3,141

2003 40,675 28,938 499,526 1,421 1,881,771 44,376 242,676 2,739,383

2002 42,650 30,108 824,629 1,432 1,331,933 754,626 185,608 3,170,986

Wiener Borse - Derivatives Market of Vienna, Austria (formerly the AFOE) ATX I ndex CeCe (5 Eastern European I ndices) Total Futures ATX I ndex All Options on I ndividual Equities Total Options

2003 49,441 63,439 112,880 27,608 1,252,041 1,279,649

Winnipeg Commodity Exchange (WCE), Canada W h ea t Flaxseed Canola (Rapeseed) Western Barley Total Futures W h ea t Flaxseed Western Barley Canola Total Options

2003 59,194 4,438 1,547,283 200,701 1,811,616 4 10 2,778 28,368 31,160

Hong Kong Futures Exchange (HKFE), Hong Kong Hang Seng I ndex Mini Hang Seng I ndex H-Shares I ndex MSCI China Free I ndex Dow Jones I ndustrial Average 1-Month HI BOR 3-Month HI BOR 3-Year Exchange Fund Note All Futures on I ndividual Equities Total Futures Hang Seng I ndex Mini Hang Seng I ndex All Options on I ndividual Equities Total Options

14,315 629,491 1,175 7,756 5,830,672 716,114

12,075 325,155

9,726 308,646

3,322 4,521,926 544,047

5,696 5,563,358 714,309

4,002,655 4,718,880

4,188,702 4,738,644

2,197,972 2,966,014

2001 54,845 122,429 1,478,070 1,437 2,016,968 2,693,858

2000 37,689 307,676 1,284,179 1,443 2,357,240 2,443,593

1999 92,622 498,795 1,421 2,897,402 1,203,656

6,367,607

6,431,820

4,693,896

2002 4,470,763

2001 7,624,711 2,904

2000 17,077,791 8,255

1999 14,572,255 57,479

4,470,763

7,628,909

17,089,946

14,658,415

Fukuoka Futures Exchange (FFE), Japan (Formerly KCE) R ed B ea n s I mported Soybeans Non-GMO Soybeans Refined Sugar Corn Broiler Soybean Meal Total Futures

Tokyo International Financial Futures Exchange (TIFFE), Japan 3-Month Euroyen TI BOR 3-Month Euroyen LI BOR 5-Year Yen Swapnote 10-Year Yen Swapnote Total Futures

2003 4,155,800 3,000 205,092 408,025 4,771,917

57T

VOLUME WORLDWIDE Kansai Agricultural Commodities Exchange (KANEX), Japan (Formerly OGE, OSE and KGE) R ed B ea n s I mported Soybeans Non-GMO Soybeans Refined Sugar Raw Sugar Raw Silk (formerly at Kobe Raw Silk Exchange) Frozen Shrimp Corn 75 I ndex Coffee I ndex Total Futures Raw Sugar Total Options

2003 12,080 41,126 622,337 2,842 18,956 8,009 1,144,264 317,561 1,274,190 3,441,365 2,931 2,931

2002 45,786 161,244 767,206 2,864 42,736 69,609 1,937,842 499,912 961,715 4,488,914 3,040 3,040

2001 30,069 465,057 971,980 2,874 94,961 269,199

2000 47,563 872,373 856,623 2,886 231,550 188,091

1999 177,039 1,245,358

263,520 371,272 2,901,551 6,097 6,097

2,447,652 12,388 12,388

2,442,440 30,363 30,363

2003 30,100 409 418,476 399,167 16,705,638 13,984,740 31,538,530

2002 71,057 20,273 18,419 338,291 15,212,512 14,338,356 30,011,863

2001 29,614 60,759 22,471 596,415 14,392,478 12,346,595 27,846,712

2000 45,297 372,475 65,642 590,274 11,048,071 8,714,440 21,328,867

1999 147,511 348,567

1,327,024

2003 13,058,425 172,862 13,231,287 14,958,100 234 45,412 15,003,746

2002 10,841,300 293,438 11,134,754 9,428,235 568 21,415 9,450,218

2001 9,516,875 961,566 10,478,441 6,953,222 609 38,077 6,991,908

2000 7,426,478 1,281,029 8,707,853 5,715,856 674 103,556 5,820,086

1999 9,067,883 1,470,954 10,540,224 5,753,760 652 683,778 6,438,191

2003 11,681 7,687 1,550,423 1,985,225 1,423,491 963,464 220,618 6,162,589

2002 34,055 45,650 1,300,492 587,641 1,885,262 1,285,419 69,133 5,207,652

2001 113,074 90,591 710,872 66,268 967,915 1,438,450

2000 183,568 83,508 1,404,451 213,758 1,561,707 1,695,737

1999 189,240 34,378 1,546,297

3,387,170

5,142,913

5,352,572

2003 26,637,897 1,160,565 14,211,824 275,322 329,565 25,677,079 13,208,350 1,809,711 372,977 3,568,929 87,252,219

2002 20,506,652 930,886 14,436,155 87,883 513,892 20,866,237 10,482,433 2,037,215

2001 9,791,711 660,864 16,244,583 117,098 735,366 16,441,056 8,301,559 911,597

2000 7,841,692 558,770 13,577,201 1,007,307 543,015 14,370,266 6,741,173

1999 16,011,962 966,838 13,277,043 5,832,649 710,782 3,973,668 1,441,163

5,551,837 75,413,190

3,334,411 56,538,245

6,195,440 50,851,882

6,193,292 48,442,161

2003 6,465,073 9,359,047 724 140,331 15,965,175 98,137 972,518 1,070,655

2002 6,356,612 7,131,178 466 141,751 13,630,046 93,249 1,036,395 1,129,644

2001 7,377,641 5,071,946 350 13,298 12,465,433 7,623 1,062,235 1,069,858

2000 9,909,127 4,148,776 2,610 50,545 14,254,348 2,630 1,271,887 1,274,517

1999 9,727,855 3,157,441 182 25,719 13,023,411 2,030 1,137,319 1,139,349

2,842 462,427 178,114

Central Japan Commodity Exchange (CJCE), Japan (formerly NGSE, NTE, and TDCE) R ed B ea n s I mported Soybeans Non-GMO Soybeans Hen Egg Gasoline Kerosene Total Futures

390,475

Osaka Securities Exchange(OSE), Japan Nikkei 225 I ndex Nikkei 300 I ndex Total Futures Nikkei 225 I ndex Nikkei 300 I ndex All Options on I ndividual Equities Total Options

Osaka Mercantile Exchange (OME), Japan (formerly KRE and OTE) Cotton Yarn (20S) Cotton Yarn (40S) Rubber (RSS3) Rubber (TSR20) Rubber I ndex Aluminum Nickel Total Futures

1,355,731 2,218,159

Tokyo Commodity Exchange (TOCOM), Japan Gold Silver Platinum Palladium Aluminum Gasoline Kerosene Crude Oil Gas Oil R u b b er Total Futures

Tokyo Stock Exchange (TSE), Japan 10-Year Government Yen Bond TOPI X Stock I ndex Electric Appliance I ndex Bank I ndex Total Futures TOPI X 10-Year Government Yen Bond Total Options

58T

VOLUME WORLDWIDE Tokyo Grain Exchange (TGE), Japan American Soybeans Non-GMO Soybeans Soybean Meal Arabic Coffee R ed B ea n s Corn Refined Sugar Robusta Coffee Raw Sugar Total Futures American Soybean Corn Raw Sugar Total Options

2003 1,745,697 6,735,421 52,039 5,019,572 555,190 5,984,743 2,842 617,327 371,896 21,084,727 17,548 12,214 5,979 35,741

2002 1,001,747 3,416,660 210,829 4,844,715 593,087 7,431,128 2,864 460,507 709,394 18,670,931 21,515 16,511 19,309 57,335

2001 1,740,613 3,342,542 268,513 4,465,044 1,093,922 10,341,897 2,874 420,873 1,031,530 22,707,808 19,040 52,012 37,544 108,596

2000 2,355,163 2,875,667

1999 3,279,175

4,231,369 680,751 8,341,227 2,886 729,618 1,561,657 20,778,338 84,819 113,888 85,957 284,664

3,508,798 1,378,169 8,107,879 2,842 699,153 1,042,427 18,018,443 79,955 141,578 153,285 374,818

Yokohama Commodity Exchange (YCE), Japan (formerly Maebashi Dried Cocoon & Yokohama Raw Silk Ex.) Raw Silk I nternaional Raw Silk Dried Cocoon Potato Total Futures Total Futures Percent Change Total Options Percent Change Total Futures and Options Percent Change

2003 919,049 11,581 27,368 894,160 1,852,158

2002 698,321 40,935 29,385 738,569 1,507,210

2001 602,727 241,004 69,789 399,351 1,312,871

2000 789,795 387,081 208,119

1999 704,657

1,384,995

895,705

1,927,472,371

1,473,598,607

1,173,022,823

952,905,056

781,797,938

30.80%

25.62%

23.10%

21.89%

-2.04%

4,012,673,793

2,898,783,708

1,630,793,276

722,899,112

523,145,631

38.43%

77.75%

125.59%

38.18%

51.70%

5,940,146,164

4,372,382,315

2,803,816,099

1,675,804,168

1,304,943,569

35.86%

55.94%

67.31%

28.42%

14.17%

191,048

59T

Conversion Factors Commonly Used Agricultural Weights and Measurements Bushel Weights: wheat and soybeans = 60 lbs. corn, sorghum and rye = 56 lbs. barley grain = 48 lbs. barley malt = 34 lbs. oats = 32 lbs.

1 tonne (metric ton) equals: 36.7437 bushels of wheat or soybeans 39.3679 bushels of corn, sorghum or rye 45.9296 bushels of barley grain 68.8944 bushels of oats 4.5929 cotton bales (the statistical bale used by the USDA and ICAC contains a net weight of 480 pounds of lint)

Bushels to tonnes: wheat and soybeans = bushels X 0.027216 barley grain = bushels X 0.021772 corn, sorghum and rye = bushels X 0.0254 oats = bushels X 0.014515

Area Measurements: 1 acre = 43,560 square feet = 0.040694 hectare 1 hectare = 2.4710 acres = 10,000 square meters 640 acres = 1 square mile = 259 hectares

1 tonne (metric ton) equals: 2204.622 lbs. 1,000 kilograms 22.046 hundredweight 10 quintals

Yields: wheat: bushels per acre X 0.6725 = quintals per hectare rye, corn: bushels per acre X 0.6277 = quintals per hectare barley grain: bushels per acre X 0.538 = quintals per hectare oats: bushels per acre X 0.3587 = quintals per hectare

Commonly Used Weights The troy, avoirdupois and apothecaries’ grains are identical in U.S. and British weight systems, equal to 0.0648 gram in the metric system. One avoirdupois ounce equals 437.5 grains. The troy and apothecaries’ ounces equal 480 grains, and their pounds contain 12 ounces. Troy weights and conversions:100 kilograms = 1 quintal 24 grains = 1 pennyweight 20 pennyweights = 1 ounce 12 ounces = 1 pound 1 troy ounce = 31.103 grams 1 troy ounce = 0.0311033 kilogram 1 troy pound = 0.37224 kilogram 1 kilogram = 32.1507 troy ounces 1 tonne = 32,151 troy ounces Avoirdupois weights and conversions: 27 11/32 grains = 1 dram 16 drams = 1 ounce 16 ounces = 1 lb. 1 lb. = 7,000 grains 14 lbs. = 1 stone (British) 100 lbs. = 1 hundredweight (U.S.) 112 lbs. = 8 stone = 1 hundredweight (British) 2,000 lbs. = 1 short ton (U.S. ton) 2,240 lbs. = 1 long ton (British ton) 160 stone = 1 long ton 20 hundredweight = 1 ton 1 lb. = 0.4536 kilogram 1 hundredweight (cwt.) = 45.359 kilograms 1 short ton = 907.18 kilograms 1 long ton = 1,016.05 kilograms

60T

Metric weights and conversions: 1,000 grams = 1 kilogram 1 tonne = 1,000 kilograms = 10 quintals 1 kilogram = 2.204622 lbs. 1 quintal = 220.462 lbs. 1 tonne = 2204.6 lbs. 1 tonne = 1.102 short tons 1 tonne = 0.9842 long ton U.S. dry volumes and conversions: 1 pint = 33.6 cubic inches = 0.5506 liter 2 pints = 1 quart = 1.1012 liters 8 quarts = 1 peck = 8.8098 liters 4 pecks = 1 bushel = 35.2391 liters 1 cubic foot = 28.3169 liters U.S. liquid volumes and conversions: 1 ounce = 1.8047 cubic inches = 29.6 milliliters 1 cup = 8 ounces = 0.24 liter = 237 milliliters 1 pint = 16 ounces = 0.48 liter = 473 milliliters 1 quart = 2 pints = 0.946 liter = 946 milliliters 1 gallon = 4 quarts = 231 cubic inches = 3.785 liters 1 milliliter = 0.033815 fluid ounce 1 liter = 1.0567 quarts = 1,000 milliliters 1 liter = 33.815 fluid ounces 1 imperial gallon = 277.42 cubic inches = 1.2 U.S. gallons = 4.546 liters

ENERGY CONVERSION FACTORS U.S. Crude Oil (average gravity) 1 U.S. barrel = 42 U.S. gallons 1 short ton = 6.65 barrels 1 tonne = 7.33 barrels

residual fuel oil lubricating oil grease white spirits paraffin oil paraffin wax petrolatum asphalt and road oil petroleum coke bitumen LPG

Barrels per tonne for various origins Abu Dhabi 7.624 Algeria 7.661 Angola 7.206 Australia 7.775 Bahrain 7.335 Brunei 7.334 Canada 7.428 Dubai 7.295 Ecuador 7.58 Gabon 7.245 Indonesia 7.348 Iran 7.37 Iraq 7.453 Kuwait 7.261 Libya 7.615 Mexico 7.104 Neutral Zone 6.825 Nigeria 7.41 Norway 7.444 Oman 7.39 Qatar 7.573 Romania 7.453 Saudi Arabia 7.338 Trinidad 6.989 Tunisia 7.709 United Arab Emirates 7.522 United Kingdom 7.279 United States 7.418 Former Soviet Union 7.35 Venezuela 7.005 Zaire 7.206

6.45 7 6.3 8.5 7.14 7.87 7.87 6.06 5.5 6.06 11.6

Approximate heat content of refined products: (Million Btu per barrel, 1 British thermal unit is the amount of heat required to raise the temperature of 1 pound of water 1 degree F.) Petroleum Product Heat Content asphalt 6.636 aviation gasoline 5.048 butane 4.326 distillate fuel oil 5.825 ethane 3.082 isobutane 3.974 jet fuel, kerosene 5.67 jet fuel, naptha 5.355 kerosene 5.67 lubricants 6.065 motor gasoline 5.253 natural gasoline 4.62 pentanes plus 4.62 Petrochemical feedstocks: naptha less than 401*F 5.248 other oils equal to or greater than 401*F 5.825 still gas 6 petroleum coke 6.024 plant condensate 5.418 propane 3.836 residual fuel oil 6.287 special napthas 5.248 unfinished oils 5.825 unfractionated steam 5.418 waxes 5.537 Source: U.S. Department of Energy

Barrels per tonne of refined products: aviation gasoline 8.9 motor gasoline 8.5 kerosene 7.75 jet fuel 8 distillate, including diesel 7.46 (continued above)

Natural Gas Conversions Although there are approximately 1,031 Btu in a cubic foot of gas, for most applications, the following conversions are sufficient: Cubic Feet 1,000 1,000,000 10,000,000 1,000,000,000 1,000,000,000,000

MMBtu (one thousand cubic feet) (one million cubic feet) (ten million cubic feet) (one billion cubic feet) (one trillion cubic feet)

= = = = =

1 Mcf 1 MMcf 10 MMcf 1 Bcf 1 Tcf

= = = = =

1 1,000 10,000 1,000,000 1,000,000,000

61T

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Aluminum Aluminum, symbol Al, is a silvery, lightweight metal that is the most abundant metallic element in the earth’s crust. Aluminum was first isolated in 1825 by a Danish chemist, Hans Christian Oersted, using a chemical process involving a potassium amalgam. A German chemist, Friedrich Woehler, improved Oersted’s process by using metallic potassium in 1827. He was the first to show aluminum’s lightness. In France, Henri Sainte-Claire Deville isolated the metal by reducing aluminum chloride with sodium and established a large-scale experimental plant in 1854. He displayed pure aluminum at the Paris Exposition of 1855. In 1886, Charles Martin Hall in the US and Paul L.T. Heroult in France simultaneously discovered the first practical method for producing aluminum through electrolytic reduction. The low-cost Hall-Heroult process is still the major method used for the commercial production of aluminum today. By volume, aluminum weighs less than one-third as much as steel. This high strength-to-weight ratio makes aluminum a good choice for construction of aircraft, railroad cars, and automobiles. Aluminum is used in cooking utensils and the pistons of internal-combustion engines because of its high heat conductivity. Aluminum foil, siding, and storm windows make excellent insulators. Because it absorbs relatively few neutrons, aluminum is used in lowtemperature nuclear reactors. Aluminum is also useful in boat hulls and various marine devices due to its resistance to corrosion in salt water. There were 23 primary aluminum reduction plants in the US as of 2001, operated by 12 different companies. Aluminum futures and options are traded on the New York Mercantile Exchange (NYMEX) and the London Metal Exchange. Aluminum futures are traded on the Tokyo Com-

World Production of Primary Aluminum Year

1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

modity Exchange (TOCOM), the Osaka Mercantile Exchange (OME), and the Shanghai Futures Exchange (SHFE). The NYMEX aluminum futures contract calls for the delivery of 44,000 pounds of aluminum and the contract is priced in terms of cents per pound. Prices – NYMEX aluminum prices in 2003 staged a very sharp rally in the latter half of 2003 due to the sharp upward rebound in US economic activity and to the weak dollar. Aluminum futures closed 2003 at 74.6 cents per pound, up 16.6% from the 2002 close of 63.95 cents. The 2003 close of 74.6 cents was only mildly below the contract high of 76.95 cents posted in September 2000 before the 2000-03 economic slump began in earnest. Supply – World production of aluminum rose 6.6% in 2002, the latest reporting year for the data series, to a record high of 25.900 million metric tons, up from 24.300 million in 2001. The world’s largest producers of aluminum are China with 16.6% of world production, Russia (12.9%), US (10.5%), Canada (10.5%), and Australia (7.1%). US production of aluminum in 2003 was on track to rise slightly to 2.7 million metric tons, up from 2.707 million in 2002 but still well below the high near 4 million seen in the early 1990s. The US produced 2.930 million metric tons of aluminum from scrap in 2002, more than the 2.707 million metric tons produced from mined ore. Demand – US consumption of aluminum in 2002 rose to 6.310 million metric tons from 6.230 million in 2001, although the 2001-2002 levels were depressed from the previous several years due to weak US economic growth. Trade – US imports of aluminum in 2002 rose to 4.060 million metric tons from 3.740 million in 2001. US imports in 2002 rose slightly to 1.320 million metric tons from 1.300 million in 2001.

In Thousands of Metric Tons

Australia

Brazil

Canada

China

France

Germany

Norway

Russia

Spain

United Kingdom

United States

Venezuela

World Total

1,317 1,297 1,372 1,495 1,627 1,718 1,769 1,798 1,836

1,185 1,188 1,195 1,200 1,208 1,250 1,271 1,131 1,318

2,255 2,172 2,283 2,327 2,374 2,390 2,373 2,583 2,709

1,450 1,680 1,770 1,960 2,340 2,530 2,800 3,250 4,300

437 372 380 399 424 455 441 462 450

505 575 576 572 612 634 644 652 650

857 847 863 919 996 1,020 1,026 1,068 1,096

2,670 2,724 2,874 2,906 3,005 3,146 3,245 3,300 3,347

338 361 362 360 362 364 366 376 380

231 238 240 248 258 272 305 341 340

3,299 3,375 3,577 3,603 3,713 3,779 3,668 2,637 2,707

585 630 629 634 585 570 569 571 570

19,211 19,668 20,800 21,700 22,600 23,600 24,400 24,300 25,900

2

Estimate.

Source: U.S. Geological Survey (USGS)

Production of Primary Aluminum (Domestic and Foreign Ores) in the U.S.

In Thousands of Metric Tons

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

293 281 301 305 309 315 329 256 210 242

261 253 283 277 280 287 308 220 197 220

286 280 303 307 312 320 327 232 220 238

269 272 293 295 305 309 316 225 216 225

277 285 303 304 316 319 327 229 228 228

268 277 293 296 307 310 299 215 225 221

275 288 301 305 319 319 296 214 238 226

274 286 302 304 318 324 296 212 237 225

267 280 292 294 309 310 291 206 227 217

277 289 304 307 315 323 300 214 235 224

270 285 295 298 307 316 289 208 232 215

280 299 305 310 317 328 291 205 241

3,299 3,375 3,577 3,603 3,713 3,779 3,668 2,637 2,707 2,707

1

Preliminary.

Source: U.S. Geological Survey (USGS)

1

ALUMINUM

Cents Per Pound ----- Pig Ingots, New York (Jan. 1910 - Nov. 1986) Pig Ingots, Midwest ( Dec. 1986 - date) ----- Scrap Clippings, New York (Jan. 1929 - Dec. 1984) Scrap Clippings, Midwest (Jan. 1985 - date) - - - Scrap, Old Sheet, Cast, New York (Jan. 1929 - Dec. 1984) Scrap, Old Sheet, Cast, Midwest (Jan. 1985 - date)

Salient Statistics of Aluminum in the United States

In Thousands of Metric Tons ---------------------------------- Net Shipments5 by Producers ---------------------------------

Year

Net Import ----------- Wrought Products ----------- ----------------- Castings ----------------Total Reliance P r o d u c t i o n R e c o v e r y f r o m Primary Apparent Plate, Rolled All Net as a % of ExPermaShip- ------ Scrap -----Con- Sheet, Structural ShipApparent Secondtruded nent Foil Shapes3 Shapes4 ments Consumption Primary ary OLd New sumption All Mold Die Sand All ments

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021

19 30 23 22 23 25 30 33 35 39

3,695 3,299 3,375 3,577 3,603 3,713 3,779 3,668 2,637 2,707

2,944 3,086 3,189 3,310 3,550 3,440 3,700 3,450 2,970 2,930

7,326 8,169 8,258 8,330 8,880 9,260 9,840 9,830 9,310 9,640

1,630 1,500 1,510 1,570 1,530 1,500 1,570 1,370 1,210 1,170

1,312 1,583 1,684 1,730 2,020 1,950 2,120 2,080 1,760 1,750

6,612 6,879 6,295 6,610 6,720 7,090 7,770 7,530 6,230 6,310

4,030 4,810 4,900 4,430 4,710 4,760 5,000 4,840 4,380 4,510

297 296 526 350 315 551 549 592 354 369

1,300 1,420 1,540 1,540 1,610 1,560 1,640 1,640 1,460 1,450

5,770 6,690 7,130 6,480 6,800 7,040 7,360 7,240 6,330 6,470

225 645 247 551 442 627 473 612 468 670 511 584 484 1,020 549 991 489 871 NA NA

103 208 207 180 153 134 158 152 124 NA

994 1,050 1,440 1,390 1,410 1,350 1,790 1,850 1,650 NA

6,770 7,740 8,580 7,860 8,210 8,390 9,150 9,080 7,980 NA

1

Preliminary. 2 To domestic industry. 3 Also rod, bar & wire. 4 Also rod, bar, tube, blooms & tubing. 5 Consists of total shipments less shipments to other mills for further fabrication. NA = Not available. E = Net exporter. Source: U.S. Geological Survey (USGS)

Supply and Distribution of Aluminum in the United States

Year

1991 1992 1993 1994 1995 1996 1

2

Apparent Consumption

5,043 5,715 6,612 6,879 6,295 6,610

Preliminary.

2

---- Production ---From Primary Old Scrap

4,121 4,042 3,695 3,299 3,375 3,577 Estimate.

1,317 1,612 1,632 1,503 1,505 1,570 3

Inventories -- December 31 -GovernImports Exports Private ment2

1,490 1,725 2,545 3,382 2,975 2,810

1,762 1,453 1,207 1,365 1,610 1,500

National Defense Stockpile.

1,945 2,156 2,209 2,149 2,099 1,860 4

2 57 57 57 57 57

In Thousands of Metric Tons

Inventories Apparent ---- Production ----- December 31 -ConsumpFrom Governtion Primary Old Scrap Imports Exports Private Year ment2

1997 1998 1999 2000 20011 20022

Less than 1/2 unit.

6,720 7,090 7,770 7,530 6,230 6,310

3,603 3,713 3,779 3,668 2,637 2,707

1,530 1,500 1,570 1,370 1,210 1,170

3,080 3,550 4,000 3,910 3,740 4,060

Source: U.S. Geological Survey (USGS)

1,570 1,590 1,650 1,760 1,590 1,590

1,860 1,930 1,870 1,550 1,300 1,320

4

----------------

ALUMINUM Aluminum Products Distribution of End-Use Shipments in the United States Year

Building & Construction

Consumer Durables

Containers & Packaging

Electrical

1,240 1,400 1,220 1,330 1,320 1,390 1,470 1,450 1,500 1,560

563 647 621 655 694 725 760 767 681 722

2,180 2,270 2,310 2,180 2,220 2,270 2,320 2,260 2,250 2,260

609 682 657 671 708 714 739 771 686 677

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

Preliminary.

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1 1

Exports

Transportaion

Other

Total

1,090 1,200 1,310 1,290 1,360 1,260 1,330 1,280 902 1,070

477 572 570 569 626 629 661 679 641 616

1,970 2,310 2,610 2,640 2,990 3,250 3,600 3,600 3,190 3,410

259 276 279 291 318 273 293 293 367 390

8,390 9,360 9,570 9,610 10,200 10,500 11,200 11,100 10,200 10,700

Source: U.S. Geological Survey (USGS)

Wo rld C o n su mp tio n o f P rimary Alu min u m Year

In Thousands of Metric Tons

Machinery & Equipment

In Thousands of Metric Tons

Brazil

Canada

Chi na

France

Germany

India

Italy

Japan

Rep. of Korea

Russia

United Ki ngdom

Uni ted States

World Total

377.1 378.9 414.1 500.6 497.0 478.6 521.4 463.1 513.8 550.8

420.4 492.5 559.0 611.9 619.9 628.2 720.6 777.2 798.7 759.6

1,253.8 1,339.9 1,500.1 1,941.6 2,135.3 2,260.3 2,425.4 2,925.9 3,499.1 3,545.4

730.5 667.2 736.3 743.8 671.7 724.2 733.8 774.2 780.4 772.9

1,457.1 1,150.7 1,370.3 1,491.3 1,355.4 1,558.4 1,519.0 1,438.6 1,490.3 1,590.9

414.3 475.3 475.0 581.0 584.8 553.4 566.5 569.5 602.4 558.0

660.0 554.0 660.0 665.4 585.1 671.0 675.4 735.3 780.3 770.4

2,271.6 2,138.3 2,344.8 2,335.6 2,392.6 2,434.3 2,082.0 2,112.3 2,224.9 2,014.0

397.0 524.8 603.9 675.4 674.3 666.3 505.7 814.0 822.6 849.6

1,242.0 657.0 470.0 476.0 443.8 469.2 489.2 562.8 748.4 786.2

550.0 540.0 570.0 620.0 571.0 583.0 579.0 496.8 575.5 433.3

4,616.9 4,877.1 5,407.1 5,054.8 5,348.0 5,390.0 5,813.6 6,203.3 6,079.5 5,117.0

18,529.5 18,122.6 19,670.8 20,480.9 20,596.4 21,721.8 21,797.2 23,323.0 24,811.4 23,612.8

P reliminary.

S ource: American Met al Market (AMM)

S alien t S tatistics o f R ecyclin g Alu min u m in th e U n ited S tates Year

New Old Recycled Apparent Scrap1 Scrap2 Metal3 Supply -------------------- In T h o u san d s o f Metric To n s -------------------

Percent Recycled

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

40 37 36 40 40 41 38 37 36 37

1,140 1,310 1,580 1,680 1,730 2,020 1,950 2,120 2,080 1,770

1,610 1,630 1,500 1,510 1,570 1,530 1,500 1,570 1,370 1,210

Scrap that results from the manufacturing process. S ource: U.S . Geolog ical S urvey (US GS )

1

2

2,760 2,940 3,090 3,190 3,310 3,550 3,440 3,700 3,450 2,980

6,870 7,920 8,460 7,980 8,340 8,740 9,040 9,890 9,610 8,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

1,450 1,540 2,480 3,190 2,730 3,430 2,810 3,070 3,420 2,680

Scrap that results from consumer products.

Producer Prices for Aluminum Used Beverage Can Scrap Year

New Old Recycled Apparent Scrap1 Scrap2 Metal3 Supply -------------------- Valu e in Millio n s o f D o llars -------------------

3

2,040 1,920 2,360 2,850 2,480 2,590 2,160 2,280 2,260 1,840

3,500 3,460 4,840 6,040 5,200 6,020 4,970 5,350 5,670 4,530

8,710 9,300 13,300 15,100 13,100 14,800 13,100 14,300 15,800 12,100

Metal recov ered from new plus old scrap.

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

38.45 74.85 57.73 56.98 54.53 44.50 58.58 54.26 44.50 50.50

43.08 72.24 56.00 59.00 57.00 44.50 62.90 55.50 44.66 52.30

42.50 65.00 56.24 59.00 57.00 44.20 61.50 55.45 47.21 52.45

46.60 65.00 58.90 58.27 52.95 45.68 56.85 54.50 49.41 49.43

45.50 65.00 59.00 58.05 49.85 47.45 54.50 54.23 48.68 50.17

48.98 65.00 49.70 58.05 47.09 46.50 54.50 50.79 48.50 49.75

56.40 65.00 47.50 58.32 45.50 48.40 56.50 46.93 46.89 49.22

56.00 67.98 49.25 59.60 44.50 49.00 57.00 45.50 45.06 49.83

56.00 64.80 50.20 59.50 46.21 49.00 57.00 45.50 46.36 47.43

62.64 58.45 48.50 59.13 44.50 53.79 56.20 44.63 47.07 50.17

70.40 57.00 49.03 59.00 44.50 55.50 53.50 44.50 49.76 52.00

71.00 58.50 53.50 57.12 46.14 57.64 53.50 44.50 50.29 53.73

53.13 64.91 52.96 58.50 49.15 48.84 56.88 49.71 47.37 50.58

Source: American Metal Market (AMM)

3

ALUMINUM Average Price of Cast Aluminum Scrap (Crank Cases) in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

20.00 53.53 37.50 36.09 37.50 25.50 37.50 31.00 26.00 28.10

25.79 54.08 37.50 36.50 37.50 25.50 37.50 31.00 27.47 30.00

28.33 49.02 37.50 36.50 37.50 25.50 37.50 31.00 28.95 30.00

32.50 48.50 37.50 36.50 35.95 25.50 35.55 31.00 30.00 29.00

32.50 44.41 37.50 36.50 35.50 26.45 31.09 31.00 30.00 29.00

33.18 42.50 37.50 36.50 31.59 29.23 30.32 31.00 30.00 27.90

35.90 43.76 37.50 36.50 25.50 36.83 30.30 28.29 30.00 26.68

36.50 45.80 36.50 39.36 25.50 37.50 32.00 28.00 29.64 26.00

41.07 45.05 35.40 38.60 25.50 37.50 32.00 28.00 28.00 26.00

44.45 39.27 33.80 38.50 25.50 37.50 31.09 28.00 28.00 26.00

50.50 37.50 33.50 38.50 25.50 37.50 31.00 26.40 28.00 26.00

53.50 37.50 33.50 38.07 25.50 37.50 31.00 26.00 28.00 26.00

36.19 45.08 36.27 37.34 30.71 31.87 33.04 29.25 28.67 27.56

Source: American Metal Market (AMM)

Aluminum Exports of Crude Metal and Alloys from the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

22.1 26.1 23.1 31.0 21.2 18.6 18.7 19.6 17.1 14.3

18.3 32.7 27.9 25.5 21.4 26.7 27.2 16.1 15.2 14.8

28.3 25.4 31.2 22.5 21.8 23.9 30.2 18.9 15.6 14.5

17.9 31.1 34.3 33.0 17.4 22.7 21.9 14.7 16.4 16.9

37.5 31.4 46.2 24.1 22.6 25.2 24.4 16.8 19.4 17.0

30.5 20.7 54.3 34.9 21.8 27.7 22.4 15.6 18.3 17.8

30.6 26.6 36.3 23.9 20.9 23.7 20.5 12.4 15.0 16.5

38.3 39.2 33.7 33.2 21.5 27.5 24.2 14.5 15.5 20.4

40.3 38.9 30.2 34.4 28.0 26.1 20.5 12.6 17.5 18.7

24.8 33.0 40.3 26.5 23.9 31.4 20.7 18.9 19.8 22.9

26.1 30.4 33.2 33.0 20.4 30.3 20.7 16.7 19.4

24.1 33.6 26.2 30.0 24.7 34.8 21.6 15.1 16.4

338.9 369.1 416.9 352.0 265.6 318.6 273.0 191.9 205.6 208.6

Source: U.S. Geological Survey (USGS)

Aluminum General Imports of Crude Metal and Alloys into the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

200.2 214.0 158.0 145.0 220.0 191.0 246.0 193.0 272.0 215.0

157.8 168.0 150.0 147.0 204.0 200.0 213.0 200.0 205.0 246.0

282.0 204.0 148.0 209.0 202.0 240.0 206.0 237.0 223.0 350.0

206.9 195.0 188.0 196.0 200.0 311.0 211.0 197.0 221.0 202.0

251.9 184.0 176.0 198.0 189.0 281.0 233.0 209.0 221.0 265.0

179.3 172.0 169.0 167.0 243.0 258.0 234.0 179.0 263.0 261.0

202.8 136.0 139.0 157.0 170.0 213.0 250.0 201.0 228.0 233.0

198.3 134.0 149.0 152.0 204.0 219.0 206.0 198.0 279.0 194.0

160.0 117.0 136.0 150.0 198.0 178.0 189.0 252.0 235.0 215.0

183.4 137.0 170.0 175.0 198.0 202.0 186.0 220.0 196.0 210.0

240.1 139.0 147.0 146.0 189.0 178.0 181.0 248.0 264.0

222.2 133.0 180.0 222.0 177.0 180.0 137.0 227.0 186.0

2,484.9 1,933.0 1,910.0 2,060.0 2,394.0 2,651.0 2,490.0 2,561.0 2,793.0 2,869.2

Preliminary.

Source: U.S. Geological Survey (USGS)

Average Open Interest of Aluminum Futures in New York Year

1999 2000 2001 2002 2003

In Thousands of Metric Tons

Jan.

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

---794 2,446 3,277 9,573

---580 3,173 2,744 9,163

---254 3,450 2,738 6,960

---326 3,529 2,250 7,190

1,032 965 3,269 2,397 7,686

1,461 2,035 3,724 2,902 8,529

1,875 3,938 3,891 3,903 8,402

1,984 4,803 3,459 4,618 8,445

1,767 4,580 2,753 4,643 7,655

1,244 4,598 3,728 5,139 7,283

625 3,587 3,644 8,057 8,434

615 2,046 3,276 10,479 9,471

Source: New York Mercantile Exchange (NYMEX), COMEX Division

Volume of Trading of Aluminum Futures in New York

In Contracts

Year

1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

---1,224 7,361 2,774 12,565

---2,394 1,694 4,635 9,625

---1,664 4,410 4,924 8,163

---1,901 2,822 2,593 5,440

6,179 3,859 2,853 5,388 10,567

5,875 3,566 4,634 5,389 8,463

5,275 6,295 4,404 8,953 11,797

3,373 3,767 3,794 4,194 9,451

3,114 5,993 1,428 2,571 5,119

2,801 6,365 2,887 7,328 6,222

639 5,055 4,251 16,185 8,536

722 4,016 2,551 9,066 11,542

27,978 46,099 43,089 74,000 107,490

Source: New York Mercantile Exchange (NYMEX), COMEX Division

4

Antimony fell –14.2% to 143,000 metric tons from the record high production level of 167,000 metric tons in 2001. China accounted for 91% of world antimony production in 2002, with only South Africa (4.1% of world production) and Bolivia (1.5%), showing world production shares above 1%. The 14.2% drop in antimony production in 2002 was mainly due to the -13.3% drop in Chinese production to 130,000 metric tons from a record 150,000 tons in 2001. US secondary production of antimony in 2002 fell slightly to 5,350 metric tons from 5,380 metric tons in 2001. Demand – US industrial consumption of antimony in 2002 fell to 12,900 metric tons from 13,100 in 2001. Of that consumption in 2002, 57% was for flame-retardants at 7,420 metric tons, down from 7,570 metric tons in 2001. Trade – US imports in 2002 of antimony ore fell to 1,320 metric tons from 2,610 in 2001, with the antimony content falling to 1,310 metric tons from 2,290 in 2001. Imports of antimony oxide in 2002 rose to 27,900 from 27,700 in 2001. US exports of antimony oxide fell to 3,260 metric tons from 5,880 metric tons in 2001.

Antimony is a lustrous, extremely brittle and hard crystalline semi-mental that is silvery white in its most common allotropic form. Antimony is a poor conductor of heat and electricity. In nature, antimony has a strong affinity for sulfur and for such metals as lead, silver, and copper. Antimony is primarily a byproduct of the mining, smelting and refining of lead, silver, and copper ores. There is no longer any mine production of antimony in the US. The most common use of antimony is in antimony trioxide, a chemical that is used as a flame retardant in textiles, plastics, adhesives and building materials. Antimony trioxide is also used in battery components, ceramics, bearings, chemicals, glass, and ammunition. Prices – Antimony prices in 2003 rallied sharply to an average of 110.89 cents per pound. That was a 7-year high and was up sharply by 17% from the 2002 level of 94.83 cents. Bullish factors were the same as for other key metals in 2003—the weak dollar and much stronger US economic growth in the second half of the year. Supply – World mine production of antimony in 2002

World Mine Production of Antimony (Content of Ore) Year

1999 2000 20011 20022

Australia

Bolivia

Canada

China2

Guatemala

1,679 1,511 1,380 1,200

2,790 1,907 2,264 2,200

357 364 234 143

89,600 110,000 150,000 130,000

-------------

In Metric Tons

Kyrgyzstan

Mexico3

Peru4

Russia

South Africa

Thailand

Turkey

World Total

100 150 150 150

126 39 -------

255 461 274 300

4,000 4,500 4,500 ----

5,278 4,104 4,827 5,800

59 84 18 24

180 360 370 370

107,000 125,000 167,000 143,000

1

Preliminary. 2 Estimate. 3 I ncludes antimony content of miscellaneous smelter products. Source: U.S. Geological Survey (USGS)

Salient Statistics of Antimony in the United States

Year

Avg. Price cents/lb. CIF U.S. Ports

1999 2000 20011 20022

62.7 65.5 64.7 88.4

----------- Production3 ---------------- Primary2 ------ Secondary (Alloys)2 Mine Smelter

15,300 13,300 9,080 W

8,220 7,700 5,380 5,350

1

Preliminary. 2 Estimate. 3 Antimony content. Source: U.S. Geological Survey (USGS)

In Metric Tons -------------- Industry Stocks, December 313 --------------

4

Gross Weight

Antimony Content

Oxide (Gross Weight)

Exports (Oxide)

Metallic

Oxide

Sulfide

Other

Total4

3,590 4,630 2,610 1,320

2,870 3,690 2,290 1,310

23,100 28,500 27,700 27,900

3,190 6,040 5,880 3,260

2,430 2,540 645 729

5,780 3,970 4,090 4,510

W W W W

2,720 270 256 253

10,900 6,780 4,990 5,490

I ncluding primary antimony residues & slag.

Industrial Consumption of Primary Antimony in the United States ---------------------------------- Metal Products ----------------------------------

Year

Ammu- Antimonial nition Lead

1999 2000 2001 20021

W W W W

1

2

Preliminary.

1,110 1,040 1,060 887

Sheet & P i pe

Bearing Metal & Bearings

Solder

Total All Metal Products

W W W W

29 42 52 42

136 135 78 89

2,440 2,980 2,800 2,760

Estimated coverage based on 77% of the industry.

Year

1

W = Withheld proprietary data.

In Metric Tons (Antimony Content) ----------------------- Non-Metal Products -----------------------

----- Retardents ----- Ceramics Plastics Total & Glass Pigments

6,370 8,940 6,210 6,060

7,140 9,910 7,570 7,420

1,120 1,020 518 505

W=Withheld proprietary data.

Average Price of Antimony1 in the United States 2000 2001 2002 2003

Recoverable.

-- Imports for Consumption ------------ Ore ---------

450 W -------

4

1,020 620 653 565

Plastics

Total

Grand Total

1,580 1,330 1,050 1,090

3,940 3,490 2,760 2,710

13,500 16,400 13,100 12,900

Source: U.S. Geological Survey (USGS)

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

66.50 84.90 69.50 121.53

66.50 75.00 69.50 109.15

66.50 75.00 69.50 118.48

66.50 75.00 69.50 119.49

66.50 75.00 64.22 119.77

66.50 75.00 65.13 119.07

68.38 75.00 73.09 107.86

69.00 75.00 86.97 105.01

84.40 73.26 113.24 105.01

91.00 69.50 149.59 105.01

91.00 69.50 141.91 102.76

91.00 69.50 135.25 97.52

74.48 74.31 94.83 110.89

Prices are for antimony metal (99.65%) merchants, minimum 18-ton containers, c.i.f. U.S. Ports.

Source: American Metal Market (AMM)

5

Apples The apple tree is the common name of trees from the rose family, Rosaceae, and the fruit that comes from them. The apple tree is a deciduous plant and grows mainly in the temperate areas of the world. The apple tree probably originated in the Caspian and Black Sea area. Apples were the favorite fruit of the ancient Greeks and Romans. The early settlers brought apple seeds with them and introduced them to America. John Champman, also known as Johnny Appleseed, was responsible for extensive planting of apple trees in the Midwestern United States. Supply – US production of apples in 2003 was forecast at 220.633 million bushels (42-pound units), up 8% from the poor crop level seen in 2002. Despite the 8% increase,

the 2003 crop size was the second lowest since 1988 and fell behind the 5-year average of 242.120 million bushels. The rise in US apple production in 2003 was mainly due to a sharp 63% increase in apple production in the US Midwest. Production in the eastern US rose 27%, but production in the key western US fell by 5%. Production of red and golden delicious apples in 2003 continued to fall and accounted for only 41% of total US apple production versus 50% in 2000. Demand – The utilization breakdown of the 2002 apple crop showed that 63% of apples were for fresh consumption, 18% for juice and cider, 13% for canning, 3% for dried apples, and 2% for frozen apples.

World Production of Apples3, Fresh (Dessert & Cooking)

In Thousands of Metric Tons

Year

Argentina

Canada

France

Germany

Hungary

Italy

Ja p a n

Netherlands

South Africa

Spain

Turkey

United States

World Total

1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

1,316 847 1,331 900 1,000 ----

523 582 532 467 402 440

1,794 2,166 2,300 2,055 2,060 2,080

1,980 1,936 2,631 1,522 1,563 1,407

482 420 700 605 540 480

2,243 2,196 2,267 2,220 2,210 1,989

879 928 800 931 926 892

507 575 500 500 370 385

675 581 668 584 600 ----

722 887 699 962 683 818

2,450 2,500 2,400 2,450 2,200 2,500

5,283 4,822 4,801 4,277 3,881 4,242

46,734 47,575 47,935 45,467 43,625 38,510

1

Preliminary.

2

Estimate.

3

Commercial crop.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Salient Statistics of Apples2 in the United States ------ Foreign Trade4 -------

--------------- Utiliz ation of Quantities Sold ---------------5

-- Production -- - Grow ers Prices Fresh Utilized cents/lb.

Total

Processing $/ton

--------------------- Processed ---------------------

Fresh Canned

Dried Frozen

Juice & Cider Other3

---------------------------------------- Millions of Pounds ----------------------------------------

Year

1997 1998 1999 2000 2001 20021

10,324 11,646 10,631 10,584 9,429 9,525

10,254 10,763 10,447 10,322 9,214 8,375

22.1 17.3 21.3 17.8 22.9 25.6

130.0 94.6 128.0 101.0 108.0 126.0

5,815 6,413 5,995 6,267 5,470 5,366

1,499 1,174 1,319 1,184 1,258 1,064

267 330 263 248 221 229

349 266 271 196 249 157

2,145 2,485 2,473 2,335 1,946 1,538

180 95 126 93 71 50

1

Preliminary. 2 Commercial crop. 3 Mostly crushed for vinegar, jam, etc. 4 Year beginning July. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Avg. Farm Price cents /lb.

15.4 12.2 15.0 12.8 15.8 18.8 5

1998 1999 2000 2001 2002 2003 1 1

Preliminary.

539.1 660.3 571.9 743.6 592.4 691.9

18.0 15.7 21.5 33.3 21.4

173.6 171.8 195.3 180.6 193.9 157.1

18.4 19.4 19.0 17.9

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

21.9 15.8 21.8 15.8 22.1 25.8

20.8 15.0 20.3 15.2 21.6 24.6

20.5 15.3 19.8 14.6 22.0 22.6

19.4 14.1 19.3 15.7 21.8 23.4

17.8 13.3 17.8 15.2 21.5 21.8

16.3 12.7 16.1 14.9 22.0 22.4

12.7 16.3 16.2 15.2 20.6 20.0

13.8 22.7 19.5 17.3 24.5 25.8

22.6 21.6 23.3 21.2 30.0 25.1

22.1 24.3 21.8 24.8 30.1 27.3

17.5 22.9 18.5 23.5 26.8 27.4

14.9 23.2 18.1 23.1 26.3 28.5

18.4 18.1 19.4 18.0 24.1 24.6

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Cents Per Pound ----- Average Received by Growers, US (Jan. 1947 - date)

6

1,575.4 1,316.2 1,563.6 1,320.8 1,453.1 1,572.2

Fresh weight basis.

Price of Apples Received by Grow ers (for Fresh Use) in the United States Year

---- Domestic ---Imports Farm Fresh Value Exports Dried5 & Dried5 Million Fresh ------ Metric Tons -----$

Fresh P er Capita Consumption L b s.

Arsenic ronmental concerns that could limit its use in the future. Demand for arsenic and arsenic compounds, therefore, derives from new home construction and from renovation and wooden deck construction. Arsenic and arsenic compounds are very toxic and increased scrutiny of products using arsenic is expected to result in more environmental regulations in the future, thus reducing future demand for arsenic. Recently, small doses of arsenic have been found to put some forms of cancer into remission. It can also help thin blood. Homoeopathists have successfully used undetectable amounts of arsenic to cure stomach cramps. Traditionally used as a nonferrous alloy for enhancing properties such as hardening of lead and resistance to corrosion. Arsenic is also used in the manufacture of glass and in the making of CCA pressure-treated wood. Supply – US supply of arsenic in 2002 fell to 19,700 metric tons from 25,000 metric tons in 2001. World production of white arsenic (arsenic trioxide) in 2002 was unchanged from 2001 at a 22-year low of 35,000 metric tons. The world’s largest producer by far is China with 46% of world production, followed by Chile with 23% of world production. Demand – Demand for arsenic fell to 19,600 metric tons in 2002 from 24,900 metric tons in 2001. Of that demand, 17,300 metric tons was for wood preservatives, 700 metric tons for glass, 650 metric tons for non-ferrous alloys and electric usage, and 200 for other uses. Trade – US imports of trioxide arsenic in 2002 fell to 24,700 metric tons from 31,500 metric tons in 2001. US exports were negligible at 100 metric tons, up from 57 metric tons in 2001.

Arsenic, symbol As, is a silver-gray, extremely poisonous, semi-metallic element. Arsenic, which is odorless and flavorless, has been known since ancient times, but it wasn’t until the Middle Ages that its poisonous characteristics first become known. Metallic arsenic was first produced in the 17th century by heating arsenic with potash and soap. Arsenic is rarely found in nature in its elemental form and is generally recovered as a by-product of ore processing. The U.S. Geological Survey reported that no arsenic was removed from domestic ores in the United States. All arsenic metals and compounds used in the U.S. are imported. More than 95 percent of the arsenic consumed is in compound form, mostly as arsenic trioxide, which in turn is converted into arsenic acid. Production of chromated copper arsenate, a wood preservative, accounts for over 90 percent of the domestic consumption of arsenic trioxide. Three companies in the US manufacture chromate copper arsenate. Another company used arsenic acid to produce an arsenical herbicide. Arsenic metal is used to produce nonferrous alloys, primarily for lead-acid batteries. One area where there is increased consumption of arsenic is in the semiconductor industry. Very high-purity arsenic is used in the production of gallium arsenide. High speed and high frequency integrated circuits that use gallium arsenide have better signal reception and lower power consumption. It is estimated that 30 metric tons per year of high-purity arsenic is used in the production of semiconductor materials. The largest domestic market for arsenic in the U.S. is in the production of arsenical wood preservatives. That is expected to continue, although there are increasing envi-

World Production of White Arsenic (Arsenic Trioxide) Year

Belgium

Bolivia

Canada4

Chile

China

France

Germany

Mexico

Namibia3

Peru

Phillippines

Russia5

World Total

2,000 2,000 2,000 2,000 2,000 1,500 1,500 1,500 1,000 1,000

663 341 362 255 282 284 437 318 846 850

250 250 250 250 250 250 250 250 250 250

6,200 4,050 4,076 8,000 8,350 8,400 8,000 8,000 8,000 8,000

14,000 18,000 21,000 15,000 15,000 15,500 16,000 16,000 16,000 16,000

3,000 6,000 5,000 3,000 2,500 2,000 1,000 1,000 1,000 1,000

300 300 250 250 250 200 200 200 100 100

4,447 4,400 3,620 2,942 2,999 2,573 2,419 2,522 2,381 2,300

2,290 3,047 1,661 1,559 1,297 175 -------------

391 286 285 111 637 624 1,611 2,495 1,958 2,000

2,000 ----------------------------

2,000 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500

42,100 46,800 47,000 42,900 42,000 40,300 41,800 38,800 35,000 35,000

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 1 5

In Metric Tons

Preliminary. 2 Estimate. 3 Output of Tsumeb Corp. Ltd. only. Formerly part of the U.S.S.R.; not reported separately until 1992.

4

I ncludes low-grade dusts that were exported to the U.S. for further refining. Source: U.S. Geological Survey (USGS)

Salient Statistics of Arsenic in the United States

In Metric Tons (Arsenic Content)

Year

------------------ Supply ------------------ -- Distribution -- ------------------- Estimated Demand Pattern ------------------- -- Average Price -NonTrioxide Metal Wood Ferrous AgriculIndustry ---- Imports ---- Industry Mexican Chinese Com- Stocks Apparent Stocks Imports Preserv- Alloys & tural Metal pounds Jan. 1 Total Demand Dec.31 Chemicals Total -- Cents/Pound -- Trioxide3 Exports Glass atives Electric Other

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022

767 1,330 557 252 909 997 1,300 830 1,030 879

1

Preliminary.

2

20,900 20,300 22,100 21,200 22,800 29,300 22,100 23,600 23,900 18,800

---- 21,667 ---- 21,630 ---- 22,700 ---- 21,400 ---- 23,700 ---- 30,300 ---- 23,400 ---- 24,500 ---- 25,000 ---- 19,700

Estimate.

3

21,300 21,500 22,300 21,400 23,700 30,100 22,000 24,400 24,900 19,600

For Consumption.

-------------------------------

3,000 1,200 1,000 950 1,400 1,500 1,100 ----------

900 700 700 700 700 900 600 700 750 700

16,200 18,000 19,600 19,200 20,000 26,500 19,500 21,800 21,900 17,300

Source: U.S. Geological Survey (USGS)

800 1,300 600 250 900 1,200 850 700 1,000 650

400 300 400 300 300 300 200 250 250 200

21,300 21,500 22,300 21,400 23,700 30,100 22,000 24,400 24,900 19,600

33 32 33 33 31 30 -------------

44 40 66 40 32 40 -------------

27,500 364 26,800 79 29,000 430 28,000 36 30,000 61 38,600 177 29,100 1,350 31,100 41 31,500 57 24,700 100

7

Barley Barley is the common name for any of a genus of cereal grass and is native to Asia and Ethiopia. Barley is an ancient crop and was grown by the Egyptians, Greek, Romans and Chinese. Barley is now the world’s fourth largest grain crop, after wheat, rice, and corn. Barley is planted in the spring in most of Europe, Canada and the United States. The U.S. barley crop year begins June 1. It is planted in the autumn in parts of California, Arizona and along the Mediterranean Sea. Barley is hardy and drought resistant and can be grown on marginal cropland. Salt-resistant strains are being developed for use in coastal regions. Barley grain, along with hay, straw, and several by-products are used for animal feed. Barley is used for malt beverages and in cooking. Barley, like other cereals, contains a large proportion of carbohydrate (67%) and protein (12.8%). Barley futures are traded on the Winnipeg Commodity Exchange (WCE), the London International Financial Futures and Options Exchange (LIFFE) and the Budapest Commodity Exchange. Prices – Barley prices on the Winnipeg nearest futures chart started out 2003 in the CD$180 per metric ton area, fell sharply by about 38% to the year’s low of CD$112 in July, and then recovered slightly to close the year at CD$135 per metric ton. Supply – World barley production in 2002/3 fell to 132.791 million metric tons, down from 141.788 million in 2001/2. World production is expected to recover in 2003/4

World Barley Supply and Demand

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

1,356 3,375 3,967 2,838 4,241 2,870 3,922 4,150 2,200 4,300

Preliminary.

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

8

In Thousands of Metric Tons

---------------------------------- Exports ---------------------------------- ------------- Imports ------------- ------------- Utiliz ation ------------- -------- Ending Stocks -------Total AusCanTotal Total Saudi UnacTotal UtilTotal ization Canada U.S. Stocks tralia ada EC-15 Non-US U.S. Exports Arabia ounted Imports Russia U.S.

2

2,551 5,061 2,596 2,480 3,442 6,183 1,897 2,990 1,185 8,894 1,806 10,443 1,956 6,159 1,126 3,082 304 6,000 2,000 3,000

Estimate.

18,451 18,347 21,798 11,755 17,235 17,927 15,840 16,714 16,131 14,900

Preliminary.

Australia

Canada

China

2,913 5,823 6,696 6,482 5,987 5,032 6,743 8,423 3,713 8,000

11,690 13,035 15,562 13,527 12,709 13,196 13,172 10,846 7,489 12,300

4,411 4,089 4,000 4,000 2,656 2,970 2,646 2,893 2,470 2,200

2

Estimate.

1,355 1,182 1,214 1,071 550 853 1,068 517 551 625

19,806 19,529 23,012 12,826 17,785 18,780 16,908 17,231 16,682 15,525

4,235 3,876 5,887 4,026 5,814 5,900 5,100 6,000 7,300 5,500

99 214 737 483 809 110 535 121 125 755

19,167 19,172 22,342 12,826 17,785 18,780 16,908 17,231 16,682 15,525

24,087 17,566 16,435 16,494 12,900 11,441 12,700 14,250 15,500 17,500

8,726 7,635 8,459 6,879 7,207 6,752 6,427 5,669 5,187 5,618

165,712 150,965 149,480 146,037 138,916 132,559 134,508 136,258 135,036 144,131

1,820 1,749 2,919 2,459 2,737 2,838 2,516 2,047 1,441 2,191

2,451 2,168 2,383 2,596 3,084 2,424 2,314 2,021 1,510 2,012

28,570 19,700 23,761 32,137 28,850 24,026 22,775 28,305 26,061 19,182

Source: Foreign Agricutural Service, U.S. Department of Agriculture (FAS-USDA)

World Production of Barley

1

to 139.652 million metric tons. The EU is by far the world’s largest producer of barley with 48.023 million metric tons in 2002/3, accounting for 36% of world production, followed by Russia at 18.700 million (14%), and the Ukraine at 10.350 million (8%). US production in 2002/3 fell to a record low of 4.933 million metric tons (only 3.7% of world production) from 5.430 million in 2001/2 but is expected to expand sharply to 6.011 million in 2003/4 (USDA). US planted acreage for barley has shown a steady contraction, averaging around 5 million acres in recent years versus 7 million in the mid-1990s. North Dakota and Montana are the largest producing states. Demand – U.S. total barley use in 2003/4 is expected to increase to 283.0 million bushels from the post-war record low of 269.0 million in 2002/3. Seed use has run at about 8.0 million bushels in the past several years, feed & residual use is expected to rise to 85.0 million in 2003/4 from 65.0 million in 2002/3, and demand for use in food and alcohol beverages remains steady at 164.0 million bushels. Trade – World trade in barley fell to 16.663 million metric tons from 17.231 million in 2001/2 and is expected to remain lower at 15.625 million in 2003/4. The European Union is the largest exporter with at least a third of the total, with Russia, the Ukraine, and Australia exporting much of the balance. Importing countries are many, with Saudi Arabia being the largest importer.

In Thousands of Metric Tons Denmark

France

Germany

India

Russia

Spain

3,446 3,864 3,953 3,887 3,565 3,680 3,980 3,980 4,150

7,646 7,739 9,540 10,181 10,591 9,540 9,950 9,800 11,000

10,902 11,891 12,074 13,399 12,512 13,300 12,110 13,500 11,000

1,310 1,730 1,510 1,462 1,680 1,470 1,447 1,432 1,500

27,000 15,800 15,900 20,800 9,800 10,600 14,100 19,500 18,700 15,500

7,596 5,200 9,600 8,600 10,902 7,430 11,280 6,250 8,200

Turke y

United Kingdom

United States

World Total

6,500 6,900 7,200 7,300 7,500 6,600 7,400 6,900 7,400 7,000

5,945 6,833 7,780 7,828 6,630 6,580 6,490 6,700 6,000

8,162 7,824 8,544 7,835 7,667 6,103 6,939 5,430 4,933 6,011

161,046 142,095 143,541 154,491 135,586 127,735 133,257 141,788 132,792 137,252

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

BARLEY Barley Acreage and Prices in the United States ---------------------- Seasonal Prices ---------------------- ------ Government Price Support Operations -----Year Beginning June 1

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

Acreage ----- 1,000 Acres ----Planted

Harvested for Grain

Yield Per Harvested Acre -- Bushels --

7,094 6,706 6,337 5,194 5,864 4,967 5,071 5,299

6,707 6,198 5,864 4,734 5,213 4,289 4,129 4,688

58.5 58.1 60.0 59.2 61.1 58.2 54.9 58.9

National Portland Average Target No. 2 All F eed4 Malting4 Price Western Loan Rate --------------------------------------- Dollars per Bushel ------------------------------------------------ Received by Farmers3 ---------

2.70 2.33 1.95 2.10 2.12 2.18 2.69 2.85

1 Preliminary. 2 Estimate. 3 Excludes support payments. U.S. Department of Agriculture (ERS-USDA)

4

2.32 1.86 1.55 1.65 1.74 1.74 2.16 2.31

2.86 2.69 2.33 2.50 2.36 2.58 2.97 3.12

3.07 2.49 1.96 2.11 2.25

Duluth through May 1998.

Salient Statistics of Barley in the United States

1.55 1.57 1.56 1.59 1.62 1.62

NA NA NA NA NA NA

Put Under Support (mil. Bu.)

% of Production

28.7 33.3 25.9 13.6 16.0 NA

7.3 9.3 7.4 4.9 5.0 NA

Source: Economic Research Service,

In Millions of Bushels

------------------------------------ Disappearance ----------------------------------Year Beginning June 1

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

-------------------- Domestic Use -------------------F ood & -------------------- Supply -------------------Beginning ProducTotal F eed & Acohol Stocks tion Imports Supply Beverages Seed Residual Total

99.6 109.5 119.2 141.7 111.0 106.0 93.0 69.0

392.4 360.0 359.9 352.1 318.7 249.4 226.6 276.1

36.8 40.3 29.8 25.0 29.0 24.0 18.0 25.0

528.8 509.6 501.2 448.5 459.0 380.0 338.0 370.0

1

Preliminary. 2 Estimate. 3 Uncommitted inventory. Service, U.S. Department of Agriculture (ERS-USDA)

160.9 161.6 161.4 162.5 164.0 164.0 164.0 4

11.1 10.4 8.6 9.5 8.0 8.0 8.0

216.5 144.0 161.1 136.0 123.0 88.0 65.0 75.0

388.5 316.0 331.1 308.0 295.0 260.0 237.0

Total D i sa p Exports pearance

30.8 74.4 28.5 30.0 58.0 26.0 30.0 25.0

419.3 390.3 359.5 338.0 353.0 287.0 269.0 273.0

I ncludes quantity under loan & farmer-owned reserve.

---------- Ending Stocks --------Gov’t Privately Total Owned Owned3 Stocks

0 0 0.3 0 0 0 0 0

109.5 119.2 141.4 111.0 106.0 93.0 69.0 97.0

109.5 119.2 141.7 111.0 106.0 93.0 69.0 97.0

Source: Economic Research

Cents Per Bushel ----- Malting, Top Quality, Mpls. (Jan. 1972 - date) ----- No. 2 Mpls. (Jan. 1909 - June 1925) No. 3 Mpls. (July 1925 - June 1976) No. 2 Feed, Mpls. (July 1976 - Dec. 1986) No. 2 Feed, Duluth (Mar. 1987 - Dec. 1990) - - - No. 1 Western Feed, Lethbridge (Aug. 1991 - date)

9

BARLEY Average Price Received by Farmers for All Barley in the United States

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

3.55 2.26 1.93 1.70 2.04 1.98 2.09 3.01

3.18 2.27 2.01 2.04 2.70 2.00 2.14 2.74

2.99 2.35 2.07 2.37 2.23 2.41 2.68 2.91

2.78 2.38 2.01 2.03 1.81 2.24 2.64 2.88

2.69 2.44 1.91 1.96 1.97 2.29 2.64 2.77

2.65 2.61 2.05 2.14 2.15 2.30 2.79 2.86

2.67 2.43 2.03 2.25 2.22 2.21 2.91 2.94

2.52 2.42 1.89 2.04 2.00 2.09 2.85 2.70

2.45 2.40 1.90 2.13 2.10 2.17 2.87

2.37 2.13 2.00 2.23 2.07 2.17 2.83

2.29 2.16 1.78 2.09 2.05 2.09 2.87

2.31 2.13 1.82 2.19 2.12 2.24 2.91

2.70 2.33 1.95 2.10 2.12 2.18 2.69 2.85

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Feed Barley in the United States

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

3.22 2.31 1.82 1.55 1.73 1.77 1.83 2.35

2.79 2.04 1.62 1.48 1.71 1.63 1.88 2.23

2.60 2.10 1.49 1.50 1.50 1.54 2.05 2.40

2.34 2.29 1.40 1.64 1.54 1.71 2.23 2.30

2.10 2.05 1.46 1.61 1.71 1.86 2.26 2.25

1.90 1.98 1.47 1.66 1.87 1.79 2.32 2.44

1.96 1.66 1.55 1.64 1.90 1.77 2.14 2.30

1.95 1.58 1.58 1.63 1.80 1.67 2.17 2.20

2.01 1.56 1.60 1.68 1.77 1.69 2.20

2.22 1.51 1.49 1.78 1.76 1.75 2.30

2.33 1.42 1.54 1.68 1.73 1.79 2.22

2.45 NQ 1.62 1.94 1.91 1.89 2.33

2.32 1.86 1.55 1.65 1.74 1.74 2.16 2.31

1

Preliminary.

Source: National Agricultural Statistical Service, U.S. Department of Agriculture (NASS-USDA)

Average Open Interest of Western Feed Barley Futures in Winnipeg Year

1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

13,803 22,718 15,789 8,231 16,709 19,453 9,771 8,559

12,979 19,290 17,337 10,635 20,500 20,515 10,653 8,203

15,746 15,080 18,039 10,579 21,100 19,163 11,255 8,546

18,022 14,620 14,706 9,713 22,501 19,458 11,113 9,028

19,045 14,385 12,666 8,333 20,299 16,020 11,141 9,631

18,502 12,291 10,847 8,993 17,402 15,778 11,068 10,290

15,504 10,023 9,915 10,348 15,128 16,475 11,271 10,676

14,190 13,641 10,384 11,959 15,095 17,202 13,046 9,580

16,647 12,909 11,420 13,206 15,885 16,926 13,845 8,409

20,143 13,147 11,460 15,014 14,921 13,577 12,172 7,154

21,233 14,473 11,338 15,662 17,192 11,407 9,000 7,524

24,590 13,576 8,622 15,031 19,605 10,480 8,027 5,346

Source: Winnipeg Commodity Exchange (WCE)

Volume of Trading of Western Barley Futures in Winnipeg Year

1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

24,789 30,608 23,954 15,463 23,371 26,836 14,268 10,555

14,762 30,298 23,472 17,539 22,598 18,732 16,370 18,933

22,492 25,910 23,904 13,853 21,563 16,962 15,924 13,069

29,326 23,511 23,553 17,179 23,631 24,993 17,663 18,879

25,659 17,228 17,395 8,911 19,816 26,361 21,440 13,900

22,968 18,912 20,273 16,294 24,298 20,465 18,349 15,153

33,908 15,615 21,011 17,936 15,230 20,849 19,860 13,293

24,878 21,993 18,101 15,837 11,981 20,137 23,436 29,799

25,456 23,291 16,097 29,141 23,105 19,735 22,431 19,438

50,745 29,418 21,330 16,662 23,447 21,276 14,471 18,937

33,702 31,629 21,589 26,445 42,529 14,926 17,035 17,768

26,124 16,201 8,315 16,117 14,508 6,302 10,772 10,977

334,809 284,614 238,994 211,377 266,077 237,574 212,019 200,701

Source: Winnipeg Commodity Exchange (WCE)

10

In Contracts

Jan.

Bauxite Bauxite is a naturally occurring, heterogeneous material comprised of one or more aluminum hydroxide minerals plus various mixtures of silica, iron oxide, titanium, alumina-silicates, and other impurities in trace amounts. Bauxite is an important ore of aluminum and forms by the rapid weathering of granite rocks in warm, humid climates. It is easily purified and can be converted directly into either alum or metallic aluminum. It is a soft mineral with hardness varying from 1 to 3, and specific gravity from 2 to 2.55. Bauxite is dull in appearance and may vary in color from white to brown. It usually occurs in aggregates in pea-sized lumps. Bauxite is the only raw material used in the production of alumina on a commercial scale in the United States. Bauxite is classified according to the intended commercial application, such as abrasive, cement, chemical, metallurgical, and refractory. Of all the bauxite mined, about 95 percent is converted to alumina for the production of aluminum metal with some smaller amounts going to nonmetal uses as various forms of specialty alumina. Small amounts are used in non-metallurgical bauxite applications. Quantities of bauxite are also used to produce aluminum chemicals and in the steel industries. Australia, Guinea, and Jamaica are large miners of bauxite. Supply – World production of bauxite in 2002 rose 5.1%

to a record high 144 million metric tons from 137 million metric tons in 2001. The world’s largest producer of bauxite is Australia with 38% of world production in 2002. Other key producers are Guinea (10.9%), Brazil (9.7%), Jamaica (9.1%), and China (8.3%). Chinese production rose sharply by 22% to 12.0 million metric tons in 2002 from 2001, and production has quadrupled in the past 10 years. India’s bauxite production is also rising rapidly and showed an 18% annual gain in 2002 to 9.274 million metric tons, more than triple the amount seen 15 years ago. Demand – US consumption of bauxite in 2002 rose slightly to 9.970 million metric tons from 9.770 million in 2001. The alumina industry took 93% of bauxite production in 2002, or 9.290 million metric tons. The refractory industry took 1.2% of US bauxite supply in 2002 (115,000 metric tons), the abrasive industry took 0.5% (52,000 metric tons), and the chemical industry took the remainder. Trade – The US relies on imports for virtually 100% of its consumption needs. Domestic ore, which is less than 1 percent of the US requirement for bauxite, was mined by one company from surface mines in the states of Alabama and Georgia. US imports of bauxite fell to 7.577 million metric tons in 2002 from 8.542 million metric tons in 2001. US exports of bauxite were negligible at 42,000 metric tons, down from 81,000 metric tons in 2001.

World Production of Bauxite

In Thousands of Metric Tons

Year

Australia

Brazil

China

Greece

Guinea

Guyana2

Hungary

India

Jamai ca 3

Russia3

Sierra Leone

Suriname

World Total

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022

41,320 41,733 42,655 43,063 44,465 44,553 48,416 53,802 53,285 54,024

10,001 8,673 10,214 10,998 11,671 11,961 14,372 14,290 13,178 13,900

3,500 3,700 5,000 6,200 8,000 8,200 8,500 9,000 9,800 12,000

2,205 2,196 2,200 2,452 1,877 1,823 1,883 1,991 2,052 2,492

15,300 13,300 15,800 15,600 16,359 15,570 15,590 15,700 15,700 15,700

2,125 1,732 2,028 2,475 2,467 2,267 2,359 2,471 1,985 2,000

1,561 836 1,015 1,044 743 1,138 935 1,047 1,000 1,000

5,277 4,809 5,240 5,757 6,019 6,102 6,712 7,562 7,864 9,274

11,307 11,564 10,857 11,863 11,987 12,646 11,688 11,127 12,370 13,119

4,260 3,000 3,100 3,300 3,350 3,450 3,750 4,200 4,000 3,800

1,165 735 -------------------------

3,421 3,772 3,530 3,695 3,877 3,931 3,714 3,610 4,512 4,500

110,000 106,000 112,000 117,000 122,000 123,000 129,000 136,000 137,000 144,000

1

Preliminary.

2

Estimate.

3

Dry Bauxite equivalent of ore processed.

Salient Statistics of Bauxite in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Source: U.S. Geological Survey (USGS)

In Thousands of Metric Tons

Net Import ----------- Dry Equivalent ----------- ------- Stocks, December 31 ------Reliance Average Price ------------------ Consumption by Industry -----------------Imports3 Producers as a % of & ConApparent FOB Mine (for ConConGovernTotal Alumina Abrasive Chemical Refractory sumption) Exports3 sumption sumers Consumption $ per Ton ment Total

100 99 99 100 100 100 100 100 100 100

15-24 15-24 15-18 15-18 15-18 ----------------

11,917 11,200 10,900 11,000 11,500 12,700 11,700 10,800 9,770 9,970

11,002 10,400 10,100 10,300 10,700 12,000 11,100 10,100 9,010 9,290

Preliminary. 2 Estimate. 3 I ncluding concentrates. Source: U.S. Geological Survey (USGS)

203 197 133 117 98 135 113 111 61 52

225 192 201 W W W W W W W

429 350 394 380 466 332 251 160 175 115

11,838 11,349 10,582 10,552 11,069 11,393 10,189 8,860 8,542 7,577

90 129 108 132 85 99 149 142 81 42

12,200 11,200 10,900 11,000 11,500 12,700 11,700 10,800 9,770 9,970

1,590 1,560 1,730 1,930 2,260 1,860 1,440 1,300 1,740 1,260

16,938 17,200 16,300 15,700 14,300 11,000 6,800 5,710 2,070 1,770

18,500 18,800 18,100 17,600 16,500 12,800 8,250 7,000 3,810 3,030

W = Withheld to avoid disclosing company proprietary data.

11

Bismuth Bismuth is a rare metallic element with a pinkish tinge. Bismuth has been known since ancient times, but it was confused with lead, tin, and zinc until the middle of the 18th century. Among the elements in the earth’s crust, bismuth is ranked about 73rd in natural abundance. This makes bismuth about as rare as silver. Most industrial bismuth is obtained as a by-product of ore extraction. Bismuth is useful for castings because of the unusual way it expands on solidifying. Some of bismuth’s alloys have unusually low melting points. Bismuth is one of the most difficult of all substances to magnetize. It tends to turn at right angles to a magnetic field. Because of this property, it is used in instruments for measuring the strength of magnetic fields. Bismuth finds a wide variety of uses such as pharmaceutical compounds, ceramic glazes, crystal ware, and chemicals and pigments. Bismuth is found in household pharmaceuticals and is used to treat stomach ulcers. Bismuth is opaque to X rays and can be used in fluoroscopy. Bismuth has also found new use as a nontoxic substitute for lead in various applications such as brass plumbing fixtures, crystal ware, lubricating greases, pigments, and solders. There has been environmental interest in the use of bismuth as a replacement for lead used in shot for waterfowl hunting and in fishing sinkers. Another use has been in galvanizing to improve drainage characteristics of galva-

World Production of Bismuth

In Metric Tons (Mine Output=Metal Content)

-------------------------- Mine Output, Metal Content -------------------------Year

Canada

China

Ja p a n

Mexico

Peru

Total

187 150 196 186 264 202 258 189

740 610 550 240 2,680 1,120 1,250 1,300

177 169 30 24 24 26 28 28

995 1,070 1,642 1,204 548 1,112 1,390 1,200

900 1,000 1,000 1,000 1,000 1,000 1,000 1,000

3,430 3,600 4,360 3,980 5,490 3,800 4,270 4,070

1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

2

Estimate.

nizing alloys. Zinc-bismuth alloys have the same drainage properties as zinc-lead without being as hazardous. Prices – The dealer price of bismuth in 2002 fell to a 9-year low of $3.14 per pound from $3.74 in 2001. The weak price was due to the weak global economy in 2002, but prices were set to recover in 2003 along with most other basic commodities. Supply – World mine production of bismuth in 2002 fell to 4,070 metric tons from 4,270 metric tons in 2001. The world’s largest producer in 2002 was China with 32% of world production, followed by Mexico (30%), Peru (25%), and Canada (5%). As for refined metal, China had 24% of production, Mexico had 23%, Belgium had 19%, and Peru had 13% in 2002. There is no domestic refinery production of bismuth in the US currently. Demand – US consumption of bismuth in 2002 rose to 2,320 metric tons from 2,200 metric tons in 2001. Of that, 46% went for fusible alloys, 35% to chemicals, 17% to metallurgical additives, and 2% to other alloys and uses. Trade – US imports of bismuth fell to 1,930 metric tons in 2002 from 2,220 metric tons in 2001. Of US imports, 38% came from Belgium, 27% came from Mexico, and 1% came from Peru in 2002. Exports of bismuth and alloys was negligible in 2002 at 131 metric tons, down from 541 metric tons in 2001.

------------------------------------------------- Refined Metal --------------------------------------KazakBelgium China hastan Ja p a n Mexico Peru Total

800 800 800 700 700 700 700 1,000

800 750 760 820 860 770 1,230 1,250

33 50 50 50 55 55 130 130

591 562 550 479 481 518 550 560

924 957 990 1,030 412 1,083 1,390 1,200

581 939 774 832 705 744 640 650

Source U.S. Geological Survey (USGS)

Salient Statistics of Bismuth in the United States

In Metric Tons

---------------------------- Bismuth Consumed, By Uses -----------------------------

Year

Metallurgical Additives

Other Alloys & Uses

Fusible Alloys

257 231 252 335 340 346 369 388

27 35 31 32 31 34 45 50

544 401 593 741 823 889 981 1,070

1995 1996 1997 1998 1999 2000 20011 20022 1

Preliminary.

2

Estimate.

3,840 4,180 4,070 4,330 3,610 4,220 5,050 5,190

3

Chemicals3

Total Consumption

Consumer Stocks D e c. 3 1

Exports of Metal & Alloys

Belgium

Mexico

Peru

Total

Dealer Price $ P er Pound

1,320 855 655 884 855 861 805 813

2,150 1,520 1,530 1,990 2,050 2,130 2,200 2,320

390 122 213 175 130 118 95 111

261 151 206 245 257 491 541 131

636.0 584.0 691.0 739.0 742.0 832.0 728.0 724.0

444.0 453.0 601.0 807.0 277.0 516.0 605.0 518.0

10.9 19.5 163.0 68.8 6.8 20.4 ---19.5

1,450 1,490 2,170 2,720 2,110 2,410 2,220 1,930

3.85 3.65 3.50 3.60 3.85 3.70 3.74 3.14

I ncludes pharmaceuticals.

Imports from --------------- Metallic Bismuth from ---------------

Source: U.S. Geological Survey (USGS)

Average Price of Bismuth (99.99% ) in the United States

In Dollars Per Pound

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

2000 2001 2002 2003

---------2.90

------3.20 2.90

3.93 4.15 3.20 2.90

------3.10 2.92

------3.05 2.98

3.53 3.73 3.05 2.98

------2.94 2.98

------2.90 2.98

3.38 3.58 2.90 2.98

------2.90 2.98

------2.90 2.98

4.00 3.43 2.90 2.98

3.71 3.72 3.00 2.96

Source: American Metal Market (AMM)

12

Broilers Broiler chickens are raised for meat rather than for eggs. The broiler industry was started in the late 1950’s when chickens were selectively bred for meat production. Broiler chickens are housed in massive flocks mainly between 20,000 and 50,000 birds, with some flocks reaching over 100,000 birds. Broiler chicken farmers usually rear five or six batches of chickens per year. After just six or seven weeks, broiler chickens are slaughtered (a chicken’s natural lifespan is around seven years). Chickens marketed as pouissons, or spring chickens, are slaughtered after four weeks. A few are kept longer than seven weeks to be sold as the larger roasting chickens. Prices – The average price received by farmers for broilers (live weight) rose to an average 35.3 cents per pound in 2003. That was slightly below the 10-year average of 36 cents but represented a recovery from 2002 when the average price of 30.4 cents was the lowest level seen in more

than 10 years. Average wholesale broiler prices (ready-tocook) were on track to rise to about 61 cents per pound in 2003, up from the 10-year low of 55.54 cents seen in 2002. Supply – Total production of broilers in 2003 rose slightly by +0.9% to 32.533 billion pounds, up from 32.240 billion in 2002. The number of broilers raised for commercial production rose 2.6% to 8.732 billion in 2003, up from 8.511 billion in 2002. Furthermore, in addition to a larger number of broilers, the average weight per bird rose by 1.6% to 5.20 pounds, up from 5.12 pounds in 2002. Demand – US per capita consumption of broilers in 2003 was unchanged from 2002 at a record 80.5 pounds (ready-to-cook) per person per year. US consumption of chicken has nearly doubled in the past two decades, up from as little as 47.0 pounds in 1980, as consumers have switched to the leaner and healthier meat of chicken versus beef.

Broiler Supply and Prices in the United States ---------------------- Federally Inspected Slaughter ---------------------Certified Liveweight Average RTC Weight Pounds Weight Number (Mil. Lbs.) (Mil. Lbs.) (Pounds) (Millions)

Year & Quarters

1998 1999 2000 2001 20021 20032 I II III IV

7,825 8,112 8,239 8,387 8,511 8,509 2,039 2,145 2,215 2,114

1

Preliminary. condemnation.

2

4.86 4.99 5.00 5.04 5.12 5.19 5.17 5.20 5.15 5.25

38,016 40,444 38,417 42,337 43,529 44,185 10,537 11,152 11,408 11,102

27,832 29,741 30,397 31,257 32,190 32,666 7,770 8,238 8,454 8,200

Total Production RTC 3 (Mil. Lbs.)

Per Capita Consumption RTC Basis (Mil. Lbs.)

27,863 29,741 30,495 31,266 32,240 32,637 7,770 8,238 8,454 8,175

72.6 77.0 77.4 76.6 80.5 81.4 19.6 20.6 21.3 19.9

------------------ Prices -----------------Geogia Dock4

Farm

---------- Cents per Pound ----------

39.81 36.89 35.20 39.58 30.42 35.33 34.00 33.67 36.33 37.33

59.81 58.75 58.14 62.08 61.65 64.80 61.93 63.35 66.61 67.32

Estimate. 3 Total production equals federal inspected slaughter plus other slaughter minus cut-up & further processing Ready-to-cook basis. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

4

Salient Statistics of Broilers in the United States ------------------------------------- Total Chickens3 Supply and Distribution --------------------------------

Year

1996 1997 1998 1999 2000 20011 20022 1

-------- Average -------------------- Production ------------Commercial Storage ----- Production ----- Liveweight Average F e derally Other Stocks Broiler ------ Consumption -----Value of Total January 1 Exports Feed Ratio Number Liveweight Per Bird Total Per Capita4 Price Production Inspected Chickens (Mil. Lbs.) (Mil. Lbs.) (Pounds) (Cents/Lb.) (Pounds) (Mil. $) ----------------------- In Millions of Pounds ----------------------- (Pounds) (Mil. Lbs.)

7,597 7,764 7,934 8,146 8,263 8,389 8,590

Preliminary.

2

36,479 37,541 38,554 40,830 41,516 42,446 44,050

Estimate.

3

4.80 4.84 4.86 5.01 5.02 5.06 5.13 Ready-to-cook.

38.1 37.7 39.3 37.1 33.6 39.3 30.5 4

13,903 14,159 15,145 15,129 13,953 16,694 13,435

Retail weight basis.

Average Wholesale Broiler1 Prices RTC Year

1997 1998 1999 2000 2001 2002 2003 2 1

26,124 27,041 27,612 29,468 30,209 30,816 31,583

491 510 525 554 531 614 500

26,615 27,570 28,137 30,022 31,740 31,330 32,083

567 647 614 717 804 807 717

4,685 5,048 5,099 5,312 5,612 6,357 6,530

4.7 6.3 7.2 6.7 7.8 5.5 5.4

21,854 22,541 22,942 24,631 25,132 25,075 25,571

70.40 71.90 72.60 77.00 77.40 76.90 80.80

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

(Ready-to-Cook)

(In Cents Per Pound)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

61.99 54.66 59.33 55.43 56.87 56.86 60.46

59.53 56.40 58.23 53.84 57.47 55.91 60.49

58.41 58.10 56.79 54.48 58.95 55.17 60.02

59.77 58.52 55.08 55.39 58.46 53.47 57.78

58.53 60.08 60.02 55.71 59.40 56.42 59.44

59.05 64.26 60.33 56.01 59.88 58.44 61.56

63.04 68.53 59.46 56.61 60.43 57.47 62.80

63.25 72.13 57.65 55.47 60.90 55.72 63.20

59.86 70.53 57.15 58.35 61.93 55.88 64.08

55.39 68.04 54.87 57.22 60.17 52.97 63.59

54.62 64.13 59.52 58.22 58.89 53.42 64.45

52.25 60.45 58.42 57.23 55.98 54.74 65.71

58.81 62.99 58.07 56.16 59.11 55.54 61.97

12-city composite wholesale price.

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

13

Butter Butter is a dairy product produced by churning the fat from milk, usually cow’s milk, until it solidifies. In some parts of the world, butter is also made from the milk of goats, sheep, and even horses. Butter has been in use since 2,000 BC. Today butter is used principally as a food item, but in ancient times it was used more as an ointment, medicine, or illuminating oil. Butter was first churned in skin pouches thrown back and forth or swung over the backs of trotting horses. It takes about 10 quarts of milk to produce 1 pound of butter. The manufacture of butter is the third largest use of milk in the US. California is generally the largest producing state, followed closely by Wisconsin, with Washington as a distant third. Commercially finished butter is comprised of milk fat (80% to 85%), water (12% to 16%), and salt (about 2%). Although the price of butter is highly correlated with the price of milk, it also has its own supply and demand dynamics. The consumption of butter has dropped in recent decades because pure butter has a high level of animal fat and cholesterol that has been linked to obesity and heart disease. Per capita consumption of butter in the US in 2000, the latest reporting year, was 4.6 pounds, little changed from 1980 but sharply lower than 7.5 pounds in 1960 and 17.3 pounds in 1930. The primary substitute for butter is margarine, which is produced from vegetable oil rather than milk fat. US per capita consumption of margarine has risen from 2.6 pounds in 1930 to recent levels near 8.3 pounds, much higher than US butter consumption.

Supply and Distribution of Butter in the United States

Year

------------------------ Supply -----------------------Cold Storage Stocks3 ProTotal Imports duction Supply Jan. 15

1994 1995 1996 1997 1998 1999 2000 2001 1 20022

1,296 1,264 1,174 1,151 1,082 1,167 1,274 1,237 1,355

244 80 19 14 21 26 25 24 56

2.745 1.537 10.545 24.154 70.369 39.813 32.400 75.000 34.800

1,543 1,348 1,204 1,177 1,243 1,337 1,331 1,336 1,445

Futures on butter are traded at the Chicago Mercantile Exchange (CME). The CME’s butter futures contract calls for the delivery of 40,000 pounds of Grade AA butter and is priced in cents per pound. Prices – Butter futures traded in a relatively narrow range early in the year, generally between $1.15 to $1.20 per pound. Butter then staged a sharp rally late in the year to post a new 2-year high and closed the year at $1.36, up 14% from the 2002 close of $1.19. Butter rallied late in 2003 and early in 2004 on concerns about mad cow disease and whether that would result in the slaughter of a large number of cows thereby cutting milk production. Butter also benefited from the general rally in commodity prices seen in late 2003 due to the weak dollar and stronger US economic growth. Supply – US production of butter in 2003 fell to 1.253 billion pounds, down from 1.360 billion in 2002. World production of butter in 2002 rose to 6.121 million metric tons, up from 5.737 million metric tons in 2001. India is by far the world’s largest producer of butter with 42.5% of the world’s production in 2002. After India, the world’s largest butter producers are the US with 9.5% of world production, France with 7.4%, New Zealand with 5.6%, and Russia with 4.7%. Demand – US usage of butter in 2003 fell to 1.192 billion pounds from 1.293 billion pounds in 2002. Trade – US imports of butter in 2003 fell to 31.73 million pounds from 34.80 million pounds in 2002, accounting for a meager 2% of US usage.

In Millions of Pounds

------------------------------------- Distribution -------------------------------------

-------- 93 Score --------

-- Domestic Disappearance -- --- Department of Agriculture --P er Removed Capita Jan. 1 Dec. 31 by USDA Stocks4 Total (Pounds) Exports Stocks4 Programs

AA Wholesale Price

1,255 1,186 1,148 1,115 1,220 1,307 1,329 1,268 1,293

4.8 4.5 4.3 4.1 4.4 4.7 4.6

203 100 83 46 33 20 7

1

Preliminary. 2 Estimates. 3 I ncludes butter-equivalent. 4 I ncludes butteroil. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

5

229 68 3 0 0 0 0 0 0

Year

Second Quarter

Third Quarter

Fourth Quarter

Total

1992 1993 1994 1995 1996 1997

214.6 224.6 261.7 335.7 325.6 302.7

216.6 231.5 254.9 269.0 301.8 250.7

236.8 271.9 285.0 261.2 237.5 265.8

276.2 312.7 298.3 304.9 310.3 287.6

944.3 1,040.6 1,097.3 1,186.0 1,180.0 1,109.0

1

Preliminary.

14

204.3 77.8 0.1 38.4 12.6 3.7 8.8

1,463 1,329 1,190 1,156 1,229 1,314 1,307

.9581 -------------------------

.7068 .8188 1.0824 1.1625 1.7685 1.2396 1.1768 1.6630 1.1059

I ncludes stocks held by USDA.

Commercial Disappearance of Creamery Butter in the United States First Quarter

68 3 0 0 0 0 0 0 1

California Chicago Total Use ----- $ per Pound -----

In Millions of Pounds

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

1998 1999 2000 2001 2002 20031

289.0 299.3 300.8 290.9 313.5 304.2

276.3 316.4 286.9 278.4 263.5 275.0

255.3 318.3 332.3 316.1 317.4 315.7

308.6 374.8 380.6 397.0 393.4 406.5

1,137.0 1,308.8 1,300.6 1,282.4 1,287.8 1,301.4

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

BUTTER World (Total) Butter3 Production Year

Australia

1996 1997 1998 1999 2000 2001 2002 1 20032

153 147 154 176 180 160 164 150

In Thousands of Metric Tons

France

Germany

India

Ireland

Netherlands

New Zealand

Poland

Russia

Ukraine

United Kingdom

United States

World Total

462 466 463 448 453 450 450 ----

480 442 426 427 426 425 420 ----

1,400 1,470 1,600 1,750 1,950 2,250 2,400 2,500

150 145 145 143 144 131 132 ----

122 134 149 140 126 128 120 ----

309 307 343 316 344 352 370 390

160 178 183 168 169 181 180 185

290 280 270 260 265 270 280 270

163 109 113 108 135 156 125 120

129 139 137 143 132 130 132 ----

533 522 530 579 570 559 615 610

5,136 5,171 5,336 5,513 5,688 6,015 6,296 6,349

1 Preliminary. 2 Forecast. 3 Factory (including creameries and dairies) & farm. U.S. Department of Agriculture (FAS-USDA)

Source: Foreign Agricultural Service,

Production of Creamery Butter in Factories in the United States Year

1996 1997 1998 1999 2000 2001 2002 1 20032 1

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

132.4 127.6 117.8 123.3 139.9 127.4 140.1 141.4

114.7 108.6 105.7 111.5 128.2 111.8 124.2 128.4

111.9 105.4 106.7 113.7 121.0 111.4 127.7 126.3

109.3 118.3 107.1 106.4 111.7 109.0 131.6 122.7

100.9 102.7 92.6 104.7 108.9 111.0 125.5 114.7

72.7 82.0 69.9 86.0 89.1 86.8 95.8 83.8

75.2 80.0 63.8 75.8 85.4 84.2 94.4 79.5

73.2 68.8 64.3 66.1 83.7 75.6 88.9 70.1

80.7 79.3 68.2 78.8 89.9 86.7 92.8 73.1

96.6 83.3 88.5 93.0 103.9 109.9 102.6 97.0

95.3 89.1 91.1 90.4 100.4 100.1 103.9 88.0

111.3 106.0 106.3 117.2 111.6 123.0 127.6 114.4

1,174.5 1,151.3 1,081.9 1,166.8 1,273.6 1,236.8 1,355.1 1,239.5

Preliminary.

2

Estimate.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Cold Storage Holdings of Creamery Butter on First of Month in the United States Year

1996 1997 1998 1999 2000 2001 2002 20031 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

18.6 13.7 20.8 25.9 25.1 24.1 55.9 157.8

25.5 23.2 34.2 60.8 82.4 68.4 99.2 202.7

33.7 36.0 44.2 95.0 107.8 86.1 130.1 238.2

48.7 50.3 55.9 108.4 114.0 96.2 145.2 248.6

39.8 86.8 67.4 125.5 126.9 112.3 196.6 266.4

34.0 104.2 72.7 136.6 138.2 138.0 226.8 289.8

29.7 93.7 60.6 120.6 145.8 153.5 243.0 292.0

31.7 85.6 51.0 123.6 136.9 151.1 245.3 283.9

27.3 69.5 41.1 90.7 101.3 118.0 229.5 253.9

21.4 43.9 34.1 71.5 85.0 110.9 209.1 207.2

20.5 26.6 31.2 64.2 58.3 100.8 164.6 170.2

17.6 15.4 28.7 30.2 27.3 57.9 135.6 122.5

Preliminary.

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Average Price of Butter at Chicago Mercantile Exchange1 Year

1996 1997 1998 1999 2000 2001 2002 2003

In Millions of Pounds

Jan.

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

75.4 81.9 109.2 144.4 91.6 122.3 134.5 108.2

66.4 98.4 139.8 133.1 92.9 138.1 124.3 104.1

65.5 106.3 134.1 130.3 99.7 154.9 124.7 109.2

69.0 95.6 136.4 103.9 108.7 174.7 117.1 109.1

87.8 86.1 153.2 111.0 122.2 190.4 105.9 109.2

129.3 105.5 186.7 147.7 128.6 197.4 104.3 111.4

145.3 102.7 203.1 134.7 120.3 192.4 103.0 119.9

145.5 102.5 216.6 141.4 120.3 204.5 97.5 117.1

145.5 101.6 273.1 135.8 119.1 219.7 96.4 117.3

128.6 135.3 242.3 113.8 116.9 151.9 103.2 118.5

74.1 148.8 187.9 109.6 151.7 135.2 104.3 120.6

71.9 120.1 140.8 94.2 150.0 130.2 112.0 129.7

100.4 116.2 177.6 125.0 118.5 167.6 110.6 114.5

1

Data from June 1998 through December 2001 are for Wholesale Price of 92 Score Creamery (Grade A) Butter, Central States; prior to June 1998 are for Grade AA in Chicago. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Cents Per Pound ----- Grade AA, Chicago (Jan. 1929 - May 1998) 92 Score Creamery (Grade A), Central States (June 1998 - Dec. 2001) Chicago Mercantile Exchange (Jan. 2002 - date)

15

Cadmium Cadmium is a soft, bluish-white, metallic element that can easily be shaped and cut with a knife. The atomic symbol is Cd, and the atomic number is 48. Cadmium melts at 321 degrees Celsius and boils at 765 degrees Celsius. Cadmium burns brightly in air when heated, forming the oxide CdO. In 1871, the German chemist Friedrich Stromeyer discovered cadmium in incrustations in zinc furnaces. Rare greenockite is the only mineral bearing cadmium. Cadmium occurs most often in small quantities associated with zinc ores, such as sphalerite. Electrolysis or fractional distillation is used to separate the cadmium and zinc. It is estimated that at least 80% of world cadmium output is as a by-product from zinc refining. The remaining 20% comes from secondary sources and recycling of cadmium products. Cadmium recycling has been practical only from nickel-cadmium batteries and from some alloys and dust from electric-arc furnaces. Cadmium is used primarily for metal plating and coating operations in transportation equipment, machinery, baking enamels, photography, and television phosphors. It is also used in pigments and lasers, and in nickel-cadmium and solar batteries. Prices – Cadmium prices in the past 6 years have been at severely depressed levels, reflecting the decreased demand for the substance. Cadmium prices in 2003 rose 26% to 29 cents per pound from 23 cents in 2002. The 2003 price

World Refinery Production of Cadmium Year

In Metric Tons

Australia

Belgium

Canada

China

Finland

Germany

Italy

Ja p a n

Kazakhstan

Mexico

United Kingdom

United States3

World Total

838 639 632 585 462 552 378 350

1,710 1,579 1,420 1,318 1,235 1,148 1,236 117

2,349 2,537 2,260 2,090 1,911 2,024 1,429 896

1,450 1,570 1,980 2,130 2,150 2,370 2,510 2,500

539 648 650 520 700 683 604 ----

1,150 1,150 1,145 1,020 1,145 1,130 540 422

308 296 287 328 360 284 312 300

2,652 2,344 2,473 2,337 2,567 2,472 2,486 2,500

794 800 745 1,622 1,246 257 170 600

689 784 1,223 1,218 1,275 1,268 1,241 1,200

549 541 455 440 547 503 485 450

1,270 1,530 2,060 1,240 1,185 1,890 680 700

20,100 18,900 20,300 20,200 20,200 20,100 18,000 15,800

1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

2

3

Estimate.

Primary and secondary metal.

Source: U.S. Geological Survey (USGS)

Salient Statistics of Cadmium in the United States

Year

1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1 6

of 29 cents was an improvement from the record low of 14 cents in 1999 but it was still far below the 20-year average price of $1.59 per pound. Supply – World cadmium production in 2002 fell to a 27-year low of 15,800 metric tons. China and Japan were the largest producers of cadmium in 2002, each producing 2,500 metric tons, representing 15.8% of world production. US production of cadmium in 2002 rose +3% to 700 metric tons from the record low of 680 metric tons in 2001. The US production level in 2002 was less than half the level seen just two years earlier. The US in 2002 accounted for just 4.4% of world production. Demand – Consumption of cadmium has been declining fairly steeply in the last few years due to environmental concerns. Of the total apparent consumption, some 75 percent was for batteries. Another 12 percent went into pigments while coatings and plating used 8 percent. Stabilizers for plastics took 4 percent while nonferrous alloys and other uses took 1 percent. Trade – The US in 2002 relied on imports for virtually none of its cadmium usage, down from 38% as recently as 1998. US imports of cadmium have plunged in recent years and in 2002 fell to a negligible 25 metric tons from 107 metric tons in 2001 and 425 metric tons in 2000. US exports of cadmium fell to 194 metric tons in 2002 from 272 metric tons in 2001.

Net Import Reliance as a % of Apparent Consumption

Production (Metal)

Producer Shipments

Cadmium Sulfide Production

1,270 1,530 2,060 1,240 1,190 1,890 680 700

1,280 1,310 1,370 1,570 1,020 1,580 954 776

105 119 113 125 64 42 31 33

E 32 19 38 9 6 3 0

In Metric Tons of Contained Cadmium

Production Other Compounds

Imports of Cadmium Metal3

Exports4

936 720 607 638 604 417 -------

848 843 790 514 294 425 107 25

1,050 201 554 180 20 314 272 194

Apparent Consumption

Industry Stocks D e c. 3 1 5

New York Dealer Price $ per Pound

1,160 2,250 2,510 2,100 1,850 2,010 659 2,250

990 1,140 1,090 729 893 1,200 1,110 63

1.84 1.24 .51 .28 .14 .16 .23 .29

Preliminary. 2 Estimate. 3 For consumption. 4 Cadmium metal, alloys, dross, flue dust. 5 Metallic, Compounds, Distributors. Sticks & Balls in 1 to 5 short ton lots. E = Net exporter. Source: U.S. Geological Survey (USGS)

Average Price of Cadmium (99.95% ) in the United States Year

2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

---58.33

30.50 55.00

30.07 55.00

27.50 55.00

27.50 59.29

27.50 67.50

27.59 67.50

29.50 67.50

31.15 67.50

43.15 63.15

56.58 57.50

64.52 57.50

35.96 60.90

Source: American Metal Market (AMM)

16

In Dollars Per Pound

Jan.

Canola (Rapeseed) Canola is a genetic variation of rapeseed that was developed by Canadian plant breeders specifically for its nutritional qualities and its low level of saturated fat. The term Canola is a contraction of “Canadian oil.” The history of canola oil begins with the rapeseed plant, a member of the mustard family. The rape plant is grown both as feed for livestock and birdfeed. For 4,000 years, the oil from the rapeseed was used in China and India for cooking and as lamp oil. During World War II, rapeseed oil was used as a marine and industrial lubricant. After the war, the market for rapeseed oil plummeted. Rapeseed growers needed other uses for their crop, and that stimulated the research that led to the development of canola. In 1974, Canadian plant breeders from the University of Manitoba produced canola by genetically altering rapeseed. Each canola plant produces yellow flowers, which then produce pods. The tiny round seeds within each pod are crushed to produce canola oil. Each canola seed contains approximately 40% oil. The rest of the seed is processed into canola meal, which is used as high protein livestock feed. The climate in Canada is especially suitable for canola plant growth. Today, over 13 million acres of Canadian soil are dedicated to canola production. Canola oil is Canada’s leading vegetable oil. Due to strong demand from the US for canola oil, approximately 70% of Canada’s canola oil is exported to the US. Canola oil is used as a salad oil, cooking oil, and for margarine as well as in the manufacture of inks, biodegradable greases, pharmaceuticals, fuel, soap, and cosmetics. Canola futures and options are traded at the Winnipeg Exchange. The futures contract calls for the delivery of 20 metric tons of canola and 5 contracts are together called a “1 board lot.” The contract is priced in Canadian dollars per metric ton. Prices – Canola prices on the Winnipeg nearest-futures chart generally range-traded during 2003 between CD$330 and $390 per metric ton. Canola futures ended 2003 at CD$365, which was below the year’s high of $388.90 that was posted in late October 2003. Canola prices were pushed lower during the year due to a bumper crop, although de-

World Production of Canola (Rapeseed) Year

Austrlia

Canada

China

Czechoslovakia

179 305 309 557 624 856 1,690 2,460 1,905 1,797 841 1,400

3,872 5,480 7,233 6,436 5,062 6,392 7,643 8,798 7,205 4,926 4,178 6,670

7,653 6,940 7,492 9,777 9,200 9,578 8,300 10,132 11,381 11,331 10,552 11,600

375 377 452 662 521 575 680 931 844 973 710 400

1992-3 1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Preliminary.

2

Estimate.

3

Forecast.

mand rose to absorb almost all of that higher supply. As the year ended, prices were on the rise as stocks were being drawn down. Supply – World rapeseed production in 2003/4 was forecast by the USDA at 38.00 million metric tons, up sharply by 17% from 32.50 million in 2002/3. China is the world’s largest producer of rapeseed (canola) with 32% of world production (2003/4), followed by the European Union (25%), Canada (18%), and India (15%). China’s production in 2003/ 4 rose sharply by 10% to a forecasted 11.60 million metric tons from 10.55 million in 2002/3. Canada’s production soared by 60% to 6.67 million in 2003/4 from 4.18 million in 2002/3. EU production collectively rose slightly by 1.3% to 9.45 in 2003/4 from 9.33 in 2002/3. US production only accounted for 1.8% of world production and fell slightly by 1.4% to 700,000 metric tons in 2003/4 from 710,000 in 2002/ 3. Ending stocks of rapeseed in 2003/4 were forecast by the USDA at 1.85 million metric tons, down sharply by 32% from 2.71 million in 2002/3. Canola oil is the world’s third largest source of vegetable oil accounting for 13% of world vegetable oils, following soybean oil at 32%, and palm oil at 28%. Canola oil production in 2003/4 rose sharply by 12% to 13.25 million metric tons in 2003/4 from 11.78 million in 2002/3. Demand – Crush demand was strong in 2003/4 with a forecasted 35.29 million metric ton demand for canola for crushing into oil and meal, up by 13% from 31.11 million in 2002/3. The crush demand of 35.29 million accounted for 92% of world production in 2003/4. Consumption of rapeseed oil in 2003/4 rose by 11% to 13.21 million metric tons from 11.85 million in 2002/3. Consumption of rapeseed meal in 2003/4 rose by 12% to 21.09 million metric tons from 18.78 million in 2002/3. Trade – World exports of rapeseed rose by 16% to 5.43 million metric tons in 2003/4, up from 4.69 million. World exports in 2003/4 accounted for 14% of world production. The US is a net importer of rapeseed products. US imports of rapeseed oil in fiscal year 2003 fell to 445,000 metric tons from 503,000 in FY-2002/3. US imports of rapeseed meal in FY-2003 fell to 919,000 from 836,000 in 2002.

In Thousands of Metric Tons

France

Germany

India

Pakistan

Poland

Sweden

United Kingdom

Former USSR

World Total

1,810 1,550 1,800 2,700 2,870 3,496 3,734 4,392 3,481 2,874 3,317 ----

2,617 2,848 2,837 3,127 2,150 2,867 3,388 4,285 3,286 4,160 3,870 ----

4,872 5,390 5,884 6,000 6,942 4,935 4,900 5,110 3,725 4,500 3,600 5,800

243 225 225 255 255 286 292 279 297 231 221 241

758 594 756 1,377 449 595 1,099 1,132 958 1,064 995 750

247 313 214 215 139 132 129 154 112 112 165 ----

1,150 1,136 1,298 1,330 1,410 1,527 1,566 1,737 1,157 1,157 1,468 ----

329 211 244 252 226 221 339 505 522 440 493 ----

25,285 26,735 30,310 34,435 31,531 33,108 35,885 42,525 37,559 35,995 32,453 37,990

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA); The Oil World

17

CANOLA

Volume of Trading of Canola Futures in Winnipeg Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

119,691 75,068 99,542 121,433 100,926 129,758 137,528 196,137 164,945 129,903

103,517 87,113 95,034 133,056 144,309 59,772 182,744 292,226 179,753 152,738

85,125 86,340 76,704 131,473 110,708 132,732 163,038 286,463 166,889 108,991

100,923 67,937 128,169 148,647 140,789 143,282 169,807 247,744 159,981 153,528

111,962 95,447 148,189 117,219 130,551 102,838 168,164 205,798 133,202 120,178

79,307 85,126 103,892 116,117 121,829 134,179 152,358 188,175 139,256 152,979

Aug.

Sept.

Oct.

Nov.

D e c.

Total

83,903 95,712 94,576 70,904 135,652 87,896 80,867 72,602 107,816 89,457 94,256 113,913 79,071 91,762 163,901 155,531 132,524 174,527 90,909 66,768

July

54,893 94,794 108,490 93,967 121,573 130,505 146,890 143,220 131,034 109,760

87,350 126,210 161,894 150,065 181,002 184,973 208,639 205,016 170,873 217,310

101,727 84,991 90,105 97,984 127,120 157,428 154,727 174,910 105,661 90,950

96,797 107,177 110,453 124,245 181,278 179,798 204,045 165,852 169,477 153,269

1,120,907 1,075,683 1,346,020 1,387,675 1,557,358 1,563,434 1,858,773 2,424,973 1,828,122 1,547,283

Source: Winnipeg Commodity Exchange (WCE)

Average Open Interest of Canola Futures in Winnipeg Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

50,335 47,579 42,646 48,681 35,864 57,958 59,057 57,537 57,821 52,818

55,280 43,662 43,808 48,281 46,678 64,014 65,545 73,539 56,443 54,749

54,899 36,530 45,126 50,815 49,161 57,851 65,296 88,111 53,321 55,369

58,012 32,580 47,989 50,025 48,683 57,351 66,253 78,143 56,830 53,480

60,567 38,361 54,228 49,212 56,163 51,808 65,855 77,425 50,924 50,549

55,434 42,961 52,176 43,941 60,285 53,039 59,673 84,315 38,901 49,930

54,733 43,607 49,387 35,496 57,627 49,273 46,813 72,430 48,329 47,479

57,044 42,828 40,619 30,039 51,462 41,819 51,367 70,137 54,286 45,314

57,049 51,067 42,242 25,255 53,919 53,425 59,342 67,275 53,630 44,510

54,375 57,638 52,273 36,674 56,651 67,244 72,618 71,651 50,379 49,008

55,045 46,640 53,121 38,702 51,426 63,780 64,862 65,580 56,896 45,423

49,475 45,444 54,323 42,510 60,663 64,286 65,170 66,884 57,983 48,655

Source: Winnipeg Commodity Exchange (WCE)

18

In Contracts

Jan.

CANOLA World Supply and Distribution of Canola and Products Year

1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

In Thousands of Metric Tons

---------------------------- Canola ---------------------------- ------------------------ Canola Meal -----------------------ProEnding ProCon- Ending duction Exports Imports Crush Stocks duction Exports Imports sumption Stocks

31,531 33,108 35,885 42,525 37,559 35,995 32,453 37,990

Preliminary.

2

5,673 6,902 6,836 8,912 7,852 5,844 4,687 5,413

5,967 6,757 6,990 8,988 7,402 5,648 4,511 5,204 3

Estimate.

Forecast.

28,853 31,204 31,952 37,346 35,189 33,201 31,211 35,393

2,047 1,081 2,241 4,116 2,666 2,712 1,842 1,750

17,531 18,838 19,173 22,451 21,171 20,057 18,850 21,449

4,361 4,581 2,052 2,719 2,212 1,883 1,938 2,404

4,023 4,417 2,167 2,652 2,173 1,834 1,927 2,227

17,265 18,742 19,365 22,400 21,151 20,076 18,830 21,295

2,625 3,024 1,844 1,798 1,183 1,186 1,042 1,226

2,547 2,685 1,625 1,522 1,229 1,085 1,096 1,211

10,507 11,030 11,586 13,381 12,949 12,723 11,927 13,293

390 446 488 559 688 541 449 432

In Thousands of Metric Tons

---------------------------------------- Canola Oil ---------------------------------------------

------------------------ Supply -------------------

------------------------- Supply ---------------------------- Disappearance ---------

--------- Disappearance ---------

Stocks June 1

Production

Imports

Total

Crush

Exports

Total3

Stocks June 1

Production

Imports

40 36 19 77 50 39 68 72

219 355 710 621 909 908 706 686

259 355 310 242 217 125 197 290

518 746 1,039 940 1,176 1,072 971 1,048

395 589 698 722 773 757 587 764

79 126 246 136 220 218 284 195

474 715 944 858 993 975 871 959

35 30 52 79 96 51 24 38

155 205 250 281 292 266 246 299

502 504 503 534 545 503 445 600

Preliminary.

2

3

Forecast.

I ncludes planting seed and residual.

Wholesale Price of Canola Oil in Midw est2 Year

1996 1997 1998 1999 2000 2001 2002 2003 1

10,525 11,425 11,847 13,728 13,032 12,677 11,781 13,291

--------------------------------------------- Canola ---------------------------------------------

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

510 442 365 349 330 262 271 248

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA); The Oil World

Salient Statistics of Canola and Canola Oil in the United States

Year

------------------------- Canola Oil ------------------------ProCon- Ending duction Exports Imports sumption Stocks

Total Domestic

692 739 805 894 933 820 715 937

Exports

Total

133 158 123 129 85 116 73 75

662 687 726 798 882 796 677 912

529 529 603 669 797 680 604 837

Source: Economic Research Service, U.S. Department of Agriculture

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

50.75 90.00 28.00 25.31 17.31 14.81 20.81 24.30

50.75 90.00 29.00 21.44 16.50 15.19 21.31 28.88

50.75 90.00 30.30 20.69 17.25 16.69 27.44 27.63

50.75 90.00 30.58 21.50 18.69 16.69 21.94 27.44

50.75 90.00 31.13 20.38 17.75 18.00 21.95 28.13

50.75 90.00 28.45 20.58 16.45 19.25 23.19 27.13

50.75 90.00 28.44 19.33 15.50 22.50 25.06 26.56

50.75 90.00 26.85 19.75 15.69 21.80 28.45 26.30

50.75 90.00 29.75 19.25 15.60 19.94 29.81 28.44

60.56 82.00 28.20 18.44 15.00 19.00 30.75

90.00 82.00 27.19 18.19 15.31 20.56 34.19

90.00 82.00 26.10 17.95 15.50 21.88 41.19

58.11 88.00 28.67 20.23 16.38 18.86 27.17 27.20

1

Preliminary. 2 Data prior to 1998 are for Refined (Denatured), in Tanks in New York Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price of Canola in Vancouver Year

1996 1997 1998 1999 2000 2001 2002 2003

In Canadian Dollars Per Tonne

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

424.07 441.96 416.48 402.74 286.09 279.07 329.23 396.78

422.60 441.68 428.88 368.17 277.92 285.05 328.38 380.81

417.55 457.95 434.68 363.24 280.97 302.04 329.39 351.97

443.94 448.09 441.44 362.16 287.34 299.59 316.74 362.89

473.04 446.00 450.56 353.21 284.59 310.00 318.67 344.59

469.28 428.47 443.11 356.53 274.12 320.79 330.21 333.48

470.38 395.58 404.86 317.36 265.32 356.98 369.42 322.64

453.86 400.68 387.05 305.73 262.24 368.33 401.78 319.37

453.53 390.38 389.34 302.93 269.17 351.01 408.43 324.07

444.01 398.81 400.40 302.68 265.32 332.16 413.64 338.93

432.30 419.12 412.17 297.76 267.75 328.99 436.25 343.65

439.79 410.21 417.41 287.62 278.59 334.53 418.74 338.57

445.36 423.24 418.87 335.01 274.95 322.38 366.74 346.48

Source: Winnipeg Commodity Exchange (WCE)

Average Wholesale Price of Canola Meal, 36% Pacific Northw est Crop Year

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

In Dollars Per Short Ton

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Average

------------122.58 142.85 131.50 169.65

------------132.30 142.44 134.70 187.19

------------142.34 129.48 142.17 181.35

------------140.53 135.34 154.10 201.07

------------132.90 137.33 155.80

------------132.01 150.15 147.55

------------140.25 146.60 145.60

------------144.00 141.90 148.50

------------149.30 142.10 146.95

------------154.29 153.40 137.10

------------142.60 149.10 135.50

------------137.27 149.30 149.20

192.02 131.15 112.28 117.07 139.20 143.33 144.06 184.82

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

19

Cassava Cassava is a perennial woody shrub with an edible root. Cassava, which is also called manioc, mandioca, or yucca, grows in tropical and subtropical areas of the world. Cassava has been known since the 1500s and originates from Latin America. The cassava’s starchy roots are a major source of dietary energy for more than 500 million people. Cassava is the highest producer of carbohydrates among staple crops, and it ranks fourth in food crops in developing countries. The leaves of the cassava plant are also edible and are relatively rich in protein and vitamins A and B. Cassava is drought-tolerant and needs less soil preparation and weeding than other crops. Because cassava can be stored in the ground for up to 3 years, it also serves as a reserve food when other crops fail. The cassava is propagated by cuttings of the woody stem, thereby resulting in a low multiplication rate compared to crops propagated by true seeds. One problem with cassava is the poisonous cyanides, which need to be destroyed before consumption. The cyanide content differs with each variety of cassava, but higher cyanide is usually correlated to high yields. The cyanide content can be destroyed through heat and various processing methods such as grating, sun drying, and fermenting.

World Cassava Production

1

In Thousands of Metric Tons

Brazil

China

Ghana

India

Indonesia

Mozambique

Nigeria

Paraguay

Tanzania

Thailand

Uganda

Congo

World Total

25,423 24,584 24,305 19,503 20,864 23,336 22,479 23,108

3,501 3,601 3,651 3,701 3,751 3,801 3,851 3,851

6,612 7,111 7,000 7,227 7,845 8,107 8,966 9,731

5,929 5,443 5,868 6,000 6,700 6,800 6,900 6,900

15,442 17,002 15,134 14,696 16,438 16,089 17,055 16,723

4,178 4,734 5,337 5,639 5,353 5,362 5,400 5,400

31,404 31,418 30,409 32,695 32,697 32,010 32,586 34,476

3,054 2,648 3,155 3,300 3,694 2,719 3,568 4,142

5,969 5,992 5,700 6,128 7,182 7,120 6,884 6,888

17,388 17,388 18,084 15,591 16,507 19,064 18,396 16,870

2,224 2,245 2,291 3,204 4,875 4,966 5,265 5,300

17,500 18,000 16,973 17,060 16,500 15,959 15,436 14,929

165,436 164,711 164,373 162,856 171,918 178,567 183,289 184,853

Year

1995 1996 1997 1998 1999 2000 2001 2002 1

Cassava is the primary source of tapioca. Cassava is also eaten raw or boiled, and is processed into livestock feed, starch and glucose, flour, and pharmaceuticals. One species of cassava has been successfully grown for its rubber. Prices – The prices of tapioca (hard pellets, FOB Rotterdam) rose in the first quarter of 2003 to $94 per metric ton from $90 in 2002 and the recent trough of $82 in 2001. Still, tapioca prices are far below the 10-year average of $118 per metric ton. Supply – World production of cassava in 2000, the latest full reporting year for the series, rose by +2.2% to 172.737 million metric tons from 169.026 million in 1999. The world’s largest producers of cassava in 2000 were Nigeria (with 18.9% of world production), Brazil (13.3%), Thailand (10.7%), and Indonesia (9.5%). Trade – World exports of tapioca in 2002 fell to 3.560 million metric tons from 5.140 million in 2001. Thailand accounted for 86% of world exports in 2002, followed by Vietnam with 9% of world exports and Indonesia with 4%. The world’s two main importers of tapioca in 2002 were China with 49% of world imports and the European Union with 44% of world imports.

Source: Food and Agriculture Organization of the United Nations (FAO-UN)

Estimate.

Prices of Tapioca, Hard Pellets, F.O.B. Rotterdam

U.S. Dollars Per Tonne

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1995 1996 1997 1998 1999 2000 2001 2002 2003

164 167 133 96 104 94 83 86 91

170 160 118 100 102 90 80 82 92

180 155 112 98 101 88 77 82 95

178 158 108 104 102 92 78 84 96

174 163 114 106 108 85 80 87

176 154 110 104 104 88 82 91

183 149 100 105 99 88 84 96

176 154 97 106 102 81 84 97

178 146 100 112 100 78 87 95

184 139 102 122 99 74 83 93

182 140 102 124 100 76 84 93

178 133 100 109 97 79 84 89

177 152 108 107 102 84 82 90 94

Source: The Oil World

World Trade in Tapioca

In Thousands of Metric Tons

------------------------ Exports -----------------------Year

1995 1996 1997 1998 1999 2000 2001 2002 1 1

Estimate.

20

China

Indonesia

Thailand

Viet Nam

Total World Exports

10 11 11 10 10 10 10 ----

481 389 247 221 340 151 177 130

3,297 3,607 4,155 3,199 4,341 3,915 4,494 3,067

1 1 68 87 117 215 409 308

3,860 4,052 4,519 3,555 4,857 4,334 5,140 3,560

2

I ntra-EU trade is excluded.

Source: The Oil World

------------------------------------------- Imports ------------------------------------------Rep. of United Former Ja p a n Korea States USSR China EC-122

362 75 242 250 381 170 1,950 1,760

2,924 3,321 3,413 2,620 3,781 3,765 2,728 1,576

16 22 15 19 18 19 20 14

140 554 585 463 212 292 445 157

-------------------------

-------------------------

Total World Imports

3,590 4,174 4,605 3,536 4,501 4,555 5,288 3,601

Castor Beans Castor bean plants are native to the Ethiopian region of tropical east Africa. The seeds of the castor bean are used to produce castor oil. The average castor bean seed contains 35% to 55% oil. The oil is removed from the bean seeds by either pressing or solvent extraction. Castor oil is used in many products. In the US, the paint and varnish industry is the largest single market for castor oil. It is also used for coating fabrics, insulation, cosmetics, skin emollients, hair oils, inks, nylon plastics, greases, and hydraulic fluids. Ricin is one of the most deadly, naturally occurring poisons known. It received attention when it was used in a subway attack in Japan in 1995 and again recently when it was sent to a Congressional office in an envelope in February 2004. Ricin is found in all parts of the castor bean plant, but the most concentrated amounts are found in the

World Production of Castorseed Beans Crop Year

cake by-product after oil extraction. One non-deadly use for ricin is for medical research where it is being studied for use as a potential treatment for cancer. Supply – World production of castor-seed beans in 2002/ 3 fell to 989,000 metric tons from 1.033 million metric tons in 2001/2. The world’s largest producer of castor-seed beans by far is India with 59% of world production in 2002 at 580,000 metric tons. The second and third largest producers are China with 27% of world production (265,000 metric tons) and Brazil with 7% of world production (72,000 metric tons). Demand – US consumption of castor oil in 2002/3 fell sharply to 20.971 million pounds from 34.099 million pounds in 2001/2. US consumption of castor oil has fallen by more than half in the past three years.

In Thousands of Metric Tons

Brazil

China

Ecuador

India

Mexico

Paraguay

Pakistan

Philippines

Sudan

Tanzania

Thailand

Former U.S.S.R.

World Total

1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

41 97 17 33 116 100 72

222 180 230 250 300 260 265

4 4 4 4 4 4 4

770 829 840 910 867 600 580

1 2 1 1 1 1 1

15 16 19 8 11 13 12

5 5 6 3 1 2 2

4 4 4 4 4 4 4

1 1 1 1 1 1 1

2 3 3 3 3 3 3

15 11 7 7 9 9 9

3 2 2 2 2 2 2

1,116 1,189 1,168 1,261 1,353 1,033 989

1

2

Preliminary.

3

Estimate.

Forecast.

Sources: Foreign Agricultural Service, U.S.Department of Agriculture (FAS-USDA); The Oil World

Castor Oil Consumption2 in the United States Year

1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Thousands of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

3,276 2,348 4,281 2,694 4,127 3,281 2,072

4,353 3,579 3,917 4,601 2,346 1,887 1,836

4,367 3,740 4,682 2,386 1,650 1,528 1,779

4,409 3,323 3,819 3,975 3,012 1,641

3,035 4,197 4,328 2,896 3,703 1,642

4,389 5,004 5,346 3,209 3,129 1,629

4,218 5,218 4,135 3,159 3,062 1,123

3,645 4,639 3,341 3,840 3,096 1,315

4,651 4,396 4,268 3,112 1,243 1,518

4,350 4,471 3,884 3,050 2,992 1,839

3,489 4,465 4,257 4,686 2,872 1,449

4,210 4,494 4,573 2,257 2,867 2,119

48,392 49,874 50,831 39,865 34,099 20,971 22,748

2

Source: Bureau of the Census, U.S. Department of Commerce

I n inedible products (Resins, Plastics, etc.).

Castor Oil Stocks in the United States, on First of Month Year

1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

In Thousands of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

25,098 40,018 44,427 32,585 53,083 41,322 26,463

24,188 46,809 34,180 35,858 45,933 37,282 17,753

25,425 36,881 31,191 30,058 23,973 33,195 16,630

17,543 35,668 44,315 24,728 38,459 32,983 18,582

12,736 31,961 36,632 32,566 31,058 25,926

7,138 22,252 26,885 35,186 36,743 20,551

2,804 13,771 25,486 24,808 39,591 22,460

18,897 11,950 27,605 51,808 39,528 15,337

15,386 5,568 39,038 57,910 43,227 23,212

24,682 13,952 38,118 48,415 50,814 24,138

16,586 34,956 42,934 40,279 49,283 32,110

29,862 25,944 31,015 59,461 53,075 27,827

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

Average Wholesale Price of Castor Oil No. 1, Braz ilian Tanks in New York Year

1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

41.50 41.50 48.00 47.00 48.00 47.50 47.00

41.50 41.50 48.00 47.00 48.00 47.50 47.00

41.50 41.50 48.00 47.00 48.00 47.50 47.00

41.50 41.50 48.00 47.00 48.00 47.50 47.00

41.50 41.50 48.00 47.00 48.00 47.50 47.00

41.50 48.00 48.00 47.00 48.00 47.50 47.00

41.50 48.00 48.00 47.00 48.00 47.00 47.00

41.50 48.00 48.00 48.00 48.00 47.00 47.00

41.50 48.00 48.00 48.00 48.00 47.00 47.00

41.50 48.00 48.00 48.00 48.00 47.00

41.50 48.00 48.00 48.00 47.50 47.00

41.50 48.00 48.00 48.00 47.50 47.00

41.50 45.29 48.00 47.42 47.92 47.25 47.00

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

21

Cattle and Calves The cattle and beef industry begins with the cow-calf operation, which breeds the new calves. Most ranchers breed their herds of cows in summer, thus producing the new crop of calves in spring (the gestation period is about nine months). This allows the calves to be born during the milder weather of spring thus having ample forage available through the summer and early autumn. The calves are weaned from the mother after 6-8 months and most are then moved into the “stocker” operation. The calves usually spend the next 6-10 months in the stocker operation, growing to near full-sized by foraging for summer grass or winter wheat. When the cattle reach 600-800 pounds, they are typically sent to a feedlot and become “feeder cattle”. In the feedlot, the cattle are fed a special food mix to encourage rapid weight gain. The mix includes grain (corn, milo, or wheat), a protein supplement (soybean, cottonseed, or linseed meal), and roughage (alfalfa, silage, prairie hay, or an agricultural by-product such as sugar beet pulp). The animal is considered “finished” when it reaches full weight and is ready for slaughter, typically at around 1,200 pounds, which produces a dressed carcass of around 745 pounds. After reaching full weight, the cattle are sold for slaughter to a meat packing plant. The beef industry as a whole is estimated at $175 billion. Futures on live cattle and feeder cattle are traded at the Chicago Mercantile Exchange. Prices – Cattle prices rallied sharply through most of 2003, but then plunged in late December after a cow from a Washington state dairy farm was found to have mad cow disease. On the nearest futures chart, live cattle prices started 2003 at around 80 cents per pound, traded sideways in a choppy range between about 71-82 cents through July, and then rallied very sharply to an all-time record high of 104.25 cents/pound in November. Prices then plunged in late December by about 20% on the mad cow scare, finally closing the year mildly lower near 74 cents. Cattle prices rallied in the July-December period on a combination of events including (1) the fact that mad cow disease was found in a cow in Alberta, Canada in May, thus leading to increased demand for US cattle exports after most nations banned Canadian beef, (2) drought and poor grain-growing conditions in some parts of the US which

World Cattle and Buffalo Numbers as of January 1 Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 20042 1

Argentina

54,207 53,569 51,696 49,238 49,437 49,832 50,167 50,369 50,869 51,119

Preliminary.

22

2

Australia

Brazil

China

25,736 149,315 26,500 149,228 26,780 146,110 26,710 144,670 26,688 143,893 27,588 146,272 27,720 150,382 27,870 156,314 26,900 161,463 26,500 165,491

123,317 104,000 110,318 121,757 124,354 126,983 128,663 128,242 130,848 133,023

Forecast.

Colombi a

17,556 18,478 19,038 19,507 20,621 21,700 22,676 23,757

reduced cattle weights and herd sizes, (3) higher demand for choice cuts of beef with the increasing popularity of the high-protein Atkins and South Beach diets, and (4) low inventories as ranchers rushed their cattle to market to take advantage of high prices. But when mad cow disease hit the US on December 23, cattle prices gave back all their gains of the year, and then some. As of the end of 2003, 43 nations had banned the import of US beef. However, US consumer demand for beef did not show much of a dent from the mad cow scare as government officials insisted there was no risk from eating US beef. As 2003 ended, US officials in January were scrambling to determine what type of inspection and rules would assure US consumers of beef ’s safety and convince foreign countries to lift their ban on US beef. Supply – The US is the world’s largest producer of beef and veal with an estimated 12.226 million metric tons of production, accounting for about 25% of world production, which totaled 49.789 million metric tons in 2003 (USDA). The other key producers in 2003 were Brazil (7.530 million metric tons), European Union (7.360 million metric tons), and China (6.020 million metric tons). Demand – The US is by far the largest consumer of beef at 12.422 million metric tons in 2003, down slightly from 12.738 million in 2002. The USDA is forecasting US consumption to fall to 11.962 million metric tons in 2004 due in part to the mad cow disease scare. The other key consumers of beef are the European Union (7.598 million metric tons in 2003), Brazil (6.460 million metric tons), and China (6.007 million tons). Trade – Despite the fact that the US is the world’s largest producer of beef, the US is a net importer of beef. The beef the US exports is typically grain-fed, high-quality choice cut meat, whereas imports are typically lower-quality grass-fed beef that is destined for processing into items such as ground beef. The key countries to which the US exports its beef are Japan, South Korea, Mexico, and Canada. The key countries from which the US imports beef are Australia, Canada, New Zealand, Argentina, and Brazil. US beef exports in 2003 were approximately 1.2 million tons (USDA), accounting for about 10% of production.

In Thousands of Head

France

Germany

20,524 20,662 20,557 20,154 20,097 20,197 20,518

15,962 15,890 15,760 15,227 14,942 14,657 14,557

India

Mexico

Russia

Ukraine

293,922 296,462 299,802 303,030 306,967 312,572 313,774 317,000 323,000 327,250

30,191 28,140 26,822 25,628 24,859 23,715 22,551 21,296 20,519 19,524

43,296 39,700 35,800 31,500 28,600 27,000 25,500 24,510 23,500 22,345

19,624 17,558 15,313 12,579 11,722 10,627 9,424 9,433 9,108 8,700

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Total United States (Mil. Head)

102,785 103,548 101,656 99,744 99,115 98,198 97,277 96,704 96,106 95,133

1,073 1,048 1,043 1,043 1,041 1,045 1,040 1,047 1,014 1,019

CATTLE AND CALVES Cattle Supply and Distribution in the United States

Year

Imports

Calves Born

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

100,974 102,755 103,548 101,656 99,744 99,115 98,198 97,277 96,704 96,106

2,083 2,786 1,965 2,046 2,034 1,945 2,187 2,437 2,503 1,730

40,105 40,264 39,823 38,961 38,812 38,796 38,631 38,280 38,193 38,000

1

Preliminary.

2

In Thousands of Head

------------ Livestock Slaughter - Cattle and Calves ------------

Cattle & Calves on Farms January 1

Estimate.

3

---------------- Commercial ---------------Total Federally All Supply Inspected Other3 Commercial

143,799 145,805 145,336 142,663 140,590 139,856 139,016 137,994 137,400 135,836

Wholesale and retail.

34,719 36,272 37,435 37,101 36,209 36,737 36,720 35,752 36,140 35,840

745 798 917 792 714 695 658 625 641 616

35,464 37,069 38,351 37,893 36,923 37,432 37,378 36,377 36,780 36,455

Farm

227 225 224 218 215 210 210 200 190

Total Deaths Slaughter on Farms

35,691 37,294 38,575 38,111 37,138 37,642 37,588 36,577 36,970

Exports

4,254 4,382 4,572 4,676 4,210 4,114 4,097 4,211

231 95 174 282 285 329 481 678 243 100

Total D i sa p pearance

40,176 41,771 43,321 43,069 41,633 42,085 42,166 41,466

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Beef Supply and Utiliz ation in the United States

Year/ Quarter

Total - Per Capita Disappearance --------- Production ---------Beginning Total Ending Carcass Retail D i sa p Stocks Commercial Total Imports Supply Exports Stocks Weight Weight pearance ------------------------------------------------------------------- Million Pounds ------------------------------------------------------------------------ -------------- Pounds --------------

1999

296 296 309 293 294 314 314 367 380 406

I II III IV 2000 I II III IV 2001 I II III IV 2 0 0 21 I II III IV 20032 I II III IV 1

Preliminary.

2

Forecast.

26,386 6,399 6,627 6,838 6,522 26,777 6,653 6,699 6,914 6,511 26,107 6,182 6,502 6,723 6,700 27,090 6,377 6,833 7,097 6,783 26,772 6,287 6,907 7,078 6,500

27,579 6,695 6,936 7,131 6,816 28,244 6,967 7,066 7,294 6,917 26,107 6,182 6,502 6,723 6,700 27,090 6,377 6,833 7,097 6,783 26,772 6,287 6,907 7,078 6,500

2,874 628 812 742 692 3,031 720 820 775 700 3,164 785 839 848 689 3,218 737 934 839 708 2,860 810 741 619 690

2000 I II III IV 2001 I II III IV 1

Preliminary.

2,329 564 557 593 615 2,468 540 565 625 620 2,269 569 509 583 610 2,447 572 601 662 612 2,604 585 678 681 660

302 309 293 294 302 402 369 374 378 412

69.1 16.7 17.7 17.2 15.8 69.5 17.2 17.5 18.0 16.7 66.2 16.1 16.8 17.0 16.3 67.6 16.2 17.5 17.3 16.6 65.6 16.2 16.9 16.8 15.7

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

United States Cattle on Feed in 13 States Year/ Quarter

30,453 7,323 7,748 7,873 7,508 31,259 7,687 7,886 8,069 7,617 29,268 6,967 7,341 7,571 7,389 30,308 7,114 7,767 7,936 7,491 29,632 7,097 7,648 7,697 7,190

In Thousands of Head

Number on F eed3

Placed on F eed

Marketings

Other Disappearance

Year/ Quarter

Number on F eed3

Placed on F eed

Marketings

Other Disappearance

11,475 11,475 11,182 10,389 11,016 11,798 11,798 11,523 11,011 11,125

25,348 6,107 5,656 7,043 6,542 24,092 5,685 5,888 6,331 6,188

24,100 6,150 6,187 6,269 5,494 23,401 5,703 6,133 6,058 5,507

925 250 262 147 266 924 257 267 159 241

20021 I II III IV 20032 I II III IV

11,565 11,565 11,577 10,487 10,416 10,593 10,593 10,703 9,923 10,213

23,513 5,942 5,364 6,246 5,961 24,944 5,790 5,849 6,850 6,455

23,639 5,709 6,243 6,176 5,511 23,507 5,558 6,440 6,377 5,132

846 221 211 141 273 868 208 189 183 288

2

Estimate.

3

Beginning of period.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

23

CATTLE AND CALVES

Cents Per Pound ----- All Grades, Chicago (Jan. 1909 - Dec. 1947) Good, Chicago (Jan. 1948 - Dec. 1964) Choice, Chicago (Jan. 1965 - July 1971) Choice, Average, Omaha (Aug. 1971 - Aug. 1987) Average, Texas-Oklahoma (Sept. 1987 - date)

United States Cattle on Feed, 1000+ Capacity Feedlots2, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

8,256 8,031 8,667 8,943 9,455 9,021 9,752 11,798 11,565 10,593

8,139 8,119 8,304 8,813 9,180 8,917 9,885 11,941 11,572 10,660

7,981 8,227 8,152 8,769 8,835 8,878 9,695 11,695 11,518 10,526

7,960 8,328 8,286 8,904 8,607 8,899 9,593 11,523 11,577 10,703

7,772 8,233 7,758 8,484 8,295 8,583 9,391 11,170 10,951 10,530

7,511 8,182 7,253 8,231 8,289 8,547 9,411 11,245 10,970 10,534

6,910 7,734 6,578 7,679 7,825 8,183 8,959 11,011 10,487 9,923

6,841 7,391 6,337 7,536 7,706 7,889 8,812 10,891 10,089 9,590

6,949 7,189 6,612 7,850 7,750 8,185 8,972 10,855 10,129 9,834

7,295 7,722 7,486 8,558 8,376 8,793 9,502 11,125 10,416 10,213

7,988 8,420 8,534 9,390 9,190 9,789 10,192 11,863 10,742 11,038

8,198 8,685 9,003 9,718 9,404 10,020 10,213 11,891 10,898 11,330

Preliminary.

2

7 States through 2000.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

United States Cattle Placed on Feed, 1000+ Capacity Feedlots2 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousands of Head

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1,416 1,631 1,312 1,663 1,492 1,681 1,931 2,263 2,179 2,101

1,256 1,532 1,441 1,552 1,290 1,563 1,606 1,580 1,810 1,652

1,518 1,681 1,666 1,694 1,421 1,741 1,736 1,842 1,953 2,037

1,310 1,403 1,150 1,296 1,358 1,443 1,470 1,551 1,453 1,875

1,359 1,673 1,242 1,612 1,740 1,733 1,998 2,372 2,267 2,302

1,113 1,356 1,068 1,224 1,314 1,515 1,413 1,965 1,644 1,672

1,520 1,404 1,483 1,751 1,677 1,565 1,674 1,986 1,840 1,997

1,761 1,653 1,965 2,111 1,773 2,085 2,091 2,204 2,218 2,379

1,915 2,173 2,267 2,278 2,254 2,345 2,286 2,141 2,188 2,474

2,244 2,278 2,536 2,454 2,396 2,629 2,387 2,702 2,389 2,781

1,642 1,804 1,953 1,826 1,732 1,823 1,678 1,908 1,977 1,926

1,345 1,446 1,423 1,304 1,250 1,408 1,440 1,578 1,595 1,748

18,399 20,034 19,506 20,765 19,697 21,531 21,710 24,092 23,513 24,944

Preliminary.

24

In Thousands of Head

2

7 States through 2000.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

CATTLE AND CALVES

United States Cattle Marketings, 1000+ Capacity Feedlots2 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1,481 1,484 1,626 1,728 1,689 1,738 1,747 2,042 2,083 1,959

1,357 1,372 1,541 1,554 1,579 1,560 1,749 1,745 1,801 1,715

1,467 1,513 1,476 1,497 1,580 1,668 1,764 1,916 1,825 1,798

1,430 1,437 1,613 1,648 1,609 1,681 1,601 1,815 1,996 1,985

1,542 1,667 1,747 1,785 1,681 1,696 1,863 2,196 2,171 2,233

1,632 1,754 1,696 1,732 1,727 1,835 1,828 2,122 2,076 2,222

1,550 1,698 1,678 1,852 1,755 1,816 1,784 2,047 2,193 2,270

1,602 1,815 1,653 1,755 1,687 1,747 1,895 2,186 2,135 2,075

1,525 1,594 1,342 1,528 1,577 1,682 1,708 1,825 1,848 2,032

1,504 1,529 1,431 1,545 1,537 1,570 1,647 1,896 1,979 1,855

1,370 1,478 1,418 1,429 1,455 1,530 1,568 1,800 1,731 1,537

1,432 1,412 1,415 1,499 1,564 1,601 1,500 1,811 1,801 1,740

17,892 18,753 18,636 19,552 19,440 20,124 20,654 23,401 23,639 23,421

Preliminary.

2

7 States through 2000.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Quarterly Trade of Live Cattle in the United States

1

In Head

---------------------------------------- Imports ---------------------------------------First Second Third Fourth Quarter Quarter Quarter Quarter Annual

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31

In Thousands of Head

569,466 868,694 605,648 494,637 538,018 549,847 580,174 700,239 785,559 630,303

Preliminary.

540,845 804,686 467,059 500,052 503,547 424,182 537,009 612,645 398,072 408,833

386,596 488,515 391,633 423,838 373,451 313,211 346,087 444,637 474,128 142,780

585,597 624,350 501,108 627,825 618,993 657,836 724,016 679,194 845,214 548,112

2,082,504 2,786,245 1,965,448 2,046,352 2,034,009 1,945,076 2,187,286 2,436,715 2,502,973 1,730,028

---------------------------------------- Exports ---------------------------------------First Second Third Fourth Quarter Quarter Quarter Quarter Annual

51,803 26,597 33,906 63,217 69,824 51,830 117,889 111,549 73,401 38,246

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

43,115 18,441 42,796 58,153 63,459 59,195 67,895 75,152 62,140 34,145

62,729 19,794 42,757 81,095 53,145 47,049 72,028 297,069 49,930 10,953

73,144 29,716 54,848 79,879 98,781 171,245 223,430 194,683 57,472 16,571

230,791 94,548 174,307 282,344 285,209 329,319 481,242 678,453 242,943 99,915

25

CATTLE AND CALVES

Cents Per Pound ----- Oklahoma City (Jan. 1971 - date)

Average Slaughter Steer Price, Choice 2-4, Texas, 1100-1300 Lb. Year

1997 1998 1999 2000 2001 2002 2003

In Dollars Per 100 Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

65.07 64.57 61.46 69.07 78.79 64.00 78.24

65.35 60.77 63.17 68.88 79.40 71.24 80.39

67.44 64.52 64.75 71.74 79.44 71.97 77.34

67.66 65.00 65.34 73.13 76.50 67.63 78.98

67.36 64.52 65.00 71.28 74.93 65.49 78.90

63.53 63.85 66.15 69.41 72.64 63.85 76.49

63.80 60.28 64.51 67.22 70.71 63.57 75.61

65.19 60.00 65.29 65.02 69.07 63.41 79.77

66.04 57.93 66.05 65.43 68.75 65.63 87.37

66.93 61.54 69.63 68.51 66.30 65.64 97.63

67.66 62.23 70.28 72.19 63.60 70.21 100.31

65.91 59.97 69.01 76.41 63.62 73.11 91.11

66.00 62.10 65.89 69.86 71.98 67.15 83.51

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price of Steers (Feeder) in Oklahoma City Year

1997 1998 1999 2000 2001 2002 2003

In Dollars Per 100 Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

71.52 85.58 79.49 96.49 93.08 92.43 87.76

76.77 86.53 80.92 97.21 86.63 93.66 88.84

79.66 87.87 83.21 101.16 94.17 94.06 91.31

81.60 89.46 84.44 99.01 105.06 91.76 92.94

85.43 86.84 81.80 95.88 99.71 90.78 93.58

87.04 79.54 84.37 97.01 102.16 85.68 96.04

91.67 74.13 86.80 102.11 100.39 83.29 99.28

88.69 72.72 83.84 99.05 96.74 85.19 99.15

87.23 71.13 85.24 93.41 98.31 84.71 102.68

85.66 71.85 84.75 90.84 91.06 84.23 102.63

84.37 74.24 89.13 96.19 90.83 85.69 106.87

85.25 75.71 95.92 97.40 94.51 89.43 104.66

83.74 79.63 84.99 97.15 96.05 88.41 97.15

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Federally Inspected Slaughter of Cattle in the United States Year

1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

3,169 2,977 2,904 2,878 2,947 2,999 2,950

2,726 2,691 2,665 2,883 2,533 2,564 2,519

2,795 2,838 2,990 3,078 2,867 2,688 2,725

2,998 2,872 2,916 2,735 2,667 2,899 2,918

3,125 2,906 2,947 3,128 3,152 3,098 3,201

3,003 3,050 3,154 3,191 3,075 3,017 3,205

3,127 2,987 3,037 2,918 2,898 3,141 3,240

3,050 2,987 3,099 3,211 3,193 3,163 3,088

2,909 2,938 3,045 2,984 2,758 2,816 3,074

3,156 2,991 3,033 3,082 3,103 3,205 2,946

2,698 2,717 2,882 2,879 2,854 2,812 2,380

2,811 2,834 2,814 2,665 2,726 2,719 2,618

35,567 34,787 35,486 35,631 34,771 35,120 34,863

Preliminary.

26

In Thousands of Head

Jan.

Source: National Agricultural Statistics Board, U.S. Department of Agriculture (NASS-USDA)

CATTLE AND CALVES

Average Open Interest of Live Cattle Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

87,923 80,306 72,870 97,014 105,559 115,254 128,918 132,298 93,589 111,874

87,578 78,793 83,064 103,437 102,036 115,283 123,980 132,866 91,566 105,882

83,949 76,821 91,348 108,157 101,264 115,410 123,925 131,312 98,176 98,943

70,287 64,763 97,315 98,354 88,257 104,482 122,596 123,075 98,343 96,875

72,851 61,460 97,911 99,640 88,167 103,290 117,834 112,180 98,846 107,193

75,470 56,783 96,320 96,279 87,493 101,078 106,196 114,970 91,129 111,397

76,663 58,077 96,547 99,042 86,776 96,843 116,266 116,162 93,541 113,324

72,988 55,511 93,557 98,590 86,874 101,858 120,526 105,252 92,966 115,417

73,391 58,319 92,804 94,137 95,013 121,305 123,945 114,214 109,651 130,836

67,924 62,222 88,467 93,579 102,636 123,466 123,517 109,677 111,338 124,525

74,152 69,495 88,062 100,368 108,263 126,040 131,773 108,574 121,671 113,224

68,600 69,065 87,305 102,741 106,156 120,204 132,239 95,182 116,588 106,522

Source: Chicago Mercantile Exchange (CME)

Volume of Trading of Live Cattle Futures Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

280,820 289,710 312,018 361,620 355,728 298,814 347,290 511,050 331,026 378,862

291,834 259,210 275,399 352,173 400,210 342,572 323,524 357,474 275,699 343,931

262,399 391,721 333,200 312,113 327,169 338,076 356,258 385,581 387,115 334,007

264,242 287,194 457,536 331,948 400,584 320,457 236,494 302,829 448,508 306,713

372,913 285,686 385,875 285,885 296,651 296,512 302,001 348,294 304,900 391,477

363,935 290,224 303,091 303,369 321,370 342,854 244,755 289,093 247,940 311,239

318,198 245,250 319,815 387,526 334,424 287,557 248,377 318,564 286,248 449,966

317,127 266,793 299,498 324,943 369,604 266,544 293,450 324,614 288,525 319,677

270,048 233,402 278,083 316,822 370,282 371,735 277,913 340,969 314,927 473,218

308,879 220,130 339,419 374,632 373,207 345,269 293,972 403,101 352,487 469,405

275,875 246,655 312,577 238,003 318,152 375,960 397,879 403,009 315,658 324,732

254,626 241,130 309,681 330,608 349,125 253,198 359,599 294,695 298,703 332,862

3,580,896 3,257,105 3,926,192 3,919,642 4,216,506 3,839,548 3,681,512 4,279,273 3,851,736 4,436,089

Source: Chicago Mercantile Exchange (CME)

27

CATTLE AND CALVES Beef Steer-Corn Price Ratio in the United States Year

1996 1997 1998 1999 2000 2001 2002 2003 2

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

20.3 24.2 25.8 30.2 37.5 40.1 36.1 33.4

18.1 24.6 24.8 31.0 35.9 40.2 38.1 33.4

17.2 24.3 25.2 31.8 36.2 41.1 38.2 32.9

15.1 24.3 27.5 32.4 37.0 42.1 37.0 33.7

13.9 25.4 28.3 32.8 34.7 42.5 35.3 33.4

14.2 25.4 28.3 33.9 37.4 43.6 34.0 33.6

14.0 27.0 27.9 37.5 42.9 40.1 31.2 36.3

15.0 26.6 31.6 37.8 44.7 38.7 28.3 38.8

19.1 26.6 32.2 38.3 42.6 37.7 27.4 40.6

23.6 26.5 32.1 41.5 40.5 38.1 29.3 46.1

25.8 27.1 32.3 41.7 39.7 36.6 31.5 45.5

24.9 26.5 30.0 38.9 39.0 34.6 32.3 41.3

18.4 25.7 28.8 35.7 39.0 39.6 33.2 37.4

1 Bushels of corn equal in value to 100 pounds of steers and heifers. U.S. Department of Agriculture

2

Source: Economic Research Service,

Preliminary.

Farm Value, Income and Wholesale Prices of Cattle and Calves in the United States ----- January 1 ----Year

1996 1997 1998 1999 2000 2001 2002 1

Per Head Dollars

Total Million $

503 525 603 594 683 725 747

52,056 53,383 60,193 58,834 67,099 70,495 72,284

Gross Income From C & C2 Million $

31,251 36,322 33,720 36,861 41,078 40,803

F eeder Cows, Cows, Wholesale Prices, Central U.S. Heifers at Boning Com------- Steers3 ------- ------- Heifers ------- Oklahoma Utility mercial Choice Select Cow6, Choice Select Select Choice City5 Sioux Falls6 Sioux Falls 700-850 lb. 700-850 lb. Canner7 ------------------------------------------------------------ Dollars per 100 Pounds ------------------------------------------------------------------------------ At Ohama3 -------------------

74.50 65.92 60.07 65.64 69.52 67.68 66.39

61.83 63.85 56.17

61.22 63.36 55.17

64.18 65.66 59.23 65.68 69.55 67.81 67.39

57.21 72.04 67.89 71.90 82.23 84.19 76.70

30.45 34.27 36.19 38.40 41.71 44.39 40.47

33.70 36.14 38.93 40.61 44.45 46.65 39.63

102.01 102.56 98.42 110.91 117.45 122.17 113.59

95.70 95.92 92.20 103.07 108.83 114.42 107.66

1 Preliminary. 2 Excludes interfarm sales & Gov't. payments. Cash receipts from farm marketings + value of farm home consumption. 4 5 6 1,000 to 1,200 lb. 1992 to date are 700 to 750 lb., 1987 thru 1991 are 600 to 700 lb. All weights. 7 & Cutter. 1,100 lb. Source: Economic Research Service, U.S. Department of Agriculture (NASS-USDA)

Average Price Received by Farmers for Beef Cattle in the United States Year

1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Dollars Per 100 Pounds

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

59.10 61.40 62.50 59.00 67.80 74.80 67.10 73.20

57.90 61.90 60.40 60.60 67.60 74.70 70.00 74.00

56.80 64.80 61.30 62.40 69.80 76.00 70.60 72.70

54.90 64.80 63.00 62.70 71.30 75.40 67.30 74.60

54.70 65.10 63.00 62.10 69.40 73.60 65.10 75.50

56.40 62.30 61.80 63.70 68.50 73.60 64.00 74.90

59.10 62.80 58.40 62.60 67.50 71.80 63.70 75.80

61.30 63.90 57.40 63.50 65.50 70.60 64.40 79.90

63.80 63.60 56.10 63.80 65.30 69.00 64.50 85.10

63.30 63.30 58.00 66.20 66.70 66.50 64.60 92.00

63.40 63.30 58.10 66.20 69.10 64.00 67.30 93.70

61.00 62.90 56.80 66.60 71.90 64.80 70.40 90.50

59.30 63.30 59.70 63.28 68.37 71.23 66.58 80.16

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Price Received by Farmers for Calves in the United States Year

1

1,000 to

Jan.

Preliminary.

1996 1997 1998 1999 2000 2001 2002 2003 1

3

58.16 64.30 61.49 66.51 72.57 55.32

In Dollars Per 100 Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

61.80 68.10 86.60 83.20 103.00 108.00 102.00 96.80

60.20 74.90 88.70 86.90 105.00 109.00 105.00 97.30

59.40 80.00 89.80 87.30 109.00 112.00 105.00 97.00

55.10 82.20 90.80 88.20 111.00 112.00 101.00 99.10

54.40 84.30 88.90 87.60 107.00 111.00 99.50 100.00

55.10 85.40 81.70 89.00 104.00 110.00 96.50 107.00

56.80 86.90 76.60 89.20 106.00 108.00 92.40 103.00

59.30 88.00 76.90 89.60 106.00 106.00 94.90 107.00

61.00 86.90 74.10 90.90 103.00 107.00 92.40 109.00

60.10 84.30 75.70 91.90 102.00 99.70 92.00 113.00

61.20 82.90 77.50 93.00 106.00 96.70 91.90 112.00

61.80 83.30 80.20 98.60 106.00 101.00 95.30 112.00

58.90 82.30 82.30 89.62 105.67 106.70 97.33 104.43

Preliminary.

Source: National Agricultural Statistics Board, U.S. Department of Agriculture (NASS-USDA)

Federally Inspected Slaughter of Calves and Vealers in the United States

In Thousands of Head

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1996 1997 1998 1999 2000 2001 2002 2003 1

140 143 125 103 91 89 86 92

140 122 111 98 92 77 71 81

141 128 125 115 97 82 76 83

128 126 107 95 75 72 80 77

133 114 99 87 86 77 76 74

131 115 115 102 91 75 74 72

156 131 131 109 92 81 94 83

153 123 122 115 98 92 94 78

146 133 132 117 91 77 87 80

159 137 121 102 95 91 98 85

139 121 109 100 91 85 88 76

149 142 127 110 90 82 96 95

1,715 1,534 1,422 1,252 1,088 981 1,019 976

1

Preliminary.

28

Source: Crop Reporting Board, U.S. Department of Agriculture (CRB-USDA)

Cement Cements are made in a wide variety of compositions and are used in many different ways The best-known cement is Portland cement, which is bound with sand and gravel to create concrete. Concrete is used to unite the surfaces of various materials and to coat surfaces to protect them from various chemicals. Portland cement is almost universally used for structural concrete. It is manufactured from lime-bearing materials, usually limestone, together with clays, blast-furnace slag containing alumina and silica or shale in a combination of approximately 60 percent lime, 19 percent silica, 8 percent alumina, 5 percent iron, 5 percent magnesia, and 3 percent sulfur trioxide. To slow the hardening process, gypsum is often added. In 1924, the name “Portland cement” was coined by Joseph Aspdin, a British cement maker, because of the resemblance between concrete made from his cement and Portland stone. The United States did not start producing Portland cement in any great quantity until the 20th century. Hydraulic cements are those that set and harden in water. Clinker cement is an intermediate product in cement manufacture. The production and consumption of cement is directly related to the level of activity in the construction industry.

World Production of Hydraulic Cement Year

1995 1996 1997 1998 1999 2000 2001 1 20022 1

Brazil

China

France

28,256 34,597 38,096 39,942 40,270 39,208 38,927 39,500

475,910 491,190 511,730 536,000 573,000 597,000 661,040 704,720

19,692 19,514 19,780 19,500 20,219 20,137 19,839 20,000

Preliminary.

2

Estimate.

Prices – The average value (F.O.B. mill) of Portland cement in 2002 was $76.00 per ton, down from $76.50 in 2001. That was well above the 10-year average price of $71.50. Supply – World production of hydraulic cement in 2002, the latest reporting year, reached a record high of 1.80 billion metric tons. The world’s largest hydraulic cement producer is China with 39% of world production, followed by India with 5.6%, the US with 5.1%, and Japan with 4.0%. Other large producers include South Korea, Germany, and Brazil. US mills produced approximately 90.78 million metric tons of Portland cement in 2003, which was a record high and up from 86.97 million in 2002 and 88.12 million in 2001. Demand – US consumption of cement in 2002 fell to 110.02 million tons from 112.81 million in 2001. Trade – US exports of hydraulic and clinker cement rose to 834 million tons in 2002 from 746 million in 2001. The major suppliers of cement to the US are Canada, Thailand, China, Venezuela, and Greece. The US exports only a very small portion of cement, less than 1% of production.

In Thousands of Short Tons India

Italy

Ja p a n

Rep. of Korea

Russia

Spain

Turkey

United States

World Total

33,302 62,000 31,533 75,000 35,945 80,000 36,610 85,000 35,912 90,000 34,727 95,000 30,989 100,000 30,000 100,000

33,715 33,327 33,721 35,512 37,299 38,925 39,804 40,000

90,474 94,492 91,938 81,328 80,120 81,097 76,550 71,800

55,130 58,434 60,317 46,091 48,157 51,255 52,046 55,514

36,500 27,800 26,700 26,000 28,400 32,400 35,300 37,700

26,423 25,157 27,632 33,080 35,782 38,115 40,512 42,500

33,153 35,214 36,035 38,200 34,258 35,825 30,125 32,577

76,906 80,818 84,255 85,522 87,777 89,510 90,450 91,266

1,445,000 1,493,000 1,540,000 1,540,000 1,600,000 1,650,000 1,730,000 1,800,000

Germany

Source: U.S. Geological Survey (USGS)

Salient Statistics of Cement in the United States

Year

Net Import Average Capacity Reliance Shipments Imports for Consumption5 Apparent Value Stocks Used at as a % of ----------- Production -------------- From Mills ----------------------- by Country --------------------C o n a t M i l l s (F.O.B. (Portland Apparent 3 Total Total Mill) Dec. 31 Exports sumption Canada Japan Mexico Spain Mills) Con- Portland Others Total Value4 % Mil. Tons Mil. $ $ per ton --------- Million Tons --------- --------- Thousands of Short Tons ---------sumption ------- Thousand Tons -------

1995 1996 1997 1998 1999 2000 20011 20022

11 12 14 19 23 20 21 19

73,303 75,797 78,948 79,942 81,577 83,514 84,450 85,283

3,603 3,469 3,634 3,989 4,375 4,332 4,450 4,449

76,906 79,266 82,582 83,931 85,952 87,846 88,900 89,732

81.2 83.4 84.7 84.9 83.6 80.7 79.1 78.7

78,518 83,963 90,359 96,857 103,271 105,557 112,510 108,500

5,329 5,952 6,637 7,404 8,083 8,293 8,600 8,250

67.87 70.89 73.46 76.45 78.27 78.56 76.50 76.00

5,814 5,488 5,784 5,393 6,367 7,566 6,600 7,680

759 803 791 743 694 738 746 834

86,003 90,355 96,018 103,460 108,862 110,470 112,810 110,020

4,886 5,351 5,350 5,957 5,511 4,948 5,110 5,181

6 6

1

850 1,272 995 1,280 1,286 1,409 1,645 1,228

Preliminary. 2 Estimate. 3 Masonry, natural & pozzolan (slag-line). 4 Value received F.O.B. mill, excluding cost of containers. clinker cement for consumption. 6 Less than 1/2 unit. Source: U.S. Geological Survey (USGS)

Shipments of Finished Portland Cement from Mills in the United States Year

1997 1998 1999 2000 2001 2002 2003 1 1

5

1,501 1,595 1,845 2,204 1,900 1,177 651 327

13,848 14,154 17,596 24,086 29,351 28,683 25,861 24,169

Hydraulic &

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

4,111.3 4,552.0 4,487.3 4,765.5 5,107.6 5,554.3 5,489.6

4,487.1 4,559.7 5,132.9 5,343.1 5,088.8 5,369.3 4,559.9

5,739.1 5,867.4 6,380.5 7,196.9 6,684.5 6,133.9 6,511.6

7,009.5 7,009.7 7,112.2 6,930.2 7,799.4 7,859.7 8,009.0

7,489.3 7,420.2 7,406.9 8,448.2 8,507.9 8,291.4 8,290.4

7,733.7 8,095.1 8,096.9 8,391.5 8,385.8 8,135.6 8,521.9

8,132.4 8,295.6 7,782.2 7,843.8 8,333.2 8,466.9 9,078.5

7,909.2 7,963.3 8,173.2 8,982.3 8,851.2 8,676.2 8,837.0

8,186.1 8,089.5 7,652.7 7,860.8 7,512.2 7,909.7 8,758.7

8,678.9 8,404.6 8,204.2 8,474.2 8,953.3 8,326.1 9,777.7

6,108.6 6,640.5 7,453.4 6,587.0 7,353.3 6,956.3 6,983.4

5,471.9 6,059.4 5,959.1 4,865.5 5,548.0 5,293.4

81,064.3 82,956.8 83,841.5 84,980.3 88,124.9 86,972.9 92,528.3

Preliminary.

Source: U.S. Geological Survey (USGS)

29

Cheese Since prehistoric times, humans have been making and eating cheese. Dating back as far as 6,000 BC, archaeologists have discovered that cheese had been made from cow and goat milk and stored in tall jars. The Romans turned cheese making into a culinary art, mixing sheep and goat milk and adding herbs and spices for flavoring. By 300 AD, cheese was being exported regularly to countries along the Mediterranean coast. Cheese is made from the milk of cows and other mammals such as sheep, goats, buffalo, reindeer, camels, yaks, and mares. More than 400 varieties of cheese exist. There are three basic steps common to all cheese making. First, proteins in milk are transformed into curds, or solid lumps. Second, the curds are separated from the milky liquid (or whey) and shaped or pressed into molds. Finally, the shaped curds are ripened according to a variety of aging and curing techniques. Cheeses are usually grouped according to their moisture content into fresh, soft, semi-soft, hard, and very hard cheeses, with many classifications overlapping due to texture changes with aging. Cheese is a multi-billion dollar a year industry in the US. Cheddar cheese is the most common natural cheese produced in the US, accounting for 35% of US production. Cheeses originating in America include Colby, cream cheese,

and Monterey Jack. Varieties other than American cheeses, mostly Italian, now have had a combined level of production that easily exceeds American cheeses. Annual cheese consumption in the US totals about 29 pounds per person. Prices – Cheese prices in 2003 rallied to an average of 131.0 cents per pound from 118.2 cents in 2002. The average price of cheese in 2003 was mildly below the 10-year average price of about 135.0 cents. Cheese prices in 2003 recovered from the very weak years seen in 2000 (116.1 cents) and 2002 (118.2 cents), which were the lowest prices seen since 1975. Supply – US production of cheese in 2003 was on track to fall slightly to 8.595 billion pounds, down from 8.599 billion in 2002. The 2002 production level of 8.599 billion was an all-time record high for the US cheese industry. World production of cheese in 2002 rose to 12.680 million metric tons from 12.421 million in 2001. The US is the world’s largest producer of cheese with 29.9% of world production in 2002, followed by France (13.7%), and Germany (9.0%). Trade – US imports of cheese in 2002 rose to 475 million pounds from 445 million in 2001. US exports of cheese in rose to 119 million pounds in 2002 from 115 million pounds in 2001.

World Production of Cheese

In Thousands of Metric Tons

Year

Argentina

Australia

Brazil

Canada

Denmark

France

Germany

Italy

Netherlands

New Zealand

United Kingdom

United States

World Total

385 370 390 415 407 446 445 440 370 340

234 241 268 285 305 320 373 374 413 371

330 360 385 405 421 434 445 460 470 480

282 277 289 329 330 329 328 329 335 330

286 311 298 290 289 293 305 312 317

1,541 1,579 1,594 1,645 1,648 1,658 1,720 1,740 1,740

855 875 947 990 1,008 1,006 1,098 1,125 1,145

913 942 950 985 1,003 969 958 972 980

648 680 688 693 638 655 683 650 640

192 197 230 240 266 245 297 281 312 272

326 354 364 368 358 361 332 365 365

3,054 3,138 3,274 3,325 3,398 3,581 3,746 3,747 3,900 3,975

11,194 11,345 11,059 11,388 11,378 11,750 12,223 12,313 12,649 12,647

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

2

Preliminary.

Estimate.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Supply and Distribution of All Cheese in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1 5

Cheese ---------------------------------- Supply ----------------------------- 40-lb. Blocks January 1 Wisconsin ComAssembly ----- Production ----mercial Whole Points All Total Stocks Imports4 Milk2 Cheese3 cents/lb. Supply

2,957 2,974 3,131 3,281 3,286 3,315 3,533 3,642 3,544 3,709

Preliminary. Commercial.

30

2

6,528 6,735 6,917 7,218 7,330 7,492 7,894 8,258 8,261 8,599

470 466 437 412 487 481 518 621 706 659

321 335 340 338 312 371 436 416 445 475

7,303 7,536 7,695 7,968 8,130 8,344 8,847 9,295 9,412 9,733

131.50 131.50 132.80 146.80 132.40 158.10 142.28 116.14 144.93 118.22

In Millions of Pounds

--------------------------------------------- Distribution ---------------------------------------------

Exports & Shipments6

38 49 65 72 83 81 85 105 115 119

American --- Domestic Disappearance --Cheese Total American - Gov't - Removed Cheese D i sa p Dec. 31 by USDA P er Stocks Programs pearance Donated Total Capita

2.2 .9 .4 .3 .5 .6 1.0 2.3 4.0 2.7

8.3 6.9 6.1 4.6 11.3 8.2 4.6 28.0 3.9 15.1

Whole milk American cheddar. 3 All types of cheese except cottage, pot and baker's cheese. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

6,853 7,094 7,279 7,478 7,647 7,799 8,219 8,555 8,741 8,983 4

0 0

6,766 6,994 7,174 7,364 7,511 7,662 8,086 8,409 8,426

I mports for consumption.

26.24 26.82 26.90 27.30 27.50 27.70 29.00 29.80 29.60

CHEESE Production of Cheese in the United States

In Millions of Pounds

----------- American ----------Year

Whole Milk

Part S ki m

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021

2,957 2,974 3,131 3,281 3,286 3,315 3,533 3,642 3,544 3,709

3.7 24.7 24.0 NA NA NA NA NA NA NA

Swiss, Including Block Munster Total

2,961 2,999 3,155 3,281 3,286 3,315 3,533 3,642 3,544 3,709

231.4 221.2 221.7 219.0 207.6 206.4 221.0 229.3 245.5 254.1

Brick

117.5 113.6 109.1 106.8 100.2 94.6 80.3 85.5 82.2 80.4

Cream & Lim- Neufchatel Cheese burger

12.5 12.2 10.4 10.6 8.5 7.6 8.1 8.6 8.7 9.3

.9 .8 .9 .7 .7 .9 .7 .6 .7 .7

539.9 573.4 543.8 574.7 614.9 621.3 639.3 687.4 645.1 709.6

Italian Varieties

2,494.5 2,625.7 2,674.4 2,812.4 2,881.4 3,004.7 3,144.7 3,288.9 3,425.9 3,506.5

Total of All Blue All Other Mond Varieties Cheese2

33.3 36.5 36.6 38.3 42.8 5 5 5 5 5

137.2 152.1 164.6 106.7 119.8 166.0 181.0 219.7 199.6 208.3

------- Cottage Cheese ------Curd3 Creamed4

Lowfat

6,528 6,735 6,917 7,218 7,330 7,492 7,894 8,258 8,261 8,599

317.0 321.1 325.9 329.9 346.7 361.2 359.3 363.7 370.2 374.3

471.4 463.3 458.9 448.3 458.5 465.8 464.8 461.0 453.2 437.9

430.5 410.0 384.9 360.4 359.5 366.8 360.6 371.5 371.6 372.4

1

Preliminary. 2 Excludes full-skim cheddar and cottage cheese. 3 I ncludes cottage, pot, and baker's cheese with a butterfat content of less than 4%. 4 I ncludes cheese with a butterfat content of 4 to 19 %. 5 I ncluded in All Other Varieties. Source: Economic Research Service, U.S. Department of Agriculture ERS-USDA)

Average Price of Cheese, 40-lb. Blocks, Chicago Mercantile Exchange2 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

132.2 124.5 139.3 127.9 144.5 162.4 114.6 110.3 132.4 109.3

134.2 130.4 139.3 132.3 144.7 131.5 111.6 120.0 120.8 109.2

140.0 131.1 140.9 134.0 138.8 134.0 112.2 131.9 121.3 108.2

143.3 122.8 145.1 125.6 129.7 133.6 110.7 140.5 124.5 112.3

125.7 122.1 151.8 116.5 123.0 124.8 110.6 160.3 120.1 114.2

120.2 126.9 151.5 117.9 151.3 138.1 120.0 166.8 113.0 118.6

129.1 126.7 158.2 123.3 162.6 159.7 125.2 168.5 108.9 151.2

132.2 132.2 167.6 137.6 166.9 189.0 125.5 171.8 115.8 160.0

135.6 141.3 145.5 141.4 171.0 167.3 133.4 173.9 120.4 160.0

135.4 145.0 162.3 142.4 183.5 134.0 109.4 139.7 119.5 158.8

127.9 145.8 133.9 143.8 188.7 117.3 107.5 126.4 108.9 139.3

121.3 144.6 126.0 146.1 192.5 115.7 113.0 129.1 113.1 133.8

131.5 132.8 146.8 132.4 158.1 142.3 116.1 144.9 118.2 131.2

1

Preliminary. 2 Data through December 2001 are for Wholesale Price of Cheese, 40-lb. Blocks, Wisconsin Assembly Points. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production2 of Cheese in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

538.3 559.3 590.0 598.1 617.2 631.6 692.9 680.3 717.5 717.8

505.8 523.3 576.0 577.1 574.3 591.7 649.5 625.3 667.9 653.5

591.8 596.0 625.4 638.0 646.7 698.2 714.8 713.7 742.8 735.4

554.3 559.6 606.0 598.5 636.9 663.8 694.0 670.2 719.2 721.4

590.4 595.3 636.5 642.0 650.4 668.9 730.4 706.8 748.3 742.2

558.7 579.2 595.8 623.4 639.9 664.4 695.7 678.5 708.3 714.5

550.7 556.5 582.2 613.2 607.9 641.3 687.6 676.0 692.2 717.2

562.4 550.8 589.5 596.5 596.4 642.6 683.8 660.0 714.3 709.0

565.5 571.3 584.5 604.3 583.8 637.6 653.8 641.8 683.9 712.1

574.5 588.6 612.2 615.5 633.2 666.5 688.5 682.1 732.2 741.4

559.3 584.7 595.5 594.5 637.8 683.4 675.0 691.2 725.4 710.4

578.3 618.4 623.9 627.9 667.4 704.2 688.4 703.1 747.2 753.1

6,730 6,883 7,218 7,329 7,492 7,894 8,255 8,129 8,599 8,628

Preliminary.

2

Excludes cottage cheese.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Cold Storage Holdings of All Varieties of Cheese in the United States, on First of Month Millions of Pounds Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

465.2 436.9 412.1 487.0 480.4 517.2 621.3 707.8 660.0 730.1

495.2 449.7 441.3 501.5 509.3 622.4 728.1 709.9 693.6 759.5

473.6 448.7 466.4 494.6 521.5 635.9 757.2 723.9 720.3 768.5

473.3 458.8 490.9 517.0 533.1 645.1 765.1 711.6 731.7 770.5

487.9 466.1 525.5 555.4 557.6 688.7 794.0 711.8 765.6 777.4

513.4 465.8 541.8 584.3 568.5 741.3 811.4 712.1 789.0 791.0

521.4 473.6 542.8 604.8 583.7 728.4 828.1 739.2 797.6 799.7

506.3 482.4 536.6 604.9 595.8 748.7 870.3 752.6 833.6 809.0

474.7 458.1 506.9 582.3 576.8 694.7 839.9 721.2 801.5 794.2

453.0 428.5 495.8 543.7 553.0 651.3 780.9 708.7 753.9 771.6

448.3 418.7 494.6 505.0 522.7 622.0 732.0 672.2 720.4 722.4

434.2 393.6 480.2 474.4 494.5 591.7 696.0 631.3 697.1 695.5

Quantities are given in net weight.

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

31

Chromium babwe with 6%. India has emerged as a major producer of chromium in the past two decades. India’s 2002 production level of 1.900 million metric tons was 5 times the level of 360,000 metric tons seen 20 years earlier. South Africa’s production in the late-1990s roughly doubled from the levels seen in the 1980s, but has flattened out in the past 8 years to an average year 6 metric tons per year. Kazakhstan’s production in 2002 of 2.300 million was slightly above its 10-year average production level of 2.14 million metric tons. Zimbabwe’s production in 2002 posted a new 25-year high of 780,000 metric tons. Demand – Based on the most recently available data, the metallurgical and chemical industry accounts for 94% of chromium usage in the US, with the remaining 6% used by the refractory industry. Trade – The US relied on imports for a record low 63% of its chromium consumption in 2002, down from 78% in 2000 and 2001 and 80% in 1998 and 1999. US chromium imports in 2002 fell to a record low 174,000 metric tons from 239,000 in 2001, and was less than half of the 453,000 metric ton import level in 2000. US exports of chromium are negligible and fell to 10,000 metric tons in 2002 from 38,000 in 2001.

Chromium is a steel-gray, hard, and brittle, metallic element that can take on a high polish. Its symbol is Cr and atomic number is 24. Chromium and its compounds are toxic. Discovered in 1797 by Louis Vauquelin, chromium is named after the Greek word for color, khroma. Vauquelin also discovered that an emerald’s green color is due to the presence of chromium, and many precious stones owe their color to the presence of chromium compounds. Chromium is primarily found in chromite ore. The primary use of chromium is to form alloys with iron, nickel, or cobalt. Chromium improves hardness and resistance to corrosion and oxidation in iron, steel, and nonferrous alloys. It is a critical alloying ingredient in the production of stainless steel, making up 10% or more of the final composition. More than half of chromium production is used in metallic products, and about one-third is used in refractories. Chromium is also used as a lustrous decorative plating agent, in pigments, leather processing, plating of metals, and catalysts. Supply – World production of chromium in 2002 rose +7.4% to 13.000 million metric tons from the 6-year low of 12.100 million metric tons in 2001. The world’s largest producers of chromium are South Africa with about 45% of world production, Kazakhstan with 17%, India with 14%, and Zim-

World Mine Production of Chromite

In Thousands of Metric Tons (Gross Weight)

Year

Albania

Brazil

Cuba

Finland

India

Iran

Kazakhstan

Madag a sca r

Philippines

South Africa

Turkey

Zimbabwe

World Total

115 118 160 144 106 102 71 63 130 135

308 360 448 408 301 537 488 603 409 280

18 29 31 37 44 46 52 56 50 46

511 573 598 582 589 498 597 628 575 566

1,000 909 1,540 1,363 1,363 1,311 1,473 1,947 1,678 1,900

124 354 371 130 169 212 255 153 105 80

2,900 2,100 2,420 1,190 1,796 1,603 2,406 2,607 2,046 2,369

144 90 106 137 140 104 ---119 52 11

62 76 111 107 88 54 20 26 27 24

2,840 3,640 5,090 5,078 6,162 6,480 6,817 6,622 5,502 6,436

767 1,270 2,080 1,279 1,703 1,404 770 546 390 314

252 517 707 697 640 605 653 668 780 749

9,300 10,400 14,000 11,600 13,600 13,700 14,300 14,700 12,200 13,500

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

2

Source: U.S. Geological Survey (USGS)

Estimate.

Salient Statistics of Chromite in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 1

Net Import Reliance as a % of Apparent Production Con- of Ferrosumption chromium

81 75 80 79 75 80 80 78 78 63

63 67 73 37 61 W W W W W

- Primary Conumer Groups - - Government5 Stocks, Dec. 31--

Exports

18 31 24 47 27 55 53 86 38 10

Imports for Consumption Reexports

329 272 415 361 349 383 475 453 239 174

Preliminary. 2 Estimate. 3 Cr2O3, 44% (Transvaal). Source: U.S. Geological Survey (USGS)

32

In Thousands of Metric Tons (Gross Weight)

Consumption by

2

4

Metallurgical & Chemical Refractory

Total

337 322 W W W W W W W W

48% Cr2O3.

314 302 W W W W W W W W 5

23 20 W W W W W W W W

Metallurgical & Chemical Refractory

259 250 194 165 167 W W 396 396 78

Data through 1999 are for Consumer.

16 17 11 8 8 W W 241 241 126

Total Stocks

275 266 205 173 175 159 130 637 637 204

W = Withheld.

- $ per Metric Ton South Africa3

Turkish4

60 110 60 110 80 230 80 230 75 150 68 145 63 145 60-65 140-150 NA NA NA NA

Coal Coal is a sedimentary rock composed primarily of carbon, hydrogen, and oxygen. Coal is a fossil fuel formed from ancient plants buried deep in the Earth’s crust over 300 million years ago. Historians believe coal was first used commercially in China for smelting copper and for casting coins around 1,000 BC. Almost 92% of all coal consumed in the US is burned by electric power plants, and coal accounts for about 55% of total electricity output. Coal is also used in the manufacture of steel. The steel industry first converts coal into coke, then combines the coke with iron ore and limestone, and finally heats the mixture to produce iron. Other industries use coal to make fertilizers, solvents, medicine, pesticides, and synthetic fuels. There are four types of mined coal: anthracite (used in high-grade steel production), bituminous (used for electricity generation and for making coke), sub-bituminous, and

World Production3 of Coal (Monthly Average) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

Australia

Canada

China

CzechRep.

14,721 15,921 16,120 17,235 18,247 18,751 25,292 27,409 21,739

3,054 3,216 3,336 3,435 3,190 3,043 2,817 2,845 2,537

103,325 113,394 116,417 114,402 94,806 80,200 70,782 80,040 92,339 104,686

1,448 1,431 1,378 1,339 1,343 1,193 1,238 1,261 1,206 1,133

lignite (both used primarily for electricity generation). Coal futures trade at the New York Mercantile Exchange (NYMEX). The contract trades in units of 1,550 tons and is priced in terms of dollars and cents per ton. Supply – US production of bituminous coal in 2003 fell slightly to 1.07 billion tons from 1.09 billion tons in 2002. Wyoming is the largest producer of coal in the US with 34% of the total, followed by West Virginia (14%), and Kentucky (11%). Demand – US consumption of coal in 2002 rose slightly to 1.07 billion tons. Trade – US exports of coal in 2002 totaled 39.6 million tons, accounting for about 4% of US production. The key exporting destinations for the US are Canada and Europe.

In Thousands of Metric Tons

Germany

India

Indonesia

Kazakhstan

Poland

Russia

Ukraine

United Kingdom

United States

4,802 4,905 4,428 4,267 3,776 3,657 3,111 2,406 2,197 2,095

20,974 22,785 23,840 24,764 24,356 25,004 25,802 26,563 27,938 28,297

2,603 3,460 3,945 4,340 5,027 5,892 6,402 7,554 8,588 7,641

8,298 6,626 6,086 6,268 5,672 4,644 6,239 6,355 5,884 6,248

11,094 11,349 11,425 11,427 9,644 9,301 8,598 8,658 8,676 8,541

14,730 14,743 13,875 13,317 12,779 13,799 14,292 15,507 15,198 16,068

7,608 6,796 6,178 6,293 6,431 6,804 6,749 6,908 6,838 6,491

4,149 4,420 4,183 4,041 3,431 3,090 2,600 2,677 2,482 2,482

78,131 78,091 80,426 82,398 84,484 83,191 81,164 84,771 81,139 81,139

1

Preliminary. 2 Estimate. 3 All grades of anthracite and bituminous coal, but excludes recovered slurries, lignite and brown coal.. NA = Not avaliable. Source: United Nations

Production of Bituminous & Lignite Coal in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

Alabama

Colorado

Illinois

Indiana

Kentucky

Montana

Ohio

23,266 24,640 24,637 24,468 23,224 19,504 19,324 19,513 19,062 19,680

25,304 25,710 24,886 27,449 30,825 29,989 29,137 33,372 35,103 35,818

52,797 48,180 46,656 41,159 38,182 40,417 33,444 33,783 33,358 31,700

30,927 26,007 29,670 35,497 36,297 34,004 27,965 36,738 35,513 35,241

161,642 153,739 152,425 155,853 145,609 139,626 130,688 134,298 124,388 112,966

41,640 39,451 37,891 41,005 42,092 41,102 38,352 39,143 37,386 36,111

29,897 26,118 28,572 29,154 28,600 22,480 22,269 25,400 21,157 21,592

62,237 61,576 67,942 76,198 76,519 76,368 74,619 74,784 67,104 65,541

Preliminary.

2

Estimate.

Year

1

Texas

Virginia

West Virginia

Wyoming

Total

52,346 52,684 55,164 53,328 53,578 53,071 49,498 45,042 45,247 47,260

37,129 34,099 35,590 35,837 34,059 32,181 32,834 33,060 30,126 31,126

161,776 162,997 170,433 173,743 175,794 157,919 158,257 162,631 150,222 142,294

237,092 263,822 278,440 281,881 313,983 337,119 338,900 368,749 373,161 376,517

1,033,504 1,032,974 1,063,856 1,089,932 1,109,768 1,095,474 1,073,612 1,125,749 1,092,916 1,074,630

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Production2 of Bituminous Coal in the United States 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Thousands of Short Tons

Pennsylvania

In Thousands of Short Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

76,578 88,351 83,013 92,425 97,012 90,928 87,222 96,721 101,939 92,649

81,569 83,893 83,671 88,028 86,167 92,015 86,846 86,802 90,208 82,130

95,969 93,020 90,392 92,265 95,091 98,672 99,045 99,176 90,108 88,994

87,534 80,092 88,158 87,909 91,735 88,630 81,793 89,954 90,039 88,819

82,105 83,291 88,562 94,296 90,397 84,436 88,715 94,840 91,673 90,055

86,223 84,210 83,824 86,382 92,099 89,734 90,583 92,657 85,555 87,982

77,421 79,511 88,331 88,666 90,497 87,759 84,442 89,037 86,190 88,231

93,881 88,035 94,664 89,319 91,212 92,600 96,361 99,048 92,054 89,285

88,346 89,052 87,388 92,298 95,442 92,248 88,848 88,985 92,212 90,131

85,085 90,573 94,195 94,562 96,723 89,146 92,542 99,529 94,033 96,148

86,317 86,779 86,400 83,344 90,544 90,885 94,035 93,736 87,836 86,052

87,856 81,292 86,493 94,913 94,567 92,450 87,272 88,234 91,058 94,154

1,028,884 1,032,974 1,059,104 1,085,254 1,106,128 1,089,503 1,077,704 1,118,719 1,092,905 1,074,630

Preliminary.

2

I ncludes small amount of lignite.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

33

COAL Production2 of Pennsylvania Anthracite Coal

In Thousands of Short Tons

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

318 304 302 351 306 355 271 302 131 108

335 304 349 366 305 369 283 275 117 98

415 372 367 492 309 389 382 323 116 98

380 332 371 374 405 354 342 283 121 115

375 335 361 351 384 459 375 300 122 114

379 353 335 390 388 402 383 297 240 107

346 307 367 407 525 343 366 328 116 97

457 396 418 423 454 436 430 358 126 95

412 428 385 415 452 479 412 318 119 100

453 445 557 448 533 414 417 375 130 139

452 388 505 384 167 407 402 349 120 119

395 347 434 415 167 406 366 173 126 124

4,717 4,682 4,751 4,678 4,612 4,808 4,432 3,681 1,584 1,314

1

2

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Represents production in Pennsylvania only.

Salient Statistics of Coal in the United States

In Thousands of Short Tons

------------------------------------- Exports ------------------------------------Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21

Production

Imports

Consumption

Brazil

Canada

Europe

A si a

Total

Total Ending Stocks2

945,424 1,033,504 1,032,974 1,063,856 1,089,932 1,117,535 1,100,431 1,073,612 1,127,689 1,093,806

7,309 7,584 7,201 7,126 7,487 8,724 9,089 12,513 19,787 16,875

944,081 951,461 962,039 1,005,573 1,030,453 1,038,972 1,044,536 1,080,894 1,060,789 1,071,862

5,197 5,482 6,351 6,540 7,455 6,475 4,442 4,536 4,574 3,538

8,889 9,193 9,427 12,029 14,975 19,901 19,826 18,769 17,633 16,686

37,575 35,825 48,620 47,193 41,331 33,773 22,508 24,969 20,821 15,574

19,500 17,957 19,095 17,980 14,498 12,311 9,157 6,702 3,246 1,735

74,519 71,359 88,547 90,473 83,545 77,295 58,476 58,489 48,666 39,601

120,458 169,358 169,083 151,627 140,374 164,602 183,523 140,020 181,926 181,885

L o sse s & Unaccounted For3

-13,924 -2,743 -7,863 -7,366 -4,418 -13,118 -6,525 -12,956 -3,885 -741

1

Preliminary. 2 Producer & distributor and consumer stocks, excludes stocks held by retail dealers for consumption by the residential and commercial sector. 3 Equals production plus imports minus the change in producer & distributor and consumer stocks minus consumption minus exports. Source: Energy I nformation Administraion, U.S. Department of Energy (EI A-DOE)

Consumption and Stocks of Coal in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

In Thousands of Short Tons

------------------------------------------------------- Consumption ------------------------------------------------------------------------------------ Electric Utilities ------------------------- Industrial ------ Residential C o ke Other and Anthracite Bituminous Lignite Total Plants Industrial2 Commercial Total

951 1,123 978 1,009 1,014 867 686 NA NA NA

732,736 737,102 749,951 795,252 821,823 832,094 815,909 781,821 NA NA

79,821 79,045 78,078 78,421 77,524 77,906 77,525 75,794 NA NA

831,645 838,354 850,230 896,921 921,364 936,619 940,922 985,821 964,489 975,858

31,323 31,740 33,011 31,706 30,203 28,189 28,108 28,939 26,075 22,537

74,892 75,179 73,055 71,689 71,515 67,439 64,738 65,208 65,268 63,077

6,221 6,013 5,807 6,006 6,463 4,856 4,879 4,127 4,369 4,369

944,081 951,286 962,104 1,006,321 1,029,544 1,037,103 1,038,647 1,084,095 1,060,202 1,065,842

------------------- Stocks, Dec. 313 ------------------Producers -------------- Consumer -------------and Electric C o ke Other Utilities Plants Industrials Distributors

111,341 126,897 126,304 114,623 98,826 120,501 141,604 102,296 138,496 142,026

2,401 2,657 2,632 2,667 1,978 2,026 1,943 1,494 1,510 1,163

6,716 6,585 5,702 5,688 5,597 5,545 5,569 4,587 6,006 5,792

25,284 33,219 34,444 28,648 33,973 36,530 39,475 31,905 35,900 31,968

1

Preliminary. 2 I ncluding transportation. 3 Excludes stocks held at retail dealers for consumption by the residential and commercial sector. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Average Prices of Coal in the United States

Year

1993 1994 1995 1996 1997 1

------- End-Use-Sector ------Other IndustElectric C o ke rial3 Imports4 Utilities Plants

28.58 28.03 27.01 26.45 26.16

47.44 46.56 47.34 47.33 47.36

32.23 32.55 32.42 32.32 32.41

29.89 30.21 34.13 33.78 34.32

In Dollars Per Short Ton

------------- Exports ------------MetalTotal Steam lurgical Average4

36.03 34.34 34.51 34.09 32.45

44.11 42.77 44.30 45.49 45.47

41.41 39.93 40.27 40.76 40.55

------- End-Use-Sector ------Other IndustElectric C o ke rial3 Imports4 Year Utilities Plants

1998 1999 2000 2001 20021

25.64 24.72 24.28 24.68 24.74

46.06 45.85 44.38 46.42 50.67

32.30 31.59 31.46 32.26 35.49

Preliminary. 2 Estimate. 3 Manufacturing plants only. 4 Based on the free alongside ship (F.A.S.) value. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

34

32.18 30.77 30.10 34.00 35.51

------------ Exports -----------MetalTotal Steam lurgical Average4

30.27 29.91 29.67 31.88 34.51

NA = Not available.

44.53 41.91 38.99 41.63 45.41

38.89 36.50 34.90 36.97 40.44

COAL Trends in Bituminous Coal, Lignite and Pennsylvania Anthracite in the U.S. ----------------------------------- Bituminous Coal and Lignite -----------------------------------

In Thousands of Short Tons

------------------ Pennsylvania Anthracite ------------------

All Mines Labor Labor Product. Product. Miners1 Short Tons Short Tons Total Employed Miner/Hr. Miner/Hr.

------------ Labor Productivity --------------------------------- Production ----------------------Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Undergound

Surface

350,637 399,103 396,249 409,849 420,657 417,728 391,790 373,659 380,627 357,385

590,482 634,401 636,725 654,007 669,274 699,807 708,642 699,953 745,308 735,910

Underground Surface Average Miners1 Total Employed - Short Tons Per Miner Per Hour -

941,119 101,322 1,033,504 97,500 1,032,974 90,252 1,063,856 83,462 1,089,932 81,516 1,117,535 85,418 1,100,431 78,723 1,073,612 72,748 1,127,689 77,088 1,094,283 75,466

2.95 3.19 3.39 3.57 3.83 3.90 3.99 4.15 4.02 3.98

7.23 7.67 8.48 9.05 9.46 9.58 10.39 11.01 10.60 10.38

1 Excludes miners employed at mines producing less than 10,000 tons. U.S. Department of Energy (EI A-DOE)

Average Mine Prices of Coal in the United States ----- Average Mine Price by Method -----

Underground

Surface

416 343 428 391 419 408 377 301 341 305

3,889 4,278 4,254 4,360 4,259 4,823 4,376 4,271 1,143 1,189

4.70 4.98 5.38 5.69 6.04 6.20 6.61 6.99 6.82 6.80

4,306 4,621 4,682 4,751 4,678 5,231 4,753 4,572 1,484 1,494

1.85 1.93 2.08 1.92 1.76 2.04 1.76 1.89 .81 .78

4.70 4.98 5.38 5.69 6.04 6.20 6.61 6.99 6.82 6.80

Source: Energy I nformation Administration,

In Dollars Per Short Ton

--------------- Average Mine Prices by Rank ---------------

Year

Underground

Surface

Total

Lignite

Subbituminous

Bituminous

Anthracite1

Bituminous & Lignite FOB Mines2

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

26.92 26.39 26.18 25.96 25.68 25.64 24.33 23.84 25.37 26.68

15.67 15.02 14.25 13.82 13.39 12.92 12.37 12.26 13.18 13.65

19.85 19.41 18.83 18.50 18.14 17.67 16.63 16.44 17.38 17.98

11.11 10.77 10.83 10.92 10.91 10.80 11.04 11.41 11.52 11.07

9.33 8.37 8.10 7.87 7.42 6.96 6.87 7.12 6.67 7.34

26.15 25.68 25.56 25.17 24.64 24.87 23.92 24.15 25.36 26.57

32.94 36.07 39.78 36.78 35.12 42.91 35.13 40.90 47.67 47.78

20.56 25.68 25.56 25.17 24.64 24.87 23.92 24.15 25.36 26.57

1

1,124 1,183 1,069 1,171 1,287 1,281 1,326 1,272 955 872

Produced in Pennsylvania. 2 FOB = free on board. 3 CI F = cost, insurance and freight. Source: Energy I nformation Adminstration, U.S. Department of Energy (EI A-DOE)

Anthracite FOB Mines2

All Coal CIF3 Electric Utility Plants

37.80 36.07 39.78 36.78 35.12 42.91 35.13 40.90 47.67 47.78

28.58 28.03 27.01 26.45 26.16 25.64 24.72 24.28 24.68 24.74

W = Withheld data.

Dollars Per Short Ton ----- Bituminous, F.O.B. Mines (1949 - date) - - - Anthracite, F.O.B. Preparation Plants (1949 - 1978) Anthracite, F.O.B. Mines (1979 - date)

35

Cobalt Cobalt is a lustrous, silvery-white, magnetic, metallic element used chiefly for making alloys. Cobalt was known in ancient times and used by the Persians in 2250 BC to color glass. The name cobalt comes from the German word kobalt or kobold, meaning evil spirit. Miners gave cobalt its name because it was poisonous and troublesome since it polluted and degraded other mined elements, like nickel. In the 1730s, George Brandt first isolated metallic cobalt and was able to show that cobalt was the source of the blue color in glasses. In 1780, it was recognized as an element. Generally found in the form of ores, cobalt is not found as a free metal. It tends to be produced as a by-product of nickel and copper mining. Cobalt is used in high temperature steel alloys, fasteners in gas turbine engines, magnets and magnetic recording media, drying agents for paints, pigments, and in steelbelted radial tires. Cobalt-60, an important radioactive tracer and cancer-treatment agent, is an artificially produced radioactive isotope of cobalt. Prices – The price of cobalt plunged in 2002 to $6.90 per pound from $10.55 in 2001. The 2002 price was down by a dramatic 76% from the record high of $29.21 per pound posted in 1995. Supply – World mine production of cobalt in 2002 rose slightly by +0.5% to a 12-year high of 36,900 metric tons from 36,700 metric tons in 2001. Zambia was the world’s largest mine producer of cobalt in 2002 with 7,600 metric tons of production, followed by Australia with 6,600 metric

World Mine Production of Cobalt Year

Australia

Botswana

Canada

1,900 2,300 2,500 2,800 3,000 3,300 4,100 5,600 6,200 6,700

205 225 271 408 334 335 331 308 325 269

5,108 4,265 5,339 5,714 5,709 5,861 5,323 5,298 5,326 5,093

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

2

Estimate.

3

In Metric Tons (Cobalt Content) Finland France Ja p a n New Norway Cuba (Refinery) (Refinery) (Refinery) Caledonia (Refinery)

1,061 972 1,591 2,011 2,358 2,665 2,537 2,943 3,411 3,400

Formerly Zaire.

2,200 3,000 3,610 4,160 5,000 10,600 10,000 10,000 10,000 10,000

Year

1

191 161 227 258 264 480 480 480 480 480

800 1,000 1,100 1,100 1,000 1,000 1,100 1,200 1,400 1,400

2,414 2,823 2,804 3,098 3,417 4,500 4,500 4,500 4,500 4,500

Congo3

Zambia

World Total

3,500 3,000 3,500 3,300 3,300 3,600 3,900 4,000 4,600 4,600

2,459 826 1,647 2,000 3,500 5,000 6,000 10,000 13,000 12,500

4,840 3,600 5,908 6,959 6,037 11,900 5,640 4,600 8,000 10,000

21,900 18,000 24,500 26,200 27,400 35,300 31,600 37,200 45,800 47,600

In Metric Tons (Cobalt Content)

Net Import ------------------------------------------------- Consumption by End Uses -----------------------------------------------Reliance Cobalt Processors and Imports as a % of SeconCutting Drier in & WearMagfor Ground Stainless Price dary Consumer Total Apparent netic Pig- Paints, Resistant Welding Apparent Coat & Heat Cata- Super- Tool ConStocks $ P er ProConetc.3 Material Materials lysts alloys Steel Alloys ments Frit Resisting Dec. 31 sumption Uses Pound4 sumption duction

79 81 79 76 76 73 73 74 78 75

1,566 1,570 1,860 2,280 2,750 3,080 2,720 2,550 2,740 2,700

819 914 818 770 763 750 738 820 852 917

5,950 6,780 6,440 6,710 8,430 7,670 8,150 8,770 9,410 8,450

Preliminary. 2 Estimate. 3 Or related usage. Source: U.S. Geological Survey (USGS)

36

144 146 161 174 159 300 300 300 300 300

Russia

Source: U.S. Geological Survey (USGS)

Salient Statistics of Cobalt in the United States

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022

tons, Canada with 5,300 metric tons, and Russia with 4,600 metric tons. Russian production is on the upswing and rose by 21% in 2002 from 2001. Australian production rose 6.5% in 2002 to 6,600 metric tons, and tripled its output from 10 years earlier. When factoring in countries that are big refiners of cobalt, versus miners, Finland takes the world production record with 10,000 metric tons of production in 2001 and Norway had production of 4,500 metric tons. The United States does not mine or refine cobalt although some cobalt is produced as a by-product of mining operations. The US cobalt supply was made up of imports, stock releases, and secondary materials. Secondary production included extraction from super-alloy scrap, cemented carbide scrap and spent catalysts. In the US there were two domestic producers of extra-fine cobalt powder. One produced the powder from imported primary metal and the other from recycled materials. There were seven companies that produced cobalt compounds. US secondary production of cobalt in 2002 fell to 2,700 metric tons from 2,740 metric tons in 2001. Demand – US consumption of cobalt in 2002 fell to 10,800 metric tons from 11,800 metric tons in 2001. The largest use by far was for super-alloys with 4,850 metric tons of consumption. Trade – US imports of cobalt in 2002 fell slightly to 9,400 metric tons, but that was only mildly below the record high of 9,410 metric tons seen in 2001. The US relies on imports for 75% of its cobalt consumption.

W W 196 391 490 W W W W W 4

41 41 38 38 38 38 W W W W

935 871 732 652 734 W W W W W

2,530 2,810 2,940 3,360 4,170 4,060 3,830 4,070 4,850 3,700

Annual spot for cathodes.

59 84 146 95 112 96 W W W W

569 698 757 719 879 771 794 625 472 416

193 198 172 191 201 W W W W W

732 809 770 733 556 W W W W W

W = Withheld proprietary data.

569 723 748 722 789 844 755 760 720 617

171 312 287 347 342 421 291 867 661 634

7,350 8,730 8,970 9,380 11,200 11,500 10,700 11,600 11,800 9,860

13.79 24.66 29.21 25.50 23.34 21.43 17.02 15.16 10.55 6.91

Cocoa Cocoa is the common name for a powder derived from the fruit seeds of the cacao tree. The Spanish called cocoa “the food of the gods” when they came upon it in South America 500 years ago. Today, it remains a precious commodity. Dating back to the time of the Aztecs, cocoa was mainly used as a beverage. The processing of the cacao seeds, also known as cocoa beans, begins when the harvested fruit is fermented or cured into a pulpy state for three to nine days. The cocoa beans are then dried in the sun and cleaned in special machines before they are roasted to bring out the chocolate flavor. After roasting, they are put into a crushing machine and ground into cocoa powder. Cocoa has a high food value because it contains as much as 20 percent protein, 40 percent carbohydrate, and 40 percent fat. It is also mildly stimulating because of the presence of theobromine, an alkaloid that is closely related to caffeine. Roughly two-thirds of cocoa bean production is used to make chocolate and one-third to make cocoa powder. The four major West African cocoa producers are the Ivory Coast, Ghana, Nigeria and Cameroon, that together account for about two-thirds of world production. The Ivory Coast produces about 43 percent of the world’s cocoa. The next largest producer is Ghana with about 14 percent of the world’s output. Nigeria produces about 6 percent of the world’s cocoa. Outside of West Africa, the major producers of cocoa are Indonesia, Brazil, Malaysia, Ecuador, and the Dominican Republic. Cocoa producers like Ghana and Indonesia have been making efforts to increase cocoa production while producers like Malaysia have been switching to other crops. Ghana has had an ongoing problem with black pod disease and with smuggling of the crop into neighboring Ivory Coast. Brazil was once one of the largest producers but has had problems with witches’ broom disease. In West Africa, the main crop harvest starts in the September-October period and can be extended into the JanuaryMarch period. Cocoa trees reach maturity in 5-6 years but can live to be 50 years old or more. During the course of a growing season, the cocoa tree will produce thousands of flowers but only a few will develop into cocoa pods. Cocoa futures and options are traded at the CSCE Division of the New York Board of Trade (NYBOT) and on the London International Financial Futures and Options Exchange (LIFFE). The futures contracts call for the delivery of 10 metric tons of cocoa and the contract is priced in US dollars per metric ton.

World Supply and Demand Cocoa Crop Year Beginning October

Net World ProStocks Oct. 1 duction

1988-9 1989-90 1990-1 1991-2 1992-3 1993-4 1994-5 1995-6

959 1,283 1,477 1,616 1,581 1,532 1,520 1,372

1

2,460 2,425 2,510 2,269 2,360 2,472 2,353 2,941

Total Avail- Seasonal ability Grindings

3,419 3,708 3,987 3,885 3,941 4,004 3,873 4,313

Preliminary. 2 Estimate. 3 Forecast. Source: ED&F Man Cocoa Ltd.

2,118 2,212 2,351 2,284 2,395 2,465 2,483 2,655 4

Prices – Cocoa prices on the CSCE nearest-futures chart posted a new 20-year high of $2,420 per metric ton in early 2003 and then fell sharply early in the year, spending the latter half of the year consolidating in the range mainly between $1400-1800. However, that was still well above the all-time contract low of $674 posted as recently as December 2000. Cash cocoa in late 2000 hit lows not seen since the early 1970s. Prices were boosted in 2002 and early 2003 by tighter supplies and by unrest in the Ivory Coast. The cocoa market is very sensitive to developments in West Africa and particularly in the Ivory Coast where most of the world’s cocoa is produced. Developments there that would in any way hinder the harvesting and movement of cocoa to the market are seen as very bullish and result in higher prices. Prices in early 2003 fell back as the cocoa market moved into a surplus situation in 2002/3 versus the deficit seen in 2001/2. Production was strong in West Africa as producers responded to high prices by maximizing output, thus putting downward pressure on prices. Supply – The International Cocoa Organization (ICCO) estimates that global cocoa production in the 2002/3 (Oct/ Sep) season was 3.102 million metric tons, up 8.4% from 2.861 million in 2001/2. Cocoa beans are processed or ground to produce the ingredients that are used in making chocolate and chocolate products. Those ingredients are mainly cocoa powder and cocoa butter. The trend among cocoa processors has been to grind beans to produce cocoa powder rather than butter because the demand for cocoa butter has been weaker since there are less expensive substitutes for making chocolate. World grindings are forecast in 2002/3 at 2.996 million metric tons, up 4.1% from 2.877 million in 2001/2. West Africa is expected to produce the most significant contribution to the rise in global output where production is forecast to increase by close to 9 percent (up 167,000 metric tons to 2.109 million metric tons), followed by the Americas (up 33,000 metric tons or 9 percent), while production in the Asia and Oceania regions is likely to remain the same. End-of-season stocks are forecast in 2002/3 at 1.191 million metric tons, up 6.7% from 1.116 million in 2001/2. The ICCO forecasts that the cocoa market in 2002/3 was in a surplus state of 75,000 metric tons, which is a bearish factor and a switch from a 45,000 metric ton deficit in 2001/ 2.

In Thousands of Metric Tons Closing Stocks

Stock Change

1,283 1,477 1,616 1,584 1,532 1,520 1,372 1,636

323 194 139 -32 -53 -12 -148 264

Crop Year Beginning October

Stocks Oct. 1

Net World Production

1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43

1,636 1,598 1,440 1,470 1,495 1,210 1,097 1,166

2,712 2,635 2,808 3,036 2,803 2,773 3,045 3,068

Total Avail- Seasonal ability Grindings

4,348 4,233 4,248 4,506 4,298 3,983 4,142 4,234

2,730 2,773 2,756 2,988 3,067 2,865 2,954 3,042

Closing Stock Stocks Change

1,598 1,440 1,470 1,495 1,210 1,097 1,166 1,168

-39 -158 31 25 -285 -113 68 3

Obtained by adjusting the Gross World Crop for one percent loss in weight.

37

COCOA World Production of Cocoa Beans Crop Year Beginning October

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Preliminary.

Brazil

Cameroon

Colombi a

Domini ca n Republic

215 222 183 173 138 124 163 124 162 170

109 117 121 114 123 115 131 126 140 130

48 45 39 38 39 37 42 42 43 42

57 55 47 60 22 28 37 44 45 45

2

Estimate.

3

Forecast.

Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

Belgium

Brazil

50 53 54 55 55 55 55 55 NA NA

210 174 183 180 188 191 202 195 173 189

110 108 130 145 195 210 230 285 276 275

1

Preliminary. 2 Estimate. 3 Forecast. Source: ED&F Man Cocoa Ltd

Ecuador

83 103 101 28 72 92 81 72 78 95

Year

1990 1991 1992 1993 1994 1995 1996 1997 1998 1 9 9 91 1990 1991 1992 1993 1994 1995 1996 1997 1998 1 9 9 91

Total

World Total

43 30 35 30 25 31 33 31 32 30

145 165 160 165 200 175 177 167 150 160

29 35 28 26 35 46 39 38 40 40

2,353 2,941 2,712 2,635 2,808 3,036 2,803 2,773 3,045 3,068

Ghana

Ivory C o a st

Malaysia

Mexico

310 404 323 409 398 435 395 340 490 475

238 284 327 331 396 415 393 443 425 465

862 1,265 1,130 1,090 1,175 1,404 1,185 1,240 1,315 1,300

120 116 102 57 79 37 29 10 15 20

4

In Thousands of Metric Tons France

Germany

Italy

Malaysia

Netherlands

Singapore

United Kingdom

United States

Former U.S.S.R.

World Total

95 108 111 106 107 124 142 148 NA NA

310 280 270 255 240 197 215 225 NA NA

65 69 73 71 72 72 73 73 NA NA

103 101 96 103 94 109 117 121 93 123

331 350 385 402 425 415 437 440 NA NA

59 59 63 61 68 63 60 59 62 74

170 154 191 172 174 166 167 159 NA NA

317 331 345 394 399 406 439 445 393 402

75 75 75 74 50 48 62 67 70 60

2,465 2,483 2,655 2,730 2,773 2,756 2,988 3,067 2,865 2,954

Figures represent the grindings of cocoa beans in each country.

R aw C o co a Grin d in g s in S elected C o u n tries Fi rst Quarter

Nigeria

Papua New Guinea

Indonesia

Source: ED&F Man Cocoa Ltd

World Consumption of Cocoa4 Cote d'Ivoire

In Thousands of Metric Tons

Second Quarter

Thi rd Quarter

NA = Not available.

In Metric Tons Fourth Quarter

---------------------------------- Germa ny 2 ---------------------------------281,855 69,125 64,613 70,994 77,123 290,703 73,172 72,396 70,934 73,661 319,251 78,661 73,797 80,111 86,682 298,681 74,119 69,805 74,010 80,747 296,219 80,242 68,033 67,706 80,238 258,817 69,441 56,478 61,523 71,375 251,070 69,520 59,471 65,824 56,255 245,244 61,379 57,402 65,233 61,230 217,442 62,154 47,565 55,267 52,456 195,732 48,486 48,605 47,321 51,320 ---------------------------- United King do m -----------------------------124,791 32,116 29,322 29,419 33,934 148,191 32,902 36,016 41,863 37,410 159,284 39,831 37,903 37,120 44,430 171,343 44,575 41,975 37,496 47,297 163,170 44,131 39,063 39,591 40,385 159,877 43,410 35,348 34,431 46,688 189,037 50,500 44,535 48,855 45,147 173,522 44,059 42,702 41,180 45,581 171,773 45,787 42,338 40,047 43,601 167,556 42,557 39,758 40,238 45,003

Total

Fi rst Quarter

Second Quarter

Thi rd Quarter

------------------------------------ Netherla nds --------------------------------247,590 62,243 58,817 58,702 67,828 274,741 64,299 71,643 63,973 74,826 293,157 77,954 71,537 69,871 73,795 320,060 78,338 75,548 81,183 84,991 334,384 83,963 78,055 84,249 88,117 355,492 91,314 85,248 85,311 93,619 388,412 100,866 90,724 99,549 97,273 407,340 102,338 100,132 101,817 103,053 427,393 104,936 108,101 108,580 105,776 415,250 107,189 102,933 98,828 106,300 -------------------------------- United Sta tes3 --------------------------------216,740 51,559 51,683 58,278 55,220 255,781 51,191 64,365 66,544 73,681 313,921 70,335 74,515 84,109 84,962 321,905 78,968 77,720 84,593 80,624 322,629 71,398 78,805 86,247 86,179 338,401 78,835 78,886 87,360 93,320 351,042 79,044 82,713 93,933 95,352 397,895 95,435 97,223 105,984 99,253 397,389 99,189 96,341 104,359 97,500 418,996 98,218 102,488 107,568 110,722

P reliminary. 2 B eg inning October 1990, includes former E ast Germany. 3 Data incomplete January 1984-March 1991, ex cludes one maj or processor. S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

1

38

Fourth Quarter

COCOA Imports of Cocoa Butter in Selected Countries Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1 1

In Metric Tons

Australia

Austria

Belgium

Canada

France

Germany

Italy

Ja p a n

NetherLands

Sweden

Switzerland

United Kingdom

United States

10,697 13,129 13,030 12,150 14,316 14,896 16,305 22,573 20,591 20,632

5,249 5,417 5,410 7,425 7,124 6,922 5,984 5,363 4,425 NA

31,836 28,989 34,061 26,185 23,771 34,222 25,722 42,278 52,917 51,576

10,706 10,225 11,551 11,146 12,166 16,782 16,941 17,323 22,005 23,307

28,560 30,611 36,698 40,245 47,349 46,516 43,610 49,722 48,033 51,101

44,906 37,269 59,170 69,928 69,298 71,094 76,057 70,323 71,985 80,278

8,431 9,851 9,173 12,027 11,178 9,706 8,957 8,281 11,106 10,935

15,835 16,422 15,937 12,898 16,096 16,609 15,363 17,824 21,696 21,665

29,999 51,559 43,192 38,300 39,193 29,023 28,523 35,602 27,253 NA

5,885 6,390 7,079 7,078 5,698 6,937 7,403 6,884 5,986 NA

17,422 16,711 17,242 17,835 18,690 19,058 19,857 21,278 19,923 20,604

26,300 25,941 35,453 30,654 32,781 37,021 32,951 39,648 36,360 40,668

99,509 85,400 54,550 57,210 68,761 87,687 65,306 80,475 94,649 80,806

Preliminary.

NA = Not available.

Source: ED&F Man Cocoa Ltd

In Metric Tons

Imports of Cocoa Liquor and Cocoa Pow der in Selected Countries Year

----------------------------------- Cocoa Liqour ----------------------------------NetherUnited United France Germany lands Japan Kingdom States

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1

45,056 41,999 42,392 46,570 62,938 61,148 70,883 74,721 67,812 67,590

1

Preliminary.

2,540 1,694 2,682 5,083 7,437 10,299 9,121 13,833 14,295 17,548

7,130 15,543 14,913 6,822 9,926 8,401 12,534 25,639 33,815 NA

NA = Not available.

2,246 2,468 2,312 1,832 2,133 1,393 1,144 1,421 1,618 1,613

3,611 1,490 4,443 5,030 5,069 5,860 3,813 4,396 8,529 10,290

24,255 31,641 26,846 19,192 15,357 17,850 21,894 12,823 10,902 17,937

------------------------------------------- Cocoa Pow der -------------------------------------------NetherUnited Denmark France Germany Italy Ja p a n lands States

3,291 3,402 3,625 3,229 3,711 4,189 3,865 3,676 3,348 4,014

14,896 16,773 19,215 17,081 18,398 19,555 19,533 19,342 21,932 18,987

27,745 25,732 28,806 32,247 36,211 35,069 32,479 33,404 34,601 29,775

14,469 13,221 12,884 15,265 15,006 15,872 17,122 16,464 18,261 NA

6,067 5,771 6,461 6,310 13,069 8,941 8,779 9,779 11,245 11,424

9,412 5,626 10,078 10,048 6,678 4,424 3,746 8,405 22,492 NA

56,089 66,533 67,207 66,075 68,658 71,024 84,211 84,975 86,908 83,169

Source: ED&F Man Cocoa Ltd

Imports of Cocoa and Products in the United States

In Thousands of Metric Tons

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

67 68 90 80 86 100 111 108 86 114

68 54 87 47 105 79 128 97 73 73

56 44 90 77 90 81 101 77 72 91

61 48 80 71 71 93 91 47 61 70

49 47 55 64 55 51 70 68 76 67

51 48 49 54 65 60 67 61 71 73

49 48 62 59 65 77 70 80 86 93

58 51 53 47 62 62 70 78 97 78

58 53 53 64 72 68 86 76 61 78

61 49 60 61 63 67 76 86 65 94

45 54 60 56 54 82 59 92 89 84

48 79 86 88 77 102 69 118 72 115

672 643 821 768 865 922 999 989 909 1,031

1

Preliminary.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Visible Stocks of Cocoa in Port of Hampton Road Warehouses1, at End of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Thousands of Bags

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

2,329.6 2,152.7 1,439.8 1,128.3 726.5 661.6 469.7 741.9 504.7 149.9

2,441.1 2,098.6 1,492.8 1,132.1 693.4 693.2 448.4 657.4 462.8 121.7

2,443.9 2,195.7 1,458.0 1,133.0 841.9 642.5 571.7 632.0 436.7 103.1

2,522.9 2,212.3 1,549.6 1,094.0 842.5 579.7 583.4 607.7 424.0 102.3

2,533.1 2,120.2 1,561.7 1,010.5 811.6 536.9 711.1 577.3 383.8 80.5

2,460.2 2,016.0 1,493.9 970.2 764.7 500.7 672.4 518.8 353.4 71.9

2,445.4 1,919.8 1,412.3 872.4 714.3 489.0 720.3 498.2 327.4 69.2

2,335.0 1,786.6 1,315.4 840.1 712.3 472.7 925.2 487.5 273.3 67.7

2,308.4 1,713.1 1,239.6 727.3 795.4 473.4 921.4 475.2 255.4 56.9

2,360.2 1,598.2 1,338.9 763.9 801.9 451.8 839.7 506.8 194.8 53.0

2,306.9 1,463.9 1,108.1 695.7 705.9 438.9 762.9 509.0 181.5 49.6

2,253.7 1,470.3 1,116.2 704.8 673.0 421.2 816.0 511.4 169.9 49.3

Licensed and unlicensed warehouses approved by the CSCE.

Source: New York Board of Trade (NYBOT)

39

COCOA

USD Per Metruc Ton ----- Ivory Coast (Oct. 1980 - date) ----- Exchange Standard, New York (Dec. 1926 - Dec. 1947) Accra, New York (Jan. 1948 - Dec. 1984)

Visible Stocks of Cocoa in Philadelphia (Del. River) Warehouses1, at End of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

831.5 807.5 960.2 1,753.0 1,420.3 1,763.0 1,619.0 1,844.0 1,701.5 1,347.2

937.7 1,034.3 1,005.2 1,634.4 1,435.7 1,832.8 1,801.7 2,082.3 1,876.7 1,422.0

1,004.2 1,038.9 1,205.6 1,579.6 1,592.6 1,982.7 2,466.4 2,173.3 1,849.3 1,327.9

1,010.9 1,020.2 1,658.8 1,641.0 1,555.3 2,217.8 2,582.0 1,960.0 1,708.0 1,326.5

1,055.4 963.7 1,871.3 1,578.7 1,398.5 2,019.4 2,581.6 1,785.9 1,746.4 1,217.2

1,095.2 924.3 1,851.7 1,625.9 1,287.8 1,999.6 2,363.7 1,610.4 1,689.5 1,202.3

1,076.0 860.7 1,969.1 1,696.2 1,279.8 2,084.6 2,168.3 1,391.6 1,793.1 1,229.2

1,029.8 759.2 1,816.2 1,637.6 1,376.9 2,133.4 2,101.6 1,543.0 1,832.7 1,123.7

968.5 852.2 1,851.1 1,530.9 1,373.7 2,144.1 2,105.1 1,391.3 1,750.9 930.6

857.1 727.0 1,705.1 1,491.8 1,260.6 2,015.5 2,039.1 1,131.4 1,334.5 798.9

843.9 666.0 1,671.7 1,414.2 1,406.7 1,774.4 1,697.4 1,303.2 1,162.7 723.7

818.9 735.6 1,696.5 1,394.0 1,637.1 1,608.5 1,589.4 1,682.1 1,250.6 806.0

Licensed and unlicensed warehouses approved by the CSCE.

Source: New York Board of Trade (NYBOT)

Visible Stocks of Cocoa in New York Warehouses1, at End of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Thousands of Bags

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

271.0 560.5 667.6 984.7 973.9 1,085.0 1,633.7 1,005.6 1,088.9 614.6

275.0 634.5 646.1 981.3 1,342.7 1,089.3 1,689.5 1,173.8 870.8 625.4

280.8 559.2 632.7 945.0 1,271.3 1,083.1 1,926.9 1,119.6 892.0 593.7

296.6 539.4 627.2 1,250.0 1,675.7 1,134.1 2,049.8 1,024.9 816.1 612.9

358.6 510.4 656.1 1,574.4 1,552.3 1,139.4 1,926.7 967.5 739.1 515.1

394.1 561.1 633.5 1,524.7 1,516.7 1,114.3 1,789.6 906.6 736.0 476.1

447.5 579.3 1,191.7 1,512.8 1,404.6 1,093.5 1,632.2 776.2 640.9 423.6

447.5 595.4 1,154.2 1,348.0 1,293.1 974.5 1,383.7 758.5 553.6 388.2

467.3 459.9 1,121.4 1,217.3 1,300.1 941.9 1,323.7 657.6 670.1 483.4

427.3 598.7 973.2 1,073.7 1,126.4 821.7 1,234.8 687.4 525.7 301.9

407.2 679.7 950.1 1,020.0 989.2 847.5 1,100.0 750.8 473.1 391.3

556.1 598.7 919.0 980.4 1,031.6 1,573.1 1,019.4 1,196.2 554.8 342.9

Licensed and unlicensed warehouses approved by the CSCE.

40

In Thousands of Bags

Source: New York Board of Trade (NYBOT)

COCOA

Average Open Interest of Cocoa Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

89,174 78,873 90,478 86,960 90,574 77,067 100,540 132,711 97,563 96,375

87,349 80,786 93,533 90,589 82,205 72,324 110,316 119,459 98,169 91,944

91,715 82,299 98,049 96,771 78,022 69,221 106,056 114,036 96,336 83,625

82,500 78,435 95,390 96,956 73,237 65,856 102,382 102,275 98,851 83,230

82,970 80,547 96,346 94,651 79,294 71,990 113,239 107,008 103,746 95,307

72,288 75,496 88,232 97,385 74,347 75,195 111,948 111,224 100,701 96,813

72,249 74,975 80,873 101,815 74,295 70,787 112,864 104,473 107,080 89,846

69,614 65,794 77,134 101,138 73,975 69,939 117,260 99,280 102,441 78,197

73,436 68,547 77,942 106,487 71,978 74,572 123,463 92,235 107,294 76,468

74,163 72,758 79,572 108,263 74,139 79,770 138,523 96,204 107,880 86,392

72,232 76,680 77,139 99,544 74,127 89,035 139,141 93,088 82,236 99,038

75,995 79,844 78,592 97,009 73,480 92,609 138,266 92,326 82,844 94,185

Source: New York Board of Trade (NYBOT)

Volume of Trading of Cocoa Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

178,303 197,032 177,720 180,669 175,844 136,109 156,812 311,900 155,699 172,845

190,804 183,784 226,701 172,510 145,311 155,090 231,562 168,587 187,550 215,240

205,623 191,328 213,189 219,896 171,333 141,090 232,803 164,131 129,833 136,564

188,004 208,707 242,988 235,020 192,120 180,837 186,837 136,021 217,590 179,956

267,188 169,061 164,749 130,041 143,602 130,019 147,072 154,397 160,364 176,969

251,300 199,211 183,544 251,471 183,719 230,925 267,470 201,299 220,289 207,255

193,883 140,789 159,070 186,280 131,642 125,360 124,906 108,189 176,450 143,888

241,340 205,169 164,719 200,707 156,737 144,290 191,849 207,569 209,249 206,428

142,589 120,433 107,634 168,981 115,066 147,124 111,740 118,428 138,394 146,113

183,975 149,810 167,227 204,394 125,320 143,335 174,216 124,884 207,310 197,316

210,635 211,171 185,226 180,805 155,280 209,608 186,515 202,847 162,982 209,775

164,917 113,603 128,809 143,735 114,606 124,249 98,266 107,565 114,270 135,857

2,417,006 2,090,098 2,121,576 2,274,509 1,810,580 1,868,036 2,110,048 2,005,817 2,079,980 2,128,206

Source: New York Board of Trade (NYBOT)

41

Coconut Oil and Copra Coconut oil and copra come from the fruit of the coconut palm tree, which originated in Southeast Asia. Coconut oil has been used for thousands of years as cooking oil, and is still a staple in the diets of many people living in tropical areas. Until shortages of imported oil developed during WWII, Americans also used coconut oil for cooking. Copra is the meaty inner lining of the coconut. It is an oil-rich pulp with a light, slightly sweet, nutty flavor. Copra is used mainly as a source of coconut oil and is also used shredded for baking. High-quality copra contains about 65% to 72% oil, and oil made from the copra is called crude coconut oil. Crude coconut oil is processed from copra by expeller press and solvent extraction. It is not considered fit for human consumption until it has been refined, which consists of neutralizing, bleaching and deodorizing it at high heat with a vacuum. The remaining oil cake obtained as a by-product is used for livestock feed. Premium grade coconut oil, also called virgin coconut oil, is oil made from the first pressing with out the addition of any chemicals. Premium grade coconut oil is more expensive than refined or crude oil because the producers use only selected raw materials and there is a lower production yield due to only one pressing. Coconut oil accounts for approximately 20% of all vegetable oils used worldwide. Coconut oil is used in margarines, vegetable shortening, salad oils, confections, and in sports drinks to boost energy and enhance athletic perfor-

World Production of Copra Year

India Indonesia

1994 1995 1996 1997 1998 1999 2000 2001 1 20022 20033

592 655 720 720 735 718 700 710 720 690

1

Preliminary.

2

3

In Thousands of Metric Tons

Ivory C o a st

Malaysia

Mexico

Mozambique

New Guinea

Philippines

Sri Lanka

Thailand

Vanuatu

Vietnam

World Total

65 72 75 45 43 36 45 45 45 45

60 66 60 60 50 48 49 49 58 60

216 217 204 217 237 199 202 198 165 172

74 74 75 76 76 73 75 75 75 75

104 125 178 159 143 146 152 70 81 85

1,930 2,500 1,725 2,210 2,270 1,250 2,140 2,790 2,065 2,020

104 113 75 67 71 68 98 95 70 75

100 103 61 61 61 65 69 69 69 70

27 30 33 34 43 30 27 24 27 28

210 208 210 96 68 72 45 50 52 53

5,072 5,544 4,880 5,363 5,077 3,874 5,248 5,668 4,982 4,960

1,270 1,080 1,155 1,300 965 860 1,330 1,180 1,240 1,270

Estimate.

Forecast.

Source: The Oil World

World Supply and Distribution of Coconut Oil Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

Preliminary.

42

--------------------- Production --------------------IndoMalPhilipIndia nesia aysia pines Total

343 383 397 424 442 431 421 431 421 435 2

704 638 612 756 652 458 787 700 746 756

Estimate.

32 36 35 35 39 51 54 49 49 55 3

mance. It is also used in the manufacture of soaps, detergents, shampoos, cosmetics, candles, glycerin and synthetic rubber. Coconut oil is very healthy, unless it is hydrogenated, and is easily digested. Prices – The price of coconut oil (crude) in December 2003 was 21.00 cents per pound, little changed from the 2002 average of 21.01 cents. The 2003 price was a 13-year low going back to 20.66 in 1990. Coconut prices in 2003 were down by more than 50% from the peak of 42.42 cents seen in 1996. Supply – World production of copra in 2003/4 was forecast at 5.38 million metric tons, up 5.3% from 5.11 million in 2002/3. Ending stocks were unchanged in 2003/4 from 2002/3 at 20,000 metric tons. World production of coconut oil in 2003/4 was forecast at 3.33 million metric tons, up 5.0% from 3.17 million 2002/3. The world’s largest producer of copra in 2003 by far was the Philippines with 41% of world production, followed by Indonesia with 26%. Demand – Virtually all of world production of copra in 2003/4 went for crushing into coconut meal and oil (98.7%). World consumption of coconut oil in 2003/4 rose 2.2% to 3.32 million metric tons. Trade – Copra is generally crushed in the country of origin, so exports of copra account for less than 4% of world production. However, exports of coconut oil in 2003/4 rose 7.3% to 1.91 million metric tons, accounting for 57% of world production.

1,242 1,564 1,206 1,257 1,628 783 1,198 1,731 1,441 1,292

Forecast.

3,009 3,312 2,912 3,150 3,411 2,369 3,100 3,517 3,213 3,085

Exports

1,361 1,775 1,374 1,726 2,125 1,040 1,805 2,182 1,828 1,782

Source: The Oil World

In Thousands of Metric Tons --------------------------- Consumption --------------------------- ------ Ending Stocks -----European Indo- PhilipUnited Philip- United Imports Union India nesia pines States Total pines States Total

1,437 1,760 1,405 1,658 2,111 1,136 1,725 2,179 1,878 1,784

547 346 660 384 606 396 688 432 771 440 578 446 754 435 729 448 693 448 634 458

337 492 373 213 211 110 110 280 304 245

294 309 306 339 302 295 299 348 372 362

483 491 427 504 540 461 420 437 516 463

2,962 3,325 3,005 3,067 3,184 2,744 2,927 3,357 3,346 3,187

181 99 100 92 32 58 112 60 60 55

74 74 38 68 178 69 62 118 103 67

457 430 368 384 598 319 412 570 486 387

COCONUT OIL AND COPRA Supply and Distribution of Coconut Oil in the United States

In Millions of Pounds

----- Rotterdam -----

Year

Copra Coconut Tonne Oil, CIF --------- $ U.S. --------

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 1

388 432 487 452 391 468 357 208 245 293

Preliminary.

2

564 656 746 693 625 748 539 323 388 458

Estimate.

---------- Disappearance ---------- -------- Production of Coconut Oil (Refined) --------

Imports For Consumption

Stocks Oct. 1

Total Supply

999 1,100 873 1,188 1,440 791 926 1,100 1,150 1,150

251 163 163 83 149 392 152 136 260 301

1,250 1,263 1,036 1,271 1,589 1,183 1,078 1,236 1,410 1,451

Total Exports Domestic

20 18 11 11 7 11 14 8 11 10

Edible Products

Inedible Products

Total

Oct.D e c.

Jan.Mar.

AprilJune

JulySept.

234 247 221 120 141 144 221 237 294 305

716 694 453 471 472 380 371 297 302 310

536.2 546.8 445.0 324.2 397.8 363.2 442.3 534.9 501.8 546.7

155.6 137.5 127.5 77.0 113.4 89.6 69.1 135.7 139.5 128.8

129.0 142.7 118.4 61.5 103.6 82.9 117.0 128.3 126.1 137.0

131.8 144.3 132.8 101.5 100.4 99.3 129.6 146.9 115.4 155.6

119.8 122.3 66.4 84.2 80.4 91.4 126.7 124.0 120.8 125.2

1,067 1,082 941 1,111 1,190 1,021 927 968 1,100 1,201

Source: Bureau of Census, U.S. Department of Commerce

Consumption of Coconut Oil in End Products (Edible and Inedible) in the U.S. Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

74.4 78.2 47.0 44.1 51.5 39.9 49.4 49.3 55.4 51.2

77.4 79.5 54.3 44.8 48.1 44.7 44.0 40.6 41.3 49.3

77.5 86.5 60.1 52.8 59.4 50.8 52.7 45.5 50.8 56.8

80.4 81.0 60.2 46.1 54.3 43.0 54.6 42.5 59.3 50.6

86.6 79.7 68.6 41.9 54.5 41.4 51.4 48.3 53.9 52.3

88.8 82.0 54.6 49.4 47.0 45.4 56.5 43.3 46.4 46.7

76.0 76.5 55.1 49.9 49.3 36.9 49.1 46.5 50.7 48.9

88.4 71.4 47.9 48.3 50.3 33.3 56.2 45.6 51.8 49.6

65.1 61.6 44.9 66.9 53.7 46.2 54.7 48.4 45.9 50.3

74.6 62.1 49.6 53.4 49.4 41.5 44.1 50.3 54.3 47.8

85.1 59.8 50.3 43.9 50.0 43.6 44.3 44.4 56.1 41.8

95.0 59.9 47.9 48.0 42.1 38.8 43.0 45.5 49.4 38.5

969.3 878.0 640.7 589.5 609.6 505.5 600.0 550.2 615.4 583.7

Source: Bureau of Census, U.S. Department of Commerce

Stocks of Coconut Oil (Crude and Refined) in the U.S., on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

316.5 173.6 229.1 147.4 332.4 446.5 123.6 280.3 238.8 194.0

284.5 168.1 200.4 141.1 344.5 387.5 100.1 357.8 249.6 214.3

251.5 163.7 217.7 204.5 337.4 366.3 99.6 276.5 251.3 224.9

237.6 148.5 173.6 174.5 318.8 309.8 102.3 286.9 233.5 223.7

199.9 183.5 175.9 161.3 300.6 240.5 104.0 194.3 231.6 187.8

151.4 163.8 171.5 143.8 366.3 134.7 137.7 254.4 303.3 162.2

163.7 136.9 116.7 143.4 424.6 197.5 163.6 260.9 301.6 202.9

156.0 124.1 113.8 154.3 434.4 191.8 161.4 246.4 245.8 195.6

164.1 162.9 84.0 149.6 392.6 152.0 136.4 259.7 226.5 218.9

166.2 199.7 78.6 162.1 431.8 106.4 178.1 234.1 273.8 184.6

152.9 187.7 65.0 194.2 447.3 142.2 161.6 231.3 264.1 186.1

NA = Not available.

Source: Bureau of Census, U.S. Department of Commerce

Average Price of Coconut Oil (Crude) Tank Cars in New York Year

1

In Millions of Pounds

291.7 155.6 164.7 125.9 274.2 401.7 93.6 245.4 245.9 195.2

Preliminary.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Millions of Pounds

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

30.30 32.50 35.80 44.20 37.25 35.38 40.88 26.00 16.38 26.00

29.69 32.00 36.63 44.00 37.25 35.00 32.94 24.00 17.38 26.00

27.31 31.13 36.75 42.88 37.25 34.00 28.81 22.75 17.25 24.60

28.19 31.00 38.75 42.50 37.25 34.06 26.63 22.50 18.75 24.50

29.45 30.50 39.50 42.50 37.25 38.25 24.25 21.00 20.05 24.50

30.25 35.00 42.25 35.00 37.00 42.13 21.90 21.00 21.13 25.00

29.56 37.90 41.80 36.50 36.50 39.83 19.63 24.00 21.06 25.00

30.35 35.63 42.80 36.50 35.50 36.08 18.58 26.50 21.35 25.00

30.63 35.00 47.20 37.00 36.50 46.00 16.40 26.50 28.50 25.00

30.60 36.00 48.00 37.25 39.00 46.00 16.81 26.50 28.25 21.00

34.19 37.88 49.50 37.25 37.50 46.00 17.50 24.50 27.13 21.00

33.69 33.69 50.00 37.25 38.50 46.00 15.70 24.50 26.00 21.00

30.35 34.02 42.42 39.40 37.23 39.89 23.34 24.15 21.94 24.05

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

43

Coffee Coffee is one of the world’s most important cash commodities and is second in value only to crude oil. Coffee is the common name for any type of tree in the genus madder family. It is actually a tropical evergreen shrub that has the potential to grow 100 feet tall. The coffee tree grows in tropical regions between the Tropics of Cancer and Capricorn in areas with abundant rainfall, year-round warm temperatures averaging about 70 degrees Fahrenheit, and with no frost. The coffee plant will produce its first full crop of beans at about 5 years old and then be productive for about 15 years. The average coffee tree produces enough beans to make about 1 to 1 ½ pounds of roasted coffee per year. It takes approximately 4,000 handpicked green coffee beans to make a pound of coffee. Actually, wine was the first drink made from the coffee tree using the coffee cherries, honey, and water. In the 17th century, the first coffee house, also known as a “penny university” because of the price per cup, opened in London. The London Stock Exchange grew from one of these first coffee houses. Coffee is generally classified into two types of beans – arabica and robusta. The most widely produced coffee is arabica, which makes up about 70 percent of total production. It grows mostly at high altitudes of 600 to 2,000 meters, with Brazil and Colombia being the largest producers. Arabic coffee is traded on the New York Board of Trade. The stronger of the two types is robusta. It is grown at lower altitudes with the largest producers being Indonesia, West Africa, Brazil, and Vietnam. Robusta coffee is traded on the LIFFE exchange. Ninety percent of the world coffee trade is in green (unroasted) coffee beans. Seasonal factors have a significant influence on the price of coffee. There is no extreme peak in world production at any one time of the year, although coffee consumption declines by 12 percent or more below the year’s average in the warm summer months. Therefore, coffee imports and roasts both tend to decline in spring and summer and pick up again in fall and winter. Coffee futures are traded on the Bolsa de Mercadorias & Futuros (BM&F), the Tokyo Grain Exchange (TGE), the London International Financial Futures and Options Exchange (LIFFE), and the CSCE Division of the New York Board of Trade (NYBOT). Options are traded on the BM&F, the LIFFE and the CSCE. Prices – Coffee prices in 2003 on the CSCE nearestfutures chart remained in a relatively narrow 25-cent trading range between about 50 cents and 75 cents per pound. Coffee prices in the past 3 years have been trading in a narrow and depressed price range with the all-time contract low of 41.50 cents posted in December 2001. Some grades of cash coffee prices in late 2001 hit lows not seen since the 1960s. As 2004 began, however, coffee prices were perking up and posted new 3-1/2 year highs. The main bullish factor was tighter world supplies of coffee due to a small 2003/4 harvest by Brazil that was completed in September 2003. Brazil is the world’s leading producer of coffee, and its harvest was hurt by the biennial production cycle and

44

dry weather. Coffee prices in 2003 were also boosted by the weak dollar. The very low prices for coffee seen in the past several years have created serious problems for coffee producers. When prices fall below the costs of production, there is little or no economic incentive to produce coffee. The result is that coffee trees are neglected or completely abandoned. When prices are low, producers cannot afford to hire the labor needed to maintain the trees and pick the crop at harvest. The result is that trees yield less due to reduced use of fertilizer and fewer employed coffee workers. One effect is a decline in the quality of the coffee that is produced. Higher quality Arabica coffee is often produced at higher altitudes, which entails higher costs. It is this coffee that is often abandoned. Although the pressure on producers is severe, the market should eventually come back into balance as supply falls to meet demand, thus boosting prices. In fact, Brazil’s 2003/4 crop was sharply lower, in part, because of poor yields caused by the neglect of groves during the long period of weak prices. Supply – World coffee production in 2003/4 (July-June) was forecast by the USDA at 105.3 million bags (60 kilograms or about 132.3 pounds), down sharply by 15% from the 2002/3 season. The main reason for the decline in world production in 2003/4 was a poor crop in Brazil, the world’s leading producer of coffee with roughly 40% of world production. Being in the Southern Hemisphere, the Brazilian coffee crop is harvested starting in May and extending for several weeks into what are the winter months. Brazil is subject to frosts and freezes and a major freeze occurs about every five years. These events occur most often in June, July and August. Brazilian production in 2003/4 is forecast at 32.0 million bags, down 5% from forecasts back in June 2003. Brazilian production spiked up to 51.60 million bags in 2002/3, depressing world coffee prices, but then production in 2003/4 plunged to the lowest yearly level in 4 years (since 30.80 million in 1999/00). Other key coffee-producing countries are Columbia (with 9% of world production), Vietnam (8%), and Indonesia (5%). In the US, the only areas that produce any significant amount of coffee are Puerto Rico and Hawaii. World stocks of coffee at the end of the 2003/4 season are forecast to plunge by 24% to 21.4 million bags from 28.2 million bags at the beginning of the marketing year. Demand – World coffee consumption in 2002/3 was estimated by the USDA at 114.0 million bags, up less than 1% from the 2001/02 level. The U.S. is the largest consumer of coffee with consumption of 18.9 million bags in 2002, down from 19.3 million in 2001. Trade – World coffee exports in 2003/4 are forecasted by the USDA to fall to a 3-year low of 85.87 million bags, down 5% from 90.86 million in 2002/3. The main reason for the decline in exports was simply the lower overall production of coffee in 2003/4. Brazil’s exports in 2003/4 fell sharply by 17% to 24.5 million bags as a result of the poor harvest. The US imports virtually all of its coffee consumption.

COFFEE World Supply and Distribution of Coffee Crop Year

In Thousands of 60 Kilogram Bags (132.276 Lbs. Per Bag)

Beginning Stocks

Production

Imports

Supply

Total Exports

B ean Exports

Rst/Grn Exports

Soluble Exports

Domestic Use

Ending Stocks

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43

34,301 41,215 33,088 29,095 24,883 24,399 21,262 22,888 20,421 28,219

97,042 88,946 103,786 97,687 108,453 113,433 116,896 110,756 124,179 105,262

1,070 1,079 1,091 1,220 1,435 1,274 1,484 1,617 1,566 1,444

132,413 131,240 137,965 128,002 134,771 139,106 139,642 135,261 146,166 134,925

68,672 74,103 84,509 77,939 84,759 92,400 90,663 87,388 90,860 85,873

64,432 69,021 79,918 73,249 80,491 87,250 84,598 80,846 84,070 79,199

230 231 196 193 259 275 268 324 328 361

4,010 4,851 4,395 4,497 4,009 4,875 5,797 6,218 6,462 6,313

22,526 24,049 24,361 25,180 25,613 25,444 26,091 27,452 27,087 27,673

41,215 33,088 29,095 24,883 24,399 21,262 22,888 20,421 28,219 21,379

1

2

3

Preliminary.

Estimate.

Forecast.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Production of Green Coffee Crop Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Brazil Colombia

28,000 16,800 28,000 23,500 35,600 30,800 34,100 35,100 51,600 32,000

Preliminary.

2

13,000 12,939 10,779 12,043 10,868 9,512 10,500 11,950 11,712 11,800

Estimate.

3

Costa El Rica Salvador

2,492 2,595 2,376 2,455 2,459 2,688 2,502 2,338 2,188 2,220 Forecast.

2,314 2,325 2,498 2,040 1,860 2,612 1,624 1,610 1,302 1,300

In Thousands of 60 Kilogram Bags (132.276 Lbs. Per Bag) Ethiopia

Guatemala

India

Indonesia

Ivory C o a st

Mexico

Uganda

Vietnam

World Total

3,800 3,800 3,800 3,833 3,867 3,833 3,683 3,756 3,750 3,250

3,500 3,827 4,141 4,200 4,300 4,364 4,564 3,530 3,802 3,802

3,060 3,717 3,417 3,805 4,415 4,870 5,020 5,010 4,588 4,587

6,400 5,800 7,900 7,000 6,950 6,660 6,495 6,160 6,140 5,700

3,733 2,900 5,333 4,080 2,217 5,700 4,333 3,033 1,817 1,300

4,030 5,400 5,300 4,950 5,010 6,193 4,800 4,200 4,350 4,650

3,100 4,200 4,297 3,032 3,640 3,097 3,205 3,166 2,800 3,200

3,500 3,917 5,750 7,000 7,500 11,010 15,333 12,833 11,167 11,833

97,024 88,946 103,788 97,652 108,453 113,433 116,896 110,756 124,179 105,262

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Exportable4 Production of Green Coffee Crop Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43

Brazil Colombia

18,300 6,300 17,000 12,000 23,100 18,000 21,000 21,400 38,100 18,000

11,564 11,439 9,279 10,483 9,418 7,982 8,970 10,360 10,222 10,295

Costa Rica

El Salvador

Ethiopia

2,252 2,360 2,130 2,150 2,154 2,347 2,157 1,988 1,883 1,895

2,079 2,055 2,268 1,805 1,633 2,445 1,473 1,466 1,164 1,162

2,300 2,300 2,300 2,250 2,234 2,200 2,016 1,906 1,900 1,400

In Thousands of 60 Kilogram Bags (132.276 Lbs. Per Bag) Guatemala Indonesia

Ivory C o a st

Kenya

Mexico

Uganda

Vietnam

World Total

3,220 3,527 3,856 3,850 3,900 3,964 4,139 3,110 3,382 3,382

3,687 2,852 5,282 4,025 2,159 5,640 4,271 2,969 1,752 1,300

1,562 1,789 1,115 1,005 1,125 1,662 841 846 897 1,029

3,030 4,340 4,450 3,955 4,050 5,138 3,822 3,200 3,400 3,700

3,040 4,140 4,217 2,952 3,580 3,017 3,124 3,086 2,720 3,120

---3,700 5,463 6,717 7,200 10,660 14,916 12,333 10,667 11,300

74,957 65,393 79,817 72,986 83,162 88,121 90,965 83,528 97,371 77,882

4,440 3,750 5,820 5,360 5,350 5,305 5,160 4,695 4,660 4,205

1

Preliminary. 2 Estimate. 3 Forecast. 4 Marketing year begins in October in some countries and April or July in others. Exportable production represents total harvested production minus estimated domestic consumption. Source: Foreign Agricultural Service, U.S. Department of Agriculture

Green C o ffee Imp o rts in th e U n ited S tates Year

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1 1

Brazil Colombia

5,335 4,253 3,376 2,850 2,302 1,852 2,331 2,688 4,659 2,569

P reliminary.

3,048 4,852 2,957 2,372 2,485 3,011 3,179 3,410 3,359 3,147

Costa Domi nican Ri ca Republi c

603 662 437 325 388 482 608 771 684 705

343 254 213 207 266 255 150 164 35 28

In Thousands of 60 Ki logram Bags (132.276 Lbs. Per Bag)

Ecuador

El Salvador

Ethi opia

785 753 671 969 745 665 431 347 419 164

868 1,344 1,274 376 284 401 500 501 550 1,209

31 23 192 215 109 137 308 183 77 91

S ource: B ureau of C ensus, U.S . Depart ment of C ommerce

Guatemala Indonesi a

Mexi co

Peru

Venezuela

Grand Total

1,489 1,812 1,815 1,403 1,637 1,748 1,921 1,563 2,148 2,377

2,993 3,042 2,947 2,516 2,887 3,734 2,935 2,471 3,182 3,610

610 526 158 249 621 441 652 771 762 857

108 104 444 295 89 445 65 146 372 32

18,849 21,673 18,023 14,913 15,886 17,947 18,848 18,998 20,559 21,625

536 581 542 558 513 1,246 1,325 1,273 724 692

45

COFFEE Monthly Green Coffee Imports in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1,538 1,469 1,824 1,582 1,747 1,742 2,094 1,654 1,554 1,882

1,152 1,253 1,657 1,837 1,893 1,866 2,012 1,602 1,290 1,679

1,409 1,702 1,753 1,966 1,827 2,243 2,317 1,811 1,497 1,883

1,077 1,221 1,395 1,792 1,587 1,787 1,922 1,717 1,600 1,797

1,082 1,190 1,444 1,738 1,540 1,602 2,079 1,723 1,574 1,605

1,151 1,240 1,236 1,583 1,412 1,691 1,858 1,599 1,460 1,592

1,195 1,117 1,329 1,783 1,386 1,488 1,793 1,767 1,686 1,895

1,560 1,094 1,341 1,391 1,478 1,639 1,699 1,521 1,687 1,623

1,266 1,220 1,364 1,147 1,369 1,491 1,496 1,335 1,741 1,615

1,127 1,326 1,279 1,215 1,499 1,470 1,480 1,378 1,765 1,625

1,103 1,492 1,485 1,184 1,423 1,639 1,431 1,465 1,698 1,407

1,213 1,563 1,828 1,629 1,837 1,903 1,445 1,722 1,833 1,725

14,872 15,886 17,936 18,848 18,998 20,561 21,625 19,294 19,384 20,329

Preliminary.

2

132.276 pounds per bag.

Source: Bureau of the Census, U.S. Department of Commerce

Average Price of Braz ilian1 Coffee in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

71.42 162.81 127.54 127.28 179.83 99.43 97.68 62.38 42.56 49.14

80.14 161.07 144.05 160.21 177.78 91.72 91.51 62.50 42.79 48.54

84.72 171.48 140.99 179.75 154.84 88.90 89.93 60.35 48.79 43.77

87.14 166.54 132.92 183.73 141.11 86.14 86.46 55.11 49.90 48.71

118.37 161.72 134.76 209.62 124.89 96.29 87.23 57.19 45.19 51.06

136.43 145.22 125.44 184.21 104.09 91.69 78.32 51.86 42.96 47.11

211.81 139.68 106.93 158.52 96.04 78.13 79.89 46.43 43.58 49.64

192.38 149.54 108.28 158.25 101.92 76.67 70.57 46.49 40.55 52.88

212.73 130.26 103.10 167.77 92.76 70.43 71.14 42.42 44.46 55.19

191.21 127.23 105.77 152.12 91.32 78.74 72.28 38.63 45.28 53.51

172.83 125.33 103.76 149.07 96.67 98.41 68.95 42.28 48.37 54.15

159.73 110.46 103.71 171.12 100.28 109.47 64.39 41.60 46.70 56.92

143.24 145.95 119.77 166.80 121.81 88.84 79.86 50.60 45.09 50.89

And other Arabicas.

Source: Coffee Publications, I nc.

Cents Per Pound ----- Santos No. 4 (Jan. 1901 - July 1975) Brazilian, New York (Aug. 1975 - date) - - - Colombian Maniz, New York (Jan. 1948 - July 1953) Colombian Medellin, New York (Aug. 1953 - Dec. 1977) Colombian, New York (Jan. 1978 - date)

Exchange Closed Sep. 1941 - Sep. 1946

46

In Thousands of 60 Kilogram Bags2

COFFEE Average Monthly Retail 1 Price of Coffee in the United States Year

1996 1997 1998 1999 2000 2001 2002 2003 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

357.7 330.0 402.5 343.5 365.4 322.4 293.6 299.9

359.0 331.6 397.3 342.8 367.7 321.7 294.6 292.4

355.0 351.2 403.3 347.6 363.3 320.5 285.9 293.3

352.7 389.4 395.9 346.6 358.4 312.8 297.6 300.8

344.4 410.9 387.8 349.5 353.1 309.7 301.1 293.7

343.8 442.8 378.6 342.1 343.1 315.6 293.8 293.1

338.0 462.8 377.1 342.0 344.6 309.7 297.7 294.4

339.0 466.9 370.4 342.8 344.4 304.6 292.9 292.1

333.3 461.7 362.0 339.3 333.9 302.5 292.1 291.9

334.4 439.2 350.3 348.2 331.7 301.5 287.2 282.5

328.3 430.3 348.2 333.7 324.3 298.8 288.2 227.9

330.7 416.1 344.6 334.7 321.2 291.3 283.8 NA

343.0 411.1 376.5 342.7 345.9 309.3 292.4 287.5

Roasted in 13.1 to 20 ounce cans.

Source: Coffee Publications, I nc.

Average Price of Colombian Mild Arabicas1 in the United States Year

1996 1997 1998 1999 2000 2001 2002 2003 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

119.08 146.18 184.21 123.07 130.13 75.33 63.46 69.68

134.94 188.62 190.59 116.92 124.73 76.70 65.64 69.60

160.60 212.96 166.07 117.05 119.51 76.94 71.16 61.82

134.31 199.22 158.17 114.02 112.67 78.25 70.17 66.12

142.56 318.50 146.33 123.95 110.31 80.92 63.44 67.56

133.25 227.15 135.83 121.45 100.30 74.38 60.86 65.01

135.39 190.57 125.03 107.05 101.67 69.70 59.60 67.84

137.68 193.46 129.45 105.28 91.87 73.50 58.98 68.65

123.30 196.29 117.56 97.77 89.98 68.80 62.49 68.37

127.77 169.40 115.01 103.69 90.25 62.88 66.54 66.59

129.41 161.38 121.74 126.76 84.01 65.72 72.83 67.04

126.41 183.32 123.96 140.35 75.81 62.57 67.92 69.38

133.73 198.92 142.83 116.45 102.60 72.14 65.26 67.31

I CO monthly and composite indicator prices on the New York Market, 1979 I CA Agreement basis.

Average Price of Other Mild Arabicas1 in the United States Year

1996 1997 1998 1999 2000 2001 2002 2003 1

1996 1997 1998 1999 2000 2001 2002 2003

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

109.38 131.83 175.04 110.99 109.17 64.98 57.34 65.22

122.71 167.20 175.87 103.24 101.17 67.00 60.51 67.60

119.05 193.82 154.82 103.23 98.26 65.88 66.38 61.66

122.01 204.43 147.08 99.69 92.76 65.68 65.78 65.35

128.56 264.50 134.35 109.10 91.76 68.94 58.45 66.47

124.46 212.55 121.56 104.21 84.10 63.79 55.12 61.34

120.47 186.52 113.86 90.85 85.20 58.47 53.07 62.32

122.49 185.17 119.89 87.64 74.52 59.68 52.02 63.60

114.05 184.38 108.07 81.06 73.83 57.71 57.58 65.50

120.62 161.45 107.07 92.22 75.43 56.23 64.05 62.58

119.90 154.15 113.84 112.74 70.47 58.96 70.15 62.36

115.01 174.25 115.54 123.56 64.81 55.63 64.75 65.01

119.89 185.02 132.25 101.54 85.12 61.91 60.43 64.08

In Cents Per Pound

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

91.99 67.66 86.03 81.65 53.62 31.00 22.88 42.75

98.99 76.65 85.79 77.68 49.41 31.96 24.46 42.35

91.99 81.31 84.67 72.70 47.26 30.96 29.77 38.26

91.45 78.48 90.60 68.89 45.21 28.59 30.35 38.68

92.10 95.74 92.64 68.28 45.19 29.71 29.43 38.90

86.46 91.94 84.55 66.20 43.72 29.33 29.26 35.33

78.14 82.52 78.40 62.28 41.93 27.59 29.31 36.71

80.16 76.92 79.98 63.80 38.94 25.86 28.74 37.92

74.83 77.43 80.88 60.44 39.47 23.79 33.31 38.76

72.97 76.90 80.36 59.25 36.55 21.26 34.44 37.32

70.51 78.20 80.40 64.10 33.34 22.03 39.38 36.05

63.08 84.65 82.82 66.40 30.78 23.57 38.68 37.59

82.72 80.70 83.93 67.64 42.12 27.14 30.83 38.39

I CO monthly and composite indicator prices on the New York Market, 1979 I CA Agreement basis.

Year

1996 1997 1998 1999 2000 2001 2002 2003

Source: Coffee Publications, I nc.

Jan.

Average Price of Composite 19791 in the United States

1

In Cents Per Pound

F eb.

I CO monthly and composite indicator prices on the New York Market, 1979 I CA Agreement basis.

Year

Source: Coffee Publications, I nc.

Jan.

Average Price of Robustas 19761 in the United States

1

In Cents Per Pound

Jan.

Source: Coffee Publications, I nc.

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

100.33 100.03 130.61 97.63 82.15 49.19 43.46 54.04

110.50 121.89 130.78 92.36 76.15 49.39 44.30 54.07

105.89 137.47 119.93 89.41 73.49 48.52 49.49 49.61

107.09 142.20 119.66 85.72 69.53 47.31 50.19 51.87

110.24 180.44 114.23 89.51 69.23 49.38 47.30 53.19

105.79 155.38 103.84 85.41 64.56 46.54 45.56 48.90

99.97 135.04 97.32 78.21 64.09 43.07 44.70 50.89

102.73 132.63 101.25 77.22 57.59 42.77 42.79 52.22

96.52 132.51 95.82 71.94 57.31 41.17 47.96 54.10

98.56 121.09 95.01 76.36 56.40 42.21 50.79 51.72

97.14 118.16 98.26 88.22 52.18 44.24 54.69 49.81

90.04 130.02 100.73 95.63 48.27 43.36 51.68 52.44

102.07 133.91 108.95 85.64 64.25 45.60 47.74 51.91

I CO monthly and composite indicator prices on the New York Market, 1979 I CA Agreement basis.

Source: Coffee Publications, I nc.

47

COFFEE Average Open Interest of Coffee 'C' Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

54,796 34,455 28,430 38,516 30,042 36,194 47,829 48,914 57,897 69,508

50,230 35,391 28,224 42,888 30,539 36,693 50,620 53,050 66,825 71,682

53,713 36,925 28,127 39,092 30,211 41,294 50,565 58,111 66,798 76,934

57,226 34,387 28,793 32,644 32,617 43,846 53,662 57,722 66,207 77,954

58,574 34,615 28,394 30,324 36,345 45,947 49,692 53,481 66,289 72,716

54,589 34,462 25,096 22,552 36,651 45,675 50,293 58,311 68,994 72,155

43,056 30,156 26,188 21,497 37,531 45,411 45,513 57,888 69,197 72,110

35,052 27,448 25,799 19,818 30,074 46,725 40,177 57,243 69,635 68,259

35,800 27,800 23,929 22,788 30,429 46,255 40,133 55,674 70,079 73,809

34,258 28,408 26,202 25,109 32,940 47,956 42,906 58,345 73,753 79,038

31,046 24,505 27,599 23,636 31,677 46,271 43,187 55,317 73,431 81,253

31,134 26,412 27,201 28,577 32,816 46,764 45,086 53,953 69,343 76,628

Source: New York Board of Trade (NYBOT)

Volume of Trading of Coffee 'C' Futures in New York

In Contracts

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

188,508 169,250 203,369 242,719 155,774 216,810 158,962 189,977 201,327 205,420

219,455 191,352 186,526 280,014 194,435 201,670 232,174 221,775 279,966 283,317

208,113 213,326 152,797 267,369 186,712 252,841 166,970 167,466 229,764 169,611

284,734 156,191 197,442 223,330 194,732 243,630 224,266 236,757 295,701 334,188

380,119 163,248 137,454 219,214 157,935 237,968 177,753 182,621 159,670 255,935

304,542 186,550 158,929 186,227 189,768 243,164 218,467 220,708 225,177 270,424

210,479 162,562 171,800 135,664 165,868 187,019 198,975 134,809 174,567 237,210

196,685 161,076 196,991 136,807 189,047 232,817 175,868 250,151 254,563 278,746

159,574 165,337 136,054 142,610 156,556 151,724 119,304 100,443 232,255 332,473

177,424 152,959 196,696 151,171 172,956 270,013 163,399 153,739 250,483 309,930

184,172 157,240 135,305 145,610 197,776 244,258 187,230 229,495 236,307 314,182

142,713 123,923 166,213 163,446 133,471 177,309 111,593 111,430 178,728 219,595

2,658,073 2,003,014 2,039,576 2,294,181 2,095,030 2,659,223 2,134,961 2,199,371 2,718,508 3,211,031

Source: New York Board of Trade (NYBOT)

48

Coke Coke is the hard and porous residue left after certain types of bituminous coals are heated to high temperatures (up to 2,000 degrees Fahrenheit) for about 17 hours. It is blackish-gray and has a metallic luster. The residue is mostly carbon. Coke is used as a reducing agent in the smelting of pig iron and the production of steel. Petroleum coke is made from the heavy tar-like residue of the petroleum refining process. It is used primarily to generate electricity. Supply – Coke production in the US rose to 285.686

Salient Statistics of Coke in the United States

million barrels in 2002 from 298.261 million in 2001. That was well below the production record of 369.305 million barrels posted in 1957. US stocks at coke plants (Dec 31) fell to 606,000 tons in 2002 from 981,000 tons in 2001. Trade – US exports fell sharply to 594,000 tons from 1.069 million tons in 2001. Most of those exports were to Canada. US imports rose to 3.096 million tons in 2002 from 2.340 million tons in 2001. About one-half of the imports were from Japan.

In Thousands of Short Tons Producer and Distributor -------- Exports -------- -------- Imports -------Stocks D e c. 3 1 Canada Total Ja p a n Total

---------------------- Coke and Breez e Production at Coke Plants -------------------------------------------- By Census Division ------------------------Year

Middle Atlantic

1997 1998 1999 2000 2001 2002 1

8,994 6,371 5,869 6,095 W W

East North East South Central Central

8,882 9,224 10,115 10,835 10,272 7,952

3,393 2,922 2,821 2,558 1,979 1,925

Other

Total

C o ke Total

Breeze Total

Consumption2

2,080 2,766 2,448 2,608 7,893 7,332

23,349 21,283 21,253 22,096 20,144 17,209

22,116 20,041 20,016 20,808 18,949 16,099

1,233 1,242 1,237 1,289 1,195 1,109

24,017 23,108 22,423 23,242 20,293 18,977

1,294 933 852 1,054 981 606

498 830 686 795 793 493

832 1,129 898 1,146 1,069 594

1,018 2,062 2,012 1,884 1,508 1,508

1,565 3,834 3,224 3,781 2,340 3,096

1

Preliminary. 2 Equal to production plus imports minus the change in producer and distributor stocks minus exports. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Production of Petroleum Coke in the United States Year

1997 1998 1999 2000 2001 2002 2003 1 1

In Thousands of Barrels

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

19,798 20,929 22,312 21,502 23,970 24,543 23,420

17,594 18,968 20,084 20,017 21,112 22,849 20,030

20,603 21,998 22,148 21,654 23,299 23,529 23,810

21,274 21,834 21,444 21,161 23,713 23,850 23,768

22,210 21,790 21,410 21,785 42,465 24,713 24,831

21,052 20,856 20,943 22,095 23,345 23,305 24,054

21,619 21,790 21,741 23,321 23,838 24,556 26,080

22,229 22,469 22,180 22,835 23,339 23,939 25,746

21,630 21,526 21,249 22,455 22,321 23,465 24,072

21,782 21,234 22,166 22,121 23,306 22,527 24,588

20,313 20,837 21,695 22,628 23,350 23,497

21,827 22,258 22,866 24,262 24,203 24,913

251,931 256,489 260,238 265,836 298,261 285,686 288,479

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Coal Receipts and Average Prices at Coke Plants in the United States

Year

1997 1998 1999 2000 2001 20021 1

---------------------------- Coal Receipts at Coke Plants ---------------------------

---------------- Average Price of Coal Receipts at Coke Plants -----------------

------------- By Census Division, In Thousands of Short Tons -----------Middle East North East South Atlantic Central Central Other Total

------------------ By Census Division, In Dollars per Short Ton ----------------Middle East North East South Atlantic Central Central Other Total

11,555 8,430 7,784 7,971 W W

Preliminary.

10,825 12,442 13,524 14,020 13,084 10,657

4,290 3,777 3,571 3,209 2,678 2,335

W = Withheld proprietary data.

2,880 3,705 3,276 3,520 10,622 9,244

29,550 28,354 28,155 28,720 26,384 22,236

47.05 44.16 44.33 42.89 W W

49.12 48.39 47.74 45.62 47.53 52.88

------------------- Coal Carboniz ed at Coke Plants -------------------

1997 1998 1999 2000 2001 20021 1

W W W W W W

In Thousands of Short Tons

------------------------------------ Stocks at Coke Plants, Dec. 31 -----------------------------------

---------------------------- By Census Division ----------------------------- -------------------------- By Census Division ---------------------------Middle East North East South Middle East North East South Atlantic Central Central Other Total Atlantic Central Central Other Total

11,655 8,401 7,799 8,129 W W

Preliminary.

11,366 12,311 13,404 13,971 12,981 10,703

4,299 3,736 3,584 3,290 2,608 2,319

W = Withheld proprietary data.

47.61 46.06 45.85 44.38 46.42 51.27

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Coal Carboniz ed and Coke and Breez e Stocks at Coke Plants in the U.S.

Year

47.72 46.43 45.28 44.74 47.69 50.03

2,883 3,741 3,321 3,549 10,486 9,515

30,203 28,189 28,108 28,939 26,075 22,537

297 160 69 148 W W

509 526 500 628 637 492

159 176 157 166 266 288

465 215 277 255 607 383

1,430 1,077 1,003 1,197 1,510 1,163

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

C o ke Total

Breeze Total

1,294 933 852 1,054 981 606

135 144 150 143 88 141

49

Copper The word copper comes from name of the Mediterranean island Cyprus that was a primary source of the metal. Dating back more than 10,000 years, copper is man’s oldest metal. From the Pyramid of Cheops in Egypt, archeologists have recovered a portion of a water plumbing system whose copper tubing was found in serviceable condition after more than 5,000 years. Copper is one of the most widely used industrial metals because it is an excellent conductor of electricity, has strong corrosion-resistance properties, and is very ductile. It is also used to produce the two alloys of brass (a copperzinc alloy) and bronze (a copper-tin alloy), both of which are far harder and stronger than the pure metal. Electrical uses of copper account for about 75% of total copper usage and building construction is the single largest market. Copper is biostatic, meaning that bacteria will not grow on its surface, and is therefore used in air-conditioning systems, food processing surfaces, and doorknobs to prevent the spread of disease. Today the copper content of US coins is 2.6% for the penny, 75% for the nickel, and 91.67% for the dime, quarter, and half dollar. Known worldwide resources of copper are estimated at nearly 5.8 trillion pounds, of which only about 0.7 trillion (12%) have been mined. Copper futures and options are traded on the London Metal Exchange (LME) and the COMEX Division of the New York Mercantile Exchange (NYMEX). Copper futures are traded on the Shanghai Futures Exchange. The Comex copper futures contract calls for the delivery of 25,000 pounds of Grade 1 electrolyte copper and is priced in terms of cents per pound.

Prices – Comex copper futures prices traded sideways in the first half of 2003 but then staged an impressive rally late in 2003 as the US economy surged. Demand for copper has a strong correlation with US economic growth and with the US building industry. Copper prices were also boosted by the weakness in the dollar. Copper prices closed 2003 at a 6-1/2 year high of $1.04 per pound. That is, however, still well below the 13-year high on the copper nearest-futures chart of $1.46 posted in July 1995 and the record high of $1.65 posted in December 1988. Supply – World production of copper in 2001, the latest reporting year, rose by 3.8% to 13.700 million metric tons from 13.200 million in 2000. The world’s largest producer of copper is Chile with 34.6% of world production, followed by the US with 9.8%, Indonesia with 7.7%, and Australia with 6.3%. US production of refined copper in 2003 was on track to fall to 1.3 million tons from 1.508 million in 2002. Demand – US consumption of copper in 2001 fell to 2.620 million metric tons from 3.030 million in 2000. The primary consumer of copper in the US is wire rod mills with 74% of usage, followed by brass mills with 24% of usage. Trade – US exports of copper in 2003 were set to rebound sharply higher from the depressed levels of 22,500 metric tons in 2001 and 26,600 metric tons in 2002. US imports of copper in 2003 were set to fall slightly from 927,000 metric tons in 2002.

Wo rld Min e P ro d u ctio n o f C o p p er (C o n ten t o f Ore) Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 1 20012

Australi a

Canada3

Chi le

378.0 402.0 415.6 397.8 547.3 558.0 607.0 739.0 829.0 869.0

768.6 732.6 616.8 726.3 688.4 659.5 705.8 620.1 633.9 632.8

1,932.7 2,055.4 2,219.9 2,488.6 3,115.8 3,392.0 3,686.8 4,391.2 4,602.4 4,739.0

P reliminary. 2 E stimate. 3 R ecov erable. S ource: U.S . Geolog ical S urvey (US GS )

1

In Thousands of Metri c Tons

Chi na

Indonesi a

Mexi co

Peru

Poland

Russia4

South Afri ca

Uni ted States3

Zambi a

World Total

334 345 396 445 439 511 504 533 613 588

280.8 298.6 322.2 443.6 507.5 529.1 780.8 766.0 1,012.1 1,050.0

279.0 301.2 294.7 333.6 340.7 390.5 384.6 381.2 364.6 367.4

345.6 355.0 395.9 409.7 484.2 506.5 483.3 536.4 553.9 722.0

331.9 382.6 378.0 384.2 421.9 414.8 436.2 464.0 456.2 474.0

699 584 573 525 523 505 500 530 570 620

176.1 166.3 160.1 161.6 152.6 153.1 166.0 144.3 137.1 141.9

1,760 1,800 1,820 1,850 1,920 1,940 1,860 1,600 1,440 1,340

429.5 396.2 373.2 316.0 334.0 352.9 315.0 270.0 241.2 299.3

9,470 9,430 9,490 10,000 11,000 11,500 12,100 12,700 13,200 13,700

4

F ormerly part of the U.S.S.R .; data not reported separately until 1992.

Commodity Exchange Inc. Warehouse Stocks of Copper, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

74.0 27.0 24.0 29.5 91.5 93.9 91.6 64.7 269.2 399.3

56.7 18.7 12.1 19.0 100.7 101.8 95.6 79.3 284.8 395.2

49.8 17.7 12.8 24.8 112.3 112.3 95.6 90.0 304.0 373.7

37.2 9.0 13.9 43.6 112.6 123.1 95.9 105.1 314.1 362.7

31.6 11.5 20.7 49.5 107.6 132.6 865.2 126.5 326.0 351.2

30.4 7.0 13.2 43.0 84.8 131.7 75.0 150.9 337.4 NA

36.0 13.1 7.4 46.3 63.5 133.7 73.6 165.1 355.7 320.5

37.4 16.7 17.3 30.0 55.7 120.2 73.2 176.1 374.6 310.6

28.5 16.5 22.1 46.5 56.6 108.8 62.8 186.8 375.9 303.9

17.9 11.2 21.7 61.5 67.7 97.5 62.3 199.6 380.3 299.0

20.3 6.1 30.8 67.8 69.4 90.9 63.4 211.0 381.6 294.4

21.5 5.4 38.5 79.8 74.7 90.9 64.9 236.5 382.8 288.1

Source: New York Mercantile Exchange (NYMEX), COMEX division

50

In Thousands of Short Tons

Jan.

COPPER S alien t S tatistics o f C o p p er in th e U n ited S tates

In Thousands of Metric Tons -- S to c k s , D e c 3 1 --

Ap p aren t

------ Imp o rts3 ------ ------ E xp o rts -----Bli ster & --- C o n su mp tio n --Refi ned Pri mary SeconOre, Pri mary Materi al & Old ConcenProducers Copper in Total dary Re- Unmanutrate6 Refi ned7 COMEX (Refi ned) Soluti on (Reported) Copper8 New covered4 factured Refi ned

- - - - - - - - - - - - - - - N e w C o p p e r P ro d u c e d - - - - - - - - - - - - - - - -

Year

1992 1993 1994 1995 1996 1997 1998 1999 20001 20012

--- F ro m D o mestic Ores --Refi nMInes Smelters eri es

1,760 1,800 1,850 1,850 1,920 1,940 1,860 1,600 1,450 1,340

1,180 1,270 1,310 1,250 1,300 1,440 1,490 1,090 W W

Forei gn Ores3

1,110 1,210 1,280 1,300 1,290 1,370 1,290 1,110 865 808

96 89 64 91 147 113 238 196 163 192

1,710 1,790 1,840 1,930 2,010 2,070 2,140 1,890 1,590 1,630

555 543 500 443 428 498 466 381 357 316

593 637 763 825 961 999 1,190 1,280 1,350 1,400

289 343 470 429 543 632 683 837 1,060 991

266 227 261 239 195 127 37 63 107 45

177 217 157 217 169 93 86 25 94 23

96 67 24 22 27 83 85 83 59 244

205 153 119 163 146 314 532 565 334 952

P reliminary. 2 E stimate. 3 A lso from matte, etc., refinery reports. 4 F rom old scrap only. 5 F or consumption. (copper content). 7 I ng ots, bars, etc. 8 Old scrap only. S ource: U.S . Geolog ical S urvey (US GS )

1

C o n su mp tio n o f R efin ed C o p p er3 in th e U n ited S tates Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 1 20012

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - B y - P ro d u c t s - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Wire Ingots & Cakes Cathodes Bars Ingot Bars & Slabs Bi llets Other4

1,974.9 2,130.0 2,410.0 2,250.0 2,320.0 2,490.0 2,600.0 2,710.0 2,730.0 2,360.0

W W W W W W W W W W

20.0 37.7 37.3 31.3 26.8 29.4 30.7 24.4 23.8 24.0

43.7 55.5 73.2 75.9 80.8 81.1 76.2 79.3 101.0 95.9

W W W W W W W W W W

6

166 146 167 171 173 180 160 138 122 98

2,178 2,360 2,680 2,530 2,610 2,790 2,890 2,980 3,030 2,620

B lister

In Thousands of Metri c Tons

------------------------------ B y C lass o f C o n su mer -----------------------------Wi re Rod Brass Chemi acl Ingot Mi scelMi lls Mi lls Plants Makers Foundri es laneous5

139.6 136.0 164.0 181.0 181.0 194.0 184.0 166.0 175.0 143.0

2,311 2,510 2,690 2,540 2,830 2,940 3,030 3,130 3,130 2,500

1,675.0 1,819.1 2,060.0 1,950.0 1,980.0 2,140.0 2,170.0 2,230.0 2,240.0 1,940.0

458.5 503.0 568.0 533.0 588.0 597.0 659.0 691.0 723.0 623.0

0.9 0.9 1.1 1.1 1.1 1.0 1.1 1.2 1.2 1.2

3.0 2.2 4.5 7.7 3.6 4.2 5.4 4.5 4.6 4.6

15.0 10.2 11.1 15.6 15.8 16.6 19.2 21.2 24.3 22.8

25.8 27.6 30.4 31.4 28.6 29.9 31.8 29.8 32.5 30.9

Total Consumpti on

2,178.2 2,360.0 2,680.0 2,530.0 2,610.0 2,790.0 2,890.0 2,980.0 3,030.0 2,620.0

P reliminary. 2 E stimate. 3 P rimary & secondary. 4 1991 to date include Wirebars and B illets. 5 I ncludes iron and steel plants, primary smelters producing alloy s other than copper, consumers of copper powder and copper shot, and other manufacturers. W - Withheld proprietary data. S ource: U.S . Geolog ical S urvey (US GS )

1

London Metals Exchange Warehouse Stocks of Copper, at End of Month

In Thousands of Metric Tons

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

597.6 309.9 355.1 194.2 365.7 646.9 807.3 349.9 855.5 833.8

554.5 280.9 348.4 216.2 376.0 695.9 824.1 327.9 910.9 825.9

504.3 239.9 322.3 177.2 339.5 722.2 755.4 400.5 950.9 813.2

446.4 204.9 303.9 145.8 262.3 748.2 697.8 445.2 973.8 768.2

379.0 197.9 309.7 133.0 261.8 776.6 605.7 431.3 958.3 740.8

350.9 166.5 263.0 128.3 249.3 754.8 553.4 464.7 892.1 665.8

338.9 151.5 227.6 234.9 260.9 769.6 487.8 651.9 893.6 612.6

367.8 163.1 275.5 278.7 307.7 789.0 449.2 661.2 896.6 620.3

359.3 178.2 240.7 332.8 414.2 774.0 401.5 729.0 870.6 580.4

333.1 193.6 122.1 344.6 460.6 793.8 380.9 737.2 863.2 516.5

318.4 222.2 96.1 338.8 511.9 779.7 349.4 780.4 862.8 467.0

302.2 364.8 119.6 337.8 590.1 790.5 357.4 799.5 855.9

Preliminary.

Source: American Bureau of Metal Statistics (ABMS)

Copper Refined from Scrap in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

33.3 30.9 25.0 35.9 25.9 20.1 19.4 15.4 7.1 5.8

28.3 30.6 23.7 30.0 28.6 21.8 18.6 14.2 6.2 3.9

37.9 36.0 25.5 36.4 23.7 23.7 25.8 15.2 7.2 5.7

30.7 32.7 22.5 32.6 31.0 17.6 22.5 13.4 7.6 3.9

37.1 33.7 26.8 35.4 17.8 16.2 22.1 12.8 8.2 4.1

28.7 28.2 30.9 30.8 21.4 17.5 15.4 13.2 7.8 4.9

26.9 18.7 24.4 26.4 24.2 21.2 11.7 13.9 7.0 4.9

33.0 25.1 25.0 28.4 23.9 18.2 19.7 13.5 7.6 3.9

38.7 25.4 26.8 34.3 23.8 21.3 14.1 12.3 7.1 4.2

27.0 25.0 30.6 36.5 31.8 21.0 14.3 10.2 6.3 4.5

34.3 26.2 25.9 24.6 23.2 17.7 19.7 6.4 5.1 4.4

37.3 24.4 26.3 29.3 26.3 20.0 15.6 5.7 3.9

391.7 319.0 333.0 383.0 336.0 230.0 208.0 154.0 81.1 54.7

Source: U.S. Geological Survey (USGS)

51

COPPER

Average Open Interest of Copper Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

65,518 52,632 47,771 54,468 69,607 76,861 82,289 77,952 72,823 81,820

65,446 50,770 45,706 56,022 72,302 73,109 73,778 76,721 79,806 81,499

66,177 47,267 42,732 58,205 67,154 75,318 68,026 78,034 79,156 72,484

59,346 47,793 46,771 50,574 68,670 70,534 75,520 83,647 75,229 85,485

63,825 50,089 47,284 56,740 65,033 76,341 69,531 72,970 74,350 77,704

60,383 48,200 52,558 56,774 66,002 70,842 63,786 85,495 80,981 81,509

51,616 40,968 56,564 47,767 63,271 75,640 71,389 83,690 82,661 82,868

46,855 37,744 56,549 44,632 61,116 70,084 79,565 88,782 102,056 94,517

56,344 33,709 55,408 49,612 60,520 80,188 83,546 87,004 99,225 92,768

59,060 36,476 58,124 54,912 62,944 72,240 73,609 88,166 99,470 106,924

59,158 38,475 61,031 67,026 67,984 69,179 74,161 85,809 89,213 103,218

51,078 35,996 55,807 67,502 76,846 69,819 70,349 68,981 79,218 90,310

Source: New York Mercantile Exchange (NYMEX), COMEX division

Volume of Trading of Copper Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

197,959 242,760 184,431 193,543 172,133 159,147 220,488 240,588 217,598 232,921

233,016 267,883 173,689 221,504 223,117 288,394 276,374 246,052 233,704 269,806

231,239 232,229 157,553 190,000 197,652 230,716 195,668 247,722 164,747 249,306

207,963 242,302 210,836 218,607 264,061 296,162 261,971 279,348 254,259 274,079

247,143 195,554 200,469 164,728 175,956 224,221 232,971 260,697 218,091 221,364

297,393 274,587 255,172 238,918 217,316 319,157 241,854 317,001 267,201 301,709

188,644 167,836 150,445 191,609 202,596 244,567 187,453 159,394 263,395 252,713

242,393 213,110 174,351 198,156 213,541 267,325 283,328 298,639 303,642 324,175

219,788 169,689 166,537 197,746 196,355 220,958 171,080 129,622 195,637 196,481

208,957 181,945 250,420 202,615 195,255 193,628 243,342 190,469 232,731 230,413

290,585 185,141 227,800 203,376 250,986 231,399 266,051 337,589 276,492 363,865

178,887 146,378 160,216 135,368 174,642 177,288 197,544 149,520 179,789 172,438

2,737,967 2,519,414 2,311,919 2,356,170 2,483,610 2,852,962 2,778,124 2,856,641 2,807,286 3,089,270

Source: New York Mercantile Exchange (NYMEX), COMEX division

52

In Contracts

Jan.

COPPER

Cents Per Pound ----- Electrolytic, New York (Jan. 1910 - Dec. 1983) Electrolytic, United States (Jan. 1984 - date) - - - Scrap No. 1, New York (Jan. 1927 - Dec. 1955) Scrap No. 2, New York (Jan. 1956 - Apr. 1988) Scrap No. 2, Chicago (May 1988 - Mar. 2002)

Producers' Price of Electrolytic (Wirebar) Copper, Delivered to U.S. Destinations Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

95.65 151.91 130.09 120.29 88.88 77.07 96.83 95.70 81.79 78.62

99.13 146.00 128.75 121.02 87.52 75.96 94.41 94.01 84.23 80.21

101.76 151.14 130.20 126.50 91.69 74.50 91.63 92.07 86.60 78.87

99.87 146.00 131.29 121.70 93.54 78.79 89.32 88.27 85.11 75.60

112.30 139.80 135.33 127.25 90.02 81.07 94.80 88.85 85.22 78.56

120.58 149.51 116.55 129.57 86.90 77.23 92.74 84.58 88.23 80.44

123.68 150.00 103.63 121.94 87.37 88.02 95.81 81.44 84.44 81.55

121.38 149.77 104.14 114.11 85.30 87.88 98.67 79.34 79.82 83.51

132.53 144.14 102.51 107.14 87.62 92.89 103.49 77.41 79.71 85.34

130.91 140.00 101.80 105.08 84.26 91.26 99.63 75.21 80.16 91.50

141.92 148.48 112.58 99.53 83.51 91.10 95.25 78.13 84.57 96.47

148.86 143.78 114.78 91.39 78.30 93.35 98.92 79.83 75.56 103.72

119.05 146.74 117.86 115.55 87.09 84.09 95.96 84.57 82.62 84.53

Source: American Metal Market (AMM)

Dealers' Buying Price of No. 2 Heavy Copper Scrap in Chicago1 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

50.80 89.48 87.17 68.73 53.26 36.32 50.00 51.62 41.00 41.00

56.11 90.79 82.90 71.63 52.58 36.00 50.00 49.16 41.00 41.00

59.61 89.39 83.24 77.50 53.09 36.00 50.00 49.00 41.00 41.00

62.00 91.75 83.29 79.18 54.00 36.00 49.15 49.81 41.00 41.00

64.86 85.91 82.95 77.33 52.60 39.60 49.00 50.00 41.00 41.00

72.32 88.73 71.48 78.19 49.64 41.77 49.00 50.00 41.00 41.00

76.40 92.32 61.43 72.64 48.00 41.00 49.30 49.14 41.00 41.00

74.30 92.65 62.00 70.24 47.71 45.09 52.65 44.00 41.00 41.00

75.69 92.70 62.00 65.67 46.00 46.19 54.60 44.00 41.00 41.00

76.45 90.64 63.00 63.74 44.00 48.00 55.00 43.48 41.00 48.17

78.10 92.00 64.84 61.31 40.00 48.00 52.65 41.45 41.00 56.00

82.95 92.00 66.00 58.43 40.00 48.67 51.00 41.47 41.00 56.00

69.13 90.70 72.53 70.38 48.41 41.90 51.04 46.93 41.00 44.10

Source: American Metal Market (AMM)

53

COPPER Imports of Refined Copper into the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

28.7 34.9 43.1 55.4 62.8 64.7 84.9 105.0 82.5 60.7

33.6 30.0 41.2 48.0 49.6 53.2 67.8 91.6 87.8 87.8

49.8 37.1 48.2 43.6 59.9 68.1 85.5 90.1 53.0 69.9

36.8 36.9 49.6 43.6 64.7 59.9 92.1 94.4 92.6 78.5

36.1 36.5 56.8 61.0 57.6 62.3 83.6 70.3 59.9 72.7

46.8 37.9 44.6 42.0 52.8 63.8 84.5 72.7 76.2 62.3

35.6 31.5 53.8 53.1 45.0 73.0 89.4 61.7 80.3 74.0

34.4 31.8 64.8 73.3 51.7 84.5 83.0 66.3 90.5 78.1

34.7 28.7 62.3 53.8 71.1 90.3 98.6 83.5 69.9 81.7

62.4 38.7 46.1 55.0 52.7 81.0 112.0 71.0 79.0 82.0

35.9 44.4 61.8 53.4 62.0 59.0 100.0 110.0 82.0

36.2 40.3 47.2 42.0 63.4 77.5 73.7 74.4 73.0

470.0 429.0 543.0 632.0 683.0 837.0 1,060.0 991.0 927.0 897.2

Source: U.S. Geological Survey (USGS)

Preliminary.

Exports of Refined Copper from the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

13.0 11.1 13.7 11.1 6.2 2.4 1.6 1.2 .4 2.5

10.2 24.0 16.5 9.8 12.1 1.1 5.3 .9 .7 .8

10.7 25.6 12.7 6.5 12.2 1.8 22.0 .8 3.2 1.5

6.8 18.2 12.3 6.5 7.5 1.3 12.2 1.9 .7 .6

14.8 23.4 10.8 71.9 7.8 1.6 18.1 1.0 .8 15.9

9.1 38.9 10.7 8.2 6.4 4.2 12.8 .8 6.8 23.0

15.6 16.3 15.7 6.9 7.5 1.6 6.7 1.7 7.7 5.1

10.9 16.6 17.7 7.5 6.4 1.5 4.4 2.6 2.6 4.1

15.4 12.1 14.5 6.3 5.8 1.2 2.9 1.2 1.3 4.3

15.9 9.0 16.4 7.4 5.0 1.4 4.3 4.6 .6 4.6

13.1 12.5 12.8 8.2 3.6 3.7 1.2 5.3 .5

21.1 9.5 16.0 8.5 6.2 3.3 2.1 .6 1.5

157.0 217.0 170.0 93.3 86.2 25.2 93.6 22.5 26.6 74.9

Source: U.S. Geological Survey (USGS)

Preliminary.

Stocks of Refined Copper in the United States, on First of Month Year

1994 19952 1996 1997 1998 1999 2000 2001 2002 20031

In Thousands of Short Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

103.0 55.8 120.0 88.2 281.5 562.6 619.2 383.8 1,045.1 1,119.8

87.7 39.6 131.4 98.8 282.2 593.1 620.8 408.4 1,096.2 109.7

83.6 37.0 125.5 104.4 312.7 614.6 619.5 416.2 1,132.4 1,038.8

72.8 22.6 123.1 116.0 315.7 653.5 582.9 481.9 1,155.3 1,042.1

70.7 33.1 126.3 117.9 304.5 676.6 537.0 552.6 1,175.0 998.3

70.4 30.8 107.9 121.7 308.6 687.8 508.8 585.7 1,158.8 959.8

73.3 27.0 102.8 122.9 306.2 668.4 467.8 626.7 1,126.7 891.8

81.1 50.0 106.2 148.8 319.0 657.2 418.0 733.1 1,132.2 848.9

74.6 60.6 104.7 177.1 334.1 639.7 397.7 767.4 1,123.0 855.6

66.5 71.1 68.0 197.9 367.4 611.2 394.3 895.6 1,123.7 825.2

52.7 69.4 76.0 227.6 407.2 626.5 379.1 916.6 1,110.5 760.9

53.6 73.4 77.5 253.3 444.6 608.2 344.2 985.7 1,109.0

Recoverable copper content. 1 Preliminary. Beginning January 1999, includes Consumers.

2

New reporting method beginning January 1995, includes Comex, London Metal Exchange, and Refiners. Source: American Bureau of Metal Statistics (ABMS)

Stocks of Refined Copper Outside the United States, on First of Month Year

1994 1995 2 1996 1997 1998 1999 2000 2001 2002 2003 1

In Thousands of Short Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

1,075.0 611.6 560.2 405.4 580.8 922.6 983.8 795.0 1,241.3 1,238.8

1,095.5 655.8 566.0 469.5 512.4 944.3 1,034.9 999.5 1,273.5 2,147.6

1,046.8 622.2 552.5 476.3 487.3 960.3 1,040.7 986.4 1,291.5 1,188.0

984.9 577.9 517.5 445.7 438.1 963.0 1,011.4 971.2 1,370.4 1,216.3

913.7 537.0 498.7 413.5 371.1 990.5 988.6 995.7 1,391.1 1,147.4

859.5 525.6 563.9 402.4 368.0 1,008.3 880.9 969.4 1,399.4 1,109.8

843.7 494.9 507.9 408.3 335.7 993.3 866.0 1,000.8 1,289.0 1,129.2

839.7 464.7 476.6 489.6 324.0 990.0 857.3 1,091.0 1,342.6 1,139.9

874.6 465.7 544.4 550.9 387.2 1,017.0 837.0 1,108.7 1,369.1 1,150.9

870.7 467.7 499.5 607.7 468.0 996.9 826.7 1,083.3 1,321.1 1,140.5

835.1 481.4 391.8 574.5 506.9 1,001.5 784.1 1,021.0 1,219.7 1,164.5

818.4 503.5 362.0 553.3 509.0 992.0 764.8 1,104.5 1,224.5

Recoverable copper content. 1 Preliminary. 2 New reporting method beginning January 1995, includes London Metal Exchange and Refiners. Beginning January 1999, also includes Shanghai Metal Exchange, Consumers and Other. Source: American Bureau of Metal Statistics (ABMS)

54

COPPER Production of Refined Copper in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Thousands of Short Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

160.9 202.7 210.8 206.0 214.0 185.0 157.0 155.0 134.0 124.0

150.1 185.5 197.6 192.0 204.0 178.0 149.0 144.0 117.0 110.0

167.8 204.8 209.7 204.0 216.0 220.0 173.0 156.0 124.0 118.0

157.2 194.6 212.4 202.0 209.0 198.0 144.0 145.0 129.0 100.0

165.5 210.0 213.5 198.0 197.0 186.0 161.0 155.0 134.0 101.0

160.4 198.3 193.4 179.0 188.0 175.0 146.0 157.0 128.0 107.0

148.9 193.8 206.1 207.0 197.0 163.0 134.0 146.0 130.0 111.0

165.6 208.8 199.5 203.0 203.0 161.0 149.0 143.0 124.0 110.0

162.1 199.0 198.8 213.0 201.0 172.0 141.0 148.0 120.0 112.0

157.3 206.5 223.1 222.0 217.0 172.0 140.0 149.0 129.0 110.0

153.3 211.3 199.3 205.0 207.0 157.0 147.0 152.0 120.0 104.0

159.8 208.1 212.0 212.0 217.0 162.0 154.0 150.0 119.0

2,360 2,423 2,476 2,470 2,490 2,130 1,800 1,800 1,508 1,317

Recoverable copper content.

1

Source: U.S. Geological Survey (USGS)

Preliminary.

S to cks o f R efin ed C o p p er in th e U n ited S tates, o n F irst o f Mo n th Year

1992 1993 1994 19952 1996 1997 1998 1999 2000 20011

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

75.3 135.4 103.0 55.8 120.0 88.2 281.5 562.6 619.2 383.8

76.3 152.7 87.7 39.6 131.4 98.8 282.2 593.1 620.8 408.4

67.2 144.3 83.6 37.0 125.5 104.4 312.7 614.6 619.5 416.2

69.7 132.3 72.8 22.6 123.1 116.0 315.7 653.5 582.9 481.9

75.9 146.0 70.7 33.1 126.3 117.9 304.5 676.6 537.0 552.6

65.0 153.6 70.4 30.8 107.9 121.7 308.6 687.8 508.8 585.7

62.2 137.1 73.3 27.0 102.8 122.9 306.2 668.4 467.8 626.7

71.2 151.0 81.1 50.0 106.2 148.8 319.0 657.2 418.0 733.1

87.1 128.4 74.6 60.6 104.7 177.1 334.1 639.7 397.7 767.4

99.5 117.2 66.5 71.1 68.0 197.9 367.4 611.2 394.3 895.6

110.3 124.6 52.7 69.4 76.0 227.6 407.2 626.5 379.1

107.1 107.1 53.6 73.4 77.5 253.3 444.6 608.2 344.2

R ecov erable copper content. 1 P reliminary. B eg inning January 1999, includes C onsumers.

2

New reporting method beg inning January 1995, includes C omex , L ondon Metal E x chang e, and R efiners. S ource: American B ureau of Met al S t at ist ics (AB MS )

Deliveries of Refined Copper to Fabricators in the United States Year

1994 19952 1996 1997 1998 1999 2000 2001 2002 2003 1

In Thousands of Short Tons

Jan.

In Thousands of Short Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

193.3 233.8 221.6 246.3 284.5 199.6 166.8 166.1 152.1 136.4

168.6 209.2 227.2 234.5 248.4 202.8 161.3 150.8 126.0 123.4

204.6 239.1 240.0 240.6 288.1 235.0 176.3 167.4 140.7 124.6

178.3 200.9 242.2 247.4 289.2 221.4 157.0 148.4 149.3 106.6

187.8 230.0 270.7 254.9 278.7 206.3 173.7 167.6 148.6 107.7

171.9 210.5 222.1 228.1 258.0 201.9 161.3 165.2 136.2 117.0

154.3 187.1 233.8 241.1 252.4 188.0 145.2 162.7 147.9 127.1

194.6 208.8 246.8 258.2 242.1 186.8 149.7 154.0 141.1 120.6

188.2 202.9 277.5 252.3 260.7 193.7 150.6 151.6 129.5 125.8

188.7 224.7 239.7 259.2 232.0 182.3 154.8 160.7 141.6 125.9

167.5 222.4 240.6 256.0 251.9 182.4 149.8 154.7 124.5 112.4

175.1 175.5 231.9 236.6 220.0 175.2 162.7 147.5 129.7

2,173 2,545 2,896 2,959 3,106 2,375 1,909 1,897 1,667 1,448

Recoverable copper content. 1 Preliminary. 2 New reporting method beginning January 1995, includes crude copper deliveries. Source: American Bureau of Metal Statistics (ABMS)

D eliveries o f R efin ed C o p p er to F ab ricato rs Ou tsid e th e U n ited S tates Year

1990 1991 1992 1993 1994 1995 2 1996 1997 1998 1999 1

In Thousands of Short Tons

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

419.9 405.0 453.7 427.9 399.8 758.5 875.2 862.2 1,091.7 314.5

466.3 404.4 408.9 392.9 429.5 810.1 859.4 889.7 973.8 745.5

436.7 391.5 441.8 452.3 481.2 892.8 934.3 977.9 1,062.0

392.9 361.2 416.4 361.7 466.5 882.2 907.2 1,007.1 1,055.5

408.3 406.3 413.4 422.2 468.9 853.0 816.7 991.1 995.7

466.7 433.5 432.4 442.6 428.1 867.3 950.7 982.7 1,014.8

303.7 368.5 410.4 384.4 387.9 863.7 908.3 897.8 986.8

373.5 323.4 364.7 347.9 369.2 814.1 817.4 873.9 924.8

370.8 420.7 432.6 387.5 423.5 803.4 911.5 886.2 913.3

448.9 499.1 403.5 414.8 448.9 835.1 1,056.0 1,009.0 987.9

469.1 391.4 406.1 463.4 457.1 796.6 922.7 980.4 982.1

420.7 483.4 461.3 458.5 436.0 726.2 918.3 966.6 1,023.0

4,972 4,807 5,045 4,956 5,197 9,903 10,878 11,349 12,011 6,360

R ecov erable copper content. 1 P reliminary. 2 New reporting method beg inning January 1995, includes crude copper deliv eries. S ource: American B ureau of Met al S t at ist ics (AB MS )

55

Corn Corn is a member of the grass family of plants and is a native grain of the American continents. Fossils of corn pollen that are over 80,000 years old have been found in the lake sediment under Mexico City. Archaeological discoveries show that cultivated corn existed in the southwestern US for at least 3,000 years, indicating that the indigenous people of the region cultivated corn as a food crop long before the Europeans reached the New World. Corn is a hardy plant that grows in many different areas of the world. It can grow at altitudes as low as sea level and as high as 12,000 feet in the South American Andes Mountains. Corn can also grow in tropical climates that receive up to 400 inches of rainfall per year or in areas that receive only 12 inches of rainfall per year. Corn is used primarily as livestock feed in both the United States and the rest of the world. Other uses for corn are alcohol additives for gasoline, adhesives, corn oil for cooking and margarine, sweeteners, and as a food for humans. Corn is the largest crop in the US, both in terms of the value of the crop and of the acres planted. The largest futures market for corn is at the Chicago Board of Trade. Corn futures also trade at the Bolsa de Mercadorias & Futuros (BM&F) in Brazil, the Budapest Commodity Exchange, the Marche a Terme International de France (MATIF), the Mercado a Termino de Buenos Aires in Argentina, the Kanmon Commodity Exchange (KCE) in Korea, and the Tokyo Grain Exchange (TGE). The CBOT futures contract calls for the delivery of 5000 bushels of No. 2 yellow corn at par contract price, No. 1 yellow at 1-1/2 cents per bushel over the contract price, or No. 3 yellow at 1-1/2 cents per bushel below the contract price. Prices – Corn prices in 2003 on the nearest futures chart fluctuated in a range between about $2.05 and $2.60 per bushel, with the year’s low of $2.04 being seen in late July. Prices then staged a rally in the latter half of 2003 and closed the year at $2.53, only mildly below the 1-1/2 year high of $2.62 posted in May. Prices fell during the summer due to a bumper crop of corn in the US. However, corn prices then firmed up during the latter half of the year as stronger export demand emerged. In 2004 US exports are expected to post a 5-year high because of a poor crop in Argentina (which may have the smallest crop in 8 years in its 2004 growing year) and because of lower exports from China, which in the latter part of 2003 restricted its corn exports due to tight domestic supplies. Supply – World production of corn in 2002/03 was 603.465 million metric tons, up slightly by 0.7% from 599.349 million in 2001/2 (USDA). World production is forecasted to rise by 0.6% to 607.118 million in 2003/04 (USDA). The US is the world’s largest producer of corn with 228.805 million metric tons in 2002/03, accounting for 38% of world production. The second largest producer is China with 121.300 million metric tons (20%), then Brazil with 45.000 million (7.5%), and then the EU with 40.089 million (6.6%). World ending-stocks in 2002/03 year period rose to 630.803

56

million metric tons from 621.830 million in 2001/02 and are expected to rise further to 641.930 million in 2003/04 (USDA). The crop year goes from September to August, but the international trade year goes from October to September. US farmers planted 79.054 million acres of corn (up from 75.752 million acres in 2001/02) and a slight increase to 79.066 million acres was forecast in 2003/4. Yields in 2002/03 fell sharply to 130.0 bushels per acre from 138.2 bushels in 2002/01, but are expected to recover to 143.2 bushels in 2003/4. US production in 2003/4, according to preliminary figures, was 10.278 billion bushels (11-1-03 USDA estimate), up by a hefty 14.1% from 9.008 billion bushels in 2002/3. The largest corn producing states in the US in 2003 were Iowa (18.7%), Illinois (17.0%), Nebraska (10.5%), Minnesota (9.9%), and Indiana (8.0%). Demand – World consumption of corn rose to 630.803 million metric tons in 2002/3 from 621.830 million in 2001/ 2 and is expected to rise further to 641.930 million in 2003/ 4. The US was the world’s largest consumer of corn in 2002/ 3 with 201.669 million metric tons (32% of world total), followed by China at 126.500 million (20%), Brazil at 36.500 million (5.8%), and Mexico at 24.700 million (3.9%). Corn is the leading U.S. feed grain with sorghums a distant second. Animal feed usage in 2001/02 of 5.80 billion bushels compares with 5.89 billion in 2000/01. Corn used to make ethanol in 2003/4 was 1.10 billion bushels, up 15% from 953 million in 2002/3, accounting for a hefty 45% of overall corn usage. Demand for corn as a sweetener (high fructose corn syrup or HFCS) was 530.0 million bushels in 2003/4, accounting for 22% of overall corn demand. Corn demand in 2003/4 for glucose/dextrose was 220.0 million bushels (9% of total consumption) and for starch was 260.0 million bushels (11%). Trade – World trade in corn was forecast at 77.520 million metric tons in 2003/4, slightly lower than the 77.924 million in 2002/3 and the 78.067 million in 2001/2. The US was the world’s largest exporter in 2002/3 at 41.177 million metric tons, accounting for 53% of total world exports. After the US, the world’s largest exporters in 2002/3 were China at 15.244 million (20%), Argentina at 12.349 million (16%), and Brazil a distant fourth at 3.181 million (4%). Argentine corn exports are volatile and are expected to be about 9.000 million metric tons in 2003/4, down from the record 12.349 million in 2002/3 but above 8.581 million in 2001/2. US exports in 2003/4 are forecasted to rise sharply to 50.000 million, more than recovering from the decline to 41.177 million seen in 2002/3 from 47.271 million in 2001/ 02. Importers of corn are spread among a variety of countries with the leaders in 2002/3 being Japan at 16.868 million metric tons (22%), South Korea with 8.786 million (11%), Mexico with 5.284 million (6.8%), and Taiwan at 4.758 million (6.1%). The US is a very small importer of corn at 374,000 metric tons (2002/3), accounting for only 0.5% of world imports.

CORN World Production of Corn or Maiz e

In Thousands of Metric Tons

Crop Year

China

France

India

Italy

Mexico

Romania

South Africa

United States

Yugoslavia

World Total

99,280 112,000 127,470 104,309 132,954 128,086 106,000 114,088 121,300 114,000

12,640 12,394 14,432 16,754 15,204 15,643 16,070 16,410 16,440 11,450

8,884 9,530 10,612 10,852 10,680 11,470 12,068 13,510 11,100 14,000

7,320 8,454 9,547 10,005 8,600 10,020 10,140 10,550 10,550 8,200

17,005 17,780 18,922 17,368 17,789 19,240 17,917 20,400 19,280 19,000

8,500 9,923 9,610 12,680 8,000 10,500 4,800 7,000 7,300 6,000

4,866 10,171 10,136 7,693 7,946 11,455 8,040 10,050 9,675 8,000

255,295 187,970 234,518 233,864 247,882 239,549 251,854 241,485 228,805 256,911

7,415 8,537 8,293 9,564 8,386 10,500 2,940 6,200 5,400

560,288 517,352 592,172 575,363 605,631 607,258 588,035 598,799 602,969 609,063

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Argentina

11,360 11,100 15,500 19,360 13,500 17,200 15,400 14,700 15,500 12,500

Preliminary.

2

Brazil Canada

37,440 32,480 35,700 30,100 32,393 31,641 41,536 35,501 45,000 40,000

Estimate.

7,043 7,271 7,542 7,180 8,952 9,161 6,827 8,389 8,975 9,600

3

Forecast.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Supply and Demand of Course Grains

In Millions of Metric Tons/Hectares

Crop Year Beginning Oct.1

Area Harvested

Yield

Production

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

323.6 314.0 322.8 311.0 307.9 299.7 296.0 300.4 292.6 300.1

2.69 2.55 2.81 2.84 2.89 2.93 2.90 2.97 2.98 2.95

869.6 801.2 907.8 882.4 890.7 877.4 859.0 891.3 871.5 884.1

World Trade

Total Consumption

Ending Stocks

Stocks as % of Consumption3

98.5 88.1 94.3 85.8 96.7 104.8 104.4 102.2 104.4 103.0

857.9 840.4 874.0 871.8 870.9 883.7 881.6 904.0 902.0 929.3

192.1 152.9 186.7 197.4 217.2 210.8 188.2 175.5 145.0 99.8

22.4 18.2 21.4 22.6 24.9 23.9 21.3 19.4 16.1 10.7

1 Preliminary. 2 Estimate. 3 Represents the ratio of marketing year ending stocks to total consumption. U.S. Department of Agriculture (FAS-USDA)

Acreage and Supply of Corn in the United States ------- Harvested -------

Source: Foreign Agricultural Service,

In Millions of Bushels Carry-over,

Crop Year Beginning Sept. 13

F or F or Planted Grain Silage --------- In Thousands of Acres ---------

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

79,175 71,245 79,229 79,537 80,165 77,386 79,551 75,752 79,054 78,736

72,887 64,995 72,644 72,671 72,589 70,487 72,440 68,808 69,313 71,139

1

2 Estimate.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Preliminary.

5,601 5,295 5,607 6,054 5,913 6,037 6,082 6,148 7,490 6,528

Yield Per Harvested Acre Bushels

----------- Sept. 1 -----------

138.6 113.5 127.1 126.7 134.4 133.8 136.9 138.2 130.0 142.2

Off Farms

Beginning Stocks

Production

Imports

Total Supply

395.4 740.9 196.6 475.0 640.0 797.0 793.0 753.2 586.8 484.9

454.7 816.9 229.3 408.2 667.8 990.0 924.5 1,146.0 1,009.6 601.8

850 1,558 426 883 1,308 1,787 1,718 1,899 1,596 1,087

10,051 7,400 9,233 9,207 9,759 9,431 9,915 9,507 9,008 10,114

10 16 13 9 19 15 7 10 14 10

10,910 8,974 9,672 10,099 11,088 11,239 11,693 11,416 10,619 11,211

Production of Corn (For Grain) in the United States, by State Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Illinois

Indiana

Iowa

Kansas

Michi gan

1,786.2 1,130.0 1,468.8 1,425.5 1,473.5 1,491.0 1,668.6 1,649.2 1,496.0 1,812.2

858.2 598.9 670.4 701.5 760.4 748.4 815.9 884.5 631.6 786.9

1,930.4 1,402.2 1,711.2 1,642.2 1,769.0 1,758.2 1,740.0 1,664.4 1,963.5 1,884.0

304.6 244.3 357.2 371.8 419.0 420.2 416.0 387.4 290.0 300.0

260.9 249.6 211.5 255.1 227.6 253.5 244.3 199.5 232.3 263.3

Preliminary.

---------------------------------- Supply ----------------------------------

On Farms

In Million of Bushels

Minnesota

Missouri

Nebraska

Ohio

South Dakota

Texas

Wisconsin

Total

915.9 731.9 868.8 851.4 1,032.8 990.0 957.0 806.0 1,051.9 970.9

273.7 149.9 340.4 299.0 285.0 247.4 396.1 345.8 283.5 302.4

1,153.7 854.7 1,179.8 1,135.2 1,239.8 1,153.7 1,014.3 1,139.3 940.8 1,124.2

486.5 375.1 310.8 475.7 470.9 403.2 485.1 437.5 252.6 478.9

367.2 193.6 365.0 326.4 429.6 367.3 431.2 370.6 304.0 427.4

238.7 216.6 198.2 241.5 185.0 228.3 235.6 167.6 205.7 194.7

437.1 347.7 333.0 402.6 404.2 407.6 363.0 330.2 391.5 367.7

10,102.7 7,373.9 9,232.6 9,206.8 9,758.7 9,437.3 9,968.4 9,506.8 9,007.7 10,113.9

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

57

CORN Supply and Disappearance of Corn in the United States

In Millions of Bushels

---------------------------------- Disappearance ------------------------------------------------------ Domestic Use --------------------

Crop Year Beginning Sept. 1

F ood, ------------------------- Supply ------------------------Beginning ProTotal Alcohol & Stocks duction Imports Supply Industrial

1999-00 Sept.-Nov. Dec.-Feb. Mar.-May June-Aug. 2000-1 Sept.-Nov. Dec.-Feb. Mar.-May June-Aug. 2001-2 Sept.-Nov. Dec.-Feb. Mar.-May June-Aug. 2002-31 Sept.-Nov. Dec.-Feb. Mar.-May June-Aug. 2003-42 Sept.-Nov.

1,787 1,787 8,039 5,602 3,586 1,718 1,718 8,522 6,043 3,924 1,899 1,899 8,265 5,795 3,597 1,596 1,596 7,638 5,132 2,985 1,087 1,087

9,431 9,431 ---------9,968 9,968 ---------9,507 9,507 ---------9,008 9,008 ---------10,114 10,114

15.0 3.5 3.0 6.0 2.0 7.0 1.0 1.0 3.0 1.0 10.0 2.0 2.0 4.0 2.0 14.0 3.0 4.0 5.0 2.0 10.0 2.0

11,232 11,221 8,043 5,607 3,588 11,693 11,687 8,523 6,046 3,925 11,416 11,408 8,266 5,799 3,599 10,619 10,608 7,642 5,137 2,987 11,211 11,203

1,913 459 447 512 496 1,967 466 465 524 512 2,054 489 480 544 540 2,346 552 564 619 612 2,510 598

S eed

19.9 0 0 0 0

F eed & Residual

Total

5,664 2,189 1,526 1,059 890 5,842 2,131 1,607 1,153 951 5,861 2,207 1,542 1,161 950 5,593 2,024 1,547 1,140 882 5,800 2,187

7,597 2,648 1,973 1,571 1,386 7,809 2,597 2,072 1,677 1,463 7,915 2,696 2,022 1,705 1,490 7,939 2,576 2,111 1,759 1,494 8,310 2,785

Total --------- Ending Inventory --------D i sa p Gov't Privately Exports pearance Owned3 Total Owned4

1,937 534 468 451 485 1,941 507 415 455 564 1,905 448 448 497 512 1,592 393 400 393 406 2,000 473

9,515 3,182 2,441 2,021 1,871 9,740 3,104 2,488 2,122 2,026 9,820 3,144 2,471 2,203 2,002 9,532 2,970 2,510 2,152 1,900 10,310 3,259

15.0 19.3 15.1

1,744 8,005 5,590

1,718 8,039 5,602 3,586 1,718 1,899 8,530 6,043 3,924 1,899 1,596 8,265 5,795 3,597 1,596 1,087 7,638 5,132 2,985 1,087 901 7,945

Gulf Kansas Average City Chicago Ports Omaha ----------------- Corn for Grain Production Estimates ----------------- St. Louis Farm No. 2 No. 2 No. 2 No. 2 No. 2 Price2 Yellow White Yellow Yellow Aug. 1 Sept. 1 Oct. 1 Nov. 1 Final Yellow -------------------------- In Thousands of Bushels -------------------------- ------------------------------ Dollars Per Bushel ------------------------------

Value of Production (Million Dollars)

1

Preliminary. 2 Estimate. 3 Uncommitted inventory. 4 I ncludes quantity under loan and farmer-owned reserve. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Corn Production Estimates and Cash Price in the United States

Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

8,121,520 7,832,140 7,541,400 7,373,700 7,373,876 8,694,628 8,803,928 9,012,148 9,265,288 9,232,557 9,275,870 9,267,655 9,311,705 9,359,485 9,206,832 9,592,089 9,737,949 9,743,399 9,836,069 9,758,685 9,560,919 9,380,947 9,466,977 9,537,137 9,437,337 10,369,369 10,362,374 10,191,817 10,053,942 9,968,358 9,266,397 9,238,356 9,429,543 9,545,513 9,506,840 8,886,009 8,848,529 8,969,836 9,003,364 9,007,659 10,064,452 9,944,418 10,207,141 10,277,932 10,113,887

4.06 2.90 2.60 1.99 2.02 2.01 2.15 2.24

3.87 2.70 2.36 1.88 1.80 1.82 1.95 2.24

1 Preliminary. 2 Season-average price based on monthly prices weighted by monthly marketings. U..S. Department of Agriculture (ERS-USDA)

Distribution of Corn in the United States Crop Year Beginning Sept. 1

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

4.14 3.09 2.93 2.51 1.98 2.06 2.20 3.03

3.97 2.84 2.56 2.06 1.97 1.99 2.13 2.40

3.24 2.71 2.43 1.94 1.84 1.86 1.98 2.32 2.26

24,118 25,149 22,352 18,922 17,104 18,499 18,888 20,975 24,804

Source: Economic Research Service,

In Millions of Bushels

Livestock F eed4

Exports (Including Grain Equiv. of Products)

Domestic D i sa p pearance

Total Utilization

4,693 5,277 5,482 5,468 5,665 5,842 5,877 5,650

2,227.8 1,797.4 1,504.4 1,984.2 1,936.6 1,941.3 1,888.9 1,675.0

6,301 6,991 7,287 7,314 7,578 7,799 7,931 7,935

8,528 8,789 8,791 9,298 9,515 9,740 9,820 9,610

------------------------------------------ Food, Seed and Industrial Use ---------------------------------------------- Alcohol ----HFCS

Glucose & Dextrose

Starch

Fuel

Beverage3

482 504 513 531 540 530 541 532 535

237 246 229 219 222 218 217 225 225

219 229 246 240 251 247 246 256 260

396 429 481 526 566 628 706 996 1,150

125 130 133 127 130 130 131 131 132

1 Preliminary. 2 Estimate. 3 Also includes nonfuel industrial alcohol. U.S. Department of Agriculture (ERS-USDA)

58

4.30 3.07 2.78 2.35 2.23 2.26 2.35 2.71 2.72

S eed

20.2 20.3 20.4 19.8 20.3 19.3 20.1 20.1 4

Cereal & Other Products

Total

133 135 182 184 185 185 186 187 188

1,592 1,672 1,784 1,826 1,893 1,938 2,026 2,326 2,490

Feed and waste (residual, mostly feed). Source: Economic Research Service,

CORN

Cents Per Bushel ----- No. 3 Yellow, Chicago (Jan. 1901 - Apr. 1947) No. 2 Yellow, Chicago (May 1947 - Mar. 1982) No. 2 Yellow, Central, IL (Apr. 1982 - date)

Average Cash Price of Corn, No. 2 Yellow in Central Illinois

In Dollars Per Bushel

Year

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

2.08 2.83 3.39 2.61 1.78 1.81 1.58 1.94 2.57 2.25

1.92 3.12 2.81 2.66 1.94 1.72 1.81 1.84 2.41 2.11

2.03 3.22 2.63 2.70 2.09 1.82 1.96 1.90 2.36 2.26

2.16 3.36 2.62 2.60 2.08 1.84 2.01 1.97 2.32 2.38

2.22 3.53 2.62 2.60 2.07 1.95 1.99 1.95 2.29

2.27 3.71 2.71 2.58 2.05 2.03 1.95 1.92 2.33

2.36 3.92 2.90 2.59 2.09 2.08 1.92 1.92 2.31

2.41 4.47 2.87 2.41 2.05 2.09 1.87 1.89 2.36

2.50 4.86 2.74 2.37 2.03 2.15 1.78 1.96 2.40

2.65 4.74 2.59 2.29 1.99 1.83 1.76 2.04 2.37

2.79 4.70 2.44 2.16 1.67 1.53 1.92 2.22 2.13

2.68 4.48 2.60 1.86 1.84 1.49 2.00 2.50 2.26

2.34 3.91 2.74 2.45 1.97 1.86 1.88 2.00 2.34 2.25

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Cash Price of Corn, No. 2 Yellow at Gulf Ports2

In Dollars Per Bushel

Year

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

2.48 3.32 3.69 2.88 2.18 2.21 2.03 2.27 2.89 2.63

2.44 3.57 3.27 3.05 2.43 2.17 2.15 2.19 2.79 2.65

2.43 3.63 2.97 2.98 2.47 2.17 2.26 2.28 2.77 2.75

2.61 3.76 2.97 2.89 2.42 2.21 2.45 2.35 2.71 2.84

2.72 4.00 3.02 2.90 2.48 2.36 2.40 2.34 2.69

2.72 4.18 3.08 2.88 2.40 2.42 2.35 2.30 2.69

2.79 4.34 3.25 2.89 2.45 2.42 2.32 2.28 2.67

2.79 4.80 3.17 2.71 2.39 2.43 2.22 2.21 2.67

2.84 5.17 3.01 2.69 2.35 2.43 2.14 2.29 2.74

3.04 4.99 2.86 2.64 2.36 2.13 2.11 2.37 2.72

3.23 5.07 2.69 2.55 2.12 1.91 2.30 2.53 2.72

3.21 4.73 2.86 2.24 2.20 1.91 2.36 2.79 2.44

2.78 4.30 3.07 2.78 2.35 2.23 2.26 2.35 2.71 2.72

1

Preliminary.

2

Barge delivered to Louisiana Gulf.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

59

CORN Weekly Outstanding Export Sales and Cumulative Exports of U.S. Corn Marketing Year 2001/02 Week Ending

Sept.

Oct.

Nov.

Dec.

Jan .

F eb .

Mar.

Apr.

May

Ju n e

July

A ug .

6 2001 13 20 27 4 11 18 25 1 8 15 22 29 6 13 20 27 3 2002 10 17 24 31 7 14 21 28 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 4 11 18 25 1 8 15 22 29

2001/02 OutCumulative standing Exports Sales

7,090 6,692 6,553 7,018 6,862 6,944 7,074 6,788 7,028 6,838 6,824 6,603 7,635 7,541 7,399 7,596 7,347 6,830 7,110 7,432 7,415 7,944 8,339 8,530 8,410 7,285 7,338 7,283 7,090 6,788 6,302 6,315 6,281 6,522 6,405 6,836 6,814 6,582 6,219 6,469 6,414 6,335 6,623 5,933 5,717 5,402 5,026 4,596 4,271 3,592 2,848 2,082

567 1,660 2,992 3,780 4,552 5,287 6,059 6,909 7,569 8,566 9,261 10,131 10,618 11,595 12,339 13,051 13,825 14,456 15,092 16,075 16,834 17,637 18,278 19,260 20,187 21,710 22,704 23,849 24,831 26,090 27,020 27,893 28,841 29,726 30,601 31,637 32,618 33,979 34,761 35,819 36,917 37,922 38,618 39,667 40,599 41,687 42,732 43,489 44,621 45,706 46,634 47,460

Marketing Year 2002/03 Week Ending

Sept.

Oct.

Nov.

Dec.

Jan .

F eb .

Mar.

Apr.

May

Ju n e

July

A ug .

2002/03 CumuOutstanding lative Exports Sales

5 2002 12 19 26 3 10 17 24 31 7 14 21 28 5 12 19 26 2 2003 9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

60

6,206 6,418 6,352 6,852 7,024 6,890 6,584 6,973 7,629 7,986 8,119 8,308 7,922 7,415 7,081 6,635 6,561 5,860 5,635 5,596 5,219 5,267 5,029 4,827 4,775 5,465 5,631 6,013 6,066 5,571 5,458 5,380 5,152 5,379 5,431 5,879 5,804 5,640 5,289 5,302 5,178 5,264 5,117 5,075 4,839 4,532 4,238 3,851 3,684 3,180 2,653 1,900

439 1,276 2,080 2,536 3,034 3,836 4,659 5,299 5,729 6,521 7,322 8,285 9,345 10,399 11,444 12,568 13,013 13,998 14,839 15,551 16,241 16,938 17,793 18,462 19,183 19,904 20,444 21,231 21,880 22,732 23,706 24,469 25,283 25,955 26,483 27,099 27,923 28,723 29,608 30,325 31,191 31,918 32,834 33,596 34,309 35,086 35,928 36,739 37,238 38,006 38,728 39,646

In Thousands of Metric Tons Marketing Year 2003/04 Week Ending

Sept.

Oct.

Nov.

Dec.

Jan .

F eb .

Mar.

Apr.

May

Ju n e

July

A ug .

4 11 18 25 2 9 16 23 30 6 13 20 27 4 11 18 25 1 8 15 22 29 5 12 19 26 4 11 18 25 1 8 15 22 29 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26

2003

2004

2003/04 CumuOutlative standing Sales Exports

7,626 7,683 8,252 8,274 8,451 9,229 9,062 9,634 10,207 10,239 10,243 10,601 10,313 10,342 10,319 9,847 9,763 9,150 8,986 9,113 8,944 9,043 9,441 9,522

461 1,319 2,127 3,021 3,800 4,661 5,581 6,490 7,346 8,062 8,975 10,219 11,356 12,366 13,312 14,737 15,579 16,608 17,611 18,483 19,427 20,310 21,064 21,936

CORN Average Price Received by Farmers for Corn in the United States

In Dollars Per Bushel

Year

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

2.19 2.69 3.55 2.52 1.83 1.75 1.61 1.91 2.47 2.20

2.06 2.79 2.89 2.54 1.91 1.69 1.74 1.84 2.34 2.12

1.99 2.87 2.66 2.51 1.93 1.70 1.86 1.85 2.28 2.20

2.13 3.07 2.63 2.52 2.00 1.82 1.97 1.98 2.32 2.32

2.19 3.09 2.69 2.56 2.06 1.91 1.98 1.97 2.33 2.46

2.23 3.37 2.65 2.55 2.05 1.98 1.96 1.93 2.34

2.30 3.51 2.79 2.54 2.06 2.03 1.96 1.94 2.33

2.36 3.85 2.80 2.41 2.04 2.03 1.89 1.91 2.34

2.41 4.14 2.69 2.34 1.99 2.11 1.82 1.93 2.38

2.51 4.20 2.56 2.28 1.97 1.91 1.76 1.97 2.34

2.63 4.43 2.42 2.19 1.74 1.64 1.87 2.13 2.17

2.63 4.30 2.50 1.89 1.75 1.52 1.90 2.38 2.15

2.26 3.53 2.74 2.40 1.94 1.84 1.86 1.98 2.32 2.26

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Corn Price Support Data in the United States Crop Year Beginning Sept. 1

CCC Inventory ------- As of Dec. 31 ------Owned Placed CCC Under by C C C Under % of ProAcquired Owned C C C Loan Aug. 31 Loan duction by C C C -------------------------------------------- Millions of Bushels --------------------------------------------

National Average Target Loan Rate3 Price --- Dollars Per Bushel ---

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32

1.72 1.89 1.89 1.89 1.89 1.89 1.89 1.89 1.89 1.98

1

Preliminary. (NASS-USDA)

2

2.75 2.75 2.75 NA NA NA NA NA NA 2.60

Estimate.

3

618 2,002 970 561 1,132 823

9.7 19.8 9.2

Findley or announced loan rate.

0 0 0 0 19 0

45

54 44 42 30 2 15 26 36 24

Year Beginning Oct. 1

Algeria

Canada

Egypt

Irael

Ja p a n

Mexico

Rep. of Korea

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-32

1,095 798 507 862 829 947 1,099 1,180 1,343 1,009

574 1,108 736 879 1,404 898 1,080 2,797 3,979 3,814

1,402 2,342 1,854 2,364 1,951 2,954 3,542 4,116 4,283 2,920

268 658 625 556 141 395 748 621 847 313

11,923 16,030 14,900 15,425 13,957 15,375 14,939 14,091 14,817 14,511

1,678 3,165 6,268 3,141 4,423 5,576 4,910 5,928 4,025 5,235

631 8,866 7,333 5,404 3,364 6,659 2,822 3,109 1,085 272

Excludes exports of corn by-products.

2

Preliminary.

------------------------- On Farms -------------------------

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

13,697 26,318 677,115 970,590 1,129,915 1,129,915 1,420,878 1,393,947

26,052 53,474 1,232,669 1,764,291 2,062,308 2,062,308 2,590,443 2,562,172

In Thousands of Metric Tons

Russia

2,259 9 50 88 1 405 491 26 86

Saudi Arabia

851 864 844 1,025 883 1,175 1,197 1,003 670 222

Spain

Taiwan

Venezuela

Total

1,102 2,337 1,156 1,080 141 92 16 0 5

5,015 6,150 5,600 5,609 3,488 4,538 4,989 4,894 4,599 4,219

751 886 479 730 645 1,329 1,146 1,152 502 651

33,015 58,596 52,660 46,638 37,755 51,949 49,378 48,192 47,058 41,037

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Stocks of Corn (Shelled and Ear) in the United States Year

F a ce Amount (Thousands of Dollars)

Source: National Agricultural Statistics Service, U.S. Department of Agriculture

U.S. Exports1 of Corn (Including Seed), By Country of Destination

1

812 1,598 579 756 81

Quantity Pledged (Thousands of Bushels)

In Millions of Bushels

------------------------ Off Farms -----------------------

-------------------------- Total Stocks -----------------------

Mar. 1

June 1

Sept. 1

D e c. 1

Mar. 1

June 1

Sept. 1

D e c. 1

Mar. 1

June 1

Sept. 1

D e c. 1

2,210.2 3,502.0 2,000.2 2,870.0 2,975.0 3,570.0 3,300.0 3,600.0 3,355.0 2,940.0

1,203.0 2,072.0 780.1 1,501.0 1,830.0 2,257.0 2,029.8 2,230.8 2,020.6 1,620.2

395.4 740.9 196.6 475.0 640.0 797.0 793.0 753.2 586.8 484.9

5,417.5 3,960.0 4,800.0 4,822.0 5,320.0 5,195.0 5,550.0 5,275.0 4,800.0 5,286.0

1,785.5 2,089.7 1,799.3 1,624.1 1,964.9 2,128.4 2,301.9 2,443.0 2,440.3 2,191.9

1,156.9 1,342.9 937.8 995.6 1,209.8 1,359.2 1,556.1 1,693.2 1,576.3 1,364.7

454.7 816.9 229.3 408.2 667.8 990.0 924.5 1,146.0 1,009.6 601.8

2,663.0 2,145.8 2,103.0 2,424.8 2,731.8 2,844.4 2,972.2 2,989.7 2,838.0 2,658.8

3,995.7 5,591.7 3,799.5 4,494.1 4,939.9 5,698.4 5,601.9 6,043.0 5,795.3 5,131.9

2,359.9 3,414.9 1,717.9 2,496.6 3,039.8 3,616.2 3,585.9 3,924.0 3,596.9 2,984.9

850.1 1,557.8 425.9 883.2 1,307.8 1,787.0 1,717.5 1,899.1 1,596.4 1,086.7

8,080.5 6,105.8 6,903.0 7,246.8 8,051.8 8,039.4 8,522.2 8,264.7 7,638.0 7,944.8

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

61

CORN

Volume of Trading of Corn Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1,251.4 787.2 1,992.2 1,160.6 1,250.2 955.1 1,502.2 1,397.2 996.3 1,204.0

1,035.6 832.4 1,819.6 1,483.0 1,276.5 1,374.2 1,580.9 1,197.4 1,449.6 1,559.1

1,045.6 973.7 1,607.6 1,693.3 1,432.8 1,440.1 1,713.1 1,329.5 944.7 1,156.9

1,108.8 987.7 2,655.2 1,780.1 1,620.3 1,420.6 1,386.3 1,518.7 1,498.0 1,633.1

1,079.2 1,213.7 2,085.2 1,291.7 1,148.5 975.1 1,789.7 1,173.2 1,434.5 1,657.0

1,455.0 1,759.5 1,545.1 1,347.5 1,771.0 1,597.4 1,830.7 1,612.1 1,851.5 1,951.2

747.6 1,293.7 1,590.5 1,527.7 1,415.3 1,708.0 1,178.3 2,023.5 1,958.4 1,499.3

601.8 1,318.6 1,144.6 1,318.3 1,231.4 1,669.8 1,291.8 1,549.0 2,158.7 1,830.6

615.0 1,220.2 1,183.4 1,060.2 1,126.3 1,131.9 1,057.4 1,072.3 1,635.4 1,389.7

703.0 1,613.2 1,435.7 1,700.2 1,319.3 1,096.2 1,256.1 1,223.3 1,523.3 2,057.7

1,025.4 1,743.1 1,514.7 1,434.4 1,217.2 1,500.9 1,612.8 1,741.2 1,801.4 1,815.9

861.4 1,356.0 1,046.3 1,188.0 986.6 855.6 986.1 891.4 880.5 1,364.3

11,529.8 15,105.1 19,620.2 16,985.0 15,795.5 15,724.8 17,185.4 16,728.7 18,132.4 19,118.7

Source: Chicago Board of Trade (CBT)

Average Open Interest of Corn Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

346,077 292,090 500,837 305,779 328,020 357,682 445,999 454,326 459,314 455,967

336,342 311,372 508,496 347,392 341,444 363,153 478,892 469,027 464,368 469,611

327,539 336,433 469,697 382,261 358,221 357,126 482,080 440,548 431,923 445,343

305,722 355,443 453,707 351,852 366,657 343,624 487,758 455,718 430,712 411,983

262,621 368,381 403,118 290,649 337,703 338,467 476,891 424,386 411,346 406,987

246,308 427,744 350,066 274,760 327,237 323,658 445,018 423,840 430,856 385,775

215,081 413,839 304,265 267,531 297,894 329,460 391,967 389,898 458,081 384,561

208,990 418,450 298,894 281,194 318,162 315,858 387,289 387,710 509,069 383,590

212,983 439,170 302,170 307,415 321,992 316,247 356,583 370,315 501,523 356,181

243,678 473,698 326,373 378,453 332,337 410,955 397,966 419,447 485,859 420,680

262,849 490,970 332,809 379,045 342,868 461,037 454,920 462,930 496,998 470,165

250,646 487,977 306,256 331,386 322,157 389,187 414,851 416,593 450,016 447,455

Source: Chicago Board of Trade (CBT)

62

In Contracts

Jan.

Corn Oil Corn oil is a bland, odorless oil produced by refining the crude corn oil that is mechanically extracted from the germ of the plant seed. High-oil corn, the most common type of corn used to make corn oil, typically has oil content of 7% or higher compared to about 4% of normal corn. Corn oil is widely used as a cooking oil, for making margarine and mayonnaise, as well as for making soap, paints, inks, varnishes, and cosmetics. For humans, studies have shown that that no vegetable oil is more effective than corn oil in lowering blood cholesterol levels. Prices –The average corn oil price for 2002/3 of 28.17 cents was sharply higher than the range of 17-19 cents seen in 1999/2000 through 2001/02. Seasonally, prices tend to be highest around March/April and lowest late in the calen-

dar year. Supply – Corn oil production in 2002/3 rose by 4.7% to a record high 2.575 billion pounds from 2.459 billion in 2001/ 2. Seasonally, production tends to peak around December and March and reaches a low in July. Stocks on October 1 at the end of the 2002/3 marketing year were tight at 104 million pounds, down from 117 million in 2001/2 and 267 million in 2000/1. Demand – US usage was 1.400 billion pounds in 2002/ 3, up from 1.342 billion in 2001/2. Exports – Corn oil exports in 2002/3 accounted for nearly half of US production at 46%. US corn oil exports in 2002/3 rose to 1.200 billion pounds from 1.190 billion pounds in 2001/2.

Supply and Disappearance of Corn Oil in the United States Crop Year Beginning Oct. 1

----------------------------- Supply ----------------------------Stocks Oct. 1

Production

Imports

Total Supply

129 102 135 267 117 104 114

2,335 2,374 2,501 2,403 2,461 2,453 2,650

28.1 42.4 17.5 27.3 61.0 65.0 65.0

2,492 2,518 2,654 2,698 2,639 2,622 2,829

1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Preliminary.

2

Estimate.

W = Withheld proprietary data.

W W W W W

Year

1

Preliminary.

375 384 800 956 W

1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

1,272 1,394 1,417 1,630 1,363 1,618 1,804

1,118 989 970 951 1,172 890 900

2,390 2,383 2,387 2,581 2,535 2,508 2,704

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

199.2 209.2 204.3 208.6 196.0 218.6 209.1

207.5 199.4 212.3 192.7 203.3 195.0 196.5

202.0 189.2 218.6 190.4 206.5 212.3 193.2

171.4 182.9 214.8 198.9 200.1 206.8

162.7 177.0 199.0 180.5 183.8 181.7

201.0 201.0 214.9 201.6 187.1 206.0

203.9 201.1 210.5 200.7 189.4 199.7

201.2 205.3 213.6 206.2 219.8 203.6

201.4 205.7 204.3 204.0 227.3 207.1

192.8 194.8 226.4 205.7 220.2 216.5

202.8 212.5 225.3 211.1 217.0 202.5

188.9 196.3 201.9 203.2 211.0 203.2

2,335 2,374 2,546 2,404 2,462 2,453 2,395

2

Not seasonally adjusted.

Source: Bureau of the Census, U.S. Department of Commerce

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

87.5 106.6 96.2 136.2 W W W

83.8 104.4 97.1 112.2 W W W

100.6 105.0 114.7 129.3 W W W

83.0 82.0 94.9 106.7 W W W

89.2 W 89.2 122.6 W W

100.5 102.0 W 118.7 W W

92.5 94.6 W 111.9 W W

100.5 101.7 W 140.4 W W

104.2 104.3 W W W W

90.6 90.1 W W W W

101.7 97.0 134.2 W W W

94.6 103.5 129.6 W W W

1,129 1,190 1,296 1,467 W W

W = Withheld proprietary data.

Source: Bureau of Census, U.S. Department of Commerce

Average Corn Oil Price, Wet Mill in Chicago Year

492 496 953 1,298 950

In Millions of Pounds

Consumption Corn Oil, in Refining, in the United States Year

W W W W W

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production2 of Crude Corn Oil in the United States 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

In Millions of Pounds

------------------------------------------------------ Disappearance -----------------------------------------------------Salad Baking Total Domestic Total and and D i sa p D i sa p Edible Cooking MargFrying Exports pearance pearance Products Oil arine Fats

In Cents Per Pound

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Average

25.20 29.46 21.97 10.52 17.18 22.45 26.99

26.25 29.65 21.96 10.37 18.30 26.90 27.56

26.28 29.88 21.68 10.54 22.45 28.25 28.73

26.04 29.15 20.81 10.25 20.54 29.30 29.26

27.31 26.58 20.06 11.06 18.35 28.90

28.50 23.01 19.28 11.91 18.37 27.20

30.93 23.08 18.32 13.76 17.70 27.55

33.20 22.96 16.63 14.84 17.00 29.10

32.82 22.95 14.57 15.94 17.60 30.15

31.52 22.43 13.55 17.28 19.10 29.90

29.93 22.41 13.03 18.73 21.72 30.68

29.25 22.08 11.85 17.30 21.40 27.71

28.94 25.30 17.81 13.54 19.14 28.17 28.14

Source: Economic Research Service,U.S. Department of Agriculture (ERS-USDA)

63

Cotton Cotton is a natural vegetable fiber that comes from small trees and shrubs of a genus belonging to the mallow family, one of which is the common American Upland cotton plant. Cotton has been used in India for at least the last 5,000 years and probably much longer, and was also used by the ancient Chinese, Egyptians, and North and South Americans. Cotton was one of the earliest crops grown by European settlers in the US. Cotton requires a long growing season, plenty of sunshine and water during the growing season, and then dry weather for harvesting. In the United States, the Cotton Belt stretches from northern Florida to North Carolina and westward to California. In the US, planting time varies from the beginning of February in Southern Texas to the beginning of June in the northern sections of the Cotton Belt. The flower bud of the plant blossoms and develops into an oval boll that splits open at maturity. At maturity, cotton is most vulnerable to damage from wind and rain. Approximately 95% of the cotton in the US is now harvested mechanically with spindle-type pickers or strippers and then sent off to cotton gins for processing. There it is dried, cleaned, separated, and packed into bales. Cotton is used in a wide range of products from clothing to home furnishings to medical products. The value of cotton is determined according to the staple, grade, and character of each bale. Staple refers to short, medium, long, or extra-long fiber length, with medium staple accounting for about 70% of all US cotton. Grade refers to the color, brightness, and amount of foreign matter and is established by the US Department of Agriculture. Character refers to the fiber’s diameter, strength, body, maturity (ratio of mature to immature fibers), uniformity, and smoothness. Cotton is the fifth leading cash crop of the US and is one of the nation’s principal agricultural exports. Cotton futures and options are traded on the New York Cotton Exchange, a division of the New York Board of Trade. Cotton futures are also traded on the Bolsa de Mercadorias & Futuros (BM&F). Cotton yarn futures are traded on the Central Japan Commodity Exchange (CCOM) and the Osaka Mercantile Exchange (OME). The New York Cotton Exchange’s futures contract calls for the delivery of 50,000 pounds net weight (approximately 100 bales) of No. 2 cotton with quality of Strict Low Middling and a staple length of 1-and-2/32 inch. Delivery points include Texas (Galveston and Houston), New Orleans, Memphis, and Greenville/ Spartanburg in South Carolina. Prices – Cotton prices on the New York Board of Trade nearest futures chart started 2003 near 50 cents/pound and then showed a fairly steady rally during the year to post an 8-year high of 85 cents in October, finally closing the year near 75 cents. Bullish factors during 2003 included very tight stocks, aggressive Chinese import buying, the upward rebound in the US economy, and the weak US dollar. Supply – World cotton production in 2003/4 was forecast at 92.195 million bales (480 pounds per bale), up 4.5% from 88.184 million in 2002/3 (USDA as of Jan-2004). World ending stocks for 2003/4 are forecasted at 32.358 million bales, down 12.5% from 36.971 million in 2002/3. The world’s largest cotton producers are China with 30.200 million bales of production in 2003/4 (representing 24% of world

64

production), the US with 18.224 million bales (20%), India with 12.7 million bales (14%), and Pakistan with 7.600 million bales (8%). US cotton production for 2003/4 was forecast at 18.224 million bales, up 5.9% from 17.209 million in 2002/3. US ending stocks for 2003/4 are forecasted at 4.250 million bales, down 21.1% from 5.385 million in 2002/3. US farmers planted 13.631 million acres of cotton in 2003/4, down from 13.958 million in 2002/3, and harvested acres were also lower at 12.107 million versus 12.427 million in 2002/ 3. However, yields were higher in 2003/4 at 722 pounds/ acre versus 675 pounds in 2002/3, thus leading to the 6% increase in production in 2003/4. The leading states with US cotton production in 2002/3 were Texas (with 9.7% of US production), Georgia (5.0%), Mississippi (4.9%), Arkansas (4.1%), and California (3.5%). Texas saw a big 17% decline in production in 2002/3, but there were large increases in South Carolina (+152%), Alabama (+44%), Louisiana (+38%), Georgia (+36%) and North Carolina (+36%). US production of cotton cloth has fallen sharply in the past three years to below 4 billion square yards to 3.524 million in the latest full reporting year of 2002. That illustrates the movement of the textile industry out of the US to low-wage foreign countries. Demand – World consumption of cotton for 2003/4 was forecast at 97.111 million bales, down slightly by –0.8% from 97.923 million in 2002/3. That consumption of 97.111 million in 2003/4 far outstripped the production level of 92.195 million, a bullish factor for prices. That was the second consecutive year in which consumption was higher than production, thus leading to the sharp drawdown in stocks. Consumption of cotton continues to move toward countries with low wages, which are becoming the main producers of cotton products. The largest consumers of cotton are China (31%), India (14%), and Pakistan (10%). US consumption was forecast at 6.200 million bales in 2003/4, down -14.7% from 7.269 million in 2002/3. US consumption of 6.200 million in 2003/4 was far below US production of 18.224 million, allowing the US to be the number one world exporter of cotton by far. Trade – World trade in cotton in 2003/4 is forecasted to rise about 5% to 32 million bales from the previous year. The world’s largest exporters of cotton in 2003/4 are forecasted to be the US with 13.200 million bales (41% of world exports), Uzbekistan (9%), and Brazil (5%). Brazil in 2003/ 4 is projected to show a sharp 237% increase in cotton exports. A decline in exports of -38% is projected for Australia for 2003/4, -14% for Uzbekistan, and a -15% decline for Greece. US cotton exports in 2003/4 are projected to rise 11% to 13.200 million bales from 11.900 million in 2002/3, largely due to increased Chinese demand. The main destinations for US exports in 2003/4 were forecasted to be China (16%), Mexico (16%), Indonesia (7%), Taiwan (5%), and Thailand (5%). The world’s largest importers in 2003/4 are forecasted to be China with 7.000 million bales (22% of world imports) and Indonesia (7%). China’s imports in 2003/4 rose sharply by 124% from the previous year, clearly a major driving factor for world cotton demand and prices.

COTTON Supply and Distribution of All Cotton in the United States

In Thousands of 480-Pound Bales Ending Stocks -- Cents per Lb. --

Value of Production MIllion $

2,650 2,609 3,971 3,887 3,939 3,915 6,000 7,448 5,385 4,250

6,796.7 6,574.6 6,408.1 5,975.6 4,119.9 3,809.6 4,260.4 3,121.8 3,777.1 5,581.6

---------------- Acre ----------------- --------------------- Supply --------------------- -------------------- Disappearance --------------------

Crop Year Yield Beginning Beginning Planted Harvested ---- 1,000 Acres ---- Lbs./acre Stocks3 Aug. 1

Production4 Imports

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

19,662 17,900 18,942 18,793 13,918 16,968 17,188 20,303 17,209 18,224

13,720 16,931 14,653 13,898 13,393 14,874 15,517 15,769 13,958 13,483

13,322 16,007 12,888 13,406 10,684 13,425 13,053 13,828 12,427 12,058

708 537 705 673 625 607 632 705 665 725

3,530 2,650 2,609 3,971 3,887 3,939 3,915 6,000 7,448 5,385

20 408 403 13 443 97 16 21 67 50

Total

Mill Use Exports

23,212 20,958 21,954 22,777 18,248 21,004 21,119 26,324 24,724 23,650

11,198 9,402 10,604 7,675 11,126 6,865 11,349 7,500 10,401 4,344 10,240 6,750 8,862 6,740 7,696 11,000 7,269 11,900 6,200 13,200

UnacTotal counted

20,600 18,322 17,991 18,849 14,699 16,944 15,602 18,696 19,169 19,400

38 -27 8 -41 394 145 483 -180 -170

Farm "A" Index Price5 Price6

72.0 76.5 70.5 66.2 61.7 46.8 51.6 32.0 45.7 63.8

92.66 85.61 78.66 72.11 58.97 52.85 57.25 41.88 55.81

1

Preliminary. 2 Estimate. 3 Excludes preseason ginnings (adjusted to 480-lb. bale net weight basis). 4 I ncludes preseason ginnings. Marketing year average price. 6 Average of 5 cheapest types of SLM 1 3/32 staple length cotton offered on the European market. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA) 5

World Production of All Cotton

In Thousands of 480-Pound Bales

Crop Year Beginning Aug. 1

Argentina

Brazil

China

Egypt

India

Iran

Mexico

Pakistan

Sudan

Turkey

United States

Uzbekistan

World Total

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

1,608 1,929 1,493 1,406 920 615 735 300 290 475

2,526 1,791 1,286 1,745 2,100 3,100 4,100 3,518 3,890 4,400

19,900 21,900 19,300 21,100 20,700 17,600 20,300 24,400 22,600 25,500

1,170 1,088 1,568 1,532 1,050 1,050 920 1,441 1,310 1,000

11,148 13,250 13,918 12,337 12,883 12,180 10,900 12,300 10,600 12,500

762 800 825 600 638 650 735 575 460 380

460 974 1,078 984 1,039 669 363 432 194 300

6,250 8,200 7,323 7,175 6,300 8,600 8,200 8,300 7,800 8,350

400 490 460 400 250 240 340 275 375 500

2,886 3,911 3,600 3,651 3,860 3,634 3,600 3,975 4,134 4,200

19,662 17,900 18,942 18,793 13,918 16,968 17,188 20,303 17,209 17,559

5,778 5,740 4,813 5,228 4,600 5,180 4,400 4,900 4,600 4,300

85,857 93,063 89,589 91,570 84,879 87,242 88,526 98,349 87,989 94,495

1

Preliminary.

2

Estimate.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Stocks and Trade of Cotton Crop Year Beginning Aug. 1

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

---------------- Beginning Stocks ---------------United UzbekWorld States istan China Total

3,530 4,028 2,609 3,971 3,887 3,939 3,922 6,001 7,448 5,385

Preliminary.

2

1,006 956 1,304 822 635 603 838 743 1,043 843

Estimate.

5,251 8,828 14,052 16,655 19,955 21,133 14,958 14,351 12,858 8,934

26,758 29,884 36,614 40,059 43,684 44,885 41,672 42,452 47,190 37,308

In Thousands of 480-Pound Bales --------------------------------- Imports --------------------------------- ------------------------ Exports -----------------------IndoWorld United UzbekWorld nesia Mexico Russia Turkey Total States istan China Total

2,075 2,139 2,147 1,923 2,329 2,076 2,650 2,356 2,250 2,250

580 695 900 1,600 1,488 1,813 1,865 1,900 2,300 1,750

2,159 1,100 1,000 1,225 850 1,600 1,650 1,850 1,700 1,650

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Preliminary.

Brazil

China

Egypt

France

Germany

3,996 3,904 3,900 3,400 3,900 4,100 4,350 3,950 3,450 3,650

20,200 19,700 20,300 19,600 19,200 22,200 23,500 26,000 28,900 30,400

1,140 1,010 919 1,033 950 850 750 600 900 900

532 484 536 505 495 500 425 425 350 320

660 606 640 650 575 650 600 525 500 475

2

Estimate.

30,618 27,529 28,763 26,488 25,248 28,276 26,479 29,408 30,460 30,735

9,402 7,675 6,865 7,500 4,344 6,750 6,763 11,000 11,900 12,000

5,006 4,524 4,550 4,570 3,812 4,100 3,400 3,400 3,550 3,150

183 21 10 34 681 1,700 446 342 751 150

28,452 27,359 26,494 26,590 23,649 27,226 26,464 29,023 30,629 33,732

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Consumption of All Cottons in Specified Countries Year

1,060 574 1,150 1,450 1,139 2,400 1,750 2,868 2,100 2,350

In Thousands of 480-Pound Bales

India

Italy

Ja p a n

Mexico

Pakistan

United States

Uzbekistan

World Total

10,545 11,977 13,120 12,675 12,620 13,500 13,550 13,275 13,300 13,500

1,539 1,539 1,562 1,612 1,400 1,300 1,330 1,300 1,200 1,100

1,754 1,529 1,401 1,400 1,250 1,280 1,150 1,050 1,000 950

890 1,100 1,600 1,950 2,150 2,400 2,100 2,100 2,200 2,200

6,750 7,200 7,000 7,187 7,000 7,650 8,100 8,500 9,200 9,400

11,198 10,647 11,126 11,349 10,401 10,241 8,882 7,721 7,269 6,400

827 873 750 850 825 850 1,100 1,200 1,300 1,300

84,758 86,040 88,021 87,157 85,350 91,812 91,954 94,511 97,452 98,452

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

65

COTTON

Cents Per Pound ----- 7/8” Middling, Designated Markets (Aug. 1915 - July 1930) 15/16” Middling, Designated Markets (Aug. 1930 - Feb. 1967) 1 1/16” 7 Market Average (Mar. 1967 - date)

Averag e S p o t C o tto n P rices2, C .I.F. N o rth ern E u ro p e Crop Year Begi nni ng Aug. 1

Argentina "C"3 1 1/16"

Australia M 1 3/32"

Cotlook Index A

Cotlook Index B

1990-1 1991-2 1992-3 1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-001

77.06 55.08 64.31 80.20 101.88 82.98 79.71 69.96 57.19 ----

85.58 65.97 64.01 72.81 81.05 93.75 83.24 77.49 66.48 61.97

82.90 63.05 57.70 70.60 92.75 85.61 78.59 72.19 58.91 52.80

77.80 58.50 53.70 67.30 92.40 81.06 74.80 70.69 54.26 49.55

Egypt Gi za4 Greece 81 M 1 3/32"

177.43 128.10 99.24 88.35 93.70 ----------------

84.24 65.90 56.92 58.81 88.64 84.95 75.85 72.03 58.66 51.71

In U.S. Cents Per Pound Mexi co5 M 1 3/32"

Paki stan Si nd/ Punjab6

Tanzani a AR7 Type 3

84.46 68.19 ------82.65 94.94 79.60 81.70 65.78 56.43

77.19 58.14 52.66 54.42 73.75 81.86 73.37 72.93 -------

89.62 68.90 62.24 69.83 ---96.20 79.22 84.04 72.70 55.67

Turkey U.S. Calif. Izmi r8 ACALA 1 3/32" SJV9

81.32 74.66 ---59.80 ---90.38 -------------

92.84 74.47 68.37 77.55 106.40 103.49 89.55 85.11 78.57 68.76

U.S. U.S. Memphis Orleans/ Terr.10 Texas 11 M 1 3/32" M 1 1/32"

88.13 66.35 63.08 72.80 98.67 94.71 82.81 78.12 73.65 60.22

80.35 63.41 58.89 69.78 95.70 90.37 79.77 74.74 70.95 55.67

P reliminary. 2 Generally for prompt shipment. 3 1 1/32 prior to January 20, 1984; 1 1/16 since. 4 Dendera until 1969/70; Giz a 67 1969/70 until December 1983; Giz a 69/75/81 until Nov ember 1990; Giz a 81 since. 5 S. B raz il Ty pe 5, 1 1/32 prior to 1968-69; 1 1/16 until 1987/88; B raz ilian Ty pe 5/6, 1 1/16 since. 6 P unj ab until 1979/80; Sind SG until June 1984; Sind/P unj ab SG until January 1985; A fz al 1 until January 1986; A fz al 1 1/32 since. 7 8 No. 1 until 1978/79; No. 1/2 until F ebruary 1986; A R ' Mwanz a No. 3 until January 1992; A R ' Ty pe 3 since. I z mir ST 1 W hite 1 1/16 R G prior to 1981/82; 1 3/32 from 1981/82 until January 1987; I z mir/A ntaly a ST 1 W hite -3/32 R G since. 9 SM 1 3/32 prior to 1975/76; SM 1 1/8 since. 10 SM 1 1/16 prior to 1981/82; Middling 1 3/32 since. 11 Middling 1 prior to 1988/89; Middling 1 1/32 since. S ource: I nt ernat ional C ot t on Advisory C ommit t ee 1

Average Producer Price Index of Gray Cotton Broadw ovens Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

109.9 117.8 123.6 120.3 122.8 117.1 112.1 112.8 110.7 105.7

110.8 120.2 123.7 120.8 122.0 117.3 111.1 113.1 109.9 105.2

115.4 120.7 122.0 120.7 122.1 118.8 106.9 113.1 110.1 105.0

115.7 121.6 122.0 120.8 121.5 116.5 108.2 112.7 108.1 105.9

114.9 123.4 121.1 121.2 121.8 116.4 108.6 112.8 107.3 106.0

114.9 123.6 120.7 120.6 120.8 116.1 107.7 112.9 108.0 106.7

115.0 124.1 120.7 121.4 120.0 116.5 108.3 113.2 106.9 107.2

117.5 125.4 119.9 121.6 119.1 112.9 108.8 112.9 107.0 109.1

117.6 125.3 119.7 121.4 118.8 112.9 110.1 112.9 106.9 109.6

118.9 123.7 120.4 120.8 118.1 113.1 110.2 112.0 105.9 110.5

117.2 123.7 120.0 121.6 117.3 112.6 112.3 111.2 105.7 110.5

118.0 123.8 120.4 121.2 117.8 108.6 112.3 111.1 106.2 108.7

116.2 122.6 121.2 121.0 120.2 114.9 109.7 112.6 107.7 107.5

Preliminary.

66

Index 1982 = 100

Jan.

Source: Bureau of Labor Statistics (0337-01), U.S. Department of Commerce

COTTON Average Price of Strict Low Midd. 11/16,Cotton at Designated U.S. Mkts Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

In Cents Per Pound (Net Weight)

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Average

70.32 85.90 76.15 71.61 71.87 49.72 59.33 36.05 39.20 51.94

71.10 90.00 75.24 70.75 71.75 48.39 60.62 33.22 37.91 58.02

67.58 84.65 72.21 69.46 67.61 49.46 60.54 28.42 39.62 69.38

72.00 84.16 70.12 68.90 64.95 48.12 62.16 31.23 44.98 68.88

81.92 82.18 71.98 64.57 59.88 46.65 61.04 32.21 46.38 65.09

88.11 81.81 70.53 62.75 56.20 51.92 56.66 32.13 48.60 68.21

91.89 81.56 70.53 63.66 55.46 54.29 54.10 31.60 51.35

104.20 81.13 71.12 67.04 58.17 57.67 47.22 33.23 53.82

104.94 84.69 69.09 61.88 57.01 53.76 42.19 31.86 53.38

105.38 83.22 69.30 65.21 55.54 58.31 40.02 31.14 48.94

106.96 80.23 71.03 73.50 53.74 54.97 37.38 36.36 50.92

93.26 76.84 71.83 74.18 49.23 55.13 37.48 39.78 54.45

88.14 83.03 71.59 67.79 60.12 52.36 51.56 33.10 47.46 63.59

1 2 Preliminary. Grade 41, leaf 4, staple 34, mike 35-36 and 43-49 , strength 23.5-26.4. U.S. Department of Agriculture (AMS-USDA)

Source: Agricultural Marketing Service,

Average Spot Cotton, 1 3/32 , Price (SLM) at Designated U.S. Markets

In Cents Per Pound (Net Weight)

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-42 1

Preliminary.

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Average

71.46 88.31 77.97 73.69 73.93 52.90 62.60 38.88 42.31 55.87

72.42 92.71 76.92 72.64 73.75 51.27 63.62 36.11 41.07 61.76

68.82 87.06 73.90 71.13 69.90 52.43 63.13 31.55 43.08 73.27

73.38 86.43 71.74 70.35 67.18 51.51 65.08 34.03 48.78 72.63

83.41 84.25 75.75 66.30 62.18 49.73 64.73 34.82 50.70 68.90

89.92 84.32 72.53 64.55 58.56 55.02 60.18 34.55 52.87

94.25 84.04 72.86 65.78 58.27 57.38 57.18 34.08 55.34

106.66 83.65 73.60 69.25 61.34 61.02 50.08 36.04 57.88

107.50 87.25 71.23 64.31 60.33 57.52 44.94 34.84 57.54

107.93 85.90 71.38 67.66 58.89 63.09 42.54 34.03 52.96

109.52 82.71 73.25 76.02 56.85 59.28 39.88 39.31 55.09

96.31 78.86 74.04 76.63 52.61 58.80 39.96 42.86 58.46

90.13 85.46 73.76 69.86 62.82 55.83 54.49 35.93 51.34 45.19

Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

Average Spot Prices of U.S. Cotton1, Base Quality (SLM) at Designated Markets Crop Year Beginning Aug. 1

1993-42 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-33 1 3

In Cents Per Pound

Dallas (East Tex.-Okl.)

Fresno (San Joaquin Valley)

Greenville (Southeast)

Greenwood (South Delta)

Lubbock (West Texas)

Memphis (North Delta)

Phoenix Desert (Southwest)

Average

66.22 86.96 80.89 70.29 65.93 57.66 50.49 51.03 32.59 46.76

65.04 93.73 87.40 74.47 71.79 63.78 56.67 52.45 34.64 47.52

67.46 87.17 83.86 72.33 68.60 62.06 53.81 52.63 33.02 48.28

67.04 87.25 83.76 72.11 68.36 61.82 53.34 52.32 33.24 48.46

65.92 86.66 80.64 69.89 65.88 57.76 50.12 50.71 32.39 46.51

67.04 87.25 83.76 72.11 68.36 61.82 53.34 52.32 33.24 48.47

64.16 87.96 80.90 69.88 65.63 55.92 48.79 49.47 32.60 46.27

66.13 88.14 83.03 71.58 67.79 60.12 52.36 51.56 33.10 47.46

Prices are for mixed lots, net weight, uncompressed in warehouse. 2 1993 prices are for mixed lots, net weight, compressed, FOB car/truck. Preliminary. Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

Average Price1 Received by Farmers for Upland Cotton in the United States

In Cents Per Pound

Year

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-42

66.8 72.2 71.9 67.0 66.0 52.7 51.4 37.3 33.0 46.3

65.9 74.8 71.6 69.6 66.2 45.3 50.6 36.5 35.2 55.7

66.2 74.2 71.5 69.4 65.9 46.3 55.5 30.7 39.4 68.0

68.5 75.0 69.7 67.9 64.6 44.3 58.0 27.8 43.0 63.4

73.3 75.7 69.3 63.8 60.6 42.8 57.8 30.8 44.3 64.1

78.7 76.4 67.9 61.1 58.1 43.1 52.1 27.3 45.5 63.8

80.2 75.7 68.1 62.5 55.6 46.8 48.5 28.0 45.2

82.6 76.8 69.3 63.9 55.1 47.7 41.1 28.4 47.3

77.6 78.9 67.6 63.6 55.6 45.4 42.6 27.2 45.0

76.2 76.7 68.3 63.5 55.0 47.6 40.9 26.7 45.6

86.5 76.9 67.1 69.7 54.6 45.1 39.2 33.7 45.3

80.1 73.6 67.5 68.0 53.8 48.8 38.9 35.3 46.9

72.0 75.4 69.3 65.2 60.2 45.0 49.8 29.8 43.0 60.2

1

Weighted average by sales.

2

Preliminary.

Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

67

COTTON Purchases Reported by Exchanges in Designated U.S. Spot Markets1 Crop Year Beginning Aug. 1

Aug.

Sept.

1994-5 92,401 1995-6 60,442 1996-7 62,884 1997-8 48,504 1998-9 27,193 1999-00 83,564 2000-1 63,607 2001-2 118,000 2002-3 43,047 2003-4 125,240

98,251 38,855 73,925 106,503 52,066 95,241 69,083 94,697 49,671 245,295

1

Oct.

Nov.

D e c.

Jan.

F eb.

426,371 1,075,829 1,491,429 608,701 73,857 209,279 381,943 765,502 148,337 477,331 613,430 696,494 323,400 367,010 617,470 655,432 114,998 229,743 498,082 414,832 195,370 320,434 517,579 744,400 143,938 323,891 288,242 217,755 214,785 644,860 225,869 289,778 194,020 204,564 369,838 481,730 273,028 167,285 321,083 417,090

233,159 153,758 412,095 482,625 191,872 294,843 215,318 180,362 432,055

Mar.

May

149,762 49,192 44,228 241,197 225,797 73,459 242,606 72,234 130,163 396,946 92,072 210,906 236,762 71,993 63,335 189,460 89,473 129,879 191,667 274,185 193,774 278,853 84,259 155,391 169,064 170,951 213,679

Production of Cotton (Upland and American-Pima) in the U.S.

June

Market Total

July

43,821 13,244 59,042 31,324 201,557 93,205 105,139 39,647 62,192 64,092 49,012 33,942 152,905 167,647 143,422 93,489 149,780 86,830

4,326,388 2,314,455 3,224,261 3,445,654 2,027,160 2,743,197 2,302,012 2,523,765 2,565,229 3,098,042

In Thousands of 480-Pound Bales

------------------------------------------------------------------------------------------ Upland ------------------------------------------------------------------------------------------AlaArkanLouisMissisNorth South Tenbama Arizona sas California Georgia iana sippi Missouri Carolina Carolina nessee Texas

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

Apr.

Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

seven markets.

Year

In Running Bales

726 492 789 550 553 625 543 920 570 820

Preliminary.

2

862 793 778 847 608 716 791 690 613 560

Forecasted.

1,772 1,468 1,636 1,683 1,209 1,428 1,425 1,833 1,669 1,780

2,902 2,312 2,390 2,191 1,146 1,580 2,210 1,770 1,460 1,500

1,537 1,941 2,079 1,919 1,542 1,567 1,663 2,220 1,578 2,150

1,512 1,375 1,286 986 641 901 911 1,034 739 1,020

2,132 1,841 1,876 1,821 1,444 1,731 1,711 2,396 1,935 2,100

615 513 591 565 350 472 540 695 610 690

829 798 1,002 930 1,026 816 1,429 1,673 806 1,100

393 376 455 410 350 281 379 423 131 330

885 724 675 662 546 595 710 978 818 860

Total AmericanPima

4,968 4,460 4,345 5,140 3,600 5,050 3,940 4,260 5,040 4,200

337.7 367.6 528.5 548.0 442.3 674.3 389.1 700.4 678.3 429.0

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Cotton Production and Yield Estimates ---------- Forecast of Production (1,000 Bales of 480 Lbs.1) ---------Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

Aug. 1

Sept. 1

Oct. 1

Nov. 1

D e c. 1

Jan. 1

Actual Crop

19,195 21,811 18,577 17,783 14,263 18,304 19,159 20,003 18,439 17,104

19,025 20,266 17,900 18,418 13,563 17,535 18,315 19,992 18,134 16,939

19,303 18,771 18,189 18,410 13,288 16,430 17,485 20,072 18,070 17,559

19,453 18,838 18,594 18,848 13,231 16,531 17,510 20,175 17,815 18,215

19,573 18,236 18,738 18,819 13,452 16,875 17,399 20,064 17,375 18,215

19,728 17,971 18,951 18,977 -------------------

19,662 17,900 18,942 18,793 13,918 16,968 17,220 20,084 17,209 18,224

Net weight bales.

------ Forecasts of Yield (Lbs. Per Harvested Acre) -----Aug. 1

Sept. 1

Oct. 1

Nov. 1

D e c. 1

Jan. 1

Actual Crop

690 663 686 637 640 649 648 670 675 667

690 615 661 658 614 621 622 679 675 667

690 574 673 665 616 588 620 681 674 696

695 567 698 673 612 592 622 685 665 722

699 551 704 672 621 604 619 691 648 722

710 540 709 686 -------------------

708 537 705 673 625 607 631 698 665 725

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Supply and Distribution of Upland Cotton in the United States

In Thousands of 480-Pound Bales

Crop Year Beginning Aug. 1

-------------------- Area -------------------- --------------------------- Supply --------------------------- ---------------------- Disappearance ----------------------

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

13,552 16,717 14,376 13,648 13,064 14,584 15,347 15,499 13,714 13,304

1

Planted

Harvested

----- 1,000 Acres -----

13,156 15,796 12,612 13,157 10,449 13,138 12,884 13,560 12,184 11,880

Yield Lbs./Acre

Beginning Stocks3

Production4

Imports

705 533 701 666 619 595 626 694 651 719

3,303 2,588 2,543 3,920 3,822 3,836 3,665 5,879 7,120 5,140

19,324 17,532 18,413 18,245 13,476 16,294 16,799 19,603 16,530 17,795

18 400 403 13 431 53 8 5 8 20

Total

Mill Use

Exports

Total

Ending Stocks

22,645 20,520 21,359 22,178 17,729 20,183 20,472 25,487 23,659 22,933

11,109 10,538 11,020 11,234 10,254 10,055 8,738 7,592 7,166 6,110

8,978 7,375 6,399 7,060 4,056 6,303 6,303 10,603 11,266 12,675

20,087 17,913 17,419 18,294 14,264 16,358 15,041 18,195 18,432 18,785

2,588 2,543 3,920 3,822 3,836 3,665 5,879 7,120 5,140 4,148

Farm Price5 Cents/Lb.

72.0 75.4 69.3 65.2 60.2 45.0 49.8 29.8 44.5

Preliminary. 2 Estimate. 3 Excludes preseason ginnings (adjusted to 480-lb. bale net weight basis). 4 I ncludes preseason ginnings. 5 Marketing year average price. 6 Average of 5 cheapest types of SLM 1 3/32 staple length cotton offered on the European market. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

68

COTTON

Average Open Interest of #2 Cotton Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

54,424 71,353 58,001 59,909 89,358 79,598 63,987 71,849 64,096 83,775

55,558 75,100 60,231 65,392 86,739 75,794 67,720 73,383 64,572 89,852

53,724 79,090 57,542 72,130 81,236 62,857 69,788 71,389 63,451 91,336

54,670 71,488 61,795 76,779 85,505 60,384 56,038 70,407 63,827 78,658

52,830 71,714 64,555 73,464 84,562 61,470 54,058 66,680 67,601 73,146

51,001 68,159 62,342 70,296 90,178 66,789 48,024 64,032 65,848 69,137

52,357 65,656 61,921 73,893 81,652 68,975 53,621 61,183 74,892 62,565

50,597 69,653 60,182 79,309 78,571 65,690 63,069 65,257 72,612 62,781

50,955 69,528 58,168 87,134 85,378 63,976 73,735 65,496 69,554 80,348

51,561 65,768 58,415 92,430 88,970 60,369 67,767 59,777 71,526 108,981

53,563 38,475 57,397 89,150 88,917 63,746 65,017 56,896 82,802 97,809

59,065 35,996 47,652 87,120 77,873 61,474 62,931 58,156 74,685 79,437

Source: New York Board of Trade (NYBOT)

Volume of Trading of #2 Cotton Futures in New York

In Contracts

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

210,011 223,073 215,882 201,610 221,308 179,049 270,792 267,930 156,834 202,615

207,421 290,600 196,225 253,475 289,222 244,300 279,566 270,876 248,299 267,234

210,363 286,098 147,393 302,609 310,075 209,127 248,017 237,356 162,781 217,791

252,614 219,187 251,786 258,851 362,688 250,622 220,222 215,903 237,861 325,627

179,591 214,052 236,684 175,227 218,595 157,552 232,947 175,808 188,340 249,314

208,945 185,276 264,047 314,406 407,922 260,649 272,023 214,513 234,442 271,822

161,688 183,171 131,183 234,718 226,138 187,631 147,878 132,065 170,893 164,027

128,879 199,050 177,430 202,008 230,752 178,236 175,707 118,685 128,185 127,080

140,574 191,534 166,629 212,966 195,690 175,282 154,735 98,947 145,946 283,988

179,604 196,676 229,305 216,771 303,849 193,552 172,875 152,702 199,779 422,132

205,936 195,601 229,281 266,800 272,775 298,531 242,013 258,847 296,859 356,052

203,021 141,116 128,010 197,839 161,816 120,120 180,982 116,033 157,741 148,310

2,289,998 2,525,434 2,373,855 2,837,280 3,200,830 2,454,651 2,597,757 2,259,665 2,327,960 3,035,992

Source: New York Board of Trade (NYBOT)

69

COTTON Daily Rate of Upland Cotton Mill Consumption2 on Cotton-System Spinning Spindles in the U.S. In Thousands of Running Bales Crop Year Beginning Aug. 1

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

41.0 38.8 40.5 40.7 39.3 36.1 36.4 28.8 27.1 22.7

41.4 39.4 40.7 42.4 38.7 36.4 35.6 28.1 27.8 22.5

41.1 37.6 40.5 42.0 39.9 37.3 34.5 27.5 27.3 22.5

41.8 38.1 41.5 42.4 37.4 37.2 33.0 26.3 27.7 24.0

41.7 37.9 41.1 43.9 37.5 37.6 34.4 27.1 28.5 24.2

42.6 37.5 41.3 41.8 38.6 36.8 33.5 27.1 26.8

42.1 38.1 40.4 41.7 38.2 37.5 31.9 27.5 26.7

42.4 39.5 39.4 41.1 37.9 37.6 31.8 27.9 26.4

41.1 39.4 41.0 40.5 37.8 37.5 30.6 27.4 25.7

40.2 39.6 41.0 40.8 37.5 37.0 29.7 28.1 24.6

39.2 40.5 40.9 40.0 37.7 38.1 27.6 29.0 24.2

37.2 39.8 42.5 41.5 36.8 36.5 28.6 31.9 25.7

41.0 38.9 40.9 41.6 38.1 37.1 32.3 28.1 26.5 23.2

1

Preliminary.

2

Not seasonally adjusted.

Source: Bureau of the Census: U.S. Department of Commerce

Consumption of American and Foreign Cotton in the United States

In Thousands of Running Bales

Year

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Total

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

870 829 847 868 835 762 766 616 574 476

1,070 1,020 1,028 1,100 1,013 949 929 751 733 599

873 798 829 872 834 793 741 600 585 482

838 761 816 855 758 757 663 521 545 468

897 801 858 951 796 801 749 563 598 508

858 744 810 848 979 736 661 541 671

878 787 819 861 795 769 657 580 556

1,097 1,029 1,014 1,068 983 966 837 759 708

847 810 834 839 777 772 641 575 541

842 824 840 854 793 771 628 594 523

999 1,040 1,044 1,017 970 990 727 754 616

681 731 781 770 678 670 510 571 456

10,750 10,216 10,519 10,902 10,210 9,735 8,510 7,425 7,106 6,078

1

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

Exports of All Cotton2 from the United States

In Thousands of Running Bales

Year

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Total

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

531 315 257 458 402 254 430 612 472 810

333 245 171 299 280 146 336 824 653 555

341 452 277 400 265 167 382 678 373 446

710 733 573 581 795 455 435 649 626 758

1,098 1,230 899 774 1,027 654 541 927 935 1,116

1,115 1,262 666 734 156 658 564 964 1,206

1,383 1,295 728 777 182 736 614 1,042 873

1,392 777 848 888 221 978 720 1,225 1,597

1,104 576 711 669 169 708 568 999 1,174

684 343 631 477 256 659 692 842 1,150

410 263 604 574 260 508 784 1,067 1,273

300 183 501 571 330 479 648 679 1,231

9,402 7,675 6,866 7,202 4,344 6,402 6,715 10,505 11,561 8,845

1

Preliminary.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

U.S. Exports of American Cotton to Countries of Destination Crop Year Beginning Aug. 1

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 1

Preliminary.

70

In Thousands of 480-Pound Bales

Canada

China

Hong Kong

Indonesia

Italy

Ja p a n

Rep. of Korea

Mexico

Philippines

Taiwan

Thailand

165 253 294 253 288 281 245 322 235 303

1,183 2,257 1,845 1,756 737 71 147 124 306 1,800

314 347 223 129 151 245 316 287 407 364

653 925 794 594 464 229 573 558 947 842

96 83 115 46 85 29 61 52 58 79

790 1,061 940 630 637 406 424 355 385 355

976 951 769 568 712 381 307 489 577 390

653 558 618 733 1,447 1,359 1,500 1,760 1,516 1,784

168 173 144 84 53 59 71 42 126 103

277 441 331 197 220 82 257 237 693 576

356 352 255 255 376 249 476 367 693 546

2

Estimate.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

United Kingdom

Total

65 6,847 89 9,401 85 7,674 66 6,862 13 7,202 6 4,298 4 6,401 1 6,740 0 10,397 4 11,235

COTTON Cotton1 Government Loan Program in the United States Crop Year Beginning Aug. 1

1993-4 1994-5 1995-6 1996-7 1997-8

Support Target Put Under Price Price Support -- Cents Per Lb. -- Ths Bales

52.35 50.00 51.92 51.92 51.92

72.9 72.9 72.9 NA NA

% of Production

7,721 4,716 3,478 3,340 4,281

Owned Crop Year Acquired July 31 Beginning ----- Ths. Bales ----Aug. 1

49.0 24.4 19.8 18.1 23.5

1 Upland. 2 Preliminary. 3 Less than 500 bales. U.S. Department of Agriculture (ERS-USDA)

3

14

3

3

Support Target Put Under Price Price Support -- Cents Per Lb. -- Ths Bales

1998-9 1999-00 0 2000-1 0 2001-22 0 2002-32

0 0 0

NA = Not applicable.

Production of Cotton Cloth1 in the United States

51.92 51.92 51.92 51.92 52.00

NA NA NA NA 74.2

Owned Acquired July 31 ----- Ths. Bales -----

% of Production

4,724 8,721 8,837 13,655

36.8 54.9 52.6 69.7

31 2 6 2

3 1 5 2

Source: Economic Research Service,

In Millions of Square Yards

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total Year

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total Year

1994 1995 1996 1997 1998

1,073 1,169 1,182 1,211 1,226

1,125 1,137 1,230 1,276 1,167

1,131 1,090 1,198 1,283 1,218

1,143 1,093 1,187 1,309 1,142

4,473 4,488 4,796 5,078 4,753

1999 2000 2001 2002 20032

1,170 1,075 1,047 893 841

1,164 1,129 976 912 781

1,078 1,111 873 894 664

1,039 1,079 811 825

4,451 4,395 3,706 3,524 3,048

1

Cotton broadwoven goods over 12 inches in width.

2

Preliminary.

Cotton Ginnings1 in the United States To: Crop Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-42 1

Aug. 1

Sept. 1 Sept. 15

113 17 48 2 146 81 245 99 56 29

Excluding linters.

680 433 342 359 523 561 842 609 537 567 2

943 898 637 683 739 1,018 1,454 802 898 958

Preliminary.

Oct. 15

Nov. 1

Nov. 15

D e c. 1

D e c. 1 5

Jan. 1

Jan. 15

F eb. 1

2,324 2,455 2,146 1,210 2,056 2,690 3,264 2,007 1,648 2,004

5,002 4,795 4,780 3,752 4,265 4,885 5,930 4,562 3,523 3,827

8,878 8,430 8,876 7,930 7,359 8,263 9,221 8,748 6,685 7,396

12,479 11,262 11,906 11,601 9,366 11,006 11,546 12,522 9,294 10,527

15,587 14,199 14,623 14,735 11,310 13,379 13,657 15,498 12,367 13,477

17,465 16,101 16,528 16,662 12,558 14,992 15,364 17,727 14,395 15,686

18,438 17,011 17,681 17,613 13,160 15,965 16,097 18,672 15,689 16,914

18,842 17,292 18,101 18,013 13,376 16,322 16,518 19,242 16,337 17,426

19,028 17,416 18,308 18,170 13,458 16,468 16,648 19,587 16,589 17,620

Jan . F eb . Mar. Apr. May Ju n e July A ug . Sept. Oct. Nov. Dec.

100.76 86.24 76.29 74.21 61.45 64.06 47.08 45.56 62.54 54.39 56.13 60.16 59.84 56.09 57.12 60.97 58.44 64.75 75.14 77.01 70.48

Total Crop

19,127 17,469 18,439 18,301 13,534 16,528 16,742 19,771 17,206

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

------------ Cotton1 -----------Raw5 Actual Equivalent

Year

In Thousands of Running Bales

Oct. 1

Fiber Prices in the United States

1995 1996 1997 1998 1999 2000 2001 2002 20036

Source: Bureau of Census, U.S. Department of Commerce

111.95 95.83 84.77 82.45 68.28 71.17 52.32 50.63 69.49 60.43 62.37 66.84 66.49 62.32 63.47 67.74 64.93 71.94 83.49 85.57 78.31

In Cents Per Pound --------------- Rayon2 --------------Raw5 Actual Equivalent

118.67 118.00 115.00 110.25 98.92 97.58 98.50 97.83 90.25 94.00 93.00 93.00 92.00 92.00 90.00 88.00 88.00 88.00 88.00 88.00 89.00

123.61 122.92 119.79 114.84 103.04 101.65 102.61 101.91 94.01 97.92 96.88 96.88 95.83 95.83 93.75 91.67 91.67 91.67 91.67 91.67 92.71

------------ Polyester3 -----------Raw5 Actual Equivalent

88.83 81.10 69.50 62.50 51.67 57.08 60.42 61.17 60.67 61.00 61.00 62.00 63.00 63.00 62.00 60.00 59.00 59.00 59.00 59.00 60.00

92.53 84.48 72.40 65.11 53.82 59.46 62.93 63.72 63.20 63.54 63.54 64.58 65.63 65.63 64.58 62.50 61.46 61.46 61.46 61.46 62.50

Price Ratios4 ---------- in Percent ---------Cotton/ Cotton/ Rayon Polyester

.91 .78 .71 .72 .66 .70 .52 .50 .74 .62 .64 .69 .69 .65 .68 .74 .71 .79 .91 .93 .85

1.21 1.14 1.17 1.29 1.27 1.19 .83 .79 1.11 .95 .98 1.04 1.04 1.01 .98 1.08 1.06 1.17 1.36 1.39 1.25

1

SLM-1 1/16 at group B Mill points, net weight. 2 1.5 and 3.0 denier, regular rayon staples. 3 Reported average market price for 1.5 denier polyester staple for cotton blending. 4 Raw fiber equivalent. 5 Actual prices converted to estimated raw fiber equivalent as follows: cotton, divided by 0.90, rayon and polyester, divided by 0.96. 6 Preliminary. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

71

Cottonseed and Products Cottonseed is crushed to produce both oil and meal. Oil is typically used for cooking oil and the meal is fed to livestock. Before the cottonseed is crushed for oil and meal, it is delinted of its linters. Linters are used for padding in furniture, absorbent cotton swabs, and for manufacture of many cellulose products. The sediment left by cottonseed oil refining, called foots, provides fatty acids for industrial products. The value of cottonseeds represents a hefty 18% of a cotton producer’s income. Prices – The price of cottonseed oil in 2003 rose sharply by 59% to 37.00 cents/pound from 23.34 cents in 2002, and more than double the dismal 2001 price of 15.41. The price of cottonseed meal in 2003 rose to an average $149 per short ton, up from $141.37 in 2002. Cottonseed oil and meal prices were boosted throughout 2003 by the sharp 50% rally seen in cotton prices. Supply – World production of cottonseed was forecast

World Production of Cottonseed Crop Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 1

Preliminary.

at 34.83 million metric tons, up from 32.84 million in 2002/ 3. World ending stocks in 2003/4 are forecasted at 360,000 metric tons, down from 380,000 in 2002/3. World production of cottonseed oil was forecast to rise to 3.74 million metric tons in 2003/4 from 3.49 million in 2002/3. World production of cottonseed meal in 2003/4 was forecast to rise to 11.90 million metric tons from 11.17 million in 2002/3. US production of cottonseed in 2003/4 rose to 6.689 million short tons from 6.184 million in 2002/3. US stocks fell to 347,000 tons from 400,000 tons in 2002/3. A total of 2.750 million tons of cottonseed were forecasted to be crushed in 2003/4, up from 2.495 million tons in 2002/3. Trade – World trade in cottonseed was forecast at 1.07 million metric tons in 2003/4, a little higher than 1.06 million in 2002/3. That accounts for only 3% of world production, showing that most countries use the cottonseed domestically.

In Thousands of Metric Ton

Argentina

Australia

Brazil

China

Egypt

Greece

India

Mexico

Pakistan

Turkey

United States

Former USSR

World Total

638 748 564 542 337 223 257 102 85

474 595 859 941 1,012 1,047 1,062 968 371

980 690 568 763 961 1,310 1,720 1,407 1,520

7,727 8,487 7,481 8,193 8,012 6,817 7,868 9,470 8,758

411 384 560 564 379 375 340 518 475

574 725 540 590 665 730 720 700 650

4,709 5,339 5,890 5,150 5,420 5,300 4,800 5,370 4,700

187 344 421 348 369 237 128 154 68

2,959 3,604 3,189 3,124 2,990 3,824 3,651 3,610 3,400

930 1,288 1,220 1,193 1,282 1,315 1,289 1,240 1,370

6,898 6,213 6,480 6,291 4,867 5,764 5,838 6,761 5,823

3,380 3,150 2,707 2,692 2,580 2,832 2,530 2,716 2,581

33,129 35,290 34,557 34,522 32,868 33,695 34,021 37,055 33,568

2

Source: The Oil World

Estimate.

Salient Statistics of Cottonseed in the United States

In Thousands of Short Tons -- Products Produced --

-------------------- Supply --------------------

Crop Year Beginning Aug. 1

------------------------ Disappearance -----------------------Total ProTotal D i sa p pearance Stocks duction Supply Crush Exports Other --------------------------------------------- In Thousands of Short Tons ------------------------------------------

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

551 517 523 563 393 274 427 400 347

Preliminary.

2

6,849 7,144 6,935 5,365 6,354 6,436 7,452 6,184 6,694

Estimate.

7,399 7,681 7,553 6,135 7,055 7,084 8,206 6,688 7,266

3,882 3,860 3,885 2,719 3,079 2,753 2,791 2,495 2,700

114 116 149 68 198 235 274 371 300

2,886 3,182 2,957 2,955 3,505 3,669 4,742 3,475 3,931

6,882 7,158 6,990 5,742 6,781 6,657 7,807 6,341 6,931

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Meal Thousand Sh. Tons

106 126 121 129 89 105 91 101 117

731.0 914.6 835.4 687.2 565.5 675.7 667.3 616.4 784.2

1,229 1,310 1,224 832 939 847 876 725 850

1,748 1,807 1,769 1,232 1,390 1,338 1,294 1,114 1,215

In Dollars Per Short Ton

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

106.75 208.80 207.20 153.10 110.60 126.88 184.00 133.13 157.38

97.50 202.80 183.75 139.10 101.25 130.50 148.75 125.00 143.60

100.30 195.60 189.10 128.70 106.90 129.38 138.13 131.88 142.40

98.10 220.00 189.10 116.25 110.90 125.00 140.00 124.30 142.40

92.75 191.25 193.75 105.00 108.75 123.25 137.50 120.88 131.75

108.75 192.20 190.30 129.40 114.50 130.63 126.88 137.50 131.50

116.90 201.56 170.75 146.65 115.00 131.88 129.69 151.50 143.00

116.50 193.10 176.25 130.30 100.65 130.50 130.63 159.75 151.70

137.60 193.10 192.00 115.60 111.92 153.12 131.25 156.38 153.20

153.25 183.25 189.10 106.50 111.83 150.00 131.25 150.10 163.50

165.00 196.60 189.10 107.90 112.00 141.88 128.13 150.00 182.50

185.80 224.50 190.50 119.75 124.20 160.83 134.17 156.00 185.00

123.27 200.23 188.41 124.85 110.71 136.15 138.37 141.37 152.33

Preliminary.

72

Oil MIllion L b s.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Wholesale Price of Cottonseed Meal (41% Solvent)2 in Memphis Year

Farm Price $/Ton

Value of Production Mil. $

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

COTTONSEED AND PRODUCTS

USD Per Ton ----- 36% Protein, Memphis, TN (Aug. 1910 - Sept. 1920) 41% Protein, Memphis, TN (Oct. 1920 - Sept. 1946) 41% Protein (Expeller), Memphis, TN (Oct. 1946 - Dec. 1981) 41% Protein (Solvent), Clarksdale, MS (Jan. 1982 - date)

Supply and Distribution of Cottonseed Oil in the United States Crop Year Beginning Oct. 1

In Millions of Pounds

Per Capita Cunsump. ------------------------- Supply ------------------------- ----------- Disappearance ----------- of Salad & Cook Oils ProTotal Stocks duction Imports Supply Domestic Exports Total - In Lbs. -

1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

66 79 76 49 93 40 36

1,224 832 939 847 876 725 850

.1 48.2 8.1 ------21.0 ----

1,291 958 1,023 896 969 786 886

1,004 772 833 673 779 639 731

208 111 141 131 150 111 115

1,212 882 974 804 930 750 846

Utiliz ation ------------ Food Uses ------------ --------- Prices ---------

29 28 29 35

1

Preliminary. 2 Estimate. 3 Valley Points FOB; Tank Cars. 4 Rotterdam; US, PBSY, fob gulf. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Shortening

Salad & Cooking Oils

208 170 183 178 200 172

184 262 320 205 317 W

1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

1997 1998 1999 2000 2001 2002 2003 1 1

663 633 474 352 396 832 723

693 632 496 428 441 982

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

73.1 52.9 51.9 56.9 48.5 48.5 60.1

73.1 49.6 57.3 53.7 63.9 59.5 63.5

77.2 50.2 61.5 56.7 61.6 56.0 61.5

85.0 46.6 60.0 67.4 65.2 66.8

75.7 48.9 58.1 61.6 58.3 55.8

70.2 50.7 67.8 59.5 58.9 57.1

72.1 36.4 62.0 38.1 56.6 59.2

57.1 28.3 52.7 46.0 56.9 49.7

51.9 28.4 43.2 51.4 45.2 42.4

54.9 30.5 22.7 42.8 37.1 31.9

57.5 46.2 45.8 49.6 53.0 38.7

30.1 43.5 37.2 29.8 47.5 34.9

778.1 512.3 620.1 613.6 652.7 600.5 740.1

Source: U.S. Bureau of Census, U.S. Department of Commerce

Exports of Cottonseed Oil (Crude and Refined) from the United States Year

414 457 554 426 539 427

W = Withheld proprietary data.

Consumption of Crude Cottonseed Oil in Refining in the United States Year

U.S.3 Rott4 (Crude) (Cif) Total ------ $/Met. Ton ------

In Thousands of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

25,722 24,003 11,541 10,627 14,684 12,905 7,012

26,835 15,077 10,235 9,447 6,638 17,550 8,483

22,647 16,150 7,780 13,181 7,237 12,137 10,413

22,230 22,874 11,387 8,258 10,595 8,319 8,262

30,319 20,791 6,328 7,402 12,722 21,013 9,706

9,535 22,994 7,161 7,550 7,525 9,444 8,134

25,207 15,348 8,725 11,546 10,325 7,863 6,620

24,717 14,392 8,111 10,642 20,809 8,727 8,613

8,919 8,818 9,275 16,467 6,439 6,831 8,764

15,351 11,056 11,060 13,263 19,891 12,698 8,689

24,217 7,610 12,313 11,652 5,662 11,105 9,349

8,164 11,447 23,025 8,898 19,831 10,761 8,127

243,863 190,560 126,941 128,934 142,358 139,353 102,172

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

73

COTTONSEED AND PRODUCTS Cottonseed Crushed (Consumption) in the United States Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Thousands of Short Tons

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Total

264.4 229.2 244.4 246.0 166.8 170.8 186.8 195.1 138.7

245.5 225.0 178.6 174.9 230.7 141.1 147.6 131.4 98.9

337.1 331.7 329.7 272.7 281.6 265.9 267.5 207.8 251.6

386.7 355.1 374.5 254.3 302.5 252.3 287.0 242.5 254.8

362.4 352.6 371.3 262.7 296.4 241.5 273.1 236.6 252.0

402.3 381.0 428.4 282.2 300.2 295.2 281.3 274.5

373.5 362.8 352.3 259.5 299.4 268.7 253.2 224.5

381.4 362.2 370.8 280.2 297.7 261.9 251.8 230.4

349.6 334.4 359.1 205.5 263.5 186.0 243.0 241.5

325.2 351.3 309.1 172.0 250.3 228.3 233.3 203.6

223.7 280.8 278.8 159.9 221.3 241.9 200.3 179.4

209.2 294.0 277.6 149.2 153.5 199.2 166.3 127.4

3,861 3,860 3,875 2,719 3,064 2,753 2,791 2,495 2,390

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production of Cottonseed Cake and Meal in the United States Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Thousands of Short Tons

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Total

120.1 100.9 128.2 114.7 82.1 74.1 83.9 92.4 74.9

113.6 99.1 92.1 77.1 107.5 79.3 70.8 79.3 59.5

159.9 146.1 147.8 118.7 132.1 134.1 118.5 95.5 112.3

178.2 161.5 168.7 115.9 140.8 121.4 126.5 112.6 111.0

161.0 158.2 178.2 122.5 138.3 117.1 118.2 108.0 112.5

183.8 174.5 194.4 130.2 135.3 136.0 129.0 123.0

169.8 164.6 158.5 114.8 137.7 118.9 112.5 100.3

168.3 162.1 170.4 127.2 140.2 120.3 115.0 96.7

158.7 152.2 162.3 90.6 120.0 83.4 109.2 108.9

147.1 160.7 141.8 75.6 109.4 101.0 107.9 89.8

102.4 128.6 128.8 75.6 109.3 114.3 96.3 81.4

102.7 123.2 124.0 71.0 79.5 89.7 73.7 63.0

1,766 1,732 1,795 1,234 1,432 1,290 1,261 1,151 1,129

Source: Bureau of Census, U.S. Department of Commerce

Production of Crude Cottonseed Oil2 in the United States

In Millions of Pounds

Year

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Total

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

87.8 70.3 80.6 77.8 56.1 55.1 57.5 60.2 45.0

84.3 69.4 66.0 59.6 69.6 52.1 42.2 53.7 40.7

105.2 98.9 97.8 78.3 88.3 84.3 79.4 62.8 77.5

121.6 114.8 120.3 80.0 95.4 76.8 86.2 72.1 78.2

111.6 115.9 119.6 80.6 94.2 73.5 81.7 67.9 79.0

130.9 123.9 136.4 84.0 93.4 85.9 87.5 80.8

121.4 114.8 111.1 80.2 93.2 78.4 78.3 65.6

125.6 114.7 115.5 86.7 93.8 76.4 78.2 66.7

110.4 103.7 112.7 64.4 82.6 53.9 74.6 71.0

101.9 109.8 96.1 53.4 75.7 66.8 74.5 59.9

73.3 86.9 87.3 52.4 70.2 66.6 61.8 52.8

76.7 85.9 88.8 45.9 49.2 55.7 50.6 39.9

1,251 1,209 1,232 843 962 826 853 753 769

1

Preliminary.

2

Not seasonally adjusted.

Source: Bureau of Census, U.S. Department of Commerce

Production of Refined Cottonseed Oil in the United States

In Millions of Pounds

Year

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Total

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

80.5 62.4 57.4 55.8 44.8 44.4 49.4 52.7 38.5

69.0 53.0 38.1 29.1 42.4 36.2 29.6 47.1 34.6

74.0 64.9 48.3 51.1 50.4 55.1 48.2 48.3 59.8

89.5 82.8 71.0 47.9 55.6 52.2 63.6 59.2 63.5

86.9 82.2 74.8 48.5 59.5 54.9 61.3 55.7 61.5

91.7 85.9 82.2 45.4 58.3 65.7 64.9 66.5

84.6 80.7 73.1 47.3 56.7 59.8 58.0 55.6

89.8 78.1 68.2 49.0 65.8 57.8 58.5 56.8

81.7 75.2 69.8 35.2 60.0 36.9 56.2 58.9

75.0 76.9 55.2 27.4 51.0 44.8 56.7 49.4

53.8 56.4 50.3 27.5 41.9 50.0 45.2 42.4

54.5 53.6 53.0 29.7 22.0 41.5 36.8 31.7

931 852 741 494 608 599 628 624 619

1

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

Stocks of Cottonseed Oil (Crude and Refined) in the U.S., at End of Month Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

74

In Millions of Pounds

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

87.8 101.2 78.0 97.3 107.8 59.9 97.7 46.1 50.5

82.1 94.1 66.4 78.6 76.0 49.0 91.8 39.7 36.0

82.6 97.5 68.6 89.1 81.1 66.5 113.8 32.8 51.9

89.3 102.5 86.4 110.0 88.7 75.2 112.9 40.2 56.1

94.8 106.0 105.3 85.5 85.1 95.0 109.8 38.0 68.2

118.2 120.9 133.8 109.5 84.5 109.5 124.9 46.1

147.2 133.7 141.2 113.3 79.6 134.4 120.3 58.8

151.2 137.5 140.7 125.3 115.2 139.9 106.9 72.2

155.6 131.7 159.8 126.0 127.4 133.5 110.3 83.3

143.3 116.1 150.4 112.0 127.5 123.5 97.3 84.2

128.1 103.4 130.9 100.7 103.0 126.8 82.7 91.4

125.4 85.9 118.8 83.7 81.3 114.0 61.8 64.0

Source: Bureau of Census, U.S. Department of Commerce

COTTONSEED AND PRODUCTS

Cents Per Pound ----- Crude, FOB Southeast Mills (Aug. 1909 - Dec. 1974) PBSY, Greenwood, MS (Jan. 1975 - date)

Average Price of Crude Cottonseed Oil, PBSY, Greenw ood, MS.1 in Tank Cars Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

33.16 28.70 24.45 25.21 27.69 31.72 21.98 16.24 16.38 49.82

29.96 29.95 24.35 25.44 29.37 28.21 22.65 15.20 15.89 49.90

29.60 27.14 24.25 26.18 30.46 26.27 23.70 15.53 16.77 47.52

29.06 27.61 26.77 25.10 32.47 24.39 24.57 14.03 16.98 44.57

29.66 27.51 28.46 25.19 33.13 24.25 22.97 14.53 17.95 42.33

27.55 30.04 27.94 25.01 30.22 25.19 21.54 13.27 19.48 28.69

24.20 30.63 28.25 26.53 29.40 24.70 21.03 16.78 21.30 24.38

23.71 30.26 27.81 27.11 30.11 21.39 20.17 17.18 22.32 25.51

24.51 28.61 26.13 28.03 33.26 20.22 18.52 15.78 22.32 29.64

23.64 27.61 24.55 28.47 33.99 20.15 18.16 14.44 26.84 32.93

24.85 26.27 24.28 29.11 34.16 19.69 17.83 15.91 36.90 32.24

25.50 26.10 24.29 26.78 33.40 21.25 17.25 16.07 46.89 33.26

27.12 26.36 25.96 26.51 31.47 23.95 20.86 15.41 23.34 36.73

Data prior to 1995 are F.O.B. Valley Points, Southeastern mills.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Exports of Cottonseed Oil to Important Countries from the United States Year

Canada

Dominican Republic

7.5 10.3

Mexico

29.8 17.9 15.8 11.3 6.0 4.2 7.6 6.5 5.4 3.5

10.3 5.7 3.3 2.5 6.1 5.4 7.9 8.6 6.9 7.2

El Salvador

South Korea

1.9 1.4

26.1 37.8 20.6 25.3 16.1 .8

16.9 19.2 7.2 1.9 2.1 .0 .1 2.5 4.7 .7

10.8 12.0 23.2 28.0 37.6 37.5 40.2 26.0 36.4 33.8

1

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

.0 .0 .1 .0 .0

12.3 1.9 1.7 .4

Ja p a n

.5 3.0

In Thousands of Metric Tons

Netherlands

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 Preliminary.

.0

Egypt

Guatemala

4.2 .5 .4 3.1

4.8 1.8 .0

Turkey

Venezuela

4.4 2.8 .0 2.5 .0

.3

Total

135.6 137.7 96.0 110.6 86.9 57.0 58.5 64.6 63.2 46.3

75

Reuters-CRB Futures Index The Reuters Commodity Research Bureau Futures Price Index was first calculated by Commodity Research Bureau, Inc. in 1957 and made its inaugural appearance in the 1958 CRB Commodity Year Book. The Index originally consisted of two cash markets and 26 futures markets which were traded on exchanges in the U.S. and Canada. It included barley and flaxseed from the Winnipeg exchange; cocoa, coffee “B”, copper, cotton, cottonseed oil, grease wool, hides, lead, potatoes, rubber, sugar #4, sugar #6, wool tops and zinc from New York exchanges; and corn, oats, wheat, rye, soybeans, soybean oil, soybean meal, lard, onions, and eggs from Chicago exchanges. In addition to those 26, the Index also included the spot New Orleans cotton and Minneapolis wheat markets. Like the Bureau of Labor Statistics spot index, the Reuters-CRB Futures Price Index is calculated to produce an unweighted geometric mean of the individual commodity price relatives. In other words, a ratio of the current

price to the base year average price. Currently, 1967 is the base year the Index is calculated against (1967 = 100). The formula considers all future delivery contracts that expire on or before the end of the sixth calendar month from the current date, using up to a maximum of five contracts per commodity. However, a minimum of two contracts must be used to calculate the current price, even if the second contract is outside the six-month window. Contracts are excluded when in their delivery period. The 2003 closing value of 255.29 was 8.86 percent higher than the 2002 close of 234.52. 14 of the 17 component commodities finished higher for the year. Futures Markets Futures and options on the Reuters-CRB Futures Price Index are traded on the New York Board of Trade (NYBOT).

Reuters-CRB Futures Index Component Commodities by Group Groups: Energy:

Components Crude Oil, Heating Oil, Natural Gas

Grains and Oilseeds:

Corn, Soybeans, Wheat

Industrials:

Copper, Cotton

Livestock:

Live Cattle, Live Hogs

Precious Metals:

Gold, Platinum, Silver

Softs:

Cocoa, Coffee, Orange Juice, Sugar #11

The Reuters-CRB Futures Index is computed using a three-step process: 1) Each of the Index’s 17 component commodities is arithmetically averaged using the prices for all of the designated contract months which expire on or before the end of the sixth calendar month from the current date, except that: a) no contract shall be included in the calculation while in delivery; b) there shall be a minimum of two contract months for each component commodity (adding contracts beyond the six month window if necessary); c) there shall be a maximum of five contract months for each commodity (dropping the most deferred contracts to remain at five, if necessary). The result is that the Index extends six to seven months into the future depending on where one is in the current month. For example, live cattle’s average price on October 30, 1995 would be computed as follows:

Cattle Average =

Dec. ‘96 + Feb. ‘97 2

2) These 17 component averages are then geometrically averaged by multiplying all of the numbers together and taking the 17th root. Geometric Average = 17 √ Crude Avg. * Heating Oil Avg. * Sugar Avg.... 3) The resulting average is divided by 30.7766, the 1967 base-year average for these 17 commodities. That result is then multiplied by an adjustment factor of .8486. This adjustment factor is necessitated by the nine revisions to the Index since its inception in 1957. Finally, that result is multiplied by 100 in order to convert the Index into percentage terms:

Reuters-CRB Futures Index =

76

Current Geometric Average 1967 Geometric Avg. (30.7766)

* .8486 * 100

REUTERS-CRB FUTURES INDEX

Reuters-CRB Futures Index 17 Futures Markets Cattle (Live), Cocoa, Coffee, Copper, Corn, Cotton, Crude Oil, Gold (NY), Heating Oil #2, Hogs (Lean), Natural Gas, Orange Juice, Platinum, Silver (NY), Soybeans, Sugar #11 (World), Wheat (Chi.)

Average Open Interest of Reuters-CRB Futures Index in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

2,607 2,144 1,934 1,944 1,679 2,863 3,487 1,280 422 748

3,146 2,164 1,826 2,128 1,557 3,027 3,525 1,063 514 877

2,680 2,147 1,753 2,090 1,626 3,153 3,271 1,032 458 835

2,691 2,370 2,355 2,245 1,509 3,041 3,117 1,036 384 849

2,339 2,016 1,881 2,192 1,641 3,785 3,155 969 400 939

2,698 2,144 1,890 1,817 1,895 3,388 2,737 1,006 412 905

3,838 2,053 1,562 1,957 1,832 3,300 2,104 1,058 489 858

5,146 2,070 1,345 1,741 1,719 3,443 1,640 1,048 399 917

4,562 2,062 1,596 1,656 1,839 4,231 1,551 993 583 1,078

4,942 1,942 1,853 1,843 2,162 4,851 1,632 559 646 1,029

4,535 2,003 1,861 1,789 2,639 4,579 1,544 354 684 1,013

2,800 1,640 1,866 1,752 2,787 4,087 1,438 404 710 757

Source: New York Board of Trade (NYBOT)

Volume of Trading of Reuters-CRB Futures Index in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

6,956 6,151 7,490 6,645 7,659 7,606 14,975 2,428 1,251 2,289

7,473 5,545 6,041 4,942 4,623 7,766 6,760 1,823 1,231 2,154

10,085 5,763 6,428 5,245 3,953 7,556 3,941 1,310 896 1,826

10,274 7,955 10,784 8,600 3,890 7,808 7,582 2,062 1,472 1,634

11,298 7,877 9,526 8,156 2,933 4,986 7,402 930 785 1,514

14,652 7,573 5,543 7,776 5,634 8,404 8,924 1,965 1,191 2,106

10,560 6,875 7,476 6,248 3,394 4,378 2,023 880 1,217 1,632

8,967 10,094 5,816 7,685 4,578 12,053 3,973 2,021 915 1,350

7,445 7,376 6,311 4,537 5,101 6,660 1,333 625 1,100 1,712

6,575 5,030 6,527 4,588 4,013 8,063 2,122 1,263 1,654 2,123

10,186 5,865 5,990 3,468 8,814 9,497 3,254 843 1,430 2,502

5,515 5,309 3,181 3,592 4,401 3,932 1,205 728 1,141 2,314

109,986 81,413 81,113 71,482 58,993 88,709 63,494 16,878 14,283 23,156

Source: New York Board of Trade (NYBOT)

77

Currencies A currency rate involves the price of the base currency (e.g., the dollar) quoted in terms of another currency (e.g., the yen) or in terms of a basket of currencies (e.g., the dollar index). The world’s major currencies have traded in a floating-rate exchange rate regime ever since the BrettonWoods international payments system broke down in 1971 when President Nixon broke the dollar’s peg to gold. The key factor affecting a currency’s value is central bank monetary policy. An easy monetary policy (low interest rates) is bearish for a currency because the central bank is aggressively pumping new currency reserves into the marketplace and because foreign investors are not attracted to the low interest rate returns available in the country. By contrast, a tight monetary policy (high interest rates) is bullish for a currency because of the tight supply of new currency reserves and attractive interest rate returns for foreign investors. Currency values are also affected by economic growth and investment opportunities in the country. A country with a strong economy and lucrative investment opportunities will typically have a strong currency because global companies and investors want to buy into that country’s investment opportunities. Another key factor driving currency values is the nation’s current account balance. A current account surplus is bullish for a currency due to the net inflow of the currency, while a current account deficit is bearish for a currency due to the net outflow of the currency. Futures on major currencies and on cross-currency rates are traded at the Chicago Mercantile Exchange and the FINEX exchange. Dollar – The sharp sell-off in the dollar that began in early 2002 continued into 2003. The dollar index temporarily rebounded upward during summer of 2003 as the US economic rebound started, but then the dollar showed weakness again during autumn and the dollar index in December 2003 posted a new 7-year low. There were two major bearish factors for the dollar during 2003: (1) the Fed’s expansionary monetary policy, and (2) the massive US current account deficit. With its 1% federal funds target, the Fed aggressively pumped dollar reserves into the banking system, keeping interest rates low but also creating an oversupply of dollars that depressed the dollar’s value against other currencies as well as against real commodities. At the same time, the US in 2003 ran a record US current account deficit near $550 billion, which is roughly equal to 5% of US GDP. That meant that the US had to import

Reuters-CRB Currencies Index Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

78

more than $1.5 billion of capital every calendar day in order to cover its trade and services deficit. Cyclical factors such as weak overseas demand for US exports were partly to blame for the US current account deficit. However, structural issues were the main cause of the current account deficit. Those issues were the heavy US demand for imported energy, the need for the US to import capital to cover the burgeoning US federal budget deficit, and the perennially weak US household savings rate. The OECD expects the massive US current account deficit to continue near 5.1% in 2004, meaning the dollar will remain under a cloud. Euro – The euro rallied fairly steadily against the dollar starting in Q2-2002 and on through 2003. The euro in December 2003 posted a record high against the dollar of 1.1978 euros/USD. The euro’s rally was mainly driven by the fact that the European Central Bank (ECB) held to a tighter monetary policy than the US Fed by keeping its refinancing rate pegged at 2% through the second half of 2003, a full percentage point higher than the Fed’s 1.00% funds rate target. Higher European interest rates encouraged European investors to keep their investment capital at home in higher-yielding debt instruments. Still, Europe had its share of problems during 2003 with very weak economic growth, ongoing structural problems related to heavy business regulation, a sclerotic labor market, and fiscal problems where Germany and France couldn’t keep their budget deficits below the 3% Euro-zone ceiling in 2003. Yen – The dollar/yen traded mostly sideways in early 2003 but then dropped sharply in late 2003 to post a new 3year low of 107.50 yen/$. The Bank of Japan spent much of 2003 intervening in support of the dollar/yen because Japanese government policy was to prevent a significant appreciation in the yen so that the Japanese economy could benefit from increased exports. In spite of that effort, the dollar dropped against the yen due to the dollar’s weak fundamentals. British Pound – The British pound rallied sharply against the dollar beginning in early 2002 and lasted through 2003. The British pound in December 2003 posted a 5-year high of $1.72, which was only about 1 cent below the 11-year high of $1.7325 posted in October 1998. The British pound was supported by the relative economic strength seen in Britain and by the fact that the Bank of England was the first of the major G7 central banks to raise interest rates, pushing the base rate up 0.25 percentage points to 3.75% on November 6, 2003.

1977 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

128.54 139.31 141.69 134.61 125.06 130.97 127.65 118.42 110.20 125.37

129.57 140.54 141.01 130.30 126.10 128.48 124.37 116.58 109.38 126.36

130.89 147.85 141.12 129.56 125.65 126.37 124.01 114.25 110.40 126.61

130.57 152.52 139.61 128.71 124.96 125.74 123.43 113.01 111.33 126.42

132.23 150.20 138.11 130.83 124.33 125.32 119.42 112.24 114.54 132.07

134.18 150.85 138.37 131.75 122.86 124.63 122.54 110.92 117.39 133.04

137.60 150.58 139.53 130.14 121.89 124.08 121.59 111.29 121.30 130.30

137.51 145.41 140.52 126.84 120.65 126.89 119.04 114.02 119.68 128.77

139.78 143.89 139.51 128.02 126.18 128.89 117.11 115.20 119.54 130.93

141.94 146.33 138.74 129.07 130.98 130.66 115.99 114.04 119.02 135.96

140.29 145.21 139.92 129.58 128.86 128.24 114.89 112.69 120.77 136.23

137.85 143.83 137.47 126.93 130.69 127.71 117.55 112.01 121.97 140.44

135.08 146.38 139.63 129.70 125.68 127.33 120.63 113.72 116.29 131.04

Source: Reuters

CURRENCIES

U.S. Dollars per British Pound Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1.4933 1.5742 1.5289 1.6590 1.6347 1.6495 1.6395 1.4767 1.4314 1.6184

1.4787 1.5727 1.5376 1.6258 1.6402 1.6269 1.6007 1.4522 1.4233 1.6077

1.4921 1.6004 1.5278 1.6095 1.6615 1.6213 1.5810 1.4438 1.4233 1.5832

1.4832 1.6087 1.5159 1.6285 1.6720 1.6085 1.5807 1.4350 1.4434 1.5751

1.5038 1.5886 1.5154 1.6325 1.6370 1.6147 1.5084 1.4268 1.4601 1.6230

1.5261 1.5960 1.5417 1.6457 1.6509 1.5957 1.5102 1.4025 1.4849 1.6606

1.5446 1.5955 1.5538 1.6717 1.6429 1.5754 1.5082 1.4149 1.5566 1.6242

1.5421 1.5668 1.5501 1.6044 1.6355 1.6051 1.4885 1.4376 1.5375 1.5942

1.5647 1.5595 1.5595 1.6020 1.6814 1.6237 1.4341 1.4646 1.5562 1.6141

1.6073 1.5782 1.5863 1.6331 1.6933 1.6570 1.4509 1.4520 1.5576 1.6778

1.5864 1.5612 1.6629 1.6887 1.6613 1.6206 1.4252 1.4358 1.5718 1.6899

1.5582 1.5411 1.6660 1.6606 1.6713 1.6131 1.4657 1.4422 1.5882 1.7536

1.5317 1.5786 1.5622 1.6385 1.6568 1.6176 1.5161 1.4403 1.5029 1.6352

Source: FOREX

Volume of Trading of British Pound Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

278,825 295,416 239,698 240,280 174,345 182,398 199,577 125,643 182,013 158,326

359,264 263,900 270,247 168,714 126,907 151,829 179,811 126,230 168,158 161,822

367,818 351,089 350,969 289,352 231,941 350,218 270,898 198,749 230,355 217,383

311,269 124,103 287,349 185,273 175,668 205,348 138,872 126,975 168,201 158,137

241,414 195,292 316,413 236,648 217,110 285,044 133,307 166,262 174,050 164,674

348,188 264,635 341,492 279,338 322,996 332,107 225,758 248,926 239,757 288,625

259,710 133,691 216,712 265,125 211,706 250,328 136,227 164,219 133,306 214,871

261,557 219,644 181,815 194,612 277,322 178,203 155,884 183,572 138,290 163,548

308,111 271,815 332,895 234,092 291,374 275,899 245,069 197,117 185,291 284,467

274,492 129,859 209,828 202,058 201,960 177,921 100,723 178,944 177,535 212,596

294,803 191,694 183,558 144,975 146,837 163,232 100,684 161,367 160,887 206,163

329,995 334,952 326,369 286,099 255,545 181,470 152,465 187,388 198,017 364,543

3,635,446 2,776,090 3,257,345 2,726,566 2,633,711 2,733,997 2,039,275 2,065,392 2,155,860 2,595,155

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of British Pound Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

39,223 47,740 40,315 40,479 33,616 51,519 37,192 28,776 26,450 36,892

43,878 44,935 50,106 38,370 31,282 59,705 45,329 30,555 31,023 33,066

35,554 36,805 52,349 43,742 38,712 66,913 51,645 36,532 30,474 27,042

44,725 23,161 54,954 37,701 41,256 64,937 41,488 34,713 39,952 25,274

46,577 26,571 52,573 40,956 47,303 58,744 51,965 39,836 46,178 36,171

41,801 28,402 61,461 48,890 55,511 60,414 43,009 48,310 47,355 50,118

37,633 22,662 55,080 60,592 39,156 65,206 30,766 33,273 38,138 41,702

34,988 34,932 50,862 50,829 49,645 54,373 36,320 40,935 31,320 46,979

40,751 38,900 53,868 41,801 63,756 50,949 42,781 50,083 31,513 40,183

42,648 34,485 51,934 35,752 53,458 65,038 30,978 38,579 29,599 55,884

49,684 43,634 62,128 56,825 54,004 49,468 34,627 40,461 40,901 66,660

65,834 49,804 47,652 44,667 53,578 34,191 32,913 35,424 36,671 70,197

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

79

CURRENCIES

Canadian Dollars per U.S. Dollar Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1.3175 1.4120 1.3664 1.3484 1.4407 1.5189 1.4480 1.5021 1.5996 1.5395

1.3419 1.3995 1.3753 1.3555 1.4335 1.4971 1.4499 1.5227 1.5961 1.5119

1.3645 1.4065 1.3651 1.3727 1.4159 1.5174 1.4600 1.5579 1.5872 1.4752

1.3821 1.3749 1.3591 1.3947 1.4294 1.4868 1.4681 1.5581 1.5814 1.4567

1.3805 1.3607 1.3690 1.3793 1.4449 1.4614 1.4944 1.5403 1.5491 1.3819

1.3831 1.3772 1.3649 1.3844 1.4647 1.4691 1.4762 1.5238 1.5312 1.3520

1.3818 1.3609 1.3687 1.3769 1.4865 1.4877 1.4778 1.5294 1.5447 1.3801

1.3777 1.3550 1.3717 1.3894 1.5344 1.4921 1.4819 1.5384 1.5685 1.3948

1.3536 1.3495 1.3691 1.3865 1.5212 1.4772 1.4841 1.5665 1.5747 1.3638

1.3495 1.3449 1.3501 1.3863 1.5430 1.4767 1.5119 1.5708 1.5783 1.3226

1.3649 1.3525 1.3382 1.4127 1.5400 1.4671 1.5425 1.5934 1.5715 1.3128

1.3896 1.3685 1.3621 1.4272 1.5429 1.4713 1.5219 1.5793 1.5588 1.3121

1.3656 1.3718 1.3633 1.3845 1.4831 1.4852 1.4847 1.5486 1.5701 1.4003

Source: FOREX

Volume of Trading of Canadian Dollar Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

114,908 126,828 124,219 189,879 172,027 170,975 184,171 194,738 222,878 270,811

124,120 138,251 124,654 127,310 202,027 173,034 182,462 201,075 191,493 256,672

188,569 188,703 186,534 295,170 277,089 279,945 280,898 317,860 338,303 475,496

108,066 91,458 129,105 151,141 142,616 203,427 155,044 188,203 249,581 289,192

97,771 119,567 149,127 230,733 143,170 164,352 162,780 228,359 222,156 353,096

237,920 148,314 179,150 276,764 291,488 309,740 295,480 350,967 358,727 494,150

103,086 128,002 123,604 146,870 153,415 216,066 165,972 221,558 278,828 331,345

172,988 131,981 138,816 187,149 214,046 186,031 188,459 235,883 204,168 266,189

191,563 261,402 194,077 262,260 288,749 263,380 241,197 265,096 279,134 393,329

105,815 213,286 179,652 268,428 148,714 167,703 161,625 214,085 245,261 285,682

128,899 97,156 194,001 130,528 148,906 165,587 150,275 218,108 207,379 294,352

209,631 174,511 263,924 322,879 209,962 277,211 265,763 287,335 324,380 509,304

1,783,336 1,819,459 1,986,863 2,589,111 2,392,209 2,577,451 2,434,126 2,923,267 3,122,288 4,219,618

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of Canadian Dollar Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

28,277 55,863 31,028 55,949 63,300 50,061 66,374 54,369 68,927 82,870

38,157 44,677 37,674 56,600 67,862 71,819 64,528 58,660 72,132 105,051

48,411 33,706 38,551 72,803 61,528 63,782 58,621 72,051 70,484 107,507

42,730 45,394 41,411 82,732 58,938 73,773 60,389 64,550 68,120 97,515

44,363 47,832 46,470 73,747 64,859 84,885 76,444 65,407 81,574 96,689

42,845 36,677 37,141 57,243 74,027 71,923 69,033 62,489 86,250 85,665

35,370 44,930 37,522 43,937 71,313 65,877 67,198 54,742 74,347 68,741

39,582 42,629 42,063 59,112 75,193 71,458 65,370 54,580 63,116 63,518

49,312 49,526 44,014 56,387 60,863 61,994 65,779 73,647 63,605 70,261

40,706 43,032 68,674 59,265 51,967 58,749 81,995 71,610 57,031 79,754

42,353 40,047 82,817 75,027 61,318 59,941 77,746 82,083 60,648 82,366

59,763 40,592 72,586 74,221 50,271 51,967 65,452 67,578 71,852 74,271

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

80

CURRENCIES

Euro1 per U.S. Dollar Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1.1138 1.2380 1.2629 1.2088 1.0859 1.1584 1.0135 .9380 .8828 1.0636

1.1183 1.2536 1.2543 1.1592 1.0896 1.1202 .9842 .9208 .8706 1.0778

1.1412 1.3030 1.2544 1.1460 1.0854 1.0882 .9644 .9085 .8767 1.0795

1.1390 1.3292 1.2430 1.1396 1.0931 1.0700 .9450 .8931 .8866 1.0875

1.1636 1.3085 1.2278 1.1441 1.1099 1.0622 .9080 .8747 .9179 1.1580

1.1819 1.3196 1.2386 1.1309 1.1015 1.0385 .9496 .8536 .9567 1.1670

1.2167 1.3340 1.2554 1.0999 1.0991 1.0366 .9394 .8616 .9924 1.1374

1.2182 1.2939 1.2686 1.0694 1.1041 1.0603 .9042 .9023 .9781 1.1154

1.2314 1.2782 1.2587 1.0976 1.1566 1.0501 .8706 .9123 .9810 1.1260

1.2559 1.2987 1.2532 1.1190 1.2015 1.0705 .8533 .9062 .9818 1.1701

1.2357 1.2947 1.2695 1.1418 1.1680 1.0327 .8554 .8882 1.0020 1.1714

1.2129 1.2757 1.2416 1.1114 1.1746 1.0117 .9004 .8913 1.0210 1.2314

1.1857 1.2939 1.2523 1.1306 1.1224 1.0666 .9240 .8959 .9456 1.1321

Oct.

Nov.

D e c.

1

Data through December 1998 are theoretical based on DEM * 1.95583.

Volume of Trading of Euro FX Futures in Chicago Year

1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

---68,961 404,903 453,510 567,785 610,612

---96,573 334,967 373,233 582,292 749,195

---288,397 452,393 556,379 783,331 977,919

---157,601 289,398 368,320 650,169 785,534

May

Source: FOREX

In Contracts

June

July

3 0 183,729 276,410 318,313 382,162 407,698 585,288 611,387 917,661 902,748 1,103,826

0 259,735 234,921 425,070 821,580 866,150

Aug.

Sept.

0 0 0 258,072 422,761 302,526 303,320 486,283 287,741 494,717 533,909 533,609 525,538 675,268 525,230 824,466 1,112,408 1,069,590

Total

0 3 36 303,117 382,954 3,000,836 297,038 466,719 4,258,158 545,042 781,066 6,057,841 426,665 625,372 7,712,278 958,905 1,232,569 11,193,922

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of Euro FX Futures in Chicago Year

1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

---8,261 63,124 89,049 100,258 105,762

---30,546 68,413 91,130 108,955 106,905

---37,837 61,180 90,127 113,075 100,759

---37,881 59,110 78,762 112,413 85,604

1 46,446 67,644 89,390 136,660 108,619

1 50,615 63,361 94,160 135,364 111,651

1 46,777 57,723 84,637 112,462 96,338

1 55,858 69,561 104,437 101,992 98,671

1 49,352 77,617 112,797 99,365 95,553

0 57,380 73,314 108,445 85,462 102,568

Nov.

D e c.

7 7 58,846 65,346 79,577 92,730 108,999 104,323 103,156 108,602 113,601 131,560

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

81

CURRENCIES

Japanese Yen per U.S. Dollar Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Year

111.33 99.67 105.66 117.93 129.39 113.23 105.29 116.83 132.77 118.76

106.22 98.14 105.57 122.90 125.71 116.62 109.49 116.17 133.50 119.39

105.00 90.40 105.90 122.72 129.04 119.49 106.34 121.44 131.11 118.76

103.36 83.59 107.23 125.66 131.79 119.73 105.65 123.64 130.75 119.81

103.76 84.96 106.42 118.93 135.01 121.88 108.19 121.66 126.29 117.37

102.37 84.55 108.91 114.25 140.40 120.69 106.15 122.38 123.25 118.31

98.65 87.22 109.21 115.30 140.75 119.38 108.03 124.45 118.02 118.64

99.88 94.72 107.84 117.90 144.51 113.16 108.06 121.29 119.04 118.61

98.78 100.49 109.87 120.85 134.45 107.00 106.79 118.64 120.88 114.94

98.36 100.76 112.40 121.06 120.49 105.94 108.39 121.35 123.92 109.51

98.08 101.93 112.35 125.35 120.41 104.62 108.94 122.39 121.50 109.17

100.08 101.84 114.01 129.62 117.01 102.64 112.18 127.72 121.83 107.70

102.16 94.02 108.78 121.04 130.75 113.70 107.79 121.50 125.24 115.91

Average.

Source: FOREX

Volume of Trading of Japanese Yen Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

585,097 604,876 431,105 411,601 557,789 418,110 433,899 258,575 415,702 423,901

590,993 499,587 412,270 457,171 500,854 524,625 299,111 223,715 417,497 388,298

620,463 839,134 473,070 564,776 636,600 672,674 569,748 598,374 630,832 634,434

444,750 450,204 415,810 402,703 480,331 400,434 250,482 295,424 391,668 453,373

May

In Contracts

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

504,329 748,201 451,565 465,660 438,466 566,723 604,616 564,155 453,351 1,017,003 473,385 687,098 265,785 427,445 351,158 459,419 318,478 461,712 495,643 621,041

596,535 305,499 461,813 424,281 515,927 476,937 248,759 307,350 301,232 518,764

570,601 499,051 328,638 528,237 590,808 422,277 285,889 369,357 234,168 426,979

537,083 662,417 549,694 611,843 895,764 679,114 367,085 518,622 499,210 730,977

486,731 363,440 343,145 529,557 551,920 310,526 213,903 286,191 349,451 396,636

492,217 407,842 388,033 425,817 386,306 390,508 222,692 350,088 255,356 353,359

554,317 370,287 482,170 644,814 467,196 469,118 405,187 595,855 535,807 641,804

6,731,317 5,919,562 5,290,937 6,169,571 7,053,849 5,924,806 3,989,985 4,614,128 4,811,113 6,085,209

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of Japanese Yen Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

101,792 86,569 80,645 73,391 95,338 78,767 93,785 89,680 129,917 116,574

94,470 86,852 78,915 82,542 101,448 81,859 125,318 90,652 123,735 107,929

73,286 77,649 71,643 78,466 97,183 96,271 95,034 109,536 95,535 101,809

57,281 63,379 76,655 81,117 97,389 87,829 75,631 96,244 72,358 81,168

65,835 67,644 73,832 85,984 106,139 118,819 80,840 89,377 88,905 107,090

70,759 56,285 85,398 73,322 132,732 120,681 68,359 82,838 88,324 102,507

73,734 48,680 77,941 62,488 113,084 118,329 60,966 93,430 77,168 107,450

72,798 63,463 73,535 82,369 145,241 136,826 79,195 107,588 71,683 125,884

63,419 73,830 86,723 96,468 108,808 115,884 64,845 102,710 79,980 149,978

63,091 67,336 76,620 90,080 88,991 82,657 64,648 75,096 80,104 152,368

80,053 73,335 72,130 130,606 89,108 87,869 68,719 97,368 74,584 138,799

92,834 70,268 67,301 121,001 79,262 87,595 100,713 137,756 99,643 147,255

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

82

CURRENCIES

Sw iss Francs per U.S. Dollar Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Year

1.4707 1.2865 1.1810 1.3925 1.4756 1.3856 1.5888 1.6296 1.6710 1.3748

1.4558 1.2694 1.1942 1.4543 1.4616 1.4273 1.6326 1.6681 1.6972 1.3609

1.4295 1.1691 1.1945 1.4622 1.4896 1.4656 1.6624 1.6903 1.6741 1.3617

1.4363 1.1362 1.2194 1.4614 1.5050 1.4972 1.6638 1.7115 1.6527 1.3770

1.4120 1.1678 1.2546 1.4298 1.4782 1.5078 1.7151 1.7525 1.5868 1.3091

1.3723 1.1564 1.2574 1.4419 1.4951 1.5359 1.6422 1.7842 1.5389 1.3196

1.3256 1.1542 1.2324 1.4810 1.5126 1.5472 1.6503 1.7564 1.4731 1.3597

1.3176 1.1958 1.2022 1.5123 1.4927 1.5092 1.7146 1.6791 1.4968 1.3813

1.2895 1.1868 1.2333 1.4702 1.4002 1.5251 1.7564 1.6338 1.4929 1.3741

1.2636 1.1444 1.2583 1.4507 1.3376 1.4891 1.7727 1.6337 1.4922 1.3234

1.2974 1.1440 1.2757 1.4057 1.3856 1.5541 1.7772 1.6501 1.4647 1.3314

1.3275 1.1624 1.3296 1.4393 1.3600 1.5827 1.6778 1.6569 1.4360 1.2627

1.3665 1.1811 1.2361 1.4501 1.4495 1.5022 1.6878 1.6872 1.5564 1.3446

Average.

Source: FOREX

Volume of Trading of Sw iss Franc Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

467,930 441,183 321,668 360,482 308,046 294,598 326,213 193,487 195,322 236,109

498,186 439,121 301,971 316,346 256,815 262,128 313,127 203,006 183,156 289,893

534,057 579,510 317,936 436,807 448,008 416,987 385,297 280,280 281,307 412,709

394,814 321,736 314,692 343,582 318,515 284,021 252,122 168,700 211,505 256,871

350,355 402,216 329,676 432,533 319,210 323,252 247,653 191,601 208,078 277,835

521,986 374,352 349,509 389,458 367,417 384,664 301,236 325,961 297,010 384,893

423,700 249,013 345,546 316,105 310,745 351,105 214,594 257,565 187,191 314,997

414,561 353,817 247,502 305,189 360,394 311,835 216,576 229,380 218,533 252,056

492,822 417,160 393,374 394,103 438,052 482,425 344,515 261,837 323,067 349,889

397,617 328,248 333,207 429,683 300,715 407,570 176,202 227,481 237,559 237,163

426,432 311,200 339,849 220,959 251,266 287,172 185,388 238,232 207,825 283,751

368,155 289,039 451,999 344,886 290,785 304,493 267,322 297,281 271,584 300,492

5,290,615 4,506,595 4,046,929 4,290,133 3,969,968 4,110,250 3,230,245 2,874,811 2,822,137 3,596,658

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of Sw iss Franc Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

41,914 39,726 42,280 51,652 57,740 39,434 55,660 50,121 35,116 56,268

46,280 44,364 42,902 54,114 46,160 58,279 69,983 44,405 44,388 57,099

44,134 39,358 36,924 51,121 67,722 66,250 57,703 46,470 45,434 50,008

37,450 30,270 39,233 45,725 67,303 66,530 41,732 41,641 38,248 37,451

42,071 30,586 46,810 48,651 63,477 73,322 46,159 53,265 55,039 53,642

49,162 26,766 44,848 42,530 77,564 75,322 41,727 60,943 54,573 49,688

45,223 23,121 38,300 55,279 85,984 66,603 36,894 53,687 42,060 41,489

43,746 30,267 40,298 58,098 70,569 71,060 50,595 60,986 38,102 50,677

44,495 34,228 43,695 49,296 81,465 60,214 57,439 61,689 37,675 52,641

39,587 34,889 47,613 43,585 57,413 65,020 47,313 48,962 35,796 54,259

51,539 38,033 53,581 51,822 44,810 67,936 48,870 53,445 48,951 62,584

55,424 44,741 59,405 48,560 43,436 64,507 55,982 46,771 50,107 60,475

Source: I nternational Monetary Market (I MM), division of the Chicago Mercantile Exchange (CME)

83

CURRENCIES United States Merchandise Trade Balance Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

Jan.

F eb.

Mar.

Apr.

In Millions of Dollars

May

June

-11,999 -13,573 -11,477 -13,405 -14,079 -15,746 -14,221 -14,487 -16,051 -16,010 -15,623 -12,911 -14,574 -15,897 -16,826 -18,167 -16,780 -14,896 -16,505 -16,982 -17,187 -18,331 -20,615 -20,860 -22,236 -23,409 -25,233 -25,741 -25,851 -27,753 -34,116 -34,708 -37,215 -36,934 -36,910 -39,161 -34,648 -38,815 -37,270 -34,690 -33,467 -36,412 -36,663 -39,773 -41,698 -44,859 -43,654 -47,507 -46,359 -46,654 2

Not seasonally adjusted.

Preliminary.

July

-14,009 -15,831 -15,862 -15,887 -14,839 -17,757 -15,610 -15,864 -20,404 -21,066 -30,381 -31,227 -37,827 -38,091 -35,760 -35,633 -40,830 -39,304 -45,076 -45,032

Aug.

Sept.

Oct.

-14,232 -14,566 -14,926 -13,415 -13,243 -13,108 -16,759 -17,976 -15,320 -16,909 -16,524 -16,270 -22,291 -21,611 -20,990 -30,518 -30,573 -31,576 -36,839 -39,682 -40,205 -34,458 -35,660 -35,034 -42,070 -41,938 -40,647 -44,721 -46,574 -47,113

1996 1997 1998 1999 2000 2001 2002 2003 1

U.S. Markets U.S. Competitors U.S. Markets U.S. Competitors U.S. Markets U.S. Competitors U.S. Markets U.S. Competitors U.S. Markets U.S. Competitors U.S. Markets U.S. Competitors U.S. Markets U.S. Competitors U.S. Markets U.S. Competitors

Nov.

Total

-166,192 -173,729 -191,270 -196,652 -246,853 -345,434 -452,423 -427,215 -482,872 -546,713

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

Index of Real Trade-Weighted Dollar Exchange Rates for Total Agriculture2 Year

D e c.

-15,292 -13,272 -12,324 -12,600 -15,176 -17,695 -16,605 -16,962 -21,539 -21,059 -32,401 -32,255 -38,955 -39,360 -34,095 -31,534 -44,147 -47,447 -43,605

2000 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

81.6 66.1 84.8 70.8 95.3 82.7 92.1 78.6 95.0 88.5 103.0 99.2 109.7 106.8 103.6 90.3

81.0 65.6 85.6 73.3 94.5 81.7 94.1 81.8 96.7 91.6 104.8 102.7 111.1 109.9 104.3 89.5

81.3 66.1 86.6 74.3 93.8 81.8 94.9 84.0 97.2 94.2 107.0 104.9 110.1 109.3 103.8 89.7

81.4 67.2 86.9 74.9 93.4 81.1 94.6 85.2 98.2 96.7 107.4 106.9 109.7 109.2 102.3 87.6

82.1 68.0 84.8 73.6 95.3 81.1 95.8 86.2 100.3 101.6 107.8 109.1 107.6 105.6 99.0 80.9

82.4 67.7 84.7 74.2 96.9 82.7 95.8 87.7 99.2 97.1 109.0 112.3 106.3 101.0 99.0 80.2

81.8 66.7 86.3 76.6 96.7 82.7 95.5 87.6 99.4 98.0 108.9 110.8 104.7 98.0 100.4 82.7

81.3 66.3 87.6 78.8 98.7 83.4 94.5 86.5 100.4 102.2 107.0 105.7 105.9 100.2 101.2 84.9

82.1 67.4 87.5 77.5 96.6 79.8 94.5 87.4 102.1 107.0 107.5 105.8 107.0 100.2 99.7 83.4

83.0 68.0 88.1 76.9 91.6 76.1 93.5 86.0 104.0 110.3 106.6 106.1 107.3 100.3 97.3 79.5

82.7 67.5 90.5 77.1 92.5 78.0 93.8 88.5 104.2 110.0 107.9 106.6 106.1 97.9 96.7 78.8

83.4 68.8 94.1 80.3 91.0 77.1 93.9 89.4 103.2 103.4 108.6 105.2 104.9 94.7 95.7 76.8

1

Preliminary. 2 Real indexes adjust nominal exchange rates for differences in rates of inflation, to avoid the distortion caused by high-inflation countries. A higher value means the dollar has appreciated. Federal Reserve Board I ndex of trade-weighted value of the U.S. dollar against 10 major currencies. Weights are based on relative importance in world financial markets. Source: Economic Research Service, U.S. Department of Agriculture

United States Balance on Current Account1 Year

In Millions of Dollars

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Annual

1994 1995 1996 1997 1998 1999 2000 2001 2002 20032

-16,427 -20,975 -15,904 -23,367 -31,519 -51,124 -84,780 -104,004 -106,728 -138,707

-26,893 -30,122 -28,569 -26,380 -49,176 -70,268 -97,915 -99,964 -122,827 -139,394

-38,521 -33,230 -44,161 -40,586 -67,690 -89,564 -116,015 -103,636 -122,724 -135,041

-36,403 -21,496 -29,187 -38,039 -55,442 -81,900 -111,631 -86,140 -128,586

-118,244 -105,823 -117,821 -128,372 -203,827 -292,856 -410,341 -393,744 -480,865 -550,856

1

2

Not seasonally adjusted.

Preliminary.

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

Merch an d ise Trad e an d C u rren t Acco u n t B alan ces

In Billions of Dollars

----------------------------- Merch an d ise Trad e B alan ce ----------------------------Year

1994 1995 1996 1997 1998 1999 2000 2001 20021 20032 1

E stimate.

84

2

------------------------------ C u rren t Acco u n t B alan ce ------------------------------

Canada

Germany

Japan

Switzerland

U.K.

Canada

Germany

Japan

Switzerland

U.K.

14.8 25.8 31.1 18.6 15.3 25.9 39.9 39.8 33.9 36.6

50.9 65.1 70.6 71.3 77.8 70.9 58.6 89.5 104.0 109.3

144.1 132.1 83.7 101.6 122.5 123.2 116.6 70.3 88.7 112.2

1.6 .9 .9 -.3 -1.6 -.2 -2.5 -2.1 1.4 1.8

-17.0 -19.0 -21.4 -20.2 -36.2 -44.6 -45.4 -47.6 -50.2 -50.0

-13.0 -4.4 3.4 -8.2 -8.3 1.2 18.1 18.9 13.1 14.6

-24.3 -20.7 -7.9 -3.1 -6.7 -19.1 -20.4 2.1 26.8 30.2

130.3 111.2 65.8 94.3 121.0 107.0 116.8 91.1 124.1 159.9

17.5 21.4 21.9 25.5 26.0 28.4 31.0 24.6 26.3 28.1

-10.3 -14.3 -13.5 -2.9 -8.0 -31.0 -25.6 -25.1 -29.1 -32.4

P r o j e c t io n .

S ource: Org anizat ion for E conomic C ooperat ion and Development (OE C D)

CURRENCIES

85

Diamonds The diamond, which is the mineral form of carbon, is the hardest, strongest natural material known on earth. The word diamond is derived from adamas, the ancient Greek term meaning “invincible.” Diamonds form deep within the Earth and are typically billions of years old. Diamonds have also have been found in and near meteorites and their craters. Diamonds are considered precious gemstones but lower grade diamonds are used for industrial applications such as drilling, cutting, grinding and polishing. The South African De Beers cartel controls the largest portion of the world’s natural diamond production. Supply – World production of natural gem diamonds in 2001, the latest reporting year, rose sharply to 68.500

World Production of Natural Gem Diamonds Year

Angola

Australia

Botswana

Brazil

Central African Republic

1997 1998 1999 2000 20011 20022

1,110 2,400 3,360 3,914 4,653 5,400

18,100 18,400 13,400 12,000 10,700 15,100

15,111 14,800 17,200 18,500 19,800 21,300

100 100 900 1,000 1,000 700

400 330 311 346 360 375

1

2

Preliminary.

3

Estimate.

million carats from 62.0 million in 2000. The world’s largest producers of natural gem diamonds in 2001 were Botswana (representing 29% of world production), Russia at 17%, and Australia at 16%. World production of industrial diamonds fell to 48.0 million carats in 2001 (the latest reporting year) from 55.7 million in 2000. The world’s largest producers of industrial diamonds are Australia (27%), Russia (24%), Congo (19%), South Africa (14%), and Botswana (11%). Trade – The US relied on net imports for 89% of its consumption of natural diamonds, which totaled 1.8 million carats in 2002.

In Thousands of Carats China

Congo3

Ghana

Namibia

Russia

Sierra Leone

South Africa

World Total

230 230 230 230 235 235

3,300 5,080 4,120 3,500 9,100 9,100

664 658 546 792 936 770

1,350 1,350 1,630 1,450 1,487 1,350

11,200 11,500 11,500 11,600 11,600 11,500

300 200 450 450 450 450

4,500 4,280 4,010 4,320 4,470 4,350

57,200 60,400 61,100 61,600 69,500 76,500

Source: U.S. Geological Survey (USGS)

Formerly Zaire.

World Production of Natural Industrial Diamonds4 Year

Angola

Australia

Botswana

Brazil

Central African Republic

124 364 373 435 517 600

22,100 22,500 16,381 14,700 13,100 18,500

5,000 5,000 5,730 6,160 6,600 7,100

-------------------

100 200 120 115 120 125

1997 1998 1999 2000 20011 20022 1

2

Preliminary.

3

Estimate.

Formerly Zaire.

Year

Belarus

China

1997 1998 1999 2000 20011 20022

25,000 25,000 25,000 25,000 25,000 25,000

16,000 16,500 16,500 16,800 17,000 17,000

5,000 5,000 3,000 ----------

1

2

Preliminary.

China

Congo3

Ghana

Russia

Sierra Leone

South Africa

Venezuela

World Total

900 900 920 920 950 955

18,677 21,000 16,000 14,200 9,100 9,100

166 165 136 198 234 193

11,200 11,600 11,500 11,600 11,600 11,500

100 50 150 150 150 150

5,540 6,420 6,010 6,470 6,700 6,530

85 17 36 80 38 40

64,500 68,700 57,800 55,500 49,500 55,200

Source: U.S. Geological Survey (USGS)

World Production of Synthetic Diamonds Czech Republic

In Thousands of Carats

In Thousands of Carats

France

Greece

Ireland

Ja p a n

Russia

South Africa

Sweden

Ukraine

United States

World Total

3,000 3,000 3,000 3,000 3,000 3,000

750 750 750 750 -------

60,000 60,000 60,000 60,000 60,000 60,000

32,000 32,000 32,000 33,000 33,000 34,000

80,000 80,000 80,000 80,000 80,000 80,000

60,000 60,000 ------60,000 60,000

25,000 25,000 25,000 20,000 20,000 20,000

8,000 8,000 8,000 8,000 8,000 8,000

125,000 140,000 161,000 182,000 202,000 222,000

450,000 463,000 420,000 429,000 508,000 529,000

Source: U.S. Geological Survey (USGS)

Estimate.

Salient Statistics of Industrial Diamonds in the United States

In Millions of Carats

Bort, Grit & Pow der & Dust

Year

1997 1998 1999 2000 20011 20022 1

---------------------------------------- Natural and Synthetic ---------------------------------------- ---------------------------------- Stones (Natural) ---------------------------------Net Import Price Price ----- Production ----Value of Reliance Value of Apparent Imports Apparent Imports Secon- Imports Imports In ManuManu% of Con- $ Per Gov't Confor Con- Exports & factured Gov't Confactured $ Per dary Pro- for Con- Exports & Diamond Secondary sumption Reexports Products Sales sumption Carat duction sumption Reexports Sales sumption Carat sumption

125.0 140.0 208.0 248.0 308.0 310.0

Preliminary.

86

2

10.0 10.0 10.0 10.0 10.0 8.4

Estimate.

254.0 221.0 208.0 291.0 281.0 195.0 3

126.0 104.0 98.0 98.0 88.0 81.0

Less than 1/2 unit.

-------------------

.7 3 3

----------

264.0 267.0 328.0 451.0 511.0 432.0

.43 .44 .44 .39 .31 .34

Source: U.S. Geological Survey (USGS)

.5 .5 .4 3 3 3

2.8 4.7 3.1 2.5 2.5 2.2

.6 .8 .7 1.6 1.0 1.0

1.2 .8 .6 1.0 .5 .4

3.9 5.2 3.4 2.2 2.2 1.8

7.69 3.92 4.61 5.31 3.54 5.43

87 90 88 86 83 89

Eggs Eggs are a low-priced protein source that are consumed worldwide. Each commercial chicken lays between 265-280 eggs per year. In the United States, the grade and size of eggs are regulated under the federal Egg Products Inspection Act (1970). The grades of eggs are AA, A, and B, and must have sound, whole shells and must be clean. The difference among the grades of eggs is internal and mostly reflects the freshness of the egg. Table eggs vary in color and can be determined by the color of the chicken’s earlobe—white earlobes lay white eggs, reddish-brown earlobes lay brown eggs, etc. In the US, egg size is determined by the weight of a dozen eggs, not individual eggs, and range from Peewee to Jumbo. Store-bought eggs in the shell stay fresh for 3 to 5 weeks in a home refrigerator, according to the USDA. Eggs are primarily used as a source of food, although eggs are also widely used for medical purposes. Fertile eggs, as a source of purified proteins, are used to produce many vaccines. Flu vaccines are produced by growing single strains of the flu virus in eggs, which are then extracted to make the vaccine. Eggs are also used in biotechnology to create new drugs. The hen’s genetic make-up can be altered so the whites of the eggs are rich in tailored proteins that will form the basis of medicines to fight cancer and other diseases. The US biotech company Viragen and the Roslin Institute in Edinburgh have produced eggs with 100 mg or more of the easily-extracted proteins used in new drugs to treat various illnesses including ovarian and breast cancers. Prices – The average wholesale price of shell eggs

Wo rld P ro d u ctio n o f E g g s

1

In Mi lli ons of Eggs

Brazil

Chi na

France

Germany

Italy

Japan

Mexi co

Russia

Spain

Ukrai ne

Uni ted Ki ngdom

Uni ted States

World Total3

12,700 13,460 16,065 15,932 12,596 13,636 14,768 15,654 16,435

235,960 281,010 301,860 253,680 282,350 307,760 365,300 377,420 389,000

15,355 16,370 16,911 16,500 16,084 16,900 17,550 17,500 17,450

13,678 13,960 13,838 13,922 14,025 14,164 14,341 14,350 14,350

11,502 11,599 12,017 11,923 12,298 12,433 12,660 12,400 12,400

43,252 43,047 42,167 42,786 42,588 42,117 41,975 41,800 42,000

21,471 25,896 25,760 26,045 28,170 29,898 32,428 33,310 33,640

40,300 37,400 33,720 31,500 31,900 33,000 33,000 33,500 34,200

8,454 9,670 9,983 8,952 9,450 9,084 9,216 8,900 9,000

11,766 10,145 9,404 8,763 8,242 8,269 8,740 8,000 7,700

10,645 10,620 10,644 10,668 10,752 10,812 10,293 10,000 9,800

72,072 74,136 74,592 76,536 77,676 79,896 82,944 84,420 85,020

593,734 643,045 670,211 631,846 666,748 695,281 762,077 778,995 795,711

Year

1993 1994 1995 1996 1997 1998 1999 2000 1 20012

(large) recovered to 79.66 cents per dozen in 2003 from the 15-year low of 57.17 cents seen in 2002. Supply – US egg production in 2003 was on track to fall 0.4% to 86.345 billion eggs from the record high of 86.659 billion in 2002. World production of eggs in 2002, the last full reporting year, rose +2.1% to a record high of 795.711 billion eggs. China produced 49% of the world’s eggs in 2002, with production in 2003 rising +3.1% from 2002 to 389.000 billion eggs, and more than tripling since 1986. US egg production, which accounts for 10.7% of world production, has risen by about 23% over that same time frame. Russia is the world’s third largest producer of eggs with 4.3% of world production. Mexico, the world’s fourth largest producer of eggs, is an emerging force in the egg market with 4.2% of world production and has nearly doubled its production in the past 15 years. Demand – US consumption of eggs in 2003 fell slightly by 0.4% to 6.160 billion dozen eggs from the record high of 6.184 billion in 2002. The forecast is for consumption to rise to a new record high of 6.205 billion in 2004. US consumption of eggs has increased due to the focus on a lowcarbohydrate diet since eggs are high in protein. Trade – US imports of eggs fell sharply by 42% to 8.0 million dozen eggs in 2003, returning to more normal levels after the 14-year high spike of 13.8 million seen in 2002. US exports of eggs in 2003 fell –7.9% to 168.0 million dozen from 182.5 million in 2002. US exports represent only about 2% of overall US production, showing that most US-produced eggs are consumed domestically.

P reliminary.

2

F orecast.

3

Selected countries.

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

Salient Statistics of Eggs in the United States

Year

1995 1996 1997 1998 1999 2000 2001 2002 1 20032

-- Hens & Pullets -Average Number On During Farm Year D e c. 1 3 ----- Thousands -----

298,753 303,754 312,137 321,718 329,320 332,410 338,628 339,827 339,989

293,854 297,958 304,230 312,035 322,354 327,985 335,012 339,024 337,262

Rate of Lay Per Layer During Year4 (Number)

253 256 255 255 257 257 256 257 259

--------- Eggs --------Price in Cents P er Total Dozen Produced ------- Millions -------

74,591 76,281 77,532 79,754 82,715 84,386 85,745 87,179 87,196

62.4 74.9 70.3 66.8 62.2 61.8 62.2 59.0

----- Consumption ----Value of Production5 Million Dollars

3,880 4,762 4,540 4,439 4,287 4,345 4,446 4,263

Total Egg ProUsed for Per Capita duction Imports6 Exports6 Hatching Total E g g s6 ----------------------------- Million Doz en ----------------------------(Number)

6,216 6,367 6,489 6,671 6,928 7,050 7,172 7,240 7,260

4.1 5.4 6.9 5.8 7.4 8.4 8.9 13.8 8.0

208.9 253.1 227.8 218.8 161.9 171.1 190.0 182.5 168.0

847.2 863.8 894.7 921.8 941.7 940.2 953.0 959.8 975.0

5,167 5,242 5,359 5,522 5,817 5,927 6,019 6,086 6,105

235.7 234.6 235.8 240.1 250.0 251.8 252.6 252.6 251.0

1

Preliminary. 2 Forecast. 3 All layers of laying age. 4 Number of eggs produced during the year divided by the average number of all layers of laying age on hand during the year. 5 Value of sales plus value of eggs consumed in households of producers. 6 Shell-egg equivalent of eggs and egg products. Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

87

EGGS

Cents Per Dozen ----- Fresh Firsts, New York (Jan. 1910 - Dec. 1926) Fresh Firsts, Chicago (Jan. 1927 - June 1943) US Standards, Chicago (July 1943 - Dec. 1947) Large, Chicago (Jan. 1948 - date)

Average Price Received by Farmers for All Eggs in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031

In Cents Per Dozen

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

62.3 61.1 78.2 76.5 74.3 72.5 57.8 67.2 62.3 63.6

64.0 60.7 75.7 76.1 64.9 66.1 67.8 68.2 55.9 59.3

65.7 60.4 79.1 72.3 69.9 68.6 56.9 69.1 68.5 68.7

61.3 60.8 75.8 66.0 63.7 60.3 64.7 65.0 52.2 69.0

58.7 55.5 69.3 64.2 54.9 54.9 52.0 55.2 50.5 58.7

57.7 57.3 70.7 59.4 59.6 56.2 61.8 55.0 62.1 78.8

58.4 60.9 69.8 65.6 58.2 58.8 56.5 54.0 60.8 72.6

60.3 62.9 73.7 63.1 65.0 59.7 66.4 56.6 66.4 81.5

60.8 66.4 75.8 69.6 63.3 57.5 59.2 55.5 57.1 78.3

57.7 66.3 73.5 65.9 66.3 52.0 66.8 59.9 56.0 84.1

61.7 75.7 82.0 80.8 72.8 64.1 72.0 64.1 70.7 105.0

62.0 79.0 87.9 78.7 75.5 60.3 80.7 59.0 62.8 86.8

60.9 63.9 76.0 69.9 65.7 60.9 63.6 60.7 60.4 75.5

Source: Economic Research Service, U.S. Department of Agriculture (NASS-USDA)

Average Wholesale Price of Shell Eggs (Large) Delivered, Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

62.07 58.55 85.25 79.77 75.20 72.34 54.97 68.52 60.43 69.57

64.89 58.24 80.00 75.18 64.92 62.13 59.65 64.45 52.00 65.39

68.28 60.22 86.12 77.25 74.68 67.85 52.93 69.00 68.00 71.05

58.34 59.87 78.88 68.55 63.64 52.74 61.71 66.12 47.23 68.83

55.12 52.50 69.77 64.40 51.91 51.35 42.59 50.61 43.73 59.10

55.05 56.84 73.00 61.02 61.86 47.86 55.18 49.81 56.40 68.76

58.75 68.10 74.73 74.66 65.00 58.40 52.80 52.83 53.02 72.39

60.63 65.93 80.59 66.07 68.76 59.30 64.39 55.46 57.16 88.26

59.21 71.10 83.80 74.26 67.76 52.86 58.08 50.21 53.20 86.21

55.93 71.34 79.13 68.39 71.45 48.38 66.45 57.41 54.43 92.07

61.50 83.93 93.68 89.87 75.85 59.26 74.26 62.50 74.00 113.16

62.88 86.35 94.60 82.68 75.27 56.38 84.90 58.05 66.38 101.09

60.22 66.08 81.63 73.51 68.03 57.40 60.66 58.75 57.17 79.66

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

88

In Cents Per Dozen

Jan.

EGGS Total Egg Production in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

In Millions of Eggs

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

6,186 6,369 6,398 6,577 6,766 6,979 7,157 7,226 7,264 7,390

5,598 5,714 5,954 5,909 6,109 6,281 6,648 6,524 6,581 6,665

6,320 6,448 6,495 6,625 6,869 7,052 7,234 7,336 7,417 7,424

6,073 6,177 6,243 6,355 6,603 6,784 7,013 7,099 7,105 7,187

6,189 6,251 6,340 6,519 6,665 6,941 7,104 7,240 7,297 7,327

5,992 6,010 6,169 6,292 6,456 6,742 6,801 6,992 7,126 7,105

6,205 6,145 6,440 6,457 6,720 6,903 7,061 7,195 7,347 7,403

6,272 6,146 6,447 6,500 6,694 6,971 7,104 7,221 7,356 7,367

6,125 5,990 6,235 6,366 6,480 6,860 6,854 7,044 7,147 7,112

6,377 6,260 6,495 6,664 6,791 7,131 7,130 7,347 7,412 7,439

6,265 6,232 6,409 6,572 6,723 7,016 7,027 7,191 7,226 7,326

6,516 6,523 6,696 6,841 7,047 7,279 7,287 7,420 7,451 7,520

74,121 74,265 76,321 77,677 79,923 82,939 84,420 85,835 86,729 87,265

Preliminary.

2

Estimate.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Per Capita Disappearance of Eggs4 in the United States

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

Total Consumption (Million Dozen)

46.1 45.0 44.0 44.5 59.0 60.5

44.0 43.0 43.1 42.1 59.3 60.5

43.8 43.9 42.7 43.4 59.7 61.1

46.0 46.0 45.0 45.0 62.1 63.2

179.7 177.9 174.9 175.0 240.1 244.9

3,825 3,864 3,834 3,893 3,894 3,993

1993 1994 1995 1996 1997 1998 1

Preliminary.

2

Estimate.

3

Forecast

In Number of Eggs

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

62.7 64.5 64.5 62.4 62.5 62.8

62.8 64.0 64.2 62.6 62.9 62.7

63.8 64.2 64.7 64.0 63.6 63.8

66.2 65.6 66.6 64.6 65.1 65.0

1999 2000 2001 2002 1 20032 20043

Total Consumption (Million Dozen) Total

255.7 258.2 252.7 255.5 254.1 254.4

4,070 4,124 6,077 6,184 6,160 6,205

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Egg-Feed Ratio1 in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

7.9 9.4 9.8 10.1 10.1 11.7 8.9 10.9 10.2 9.0

8.0 9.3 8.7 9.9 8.3 10.6 11.3 11.4 8.4 8.6

8.4 9.0 9.1 8.6 9.4 11.3 8.0 11.6 11.6 9.5

7.7 8.9 7.9 7.4 8.5 9.2 9.9 11.3 7.4 9.4

7.2 7.5 6.5 7.1 6.7 7.8 6.4 8.6 6.7 6.9

7.0 7.6 6.7 6.6 8.0 8.2 9.5 8.5 9.5 8.8

8.0 8.0 6.3 8.2 7.9 9.9 9.2 7.9 7.5 9.8

9.0 8.5 6.9 7.8 10.8 10.1 12.9 8.4 7.9 12.8

9.2 8.9 8.1 9.3 10.7 9.3 10.3 8.5 7.1 11.6

8.9 8.6 9.3 8.7 11.3 8.0 12.2 10.3 6.6 12.6

10.3 10.1 11.3 11.4 12.6 11.9 13.1 11.5 10.5 15.7

9.9 10.0 12.5 11.0 12.8 10.1 15.0 9.3 8.9 12.1

8.5 8.8 8.6 8.8 9.7 9.8 10.6 9.9 8.5 10.6

1

Pounds of laying feed equivalent in value to one dozen eggs. (ERS-USDA)

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture

Hens and Pullets of Laying Age (Layers) in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 1

In Thousands

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

290,413 300,331 299,261 305,011 311,593 322,137 328,307 332,107 339,423 340,752

289,625 298,202 298,320 303,449 312,111 322,382 328,767 335,449 338,465 341,019

290,416 297,689 298,348 304,276 314,322 323,161 330,876 336,131 337,478 337,647

290,979 296,290 298,029 303,997 313,833 322,162 330,807 337,472 337,376 337,234

289,125 294,697 295,123 302,766 309,945 320,783 327,597 336,755 336,131 334,285

288,398 290,806 293,740 300,692 309,235 320,211 325,012 333,522 335,547 333,233

287,454 289,018 294,044 299,007 309,049 320,672 324,843 332,274 335,236 331,560

288,484 286,519 296,612 298,844 308,747 318,944 326,240 332,148 335,717 332,034

292,116 289,595 296,911 300,138 309,706 321,349 325,212 333,417 336,561 332,181

294,576 290,889 298,433 305,664 312,807 323,365 327,219 336,573 337,923 331,913

295,719 294,486 299,910 307,146 316,840 327,135 329,092 337,549 338,350 334,355

298,509 298,293 303,754 312,137 321,718 329,320 332,410 338,625 339,827 339,989

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

89

EGGS Eggs Laid Per Hundred Layers in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Number of Eggs

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

2,199 2,130 2,141 2,161 2,169 2,165 2,178 2,165 2,143 2,168

1,987 1,919 1,996 1,943 1,950 1,946 2,016 1,943 1,947 1,959

2,246 2,173 2,178 2,176 2,187 2,185 2,186 2,178 2,198 2,181

2,160 2,092 2,105 2,093 2,117 2,110 2,130 2,106 2,110 2,123

2,204 2,137 2,153 2,156 2,153 2,166 2,177 2,160 2,173 2,180

2,142 2,075 2,099 2,093 2,088 2,104 2,093 2,100 2,125 2,122

2,222 2,137 2,180 2,155 2,175 2,158 2,169 2,166 2,190 2,214

2,230 2,135 2,172 2,165 2,165 2,177 2,181 2,170 2,188 2,202

2,152 2,065 2,094 2,096 2,082 2,128 2,101 2,103 2,119 2,127

2,227 2,140 2,171 2,172 2,157 2,192 2,173 2,180 2,192 2,218

2,180 2,108 2,124 2,122 2,109 2,138 2,125 2,130 2,139 2,166

2,176 2,183 2,199 2,193 2,190 2,214 2,193 2,188 2,189 2,223

2,177 2,108 2,134 2,127 2,129 2,140 2,144 2,132 2,143 2,157

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Egg-Type Chicks Hatched by Commercial Hatcheries in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousands

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

33,236 32,374 31,580 33,752 37,168 35,242 34,181 36,728 35,647 33,499

31,086 32,743 34,608 35,655 34,597 36,367 34,659 37,836 34,465 29,988

33,489 36,019 36,890 37,347 40,604 41,172 38,877 41,015 36,977 36,726

35,657 35,078 35,740 38,842 39,057 42,285 36,653 42,789 38,088 37,531

35,322 37,540 38,028 39,020 39,206 40,726 41,185 42,655 38,751 38,206

31,985 34,996 33,017 36,796 39,323 41,439 37,268 40,822 35,136 36,344

29,613 29,572 31,920 33,772 35,576 34,275 33,240 38,651 35,573 35,593

31,295 31,442 31,782 33,061 33,398 35,518 34,328 34,987 35,681 33,179

31,587 33,586 31,930 37,118 37,959 39,287 36,325 37,140 35,734 35,777

32,066 33,383 32,319 35,262 34,667 39,044 36,080 35,825 32,149 34,999

26,075 29,129 30,947 28,122 31,217 32,802 32,438 32,355 31,146 30,129

30,166 30,639 32,879 35,796 35,501 33,564 35,178 31,870 31,973 33,856

381,577 396,501 401,640 424,543 438,273 451,721 430,412 452,673 421,320 415,827

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Cold Storage Holdings of Froz en Eggs in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

13.7 19.5 13.8 10.2 9.7 11.0 10.1 15.0 13.7 13.5

14.8 19.5 15.6 11.0 12.0 11.0 17.6 16.9 13.1 15.3

15.8 18.3 16.2 11.5 12.3 10.8 14.8 15.5 13.9 17.1

15.6 18.5 12.4 8.5 10.4 9.2 14.0 14.6 11.7 17.0

16.3 17.3 11.5 8.5 9.2 9.4 12.8 15.9 10.2 15.7

15.2 18.1 11.4 8.2 12.9 9.7 13.5 15.8 11.1 17.7

15.4 22.9 11.7 8.3 10.2 11.3 14.1 14.4 12.7 18.0

19.0 20.6 13.5 8.9 11.8 11.1 14.4 16.7 12.9 18.6

19.7 18.0 15.0 11.1 9.0 8.8 14.9 17.8 13.2 18.0

17.8 16.2 14.9 10.8 8.2 9.5 14.4 17.7 13.2 16.6

20.0 14.4 12.6 10.9 9.0 9.0 16.6 15.5 13.1 16.9

19.1 12.5 10.4 10.3 9.3 8.5 15.4 13.9 11.2 14.9

Preliminary. 2 Converted on basis 39.5 pounds frozen eggs equals 1 case. Agriculture (NASS-USDA)

90

In Millions of Pounds2

Source: National Agricultural Statistics Service, U.S. Department of

Electric Power the utility transmission systems of Pennsylvania Electric Co. and the Potomac Electric Co. The contract is priced in dollars and cents per megawatt hours. Supply – US electricity production in 2002 was approximately 2.6 trillion kilowatt-hours, little changed from the 2001 level. The 2001-2002 levels were down from the 3.0-3.1 trillion kilowatt-hour range seen in the 1996-2000 period. The lower supply and demand for electricity in 2001 and 2002 was caused by the weaker US economy since there is a direct correlation between economic growth and electricity generation and usage. US electricity generation in 2001 required the use of 2.686 trillion cubic feet of natural gas, 806 million short tons of coal, and 126 million barrels of fuel oil. In terms of kilowatt-hours, coal is the most widely used source of electricity production, accounting for about 56% of US electricity production. The other fuels in order of electricity production share are nuclear (23%), natural gas (9%), hydro (9%), and fuel oil (3%). Alternative sources of fuel for electricity generation that are gaining favor include biomass, wind, and fuel cells. Demand – Residential use of electricity accounts for the largest single category of electricity demand with usage of 1.141 trillion kilowatt hours in 1999, followed by industrial (1.018 trillion kilowatt hours), commercial (971 billion kilowatt hours), public authorities other than street lighting (91 billion kilowatt hours), and street and highway lighting (16 billion kilowatt hours).

The modern electric utility industry began in the 1800s. In 1807, Humphry Davy constructed a practical battery and demonstrated both incandescent and arc light. In 1831, Michael Faraday built the first electric generator proving that rotary mechanical power could be converted into electric power. In 1879, Thomas Edison perfected a practical incandescent light bulb. The electric utility industry evolved from gas and electric carbon-arc commercial and street lighting systems. In 1882, in New York City, Thomas Edison’s Pearl Street electricity generating station established the industry by displaying the four key elements of a modern electric utility system: reliable central generation, efficient distribution, a successful end use, and a competitive price. Electricity is measured in units called watts and watthours. Electricity must be used shortly after it is generated and cannot be stored to any significant degree. That means the power utilities must match the level of electricity generation to the level of demand in order to avoid wasteful over-production. The power industry has been deregulated to some degree in the past decade and now major utility companies sell power back and forth across major national grids in order to meet supply and demand needs. The quick changes in the supply-demand situation means that the price of electricity can be volatile. Electricity futures trade at the New York Mercantile Exchange (NYMEX). The futures contract is a financially settled contract, which is priced based on electricity prices in the PJM western hub at 111 delivery points, mainly on

World Electricity Production (Monthly Average) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

In Millions of Kilowatt Hours

Australia

Canada

China

Germany

India

Italy

Ja p a n

Rep. of Korea

Russia

South Africa

Ukraine

13,959 14,449 14,806 15,256 14,737 15,399 15,712 15,495 15,646 15,659

44,954 45,206 46,307 47,929 45,259 46,496 48,563 47,009 49,521

75,312 83,977 90,109 94,539 97,183 100,345 109,426 118,439 133,513 149,680

37,786 44,754 46,277 45,961 46,367 45,820 46,417 47,107 45,375

29,250 31,656 32,991 35,146 37,379 40,148 41,725 42,434 44,141 44,907

19,323 20,228 20,340 20,898 21,659 22,136 22,986 23,242 23,660 24,752

80,361 82,490 84,113 86,676 76,763 76,755 78,391 77,742 77,521 75,394

13,749 15,388 17,125 18,704 17,942 19,944 22,200 23,768 25,500 26,476

72,993 71,669 70,600 69,511 68,930 70,611 73,117 74,031 74,078 73,295

15,825 16,016 16,096 16,108 17,119 16,961 17,557 17,508 18,142 17,534

16,910 16,193 15,166 14,834 14,402 14,342 14,287 14,414 14,477 15,299

Preliminary.

2

Estimate.

United Kingdom

United States

27,042 27,970 27,191 27,012 27,914 28,095 28,484 28,825

271,150 279,820 287,250 291,185 301,489 308,712 316,662 314,876 292,134

Source: United Nations

In stalled C ap acity, C ap ab ility & P eak L o ad o f th e U .S . E lectric U tility In d u stry

In Millions of Kilowatt Hours

----------------------------------- In stalled Gen eratin g C ap acity o n D ecemb er 31 -----------------------------------

Year

1990 1991 1992 1993 1994 1995 1996 1997 1998 19 9 91 1

Total Electri c Uti li ty Industry

735.1 740.0 741.7 744.7 746.0 750.5 756.5 759.9 728.3 678.0

P reliminary.

Capaci ty Capa- Non-Co- Margi n ---------------------- Typ e o f Ow n ersh ip ---------------------Power bi li ty i nci dent Non-CoDi stri cts, at Wi nter Muni cInternal Wi nter i nci dent State ipal Nuclear Com- Investor Cooper- Subtotal Peak Peak Peak ati ve Gov't Uti li ti es Federal Projects Power busti on Owned Load Load (%) Load

----------- Typ e o f P rime Mo ver ----Gas, Turbi ne Hydro & Steam

87.2 88.7 89.7 90.2 90.3 91.1 91.0 92.5 91.2 89.8

531.1 534.1 534.5 536.9 537.9 541.6 546.6 549.7 522.1 476.3

108.0 108.4 107.9 107.8 107.9 107.9 109.0 107.6 104.8 102.3

8.7 8.8 9.6 9.8 9.9 9.9 9.9 10.0 10.2 9.6

S ource: E dison E lect ric I nst it ut e (E E I )

568.8 573.0 572.9 575.2 574.8 578.7 582.2 582.5 531.3 483.7

26.3 26.5 26.0 26.1 26.4 27.1 27.2 28.0 32.5 34.6

139.9 140.5 142.7 143.4 144.7 144.8 147.1 149.4 164.5 159.6

40.1 40.4 41.6 41.8 42.0 42.2 43.0 43.8 50.5 50.2

65.4 65.6 66.1 66.1 66.3 65.9 67.2 68.9 68.7 68.7

34.4 34.5 35.0 35.5 36.4 36.6 36.9 36.7 45.3 40.7

696.8 703.2 707.8 712.0 715.1 727.7 740.5 743.8 835.3 848.9

484.0 485.4 493.0 521.7 518.3 544.7 545.1 560.2 652.4 656.3

20.4 20.2 21.1 17.1 16.7 13.2 14.9 13.4 12.0 10.3

Total Electri c Annual Uti li ty Peak Load Industry Gen- Factor (%) erati on

2,808.2 2,825.0 2,797.2 2,882.5 2,910.7 2,994.5 3,073.1 3,119.1 3,212.2 3,173.7

60.4 60.9 61.1 61.0 61.2 59.8 61.0 61.3 62.0 61.2

91

ELECTRIC POWER Available Electricity and Energy Sales in the United States ------------------------------------- Net Generation ----------------------------------------------------------- Electric Utility Industry ------------------------

Year

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 20001

Total2

Hydro

Natural Gas

C oal

Fuel Oil

2,572 2,704 2,784 2,808 1,825 2,797 2,883 2,911 2,995 3,073 3,119 3,212 3,174 3,015

249.7 222.9 265.1 279.9 275.5 239.6 265.1 243.7 293.7 324.5 333.5 304.4 293.9 248.0

272.6 252.8 266.6 264.1 264.2 263.9 258.9 291.1 307.3 262.3 283.1 309.2 296.4 291.0

1,464 1,541 1,554 1,560 1,551 1,576 1,639 1,635 1,653 1,737 1,789 1,807 1,768 1,697

118.5 148.9 158.3 117.0 111.5 88.9 99.5 91.0 60.8 67.0 77.1 110.2 86.9 72.0

Nu- Other clear Source3

455.3 527.0 529.4 576.9 612.6 618.8 610.3 640.4 673.4 674.7 629.4 673.7 725.0 705.0

12.3 12.0 11.3 10.7 10.1 10.2 9.6 8.9 6.4 7.2 7.5 7.2 3.7 2.0

Total

2,719 2,879 2,985 3,041 3,071 3,083 3,197 3,254 3,358 3,447 3,494 3,618 3,705 3,800

In Billions of Kilowatt Hours

------------------------------ Sales to Ultimate Customers -----------------------------Rail InterStreet & Other ways Residen- depart- Com- Indust- Highway Public & RailTotal Auth. roads tial mental mercial rial Lighting Million $ Total

155,734 162,449 169,903 176,929 186,359 188,480 198,220 202,706 207,717 212,455 215,059 218,346 219,873 228,313

2,441 2,561 2,636 2,705 2,762 2,763 2,861 2,935 3,013 3,101 3,146 3,264 3,312 3,413

846 886 899 916 955 936 995 1,008 1,043 1,083 1,076 1,130 1,145 1,193

4.5 4.2 4.3 4.2 2.6 2.6 2.7 3.0 2.1 2.5 2.6

658.4 697.8 715.9 738.9 765.7 761.3 794.6 820.3 862.7 887.4 928.6 4 979.4 4 1,002.0 4 1,037.9

844 882 913 932 947 973 977 1,008 1,013 1,034 1,038 1,051 1,058 1,071

1

Preliminary. 2 I ncludes internal combustion. 3 I ncludes electricity produced from geothermal, wood, waste, wind, solar, etc. NA = Not available. Source: Edison Electric I nstitute (EEI )

Electric Pow er Production by Electric Utilities in the United States Year

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

14.4 14.6 14.6 15.2 15.6 15.8 18.1 18.5 17.9 18.0 19.7 16.3 15.9 4 4

63.0 64.6 69.3 72.8 76.1 77.2 69.7 70.6 69.9 70.3 75.6 87.2 90.9 110.6

4.9 5.1 5.3 5.3 5.3 5.2 5.4 5.8 5.5 5.3 5.3 4 4 4

I ncluded in Other.

In Millions of Kilowatt Hours

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

232,747 237,289 248,455 243,970 245,782 261,697 253,077 268,713 273,410 265,435 275,230 265,991 236,467 215,684 219,933

219,826 212,880 210,821 217,761 224,617 225,011 228,127 245,388 233,907 235,340 239,825 237,324 199,802 187,929 193,289

226,742 226,034 221,400 224,665 234,801 231,544 233,675 247,989 244,659 256,575 258,678 241,397 211,942 200,833 197,193

208,042 211,070 209,004 210,837 211,374 214,817 217,381 226,423 230,512 232,457 238,969 227,031 197,499 194,038 186,681

220,124 222,908 234,373 220,355 222,396 227,703 236,381 251,570 243,143 265,077 255,266 253,890 215,508 208,436 206,434

235,689 249,175 248,427 236,842 249,633 263,859 256,083 268,644 266,588 291,029 281,233 268,128 233,622 227,940 217,934

257,050 266,375 271,976 266,148 282,292 278,149 292,827 289,329 304,628 317,521 318,745 279,421 253,400 248,962 242,259

258,687 268,527 268,115 255,203 279,132 274,645 304,709 290,458 294,557 312,538 307,835 286,682 258,901 241,449 241,738

227,150 237,017 233,885 234,760 236,603 237,663 245,574 250,672 266,649 279,198 261,347 245,137 214,236 215,408 208,026

219,910 224,694 223,430 221,289 223,629 227,972 234,409 240,674 253,267 251,380 243,212 228,389 204,307 201,705 198,244

219,300 213,748 221,377 221,263 225,855 224,745 234,117 241,077 243,726 239,089 235,129 226,765 192,518 194,205

259,038 237,434 233,760 244,126 246,412 242,906 258,170 258,138 267,477 266,532 258,205 255,229 211,742 212,868

2,784,304 2,808,151 2,825,023 2,797,219 2,882,525 2,910,712 2,994,529 3,077,442 3,122,523 3,212,171 3,173,674 3,015,383 2,629,944 2,549,457 2,534,077

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Use of Fuels for Electric Generation in the United States ----- Consumption of Fuell -----

Year

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

C oal (Thousand Short Tons)

Fuel Oil (Thousand Barels)2

Gas (Million Cubic Feet)

766,888 773,549 772,268 779,860 813,508 817,270 829,007 874,681 900,361 910,867 894,120 859,335 806,269 767,803

267,451 200,152 188,494 152,329 168,556 155,377 105,956 116,680 132,147 187,461 151,868 125,788 133,456 99,219

2,787,012 2,787,332 2,789,014 2,765,608 2,682,440 2,987,146 3,196,507 2,732,107 2,968,453 3,258,054 3,113,419 3,043,094 2,686,287 2,259,684

Total Fuel i n C oal Equivalent3 (Thousand Short Tons)

1,004,964 988,300 987,469 983,484 1,017,086 1,033,575 1,039,174 1,063,755 1,103,037 1,147,317 1,113,614

Average C o st o f Net C o st o f FossilGeneration Pounds of Fuel Per fuel at by Fuels4 C oal P er Elec. Util. Kiliowatthour (Million Kilowatthour (Cents) (Pounds) Cents/MBTU Kilowatthour)

1,978,577 1,940,712 1,926,801 1,928,683 1,997,605 2,017,646 2,021,064 2,066,666 2,148,756 2,226,860 2,150,989

.987 .997 .996 .990 .993 .999 1.003 1.007 1.005 .996 1.012

167.5 168.9 160.3 159.0 159.5 152.6 145.3 151.9 152.2 143.8 144.1 173.8 173.0 151.5

Preliminary. 2 42-gallon barrels. 3 Coal equivalents are calculated on the basis of Btu instead of generation data. Source: Edison Electric I nstitute (EEI )

92

1.79 1.80 1.75 1.72 1.72 1.59 1.48 1.55 1.53 1.49 1.48

4

Heat Rate BTU Per kilowatthour

C o st P e r Million BTU Consumed (Cents)

10,312 10,366 10,322 10,340 10,351 10,425 10,173 10,176 10,081 10,360 10,301

174.0 174.1 169.6 166.6 166.6 152.6 145.2 151.9 152.2 143.8 144.1

Excludes wood & waste fuels.

Fertilizer Fertilizer is a natural or synthetic chemical substance or mixture that enriches soil to promote plant growth. The three primary nutrients that fertilizers provide are nitrogen, potassium, and phosphorus. In ancient times, and still today, many commonly used fertilizers contain one or more of the three primary ingredients: manure (containing nitrogen), bones (containing small amounts of nitrogen and large quantities of phosphorus), and wood ash (containing potassium). At least fourteen different nutrients have been found essential for crops. These include three organic nutrients (carbon, hydrogen, and oxygen, which are taken directly from air and water), three primary chemical nutrients (nitrogen, phosphorus, and potassium), and three secondary chemical nutrients (magnesium, calcium, and sulfur). The others are micronutrients or trace elements include iron, manganese, copper, zinc, boron, and molybdenum. Prices – The price of ammonia, a key source of ingredients for fertilizers, in 2002 fell to a 4-year low of $137 per metric ton from $183 in 2001, and was well below the 10year average price of $161 per metric ton. The average price of phosphate rock in the US rose 3% to $27.69 per metric ton from $26.81 per metric ton in 2001 and was above the 10-year average price of $24.98 per metric ton. The average price of potash in the US fell to a 3-year low of $155.00 per metric ton from $165.00 in 2001, and was right on the 10-year average price. Supply – World production of nitrogen in 2002 rose +3.8% to a record high 109.000 million metric tons. The world’s largest producers of nitrogen in 2002 were China with 27.6% of world production, the US (9.9%), India (9.0%),

World Production of Ammonia Year

In Thousands of Metric Tons of Contained Nitrogen

Canada

China

France

Germany

India

Indonesia

Ja p a n

Mexico

Netherlands

Poland

Russia

United States

World Total

3,470 3,773 3,840 4,081 3,900 4,135 4,130 3,439 3,594

20,100 22,600 25,200 24,700 25,800 28,300 27,700 28,200 30,100

1,480 1,470 1,570 1,757 1,570 1,580 1,620 1,380 1,050

2,170 2,518 2,485 2,471 2,512 2,406 2,599 2,522 2,560

7,503 8,287 8,549 9,328 10,240 10,376 10,148 10,081 9,827

3,012 3,336 3,647 3,770 3,600 3,450 3,620 3,655 4,200

1,483 1,584 1,490 1,509 1,389 1,385 1,410 1,318 1,188

2,030 1,992 2,054 1,448 1,449 1,003 701 548 537

2,479 2,580 2,652 2,478 2,350 2,430 2,540 1,940 1,970

1,230 1,726 1,713 1,824 1,683 1,474 1,862 1,735 1,311

7,300 7,900 7,900 7,150 6,500 7,633 8,735 8,690 8,600

13,300 13,000 13,400 13,300 13,800 12,900 11,800 9,350 10,800

93,600 100,000 105,000 103,000 104,000 107,000 108,000 105,000 109,000

1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

and Russia (7.9%). US nitrogen production in 2002 rose +16% to 10.800 million metric tons. World production of phosphate rock, basic slag and guano rose +7.1% to a 4-year high of 135.000 million metric tons in 2002 from 126.000 million metric tons in 2001. The world’s largest producers are the US with 26.7% of world production in 2002, China (17.0%), Morocco (17.0%), and Russia (7.9%). US production in 2002 rose +13.2% to 36.100 million metric tons from the record low of 31.900 million in 2001. World production of marketable potash rose by +0.4% to 26.500 million metric tons in 2002 from 26.400 million metric tons in 2001. The world’s largest producers of potash in 2002 were Canada with 30.9% of world production, Russia (16.6%), Belarus (14.3%), and Germany (13.0%). US production of potash in 2002 was unchanged from 2001 at 1.200 million metric tons and accounted for only 4.5% of world production. Demand – US consumption of nitrogen in 2002 rose +3.8% to 11.000 million metric tons. US consumption of phosphate rock in 2002 rose +5.9% to 37.400 million metric tons. US consumption of potash in 2002 was unchanged from 2001 at 5.300 million metric tons. Trade – US imports of nitrogen in 2002 rose +2.6% to 4.670 million metric tons and the US relied on imports for 29% of consumption. US imports of phosphate rock in 2002 rose +8.0% to 2.700 million metric tons from 2.500 million metric tons in 2001. US imports of potash rose +7.7% to 4.620 million metric tons in 2002, and imports accounted for 80% of US consumption.

Preliminary.

2

Estimate.

Source: U.S. Geological Survey (USGS)

Salient Statistics of Nitrogen3 (Ammonia) in the United States

Year

1995 1996 1997 1998 1999 2000 20011 20022 1

In Thousands of Metric Tons

- Stocks, Dec. 31Net Import Nitrogen5 Reliance Fixed Ammonia Conas a % of --- Production3 (Fixed) --Nitrogen --- Compounds --Apparent NonImports4 Com- sumption ConConsumption Fertilizer fertilizer Total (Fixed) Exports Produced sumption Ammonia pounds (Apparent)

15 19 16 19 21 20 29 29

11,600 11,500 11,400 11,800 11,400 10,300 8,420 9,730

1,410 1,720 1,900 1,950 1,550 1,510 929 1,100

13,010 13,220 13,300 13,800 12,900 11,800 9,350 10,800

2,630 3,390 3,530 3,460 3,890 3,880 4,550 4,670

319 435 395 614 562 662 647 437

10,400 11,502 11,441 11,712 11,303 10,272 7,852 8,474

Preliminary. 2 Estimate. 3 Anhydrous ammonia, synthetic. E = Net exporter. Source: U.S. Geological Survey (USGS)

4

10,700 11,100 11,300 11,300 11,500 12,500 10,600 11,000

959 881 1,530 1,050 996 1,120 916 771

For consumption.

5

1,580 1,390 2,220 1,270 1,240 1,400 1,340 1,100

15,300 16,400 15,800 17,100 16,300 14,900 13,500 15,200

-- Average Price ($ Per Tonne) -------- Urea FOB Gulf6 C o a st

217-222 188-190 102-103 82-85 107-110 158-161 104-108 128-132

------- Ammonium Ammonia FOB FOB Nitrate: Corn FOB Corn Gulf Belt Belt C o a st

220-235 197-210 125-135 110-125 115-125 175-180 130-135 150-160

Major downstream nitrogen compounds.

162-170 160-170 122-125 110-115 110-115 140-150 120-130 120-130 6

191 190 173 121 109 169 183 137

Granular.

93

FERTILIZER World Production of Phosphate Rock, Basic Slag & Guano Brazil

China

Egypt

Israel

Jordan

Morocco

Russia

Senegal

Syria

Togo

Tunisia

United States

World Total

3,419 3,937 3,888 3,823 4,276 4,421 4,344 4,725 4,805 4,850

21,200 24,100 19,300 21,000 24,500 25,000 20,000 19,400 21,000 23,000

1,585 632 765 808 1,067 1,076 1,018 1,096 972 1,500

3,680 3,961 4,063 3,839 4,047 4,067 4,128 4,110 3,511 3,500

4,129 4,217 4,984 5,355 5,896 5,925 6,014 5,526 5,843 7,179

18,193 19,764 20,684 20,855 23,084 23,587 22,163 21,463 21,983 23,000

9,400 8,000 9,000 8,300 9,800 10,100 11,400 11,100 10,500 10,700

1,667 1,587 1,500 1,340 1,565 1,478 1,814 1,739 1,708 1,500

931 1,203 1,551 2,189 2,392 2,496 2,084 2,166 2,043 2,400

1,794 2,149 2,570 2,731 2,631 2,250 1,600 1,400 1,060 1,281

5,500 5,699 7,241 7,167 6,941 7,901 8,006 8,339 8,144 7,750

35,494 41,100 43,500 45,400 45,900 44,200 40,600 38,600 31,900 36,100

119,000 127,000 131,000 135,000 143,000 144,000 134,000 132,000 126,000 135,000

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

2

Estimate.

Source: U.S. Geological Survey (USGS)

Salient Statistics of Phosphate Rock in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1

Mine Production

Marketable Production

107,000 157,000 165,000 179,000 166,000 170,000 161,000 163,000 130,000 154,000

35,500 41,100 43,500 45,400 45,900 44,200 40,600 38,600 31,900 36,100

Preliminary.

2

Estimate.

Imports Value F or Million Dollars Consumption

759 869 947 1,060 1,080 1,130 1,240 932 856 993

534 1,800 1,800 1,800 1,830 1,760 2,170 1,930 2,500 2,700

Exports

Apparent Consumption

Stocks, D e c. 3 1 (Producer)

3,200 2,800 2,760 1,570 335 378 272 299 9 39

38,300 42,900 42,700 43,700 43,600 45,000 43,500 39,000 35,300 37,400

9,220 5,980 5,710 6,390 7,910 7,920 6,920 8,170 7,510 8,860

28.51 25.60 28.35 35.82 34.80 42.70 41.96 40.38 38.58 W

21.89 22.08 21.75 23.40 24.50 25.87 31.49 24.29 26.81 27.69

Canada

China

France

Germany

Israel

Jordan

Russia

Spain

United Kingdom

United States

World Total

1,947 3,021 3,211 2,716 3,247 3,451 4,553 3,786 3,700 3,800

168 234 215 243 280 326 348 352 352 352

3,836 8,037 9,066 8,120 8,989 9,201 8,475 9,202 8,224 8,200

25 74 80 110 115 120 260 380 385 450

890 870 799 751 725 453 345 320 244 130

2,861 3,286 3,278 3,332 3,423 3,582 3,543 3,407 3,550 3,450

1,309 1,259 1,330 1,500 1,488 1,668 1,702 1,747 1,774 1,930

822 930 1,075 1,080 850 916 1,080 1,160 1,177 1,200

2,628 2,498 2,800 2,620 3,400 3,500 4,200 3,700 4,300 4,400

661 684 760 717 639 597 656 653 471 407

555 580 582 618 565 608 495 600 532 540

1,510 1,400 1,480 1,390 1,400 1,300 1,200 1,300 1,200 1,200

20,400 23,100 24,800 23,300 25,200 26,000 27,200 27,000 26,400 26,500

2

Estimate.

Source: U.S. Geological Survey (USGS)

Net Import Reliance as a % of Consumption

Production

72 76 75 77 80 80 80 70 80 80

1,510 1,400 1,480 1,390 1,400 1,300 1,200 1,300 1,200 1,200

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 Preliminary.

94

21.26 21.79 21.29 22.90 24.40 25.46 30.56 24.20 26.81 27.69

In Thousands of Metric Tons (K2O Equivalent)

Salient Statistics of Potash in the United States

1

21.38 21.14 21.75 23.40 24.50 25.87 31.49 24.29 26.81 27.69

Brazil

Preliminary.

Year

Avg. Price of Florida & N. Carolina Price - $ Avg. Per Metric Ton - $/Tonne - FOB Mine (-60% to +74% ) Domestic Export Average (FOB Mine)

Belarus

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Thousands of Metric Tons

Source: U.S. Geological Survey (USGS)

World Production of Marketable Potash Year

In Thousands of Metric Tons (Gross Weight)

2

Estimate.

3

In Thousands of Metric Tons (K2O Equivalent)

Sales by Producers

Value Million Dollars

Imports F or Consumption

Exports

Apparent Consumption

1,480 1,470 1,400 1,430 1,400 1,300 1,200 1,200 1,100 1,200

286.0 284.0 284.0 299.0 320.0 330.0 280.0 290.0 260.0 280.0

4,360 4,800 4,820 4,940 5,490 4,780 4,470 4,600 4,540 4,620

415 464 409 481 466 477 459 367 366 371

5,430 5,810 5,820 5,890 6,500 5,600 5,100 5,600 5,300 5,300

Unit of K2O, standard 60% muriate F.O.B. mine.

----- $ Per Ton ----Producer Avg. Value Avg. Value of Avg. Price3 Stocks Per Ton of Dec. 31 Product ($) K2O Equiv. $ Per Tonne

305 234 312 265 200 300 300

94.36 95.93 98.58 101.08 110.00 115.00 110.00 110.00 110.00 110.00

Source: U.S. Geological Survey (USGS)

192.72 193.50 202.43 208.57 230.00 250.00 230.00 230.00 230.00 230.00

130.74 125.34 137.99 134.07 138.00 145.00 150.00 157.50 165.00 155.00

Fish products. Supply – Of the US supply of fishery products of 18.119 billion pounds in 2001, the latest full reporting year, 52.4% came from the domestic catch, which rose to 9.492 billion pounds in 2001 from 9.068 billion pounds in 2000. Of the domestic catch, 6.162 billion pounds of the catch was finfish, 1.152 billion pounds shellfish, and 2.178 billion pounds for industrial use. The principal species of US fishery landings in 2001 were Pollock (with 3.188 billion pounds landed), Menhaden (1.741 billion pounds), Pacific Salmon (723 million pounds), Flounder (352 million pounds), Sea Herring (300 million pounds), and crabs (272 million pounds). World fishmeal production in 2002/3 fell –0.8% to 6.360 million metric tons. The world’s largest producers of fishmeal in 2001/2 were Peru with 24% of world production, Chile (12.1%), European Union (8.6%), and the US (5.3%). World production of fish oil in 2002/3 rose +7.4% to 1.024 million metric tons. The world’s largest producers of fish oil are Peru (with 17.1% of world production), Chile (16.0%), and the US (11.7%). Trade – US imports of fishery products in 2001 rose to a 14-year high of 8.627 billion pounds.

Fish is the primary source of protein for a large proportion of the world’s population. The worldwide yearly harvest of all sea fish (including aquaculture) is between 85 and 130 million metric tons. There are approximately 20,000 species of fish, of which 9,000 are regularly caught, with only 22 species harvested in large amounts. Ground-fish, which are fish that live near or on the ocean floor, account for nearly 10% of the world’s fishery harvest, and include cod, haddock, pollock, flounder, halibut and sole. Large pelagic fish such as tuna, swordfish, marlin, and mahi-mahi, account for nearly 5% of world harvest. The fish eaten most often in the United States is canned tuna. Rising global demand for fish has increased the pressure to harvest more fish, to the point where all 17 of the world’s major fishing areas have either reached or exceeded their limits. Atlantic stocks of cod, haddock and blue-fin tuna are all seriously depleted, while in the Pacific, anchovies, salmon and halibut are all being over-fished. Aquaculture, or fish farming, reduces pressure on wild stocks and now accounts for nearly 20% of world harvest. Over 30% of the fish harvested is processed directly into fishmeal and fish oil. Fishmeal is used primarily in animal feed. Fish oil is used in both animal feed and human food

In Millions of Pounds2

Fishery Products -- Supply in the United States

---------------------- Domestic Catch ----------------------

Year

1995 1996 1997 1998 1999 2000 2001 1

Grand - For Human Food Total Finfish Shellfish3

16,484 16,474 17,133 16,898 17,378 17,339 18,119

10,692 10,699 10,580 10,837 10,831 11,006 11,330

2,891 2,927 3,160 3,338 3,630 3,734 3,977

F or Industrial Use4

Total

2,900 2,848 3,393 2,723 2,916 2,599 2,812

9,788 9,565 9,843 9,194 9,339 9,068 9,492

------------------------------ Imports ------------------------------

F or % of Grand - For Human Food - Industrial Use4 Total Finfish Shellfish3

59.4 58.1 57.5 54.4 53.7 52.3 52.4

6,414 6,205 5,969 5,935 5,490 5,637 6,162

1,252 1,271 1,277 1,238 1,341 1,275 1,152

2,121 2,089 2,598 2,021 2,507 2,157 2,178

Total

F or Industrial Use4

% of Grand - For Human Food Total Finfish Shellfish3

6,696 6,909 7,290 7,704 8,039 8,271 8,627

40.6 41.9 42.5 45.6 46.3 47.7 47.6

4,278 4,494 4,612 4,901 5,341 5,369 5,168

1,639 1,656 1,883 2,100 2,289 2,459 2,828

779 759 795 702 409 442 634

1

Preliminary. 2 Live weight, except percent. 3 For univalue and bivalues mollusks (conchs, clams, oysters, scallops, etc.) the weight of meats, excluding the shell is reported. 4 Fish meal and sea herring. Source: Fisheries Statistics Division, U.S. Department of Commerce

Fisheries -- Landings of Principal Species in the United States

In Millions of Pounds

----------------------------------------------------------- Fish ------------------------------------------------------------ ---------------------------------- Shelfish ---------------------------------Year

C od, Atlantic Flounder

1995 1996 1997 1998 1999 2000 20011 1

30 31 29 25 21 25 33

Preliminary.

Halibut

Herring, S ea

Manhaden

Pollock

Salmon, Pacific

Tuna

Whiting

Clams (Meats)

45 49 70 73 80 75 78

265 318 348 272 267 235 300

1,847 1,755 2,028 1,706 1,989 1,760 1,741

2,853 2,630 2,522 2,729 2,336 2,616 3,188

1,137 877 568 644 815 629 723

14 85 83 85 58 51 52

34 35 34 33 31 27 28

134 123 114 108 112 118 123

423 460 566 391 331 413 352

Lobsters Oysters Scallops Crabs (American) ------ (Meats) ------ Shrimp

364 392 430 553 458 299 272

66 71 84 80 87 83 74

40 38 40 34 27 41 33

20 18 15 13 27 33 47

307 317 290 278 304 332 324

Source: National Marine Fisheries Service, U.S. Department of Commerce

U.S. Fisheries: Quantity & Value of Domestic Catch & Consumption & World Fish Oil Production

Year

F or F or ----------------------------------- Disposition ----------------------------------Industrial Human Fresh & For Meal, Products F ood Frozen Canned Cured Oil, Etc. Total ------------------------------------------------ Millions of Pounds ------------------------------------------------

1995 1996 1997 1998 1999 2000 20011 1

Preliminary.

7,099 7,054 6,873 6,870 6,416 6,657 7,085 2

769 678 648 516 712 530 536

90 93 108 129 133 119 123

1,830 1,740 2,213 1,679 2,078 1,763 1,748

Crop years on a marketing year basis.

9,788 9,565 9,842 9,194 9,339 9,069 9,492 3

7,667 7,474 7,244 7,173 6,832 6,912 7,314

At the Dock Prices.

2,121 2,091 2,598 2,021 2,507 2,157 2,178

Ex-vessel Value3

F i sh Per Capita Average Price Cunsumption

- Million $ - - Cents/Lb. -

3,770 3,487 3,448 3,128 3,467 3,550 3,228

38.5 36.5 35.0 34.0 37.1 39.1 34.0

World2 Fish Oil Production

- Pounds - - 1,000 Tons -

NA NA NA NA NA NA NA

1,302 1,337 1,214 886 1,413 1,422 1,132

Source: Fisheries Statistics Division, U.S. Department of Commerce

95

FISH Imports of Seafood Products into the United States

In Thousands of Pounds

Year

------------------- Fresh ------------------- ----------------------------- Froz en ----------------------------Atlantic Pacific Atlantic Pacific Salmon Salmon Shrimp Trout Salmon Salmon Shrimp

Oysters2

Mussels3

Clams4

Canned Prepared Salmon Shrimp5

1996 1997 1998 1999 2000 2001 2002 20031

116,606 150,135 190,131 217,948 257,218 316,837 356,164 349,474

14,222 14,531 18,049 18,325 20,810 18,438 19,084 22,257

21,241 26,903 34,099 34,969 43,141 39,973 45,695 43,236

6,596 5,703 6,541 7,537 8,074 8,007 7,457 8,752

4,182 3,675 3,430 5,627 8,893 11,298 16,378 25,177

43,962 38,999 38,486 26,467 19,908 17,472 23,210 22,462

-------------------------

4,552 5,403 5,670 5,259 7,083 7,382 9,887 9,023

10,752 14,956 19,092 24,222 32,089 41,176 56,883 64,999

8,514 25,662 17,134 16,596 12,866 10,515 18,317 26,658

507,823 572,111 599,466 617,089 621,231 714,706 730,002 878,124

1

Preliminary. 2 Oysters fresh or prepared. 3 Mussels fresh or prepared. 4 Clams, fresh or prepared. NA = Not available. Source: Bureau of the Census, U.S. Department of Commerce

Exports of Seafood Products into the United States Year

1996 1997 1998 1999 2000 2001 2002 20031

42,999 25,529 34,645 40,683 38,750 20,651 29,672 38,902

-------------------------

1,867 1,709 1,453 1,697 1,816 1,077 1,163 2,592

322 322 243 182 299 84 84 99

223,346 152,516 105,869 157,278 161,515 167,933 132,646 150,766

Oysters2

Mussels3

Clams4

2,097 2,890 2,496 2,727 3,229 3,915 3,896 5,827

1,603 1,157 1,347 1,861 1,513 1,485 1,178 1,337

5,126 4,916 5,375 5,240 3,413 3,939 3,861 4,003

11,180 11,967 11,323 13,607 15,162 13,905 13,890 16,466

1

Preliminary. 2 Oysters fresh or prepared. 3 Mussels fresh or prepared. 4 Clams, fresh or prepared. NA = Not available. Source: Bureau of the Census, U.S. Department of Commerce

World Production of Fish Meal

1

17,665 14,826 13,882 13,153 14,229 13,640 13,148 14,307

Shrimp, canned, breaded or prepared.

In Thousands of Metric Tons

Denmark

EU-12

FSU-12

Iceland

Ja p a n

Norway

Peru

South Africa

Thailand

United States

World Total

1,387.6 1,209.9 708.5 823.4 890.0 731.0 766.0 770.0

76.4 86.1 92.8 86.1 81.5 88.0 90.0 92.0

322.9 334.6 317.2 319.1 314.2 311.9 308.2 310.0

532.5 555.5 544.7 542.7 531.1 534.4 535.8 544.5

209.8 206.3 206.7 147.1 148.8 137.4 147.2 147.2

271.0 272.5 221.6 240.6 281.2 284.0 311.0 305.0

195.0 363.5 383.4 388.5 390.0 350.0 323.0 338.0

233.8 259.7 296.7 352.6 315.0 238.8 222.9 232.0

1,702.7 2,150.5 697.2 1,597.4 2,449.4 2,144.2 1,688.1 1,550.0

49.6 52.6 89.3 76.2 113.7 97.8 115.8 116.0

380.9 384.4 403.8 398.0 392.4 385.0 390.0 400.0

331.1 366.1 339.9 389.9 346.8 337.1 347.6 338.0

6,332.9 6,992.7 5,218.4 6,324.6 7,334.3 6,771.8 6,412.5 6,360.0

2

Estimate.

3

Forecast.

Source: The Oil World

World Production of Fish Oil

In Thousands of Metric Tons

Canada

Chile

China

Denmark

Iceland

Ja p a n

Norway

Peru

South Africa

FSU-12

United States

World Total

Fish Oil CIF4

10.6 4.8 4.5 3.3 3.7 4.1 4.3 4.5

280.2 192.6 91.4 176.8 166.0 142.9 140.2 164.0

12.0 9.0 7.2 28.8 26.7 26.3 28.0 30.0

120.0 138.0 126.7 135.2 139.7 121.3 112.7 124.0

120.5 143.2 95.1 92.1 98.0 99.0 85.0 89.0

45.8 47.6 70.7 72.8 69.7 65.0 65.0 67.0

93.7 86.4 89.0 99.2 98.3 66.4 61.2 78.0

410.0 413.3 86.3 376.5 699.4 400.8 179.5 175.0

3.7 4.1 7.8 6.8 8.9 7.9 10.0 9.0

43.0 41.0 14.3 14.5 12.0 11.1 11.0 11.0

110.4 119.8 101.3 141.6 81.3 123.3 106.0 120.0

1,363.4 1,289.0 825.5 1,277.3 1,533.3 1,217.3 953.4 1,023.7

461 502 722 408 268 375 593

1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

94,842 81,407 77,201 113,556 81,098 109,109 95,955 94,338

Spain

Preliminary.

Year

5

Canned Prepared Salmon Shrimp5

Chile

Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

Shrimp, canned, breaded or prepared.

In Thousands of Pounds

------------------- Fresh ------------------- ----------------------------- Froz en ----------------------------Atlantic Pacific Atlantic Pacific Salmon Salmon Shrimp Trout Salmon Salmon Shrimp

7,280 7,504 7,978 10,717 15,942 18,417 8,456 11,337

5

74,648 76,213 95,942 114,191 139,526 167,877 216,439 234,084

Preliminary.

2

Estimate.

3

Forecast.

4

Any origin, N.W. Europe.

NA = Not available.

Source: The Oil World

Monthly Production of Catfish--Round Weight Processed, in the US In Thousands of Pounds (Live Weight) Year

1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

38,475 42,409 46,723 48,723 50,552 46,999 52,551 55,523

38,004 45,067 47,606 48,891 50,942 50,257 52,856 55,461

46,376 48,431 53,761 56,310 56,856 57,766 58,340 65,007

38,557 45,721 49,393 46,830 48,781 52,478 50,694 57,105

39,583 43,409 45,218 47,703 48,424 51,736 52,902 58,424

36,810 42,282 46,244 48,445 48,011 47,883 49,450 52,441

39,025 43,376 46,383 50,074 49,023 47,829 52,363 54,089

40,463 44,154 47,739 50,372 53,204 51,690 54,383 54,153

38,807 43,472 46,579 50,414 49,422 49,699 53,366 51,885

42,070 46,275 47,904 52,407 51,412 52,264 56,576 57,652

37,210 40,137 43,224 48,118 45,535 44,670 50,072 51,246

36,874 40,216 43,581 48,341 41,441 43,837 48,048 48,518

472,254 524,949 564,355 596,628 593,603 597,108 631,601 661,504

Preliminary.

96

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

FISH Average Price Paid to Producers for Farm-Raised Catfish in the US

In Cents Per Pound (Live Weight)

Year

1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

77.0 73.0 69.0 70.3 74.4 69.3 54.9 52.9

78.0 73.0 73.0 71.4 78.8 69.6 55.5 54.4

78.0 73.0 78.0 73.2 78.9 69.7 56.5 58.5

78.0 73.0 79.0 75.6 78.9 69.4 56.1 63.0

79.0 73.0 79.0 77.7 78.5 68.7 57.4 61.8

79.0 72.0 78.0 77.5 78.6 66.9 58.8 58.6

79.0 71.0 76.0 76.8 76.0 65.6 59.0 56.4

78.0 70.0 74.0 74.3 74.1 62.4 58.2 55.2

77.0 69.0 73.0 72.8 72.7 61.0 57.6 56.0

76.0 69.0 71.0 71.6 71.0 59.6 56.8 56.7

75.0 69.0 70.0 71.3 69.6 56.6 56.0 61.0

73.0 69.0 70.0 71.6 68.2 55.4 54.4 62.9

77.3 71.2 74.2 73.7 75.0 64.5 56.8 58.1

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Sales of Fresh Catfish in the United States Year

Whole 1998 1999 2000 2001 2002 2003 1 Fillets2 1998 1999 2000 2001 2002 2003 1 Other3 1998 1999 2000 2001 2002 2003 1

In Thousands of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

3,700 3,650 3,496 3,516 3,713 3,833

4,049 3,957 3,396 3,242 3,656 3,785

4,308 4,467 4,031 4,260 3,826 4,339

3,856 3,459 3,655 3,644 3,373 3,643

3,421 3,492 3,483 3,271 3,644 3,692

3,340 3,380 3,581 3,166 3,313 3,266

3,342 3,471 3,491 3,233 3,477 3,553

3,270 3,271 3,545 3,204 3,733 3,510

3,332 3,583 3,246 3,174 3,418 3,233

3,431 3,561 3,504 3,294 3,822 3,231

3,152 3,209 2,971 2,865 3,031 2,798

3,254 3,313 2,993 2,803 2,986 2,693

42,455 42,813 41,392 39,672 41,992 41,576

4,292 4,581 4,686 4,884 5,684 5,362

4,784 5,030 4,853 6,112 6,132 5,158

5,130 5,768 5,957 6,751 6,010 6,715

4,634 4,897 5,206 5,709 5,236 5,700

4,371 4,918 5,099 5,587 5,682 6,364

4,220 4,707 4,792 5,122 5,093 5,737

4,542 4,846 4,650 5,191 5,327 5,984

4,622 5,002 4,899 5,313 5,442 6,013

4,626 4,550 4,650 5,264 5,317 5,308

4,588 4,811 5,283 5,273 5,420 6,082

4,092 4,171 4,355 4,463 4,447 5,187

3,975 4,142 4,099 4,489 4,119 4,710

53,876 57,423 58,529 64,158 63,909 68,320

1,499 1,243 1,429 1,443 1,526 1,668

1,712 1,614 1,437 1,292 1,446 1,532

1,721 1,724 1,685 2,156 1,375 1,599

1,509 1,153 1,547 1,309 1,356 1,458

1,395 1,227 1,364 1,282 1,732 1,472

1,453 1,126 1,299 1,298 1,527 1,319

1,246 1,305 1,340 1,375 1,576 1,425

1,369 1,495 1,438 1,436 1,569 1,366

1,314 1,354 1,332 1,449 1,441 1,473

1,345 1,676 1,473 1,430 1,596 1,361

1,117 1,299 1,271 1,223 1,165 1,138

1,081 1,227 1,198 1,252 1,205 1,134

16,761 16,443 16,813 16,945 17,514 16,945

1

Preliminary. 2 I ncludes regular, shank and strip fillets; excludes breaded products. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Prices of Fresh Catfish in the United States Year

Whole 1998 1999 2000 2001 2002 2003 1 Fillets2 1998 1999 2000 2001 2002 20031 Other3 1998 1999 2000 2001 2002 2003 1 1

3

I ncludes steaks, nuggets and all other products not reported.

In Dollars per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1.52 1.54 1.63 1.59 1.36 1.28

1.57 1.55 1.67 1.68 1.35 1.30

1.63 1.57 1.69 1.63 1.30 1.35

1.61 1.59 1.70 1.65 1.34 1.37

1.65 1.63 1.68 1.65 1.36 1.36

1.60 1.60 1.63 1.62 1.37 1.39

1.60 1.59 1.65 1.59 1.35 1.33

1.63 1.63 1.70 1.55 1.32 1.33

1.59 1.61 1.67 1.53 1.32 1.34

1.59 1.63 1.64 1.49 1.28 1.36

1.56 1.59 1.62 1.42 1.24 1.40

1.52 1.59 1.58 1.37 1.25 1.43

1.59 1.59 1.66 1.56 1.32 1.35

2.71 2.73 2.82 2.80 2.52 2.44

2.75 2.71 2.87 2.79 2.49 2.45

2.85 2.76 2.89 2.80 2.49 2.44

2.86 2.75 2.88 2.80 2.51 2.49

2.86 2.84 2.88 2.80 2.53 2.51

2.85 2.86 2.90 2.78 2.55 2.50

2.84 2.86 2.90 2.77 2.55 2.48

2.82 2.85 2.88 2.75 2.54 2.48

2.78 2.85 2.85 2.69 2.54 2.49

2.78 2.83 2.83 2.63 2.52 2.49

2.75 2.84 2.83 2.60 2.49 2.50

2.73 2.83 2.81 2.55 2.47 2.54

2.80 2.81 2.86 2.73 2.52 2.48

1.61 1.61 1.66 1.64 1.53 1.40

1.65 1.55 1.69 1.68 1.57 1.41

1.72 1.59 1.69 1.57 1.54 1.51

1.78 1.70 1.66 1.64 1.51 1.53

1.78 1.74 1.71 1.69 1.45 1.47

1.76 1.76 1.71 1.64 1.51 1.54

1.79 1.66 1.72 1.61 1.51 1.52

1.71 1.62 1.69 1.57 1.50 1.58

1.72 1.66 1.62 1.52 1.54 1.50

1.69 1.57 1.68 1.59 1.48 1.58

1.73 1.65 1.71 1.59 1.55 1.60

1.69 1.66 1.68 1.53 1.46 1.64

1.72 1.65 1.69 1.61 1.51 1.52

Preliminary. 2 I ncludes regular, shank and strip fillets; excludes breaded products. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

3

I ncludes steaks, nuggets and all other products not reported.

97

Flaxseed and Linseed Oil Flaxseed, also called linseed, is an ancient crop that was cultivated by the Babylonians around 3,000 BC. Flaxseed is used for fiber in textiles and to produce oil. Flaxseeds contain approximately 35% oil, of which 60% is omega3 fatty acid. Flaxseed or linseed oil is obtained through either expeller extraction or solvent extraction method. Manufacturers filter the processed oil to remove some impurities and then sell it as unrefined. Unrefined oil retains its full flavor, aroma, color, and naturally occurring nutrients. Flaxseed oil is used for cooking and as a dietary supplement as well as for animal feed. Industrial linseed oil is not for internal consumption due to possible poisonous additives and is used for making putty, sealants, linoleum, wood preservation, varnishes, and oil paints. Flaxseed futures and options trade at the Winnipeg Commodity Exchange. The futures contract calls for the delivery of 20 metric tons of flaxseed. The contract is now priced in US dollars per metric ton. Prices – Flaxseed prices received by US farmers in December 2003 ended the calendar year at $5.97 per bushel, slightly higher than the 2002/3 marketing year (July/June) average of $5.91 and far higher than $4.53 in 2001/2 and $3.57 in 2000/1. Supply – World production of flaxseed in 2002/3 fell to 2.064 million metric tons from 2.159 million in 2001/2 and was sharply below the recent peak of 2.868 million in 1999/

World Production of Flaxseed

00. By far, the world’s largest producer of flaxseed is Canada with 35% of world production (2002/3), followed by China (23%), the US (16%), and India (10%). Chinese production in 2002/3 rose by 11% to 465,000 metric tons from 2001/2, while Canadian production fell 5% to 730,000 metric tons. US production rose by 10% to 319,000 metric tons. North Dakota is the king of US flaxseed production, accounting for 97% of US production. The 2003/4 US flaxseed crop promises to be small since farmers harvested only 572,000 acres, down from 704,000 in 2002/3. US production of linseed oil in 2002/3 rose slightly to 198 million pounds from 195 million in 2001/2. Demand – The demand (distribution) breakdown for the US flaxseed supply of 16.507 million bushels in 2002/3 was 10.150 million bushels for crushing into flaxseed oil and meal (accounting for 62% of overall supply), 3.150 million bushels for export (19%), 2.842 million as residual consumption (17%), and 365,000 bushels for seed (2%). US consumption of linseed oil in 2002/3 rose by 4% to 94.9 million pounds from 91.3 million in 2001/2. Trade – US exports of flaxseed in 2002/3 rose sharply by 32% to 3.150 million bushels from 2.386 million in 2001/ 2. US imports of flaxseed in 2002/3 fell even more sharply by 56% to 844,000 bushels from 1.903 million in 2001/2. The US is a net exporter of flaxseed, exporting more than three times what it imports.

In Thousands of Metric Tons

Argentina

Australia

Bangladesh

Canada

China

Egypt

France

Hungary

India

Romania

United States

Former USSR

World Total

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

112 152 149 72 75 85 47 22 16 9

8 6 15 7 9 10 9 9 9 6

49 48 49 46 50 50 46 48 50 50

627 960 1,105 851 1,038 1,210 1,100 775 770 730

410 511 420 480 393 523 404 520 420 465

22 18 16 17 19 24 30 30 26 19

27 44 27 29 31 29 34 38 31 31

4 4 4 4 ---1 2 1 1 1

330 325 308 319 275 265 289 240 240 200

28 7 5 5 5 3 3 1 2 3

88 74 56 41 62 170 200 273 291 319

120 110 113 86 47 55 46 76 82 61

2,191 2,474 2,518 2,300 2,370 2,828 2,868 2,358 2,159 2,064

1

2

Year

Preliminary.

Estimate.

3

Forecast.

Source: The Oil World

Supply and Distribution of Flaxseed in the United States Crop Year Beginning June 1

Planted

------- 1,000 Acres -------

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Preliminary.

98

Harvested

178 165 96 151 336 387 536 585 785 595 2

Estimate.

Yield Per Acre (Bushels)

171 147 92 146 329 382 517 578 704 583 3

Forecast.

17.1 15.0 17.4 16.6 20.4 20.6 20.8 19.8 17.9 17.9

In Thousands of Bushels

------------------------- Supply ------------------------Beginning Stocks

Production

1,155 1,170 1,230 453 1,181 2,158 1,767 1,308 893

2,922 2,212 1,602 2,420 6,708 7,864 10,730 11,455 12,569 10,426

--------------------------------- Distribution -------------------------------

Imports

Total Supply

S eed

Crush

Exports

Residual

Total Distribution

6,005 7,248 8,390 9,636 5,992 6,629 2,850 1,903 2,650

10,082 10,630 11,222 12,509 13,881 16,651 15,347 14,666 18,157

134 78 122 272 313 434 474 636 472

8,550 9,000 10,000 10,500 10,600 11,500 12,000 10,000 10,300

72 119 144 174 476 215 1,015 2,386 2,900

156 203 503 382 333 2,735 572 751 890

8,912 9,400 10,769 11,328 11,723 14,884 14,039 13,773 14,562

Source: Economic Research Service, U.S. Department of Agriculture

FLAXSEED AND LINSEED OIL Production of Flaxseed in the United States, by States Crop Year

1994 1995 1996 1997 1998 1

Preliminary.

In Thousands of Bushels

MInnesota

North Dakota

South Dakota

Other States

Total

Crop Year

MInnesota

North Dakota

South Dakota

Other States

Total

126 171 60 96 432

2,450 1,725 1,386 1,997 5,817

304 260 126 252 294

42 55 30 75 165

2,922 2,211 1,602 2,420 6,708

1999 2000 2001 2002 20031

300 198 52 90 161

6,867 9,975 10,900 12,240 9,900

357 361 323 44 144

340 196 180 195 221

7,864 10,730 11,455 12,569 10,426

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Factory Shipments of Paints, Varnish and Lacquer in the United States Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

1994 1995 1996 1997 1998

3,039.8 3,330.3 3,438.6 3,515.2 3,600.7

3,783.0 3,838.0 4,161.9 4,023.4 4,216.4

3,736.2 3,814.5 3,954.9 3,924.1 4,063.9

3,240.8 3,423.4 3,428.9 3,323.0 3,804.4

13,800 14,406 14,984 14,786 15,685

1

Preliminary.

In Millions of Dollars

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

1999 2000 2001 2002 2003 1

3,926.2 4,073.1 3,625.0 3,729.9 3,790.7

4,452.2 4,573.5 4,345.4 4,440.7 4,450.2

4,216.5 4,082.0 4,094.5 4,251.4 4,168.2

3,925.7 3,474.7 3,652.6 3,600.7 3,715.6

16,521 16,203 15,718 16,023 16,125

Source: Bureau of the Census, U.S. Department of Commerce

Consumption of Linseed Oil (Inedible Products) in the United States

In Millions of Pounds

Year

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

Total

9.0 8.9 7.2 5.4 6.5 9.6 11.7 7.9

10.8 7.7 6.8 6.2 7.2 8.4 9.6 6.9

7.8 8.6 6.4 5.5 7.3 9.2 10.0 6.0

6.0 6.7 5.6 5.2 7.5 7.4 7.0 6.8

6.7 7.5 4.6 5.6 6.5 5.3 5.7 3.5

6.1 6.4 6.6 4.5 5.7 5.0 7.3 5.0

6.7 8.0 5.9 4.2 8.0 8.2 6.8 5.6

7.1 6.0 4.7 6.1 6.7 7.1 6.4

6.3 6.2 6.8 5.8 7.7 6.9 8.7

8.3 5.9 6.4 7.0 7.6 8.0 8.5

8.9 6.8 5.6 7.6 9.3 7.7 6.6

8.5 5.7 7.9 6.6 9.4 8.7 6.7

92.3 84.3 74.6 69.8 89.3 91.3 94.9 71.5

Source: Bureau of the Census, U.S. Department of Commerce

USD Per Bushel ----- No. 1, Minneapolis (Jan. 1901 - Jan. 1986) CAD Per Metric Ton No. 1, Thunder Bay (Aug. 1991 - date) USD Per Bushel - - - Average Received by Farmers, US (July 1929 - date)

99

FLAXSEED AND LINSEED OIL Supply and Distribution of Linseed Oil in the United States Crop Year Beginning June 1

1

Stocks June 1

Production

Total

Exports

Domestic

Total Disappearance

Average Price at Minneapolis Cents/Lb.

54 63 45 50 35 35 45 49 43 45

174 172 180 200 205 207 224 234 195 201

228 235 225 250 240 249 272 293 238 246

7 24 26 66 58 63 76 100 90 92

162 166 149 149 140 138 147 150 103 109

165 190 175 215 198 201 223 250 193 201

31.8 33.7 36.5 36.0 37.8 37.5 37.8 36.0 36.0 33.0

-------------------------------- Supply ---------------------------------

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 Preliminary.

2

Forecast.

Argentina

Bangladesh

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32

32.2 46.8 47.5 17.1 24.1 24.5 13.1 6.2 3.8 2.0

12.7 13.0 13.0 12.5 13.4 13.6 12.6 12.9 13.5 13.6

1

2

Preliminary.

Forecast.

-------------------------------- Disappearance ---------------------------

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

World Production and Price of Linseed Oil Year

In Millions of Pounds

In Thousands of Metric Tons

Belgium

China

Egypt

Germany

India

28.8 35.2 44.3 52.1 54.7 59.2 68.8 75.2 95.0 88.9

121.8 137.4 125.1 142.5 120.0 150.0 118.3 134.5 125.8 124.9

8.6 8.2 8.0 9.6 11.1 15.2 15.0 23.0 16.4 15.8

77.2 104.0 72.0 52.2 66.9 74.1 73.6 63.4 57.3 55.0

90.7 91.4 88.1 90.0 84.3 80.1 85.9 74.7 73.7 65.0

Ja p a n

United States

Former USSR

World Total

30.7 29.2 30.0 31.0 31.3 26.5 23.8 21.1 18.9 11.2

35.2 41.4 28.9 34.1 35.1 34.3 34.1 17.0 9.9 8.1

78.7 81.7 80.0 97.9 100.7 107.6 124.9 114.7 98.8 107.3

11.2 10.6 12.7 16.5 7.2 10.7 7.9 15.1 17.8 11.8

617.9 697.5 665.3 676.7 678.6 731.2 709.6 668.3 632.4 602.7

476 657 579 560 686 575 413 378 454

Source: The Oil World

Average Price Received by Farmers for Flaxseed in the United States Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

Rotterdam Ex-Tank $/Tonne

United Kingdom

In Dollars Per Bushel

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

Average

4.28 5.11 6.19 6.07 6.17 4.40 3.25 4.28 5.38 6.38

4.52 5.21 6.15 5.53 5.45 3.86 3.05 4.09 5.27 5.30

4.54 5.11 5.89 5.72 5.09 4.00 3.10 4.10 5.55 5.43

4.49 5.11 6.49 5.81 4.86 3.76 3.17 4.21 5.76 5.77

4.51 5.17 6.38 5.71 4.97 3.66 3.39 4.33 6.04 6.06

4.71 5.03 6.77 5.72 5.00 3.61 4.45 4.55 5.92 6.22

4.76 5.26 6.43 5.82 5.05 3.75 3.42 4.22 5.71 6.09

4.94 5.21 6.74 6.27 5.05 3.43 3.43 4.75 6.25 6.20

5.13 5.28 6.66 6.26 4.94 3.70 3.90 4.75 6.48

5.10 5.31 6.43 6.23 4.93 3.66 3.68 4.80 6.58

4.91 6.13 6.45 6.33 4.89 3.77 3.91 5.02 6.04

5.03 5.90 5.99 6.17 4.38 3.64 4.10 5.29 6.04

4.74 5.32 6.38 5.97 5.07 3.77 3.57 4.53 5.92 5.93

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Stocks of Linseed Oil (Crude and Refined) at Factories and Warehouses in the US

In Millions of Pounds

Year

July 1

Aug. 1

Sept. 1

Oct. 1

Nov. 1

D e c. 1

Jan. 1

F eb. 1

Mar. 1

Apr. 1

May 1

June 1

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

60.3 39.5 51.3 39.9 49.6 68.7 39.5 29.1 27.8 30.2

56.5 44.6 50.9 35.2 45.3 65.5 42.5 30.2 17.7 27.2

49.4 37.4 59.0 40.3 38.5 68.9 41.3 22.6 12.8 22.3

60.6 46.0 46.1 33.3 55.4 74.0 54.3 38.4 21.8 78.5

48.1 48.0 38.8 38.6 35.7 92.4 58.7 32.4 30.5 42.0

39.3 44.5 41.8 40.3 44.5 69.6 87.0 29.9 29.0 35.0

38.6 45.3 49.2 46.9 53.2 72.0 61.6 33.4 31.9 40.0

38.9 58.9 48.1 60.8 68.2 69.5 50.1 36.6 35.9 43.4

31.0 64.0 53.9 55.8 54.6 65.7 50.5 26.8 34.6

35.7 62.0 50.5 63.1 68.2 53.9 51.2 33.4 36.2

37.9 60.6 44.5 54.6 65.3 49.1 39.2 32.3 33.7

44.8 47.2 45.6 49.4 76.2 44.2 44.8 31.1 33.7

1

Preliminary.

100

Source: Bureau of the Census, U.S. Department of Commerce

FLAXSEED AND LINSEED OIL

Wholesale Price of Raw Linseed Oil at Minneapolis in Tank Cars Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

Average

30.31 35.00 37.00 36.00 37.00 36.00 36.00 35.50 40.00 41.75

32.00 35.50 37.20 36.00 37.00 36.00 36.00 38.00 38.00 41.75

32.00 37.00 37.50 36.00 37.00 36.00 36.00 39.00 41.00 42.00

33.50 37.00 37.00 37.00 37.00 36.00 36.00 39.00 31.75

35.00 37.00 33.75 37.00 37.00 36.00 36.00 39.00 41.00

35.00 37.00 32.12 37.00 37.00 36.00 36.00 39.00 41.00

35.00 37.00 36.00 36.00 36.00 36.00 36.00 39.00 41.00

35.00 37.00 36.00 36.00 36.00 36.00 36.00 39.00 41.00

35.00 37.00 36.00 36.00 36.00 36.00 36.00 39.00 41.00

35.00 37.00 36.00 36.00 36.00 36.00 36.00 39.00 41.00

35.00 37.00 36.00 37.00 36.00 36.00 36.00 39.65 41.19

35.00 37.00 36.00 37.00 36.00 36.00 32.00 40.35 41.75

33.98 36.71 35.88 36.42 36.50 36.00 35.67 38.79 39.97 41.83

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Open Interest of Flaxseed Futures in Winnipeg Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

6,118 6,242 6,059 5,420 10,059 4,372 4,365 4,101 2,225 235

6,201 8,731 6,056 5,356 10,190 4,552 4,907 3,476 1,981 316

5,946 7,505 4,402 5,591 9,707 4,533 5,588 4,270 1,921 477

5,519 7,121 5,192 5,151 8,540 4,238 6,218 3,043 1,787 604

4,683 8,107 6,970 4,923 6,480 3,719 5,066 3,169 1,270 394

3,945 7,212 4,435 4,075 6,874 2,456 3,696 3,661 935 489

4,301 6,436 3,102 3,891 6,030 2,149 3,152 2,745 612 298

4,654 5,557 2,989 4,031 6,767 2,758 3,585 2,350 699 305

4,997 6,230 3,257 7,131 7,421 3,725 3,936 2,400 776 253

3,077 5,245 3,438 8,284 7,221 4,236 4,666 3,158 704 193

4,888 5,937 4,326 7,255 7,564 4,493 4,922 2,726 424 94

5,251 4,414 5,119 7,955 5,828 4,276 4,914 3,031 249 49

Source: Winnipeg Commodity Exchange (WCE)

Volume of Trading of Flaxseed Futures in Winnipeg Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

10,671 10,707 9,617 7,640 15,713 4,855 9,022 8,232 2,990 333

7,839 15,819 8,301 6,486 19,906 8,922 9,340 6,428 2,838 724

9,929 10,676 4,110 7,123 8,275 4,383 9,292 6,928 2,519 412

8,553 15,315 13,531 10,912 9,060 8,460 12,604 7,117 3,832 368

6,103 12,569 10,855 6,256 5,231 5,241 7,372 6,514 3,320 452

9,389 9,235 7,997 7,851 7,642 5,891 7,393 6,745 3,018 738

7,580 6,579 6,517 7,662 4,468 4,863 2,676 4,344 1,153 343

4,455 5,922 4,153 7,081 4,062 2,833 2,525 2,620 810 96

6,580 11,790 5,430 20,967 7,328 5,852 9,822 5,242 777 491

12,415 11,051 11,126 23,418 13,085 12,078 11,915 7,291 3,030 273

15,820 15,064 7,532 20,049 13,824 7,710 14,436 4,689 955 183

6,004 7,798 10,720 15,311 6,958 7,345 7,819 6,326 344 25

105,338 132,525 99,889 140,756 115,552 78,433 100,040 72,476 25,586 4,438

Source: Winnipeg Commodity Exchange (WCE)

101

Fruits less grapes which rallied +6.0% to $1.85 per pound. The largest declines were seen in Valencia oranges, which fell – 14.1% to 52.4 cents per pound, and Delicious apples, which fell 5.5% to 86.8 cents per pound. Supply – US commercial production of selected fruits in 2001, the last reporting year, fell –8.8% to 32.992 million tons from 36.182 million tons in 2000. Oranges accounted for 37% of that US fruit production figure, followed by grapes at 20%, and apples at 15%. The value of US fruit production in 2001 was $11.694 billion. Demand – US per capita fresh fruit consumption in 2001 fell 3.0% to 97.53 pounds from 100.50 pounds in 2000 and the record high of 101.58 pounds in 1998. The highest per capita consumption categories for non-citrus fruits in 2001 were bananas (26.53 pounds), apples (15.81 pounds), grapes (7.59 pounds), nectarines and peaches (5.25 pounds), and strawberries (4.23 pounds). Per capital consumption of citrus fruits was the highest for oranges (12.32 pounds), followed by grapefruit (4.82 pounds) and lemons (2.96 pounds). The utilization breakdown for 2001 shows that 39% of total US fruit utilization went for fresh fruit, 21% for wine, 14% for dried fruit, 11% for canned fruit, 9% for juice, and 4% for frozen fruit.

A fruit is any seed-bearing structure produced from a flowering plant. A widely used classification system divides fruit into fleshy or dry types. Fleshy fruits are juicy and include peaches, mangos, apples, and blueberries. Dry fruits include tree nuts such as almonds, walnuts, and pecans. Some foods that are commonly called vegetables, such as tomatoes, squash, peppers and eggplant, are technically fruits because they develop from the ovary of a flower. Worldwide, over 430 million tons of fruit are produced each year and are grown everywhere except the Arctic and the Antarctic. The tropics, because of their abundant moisture and warm temperatures, produce the most diverse and abundant fruits. Mexico and Chile produce more than half of all the fresh and frozen fruit imported into the US. In the US, the top three fruits produced are oranges, grapes, and apples. Virtually all US production of almonds, pistachios, and walnuts occurs in California, which leads the US in tree nut production. Prices – Fruit prices were strong in 2001, the last reporting year, with the fresh fruit CPI index rising +2.6% to 265.1 and the processed fruit CPI index rising +2.0% to 109.0. The largest price increases in 2001 were seen in navel oranges which rallied 18% to 72.2 cents per pound, grapefruit which rallied +6.7% to 65.1 cents per pound, and seed-

Commercial Production for Selected Fruits in the United States Year

Apples Cherries2

1996 1997 1998 1999 2000 2001 20021

5,191 5,162 5,823 5,315 5,332 4,714 4,263

1

Preliminary.

2

290 373 371 344 351 415 213

Cranberries Grapes

234 275 272 318 286 267 284

Sweet and tart.

5,554 7,291 5,820 6,236 7,688 6,570 7,339 3

Grapefruit Lemons

2,718 2,885 2,593 2,513 2,763 2,462 2,424

992 962 897 747 840 996 801

Utilized production.

Nectarines Oranges Peaches

247 264 224 274 267 275 300

11,426 12,692 13,670 9,824 12,997 12,221 12,374

Pine- Prunes Strawapples & Plums berries Tangelos

347 324 332 352 354 323 320

952 899 559 735 902 651 736

813 814 820 916 979 826 943

110 178 128 115 99 95 97

Tangerines

Total All Fruits

349 425 360 327 458 373 420

30,904 35,507 34,582 30,802 36,105 32,908 33,264

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

In Thousands of Short Tons

-------------------------------- Utiliz ed Production --------------------------------

--------------------------------------- Value of Production -------------------------------------

Noncitrus Tree Nuts3 Total Citrus2 ------------------------- In Thousands of Short Tons -------------------------

Citrus2 Noncitrus Tree Nuts3 Total ------------------------------------ In Thousands of Dollars ----------------------------------

1996 1997 1998 1999 2000 2001 20021 1

Pears

1,052 821 1,312 1,043 1,200 970 1,263 1,016 1,300 967 1,217 1,002 1,288 869

Utiliz ed Production for Selected Fruits in the United States

Year

In Thousands of Short Tons

15,712 17,271 17,770 13,633 17,276 16,216 16,194

16,103 18,363 16,545 17,331 18,923 16,734 17,126

831 1,210 908 1,288 1,086 1,304 1,448

32,646 36,844 35,223 32,252 37,209 34,254 34,856

2,517,394 2,582,767 2,600,066 2,431,179 2,513,174 2,319,917 2,610,559

7,265,788 8,158,095 7,257,288 8,070,840 7,930,668 7,924,741 8,136,447

1,663,574 2,093,697 1,365,349 1,505,926 1,496,584 1,513,063 2,053,290

11,446,756 12,834,559 11,222,703 12,007,945 11,898,193 11,743,693 12,819,421

Preliminary. 2 Year harvest was completed. 3 Tree nuts on an in-shell equivalent. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Annual Average Retail Prices for Selected Fruits in the United States

In Dollars Per Pound ------------- Oranges -------------

Year

1996 1997 1998 1999 2000 2001 20021 1

Estimate.

102

Red Delicious Apples

Bananas

.930 .907 .943 .897 .919 .868 .948

.490 .487 .494 .491 .501 .507 .508

Anjou Pears

Thompson Seedless Grapes

Lemons

Grapefruit

Navel

Valenci a s

.916 .985 1.089 .950 .986 .966 .997

1.685 1.712 1.589 1.841 1.745 1.850 1.887

1.114 1.154 1.198 1.236 1.289 1.265 1.391

.574 .520 .599 .612 .610 .651 .648

.707 .592 .565 .843 .613 .722 .836

.703 .682 .657 .947 .610 .524 .565

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

FRUITS Utiliz ation of Noncitrus Fruit Production, and Value in the U.S.

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21 1

Preliminary.

1,000 Short Tons (Fresh Equivalent)

Utilized Production

Fresh

Canned

Dried

Juice

Frozen

Wine

Other

Value of utilized Production $1,000

16,554 17,339 16,348 16,103 18,363 16,545 17,331 18,847 16,734 17,215

6,391 6,710 6,285 6,313 6,643 6,505 6,674 7,002 6,477 6,607

2,042 2,090 1,753 1,873 2,130 1,845 1,986 1,812 1,860 1,720

2,339 2,816 2,400 2,275 2,660 1,911 2,150 3,023 2,290 2,610

1,749 1,886 1,857 1,582 1,675 1,786 1,887 1,713 1,462 1,281

627 665 647 604 699 713 719 695 669 576

3,029 2,711 2,992 3,043 4,035 3,315 3,351 4,130 3,569 3,999

181 228 205 180 247 198 248 193 169 137

6,130,119 6,268,176 6,815,962 7,265,788 8,158,095 7,257,288 8,070,840 7,888,435 7,910,713 8,163,929

--------------------------------------------------------- Processed ---------------------------------------------------------

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Indexes for Fruits in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

----------------------------------------- Producer Price Index ---------------------------------------Fresh Dried Canned Fruits Frozen Fruits Fruit Fruit and Juices and Juices ------------------------------------------------ 1982 = 100 -------------------------------------------------

Index of all Fruit and Nut Prices Received by Growers (1990-92=100)

93 90 97 118 110 111 115 99 109 112

Estimate.

84.5 82.7 85.8 100.8 101.3 90.5 103.2 91.4 97.7 91.5

113.0 116.1 116.1 119.1 119.8 119.3 116.2 117.9 118.5 ----

126.1 126.0 129.4 137.5 137.5 138.6 130.0 131.7 143.4 141.7

Year

188.8 201.2 219.0 234.4 236.3 246.5 266.3 258.3 269.3 276.5

132.3 133.1 137.2 145.2 148.8 101.9 105.4 106.9 109.0 111.5

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Fresh Fruit: Per Capita Consumption1 in the United States

1993 1994 1995 1996 1997 1998 1999 2000 2001 20022

110.9 111.9 115.8 123.9 117.3 ----------------

------- Consumer Price Index ------Fresh Processed Fruit Fruit -------------- 1982-84 = 100 --------------

----------------------------------- Citrus Fruit ---------------------------------------Tangerines Oranges and Tangelos Lemons Grapefruit Total

14.15 12.94 11.83 12.58 13.91 14.61 8.38 11.74 11.88 10.63

1.86 2.09 1.99 2.15 2.52 2.17 2.21 2.84 2.95 2.98

2.64 2.66 2.84 2.86 2.76 2.46 2.61 2.44 2.96 3.33

6.20 6.07 6.00 5.85 6.18 5.94 5.75 5.11 4.82 4.82

25.81 24.74 23.86 24.60 26.54 26.61 20.31 23.42 24.11 22.85

In Pounds

---------------------------------------------- Noncitrus Fruit ---------------------------------------CranApples Apricots Avacados Bananas Cherries berries

19.00 19.36 18.69 18.67 18.09 18.98 18.50 17.46 15.59 15.97

.13 .15 .10 .09 .14 .12 .12 .15 .08 .09

1.33 1.35 1.58 1.58 1.73 1.52 1.92 2.21 2.50 2.33

26.60 27.78 27.08 27.60 27.16 28.01 30.70 28.44 26.61 26.73

.43 .52 .29 .40 .60 .52 .63 .60 .77 .70

.07 .08 .08 .08 .07 .08 .11 .14 .13 .11

1

All data on calendar-year basis except for citrus fruits; apples, August; grapes and pears, July; grapefruit, September; lemons, August of prior year; all other citrus, November. 2 Preliminary. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Fresh Fruit: Per Capita Consumption1 in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 20022

In Pounds

-------------------------------------------------------------------------------- Noncitrus Fruit Continued -----------------------------------------------------------------------------------------Nectarines PinePlums & StrawTotal Total Grapes Kiwifruit Mangos & Peaches Pears apples Papaya Prunes berries Noncitrus Fruit

7.25 7.42 6.82 7.89 7.14 8.01 7.28 7.61 8.58

.57 .55 .54 .48 .55 .55 .56 .57 .49

.97 1.12 1.34 1.44 1.49 1.62 1.75 1.79 1.97

5.42 5.33 4.38 5.51 4.77 5.37 5.40 5.24 5.34

3.44 3.36 3.05 3.39 3.29 3.33 3.21 3.07 2.91

2.02 1.91 1.90 2.34 2.75 3.03 3.22 3.16 3.81

.30 .37 .54 .47 .47 .62 .68 .78 .79

1.60 .93 1.43 1.51 1.18 1.28 1.19 1.32 1.25

4.05 4.06 4.27 4.05 3.88 4.52 4.81 4.17 4.89

75.13 73.18 72.96 75.13 75.07 80.63 77.35 73.73 76.37

99.87 97.04 97.56 101.70 101.68 100.94 100.77 97.84 99.22

1

All data on calendar-year basis except for citrus fruits; apples, August; grapes and pears, July; grapefruit, September; lemons, August of prior year; all other citrus, November. 2 Preliminary. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

103

Gas York Mercantile Exchange (NYMEX). The NYMEX natural gas futures contract calls for the delivery of natural gas representing 10,000 million British thermal units (mmBtu) at the Henry Hub in Louisiana, which is the nexus of 16 intrastate and inter-state pipelines. The contract is priced in term of dollars per mmBtu. NYMEX also has basic swap futures contracts available for 30 different natural gas pricing locations against the benchmark Henry Hub location. Natural gas futures are also listed in London on the International Petroleum Exchange (IPE). Prices – NYMEX natural gas futures on the nearestfutures chart in 2003 showed an upward spike to a record high of $11.90 per mmBtu related to the start of the Iraq war, but then quickly settled back down to the $5-7 area through Q2 and Q3 2003. Natural gas prices then moved higher in December to post a 10-month high of $7.55 and closed the year at $6.19, up 16% from the 2002 close of $5.34. The rally late in the year was generally attributed to higher demand with the stronger economy, the weak dollar, and early cold weather in the US. However, inventories were also rising during that period and federal authorities started an investigation into allegations of price manipulation. Supply – The US recovered 24,130 billion cubic feet of natural gas in 2002, down 1.4% from 2001. The world’s largest natural gas producers are Russia (with about 34% of world production), the US (30%), and Canada (10%).

Natural gas is a fossil fuel that is colorless, shapeless, and odorless in its pure form. It is a mixture of hydrocarbon gases formed primarily of methane, but it can also include ethane, propane, butane, and pentane. Natural gas is combustible, clean burning, and gives off a great deal of energy. In about 500 BC, the Chinese discovered that the energy in natural gas could be harnessed. They passed it through crude bamboo-shoot pipes and then burned it to boil sea water to create potable fresh water. Around 1785, Britain became the first country to commercially use natural gas produced from coal for streetlights and indoor lights. In 1821, William Hart dug the first well specifically intended to obtain natural gas, and is regarded by many as the “father of natural gas” in America. There is a vast amount of natural gas estimated to still be in the ground in the US, concentrated in Texas and the Gulf of Mexico. In the US, the industrial sector accounts for 43% of natural gas used, with the residential sector coming in second. The major industries using natural gas include pulp and paper, metals, chemicals, petroleum refining, stone, clay and glass, plastic, and food processing. Natural gas as a source of energy has always been much cheaper than electricity for residential consumers. Natural gas costs less than 30% of the cost of electricity per Btu. Natural gas accounts for roughly one-quarter of all US energy consumption. Natural gas futures and options are traded on the New

World Production of Natural Gas (Monthly Average Marketed Production3) Australia

Year

1994 1995 1996 1997 1998 1999 2000 2001 20021 20032

87,178 96,912 99,461 99,077 95,265 92,440 92,746 96,523 96,841 93,959

Canada

China

Germany

Indonesia

480,577 511,447 530,891 537,295 538,273 569,819 588,447 594,397

57,036 58,261 72,609 81,954 84,033 79,523 90,287 98,431 106,720 109,099

52,911 55,714 62,479 61,804 60,748 62,651 59,164 60,463 61,147

190,775 203,633 248,574 248,585 274,281 282,485 267,707 258,122 276,990

India

Italy

Mexico

55,355 72,796 74,776 84,892 88,195 91,468 94,783 91,063 92,568 99,711

64,122 63,371 63,436 61,173 60,159 56,616 54,289 48,008 45,782 42,097

95,250 93,473 106,214 109,568 182,615 182,610 178,861 171,940 168,675 173,896

Netherlands

207,317 209,229 236,803 209,526 198,554 186,672 178,989 192,180 186,206

(In Terajoule4)

Romania

Russia

51,720 50,401 48,023 41,547 32,932 38,952 38,254 40,422 38,004 36,600

1,657,151 1,891,583 1,844,954 1,771,467 1,665,726 1,807,313 1,898,046 1,887,953 1,934,011 1,962,552

United Kingdom

United States

214,710 246,818 293,536 299,503 314,506 345,040 377,565 370,237 397,129

1,703,771 1,683,674 1,706,764 1,711,134 1,722,107 1,704,788 1,726,861 1,759,236 1,722,443

1

Preliminary. 2 Estimate. 3 Compares all gas collected & utilized as fuel or as a chemical industry raw material, including gas used in oilfields and/or NA = Not available. gasfields as a fuel by producers. 4 Terajoule = 10 to the 12th power Joule = approximately 10 to the 9th power BTU. Source: United Nations

Marketed Production of Natural Gas in the United States, by States Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

Alaska

California

Colorado

Kansas

Louisiana

430,350 555,402 469,550 480,828 468,311 466,648 462,967 458,995 471,440 464,669

315,851 309,427 279,555 286,494 285,690 315,277 382,715 376,580 377,824 360,559

400,985 453,207 523,084 572,071 637,375 696,321 722,738 752,985 696,237 605,384

686,347 712,730 721,436 712,796 687,215 603,586 553,419 525,729 480,145 450,801

4,991,138 5,169,705 5,108,366 5,289,742 5,229,821 5,277,188 5,275,730 5,068,863 5,456,463 1,537,769

Preliminary.

104

Michigan Mississippi

204,635 222,657 238,203 245,740 305,950 278,076 277,364 296,556 275,036 275,363

80,695 63,448 95,533 103,263 107,300 108,068 111,021 88,558 107,541 112,812

(In Million Cubic Feet)

New Mexico

Oklahoma

1,409,429 1,557,689 1,625,837 1,554,087 1,558,633 1,501,098 1,511,671 1,695,295 1,689,125 1,579,130

2,049,942 1,934,864 1,811,734 1,734,887 1,703,888 1,669,367 1,594,002 1,612,890 1,615,384 1,623,152

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Wyoming

Total

6,249,624 634,957 6,353,844 696,018 6,330,048 673,775 6,470,620 666,036 6,453,873 738,368 6,408,444 903,836 6,211,613 971,230 6,205,249 1,088,328 6,335,794 1,363,879 5,251,807 1,436,692

Texas

18,981,915 19,709,525 19,506,474 19,812,241 19,866,093 19,961,348 19,804,848 20,197,511 20,630,412 19,968,906

GAS World Production of Natural Gas Plant Liquids Year

Algeria

Canada

Mexico

Saudi Arabia

140 145 150 160 155 190 230 250 250 250

529 581 596 636 651 653 699 709 698 725

461 447 423 388 424 439 438 433 408 418

698 701 697 712 755 666 705 680 810 1,011

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031

(Thousand Barrels per Day) Russia

United States

Persian Gulf2

OAPEC3

OPEC4

World

200 180 185 195 220 231 232 237 236 257

1,727 1,762 1,830 1,817 1,759 1,850 1,911 1,868 1,880 1,720

1,071 1,106 1,082 1,152 1,225 1,153 1,253 1,347 1,508 1,756

1,267 1,301 1,295 1,384 1,449 1,412 1,578 1,706 1,873 2,119

1,465 1,506 1,501 1,589 1,662 1,648 1,798 1,933 2,098 2,328

5,299 5,492 5,585 5,729 5,883 5,995 6,289 6,601 6,812 7,102

1

Preliminary. 2 Bahrain, I ran, I raq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates. 3 Organization of Arab Petroleum Exporting Countries. 4 Organization of Pertroleum Exporting Countries. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Recoverable Reserves and Deliveries of Natural Gas in the United States

Year

Gross Withdrawals

Recoverable Reserves of Natural Gas D e c. 3 1 2

22,726 23,581 23,744 24,114 24,213 24,108 23,823 24,174 24,476 24,130

162,415 163,837 165,146 166,474 167,223 164,041 167,406 177,427 183,460 186,946

1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21

----------------------------------------- Deliveries -----------------------------------------Electric Utility Total Plants3 Residential Commercial Industrial Deliveries

4,956 4,848 4,850 5,241 4,984 4,520 4,726 4,996 4,776 4,906

2,863 2,897 3,034 3,161 3,215 2,999 3,045 3,218 3,037 3,154

2,682 2,987 3,197 2,732 4,065 4,588 4,820 5,206 5,343 5,672

7,981 8,167 8,580 8,870 8,511 8,320 8,079 8,142 7,363 7,222

(in Billions of Cubic Feet) Heating Value BTU per Cubic Foot

------- Consumption ------Used as L e a se & Pipeline Plant Fuel Fuel

18,483 18,899 19,660 20,006 20,782 20,436 20,679 21,538 20,477 20,969

1,172 1,124 1,220 1,250 1,203 1,173 1,079 1,151 1,089 1,053

624 685 700 711 751 635 645 642 624 635

1,027 1,028 1,027 1,027 1,026 1,031 1,027 1,025 1,028

1

Preliminary. 2 Estimated proved recoverable reserves of dry natural gas. 3 Figures include gas other than natural (impossible to segregate); therefore, shown separately from other consumption. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Gas U tility S ales in th e U n ited S tates b y Typ es an d C lass o f S ervice Total Number of Uti li ty Customers Sales (Mi lli ons)

Year

1992 1993 1994 1995 1996 1997 1998 1999 1 20002 1

9,907 10,151 9,248 9,221 9,532 8,880 8,630 8,889 9,052

P reliminary.

2

------------------------- C lass b y S ervice ------------------------Resi - CommerElectri c denti al ci al Industri al Generati on Other

56.1 57.0 57.9 58.7 59.8 59.8 60.4 64.0 64.1

E stimate.

4,694 5,054 4,845 4,803 5,198 5,013 4,828 4,865 4,941

2,209 2,397 2,253 2,281 2,395 2,234 2,157 2,087 2,116

1,959 2,009 1,690 1,591 1,519 1,279 1,153 1,200 1,382

813 524 420 328 271 245 336 644 522

231 168 159 218 148 123 117 69 91

(In Tri lli ons of BTUs)

------------ R even u e - Millio n $ F ro m S ales to C u sto mers -----------Resi - CommerElectri c Total denti al ci al i ndustri al Generati on Other

46,178 50,137 49,852 46,436 51,115 51,531 47,930 48,423 59,667

26,702 29,787 30,552 28,742 32,021 33,175 31,333 31,472 37,446

10,865 12,076 12,276 11,573 12,726 12,632 11,523 11,133 13,648

5,837 6,162 5,529 4,816 5,039 4,518 3,779 3,883 6,011

2,077 1,480 1,170 836 783 766 899 1,664 2,058

698 632 597 549 545 488 391 272 504

S ource: American Gas Associat ion (AGA)

Salient Statistics of Natural Gas in the United States

Year

------------------------------- Supply ------------------------------- ---------------- Disposition ---------------- --------- Average Price Delivered to Consumers --------MarWellTotal A dded Dry Storage Imports keted Extrachead Resi- Com- Indus- Electric to D i sTotal ConWith- (Contion ProProtrial Utilities Loss duction drawals sumed) Supply sumption Exports Storage position Price Imports Exports dential mercial duction ------------------------------------------- In Billions of Cubic Feet ------------------------------------------------ --------------- USD Per Thousand Cubic Feet ---------------

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022

18,982 886 19,710 889 19,506 908 19,812 958 19,866 964 19,961 938 19,805 973 20,198 1,016 20,630 954 19,969 922

1

Preliminary.

2

Estimate.

18,095 18,821 18,599 18,854 18,902 19,024 18,832 18,182 19,676 19,047

2,799 2,579 3,025 2,981 2,894 2,432 2,808 3,550 2,344 3,126

2,350 2,624 2,841 2,937 2,994 3,152 3,586 3,782 3,977 4,008

23,578 24,207 24,837 25,635 25,502 24,859 25,055

20,790 21,247 22,207 22,610 22,737 22,246 22,405 23,368 22,246 22,534

140 162 154 153 157 159 163 244 373 516

2,835 2,865 2,610 2,979 2,870 2,961 2,636 2,721 3,509 2,679

22,726 23,581 23,744 24,114 24,213 24,108 23,823 24,174 24,476 24,130

2.04 2.03 1.85 1.87 1.55 1.49 2.17 1.97 2.32 2.17 1.96 1.97 2.19 2.24 3.69 3.95 4.02 4.43 2.95 3.15

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

2.59 2.50 2.39 2.97 3.02 2.45 2.61 4.10 4.19 3.41

6.16 6.41 6.06 6.34 6.94 6.82 6.69 7.76 9.64 7.88

5.22 5.44 5.05 5.40 5.80 5.48 5.33 6.59 8.43 6.57

3.07 3.05 2.71 3.42 3.59 3.14 3.12 4.45 5.28 3.99

2.61 2.28 2.02 2.69 2.78 2.40 2.62 4.38 4.61 3.78

105

GAS Average Open Interest of Natural Gas Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

127,254 148,448 155,024 156,231 192,652 244,472 262,845 364,532 458,924 415,642

128,336 151,882 150,521 162,567 198,853 268,649 266,826 346,343 491,215 420,329

118,480 157,097 149,809 171,467 203,402 284,312 295,176 360,032 527,765 367,673

119,908 150,101 159,132 181,745 251,344 315,336 313,739 380,632 559,413 354,154

120,894 148,797 147,616 206,685 255,837 332,398 342,455 421,145 556,277 365,838

120,956 144,402 156,959 197,637 264,517 330,725 347,353 456,512 526,016 366,610

111,044 143,942 151,913 199,296 255,878 316,034 330,604 473,675 494,133 357,299

135,652 140,297 135,191 213,640 273,350 353,767 339,025 497,972 437,285 343,622

156,238 135,226 138,657 235,509 275,868 336,622 373,654 494,475 419,532 354,568

145,766 133,969 144,944 242,184 252,827 316,157 369,448 488,187 413,312 352,685

139,471 140,301 147,854 231,556 236,292 309,130 389,363 455,766 393,953 356,622

139,054 166,227 151,498 210,259 240,832 292,161 377,470 415,882 391,424 341,871

Source: New York Mercantile Exchange (NYMEX)

Volume of Trading of Natural Gas Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

(In Thousands of Contracts)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

667.6 733.0 887.2 922.8 1,005.6 1,296.7 1,388.8 1,044.4 1,942.5 2,134.4

470.9 557.8 655.7 693.6 1,089.1 1,158.6 1,470.9 1,044.6 1,668.6 1,909.1

373.5 676.1 694.6 664.7 1,193.5 1,788.5 1,505.0 1,131.7 2,381.1 1,362.4

344.7 524.5 620.0 836.3 1,625.9 1,655.8 1,179.3 1,144.8 2,421.7 1,321.3

411.1 621.3 590.7 945.4 1,245.2 1,465.3 1,822.2 1,632.5 2,281.4 1,521.7

465.8 622.5 681.3 803.7 1,568.8 1,474.2 1,853.7 1,536.9 1,911.7 1,584.8

438.8 641.8 829.0 812.9 1,310.4 1,865.8 1,331.4 1,350.3 2,266.1 1,543.7

724.2 745.6 628.8 1,313.8 1,237.0 1,892.1 1,483.9 1,510.9 2,115.6 1,315.3

578.7 548.3 679.1 1,377.1 1,656.3 1,978.6 1,510.2 901.1 1,990.0 1,503.7

594.2 664.4 924.4 1,394.0 1,339.5 1,676.5 1,594.9 1,639.7 2,103.4 1,948.9

621.9 763.0 802.8 1,104.8 1,243.1 1,552.3 1,759.5 1,891.7 1,569.2 1,376.6

721.8 988.5 820.4 1,054.6 1,464.0 1,360.7 975.1 1,639.6 1,706.4 1,515.2

6,413.2 8,086.7 8,813.9 11,923.6 15,978.3 19,165.1 17,875.0 16,468.4 24,357.8 19,037.1

Source: New York Mercantile Exchange (NYMEX)

Average Price of Natural Gas at Henry Hub

In Dollars Per MMBtu

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

2.49 1.51 2.93 3.31 2.10 1.85 2.42 8.18 2.25 5.49

2.59 1.58 4.82 2.22 2.22 1.77 2.65 5.62 2.31 7.41

2.08 1.54 2.95 1.89 2.24 1.79 2.79 5.16 3.03 6.08

2.05 1.63 2.23 2.03 2.43 2.15 3.03 5.16 3.42 5.27

1.87 1.64 2.24 2.24 2.14 2.25 3.58 4.21 3.49 5.81

1.96 1.62 2.49 2.20 2.17 2.30 4.28 3.71 3.22 5.83

1.88 1.44 2.48 2.19 2.17 2.31 3.96 3.11 2.98 5.03

1.59 1.56 2.03 2.48 1.85 2.79 4.41 2.95 3.09 4.97

1.48 1.64 1.84 2.85 2.02 2.54 5.11 2.15 3.55 4.61

1.54 1.77 2.37 3.04 1.89 2.72 5.02 2.45 4.12 4.66

1.54 2.04 3.03 3.02 2.10 2.35 5.54 2.35 4.04 4.47

1.69 2.71 3.91 2.36 1.72 2.36 8.95 2.43 4.75 6.13

1.90 1.72 2.78 2.49 2.09 2.27 4.31 3.96 3.35 5.48

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

106

Gasoline Gasoline is a complex mixture of hundreds of lighter liquid hydrocarbons and is used chiefly as a fuel for internal-combustion engines. Gasoline is the single largest volume refined product sold in the US. Petroleum crude, or crude oil, is still the most economical source of gasoline with refineries turning more than half of every barrel of crude oil into gasoline. The three basic steps to all refining operations are the separation process (separating crude oil into various chemical components), conversion process (breaking the chemicals down into molecules called hydrocarbons), and treatment process (transforming and combining hydrocarbon molecules and other additives). Another process, called hydro treating, removes a significant amount of sulfur from finished gasoline as is currently required by the state of California. Octane is a measure of a gasoline’s ability to resist pinging or knocking noise from an engine. Most gasoline stations offer three octane grades of unleaded fuel—regular at 87 (R+M)/2, midgrade at 89 (R+M)/2, and premium at 93 (R+M)/2. Higher octane ratings mean less engine knock. Additional refining steps are needed to increase the octane. This does not make the gasoline any cleaner or better, but yields a different blend of hydrocarbons that burn more slowly. The additional refining steps also increase the price per gallon. In an attempt to improve air quality and reduce harmful emissions from internal combustion engines, Congress in 1990 amended the Clean Air Act to mandate the addition of ethanol to gasoline. Some 2 billion gallons of ethanol is now added to gasoline each year in the US. The most common blend is E10, which contains 10% ethanol and 90%

gasoline and that mixture is approved by all auto manufacturers for use in US vehicles. Ethanol is an alcohol-based fuel produced by fermenting and distilling crops such as corn, barley, wheat and sugar. Unleaded gasoline futures and options trade at the New York Mercantile Exchange (NYMEX). The NYMEX gasoline futures contract calls for the delivery of 1,000 barrels (42,000 gallons) of unleaded gasoline in the New York harbor and is priced in terms of dollars and cents per gallon. Prices – Gasoline prices generally followed crude oil prices during 2003, rallying early in the year ahead of the Iraq war, dipping in spring, and then showing a sustained rally late in the year on tight supplies and strong demand. NYMEX unleaded gasoline futures closed 2003 at $1.02 per gallon, mildly higher than the 92-cent close in 2002. However, that was at the upper end of the range seen in the past two decades. The retail price of regular unleaded gasoline averaged $1.61 per gallon in 2003 (through October), the highest level of the past three decades and up from $1.36 in 2002. The retail price of aviation gasoline rose to an average $1.50 in 2003 from $1.29 in 2002. Supply – US production of gasoline in 2003 averaged 8.467 million barrels per day, slightly lower than 8.475 million barrels per day in 2002. Gasoline stocks in September 2003 were tight at 145 million barrels, down from 162 million in 2002 and 2001. Demand – US consumption of finished motor gasoline in 2003 averaged 8.929 million barrels per day, up +0.9% from 2002. Gasoline accounts for about one-half of US national oil consumption.

Average Spot Price of Unleaded Gasoline in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

42.40 50.99 50.70 67.64 47.85 34.24 70.43 83.32 54.30 87.56

43.75 51.43 53.26 62.49 45.14 31.81 81.30 82.56 55.41 99.62

44.04 50.74 58.56 61.28 44.13 42.33 89.11 78.18 69.64 95.51

48.98 61.01 69.17 58.59 46.98 50.11 73.15 94.95 74.66 80.08

50.62 64.76 65.10 62.08 48.26 48.86 89.06 92.37 70.32 76.16

52.84 59.47 58.03 55.17 43.95 48.65 96.18 71.85 71.65 80.65

54.52 51.45 61.65 58.58 42.29 58.35 86.76 68.31 76.62 87.17

55.61 53.45 61.17 70.42 40.14 63.89 86.97 77.18 76.75 100.42

46.53 56.10 62.43 62.17 42.70 69.37 96.04 75.00 78.36 90.41

51.14 48.89 65.52 58.35 43.71 62.63 94.71 59.79 82.34 87.12

52.32 51.15 69.23 55.60 36.78 69.57 93.94 51.34 76.08 87.33

46.87 53.44 68.58 51.75 30.92 70.55 73.66 51.85 80.56 88.37

49.14 54.41 61.95 60.34 42.74 54.20 85.94 73.89 72.22 88.37

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Average Open Interest of Unleaded Regular Gasoline Futures in New York

In Contracts

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

135,366 61,015 64,561 68,188 106,353 105,532 89,049 117,540 136,795 117,558

120,204 67,631 64,990 84,693 102,656 113,683 103,586 126,762 139,191 124,288

118,977 65,201 70,100 92,520 108,667 111,449 105,448 124,631 133,649 113,380

122,092 76,323 71,895 97,619 117,521 110,531 105,133 124,162 129,274 98,627

96,525 76,269 66,172 90,407 107,235 107,644 103,831 111,576 120,224 96,405

89,854 69,676 52,882 78,492 100,792 102,927 96,772 103,058 114,663 93,285

86,401 64,379 55,394 83,082 89,846 113,619 80,886 101,249 106,463 95,433

76,213 58,426 55,618 103,538 86,902 120,468 66,598 92,156 94,648 99,394

67,881 62,089 57,119 103,250 85,188 120,328 74,735 87,841 95,754 85,457

70,258 58,782 59,993 94,602 81,991 111,758 80,446 102,414 100,427 90,007

Source: New York Mercantile Exchange (NYMEX)

Nov.

D e c.

71,245 63,679 57,902 70,098 58,416 62,760 92,852 103,497 87,306 103,079 109,428 96,652 88,509 92,041 115,699 126,634 105,175 109,737 95,002 105,895

107

GASOLINE

USD Per Gallon ----- New York Harbor

Volume of Trading of Unleaded Regular Gasoline Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

634.0 592.3 543.8 590.1 613.6 561.5 693.6 825.2 795.0 1,054.1

526.5 506.6 449.5 563.2 612.3 619.7 721.9 701.2 744.7 968.7

615.6 736.7 570.3 605.1 766.4 876.4 921.6 809.2 942.7 1,010.9

677.9 663.7 676.2 623.2 789.3 741.5 730.0 981.0 1,019.3 909.0

637.0 780.6 623.3 618.3 681.1 721.1 927.5 1,056.5 985.2 933.7

673.0 680.8 468.0 555.5 753.1 737.7 838.5 895.0 834.5 944.0

602.0 565.7 533.8 721.4 680.6 822.0 650.6 737.3 967.8 987.5

748.4 556.6 463.8 795.4 592.0 800.4 677.2 790.8 893.6 1,021.5

569.4 573.6 469.0 664.9 654.2 751.3 641.2 581.9 867.6 943.0

684.7 473.0 527.6 613.6 670.2 705.1 635.7 664.9 1,105.0 877.1

582.4 480.5 487.6 509.9 577.8 748.8 612.1 613.3 865.9 760.8

520.0 461.7 499.3 614.6 601.7 615.7 595.1 567.2 958.4 761.6

7,470.8 7,071.8 6,312.3 7,475.1 7,992.3 8,701.2 8,645.2 9,223.5 10,979.7 11,172.1

Source: New York Mercantile Exchange (NYMEX)

Production of Finished Motor Gasoline in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

7,097 7,303 7,333 7,308 7,749 7,886 7,798 7,888 8,160 8,038

6,790 7,243 7,303 7,315 7,485 7,607 7,658 7,822 8,117 8,031

6,760 7,168 7,242 7,322 7,591 7,531 8,032 8,011 8,072 7,917

7,195 7,529 7,475 7,822 8,029 8,138 8,130 8,450 8,626 8,449

7,348 7,678 7,724 8,056 8,057 8,207 8,398 8,651 8,729 8,780

7,455 7,843 7,820 8,180 8,372 8,402 8,550 8,637 8,661 8,694

7,380 7,747 7,811 7,947 8,287 8,280 8,320 8,481 8,665 8,653

7,432 7,642 7,696 8,048 8,200 8,183 8,251 8,277 8,666 8,773

7,385 7,785 7,585 8,147 8,029 8,187 8,358 8,381 8,320 8,524

7,151 7,544 7,496 8,039 7,995 8,266 8,031 8,446 8,190 8,578

7,849 7,739 7,835 7,984 8,263 8,142 8,394 8,366 8,738 8,764

7,867 7,821 7,784 8,143 8,395 8,471 8,298 8,301 8,734 8,759

7,312 7,588 7,647 7,870 8,082 8,111 8,186 8,312 8,475 8,497

Preliminary.

108

In Thousand Barrels per Day

Jan.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

GASOLINE Disposition of Finished Motor Gasoline, Total Product Supplied in the U.S. Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousand Barrels per Day

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

6,980 7,163 7,254 7,312 7,590 7,701 7,653 8,099 8,227 8,504

7,275 7,481 7,552 7,651 7,755 8,031 8,291 8,234 8,607 8,540

7,395 7,788 7,729 7,808 7,956 8,128 8,305 8,532 8,655 8,585

7,564 7,651 7,869 8,067 8,137 8,506 8,375 8,575 8,766 8,785

7,644 7,894 7,998 8,128 8,070 8,420 8,661 8,706 9,078 9,097

7,922 8,220 8,089 8,260 8,437 8,886 8,824 8,690 9,140 9,165

7,884 7,888 8,135 8,471 8,659 8,942 8,642 9,023 9,143 9,209

7,975 8,187 8,216 8,195 8,500 8,579 8,921 8,953 9,313 9,410

7,615 7,786 7,641 8,004 8,308 8,305 8,518 8,557 8,687 8,927

7,548 7,781 8,038 8,166 8,405 8,542 8,417 8,655 8,814 9,037

7,464 7,866 7,875 7,955 8,136 8,240 8,384 8,677 8,829 8,949

7,924 7,742 7,775 8,093 8,401 8,859 8,670 8,585 8,893 9,004

7,601 7,789 7,891 8,017 8,253 8,431 8,472 8,610 8,848 8,934

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Stocks of Finished Gasoline2 on Hand in the United States, at End of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

194.1 182.7 168.7 164.9 175.3 185.2 165.3 158.7 169.7 158.4

186.2 180.0 168.4 161.3 172.8 178.4 156.4 154.6 165.5 152.1

175.6 167.8 158.3 153.8 166.4 167.8 157.1 144.7 159.8 145.0

176.4 167.1 159.8 152.0 168.3 168.9 160.6 150.3 167.0 151.9

179.0 167.1 161.8 157.8 174.9 176.5 162.2 160.1 168.3 156.1

176.9 163.5 163.8 163.9 177.7 172.3 164.5 169.4 167.6 153.4

172.9 166.0 163.7 150.6 172.5 163.6 164.6 162.3 164.8 149.6

167.6 154.6 154.9 149.6 168.8 158.6 151.0 150.6 157.3 144.7

169.2 158.9 161.3 158.1 164.7 159.2 154.2 158.0 157.4 144.8

161.7 155.6 149.1 158.0 160.0 158.8 147.4 160.2 148.2 140.3

176.6 155.6 150.7 161.1 167.5 160.5 156.7 161.2 158.0 145.9

175.9 161.3 157.0 166.1 172.0 151.6 153.0 161.5 161.9

Preliminary.

2

I ncludes oxygenated and other finished.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Average Refiner Price of Finished Motor Gasoline to End Users1 in the U.S. Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

In Millions of Barrels

In Cents Per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

66.8 74.5 74.6 86.6 73.3 59.2 91.7 106.8 70.6 106.0

67.6 73.3 74.8 86.1 69.0 56.8 98.7 106.7 71.8 122.1

67.3 73.1 79.8 84.3 65.6 65.1 113.1 103.9 87.2 130.0

69.5 77.3 88.1 83.9 67.4 79.0 108.7 117.7 100.4 120.1

71.1 83.4 92.7 84.5 71.0 78.2 110.3 130.1 99.9 110.0

74.1 83.9 90.3 83.3 70.4 75.6 121.3 120.7 99.1 109.3

77.0 80.0 87.5 81.5 69.4 80.6 117.3 103.2 100.3 110.6

81.5 76.9 84.9 86.8 66.7 86.5 110.3 102.5 100.1 123.1

79.6 75.8 84.4 87.2 65.4 88.8 117.5 1,009.2 100.1 126.5

76.9 73.6 84.4 84.3 66.4 87.1 115.5 89.9 104.0 115.0

77.5 71.8 86.7 81.6 64.0 88.4 113.5 76.9 101.2 109.5

75.1 73.0 85.9 77.8 60.0 90.3 106.3 68.5 98.1

73.8 76.5 84.7 83.9 67.3 78.1 110.6 103.2 94.7 116.6

Excludes aviation and taxes.

2

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

109

GASOLINE Average Retail Price of Unleaded Premium Motor Gasoline2 in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Cents per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

124.0 132.4 131.7 144.1 131.9 117.1 148.6 165.7 132.3 166.6

124.5 131.6 131.1 143.4 127.1 115.5 155.1 167.1 133.0 182.8

124.3 130.6 134.8 141.5 122.9 118.6 172.3 163.8 145.0 192.4

126.0 132.5 143.1 141.3 123.7 136.7 169.8 174.8 162.2 184.6

127.4 138.3 150.7 140.9 127.5 137.0 168.2 193.4 162.5 172.9

130.0 141.1 148.1 141.1 127.9 133.9 178.6 188.1 160.8 170.0

132.7 138.4 145.3 138.8 126.8 137.8 177.3 169.5 160.7 171.0

136.7 135.2 142.1 143.3 124.4 144.1 168.9 163.6 162.0 180.8

136.4 133.2 141.7 145.8 123.0 146.8 176.4 172.6 161.9 191.1

134.5 131.5 140.8 142.6 123.6 146.4 174.4 156.0 164.3 178.9

135.4 129.2 142.8 139.7 122.5 145.4 173.8 142.7 164.3 172.4

133.7 129.0 143.8 136.3 118.7 148.6 167.9 131.2 158.9 168.6

130.5 133.6 141.3 141.6 125.0 135.7 169.3 165.7 157.8 177.7

Preliminary.

2

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

I ncluding taxes.

Average Retail Price of Unleaded Regular Motor Gasoline2 in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

104.3 112.9 112.9 126.1 113.1 97.2 130.1 147.2 113.9 147.3

105.1 112.0 112.4 125.5 108.2 95.5 136.9 148.4 113.0 164.1

104.5 111.5 116.2 123.5 104.1 99.1 154.1 144.7 124.1 174.8

106.4 114.0 125.1 123.1 105.2 117.7 150.6 156.4 140.7 165.9

108.0 120.0 132.3 122.6 109.2 117.8 149.8 172.9 142.1 154.2

110.6 122.6 129.9 122.9 109.4 114.8 161.7 164.0 140.4 151.4

113.6 119.5 127.2 120.5 107.9 118.9 159.3 148.2 141.2 152.4

118.2 116.4 124.0 125.3 105.2 125.5 151.0 142.7 142.3 162.8

117.7 114.8 123.4 127.7 103.3 128.0 158.2 153.1 142.2 172.8

115.2 112.7 122.7 124.2 104.2 127.4 155.9 136.2 144.9 160.3

116.3 110.1 125.0 121.3 102.8 126.4 155.5 126.3 144.8 153.5

114.3 110.1 126.0 117.7 98.6 129.8 148.9 113.1 139.4 149.4

111.2 114.7 123.1 123.4 105.9 116.5 151.0 146.1 135.8 159.1

Preliminary.

2

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

I ncluding taxes.

Average Retail Price of All-Types2 Motor Gasoline3 in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Cents per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

110.9 119.0 118.6 131.8 118.6 103.1 135.6 152.5 120.9 155.7

111.4 118.1 118.1 131.2 113.7 101.4 142.2 153.8 121.0 168.6

110.9 117.3 121.9 129.3 109.7 104.8 159.4 150.3 132.4 179.1

112.8 119.7 130.5 128.8 110.6 123.2 156.1 161.7 149.3 170.4

114.3 125.6 137.8 128.4 114.6 123.3 155.2 181.2 150.8 158.7

116.7 128.1 135.4 128.6 114.8 120.4 166.6 173.1 148.9 155.8

119.9 125.2 132.8 126.3 113.4 124.4 164.2 156.5 149.6 156.7

124.3 122.2 129.8 131.0 110.8 130.9 155.9 150.9 150.8 167.1

123.7 120.6 129.3 133.4 109.1 133.4 163.5 160.9 150.7 177.1

121.2 118.5 128.7 130.0 109.9 132.9 161.3 144.2 153.5 164.6

122.2 116.1 130.8 127.1 108.6 131.9 160.8 132.4 153.4 157.8

120.3 116.0 131.8 123.6 104.6 135.3 154.4 120.0 147.7 153.8

117.4 120.5 128.8 129.1 111.5 122.1 156.3 153.1 144.1 163.8

1 Preliminary. 2 Also includes types of motor oil not shown separately. U.S. Department of Energy (EI A-DOE)

3

I ncluding taxes.

Source: Energy I nformation Administration,

Average Refiner Price of Finished Aviation Gasoline to End Users2 in the U.S. Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Cents per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

88.6 99.6 97.6 113.7 104.3 87.1 118.7 128.5 111.8 139.7

88.4 99.8 100.6 114.9 101.1 85.1 119.5 129.2 110.6 NA

89.0 99.0 105.0 113.8 98.2 90.1 129.1 124.5 122.6 NA

91.3 101.3 111.2 114.7 98.6 101.4 124.3 134.9 129.8 NA

92.3 105.8 114.4 115.7 99.9 104.2 126.8 150.9 128.9 139.8

95.6 106.4 113.5 114.6 99.0 104.1 139.8 145.1 127.3 145.1

95.9 101.8 113.7 112.5 98.4 107.9 142.6 134.6 139.2 151.9

101.7 99.2 114.4 114.6 95.9 113.2 NA 136.3 136.9 162.2

101.1 101.3 114.3 115.6 94.1 115.4 138.2 142.4 139.1 158.9

100.0 96.8 115.0 113.9 95.1 117.6 134.9 125.3 143.0 150.8

100.0 95.4 115.1 113.0 93.2 116.4 134.9 119.4 141.8

99.2 96.0 115.3 107.7 88.5 119.6 126.1 115.8 139.8

95.6 100.5 111.6 113.8 97.2 105.9 130.6 132.3 128.8 149.8

Preliminary.

110

In Cents per Gallon

Jan.

2

Excluding taxes.

NA = Not available.

Source: Energy I nformation Administration, U.S. Department Energy (EI A-DOE)

Gold Gold is a dense, bright yellow metallic element with a high luster. Gold is an inactive substance and is unaffected by air, heat, moisture, and most solvents. Gold has been coveted for centuries for its unique blend of rarity, beauty, and near indestructibility. It is known that the Egyptians mined gold before 2,000 BC. The first pure gold coin was made on the orders of King Croesus of Lydia in the sixth century BC. In 1792, the United States first assigned a formal monetary role for gold when Congress put the nation’s currency on a bimetallic standard, backing it with gold and silver. Under the gold standard, the US governance was willing to exchange its paper currency for a set amount of gold, thus ensuring that the paper currency was backed by a physical asset with real value. However, President Nixon in 1971 severed the convertibility between the US dollar and gold, which led to the breakdown of the Bretton Woods international payments system. That meant that the prices of gold and of paper currencies floated freely according to supply and demand factors in their own markets. The US and other central banks now only hold physical gold reserves as a psychological backing for their paper currencies. World central banks hold a little over 1 billion troy ounces of gold, which equates to roughly $400 billion worth of gold (assuming a gold price of $400 per ounce). The US holds the most gold with roughly 262 million troy ounces, followed by Germany (112 million), and France (97 million). Although the US holds roughly $100 billion worth of gold, that is a mere fraction of the total US debt or the amount of outstanding US currency, illustrating that gold now plays an insignificant role in backing the dollar or paper currencies. Gold is found in nature in quartz veins and secondary alluvial deposits as a free metal. Gold is produced from mines on every continent with the exception of Antarctica, where mining is forbidden. Because it is virtually indestructible, all the gold that has ever been mined still exists above ground in some form or another. South Africa remains the world’s largest producing nation. The largest producer of gold in the US by far is the state of Nevada, with Alaska and California running a distant second and third. Gold is a vital industrial commodity. Pure gold is one of the most malleable and ductile of all the metals. It is a

World Mine Production of Gold 1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Kilograms (1 Kilogram = 32.1507 Troy Ounces)

Australia

Brazil

Canada

Chile

China

247,196 256,188 253,504 289,530 314,500 310,070 301,070 296,410 285,030 273,010

69,894 72,397 64,424 60,011 58,488 49,567 52,634 50,393 53,207 50,500

152,929 146,428 152,032 166,378 171,479 165,599 157,617 156,207 158,875 148,860

33,638 38,786 44,585 53,174 49,459 44,980 48,069 54,143 42,673 40,000

130,000 132,000 140,000 145,000 175,000 178,000 173,000 180,000 185,000 190,000

Year

Preliminary.

2

Estimate.

good conductor of heat and electricity. Gold melts at 1,064 degrees Celsius and boils at about 2,808 degrees Celsius. The prime industrial use of gold is in electronics. Another important sector is dental gold where it has been used for almost 3,000 years. Other applications for gold include decorative gold leaf, reflective glass, and jewelry. Gold futures and options are traded on the COMEX division of the New York Mercantile Exchange. Gold futures are traded on the Bolsa de Mercadorias and Futuros (BM&F) and on the Tokyo Commodity Exchange (TOCOM), the Chicago Board of Trade (CBOT) and he Korea Futures Exchange (KOFEX). The COMEX gold futures contract calls for the delivery of 100 troy ounces of gold (0.995 fineness), and the contract trades in terms of dollars and cents per troy ounce. Prices – Comex gold futures prices rallied early in 2003 on geopolitical concerns caused by the war with Iraq, but then fell back through early April. Gold prices in August then began a steady rally that took the contract to an 8year high of $417 in the last week of December. That was only mildly below the 14-year high of $425 posted in February 1990. The record high for cash gold prices was $675.75 posted in September 1980. Bullish factors for gold in the latter half of 2003 centered on the weak dollar and improved industrial demand with the rebounding global economy. The weak dollar was a key reason for gold’s strength, since the dollar depreciated not only against other world paper currencies but also against a store of wealth such as gold. Supply – World mine production of gold fell -1.9% in 2002 to 2.550 million kilograms (1 kilogram = 32.1507 troy ounces) from 2.600 million in 2001. The world’s largest producers of gold are South Africa (with 16% of world production), followed by the US (12%), Australia (11%), China (7.5%), Russia (6.2%), and Canada (5.8%). US gold mine production in 2002 fell to 298,000 kilograms from 335,000 kilograms in 2001. US refinery production in 2002 was 196,000 kilograms for domestic and foreign ores and 78,100 kilograms from secondary (old scrap). Demand – US consumption of gold in 2002 fell to 163,000 kilograms from 179,000 kilograms in 2001. Trade – US exports of gold in 2002 (including coinage) fell sharply to 257,000 kilograms from 489,000 kilograms in 2001. US imports of gold for consumption in 2002 rose to 217,000 kilograms from 194,000 kilograms in 2001.

Ghana

IndoPapua nesia N. Guinea

38,911 42,097 43,478 42,600 53,087 64,031 49,211 83,564 54,662 86,927 72,541 124,018 79,946 127,184 72,100 124,596 68,700 166,091 69,707 135,000

Source: U.S. Geological Survey (USGS)

61,671 59,286 53,405 51,119 45,418 61,641 65,747 74,540 67,043 65,200

Russia

South Africa

United States

Uzbekistan

World Total

149,500 146,600 132,170 123,300 124,000 114,900 125,870 143,000 152,500 158,000

619,201 580,201 523,809 496,846 491,680 465,100 451,300 430,800 394,800 399,234

331,000 327,000 317,000 326,000 362,000 366,000 341,000 353,000 335,000 298,000

70,000 65,000 65,000 72,000 81,700 80,000 85,000 85,000 87,000 90,000

2,280,000 2,250,000 2,230,000 2,290,000 2,450,000 2,500,000 2,570,000 2,590,000 2,600,000 2,550,000

111

GOLD

USD Per Troy Ounce ----- U.S. Gov’t Price Controls (1901 - 1933)($20.67) U.S. Gov’t Price Controls (1934 - 1939)($35.00) London Market Prices (Jan. 1940 - Feb. 1968) Handy & Harman, N.Y. (Mar. 1968 - May 1990) Composite (June 1990 - date)

Salient Statistics of Gold in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022

Mine Production

331,013 327,000 317,000 326,000 362,000 366,000 341,000 353,000 335,000 298,000

In Kilograms (1 Kilogram = 32.1507 Troy Ounces)

Refinery Production Exports Imports Domestic Secondary (Old (Excluding for ConValue & Foreign Scrap) Coinage) sumption Million $ Ores

3,840.0 4,050.0 3,950.0 4,090.0 3,870.0 3,480.0 3,070.0 3,180.0 2,940.0 2,980.0

243,000 241,000 NA NA 270,000 277,000 265,000 197,000 191,000 196,000

152,000 148,000 NA NA 100,000 163,000 143,000 81,600 82,700 78,100

792,680 471,000 347,000 471,000 476,000 522,000 523,000 547,000 489,000 257,000

169,305 114,000 126,000 159,000 209,000 278,000 221,000 223,000 194,000 217,000

---------- Stocks, Dec. 31 ----------------------- Consumption --------------Treasury Official DeparWorld Futures Jewelry tment3 Exchange Industry Reserves4 Dental Industrial5 & Arts Total

8,143,000 8,142,000 8,140,000 8,140,000 8,140,000 8,130,000 8,170,000 8,140,000 8,120,000 8,140,000

78,514 49,100 45,400 20,700 15,200 25,200 37,900 52,900 38,000 63,900

34,400 32,700 NA NA 17,300 16,600 14,700 9,300 3,700 3,500

34,900 6,173 34,800 5,430 34,600 NA 34,400 NA 34,000 NA 33,600 NA 33,500 NA 33,000 NA 33,000 NA 32,200 NA

19,663 65,600 17,013 53,700 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA

91,400 76,100 NA NA 137,000 219,000 245,000 183,000 179,000 163,000

1

Preliminary. 2 Estimate. 3 I ncludes gold in Exchange Stabilization Fund. 4 Held by market economy country central banks and governments andinternational monetary orgainzations. 5 I ncluding space and defense. NA = Not available. Source: U.S. Geological Survey (USGS)

Monthly Average Gold Price (Handy & Harman) in New York

In Dollars Per Troy Ounce

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

387.02 378.55 399.59 355.10 289.18 287.05 284.26 265.58 281.47 356.91

382.01 376.51 404.73 346.71 297.49 287.22 299.60 261.99 295.40 359.60

384.13 382.12 396.21 351.67 295.90 285.96 286.39 263.03 294.06 340.55

378.20 391.11 392.96 344.47 308.40 282.45 279.75 260.56 302.68 328.25

381.21 385.46 391.98 343.75 299.39 276.94 275.10 272.07 314.08 355.03

385.64 387.56 385.58 340.75 292.31 261.31 285.73 270.23 321.81 356.35

385.44 386.40 383.69 324.08 292.79 255.81 281.01 267.53 313.51 351.01

380.43 383.63 387.43 324.03 283.76 256.56 274.44 272.40 310.18 359.91

391.80 382.22 382.97 322.74 289.01 265.23 273.53 283.78 319.49 379.07

389.77 383.14 381.07 324.87 295.92 310.72 270.00 283.06 316.56 378.92

349.43 385.53 378.46 307.10 293.89 292.74 266.05 276.49 319.14 389.13

379.60 387.42 369.02 288.65 291.29 283.69 271.68 275.98 333.21

384.14 384.22 387.81 331.16 294.12 278.81 278.96 271.06 310.13 359.52

Preliminary.

112

Source: U.S. Geological Survey (USGS)

GOLD

Average Open Interest of Gold in New York (NYMEX) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

156,045 184,549 210,695 199,710 180,994 179,726 149,606 134,401 124,222 221,495

139,354 170,972 226,160 190,524 171,507 185,345 158,026 142,673 142,763 210,247

146,269 168,651 203,968 167,595 183,358 178,456 160,325 126,558 142,638 186,656

144,386 191,667 201,826 157,176 180,267 198,202 155,188 120,111 159,892 176,033

147,738 173,805 203,056 160,512 158,157 193,978 162,516 118,426 190,845 191,459

146,255 174,075 192,423 170,640 172,250 207,122 144,099 116,788 174,123 198,808

148,915 175,727 185,374 207,352 169,180 205,687 133,087 114,098 166,042 199,741

155,641 176,135 159,435 198,099 192,623 193,023 126,893 116,687 146,596 224,694

167,981 185,128 185,907 201,267 183,351 206,186 132,731 125,907 167,620 284,906

166,041 185,854 192,606 188,365 186,680 216,034 132,546 125,639 162,456 258,238

166,536 170,674 187,145 212,757 164,304 189,433 134,630 114,238 164,581 275,346

178,998 141,751 185,994 188,558 153,063 156,754 113,830 111,622 191,594 277,073

Source: New York Mercantile Exchange (NYMEX), COMEX division

Volume of Trading of Gold Futures in New York (NYMEX) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

981.8 881.9 1,384.7 1,102.8 1,078.2 860.8 616.4 755.2 733.6 1,260.1

584.0 420.0 987.5 830.2 534.2 517.4 833.5 483.3 613.2 1,007.5

889.5 1,087.5 943.6 899.4 877.2 1,147.6 767.7 766.6 717.7 987.6

589.2 613.0 647.1 508.5 698.1 561.1 362.2 438.1 559.8 667.8

922.6 777.0 858.5 762.1 845.2 1,069.6 701.5 971.6 1,089.6 1,160.3

740.2 588.1 582.1 522.7 718.7 573.6 625.5 481.4 775.5 824.3

723.8 669.9 749.8 1,147.5 712.4 964.3 532.5 578.3 998.9 1,191.7

626.0 500.5 541.9 667.8 680.0 709.6 374.4 547.4 585.8 837.5

645.6 495.5 541.9 715.8 851.7 1,067.3 403.2 341.0 621.8 1,034.0

651.2 387.7 528.5 988.0 769.6 993.8 424.9 481.4 669.0 1,091.3

687.8 982.5 795.2 808.8 705.6 674.7 625.7 573.6 844.8 1,397.3

461.5 378.1 458.8 588.1 519.0 436.1 349.0 367.4 808.5 776.3

8,503.2 7,781.6 8,694.5 9,541.9 8,990.1 9,575.8 6,643.5 6,785.3 9,018.2 12,235.5

Source: New York Mercantile Exchange (NYMEX), COMEX division

113

GOLD C o mmo d ity E xch an g e, In c. (C OME X ) D ep o sito ry Wareh o u se S to cks o f Go ld

In Thousands of Troy Ounces

Year

Jan. 1

Feb. 1

Mar. 1

Apr. 1

May 1

June 1

July 1

Aug. 1

Sept. 1

Oct. 1

Nov. 1

Dec. 1

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

1,507 2,524 1,577 1,460 666 488 809 1,219 1,701 1,220

1,340 2,955 1,498 1,869 837 446 809 1,393 1,775 1,187

1,365 2,958 1,386 1,412 583 481 860 1,374 1,654 1,286

1,426 2,862 1,360 1,429 1,000 720 1,034 1,968 1,302 1,322

1,383 2,802 1,391 1,335 946 658 896 1,967 858 1,372

2,231 2,434 1,488 1,711 878 1,077 879 1,901 864 1,764

2,247 2,665 1,505 1,263 850 1,055 818 1,890 891 1,851

2,448 2,574 1,608 1,273 914 1,092 936 2,013 901 1,836

2,437 2,030 1,448 1,402 733 911 1,198 1,961 794 1,915

2,425 1,904 1,745 1,283 894 958 928 1,918 824 1,892

2,349 1,843 1,395 1,060 615 827 874 1,865 1,165 1,995

2,552 1,867 1,315 1,104 761 819 1,137 1,864 1,426 2,046

S ource: New York Mercant ile E xchang e (NYME X), C OME X division

C en tral Go ld B an k R eserves

In Millions of Troy Ounces Bank for Int'l SettleIMF2 ments

-------------------------------------------------------- In d u strial C o u n tries -------------------------------------------------------Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1 1

Germany

Italy

Japan

Netherlands

95.2 95.2 95.2 95.2 95.2 95.2 119.0 111.5 111.5 112.0

66.7 66.7 66.7 66.7 66.7 66.7 83.4 78.8 78.8 79.0

24.2 24.2 24.2 24.2 24.2 24.2 24.2 24.2 24.6 24.6

43.9 35.1 34.8 34.8 34.8 27.1 33.8 31.6 29.3 29.0

Belgi um Canada France

25.0 25.0 25.0 20.5 15.3 15.3 9.5 8.3 8.3 8.0

P reliminary.

2

9.9 81.9 6.1 81.9 3.9 81.9 3.4 81.9 3.1 81.9 3.1 81.9 2.5 102.4 1.8 97.2 1.2 97.3 1.2 97.0

I n t e r n a tio n a l M o n e t a r y F u n d .

Swi terUni ted land Ki ngdom

83.3 83.3 83.3 83.3 83.3 83.3 83.3 83.3 78.8 74.6

18.6 18.5 18.4 18.4 18.4 18.4 23.0 20.6 16.5 13.4

Montana

Nevada

Alaska

Colorado

South Dakota

New Mexico

2,710 2,050 1,920 1,740 2,140 1,840 786 442 W W

35,800 30,100 25,600 23,800 24,200 18,700 17,500 17,200 13,800 9,180

4,324 3,610 8,850 7,410 7,490 W W W W W

14,300 12,600 12,400 9,110 10,200 8,200 7,540 9,310 W W

211,000 214,000 210,000 213,000 243,000 273,000 9,310 268,000 253,000 240,000

2,780 5,660 4,410 5,020 18,400 18,300 16,200 15,600 16,700 W

W 4,420 W W W W W W W W

19,200 W W W 16,400 12,100 10,300 8,230 W W

995 W W W W W W W W W

W = Withheld proprietary data, included in Other States.

------------------------ Jew elry an d th e Arts -----------------------Gold-Fi lled ElectroKarat & Other plati ng Gold Total

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 P reliminary.

114

9,256 7,598 7,364 8,132 3,848 3,546 3,530 3,650 NA NA

3,133 1,469 1,283 429 373 581 373 369 NA NA

100.3 108.1 106.6 111.9 115.5 115.8 115.7 112.9 112.0 111.3

103.4 103.4 103.4 103.4 103.4 103.4 103.4 103.4 103.4 103.4

6.8 8.6 7.0 7.3 6.6 6.2 6.4 6.5 6.5 6.5

1,129.9 1,123.0 1,116.2 1,113.2 1,108.2 1,089.7 1,076.1 1,074.5 1,060.1 1,054.7

In Kilograms

Idaho

58,635 57,959 60,877 69,952 79,875 79,381 61,700 49,700 NA NA

71,024 67,027 69,524 78,514 84,096 83,508 65,600 53,700 NA NA

So urce: U.S. Geo lo g ica l Surv ey (USGS)

Other States

Total

W 39,891 W 33,560 W 53,820 W 57,920 W 40,170 W 33,860 W 279,364 W 34,218 W 51,500 W 48,820

331,000 306,000 317,000 318,000 362,000 366,000 341,000 353,000 335,000 298,000

Utah

Source: U.S. Geological Survey (USGS)

C o n su mp tio n o f Go ld , B y E n d -U se in th e U n ited S tates

1

42.0 42.4 42.4 41.9 42.5 42.3 41.6 41.2 41.6 42.3

California

Preliminary.

Year

877.4 860.4 856.9 848.7 840.1 821.9 809.0 810.4 796.5 791.3

Arizona

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

261.8 261.8 261.7 261.7 261.7 261.6 261.6 261.7 261.6 261.6

World Total

S ource: American Met al Market (AMM)

Mine Production of Recoverable Gold in the United States Year

DeveUni ted Industri al Deve- lopi ng States Total lopi ng Oi l Non-Oi l

Dental

6,944 7,576 7,927 8,700 8,485 6,543 6,170 5,430 NA NA

In Kilograms --------------------------------- In d u strial --------------------------------Gold-Fi lled ElectroKarat & Other plati ng Gold Total

21,010 21,034 15,723 12,725 8,102 8,802 9,470 7,450 NA NA

12,343 15,088 20,684 17,251 12,624 10,476 9,090 9,470 NA NA

1,892 1,104 1,215 1,020 1,068 1,082 1,100 96 NA NA

35,245 37,226 37,621 30,996 21,793 20,360 19,700 17,000 NA NA

Grand Total

113,319 111,836 115,078 118,216 114,375 110,410 91,400 76,100 NA NA

GOLD

115

Grain Sorghum duction), Nigeria with 7.850 million metric tons (15%), India with 7.060 million (14%), and Mexico with 6.338 million (12%). US production in 2003/4 was forecast at 10.446 million metric tons, up 11% from 9.392 million in 2002/3. US ending stocks in 2003/4 are forecasted to rise to 1.378 million metric tons from 1.093 million in 2002/3. Demand – World consumption of grain sorghum was forecast to rise slightly by 0.4% to 53.147 million metric tons in 2003/4 from 52.949 million in 2002/3. Forecasted consumption of 53.147 million metric tons in 2003/4 will be slightly below forecasted production of 53.730 million in 2003/4, a slightly bullish factor for prices. In 2002/3, consumption of 52.949 million was well above production of 51.403 million, a bearish factor for prices. The world’s main consumers of sorghum are Mexico, Nigeria, and India. Trade – World trade in grain sorghum was forecast to rise to 6.205 million metric tons in 2003/4 from 5.849 million in 2002/3. The world’s main exporter by far is the US. US exports are forecasted to rise to 5.200 million metric tons from 4.911 million in 2002/3, accounting for 84% of world exports. The U.S. generally consumes only about half its production and exports the balance. The world’s two main importers are Mexico and Japan.

Grain sorghums include milo, kafir, durra, feterita, and kaoliang. Grain sorghums are tolerant of drought by going into dormancy during dry and hot conditions and then resuming growth as conditions improve. Grain sorghums are a staple food in China, India, and Africa but in the US they are mainly used as livestock feed. The two key US producing states are Texas and Kansas, each with about one-third of total US production. US sorghum production has become more popular with the breeding of dwarf grain sorghum hybrids which are only about 3 feet tall (versus up to 10 feet tall for wild sorghum) and are easier to harvest with a combine. The U.S. sorghum crop year begins September 1. Prices – Grain sorghum prices (No. 2 yellow in Kansas City) in 2003 were on track to average above $4 per hundred pounds, the highest level since 1997/8 when prices averaged $4.18. Supply – World production of sorghum in 2003/4 was forecast to rise to 53.730 million metric tons, up 4.5% from 51.403 million in 2002/3. World ending stocks in 2003/4 are forecasted at 3.864 million metric tons, up 18% from 3.281 million in 2002/3. The world’s largest producers of grain sorghum in 2002/3 were the US with 9.392 million metric tons of production (accounting for 18% of world pro-

World Supply and Demand Grain Sorghum Year

------------------ Exports ------------------ ------------------ Imports -----------------ArgenNonUnactina U.S. U.S. Total Japan Mexico counted Total

1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

In Thousands of Metric Tons

565 920 439 419 600 500

Preliminary.

2

1,467 1,660 1,607 1,090 1,134 1,021

Estimate.

4,996 6,463 6,484 8,144 6,009 7,616 6,142 7,232 4,715 5,849 5,334 6,355 3

Forecast.

2,453 2,206 1,983 1,776 1,562 1,500

3,291 4,890 5,037 4,837 3,394 3,100

71 54 120 281 24 235

6,463 8,144 7,616 7,232 5,849 6,355

Total ----------------- Utiliz ation ----------------- ------ Ending Stocks -----ProNonduction China Mexico U.S. Total U.S. U.S. Total

59,905 4,134 59,044 3,319 52,818 2,561 57,660 2,700 52,027 2,700 54,720 2,500

9,746 11,200 11,200 10,750 9,900 8,800

7,798 8,628 6,543 6,440 5,134 4,827

59,046 60,364 54,165 56,325 53,638 54,022

3,773 3,225 2,478 3,325 2,170 2,583

1,655 1,661 1,061 1,549 1,093 1,378

5,428 4,886 3,539 4,874 3,263 3,961

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Salient Statistics of Grain Sorghum in the United States

Year

Acreage ------------------------------- For Grain ------------------------------- ------------- For Silage ------------- --------------- Sorghum Grain Stocks --------------Planted4 ProValue Acreage Pro- Yield Per ---------- Dec. 1 ---------- --------- June 1 --------for All Acreage of Pro- Harvested duction Yield Per Price in duction Harvested O n Farms Off Farms On Farms Off Farms Purposes Harvested 1,000 Harvested 1,000 Acre Cents Per duction 1,000 ----- 1,000 Acres ----Acre -------------------- 1,000 Bushels ---------------------Acres Tons Bushel Million $ Bushels Bushels

1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

9,626 9,288 9,195 10,252 9,580 9,420

Preliminary.

2

7,723 8,544 7,723 8,584 7,299 7,798

Estimate.

3

519,933 595,166 470,070 514,524 369,758 411,237

Forecast.

67.3 166 69.7 157 60.9 189 59.9 194 50.7 232 51.0 220-250 NA = Not available.

905.5 937.4 847.1 979.8 876.5 965.8

308 320 265 336 352 343

3,526 3,716 2,863 3,728 3,360 3,552

1998 1999 2000 2001 2002 2003 1 1

Arkansas

Colorado

Illinois

6,890 9,750 9,940 14,620 17,710 17,220

10,545 8,610 6,720 9,460 1,800 4,320

7,918 9,215 8,075 8,085 6,391 8,610

Preliminary.

116

Kansas Louisiana

264,000 258,400 188,800 232,500 135,000 130,500

7,500 19,270 17,845 17,850 13,365 14,025

95,900 90,300 74,300 72,400 53,600 45,200

239,416 259,136 187,681 241,477 178,252 188,507

27,400 27,300 19,000 17,300 11,150

88,680 99,606 57,411 88,178 70,744

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production of All Sorghum for Grain in the United States, by States Year

11.4 11.6 10.8 11.1 9.5 10.4

In Thousands of Bushels

Missi ssi p p i

Missouri Nebraska

New Mexico Oklahoma

2,340 4,872 6,708 7,134 6,237 6,132

26,560 22,010 24,840 20,680 15,725 16,170

2,925 7,425 1,625 6,300 2,800 1,674

56,400 42,770 35,000 35,700 15,000 31,000

15,300 18,000 13,680 15,120 14,850 9,250

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

South Dakota

Texas

Total

9,940 4,640 5,880 8,850 3,060 6,750

105,800 185,850 143,350 130,000 130,050 153,900

519,933 595,166 470,070 514,524 369,758 411,237

GRAIN SORGHUM Grain Sorghum Quarterly Supply and Disappearance in the United States

In Millions of Bushels

----------------------------------- Disappearance ---------------------------------------------------- Domestic Use -------------------

Crop Year Beginning Sept. 1

F ood ------------------------- Supply ------------------------Beginning ProTotal Alcohol & Stocks duction Imports Supply Industrial

2000-1 Sept.-Nov. Dec.-Feb. Mar.-May June-Aug. 2001-2 Sept.-Nov. Dec.-Feb. Mar.-May June-Aug. 2002-31 Sept.-Nov. Dec.-Feb. Mar.-May June-Aug. 2003-42 Sept.-Nov.

65.0 65.0 262.0 167.0 76.0 42.0 42.0 314.0 194.0 105.0 61.0 61.0 232.0 163.0 82.0 43.0 43.0

471.0 471.0 ---------515.0 515.0 ---------370.0 370.0 ---------411.0 411.0

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

536.0 536.0 262.0 167.0 767.0 556.0 556.0 314.0 194.0 105.0 431.0 431.0 232.0 163.0 82.0 454.0 454.0

1

Preliminary. 2 Forecast. 3 Uncommitted inventory. Service, U.S. Department of Agriculture (ERS-USDA)

35.0 17.0 11.0 4.0 3.0 45.0 15.0 15.0 10.0 5.0 45.0 15.0 15.0 10.0 5.0 25.0 7.0 4

S eed

F eed & Residual

Total

Export

220.0 194.0 15.0 23.0 -10.0 208.0 164.0 26.0 26.0 -8.0 158.0 133.0 7.0 31.0 -13.0 165.0 154.0

494.0 274.0 95.0 91.0 35.0 495.0 242.0 120.0 89.0 45.0 388.0 199.0 69.0 81.0 39.0 400.0 221.0

237.0 63.0 69.0 63.0 42.0 242.0 63.0 78.0 53.0 47.0 186.0 51.0 47.0 40.0 48.0 210.0 60.0

1.0 0 0 1.0 0 0 0

----------- Ending Stocks ----------Gov't Privately Total Total Owned3 Owned4 Stocks

731.0 337.0 164.0 154.0 77.0 737.0 305.0 198.0 142.0 92.0 574.0 250.0 116.0 121.0 87.0 610.0 281.0 Source: Economic Research

I ncludes quantity under loan & farmer-owned reserve.

Average Price of Sorghum Grain, No. 2, Yellow in Kansas City

42.0 262.0 167.0 76.0 42.0 61.0 314.0 194.0 105.0 61.0 43.0 232.0 163.0 82.0 43.0 54.0 234.0

In Dollars Per Hundred Pounds (Cwt.)

Year

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

5.29 4.13 2.98 2.97 2.67 3.55 4.86 4.15

4.64 4.36 3.17 2.71 3.14 3.38 4.70 4.18

4.31 4.30 3.45 2.75 3.41 3.44 4.72 4.50

4.22 4.26 3.41 2.87 3.66 3.59 4.62

4.24 4.33 3.41 3.20 3.64 3.61 4.52

4.46 4.36 3.43 3.28 3.63 3.55 4.43

4.88 4.40 3.48 3.51 3.56 3.58 4.07

4.83 4.10 3.37 3.53 3.45 3.47 4.24

4.63 4.09 3.35 3.75 3.30 3.44 4.12

4.48 4.03 3.32 3.18 3.26 3.57 4.06

4.48 4.03 2.92 2.71 3.59 3.97 3.71

4.18 3.74 2.92 2.76 3.65 4.60 4.00

4.55 4.18 3.30 3.10 3.41 3.65 4.34 4.28

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Exports of Grain Sorghum, by Country of Destination from the United States Year Beginning Oct. 1

Canada

Ecuador

1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32

3,347 5,076 3,484 4,061 4,170 4,912 5,921

0 0 0 0 0 0 91

1

Preliminary.

2

Estimate.

Israel

Ja p a n

Jordan

Mexico

South Africa

Spain

10,020 456,271 49,999 82,583 0 92,335 21,940 167,816 24,117 82,776 0 25,082 48,000 65,725

2,207,304 1,451,123 1,480,220 1,045,253 853,211 1,233,799 1,059,424

0 0 0 0 0 0 0

2,091,131 3,287,628 3,290,663 4,773,760 4,864,414 4,695,814 3,160,313

0 0 0 12,857 0 37,272 43,918

125,827 203,896 196,110 178,829 0 8,193 266,892

Ethiopia

In Metric Tons Turkey

World Total

8,000 138,590 0 94 0 101 0 0 0 0 0 0 5,880 0

5,210,569 5,164,844 5,194,028 6,297,344 5,866,340 6,014,304 4,724,964

Sudan

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Grain Sorghum Price Support Program and Market Prices in the United States

Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22

------------------------------------ Price Support Operations -----------------------------------B a si c Findley Owned by ---- Price Support ---% of ProAquired Loan Target Loan C C C at Quantity duction by CCC Year End Rate Price Rate ----------------------- Million Cw t. ---------------------- ------------- $ Per Bushel -------------

4.0 11.4 9.8 12.0 9.6 8.6

1.6 2.6 2.8 4.1 2.9 3.3

1.84 5

.1 .6 .5 .4

.1 .2

5 5 5 5

2.61 NA NA NA NA NA NA

1.80 1.81 1.76 1.74 1.74 1.71 1.71

Effective Partici- ------------ No. 2 Yellow ($ Per Cw t.) -----------Texas B a se 3 pation High Los Gulf Kansas Rate4 Million Plains Angeles Ports City Acres % of Base

13.3 13.2 13.1 13.6 13.7 13.6 13.6

76.9 98.8 98.8 98.8 98.8

6.66 4.55 4.11 3.29 3.10 3.41

7.30 5.02 4.72 3.78 3.36 3.87 3.90

----------------------

7.19 5.03 4.76 3.97 3.79 4.35 4.23

1

Preliminary. 2 Estimate. 3 National effective crop acreage base as determined by ASCS. 4 Percentage of effective base acres enrolled in acreage 5 reduction programs. Beginning with the 1996-7 marketing year, target prices are no longer applicable. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

117

Hay Hay is a catchall term for forage plants, typically grasses such as timothy and Sudan-grass, and legumes such as alfalfa and clover. Hay is generally used to make cured feed for livestock. Curing, which is the proper drying of hay, is necessary to prevent spoilage. Hay, when properly cured, contains about 20% moisture. If hay is dried excessively, however, there is a loss of protein, which makes it less effective as livestock feed. Hay is harvested in virtually all of the lower 48 states, but the top producing states are Texas (with 9% of US production), California (6%), Missouri (5%), and Minnesota (4%). Prices – Hay prices as of December 2003 were $81.30 per ton, down from the $94.00 average price seen in 2002/3

and from $96.50 seen in 2001/2. Supply – US hay production in 2003/4 was forecast at 160.7 million tons, up from 151.0 million tons in 2002/3 and 156.8 million in 2001/2. That production is well above the annual production average of 151 million tons seen in the 1990’s. Higher production in 2003/4 is expected due to a rise in yields to 2.50 tons per acre versus the previous year’s 2.34 tons. Acres harvested in 2003/4 is actually expected to decline to 64.379 million acres from 64.497 million in 2002/ 3. However, that is still significantly above the average 60.6 million acres harvested in the 1990’s. Carry-over in 2002/3 was slightly higher at 22.5 million tons, up from 21.1 million tons in 2001/2.

Salient Statistics of All Hay in the United States Crop Year Beginning May 1

Acres Harvested 1,000 Acres

1997-8 1998-9 1999-00 2000-1 2001-21 2002-32

61,084 60,076 63,220 59,854 63,521 64,497

D i sa p Yield Supply pearance Pro- Carryover D i sa p P er Per Animal Unit May 1 pearance Acre duction Tons ---------- Millions of Tons ---------- -------- In Tons --------

2.50 2.53 2.53 2.54 2.47 2.34

152.5 151.8 159.7 151.9 156.8 151.0

17.4 21.8 24.8 28.8 21.1 22.5

148.1 148.8 155.7 159.6 159.6

2.27 2.33 2.52 2.49 2.46 2.40

1.98 2.00 2.12 2.20 2.15 NA

1 Preliminary. 2 Estimate. 3 Roughage-consuming animal units fed annually. U.S. Department of Agriculture (ERS-USDA)

Production of All Hay in the United States, by States California

Idaho

8,554 8,782 8,568 8,915 9,594 9,310

5,549 5,132 5,292 4,938 5,608 4,950

Year

1998 1999 2000 2001 2002 2003 1 1

Preliminary.

Iowa

Minnesota

5,332 5,970 6,000 5,565 5,645 5,515

7,110 7,130 6,840 6,195 6,610 5,245

Retail Price Paid by Farmers -------------- for Seed, April 15 -------------Farm Farm ProAlfalfa Red Sudanduction Price Clover Grass Value (Certified) Timothy $ P er Ton Million $ --------------- Dollars Per Cw t. ---------------

Animal Units F ed3 Millions

74.9 74.5 73.3 72.5 72.0

100.0 85.0 76.7 85.4 96.5 93.8

13,250 11,607 11,014 11,417 12,597 12,450

NA = Not available.

282.00 73.00 288.00 71.20 287.00 78.80 277.00 115.00 278.00 105.00 157.00 90.00

184.00 194.00 178.00 143.00 132.00 130.00

51.40 53.70 52.20 53.00 53.00 56.00

Source: Economic Research Service,

In Thousands of Tons

Missouri

New York

North Dakota

Ohio

Oklahoma

South Dakota

Texas

Wisconsin

Total

7,703 7,225 6,657 7,853 7,840 8,168

7,680 7,700 6,055 7,578 5,950 7,600

4,190 5,511 5,110 5,065 3,920 4,598

3,875 3,060 4,521 4,275 3,750 3,974

3,380 5,000 4,659 4,025 5,030 4,992

8,160 9,440 7,393 9,150 4,800 7,210

6,870 13,135 8,880 10,837 13,850 12,388

6,370 7,510 6,000 4,790 5,340 4,380

151,780 159,707 151,921 156,764 150,962 157,123

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Hay Production and Farm Stocks in the United States

In Thousands of Short Tons

------------------------------------------------------------ Production ---------------------------------------------------------------------Year

Alfalfa & Mixtures

All Others

All Hay

Corn for Silage1

Sorghum Silage1

1998 1999 2000 2001 2002 20032

82,310 84,385 80,347 80,327 73,824 76,307

69,470 75,322 71,574 76,437 77,138 80,816

151,780 159,707 151,921 156,764 150,962 157,123

95,479 95,633 102,156 102,077 104,979 105,864

3,526 3,716 2,773 3,728 3,360 3,552

1

Not included in all tame hay.

2

Preliminary.

1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

118

May 1

D e c. 1

21,827 24,817 28,817 21,106 22,494 22,168

112,066 108,922 105,582 110,510 103,692 110,752

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Mid-Month Price Received by Farmers for All Hay (Baled) in the United States Year

----------------- Farm Stocks -----------------

In Dollars Per Ton

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

Average2

103.0 91.6 91.0 106.0 103.0 99.2

91.8 81.7 82.5 95.8 95.8 94.6

88.6 78.4 80.2 96.3 93.6 89.0

88.5 77.4 80.5 97.4 92.4 85.3

86.5 74.5 83.0 99.0 93.0 84.2

85.2 73.7 84.9 98.0 93.8 84.4

81.4 74.0 84.0 95.9 93.2 80.7

77.5 71.1 84.9 95.6 91.1 81.3

78.5 71.8 85.2 91.7 91.4 79.3

79.0 72.6 86.8 91.7 91.4 79.9

78.5 74.8 87.2 92.3 92.8

81.9 78.2 94.8 98.3 94.5

85.0 76.7 85.4 96.5 93.8 85.8

2

Marketing year average.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Heating Oil Heating oil is a petroleum product. Heating oil is also known as No. 2 fuel oil and accounts for about 25% of the yield from a barrel of crude oil. That is the second largest “cut” after gasoline. The price to consumers of home heating oil is generally comprised of 42% for crude oil, 12% for refining costs, and 46% for marketing and distribution costs (source: EIA’s Petroleum Marketing Monthly, 2001). Generally, a $1 increase in the price of crude oil translates into a 2.5-cent per gallon rise in heating oil. Because of this, heating oil prices are highly correlated with crude oil prices, although heating oil prices are also subject to swift supply and demand shifts due to weather or refinery shutdowns. The primary use for heating oil is residential space heating. In the US, approximately 8.1 million households use heating oil as their main heating fuel. Most of the demand for heating oil occurs from October through March. The Northeast region, which includes the New England and the Central Atlantic States, is most reliant on heating oil. This region consumes approximately 70% of US heating oil. However, demand for heating oil has been dropping as households switch to a more convenient heating source like natural gas. In fact, demand for heating oil is down by about 10 billion gallons/year from its peak use in 1976 (source: American Petroleum Institute). The US has two suppliers of heating oil, domestic refineries and imports from foreign countries. Refineries produce approximately 85 % of US heating oil as part of the “distillate fuel oil” product family, which includes heating oils and diesel fuel. The remainder of US heating oil is imported from Canada, the Virgin Islands, and Venezuela. Recently, a team of Purdue University researchers developed a way to make home heating oil from a mixture of soybean oil and conventional fuel oil. The oil blend is made by replacing 20% of the fuel oil with soybean oil, potentially saving 1.3 billion gallons of fuel oil per year. This soybean heating oil can be used in conventional furnaces without altering existing equipment. The soybean heating oil is relatively easy to produce and creates no sulfur emissions. The “crack-spread” is the processing margin earned when refiners buy crude oil and refine it into heating oil and gasoline. The crack-spread ratio commonly used in the industry is the 3-2-1, which involves buying 1 heating oil contract and 2 gasoline futures contracts, and then selling

Average Price of #2 Heating Oil Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

3 crude oil contracts. As long as the crack spread is positive, it is profitable for refiners to buy crude oil and refine it into products. The NYMEX has a crack-spread calculator on their web site at www.nymex.com. Heating oil futures and options trade at the New York Mercantile Exchange (NYMEX). The heating oil futures contract calls for the delivery of 1,000 barrels of fungible No. 2 heating oil in the New York harbor. In London, gas/ oil futures and options are traded on the International Petroleum Exchange (IPE). Prices – NYMEX heating oil futures prices on the nearest-futures chart posted a record high (going back to the 1982 start of the NYMEX futures contract) of $1.31in February 2003 in conjunction with the Iraq war, but then quickly fell back as it became clear that the Iraq war would be short and would not create major oil supply disruptions in the Persian Gulf and Middle East. Heating oil prices then entered a sustained rally in Q3-2003 and closed the year at 91 cents, little changed from the 2002 close of 92 cents. Still, heating oil prices closed 2003 at the upper end of the price range seen over the last 20 years. Bullish factors were basically the same as for crude oil (weak dollar, higher global economic growth, tight inventories) but were also boosted by a cold start to winter which boosted demand for heating oil in the northeastern US which is the primary consumer of heating oil for home heating. Supply – Production of distillate fuel oil in the US in 2003 averaged 3.7 million barrels per day, up 3.0% from 3.592 million in 2002. Stocks of distillate fuel oil in October 2003, the latest reporting month, were 130.9 million barrels, up from 124.4 million barrels in December 2002. US production of residual fuel in 2003 rose to an average 657,000 barrels per day, up 9.2% from 601,000 in 2002. US stocks of residual fuel oil in July 2003 rose to 35.6 million barrels from 32.7 million a year earlier. Demand – US usage of distillate fuel oil in the US in 2003 averaged 3.944 million barrels per day, up 4.4% from 3.776 million in 2002. Trade – US imports of distillate fuel oil in 2003 rose to an average 337,000 barrels per day, up 26% from 267,000 in 2002. US exports of distillate fuel oil in 2003 fell slightly to 109,000 per day from 112,000 in 2002.

In Cents Per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

49.93 47.98 55.64 69.90 46.59 33.41 91.32 84.30 53.52 90.09

55.81 47.64 61.24 61.15 44.26 30.48 94.37 78.55 54.03 112.84

49.18 45.95 65.19 54.83 42.12 38.74 77.29 74.17 63.52 99.70

48.01 49.40 67.90 57.74 42.97 43.07 75.32 78.02 66.60 79.75

47.98 50.31 57.59 56.31 41.07 41.68 75.88 77.11 66.54 74.31

49.37 47.75 51.56 52.32 37.88 43.36 78.32 75.74 64.50 75.95

49.93 46.65 55.58 53.11 36.24 50.02 78.14 69.88 67.79 79.03

49.51 49.14 60.42 54.02 34.48 54.81 89.13 73.41 69.81 81.61

47.90 50.21 67.61 53.19 40.15 60.27 98.87 71.65 77.25 73.54

48.23 48.89 72.34 57.24 38.29 58.34 97.46 62.63 76.55 81.97

49.62 51.89 70.13 56.23 35.59 64.89 102.70 54.37 72.14 83.35

48.41 57.76 72.13 51.09 31.38 67.36 94.08 52.60 81.70 89.04

49.49 49.46 63.11 56.43 39.25 48.87 87.74 71.04 67.83 85.10

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

119

HEATING OIL

Average Open Interest of #2 Heating Oil Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

196,390 128,664 114,324 100,333 171,177 167,686 135,431 138,980 166,824 178,932

185,607 112,508 95,745 105,223 163,114 160,388 132,407 127,219 173,110 174,224

186,539 118,700 90,080 122,149 177,158 166,472 108,646 120,899 160,205 134,616

164,417 121,974 94,161 139,981 174,587 172,127 100,389 127,395 144,936 111,706

140,658 115,501 98,038 135,523 176,663 170,842 117,055 130,328 139,979 118,822

129,005 122,163 97,699 141,864 196,903 168,307 129,872 141,436 136,201 124,675

124,764 136,722 109,524 151,403 205,071 182,383 153,914 149,577 131,742 127,273

149,571 140,214 119,366 149,243 198,527 188,726 169,092 145,605 141,084 146,821

172,071 149,934 138,513 151,407 188,096 192,883 177,997 145,692 147,692 150,893

165,475 152,244 141,217 141,008 188,019 179,040 168,388 155,540 153,739 156,142

152,570 139,232 127,512 126,528 192,835 165,334 155,475 162,392 161,137 145,857

148,298 138,596 108,558 145,153 184,100 146,997 142,145 153,850 156,268 146,085

Source: New York Mercantile Exchange (NYMEX)

Volume of Trading of #2 Heating Oil Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1,085.7 779.8 977.2 794.4 793.6 738.9 914.0 914.4 998.5 1,340.1

875.7 608.7 768.1 719.0 641.8 662.3 770.3 650.7 810.8 1,158.9

766.8 716.0 666.2 588.6 776.4 973.3 645.2 758.0 885.5 965.9

631.7 622.8 586.5 710.1 578.4 706.3 556.1 728.6 844.1 757.7

629.3 729.8 530.9 592.0 688.5 768.1 673.3 722.8 789.8 811.6

723.7 618.8 402.0 679.4 904.9 802.7 705.9 849.9 720.1 802.9

612.3 612.7 530.2 679.6 720.2 770.4 663.0 712.9 798.8 849.9

783.2 563.6 624.4 694.7 683.0 707.9 1,004.4 745.8 866.0 891.3

706.8 714.2 766.5 828.3 748.2 720.1 954.9 694.0 794.4 1,118.5

721.4 650.8 1,014.2 742.7 768.2 819.6 878.1 853.8 1,017.9 1,095.5

652.3 659.5 725.0 619.3 766.5 818.6 939.0 835.5 1,039.5 817.3

798.1 990.1 750.7 722.9 793.9 712.7 927.3 798.1 1,129.9 971.8

8,986.8 8,266.8 8,341.9 8,371.0 8,863.8 9,200.7 9,631.4 9,264.5 10,695.2 11,581.7

Source: New York Mercantile Exchange (NYMEX)

120

In Thousand of Contracts

Jan.

HEATING OIL

USD Per Gallon ----- No. 2, New York Harbor

Stocks of Distillate and Residual Fuel in the United States, on First of Month

In Millions of Barrels Residual Fuel ----- Oil Stocks -----

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan. 1

July 1

140.9 145.2 130.2 126.7 139.0 156.2 124.1 118.0 144.5 134.1

117.5 140.2 113.8 111.3 133.1 147.9 106.7 118.2 137.8 112.2

102.9 122.1 97.3 105.9 127.9 142.3 105.2 117.0 130.0 97.2

99.4 115.4 89.7 101.8 124.4 125.7 96.0 105.0 123.0 98.5

102.6 114.6 90.1 97.5 125.7 125.3 100.1 104.9 122.6 97.1

112.4 118.3 95.7 108.4 136.8 134.8 105.4 107.1 127.4 106.1

119.5 114.7 101.6 118.2 139.1 133.2 106.4 113.9 130.9 111.8

134.2 125.0 106.8 123.0 148.8 138.1 112.9 125.2 133.4 117.7

138.6 130.9 110.3 132.9 150.5 142.0 111.0 122.0 130.6 126.4

144.7 131.7 115.0 138.9 152.5 145.2 115.3 127.0 126.9 130.9

146.0 131.4 114.7 136.2 147.5 137.6 116.5 128.9 121.4 131.4

147.3 135.4 121.8 140.5 154.6 140.6 121.1 138.9 124.4 137.2

44.2 41.9 36.8 45.9 40.4 44.9 35.8 36.2 41.0 31.3

39.4 36.0 34.8 39.2 39.8 42.5 37.0 41.7 32.7 35.6

Preliminary.

Source: Energy I nformation Administration; U.S. Department of Energy (EI A-DOE)

Production of Distillate Fuel Oil in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousand Barrels per Day

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

3,114 3,054 3,110 3,119 3,323 3,176 3,123 3,609 3,508 3,403

3,018 2,954 3,145 3,089 3,280 3,253 3,348 3,612 3,498 3,455

3,096 3,157 3,110 3,258 3,397 3,183 3,342 3,483 3,360 3,743

3,249 3,126 3,305 3,291 3,468 3,407 3,533 3,650 3,647 3,817

3,317 3,111 3,258 3,525 3,560 3,458 3,650 3,652 3,709 3,860

3,285 3,109 3,291 3,517 3,520 3,374 3,481 3,702 3,679 3,728

3,191 3,056 3,139 3,362 3,569 3,521 3,520 3,837 3,561 3,673

3,187 3,145 3,295 3,427 3,482 3,419 3,678 3,654 3,538 3,750

3,285 3,287 3,403 3,452 3,399 3,482 3,844 3,625 3,536 3,721

3,203 3,169 3,626 3,488 3,215 3,506 3,774 3,796 3,380 3,750

3,270 3,341 3,665 3,543 3,438 3,608 3,785 3,968 3,768 3,800

3,232 3,344 3,558 3,578 3,431 3,401 3,872 3,744 3,922 3,845

3,205 3,155 3,325 3,389 3,424 3,399 3,580 3,695 3,592 3,712

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

121

HEATING OIL Imports of Distillate Fuel Oil in the United States

In Thousand Barrels per Day

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1996 1997 1998 1999 2000 2001 2002 2003 1

243 293 195 304 218 789 298 324

271 246 213 322 510 635 248 498

253 245 237 248 260 348 234 460

258 256 209 213 234 288 219 246

215 220 185 261 316 310 193 287

185 219 202 238 258 302 204 337

194 223 229 234 199 209 188 299

195 202 181 273 234 212 205 375

187 210 203 249 283 317 196 352

246 213 239 216 259 253 350 293

192 161 179 265 332 244 373 256

253 232 245 188 447 241 496 305

224 227 210 250 295 344 267 336

1

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Exports of Distillate Fuel Oil in the United States

In Thousand Barrels per Day

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1996 1997 1998 1999 2000 2001 2002 2003 1

216 133 131 117 132 67 109 119

256 107 120 116 112 77 279 132

139 120 135 159 211 75 67 161

166 166 168 191 178 107 68 139

176 153 227 187 127 146 74 162

81 174 152 180 149 120 93 101

134 151 124 123 132 113 44 103

182 185 105 130 253 140 119 68

256 160 133 162 194 152 127 43

300 133 139 192 255 99 96 62

171 149 110 170 191 132 114 81

206 192 108 212 135 202 171 100

190 152 138 162 173 119 112 106

1

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Disposition of Distillate Fuel Oil, Total Product Supplied in the U.S. Year

1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousand Barrels per Day

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

3,681 3,780 3,566 3,788 3,818 4,325 3,940 4,325

3,722 3,422 3,598 3,542 3,794 4,212 3,714 4,359

3,453 3,515 3,606 3,785 3,693 4,143 3,750 4,000

3,385 3,523 3,465 3,415 3,455 3,834 3,821 3,972

3,118 3,240 3,268 3,314 3,681 3,746 3,679 3,692

3,194 3,235 3,574 3,407 3,549 3,659 3,587 3,775

3,046 3,279 3,294 3,479 3,369 3,569 3,683 3,678

3,184 3,124 3,446 3,437 3,726 3,829 3,728 3,778

3,178 3,302 3,377 3,431 3,786 3,624 3,730 3,878

3,575 3,659 3,547 3,749 3,712 3,888 3,808 3,966

3,460 3,411 3,320 3,608 3,829 3,746 3,929 3,782

3,434 3,665 3,484 3,892 4,250 3,604 3,934 4,064

3,368 3,430 3,461 3,572 3,722 3,847 3,776 3,939

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Production of Residual Fuel Oil in the United States

In Thousands Barrels per Day

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1996 1997 1998 1999 2000 2001 2002 2003 1

774 800 765 775 640 809 625 660

776 789 672 726 627 743 613 682

701 639 790 683 649 750 617 653

671 617 857 679 620 817 601 634

732 618 766 725 640 786 582 731

731 727 739 706 679 783 540 668

646 645 778 736 741 639 566 634

732 643 782 701 760 622 583 663

713 688 749 702 702 653 607 662

693 711 676 658 747 710 593 661

712 786 753 596 778 685 648 616

753 810 805 690 768 655 641 686

719 705 762 698 696 721 601 663

1

Preliminary.

Source: Energy I nformation Administration U.S. Department of Energy (EI A-DOE)

Supply and Disposition of Residual Fuel Oil in the United States

Year

1996 1997 1998 1999 2000 2001 2002 20031 1

----------------------- Supply ----------------------- ----------------------------------- Disposition ----------------------------------Total Stock Product Production Imports Change Exports Supplied ------------------------------------------------------ Thousand Barrels Per Day ------------------------------------------------------

726 708 762 698 696 721 601 663

248 194 275 237 352 295 249 325

24 -15 12 -25 1 13 -27 18

102 120 138 129 139 191 177 197

Preliminary. 2 Less than +500 barrels per day and greater than -500 barrels per day. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

122

3

848 797 887 830 909 811 700 772 Refiner price excluding taxes.

Ending Stocks Million Barrels

Average Sales to End Users3 Cents per Gallon

46 40 45 36 36 41 31 38

45.5 42.3 30.5 37.4 60.2 53.1 56.8

Hides and Leather Hides and leather have been used since ancient times for boots, clothing, shields, armor, tents, bottles, buckets, and cups. Leather is produced through the tanning of hides, pelts, and skins of animals. Dating back at least 7,000 years, remains of leather have been found in the Middle East. The leather-tanning craft can be traced back for almost 500,000 years. Today, most leather is made of cowhide but it is also made from the hides of lamb, deer, ostrich, and even stingray. Cattle hides are the most valuable byproduct of the meat packing industry. US exports of cowhides bring more than $1 billion in foreign trade, and US finished leather production is worth about $4 billion. Prices – The price of wholesale cattle hides (packer heavy native steers FOB Chicago) in 2003 rose +2.3% to 84.00 cents per pound from 82.13 cents in 2002, slightly above the 10-year average price of 83.12 cents per pound. Supply – World production of bovine hides and skins in 2000, the last reporting year, rose slightly by +0.2% to 4.139 million metric tons from the previous year. The world’s largest producers of bovine hides and skins is the US with 24% of world production in 2000, Brazil with 16% and Argentina with 7%. US new supply of cattle hides from domestic slaughter in 2001 fell –2.9% to 35.370 million hides from 36.416 million in 2000.

World Production of Cattle and Buffalo Hides Year

Argentina

Australia

Brazil

351 357 356 347 388 384 338 364 369 369

215 212 207 207 198 211 230 230 230 230

420 461 448 475 496 515 637 667 670 670

1992 1993 1994 1995 1996 1997 1998 1999 2000 1 20012 1

Preliminary.

2

Forecast.

Canada Colombia

82 76 77 79 88 91 94 99 98 98

80 81 77 81 84 81 81 86 84 84

US production of leather footwear has been dropping off sharply in recent years due to the movement of production offshore to lower cost producers. US production of leather footwear in 2002 fell to 41.2 million pairs from 55.6 million in 2001 and was only about one-fourth of the production level seen 10 years earlier. Demand – World consumption of cowhides and skins in 2000, the last reporting year for the data series, rose +1.4% to 4,774 metric tons, which was the highest level seen in the data series which goes back to 1983. The world’s largest consumers of cowhides and skins are the US with 13.0% of world consumption in 2000, Italy (10.6%), Brazil (8.9%), Mexico, (6.0%), Argentina (6.0%), and South Korea (5.9%). Trade – US net exports of cattle hides in 2001 rose +10.6% to a 12- year high of 21.750 million hides from 19.670 million in 2000. The total value of US leather exports rose to a record high $1.221 billion in 2001. The largest destinations for US exports are South Korea (which took 28.0% of US exports in 2000), Taiwan (10.8%), Mexico (6.2%), and Italy (5.3%). World imports of cowhides and skins in 2000 rose to a record high of 2,058 metric tons from 2,002 metric tons in 1999. The world’s largest importers of cowhides and skins are South Korea (with 12.6% of world imports in 2000), Italy (10.7%) and Taiwan (6.9%).

In Thousands of Metric Tons France

Germany

Italy

Mexico

Russia

United Kingdom

United States

World Total

177 162 160 159 164 163 154 151 150 150

198 198 190 176 176 176 161 160 160 160

154 150 149 150 150 148 142 145 143 145

160 161 165 170 160 161 170 170 175 176

320 315 376 376 357 294 275 229 233 232

94 96 96 107 67 67 67 64 68 61

938 921 974 1,011 1,065 1,174 1,070 1,099 1,120 1,120

6,799 6,835 7,060 7,658 7,539 7,872 7,950 8,061 8,173 8,221

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

Salient Statistics of Hides and Leather in the United States --------- New Supply of Cattle Hides --------------- Domestic Slaughter ------

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

731 713 760 177 751 677 664 615 599 614

33,324 34,196 35,639 36,760 36,318 35,464 36,150 36,246 35,370 35,735

Wholesale Leather

-- Cents Per Pound -- ------ Production -------

Total Net Federally UninExports Inspected spected4 Production ------ Thousands of Equivalent Hides ------

32,593 33,483 34,879 36,583 35,567 34,787 35,486 35,631 34,771 35,120

In Thousands of Equivalent Hides

Wholesale Prices

17,117 16,259 18,336 18,626 17,562 15,937 15,700 19,670 21,750 19,484

Heavy Native Cows2

82.16 94.99 93.89 92.15 90.99 75.45 73.80 83.41

All U.S. CattleHeavy Tanning hide Native Steers3 In 1,000 Equiv. Hides

78.9 87.3 87.6 86.4 86.1 69.5 73.1 81.2 89.8 82.3

18,057 18,842 18,092 18,769 19,592 20,297 21,342 17,332 14,212

16,931 18,117 17,480 18,135 18,930 19,706 20,620 16,746 13,779 16,403

-------- Indexes- --------

------- Footw ear -----Value of U p p e r ProLeather duction5 Men Women Exports Exports $1,000 ------ 1982 = 100 ------- ----- Million Pairs -----

764,120 811,951 870,247 950,510 1,145,664 1,289,547 1,137,534 1,125,957 1,221,131 1,161,943

142.8 144.7 150.1 152.4 156.4 158.0 157.0 157.2 158.4 158.8

126.9 127.2 129.0 132.1 132.2 132.4 133.0 133.6 133.8 133.5

171,733 163,000 147,550 127,315 124,444 108,536 78,581 58,870 54,757

Preliminary. 2 Central U.S., heifers. 3 F.O.B. Chicago. 4 I ncludes farm slaughter; diseased & condemned animals & hides taken off fallen animals. 5 Other than rubber. Sources: Leather I ndustries of America (LI A); Bureau of Labor Statistics, U.S. Department of Commerce (BLS)

20,700 22,505 20,571 23,726 21,958 19,009 18,176 20,157 19,472 21,582

1

123

HIDES AND LEATHER Production of All Footw ear (Shoes, Sandals, Slippers, Athletic, Etc.) in the U.S. First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

1993 1994 1995 1996 1997

43.3 42.5 37.2 33.2 31.4

44.6 40.8 38.3 31.8 33.1

42.8 40.1 34.8 29.7 28.6

41.0 39.5 36.7 33.2 30.6

171.7 163.0 147.0 128.0 124.4

1

Source: Bureau of the Census, U.S. Department of Commerce

Year

Preliminary.

In Millions of Pairs

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

1998 1999 2000 2001 20021

32.8 26.7 ----------

31.8 26.1 ----------

29.3 24.5 ----------

28.6 21.7 ----------

108.5 78.6 68.7 55.6 41.2

Average Factory Price2 of Footw ear in the United States

In Dollars Per Pair

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

1993 1994 1995 1996 1997

21.62 25.77 19.61 23.65 22.42

21.67 23.60 21.46 22.78 21.56

21.37 21.49 25.37 22.14 22.21

21.79 22.44 21.26 20.38 22.24

21.61 23.22 21.79 22.07 22.11

1998 1999 2000 2001 20021

24.39 23.33 ----------

24.21 22.70 ----------

20.27 19.90 ----------

19.78 19.50 ----------

21.84 21.19 24.14 25.66 24.29

1

Preliminary.

2

Average value of factory shipments per pair.

Source: Bureau of the Census, U.S. Department of Commerce

Imports and Exports of All Cattle Hides in the United States Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

1,660 1,731 1,759 1,702 1,633 1,930 1,921 1,988 1,721 1,299

Preliminary.

1,597

18,777 17,990 20,095 20,328 19,195 17,867 17,621 21,658 23,471 20,784

965 995 952 1,149 1,320 1,126 829 875 716 837

354 309 332 522 469 1,164 738 1,163 920 1,099

4,167 3,133 3,246 2,372 1,802 1,407 1,252 1,529 1,343 584

7,919 7,472 8,283 7,956 7,470 4,897 6,038 7,673 7,602 5,812

Year

1992 1993 1994 1995 1996 1997 1998 1999 1 20002 P reliminary.

Brazil

Canada

Hong Kong

11 21 16 33 20 13 10 8 8

17 26 28 35 34 39 42 34 36

80 81 95 100 79 64 71 91 93

2

F orecast.

Italy

Japan

Mexi co

131 141 243 250 263 254 249 215 220

188 188 139 152 123 114 96 95 95

71 71 60 30 71 96 110 115 115

1

Australia

Brazil

Canada

Germany

144 142 96 85 93 115 111 115 108

71 76 84 148 174 216 220 230 250

74 87 79 90 97 97 86 83 85

38 40 24 34 33 35 31 28 31

75 76 93 100 72 60 69 90 92

P reliminary.

124

1 72 63 171

60 141 215 189 148 440 262 189 159 189

1,950 2,491 3,017 2,871 2,866 2,701 2,863 2,844 2,751 2,145

386 332 781 455 323 336 343 562 888 914

2

F orecast.

In Metri c Tons

Portugal

Spain

Tai wan

Turkey

Uni ted States

World Total

32 39 56 43 42 37 39 42 43

385 372 356 342 341 323 229 254 260

26 35 29 42 33 44 44 29 30

91 94 112 112 124 140 142 142 142

28 37 17 43 50 68 45 55 60

65 57 49 57 60 60 59 57 57

1,266 1,426 1,556 1,715 1,692 1,985 1,876 2,002 2,058

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

Hong Kong

1992 1993 1994 1995 1996 1997 1998 1999 1 20002

79 168 111 64 55 91 46 37 54 14

Rep. of Korea

E xp o rts o f B o vin e H id es an d S kin s b y S elected C o u n tries Year

2,217 1,553 899 2,123 2,501 2,846 2,723 2,196 1,647 1,470

Source: Leather I ndustries of America

Imp o rts o f B o vin e H id es an d S kin s b y S elected C o u n tries

1

In Thousands of Hides

-------- Imports -------- ------------------------------------------------------- U.S. Exports - by Country of Destination -----------------------------------------------------------From Rep. of Total Canada Total Canada Italy Ja p a n Korea Mexico Portugal Romania Spain Taiwan Thailand

In Metri c Tons

Italy

Netherlands

New Zealand

Poland

Russia

Uni ted Ki ngdom

Uni ted States

World Total

9 7 10 10 20 16 24 7 8

66 35 37 47 47 48 32 30 25

31 21 22 22 28 27 28 30 30

17 5 2 2 3 3 6 7 7

28 150 216 195 212 210 202 190 170

19 25 22 22 24 25 17 15 15

610 581 455 510 506 473 443 436 427

1,261 1,374 1,271 1,351 1,423 1,475 1,400 1,389 1,399

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

HIDES AND LEATHER

Cents Per Pound ----- Heavy Native Steers, Chicago (Jan. 1901 - date) - - - Light Native Steers, Chicago (Jan. 1901 - Feb. 1966)

U tiliz atio n o f B o vin e H id es an d S kin s b y S elected C o u n tries Year

Argenti na

1991 1992 1993 1994 1995 1996 1997 1998 1999 1 20002 1

308 298 302 304 300 308 332 285 300 285

P reliminary.

2

Brazil Colombia

396 382 510 505 493 461 387 412 415 425

F orecast.

98 97 94 96 89 91 89 91 89 89

In Metric Tons

Germany

Italy

Japan

Mexi co

Rep. of Korea

143 129 100 83 79 80 101 100 102 103

435 435 435 550 570 615 570 540 500 505

253 229 226 200 191 165 150 135 130 130

225 231 232 226 200 230 251 275 280 285

400 400 385 374 355 353 347 265 280 283

Spain

Taiwan

Turkey

Uni ted States

World Total

119 98 98 94 98 95 106 108 104 108

101 91 94 112 112 124 140 142 142 142

78 90 95 85 100 110 120 100 110 120

491 528 554 536 523 548 572 603 623 623

4,009 3,977 4,322 4,282 4,365 4,332 4,609 4,584 4,707 4,774

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

Wholesale Price of Hides (Packer Heavy Native Steers) F.O.B. Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

75.07 90.10 73.67 89.77 66.88 69.42 75.92 85.33 68.23 83.77

75.08 91.42 75.11 93.47 77.33 69.97 76.29 84.12 72.39 85.81

79.00 97.99 77.96 99.44 82.61 70.84 77.86 93.02 80.41 86.04

84.75 102.32 84.58 99.40 83.72 67.36 78.83 102.64 83.21 85.81

87.33 99.64 87.56 89.44 85.05 65.96 79.24 106.19 84.32 79.42

88.77 92.45 82.51 81.45 83.13 66.89 75.18 97.31 86.72 77.64

90.38 85.74 89.45 80.20 81.17 68.17 77.25 87.59 84.43 80.53

89.76 82.46 96.06 83.92 81.11 72.41 81.64 77.28 85.77 84.09

93.90 82.45 98.91 84.86 75.23 77.52 85.60 73.51 85.84 86.78

93.67 82.16 101.51 86.35 67.95 80.43 84.89 70.58 85.75 86.13

93.19 78.02 94.60 89.20 67.53 79.67 84.41 73.30 83.35 85.89

91.13 73.02 90.65 82.61 68.26 78.00 85.31 69.16 85.18 86.05

86.84 88.15 87.71 88.34 76.66 72.22 80.20 85.00 82.13 84.00

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

125

Hogs Hogs are generally bred twice a year in a continuous cycle designed to provide a steady flow of production. The gestation period for hogs is 3-1/2 months and the average litter size is 9-10 pigs. The pigs are weaned at 3-4 weeks of age. The pigs are then fed so as to maximize weight gain. The feed consists primarily of grains such as corn, barley, milo, oats, and wheat. Protein is added from oilseed meals. Hogs typically gain 3.1 pounds per pound of feed. The time from birth to slaughter is typically 6 months. Hogs are ready for slaughter at about 254 pounds, producing a dressed carcass weight of around 190 pounds and an average 88.6 pounds of lean meat. The lean meat consists of 21% ham, 20% loin, 14% belly, 3% spareribs, 7% Boston butt roast and blade steaks, and 10% picnic, with the remaining 25% going into jowl, lean trim, fat, miscellaneous cuts, and trimmings (USDA). Futures on lean hogs are traded at the Chicago Mercantile Exchange. The futures contract is settled in cash based on the CME Lean Hog Index price, meaning that no physical delivery of hogs occurs. Prices – Lean hog prices on the weekly nearest futures chart moved sideways in the first quarter of 2003 in the narrow range of about 48-55 cents/pound. Hog prices then rallied sharply in the April-June period to post a 2-year high of 68.20 cents in mid-June. Prices then trended lower through the rest of the year and closed the year at 55.42 cents. That close was very close to the average price of 55 cents seen over the past 3 years. The decline in hog prices in the latter half of the year was due mainly to higher than expected hog counts and slaughter rates, which put downward pressure on cash pork prices. Furthermore, hogs coming to market were several pounds heavier on average than in the previous year. Downward pressure on hog prices also stemmed from a sharp increase in the number of feeder pigs and market hogs being imported from Canada (7 million in 2003, up 1.25 million from 2002, USDA). Offsetting the bearish supply situ-

ation was an increase in US consumer demand for pork, boosted in the latter half of 2003 by some switching away from beef. The switch from beef to pork was due to high beef prices into November and then by beef safety concerns after US mad cow scare hit in late December. Supply – World production of pork in 2003 totaled 87.204 million metric tons, according to the USDA, up by 1.4% from 86.030 million tons in 2002. The USDA is forecasting a continued rise in production to 88.303 million tons in 2004. The US in 2003 produced 8.931 million metric tons of pork, up slightly from 8.929 million tons in 2002. US pork production in 2003 accounted for about 10% of world production. China was the world’s largest pork producer in 2003 at 44.100 million metric tons, followed by the European Union at 17.850 million tons, and then the US. Demand – World consumption of pork in 2003 totaled 86.732 million metric tons, up from 85.639 million in 2002. China is the largest consumer of pork at 43.856 million tons, followed by the European Union at 16.940 million tons, and the US at 8.733 million tons. The US accounts for about 10% of world pork consumption. Trade – World pork exports in 2003 reached a record 4.061 million metric tons, up 1.3% from 4.008 million tons in 2002. The largest exporters of pork in 2003 were the European Union (1.000 million tons), Canada (975,000 tons), the US (762,000 tons), and Brazil (620,000 tons). The largest export markets for US pork products in 2003 were Japan (accounting for 49% of US exports), Mexico (accounting for 19% of US exports), and Canada (accounting for 11% of US exports). World imports in 2003 fell 4.3% to 3.591 million tons from 3.752 million tons in 2002 and a continued slight decline to 3.584 million is expected in 2004. The world’s largest importers of pork in 2003 were Japan (1.150 million tons), Russia (600,000 tons), the US (567,000 tons), and Mexico (335,000 tons).

Salient Statistics of Pigs and Hogs in the United States --------------------------- Pig Crop -------------------------------------- Spring3 ----------- ------------ Fall4 --------------

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

Value of Hogs Quantity Hog Sows Pig Pigs on Farms, Dec. 1 Marketings Produced Sows P i g P i gs Crop Per $ Per Farrowed Crop Per Farrowed Total Thousand (Live Wt.) --- 1,000 Head --- Litter --- 1,000 Head --- Litter Head Million $ Head Mill. Lbs.

6,257 6,046 5,648 5,595 6,015 5,877 5,683 5,619 5,779 5,645

Preliminary.

126

2

51,217 50,077 47,887 48,393 52,469 51,519 50,087 49,472 50,752 49,942

Estimate.

8.18 8.28 8.46 8.65 8.73 8.77 8.81 8.81 8.78 8.85 3

6,139 5,843 5,449 5,885 6,047 5,764 5,727 5,767 5,704 5,660

50,262 48,739 46,571 51,190 52,536 50,835 50,660 51,031 50,592 50,464

December-May.

4

8.19 8.35 8.55 8.70 8.69 8.82 8.85 8.85 8.87 8.92

53.2 70.7 94.0 82.0 44.0 72.0 77.0 77.0 71.0

June-November.

3,178 4,115 5,281 4,986 2,766 4,254 4,542 4,590 4,201

100,747 102,684 101,852 104,301 117,240 121,137 118,418 119,262 123,677

24,437 24,426 23,267 23,979 25,715 25,791 25,717 25,884 26,254

-- Hogs Slaughtered in Thousand Head -Value --------- Commercial --------of Production Federally Mil. $ Inspected Other Total Farm Total

9,692 9,829 12,013 12,552 8,674 7,766 10,791 11,430 8,679

93,435 94,203 90,534 90,228 99,285 99,739 96,436 96,528 98,915 99,535

2,261 2,123 1,860 1,733 1,745 1,806 1,540 1,434 1,348 1,242

95,696 96,325 92,394 91,960 101,029 101,544 97,976 97,962 100,263 100,777

208 95,905 210 96,535 175 92,569 161 92,121 163 101,192 141 101,685 125 98,101 119 98,081 114 100,377

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

HOGS Wo rld H o g N u mb ers in S p ecified C o u n tries as o f Jan u ary 1 Brazil

Canada

Chi na

Denmark

France

Germany

Phi li ppi nes

33,050 31,050 31,200 31,338 32,068 31,369 31,427 31,427 31,860 32,440

10,498 10,577 10,534 11,291 11,588 11,480 11,985 12,409 12,242 12,137

369,646 384,210 393,000 414,619 345,848 362,836 400,348 422,563 430,198 446,815

9,767 10,345 10,870 10,864 10,709 11,081 11,442 11,991 11,914 12,125

12,067 13,015 14,791 14,593 14,523 14,968 15,473 15,869 15,991 15,911

26,063 26,514 26,075 24,698 23,737 24,283 24,845 26,299 26,043 25,862

8,022 7,954 8,227 8,941 9,023 9,750 10,210 10,398 10,764 11,715

Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 1 20012 1

P reliminary.

2

F orecast.

In Thousands of Head Poland

Russia

Spain

Ukrai ne

Uni ted States

World Total

20,725 21,059 17,422 19,138 20,343 17,697 18,498 19,275 18,224 16,988

35,384 31,520 28,600 24,859 22,630 19,500 16,579 16,400 16,100 15,780

17,209 18,260 18,234 18,295 18,600 18,651 18,970 21,715 22,597 22,700

17,839 16,175 15,298 13,946 13,144 11,236 9,479 10,083 10,073 7,652

57,469 58,202 57,940 59,738 58,201 56,124 61,158 62,206 59,342 59,138

728,789 740,758 743,930 758,461 782,425 695,133 731,575 762,206 774,451 652,022

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

Hogs and Pigs on Farms in the United States on December 1 Year

Geargia

Illinois

Indiana

Iowa

Kansas

Minnesota

1,020 900 800 520 480 480 380 315 345 295

5,350 4,800 4,400 4,700 4,850 4,050 4,150 4,250 4,150 3,950

4,500 4,000 3,750 3,950 4,050 3,250 3,350 3,200 3,200 3,100

14,500 13,400 12,200 14,600 15,300 15,400 15,100 15,400 15,600 15,800

1,310 1,230 1,450 1,530 1,590 1,460 1,520 1,570 1,530 1,630

4,850 4,950 4,850 5,700 5,700 5,500 5,800 5,800 6,000 6,400

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

In Thousands of Head

Missouri Nebraska

3,500 1,100 3,450 3,550 3,300 3,150 2,900 3,000 2,950 2,950

4,350 4,050 3,600 3,500 3,400 3,000 3,050 2,900 2,950 2,900

North Carolina

Ohio

South Dakota

Wisconsin

Total

7,000 8,200 9,300 9,600 9,700 9,500 9,300 9,800 9,700 9,900

1,800 1,800 1,500 1,700 1,700 1,480 1,490 1,430 1,440 1,520

1,740 1,450 1,200 1,400 1,400 1,260 1,320 1,290 1,310 1,260

1,040 900 800 740 690 570 610 540 520 490

59,990 58,264 56,171 61,158 62,206 59,342 59,138 59,804 59,513 60,040

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Hog-Corn Price Ratio1 in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

16.1 16.8 13.8 20.0 14.1 12.8 19.3 18.8 19.1 14.2

17.2 17.5 13.8 19.9 14.1 13.5 20.2 20.0 19.9 14.7

16.2 16.4 13.9 17.7 13.7 13.6 20.5 23.5 18.6 14.9

16.1 15.1 12.9 19.2 14.8 14.8 23.3 25.3 16.6 14.9

16.4 15.3 13.7 21.6 18.1 18.4 22.9 27.7 17.2 17.4

16.4 16.8 13.4 22.6 18.6 17.3 25.6 29.7 18.2 19.2

18.4 17.6 13.2 24.3 16.8 18.2 29.5 27.6 18.4 19.7

19.4 18.5 13.9 22.1 18.6 20.7 28.8 26.6 13.4 18.4

16.2 18.0 15.4 20.0 16.1 19.4 25.8 23.7 10.7 18.0

15.4 16.4 19.3 18.6 14.6 20.2 23.8 21.8 13.2 17.4

14.1 13.9 20.5 18.0 9.7 19.6 19.8 18.9 12.2 15.8

14.5 14.2 21.1 16.5 7.3 19.6 20.2 16.8 13.1 14.7

16.4 16.4 15.4 20.0 14.7 17.3 23.3 23.4 15.9 16.6

1 Bushels of corn equal in value to 100 pounds of hog, live weight. U.S. Department of Agriculture (ERS-USDA)

2

Preliminary. Source: Economic Research Service,

Cold Storage Holdings of Froz en Pork2 in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

299.2 365.3 334.8 313.8 346.4 503.5 415.4 411.5 465.0 468.5

348.8 389.6 382.2 342.2 446.1 510.3 481.4 471.4 503.9 512.7

356.9 395.1 385.5 383.9 464.5 540.9 523.5 468.3 510.9 519.7

393.1 416.8 352.9 404.7 458.8 552.8 534.7 432.3 531.5 530.5

429.7 422.3 385.5 440.2 487.0 596.9 532.1 432.6 567.7 520.0

437.6 434.9 381.3 413.4 477.4 572.7 537.9 421.5 548.0 499.7

410.8 431.1 351.8 406.2 426.8 528.6 495.5 374.1 497.8 455.0

393.7 408.3 322.7 388.7 414.6 494.6 478.5 339.5 472.2 440.7

364.0 354.0 322.9 371.8 392.6 432.6 455.6 332.6 464.4 430.2

352.7 332.6 340.3 346.6 388.9 430.6 439.5 366.9 480.2 435.2

385.4 321.6 333.3 354.2 411.9 438.1 438.6 430.6 489.8 446.8

383.2 347.1 316.4 334.1 443.4 422.5 445.6 432.7 463.9 438.9

2

Excludes lard.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

127

HOGS

Cents Per Pound ----- Top, Chicago (Jan. 1909 - Mar 1968) Farrowing, Chicago (Apr. 1968 - May 1970) Average, Omaha (June 1970 - date)

Average Price of Hogs, National Base 51-52% lean2 In Dollars Per Hundred Pounds (Cwt.) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

43.99 37.82 42.39 52.96 35.60 28.58 38.32 38.61 40.16 34.39

48.12 39.09 46.93 51.36 34.53 29.65 41.58 41.47 40.65 35.64

44.30 37.94 49.06 48.52 37.22 28.25 43.52 48.41 37.47 36.11

42.72 35.88 50.88 54.41 37.22 31.69 49.59 49.28 32.97 36.42

42.27 37.35 58.29 57.84 45.51 38.45 50.21 52.34 34.64 43.62

42.76 43.03 56.45 57.43 45.32 35.39 51.48 54.53 37.32 47.88

42.62 47.18 59.47 58.89 39.85 32.84 50.45 53.75 40.53 44.98

42.37 49.46 60.49 54.17 37.98 38.56 45.35 52.47 34.00 41.90

35.49 48.67 54.60 49.45 32.00 35.71 43.49 46.93 26.98 41.82

32.56 45.42 55.41 46.12 29.60 35.84 43.09 41.27 31.69 38.63

28.25 40.02 54.42 44.86 19.95 35.34 37.84 35.49 29.99 36.02

31.59 43.80 55.47 40.33 16.62 37.70 41.40 35.14 32.35 36.02

39.75 42.14 53.66 51.36 34.28 34.00 44.69 45.81 34.90 39.45

Preliminary.

2

Data Prior to January 1998 are for Sioux City.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Hogs in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

128

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

43.5 36.8 42.6 53.8 36.0 26.5 36.8 37.2 37.7 33.0

47.9 39.1 46.5 52.8 35.9 27.7 39.9 39.2 38.5 34.3

44.4 37.8 48.7 49.4 34.9 28.0 41.7 45.9 36.0 34.7

42.7 35.6 49.7 53.8 35.6 30.1 47.4 47.8 31.7 34.8

42.7 37.1 56.8 58.2 42.4 36.6 48.3 50.4 33.2 41.3

42.7 42.2 56.4 57.8 42.5 34.1 48.9 52.2 35.8 45.0

42.2 46.3 58.6 58.9 36.9 31.6 48.3 51.7 39.2 42.8

41.8 48.6 59.7 55.3 35.2 36.2 43.8 50.8 31.9 39.5

35.4 48.4 54.7 50.4 29.5 33.9 41.6 45.2 26.5 39.6

31.8 45.7 55.6 47.3 27.8 34.2 41.4 40.2 30.8 36.8

28.0 39.9 54.4 45.1 18.9 33.4 36.8 35.0 27.8 34.8

30.9 43.5 55.6 41.6 15.0 35.6 39.8 33.3 30.3 34.2

39.5 41.8 53.3 52.0 32.6 32.3 42.9 44.1 33.3 37.6

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

HOGS Quarterly Hogs and Pigs Report in the United States, 10 States Year2

Inventory3

Breeding3

1994 I II III IV 1995 I II III IV 1996 I II III IV 1997 I II III IV 1998 I II III IV

57,904 57,904 57,350 60,715 62,320 59,990 59,990 58,465 59,560 60,540 58,264 58,264 55,741 56,038 56,961 56,124 56,141 55,049 57,366 60,456 61,158 61,158 60,163 62,213 63,488

7,130 7,130 7,210 7,565 7,415 7,060 7,060 6,998 7,180 6,898 6,839 6,839 6,701 6,682 6,577 6,578 6,667 6,637 6,789 6,858 6,957 6,957 6,942 6,958 6,875

Market3 Farrowings

Pig Crop

Year2

50,739 50,739 50,140 53,150 54,905 52,930 52,930 51,467 52,380 53,642 51,425 51,425 49,040 49,356 50,384 49,546 49,474 48,412 50,577 53,598 54,200 54,200 53,220 55,254 56,612

101,400 23,368 27,984 25,547 24,517 98,516 23,851 26,373 24,813 23,479 94,458 23,054 24,833 23,244 23,327 99,583 23,164 25,229 25,696 25,494 104,981 25,480 26,989 26,634 25,878

1999 I II III IV 2000 I II III IV 2001 I II III IV 2002 I II III IV 2003 1 I II III IV

12,376 2,885 3,390 3,107 2,997 11,847 2,886 3,170 2,976 2,815 11,114 2,735 2,930 2,718 2,731 11,480 2,684 2,911 2,946 2,939 12,062 2,929 3,086 3,054 2,993

In Thousands of Head

Inventory3

Breeding3

62,206 62,206 60,191 60,896 60,776 59,342 59,342 57,782 59,117 59,495 59,138 59,138 57,524 58,603 59,777 59,804 59,804 59,248 60,288 60,725 59,513 59,513 58,207 59,586 60,103

6,682 6,682 6,527 6,515 6,301 6,234 6,234 6,190 6,234 6,246 6,270 6,270 6,232 6,186 6,158 6,209 6,209 6,236 6,209 6,054 6,012 6,012 6,021 5,960 5,902

1

Preliminary. 2 Quarters are Dec. preceding year-Feb.(I ), Mar.-May(I I ), June-Aug.(I I I ) and Sept.-Nov.(I V). Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Federally Inspected Hog Slaughter in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

3

Market3 Farrowings

Pig Crop

55,523 55,523 53,663 54,380 54,474 53,109 53,109 51,593 52,884 53,250 52,868 52,868 51,292 52,417 53,619 53,594 53,594 53,011 54,078 54,670 53,501 53,501 52,186 53,626 54,201

102,354 25,247 26,272 25,862 24,973 100,747 24,522 25,565 25,548 25,112 100,503 23,963 25,509 25,539 25,492 101,345 24,794 25,959 25,700 24,892 125,556 24,359 25,583 25,150 50,464

11,641 2,891 2,986 2,920 2,844 11,410 2,798 2,885 2,889 2,838 11,385 2,748 2,870 2,878 2,889 11,483 2,836 2,943 2,887 2,817 11,307 2,765 2,881 2,825 2,836

Beginning of period.

In Thousands of Head

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

7,285 7,882 8,129 7,610 8,454 8,373 8,010 8,521 8,552 8,680

6,783 7,157 7,506 6,836 7,590 7,746 7,955 7,491 7,400 7,580

8,148 8,628 7,549 7,437 8,335 8,945 8,695 8,207 7,879 8,052

7,609 7,379 7,886 7,590 8,198 8,386 7,108 7,722 8,321 8,230

7,383 8,012 7,485 6,971 7,443 7,303 7,816 7,836 8,215 7,705

7,452 7,731 6,395 6,859 7,596 8,176 7,823 7,368 7,425 7,649

6,941 6,918 7,187 7,169 8,130 7,778 7,235 7,333 7,957 7,995

7,997 8,083 7,509 7,197 8,024 8,256 8,481 8,247 8,425 7,936

8,192 7,752 7,541 7,872 8,443 8,501 7,992 7,687 8,384 8,445

8,585 8,358 8,423 8,625 9,192 8,806 8,746 9,210 9,276 9,534

8,516 8,424 7,469 7,601 8,650 8,750 8,633 8,610 8,548 8,490

8,547 7,881 7,455 8,461 9,231 8,719 7,943 8,298 8,534 9,236

93,435 94,203 90,534 90,228 99,285 99,739 96,436 96,528 98,915 99,532

Preliminary. Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Live Weight of all Hogs Slaughtered Under Federal Inspection

In Pounds Per Head

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

254 258 257 257 259 259 262 265 268 268

254 256 254 256 258 259 262 264 267 267

254 257 255 256 257 259 263 264 267 268

256 258 255 256 257 260 263 265 268 268

255 258 255 256 256 260 264 264 267 268

256 258 256 257 255 260 263 264 266 266

252 256 251 253 252 257 260 261 261 263

252 253 250 252 252 254 258 258 259 261

255 252 250 255 253 256 260 262 261 263

259 255 255 257 257 259 263 267 264 268

261 259 258 261 262 262 266 269 268 270

260 258 257 260 261 262 265 268 268 269

256 257 254 256 257 259 262 264 265 267

1

Preliminary. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

129

HOGS

Data through December 1996 contract are for Live Hogs * .74 Adjusted to correspond to the Lean Hogs contract.

Average Open Interest of Lean Hog1 Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

31,899 36,705 35,253 33,105 45,908 46,003 49,209 41,425 28,720 40,660

32,123 30,958 34,823 33,953 42,241 44,211 54,094 41,892 31,662 39,862

31,012 30,736 38,730 31,289 38,965 43,803 57,472 48,381 33,056 40,446

31,713 28,035 42,900 34,071 33,610 48,277 68,535 45,296 33,472 37,883

30,889 28,294 41,916 41,978 34,257 55,951 64,938 41,910 33,161 43,672

27,327 28,729 36,620 37,398 32,456 52,398 54,208 45,715 28,719 47,338

26,414 29,959 35,616 36,141 32,085 54,723 45,730 51,661 29,338 39,706

25,335 31,599 32,541 33,712 31,199 49,915 38,233 47,760 32,030 37,700

28,957 34,183 32,591 31,483 34,165 53,055 38,802 42,072 36,136 49,469

32,077 31,312 34,329 36,928 34,051 54,089 38,254 36,983 35,245 46,295

36,304 31,519 33,148 39,363 42,224 54,432 40,075 32,821 42,852 43,552

33,516 35,127 32,163 39,394 45,241 50,691 45,141 27,687 43,974 43,352

1

Data thru October 1995 are Live Hogs, November 1995 thru December 1996 are Live Hogs and Lean Hogs. Source: Chicago Mercantile Exchange (CME)

Volume of Trading of Lean Hog1 Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total2

144,701 155,766 177,299 180,241 180,241 218,608 175,399 183,493 145,266 186,436

96,736 115,800 138,002 159,600 182,698 171,108 186,352 159,020 120,994 137,479

146,934 181,919 150,117 200,118 174,752 196,825 231,532 197,004 168,929 186,511

93,105 116,767 216,476 212,810 132,952 189,773 158,765 142,892 196,956 156,370

127,381 145,350 208,696 222,759 155,737 214,852 218,222 165,220 163,816 209,740

144,373 155,295 177,359 188,615 167,767 237,240 235,036 184,421 158,074 210,901

116,181 139,013 185,872 181,637 185,427 239,096 172,725 198,503 166,064 199,782

122,058 144,590 157,540 146,297 157,973 167,787 145,849 164,712 140,154 124,677

110,697 135,262 158,077 149,950 164,964 190,238 146,240 152,178 174,797 232,705

128,980 132,122 203,789 175,135 173,163 187,794 142,240 177,601 167,065 207,247

150,744 142,460 170,586 152,876 218,950 205,505 153,043 163,798 165,039 164,190

172,132 136,191 152,098 130,871 241,767 139,270 146,404 129,497 164,106 148,117

1,554.0 1,700.7 2,095.9 2,100.9 2,136.3 2,358.1 2,111.8 2,018.3 1,931.3 2,164.2

Data thru October 1995 are Live Hogs, November 1995 thru December 1996 are Live Hogs and Lean Hogs. Source: Chicago Mercantile Exchange (CME)

130

2

I n thousands of contracts.

Honey Honey is the thick, supersaturated sugar solution produced by bees to feed their larvae. It is composed of fructose, glucose and water in varying proportions and also contains several enzymes and oils. The color of honey varies due to the source of nectar and age of the honey. Light colored honeys are usually of higher quality than darker honeys. The average honeybee colony can produce more than 700 pounds of honey per year but only 10 percent is usually harvested by the beekeeper. The rest of the honey is consumed by the colony during the year. American per capita honey consumption is 1 pound per person per year. Honey is said to be humanity’s oldest sweet, and beeswax was the first plastic. Honey is used in many ways, including direct human consumption, for baking, and as medicine. Honey has several healing properties. Its high sugar content nourishes injured tissues, thus enhancing faster healing time. Honey’s phytochemicals create a form of hydrogen peroxide that cleans out the wound, and the thick consistency protects the wound from contact with air Honey has also proven superior to antibiotic ointments for reducing rates of infection in people with burns. Prices – US average domestic honey prices in 2001 rose to 70.4 cents per pound from the 7-year low of 59.7 cents posted in 2000. The value of US honey production in

World Production of Honey Year

In Metric Tons

Argentina

Australia

Brazil

Canada

China

Germany

Ja p a n

Mexico

Russia

United States

Total

57,000 70,000 65,000 93,000 93,000 80,000 85,000

26,000 27,000 22,000 19,000 21,000 22,000 22,000

18,000 18,000 18,000 20,000 22,000 22,000 22,000

27,000 31,000 46,000 37,000 32,000 35,000 33,000

189,000 215,000 211,000 236,000 252,000 255,000 258,000

15,000 15,000 16,000 20,000 20,000 2,600 22,000

3,000 3,000 3,000 3,000 3,000 3,000 3,000

49,000 54,000 55,000 55,000 59,000 59,000 55,000

46,000 49,000 50,000 51,000 54,000 53,000 55,000

90,000 89,000 100,000 94,000 100,000 84,000 90,000

1,091,000 1,148,000 1,178,000 1,234,000 1,246,000 1,255,000 1,270,000

1996 1997 1998 1999 2000 2001 20021 1

Preliminary.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Salient Statistics of Honey in the United States

Year

1998 1999 2000 2001 20021 20032 1

2002 was $222 million, up sharply from $132 million in 2001. Supply – World production of honey in 2000, the latest reporting year for the series, rose +1.4% to 1.241 million metric tons from 1.224 million metric tons in 1999. World honey production has been stable in the 1.0-1.2 million metric ton range over the last 15 years. The world’s largest producer of honey by far is China with 256,000 metric tons of production in 2000, representing 21% of total world production. US production of honey in 2002 fell –7.7% to 171.1 million pounds from 185.5 million in 2001, and was sharply below the recent 9-year high of 220.3 million pounds posted in both 1998 and 2000. Stocks in 2002 (Jan 1) fell to a 22year low of 39.0 million pounds from 64.6 million pounds in 2001. The drop in production in 2002 was mostly due to a sharp decline in yield per colony to a 12-year low of 67.8 pounds per colony, down from 74.0 in 2001 and 84.1 pounds in 2000. The number of colonies in 2002, however rose +0.7% to 2.524 million. Trade – The US imports almost as much honey as it produces, with imports in 2001 at 145.0 million pounds, down from 198.5 million pounds in 2000. US exports of honey are small and totaled only 7.4 million pounds in 2001, accounting for only 4% of US production.

Imports Domestic Total D i sa p Stocks U.S. Pro- for Conduction sumption pearance Jan. 1

Number of Yield Per Colonies Colony (1,000) Pounds

2,633 2,688 2,620 2,506 2,574 2,590

Preliminary.

2

83.7 76.4 84.1 74.0 66.7 69.9

Forecast.

69.1 79.4 85.3 64.6 39.4 40.7 3

220.3 205.3 220.3 185.5 171.7 181.1

Fiscal year.

132.4 182.5 198.5 144.8 202.5

In Millions of Pounds

Exports

Total Supply

10.4 11.1 10.1 7.4 7.3

397.5 -------------

332.9 -------------

------- Program Activity ------Net Gov't ExpendCCC Placed iture3 Take Under Over Loan Mil. $

----------------

----------------

Domestic National Avg. Price Avg. Price All Honey Support - Cents Per Pound -

----------------

65.5 60.1 59.7 70.4 132.7 140.4

----------------

P er Capita Consumption Pounds

----------------

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production and Yield of Honey in the United States Year

1998 1999 2000 2001 2002 20031 1

------------------------ Production in Thousands of Pounds ----------------------CaliMinneNorth South fornia Florida sota Dakota Dakota Total

37,350 30,300 30,800 27,625 23,500 32,160

Preliminary.

22,540 23,256 24,360 22,000 20,460 14,910

11,060 11,890 13,500 10,935 8,541 9,960

29,440 26,775 34,500 26,880 24,000 29,580

21,375 23,296 28,435 15,275 11,475 14,000

220,316 205,250 220,339 185,461 171,718 181,096

Value of -------------------- Yield per Colony in Pounds---------------------Production CaliMinneNorth South $1,000 fornia Florida sota Dakota Dakota Average

144,304 126,075 132,742 132,225 228,338 255,791

83 60 70 65 50 67

98 102 105 100 93 71

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

79 82 90 81 73 83

128 105 115 96 75 87

95 104 121 65 51 70

83.7 76.4 84.1 74.0 66.7 69.9

131

Interest Rates, U.S. US interest rates can be characterized in two main ways, credit quality and maturity. Credit quality refers to level of risk associated with a particular borrower, with US Treasury securities carrying the lowest risk. Maturity refers to the point in time when the security matures and must be repaid. Treasury securities, for example, carry the full spectrum of maturities, from short-term cash management bills, to T-bills (3-months, 6-months, and 4-weeks), Tnotes (2-year, 3-year, 5-year and 10-years), and 30-year Tbonds. The most active futures markets are Treasury note and bond futures traded at the Chicago Board of Trade (CBOT) and Eurodollar futures traded at the Chicago Mercantile Exchange (CME). Fed policy – US interest rates during 2003 trended lower early in the year due to weak economic growth tied to the impending Iraq war. Interest rates then moved higher over the summer after the economy started to recover. The Federal Open Market Committee (FOMC) came into 2003 with its overnight federal funds rate at 1.25% but the FOMC then cut its funds rate target by another 0.25% to a 45-year low of 1.00% on June 25 to ensure an economic recovery. As 2003 ended, the market was expecting the Fed to raise its funds rate target by 25 bp by summer 2004 and by another 25 bp by autumn 2004. The Fed’s extraordinarily accommodative monetary policy during 2003 was designed to ensure that the US economy would get back on its feet. The US economy had taken some major hits in the previous two years, with the stock market bubble bursting in 2000, the 9/11 terrorist attack in September 2001, and the corporate scandals seen through 2002 and 2003. Those external shocks, combined

U.S. Producer Price Index2 for All Commodities Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

1982 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

122.9 126.3 129.7 125.4 122.9 128.3 140.0 128.5 135.3

123.5 126.2 128.5 125.0 122.3 129.8 137.4 128.4 137.6

123.9 126.4 127.3 124.7 122.6 130.8 135.9 129.8 141.2

124.6 127.4 127.0 124.9 123.6 130.7 136.4 130.8 136.8

124.9 128.1 127.4 125.1 124.7 131.6 136.8 130.8 136.7

125.3 128.0 127.2 124.8 125.2 133.8 135.5 130.9 138.0

125.3 128.0 126.9 124.9 125.7 133.7 133.4 131.2 137.7

125.1 128.3 127.2 124.2 126.9 132.9 133.4 131.5 138.0

125.2 128.2 127.5 123.8 128.0 134.7 133.3 132.3 138.5

125.3 128.0 127.8 124.0 127.7 135.4 130.3 133.2 139.4

125.4 128.2 127.9 123.6 128.3 135.0 129.8 133.1 138.9

125.7 129.1 126.8 122.8 127.8 136.2 128.1 132.9 139.4

124.8 127.7 127.6 124.4 125.5 132.7 134.2 131.1 138.1

Preliminary.

2

Not seasonally adjusted.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS)

U.S. Consumer Price Index2 for All Urban Consumers Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

1982-84 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

150.3 154.4 159.1 161.6 164.3 168.8 175.1 177.1 182.2

150.9 154.9 159.6 161.9 164.5 169.8 175.8 177.8 183.3

151.4 155.7 160.0 162.2 165.0 171.2 176.2 178.8 183.9

151.9 156.3 160.2 162.5 166.2 171.3 176.9 179.8 183.3

152.2 156.6 160.1 162.8 166.2 171.5 177.7 179.8 183.3

152.5 156.7 160.3 163.0 166.2 172.4 178.0 179.9 183.6

152.5 157.0 160.5 163.2 166.7 172.8 177.5 180.1 183.9

152.9 157.3 160.8 163.4 167.1 172.8 177.5 180.7 184.5

153.2 157.8 161.2 163.6 167.9 173.7 178.3 181.0 185.0

153.7 158.3 161.6 164.0 168.2 174.0 177.7 181.3 185.0

153.6 158.6 161.5 164.0 168.3 174.1 177.4 181.4 184.6

153.5 158.6 161.3 163.9 168.3 174.0 176.7 181.6 185.0

152.4 156.9 160.5 163.0 166.6 172.2 177.1 179.9 184.0

Preliminary.

132

with the impending war with Iraq in early 2003, caused concern that the US might slip into another recession and that deflation could become a serious problem. But by late 2003, the Fed’s extremely stimulative monetary policy, combined with the expansive fiscal policy, helped create an economic boom and US GDP soared to +8.2% by Q3. Treasury supply – The Treasury in 2003 made some substantial changes to its debt auction schedule due to the US budget deficit, which soared to $401 billion in fiscal 2003 and is expected to be near $480 billion in fiscal 2004. The higher budget deficit is due to three main factors: (1) lower revenues with the weak economy, (2) high expenses from the war on terror and the wars in Afghanistan and Iraq, and (3) the Bush tax cuts. The Treasury in 2003 revised its auction mix by (1) selling 5-year T-notes monthly versus its previous pattern of eight sales per year, (2) reinstating a quarterly sale of 3-year T-notes (after a 5-year hiatus), (3) increasing the frequency of 10-year T-note sales to eight per year from four per year, and (4) increasing the frequency of inflation-indexed 10-year T-notes to four per year. Treasury yield curve – The Treasury yield curve was extremely steep during 2003. The Fed’s extraordinarily easy monetary policy and the funds rate target of 1.00% kept short-term interest rates locked down to extremely low levels. Longer-term rates, however, were higher as the market discounted a return to a more normal inflation and interest rate situation in coming years. The spread between the 10-year T-note and the 2-year T-note, a widely-watched indicator of yield curve steepness, rose to 2.73 percentage points in July 2003, which was a record high going back to the beginning of the data series in 1977.

2

Not seasonally adjusted.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS)

INTEREST RATES, U.S.

Average Open Interest of 3-month Eurodollar Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

2,300.5 2,443.6 2,519.4 2,190.8 2,713.4 2,917.9 2,971.3 3,576.4 4,592.0 4,007.1

2,529.5 2,535.4 2,638.6 2,333.2 2,821.5 3,039.5 3,261.4 3,878.6 4,937.0 4,500.1

2,568.1 2,463.9 2,511.4 2,423.1 2,797.9 2,973.5 3,138.7 4,117.4 4,727.9 4,517.3

2,627.3 2,447.4 2,483.5 2,523.1 2,892.6 2,894.7 3,156.6 4,109.3 4,411.6 4,448.6

2,734.3 2,503.3 2,571.8 2,671.3 3,089.0 3,183.2 3,331.7 4,316.3 4,421.0 5,098.7

2,565.2 2,390.8 2,590.1 2,706.5 3,093.9 3,208.8 3,272.1 4,471.7 4,295.5 5,514.2

2,599.1 2,279.5 2,504.4 2,699.2 3,027.7 3,064.4 3,160.3 4,452.4 4,123.7 5,218.4

2,703.8 2,374.6 2,485.5 2,788.0 3,223.0 3,115.6 3,225.7 4,753.5 4,482.4 5,277.9

2,699.6 2,347.2 2,392.4 2,769.3 3,359.9 2,904.0 3,181.8 4,567.8 4,243.4 5,034.1

2,561.2 2,290.3 2,349.7 2,815.1 3,303.4 2,918.2 3,067.2 4,524.0 4,237.9 4,935.4

2,660.3 2,405.5 2,378.2 2,799.5 3,297.4 2,879.7 3,201.1 4,950.8 4,553.7 5,024.2

2,606.3 2,480.5 2,225.7 2,661.6 3,000.1 2,859.4 3,349.7 4,559.1 4,072.5 4,936.1

Source: I nternational Monetary Market (I OM), division of the Chicago Mercantile Exchange (CME)

Volume of Trading of 3-month Eurodollar Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

6,075 10,341 7,486 7,903 10,908 7,471 8,380 17,515 19,487 13,534

8,745 10,429 9,267 6,918 7,861 7,675 9,723 12,908 14,491 12,315

9,469 9,549 9,526 8,936 8,842 8,719 10,198 15,479 17,987 18,275

9,639 6,069 6,872 9,352 9,488 7,347 10,172 15,192 17,947 15,393

11,494 9,897 7,414 8,447 7,202 8,957 10,261 15,691 18,717 19,403

9,348 10,105 7,415 8,050 8,350 9,650 9,791 14,310 17,932 21,163

7,810 6,670 8,323 7,292 5,452 7,746 7,385 12,673 20,367 18,733

7,128 7,013 6,968 9,295 9,811 8,898 7,010 14,948 17,758 18,724

7,641 7,171 8,232 7,635 13,594 7,629 8,205 16,776 15,310 18,817

7,992 6,478 7,014 12,570 11,757 7,501 9,276 14,139 18,496 20,004

9,715 6,055 5,057 6,314 9,628 6,223 7,561 21,150 13,349 15,432

9,766 5,952 5,308 7,058 6,579 5,604 10,152 13,234 10,240 16,978

104,823 95,730 88,883 99,770 109,473 93,418 108,115 184,015 202,081 208,771

Source: I nternational Monetary Market (I OM), division of the Chicago Mercantile Exchange (CME)

133

INTEREST RATES, U.S.

Prior to the March 2000 contract, prices are theoretical based on a 6% coupon.

Average Open Interest of 2-Year U.S. Treasury Note Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

24,696 43,794 20,194 20,599 39,649 39,971 34,325 82,168 86,505 107,084

36,184 41,932 26,865 23,027 40,462 40,747 43,026 79,389 103,331 114,234

39,818 33,705 21,125 22,750 40,840 40,339 44,512 81,688 103,568 123,909

37,306 29,109 17,494 24,090 40,899 40,078 43,772 72,517 87,850 108,979

36,331 26,227 16,606 29,379 46,833 34,731 49,033 66,185 102,040 120,264

32,673 18,721 17,547 33,225 47,241 35,959 51,216 63,601 105,931 118,776

29,963 19,346 15,758 36,047 44,701 35,349 55,806 56,610 99,383 112,052

33,038 18,657 16,849 47,253 48,888 37,624 53,449 72,951 107,955 149,099

36,606 16,756 17,792 44,003 47,030 38,693 47,912 74,353 110,434 151,922

31,385 17,057 17,730 40,960 37,245 38,157 53,338 65,433 108,089 144,646

35,929 25,740 19,247 37,785 38,222 38,702 60,894 72,697 115,503 149,014

40,344 19,362 20,309 37,701 40,303 34,135 77,860 71,270 113,618 156,506

Source: Chicago Board of Trade (CBT)

Volume of Trading of 2-Year U.S. Treasury Note Futures in Chicago

In Contracts

Year

Sept.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

39,855 60,170 38,710 32,403 77,139 64,460 51,539 174,603 195,004 146,797

99,669 93,842 98,916 93,921 104,312 132,651 159,339 299,158 332,884 392,934

Mar.

Apr.

May

127,658 38,595 131,682 29,273 51,861 28,135 79,008 44,548 107,051 52,038 66,958 62,860 97,880 76,889 160,898 194,758 290,410 159,242 292,515 153,316

90,394 73,610 60,097 100,191 140,903 132,319 160,157 273,983 376,968 513,945

Source: Chicago Board of Trade (CBT)

134

June

July

Aug.

102,460 43,231 68,363 34,073 46,049 37,971 102,651 53,120 123,312 59,360 93,555 46,547 105,192 43,017 163,314 93,386 242,925 177,001 339,209 274,095

65,330 68,666 61,838 138,498 177,445 139,182 180,980 316,446 376,991 513,993

Oct.

Nov.

D e c.

Total

98,060 31,830 37,805 34,181 58,688 25,530 96,988 68,512 160,102 93,117 71,284 43,987 107,353 97,403 198,066 122,944 253,009 174,779 522,811 281,118

94,659 81,013 69,046 107,780 140,650 124,064 287,602 303,778 387,153 496,714

104,291 49,033 61,006 100,630 72,923 72,262 126,469 160,646 232,287 488,459

936,032 761,711 637,847 1,018,250 1,308,352 1,050,129 1,493,820 2,461,980 3,198,653 4,415,906

INTEREST RATES, U.S.

Prior to the March 2000 contract, prices are theoretical based on a 6% coupon.

Average Open Interest of 5-Year U.S. Treasury Note Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

200,812 206,539 163,026 176,691 257,094 290,373 387,008 377,692 507,207 685,117

213,037 210,192 184,523 208,928 270,048 268,561 475,464 391,989 576,204 743,152

200,626 199,357 200,253 219,540 282,327 247,526 420,789 374,481 585,576 777,801

185,083 200,087 191,690 235,543 277,540 246,916 417,929 376,929 632,211 835,470

192,659 213,531 179,951 227,882 274,145 311,106 428,239 436,278 656,402 856,337

186,026 189,332 177,370 225,691 257,193 348,627 379,628 421,968 594,924 827,497

189,828 176,329 174,484 226,306 264,756 325,348 402,658 460,960 554,875 781,691

182,027 173,897 179,599 225,792 389,118 341,495 405,087 483,252 652,799 840,392

181,518 163,419 154,764 234,309 382,855 298,861 372,779 451,429 655,029 737,028

181,578 162,121 138,246 233,480 383,809 328,581 373,698 463,247 662,475 819,361

176,322 177,915 155,820 248,377 353,399 272,628 381,432 554,640 720,688 925,644

205,150 171,023 154,764 257,886 326,860 288,523 380,248 491,105 692,750 880,093

Source: Chicago Board of Trade (CBT)

Volume of Trading of 5-Year U.S. Treasury Note Futures in Chicago

In Thousands of Contracts

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

696 988 837 928 1,452 1,120 1,801 2,423 2,868 4,436

1,235 1,296 1,312 1,157 1,482 1,554 2,874 2,592 3,826 5,178

1,295 1,387 1,085 1,271 1,391 1,337 2,010 2,281 3,848 5,534

917 783 816 984 1,155 1,115 1,708 2,063 3,092 4,624

1,202 1,291 1,135 1,191 1,281 1,906 2,548 3,222 4,638 7,268

1,155 1,403 878 1,144 1,377 1,544 1,757 2,264 4,096 6,166

835 829 882 761 944 1,166 1,189 1,702 4,437 6,463

945 1,100 1,062 1,245 2,481 2,164 2,253 2,697 5,354 7,090

1,107 1,009 979 1,244 1,913 1,034 1,516 2,617 4,859 7,454

841 770 690 1,314 1,583 1,245 1,774 2,526 5,027 6,364

1,157 996 831 1,068 1,723 1,607 2,260 4,053 5,013 6,885

1,078 785 957 1,183 1,279 1,193 1,643 2,684 3,453 6,286

12,463 12,637 11,463 13,489 18,060 16,984 23,332 31,122 50,512 73,746

Source: Chicago Board of Trade (CBT)

135

INTEREST RATES, U.S.

Prior to the March 2000 contract, prices are theoretical based on a 6% coupon.

Average Open Interest of 10-year U.S. Treasury Note Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

May

264,848 282,978 260,374 332,285 430,335 528,538 595,180 550,287 572,937 772,919

258,643 285,187 297,850 343,661 507,986 549,518 653,822 541,619 643,864 896,941

300,080 265,747 285,501 323,982 474,916 515,404 571,932 560,035 679,635 914,943

328,821 263,816 319,234 348,683 494,417 510,091 615,618 595,103 699,051 897,057

294,091 273,945 331,032 350,814 533,214 541,057 621,361 628,693 806,458 968,072

June

July

In Contracts

Aug.

Sept.

254,612 232,373 253,233 289,052 306,046 323,078 293,416 302,330 326,391 336,927 363,744 407,147 513,369 512,173 604,862 574,514 588,272 623,806 583,900 608,358 602,068 512,127 550,155 627,305 792,956 877,642 958,338 993,643 1,009,484 1,032,497

273,564 277,011 291,208 387,284 555,268 607,305 547,582 610,435 888,696 856,204

Nov.

D e c.

277,313 301,000 278,832 270,527 284,581 313,298 398,645 404,980 482,928 508,299 653,080 582,003 564,606 555,189 590,328 661,963 970,176 938,028 985,673 1,140,655

Oct.

271,992 249,073 303,702 374,448 503,533 487,888 508,888 559,949 751,575 965,049

Source: Chicago Board of Trade (CBT)

Volume of Trading of 10-year U.S. Treasury Note Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1,484 1,753 1,649 1,781 2,394 2,269 3,557 4,633 5,540 9,121

1,936 1,979 2,313 1,940 2,749 3,562 4,975 4,915 6,407 10,746

2,572 2,459 2,076 2,052 2,817 2,994 3,750 4,501 6,521 11,321

2,213 1,368 1,632 1,703 2,342 2,145 3,530 4,299 5,463 9,377

2,399 2,236 2,211 2,026 2,696 3,519 4,712 5,483 8,309 13,817

2,250 2,496 1,716 1,942 2,682 3,153 3,706 4,084 7,548 12,149

1,622 1,589 1,556 1,510 1,704 2,438 2,581 3,493 8,981 15,285

2,029 2,029 1,866 2,536 3,632 3,736 4,460 5,683 10,590 14,249

1,933 1,859 1,810 2,063 3,560 2,509 3,780 4,390 8,529 13,707

1,635 1,460 1,495 2,594 2,883 2,471 3,824 4,145 11,199 13,587

2,254 1,731 1,905 1,826 2,912 3,202 4,514 7,270 9,679 12,475

1,750 1,488 1,711 1,991 2,112 2,048 3,313 4,690 7,020 10,912

24,078 22,445 21,940 23,962 32,483 34,046 46,701 57,586 95,786 146,745

Source: Chicago Board of Trade (CBT)

136

In Thousands of Contracts

Jan.

INTEREST RATES, U.S.

Prior to the March 2000 contract, prices are theoretical based on a 6% coupon.

Average Open Interest of 30-year U.S. Treasury Bond Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

380,057 384,356 382,001 497,539 744,894 657,180 637,023 413,244 468,455 420,797

422,902 389,908 403,403 545,775 764,309 801,115 612,298 479,165 520,573 506,910

454,539 369,989 395,338 509,573 766,233 664,131 530,957 519,987 479,939 487,277

500,790 367,964 381,926 493,511 806,559 618,453 503,412 509,558 463,100 449,286

May

June

July

In Contracts

Aug.

Sept.

Oct.

Nov.

D e c.

497,296 421,286 441,884 451,462 399,500 421,234 438,267 381,237 413,944 443,644 464,145 471,203 554,418 480,669 530,011 608,474 888,215 1,040,659 1,084,889 1,061,223 717,453 674,225 672,983 748,974 434,771 390,928 394,075 440,437 503,194 455,799 458,613 531,098 472,778 458,020 427,896 465,971 566,887 596,186 554,632 521,928

447,924 361,394 420,622 624,231 837,986 647,816 402,156 525,972 496,815 423,995

436,684 395,346 409,950 723,321 769,932 621,816 399,880 567,177 467,440 443,177

449,642 447,409 463,731 719,186 782,677 637,656 443,282 602,647 459,877 489,185

397,554 426,384 479,086 737,703 662,025 561,919 445,386 478,418 440,225 471,848

Source: Chicago Board of Trade (CBT)

Volume of Trading of 30-year U.S. Treasury Bond Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

7,288 7,058 7,529 8,105 9,595 8,075 7,966 5,123 4,133 3,625

8,430 7,714 8,781 7,523 9,368 10,031 8,157 5,546 4,721 4,841

10,837 9,624 7,199 7,493 9,764 8,667 5,379 5,196 4,505 5,107

9,557 5,835 6,011 7,520 8,517 7,197 5,282 4,584 3,933 3,795

9,999 8,722 7,932 8,339 9,054 9,556 5,973 6,022 5,191 7,188

9,804 8,447 6,521 7,400 10,209 8,072 4,459 4,233 4,722 5,896

6,987 5,790 6,422 7,680 8,071 6,415 3,080 3,347 5,158 6,352

7,910 7,084 6,626 10,228 12,025 7,995 4,710 4,966 5,667 6,198

7,913 7,317 6,926 8,356 11,159 6,560 4,529 4,331 4,534 5,738

7,004 6,927 6,772 12,468 10,698 6,301 4,460 4,599 5,190 5,122

8,533 6,626 7,298 7,736 8,155 6,909 5,073 6,746 4,723 4,823

5,699 5,232 6,708 6,980 5,609 4,263 3,682 3,886 3,606 4,835

99,960 86,376 84,725 99,828 112,224 90,042 62,751 58,579 56,082 63,522

Source: Chicago Board of Trade (CBT)

137

INTEREST RATES, U.S.

U.S. Federal Funds Rate

In Percent

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

3.05 5.53 5.56 5.25 5.56 4.63 5.46 5.98 1.73 1.24

3.25 5.92 5.22 5.19 5.51 4.76 5.73 5.49 1.74 1.26

3.34 5.98 5.31 5.39 5.49 4.81 5.85 5.31 1.73 1.25

3.56 6.05 5.22 5.51 5.45 4.74 6.02 4.80 1.75 1.26

4.01 6.01 5.56 5.50 5.49 4.74 6.27 4.21 1.75 1.26

4.25 6.00 5.27 5.56 5.56 4.76 6.53 3.97 1.75 1.22

4.26 5.85 5.40 5.52 5.54 4.99 6.54 3.77 1.73 1.01

4.47 5.74 5.22 5.54 5.55 5.07 6.50 3.65 1.74 1.03

4.73 5.80 5.30 5.54 5.51 5.22 6.52 3.07 1.75 1.01

4.76 5.76 5.24 5.50 5.07 5.20 6.51 2.49 1.75 1.01

5.29 5.80 5.31 5.52 4.83 5.42 6.51 2.09 1.34 1.00

5.45 5.60 5.29 5.50 4.68 5.30 6.40 1.82 1.24 0.98

4.20 5.84 5.30 5.46 5.35 4.97 6.24 3.89 1.67 1.13

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

U.S. Municipal Bond Yield1

In Percent

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

5.31 6.53 5.43 5.72 5.06 5.02 6.08 5.10 5.16 4.90

5.40 6.22 5.43 5.63 5.10 5.03 6.00 5.18 5.11 4.81

5.91 6.10 5.79 5.76 5.21 5.10 5.83 5.13 5.29 4.76

6.23 6.02 5.94 5.88 5.23 5.08 5.75 5.27 5.22 4.74

6.19 5.95 5.98 5.70 5.20 5.18 6.00 5.29 5.19 4.41

6.11 5.84 6.02 5.53 5.12 5.37 5.80 5.20 5.09 4.33

6.23 5.92 5.92 5.35 5.14 5.36 5.63 5.20 5.02 4.74

6.21 6.06 5.76 5.41 5.10 5.58 5.51 5.03 4.95 5.10

6.28 5.91 5.87 5.39 4.99 5.69 5.56 5.09 4.74 4.92

6.52 5.80 5.72 5.38 4.93 5.92 5.59 5.05 4.88 4.89

6.97 5.64 5.59 5.33 5.03 5.86 5.54 5.04 4.95 4.73

6.80 5.45 5.64 5.19 4.98 5.95 5.22 5.25 4.85 4.65

6.18 5.95 5.76 5.52 5.09 5.43 5.71 5.15 5.04 4.75

1

20-bond average.

138

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

INTEREST RATES, U.S.

U.S. Industrial Production Index1 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

1997 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

105.7 111.9 112.4 121.3 130.3 134.1 143.6 143.9 109.0 111.2

106.2 111.6 113.8 122.1 130.2 134.5 144.3 143.5 109.2 111.6

107.0 111.7 113.2 122.5 130.7 135.1 145.2 142.9 109.6 110.8

107.4 111.4 114.3 123.1 131.3 135.5 146.3 142.0 110.1 110.1

108.1 111.5 114.8 123.3 131.9 136.2 147.2 141.6 110.4 110.0

108.6 111.7 115.5 123.5 130.6 136.6 147.9 140.3 110.8 110.0

109.1 111.7 115.5 124.5 130.5 137.4 147.6 140.4 111.6 110.8

109.2 112.6 115.8 125.2 132.4 137.7 148.7 140.0 111.3 110.9

109.3 113.0 116.0 125.6 131.9 138.1 148.8 138.5 111.2 111.5

109.9 112.5 116.2 129.3 134.1 139.1 146.3 137.7 111.0 111.9

110.6 112.7 120.6 129.9 133.8 141.9 145.8 108.8 111.2 113.1

111.6 112.8 120.9 130.3 133.8 142.8 145.1 108.3 110.6 113.2

108.6 114.5 119.5 127.0 132.4 139.2 145.7 111.5 110.9 111.3

1

Total I ndex of the Federal Reserve I ndex of Quantity Output, seasonally adjusted. Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

2

Preliminary.

U.S. Gross National Product, National Income, and Personal Income Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20032 1

--------------- Gross Domestic Product --------------First Second Third Fourth Annual Quarter Quarter Quarter Quarter Average

-------------------- National Income -------------------First Second Third Fourth Annual Quarter Quarter Quarter Quarter Average

6,888 7,016 7,096 7,218 7,054 7,298 7,343 7,433 7,529 7,401 7,630 7,783 7,859 7,981 7,813 8,124 8,280 8,391 8,479 8,318 8,628 8,697 8,817 8,985 8,782 9,093 9,172 9,317 9,516 9,274 9,650 9,821 9,875 9,954 9,825 10,028 10,050 10,098 10,153 10,082 10,313 10,377 10,506 10,589 10,446 10,688 10,803 11,063 10,852

Seasonally adjusted at annual rates.

2

Preliminary.

In Billions of Constant Dollars1

5,373 5,775 6,067 6,455 6,874 7,343 7,860 8,092 8,269 8,496

5,525 5,834 6,178 6,556 6,986 7,406 7,955 8,110 8,328 8,618

5,609 5,920 6,255 6,676 7,109 7,476 8,048 8,089 8,350 8,796

5,720 5,978 6,343 6,787 7,197 7,650 8,075 8,197 8,414

5,557 5,877 6,210 6,618 7,041 7,462 7,984 8,122 8,340 8,637

-------------------- Personal Income -------------------First Second Third Fourth Annual Quarter Quarter Quarter Quarter Average

5,714 6,110 6,405 6,792 7,255 7,656 8,212 8,658 8,803 9,080

5,861 6,163 6,509 6,879 7,383 7,722 8,350 8,676 8,914 9,156

5,935 6,226 6,597 6,979 7,491 7,808 8,488 8,706 8,959 9,249

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

6,042 6,305 6,678 7,098 7,576 7,960 8,577 8,701 9,013

5,888 6,201 6,547 6,937 7,426 7,787 8,407 8,685 8,922 9,162

139

INTEREST RATES, U.S. U .S. Money Supply M12 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Bi lli ons of D ollars

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1,131.8 1,151.0 1,122.8 1,080.9 1,073.7 1,095.8 1,120.3 1,095.3 1,182.7 1,218.4

1,136.3 1,147.0 1,118.3 1,077.6 1,077.7 1,096.6 1,108.6 1,099.4 1,184.6 1,232.9

1,140.3 1,146.4 1,122.1 1,070.3 1,076.5 1,097.4 1,108.9 1,107.7 1,188.4 1,238.2

1,141.2 1,149.8 1,124.8 1,062.7 1,076.7 1,101.2 1,111.9 1,110.6 1,177.5 1,243.4

1,143.2 1,144.8 1,116.4 1,062.9 1,076.6 1,100.7 1,104.8 1,115.6 1,182.0 1,255.5

1,145.3 1,143.5 1,114.8 1,064.6 1,075.6 1,098.8 1,104.3 1,123.6 1,186.3 1,268.7

1,149.7 1,145.0 1,111.5 1,065.9 1,074.9 1,097.7 1,103.1 1,135.6 1,192.6 1,273.3

1,150.0 1,145.1 1,100.7 1,072.8 1,073.3 1,097.3 1,101.4 1,147.3 1,181.1 1,282.3

1,151.3 1,140.7 1,095.0 1,066.6 1,078.9 1,096.6 1,098.7 1,199.2 1,188.7 1,282.3

1,150.0 1,136.2 1,086.4 1,066.4 1,085.2 1,101.5 1,099.0 1,161.5 1,200.0 1,284.6

1,150.2 1,133.3 1,081.6 1,068.8 1,092.7 1,109.8 1,092.4 1,164.9 1,202.6 1,283.8

1,150.5 1,127.0 1,079.3 1,072.5 1,096.1 1,124.0 1,087.9 1,177.2 1,215.0 1,293.0

1,145.0 1,142.5 1,106.1 1,069.3 1,079.8 1,101.5 1,103.4 1,136.5 1,190.1 1,263.0

1

2 Preliminary. M1 -- The sum of currency held outside the vaults of depository institutions, Federal R eserve B anks, and the U.S. Treasury; travelers checks; and demand and other checkable deposits issued by financial institutions (ex cept demand deposits due to the Treasury and depository institutions), minus cash items in process of collection and Federal R eserve float. Seasonally adjusted. Source: B oard of Governors of the Federal Reserve System

U.S. Money Supply M22 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Billions of Dollars

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

3,485.1 3,501.8 3,658.0 3,829.8 4,055.3 4,407.3 4,678.2 4,989.7 5,480.3 5,838.2

3,485.7 3,499.4 3,673.3 3,840.9 4,088.2 4,434.1 4,692.3 5,029.2 5,510.4 5,881.0

3,491.6 3,500.6 3,698.6 3,856.3 4,114.9 4,444.5 4,723.1 5,088.6 5,521.5 5,906.4

3,496.2 3,510.6 3,709.9 3,873.2 4,140.1 4,475.3 4,775.3 5,152.8 5,527.6 5,949.7

3,504.3 3,532.5 3,720.5 3,884.9 4,159.4 4,494.3 4,766.8 5,154.7 5,558.6 5,998.5

3,492.6 3,557.8 3,734.2 3,903.1 4,183.9 4,514.8 4,783.6 5,193.0 5,580.6 6,035.7

3,497.3 3,577.9 3,748.4 3,922.7 4,203.7 4,538.8 4,798.9 5,224.5 5,623.0 6,079.5

3,494.8 3,599.5 3,756.6 3,951.9 4,230.2 4,560.8 4,833.2 5,257.2 5,658.3 6,118.1

3,495.4 3,610.2 3,767.7 3,970.4 4,271.5 4,577.1 4,863.9 5,368.5 5,684.9 6,096.3

3,495.0 3,622.2 3,780.8 3,989.1 4,312.3 4,595.5 4,881.1 5,360.3 5,730.7 6,080.3

3,497.1 3,631.2 3,794.6 4,011.0 4,351.9 4,619.8 4,892.8 5,403.3 5,777.2 6,076.0

3,496.3 3,640.2 3,815.5 4,031.0 4,383.7 4,649.4 4,933.3 5,452.8 5,805.8 6,070.8

3,494.3 3,565.3 3,738.2 3,922.0 4,207.9 4,526.0 4,801.9 5,222.9 5,621.6 6,010.9

1

Preliminary. 2 M2 -- M1 plus savings deposits (including money market deposit accounts) and small-denomination (less than $100,000) time deposits issued by financial institutions; and shares in retail money market mutual funds (funds with initial investments of less than $50,000), net of retirement accounts. Seasonally adjusted. Source: Board of Governors of the Federal Reserve System

U .S. Money Supply M32 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Bi lli ons of D ollars

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

4,275.2 4,383.7 4,658.8 4,999.9 5,493.0 6,063.4 6,585.1 7,213.1 8,033.2 8,550.6

4,259.8 4,385.1 4,687.4 5,028.8 5,526.1 6,111.4 6,614.3 7,279.2 8,077.6 8,587.8

4,271.2 4,405.7 4,723.0 5,066.9 5,595.7 6,117.1 6,686.8 7,351.8 8,097.4 8,619.4

4,282.4 4,428.3 4,741.2 5,107.2 5,634.0 6,156.6 6,751.1 7,486.7 8,119.3 8,655.9

4,292.7 4,466.3 4,777.1 5,132.7 5,671.7 6,185.1 6,760.0 7,543.5 8,155.4 8,711.3

4,290.7 4,504.5 4,800.4 5,162.9 5,710.8 6,219.1 6,804.4 7,618.4 8,166.6 8,761.5

4,310.5 4,531.5 4,825.9 5,221.3 5,733.6 6,249.0 6,855.2 7,657.8 8,208.5 8,837.9

4,311.4 4,566.0 4,845.3 5,277.3 5,799.6 6,281.0 6,927.1 7,666.2 8,271.6 8,876.2

4,320.0 4,585.1 4,873.2 5,317.4 5,866.6 6,305.8 6,984.0 7,821.8 8,308.0 8,865.2

4,331.7 4,602.8 4,913.6 5,362.3 5,937.3 6,360.6 7,006.8 7,864.9 8,335.9 8,835.6

4,346.3 4,614.6 4,932.7 5,403.6 5,995.4 6,447.5 7,024.2 7,943.4 8,467.5 8,821.9

4,360.2 4,625.4 4,972.1 5,446.0 6,036.2 6,535.1 7,102.3 8,012.2 8,540.6 8,813.6

4,304.3 4,508.2 4,812.6 5,210.5 5,750.0 6,252.6 6,841.8 7,621.6 8,231.8 8,744.7

2 Preliminary. M3 -- M2 plus large-denomination ($100,000 or more) time deposits; repurchase agreements issued by depository institutions; Eurodollar deposits, specifically, dollar-denominated deposits due to nonbank U.S. addresses held at foreign offices of U.S. banks worldwide and all banking offices in C anada and the United Kingdom; and institutional money market mutual funds (funds with initial investments of $50,000 or more). Seasonally adjusted. Source: Board of Governors of the Federal Reserve System

140

INTEREST RATES, U.S.

Percent ----- Prime Rate - - - Discount Rate

Percent ----- Municipal Bonds - - - Corporate AAA Bonds

141

INTEREST RATES, U.S.

-------------

142

Percent Prime Rate 30-Year Bond Discount Rate 3-Month Treasury Bill

Interest Rates, Worldwide Interest rate futures contracts are widely traded throughout the world. The most popular futures contracts for each country are generally the 10-year government bond and the 3-month interest contract. In Europe, futures on German interest rates are traded at the all-electronic Eurex Exchange in Frankfurt. Futures on UK interest rates are traded at the Liffe Exchange in London. Futures on Canadian interest rates are traded at the Montreal Exchange. Futures on Japanese interest rates are traded at the Singapore Exchange (Simex) and at the Tokyo Stock Exchange. A variety of other interest rate futures contracts are traded throughout the rest of the world (please see the front of this Yearbook for a complete list). Euro-Zone – The 10-year German Bund futures contract traded at the Eurex and rallied sharply and posted a record high of 120.00 in June 2003. However, the Bund then backed off through November and traded sideways into December, finally closing the year at 112.53, only slightly above the 2002 close of 112.23. The Bund in 2003 basically tracked the movement in US T-Notes, rallying early in the year on the Iraq war and then trailing off later in the year due to the upward rebound in the European and general world economies. The 3-month Euribor contract rallied sharply into June and then traded sideways for the remainder of the year in the narrow range between 97.80 (2.20%) and 98.00 (2.00%) on the weekly nearest futures chart. The European Central Bank (ECB) in 2003 cut its key refinancing rate by a total of 75 basis points, with a 25 basis point cut to 2.50% on March 7 and a 50 basis point cut to 2.00% on June 6. Despite the 75 basis point rate cut, the ECB’s key rate of 2.00% in the latter half of the year was still a full 100 basis points higher than the US Federal Reserve’s federal funds target rate of 1.00%, even though the European economy during 2003 was weaker than the US economy. That left the ECB open to charges of being overly hawkish with its monetary policy. Moreover, the sharp rally in the euro during the year also had the effect of dampening the European economy via lower exports. The euro ended 2003 more than 50% above its record low against the dollar in 2000 and was up 34% from its 2002 average. As 2003 ended, the ECB was under pressure to counteract the impact on the strong euro, either through talking down the euro, through currency intervention, or through some easing of monetary policy. UK – The 10-year Gilt contract traded at the Liffe Exchange in London and rallied into June to post a record high of 124.77 but then sold off sharply through November, finally closing the year near 117.07. Gilts in the latter half of 2003 were much weaker than the German Bund because the UK economy in 2003 proved to be much stronger than in continental Europe. The Bank of England in early 2003 cut its base rate by a total of 50 basis points with a 25 basis point cut on February 6 to 3.75% and another 25 basis point cut on July 10 to 3.50%. However, the BOE was then forced to raise the base rate by 25 basis points to 3.75% on Novem-

ber 6 due to the strong UK economy, strong consumer credit growth, and a torrid real estate sector. With its base rate at 3.75%, the UK key reference rate was a hefty 275 basis points above the Federal Reserve’s 1.00% federal funds rate target. Canada – The Canadian 10-year T-note futures contract traded at the Montreal Exchange and rallied in April and May to peak at a record high of 114.09 in June. The contract then fell back into the relatively narrow trading range of 107-110 through the remainder of the year, tracking US T-Note prices fairly closely. The 3-month Bankers Acceptance futures contract traded at the Montreal Exchange and rallied from April through October and closed the year near 1-3/4 year highs of 97.425 (or 2.575%). The Bank of Canada in 2003 raised its overnight target range by a total of 50 basis points in early 2003 (+25 basis points on March 4 and +25 basis points on April 15) to 3.25%, but then reversed that with a 50 basis point rate cut during mid-year (-25 basis points on July 15 and –25 basis points on September 3). The Canadian economy was hurt during the year by the impact from mad cow disease and from the SARS outbreak that hit Toronto. In addition, the Canadian dollar rallied sharply against the US dollar during 2003, causing concern about lower exports to the US. However, as 2003 ended, the Bank of Canada was fairly confident about the prospects for the Canadian economy. Japan – The 10-year JGB futures contract at the Simex rallied steadily in early 2003 to post a 145.03 on the weekly nearest futures chart. However, the contract then sold off sharply in the July-September period as signs finally emerged of a recovery in the Japanese economy. JGBs finally closed the year at 137.41, about 4-1/2 points lower than the 2002 close of 141.98. The 3-month Euroyen contract at the Simex traded sideways all year in the extraordinarily narrow range of 99.90 to 99.95 (10-15 basis points). Short-term rates were locked near zero due to the Bank of Japan’s continued zero-interest-rate monetary policy. The Bank of Japan (BOJ) in 2003 left its monetary policy unchanged all year with its overnight rate set only a few basis points above zero. The Bank of Japan in 2003 finally appeared to be making a little headway in stimulating the economy and trying to get a sustainable economic expansion going. The 1990’s were basically a lost decade for Japan which suffered from the severe hangover from the real estate and stock market bubble of the late 1980’s. Japanese monetary policy was basically caught in a classic liquidity trap through 2003 whereby even zero interest rates and a huge amount of excess reserves were ineffective in stimulating the economy because of the crippled banking system and the lack of credit demand from Japanese consumers and businesses. However, as 2003 ended, the Japanese government was making some headway on reforming the Japanese banking system and the Japanese economy was picking up, raising hopes that the Japanese economy in 2004 might finally display the long-awaited recovery.

143

INTEREST RATES, WORLDWIDE

9% through March 1998 contract 7% June 1998 contract to December 2003 contract 6% March 2004 contract to date

144

INTEREST RATES, WORLDWIDE

145

INTEREST RATES, WORLDWIDE

9% through March 2000 contract 6% June 2000 contract to date

146

INTEREST RATES, WORLDWIDE Australia -- Economic Statistics

Year

1996 1997 1998 1999 2000 2001 2002 2 0 0 32 20043

Percentage Change from Previous Period

Real GDP

Nominal GDP

Real Private Consumption

4.1 3.7 5.4 4.4 3.0 2.7 3.3 2.4 3.7

5.1 5.4 5.7 5.2 7.4 5.8 6.2 5.3 6.1

3.2 4.0 4.5 4.9 3.2 3.0 4.1 3.8 3.6

Real Public Consumption

Grossed Fixed Investment

Real Total Domestic Demand

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

2.9 2.6 3.4 2.9 5.8 1.6 4.0 3.0 3.5

4.2 9.4 8.3 6.9 -.4 -1.7 13.6 7.5 3.6

3.1 3.2 6.9 5.4 2.0 1.6 5.8 5.3 3.6

10.6 11.5 -.2 4.6 10.8 1.4 -.1 -2.7 7.1

8.3 10.5 6.0 9.2 7.1 -4.1 12.0 9.4 6.8

2.6 .3 .9 1.5 4.5 4.4 3.0 2.8 2.0

8.2 8.3 7.8 7.0 6.3 6.8 6.3 6.0 5.9

Estimate.

3

1

National accounts inplicit private consumption deflator. Development (OECD)

Canada -- Economic Statistics

Year

1996 1997 1998 1999 2000 2001 2002 20032 20043

Real GDP

Nominal GDP

1.6 4.2 4.1 5.5 5.3 1.9 3.3 1.8 2.8

3.3 5.5 3.7 7.4 9.5 3.0 4.3 5.4 4.4

2.6 4.6 2.8 3.8 4.0 2.6 3.4 3.4 3.1

France -- Economic Statistics

Grossed Fixed Investment

Real Total Domestic Demand

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

-1.2 -1.0 3.2 2.1 2.6 3.7 3.0 3.1 3.4

4.4 15.2 2.4 7.3 5.5 4.3 1.3 3.3 4.9

1.3 6.2 2.5 4.3 4.8 1.4 3.8 4.1 3.1

5.6 8.3 9.1 10.7 8.8 -3.1 -.1 -1.8 5.0

5.1 14.2 5.1 7.8 8.0 -5.0 .6 3.8 6.2

1.6 1.6 1.0 1.7 2.7 2.5 2.2 2.8 1.4

9.6 9.1 8.3 7.6 6.8 7.2 7.6 7.8 7.8

Real GDP

Nominal GDP

1.0 1.9 3.6 3.2 4.2 2.1 1.3 .1 1.7

2.5 3.2 4.5 3.7 5.0 3.8 3.2 1.6 3.0

1.3 .2 3.6 3.5 2.9 2.8 1.5 1.6 1.6

Germany2 -- Economic Statistics

1 4

Estimate.

3

Projection.

Source: Organization for Economic Co-opertation and

Real Public Consumption

Grossed Fixed Investment

Real Total Domestic Demand

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

2.2 2.1 -.1 1.5 3.0 2.9 4.1 2.0 1.5

-.1 -.2 7.2 8.3 8.4 2.1 -1.4 -1.1 1.6

.7 .7 4.2 3.7 4.5 2.0 1.1 1.1 1.7

3.2 12.0 8.3 4.2 13.4 1.8 1.3 -2.2 4.6

1.6 7.3 11.6 6.2 15.3 1.4 .8 1.2 5.0

2.1 1.3 .7 .6 1.8 1.8 1.9 2.0 1.4

12.0 12.1 11.5 10.7 9.4 8.7 9.0 9.6 9.8

Estimate.

3

Source: Organization for Economic Co-opertation and

National accounts inplicit private consumption deflator. Development (OECD)

Year

2

Percentage Change from Previous Period

Real Private Consumption

1

1996 1997 1998 1999 2000 2001 2002 20032 20043

Source: Organization for Economic Co-opertation and

Real Public Consumption

National accounts inplicit private consumption deflator. Development (OECD)

Year

Projection.

Percentage Change from Previous Period

Real Private Consumption

1

1996 1997 1998 1999 2000 2001 2002 20032 20043

2

Real GDP

Nominal GDP

Real Private Consumption

.8 1.5 1.7 1.9 3.1 1.0 .2 .0 1.4

1.8 2.2 2.8 2.4 2.8 2.3 1.8 .9 2.7

.9 .7 1.7 3.6 2.2 1.5 -1.0 .7 1.2

2

Projection.

Percentage Change from Previous Period Real Public Consumption

Grossed Fixed Investment

Real Total Domestic Demand

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

1.8 .3 1.9 .8 1.0 1.0 1.7 .8 .1

-.7 .9 2.3 3.8 3.2 -3.9 -6.5 -2.1 1.4

.3 .7 2.2 2.7 2.0 -.7 -1.6 .8 1.2

5.3 11.4 6.4 5.1 14.4 6.1 3.4 .3 4.6

3.3 8.4 8.6 8.1 11.0 1.2 -1.6 2.9 4.4

1.2 1.5 .6 .6 1.4 1.9 1.3 .9 .8

8.4 9.2 8.7 8.0 7.3 7.4 8.1 8.9 9.1

National accounts inplicit private consumption deflator. 2 Data are for Western Germany only, except for foreign trade statistics. Projection. Source: Organization for Economic Co-operation and Development (OECD)

3

Estimate.

147

INTEREST RATES, WORLDWIDE Italy -- Economic Statistics

Year

1996 1997 1998 1999 2000 2001 2002 20032 20043

Percentage Change from Previous Period

Real GDP

Nominal GDP

Real Private Consumption

1.0 2.0 1.7 1.7 3.3 1.7 .4 .5 1.6

6.4 4.5 4.5 3.2 5.4 4.5 3.1 3.2 3.6

1.3 3.2 3.2 2.6 2.7 1.1 .4 1.9 1.7

Real Public Consumption

Grossed Fixed Investment

Real Total Domestic Demand

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

1.0 .2 .2 1.3 1.6 3.6 1.7 1.3 .8

3.4 2.1 3.8 5.0 7.5 2.4 .7 -2.1 2.3

.8 2.7 3.1 3.2 2.4 1.7 1.1 1.7 1.8

.6 6.4 3.4 .1 11.7 1.1 -1.0 -2.6 4.9

-.3 10.1 8.9 5.6 8.9 1.0 1.5 1.6 5.5

4.0 1.9 2.0 1.7 2.6 2.3 2.6 2.8 2.0

11.7 11.8 11.9 11.5 10.7 9.6 9.1 8.9 8.9

1

National accounts inplicit private consumption deflator. Development (OECD)

Japan -- Economic Statistics

Year

1996 1997 1998 1999 2000 2001 2002 2 0 0 32 20043

Real GDP

Nominal GDP

Real Private Consumption

3.4 1.8 -1.1 .1 2.8 .4 .2 2.7 1.8

2.6 2.2 -1.2 -1.4 .9 -1.2 -1.5 .1 .4

2.4 .9 -.1 .2 1.0 1.7 1.3 1.1 1.1

Sw itz erland -- Economic Statistics

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

2.9 1.0 2.1 4.4 4.7 2.5 2.3 1.6 2.0

6.4 .9 -3.9 -.9 2.9 -1.2 -4.7 4.4 .2

3.9 .9 -1.5 .2 2.4 1.1 -.5 2.3 1.1

6.5 11.3 -2.3 1.5 12.3 -6.0 8.1 7.5 9.5

13.2 1.2 -6.8 3.0 9.4 .1 2.0 4.5 5.2

.1 1.7 .7 -.3 -.7 -.7 -.9 -.2 -.2

3.4 3.4 4.1 4.7 4.7 5.0 5.4 5.3 5.2

Estimate.

3

Real GDP

Nominal GDP

Real Private Consumption

.3 1.7 2.4 1.5 3.2 .9 .2 -.5 1.2

.7 1.5 2.3 2.2 4.4 2.0 .8 -.6 1.0

.7 1.4 2.3 2.2 2.0 2.1 .7 .4 1.2

2

Real GDP

Nominal GDP

Real Private Consumption

2.7 3.3 3.1 2.8 3.8 2.1 1.7 1.9 2.7

6.1 6.2 6.0 5.2 5.2 4.5 5.0 4.8 4.9

3.6 3.6 3.9 4.4 4.6 3.1 3.6 2.4 2.4

Source: Organization for Economic Co-opertation and

Real Public Consumption

Grossed Fixed Investment

Real Total Domestic Demand

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

2.0 .0 1.3 1.2 2.1 2.4 1.9 .9 .4

-2.4 1.5 4.5 2.7 5.8 -3.3 -4.1 -2.1 .6

.1 .8 3.5 2.5 2.5 .7 -1.2 -1.4 1.3

2.4 8.4 5.4 5.1 10.1 .0 -.4 -.5 3.8

1.9 6.1 8.3 7.4 8.4 -.3 -3.5 -2.4 4.4

.8 .5 .0 .8 1.6 1.0 .6 .6 .3

3.8 4.0 3.4 2.9 2.5 2.5 3.1 3.9 3.9

Estimate.

3

2

Projection.

Source: Organization for Economic Co-opertation and

Percentage Change from Previous Period

Real Public Consumption

Grossed Fixed Investment

Real Total Domestic Demand

Real Exports of Goods & Services

Real Imports of Goods & Services

Consumer Prices1

Unemployment Rate

.7 -.3 1.3 3.2 1.9 1.7 2.4 3.4 1.7

5.7 6.8 12.7 1.6 3.6 3.6 1.8 2.9 4.9

3.0 3.6 4.9 3.8 3.8 2.7 2.9 2.4 3.0

8.6 8.4 2.8 4.3 9.4 2.5 -.9 -.9 6.5

9.7 9.8 9.3 7.9 9.1 4.5 3.6 1.1 7.0

2.9 2.8 2.7 2.3 2.1 2.1 2.2 2.8 2.6

8.0 6.9 6.2 6.0 5.5 5.1 5.2 5.0 4.9

Estimate.

3

National accounts inplicit private consumption deflator. Development (OECD)

148

Projection.

Percentage Change from Previous Period

United Kingdom -- Economic Statistics

1

Source: Organization for Economic Co-opertation and

Real Total Domestic Demand

National accounts inplicit private consumption deflator. Development (OECD)

Year

Projection.

Grossed Fixed Investment

1

1996 1997 1998 1999 2000 2001 2002 20032 20043

3

Real Public Consumption

National accounts inplicit private consumption deflator. Development (OECD)

Year

Estimate.

Percentage Change from Previous Period

1

1996 1997 1998 1999 2000 2001 2002 2 0 0 32 20043

2

2

Projection.

Source: Organization for Economic Co-opertation and

Iron and Steel China with 20.8% of world production, followed closely by Brazil (19.8%), and Australia (17.1%). The US accounted for only 4.4% of world iron ore production in 2001. World production of raw steel (ingots and castings) in 2002 fell – 0.1% to 846.972 million metric tons, with the largest producers being China (with 17.6% of world production), Japan (12.1%), and the US (10.6%). US production of steel in 2003 was on track to match or fall slightly below the 2002 production level of 100.976 million short tons, which was up from the 10-year low of 98.889 million short tons in 2001. US production of pig iron (excluding ferro-alloys) in 2003 was on track to fall -3.7% to 42.712 million short tons. Demand – US consumption of ferrous scrap and pig iron fell –5.0% in 2002 to 113.000 million metric tons from 119.000 million metric tons in 2001. The largest consumers of ferrous scrap and pig iron in 2002 were the manufacturers of pig iron and steel ingots and castings with 87% of consumption at 98.000 million metric tons. Iron foundries and miscellaneous users accounted for 11% of consumption and manufacturers of steel castings (scrap) accounted for 2% of consumption. Trade – The US imported 10.70 million metric tons of iron ore in 2001, down sharply from 15.700 million metric tons in 2000. The bulk of 2001 imports came from Canada (4.530 million metric tons) and Brazil (4.260 million metric tons).

Iron is a soft, malleable, and ductile metallic element. Next to aluminum, iron is the most abundant of all metals. Pure iron melts at about 1535 degrees Celsius and boils at 2750 degrees Celsius. Archaeologists in Egypt discovered the earliest iron implements dating to about 3000 BC, and iron ornaments were used even earlier. Steel is an alloy of iron and carbon, often with an admixture of other elements. The physical properties of various types of steel and steel alloys depend primarily on the amount of carbon present and how it is distributed in the iron. Steel is marketed in a variety of sizes and shapes, such as rods, pipes, railroad rails, tees, channels, and Ibeams. Steel mills roll and form heated ingots into the required shapes. The working of steel improves the quality of the steel by refining its crystalline structure and making the metal tougher. There are five classifications of steel: carbon steels, alloy steels, high-strength low-ally steels, stainless steel, and tool steels. Prices – Steel prices in 2003 recovered sharply, mainly due to import tariffs imposed by President Bush, which allowed US producers to push prices higher. The average wholesale price of No. 1 heavy melting steel scrap rose to $114.03 per metric ton from the depressed levels of $89.78 seen in 2002 and $74.17 seen in 2001. Supply – World production of iron ore in 2001 fell slightly to 1.060 billion metric tons from 1.080 billion in 2000. The world’s largest producers of iron ore in 2001 were

World Production of Raw Steel (Ingots and Castings) Brazil

Canada

China

France

Germany

Italy

Ja p a n

Rep. of Korea

Russia

Ukraine

25,207 25,747 25,076 25,237 26,153 25,800 24,996 27,865 26,717 29,604

14,387 13,897 14,415 14,735 15,554 15,930 16,300 15,900 16,300 16,300

89,539 92,613 95,360 101,237 108,911 115,590 124,260 128,500 151,630 181,550

17,106 18,031 18,100 17,633 19,767 20,126 20,211 21,002 19,431 20,524

37,625 40,837 42,051 39,793 45,007 44,046 42,056 46,376 44,775 44,999

25,720 26,151 27,766 23,910 25,842 25,798 24,964 26,544 26,483 25,930

99,623 98,295 101,640 98,801 104,545 93,548 94,192 106,444 102,866 107,745

33,026 33,745 36,772 38,903 42,554 39,896 41,042 43,107 43,852 45,390

58,346 48,812 51,589 49,253 48,502 43,822 51,524 59,098 59,030 59,777

32,609 24,081 22,309 22,332 25,629 23,461 27,390 31,780 33,110 34,538

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Thousands of Metric Tons

Preliminary.

2

Estimate.

United Kingdom

United States

World Total

16,625 88,793 17,286 91,244 17,604 95,191 17,992 95,535 18,489 98,486 17,066 98,600 16,634 97,400 15,022 102,000 13,610 90,100 11,718 91,600

727,549 725,107 752,260 749,992 798,892 770,000 784,000 845,000 847,000 898,000

Source: U.S. Geological Survey (USGS)

Average Wholesale Prices of Iron and Steel in the United States No. 1 Heavy Melting

------------------------------------------------------------------------ Pittsburg Prices -----------------------------------------------------------------------H ot GalvanRailroad Cold Carbon Hot Used ------ Sheet Bars -----Rolled ized Steel Rolled Steel Rolled Steel Hot Cold Sheet2 Scrap3 Sheets Strip Strip Plates Cans4 Pittsburg Chicago Rolled Finished ---- $ Per Gross Ton ---- -------------------------------------------------- Cents Per Pound -------------------------------------------------- ------ $ Per Gross Ton ------------ Steel Scrap -------

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 1

136.76 142.34 137.28 133.38 110.10 97.86 103.73 79.34 101.06 128.32

131.91 143.17 136.07 139.40 118.76 102.49 96.07 74.17 89.92 113.82

22.93 25.32 23.94 18.12 15.57 14.74 15.67 11.71 16.46 14.80

-------------------------------

25.70 25.70 26.46 25.65 25.50 23.50 23.08 22.76 23.26 25.15

Preliminary. 2 10 gauge; thru 1992,list prices;1993 to date, market prices. NA = Not available. Source: American Metal Market (AMM)

23.50 24.88 25.00 ---------------------3

27.61 29.98 31.58 32.00 22.50 14.00 15.69 12.94 -------

Specialties scrap.

39.40 39.40 ------------------------4

32.24 34.47 35.05 28.62 24.11 21.20 21.38 16.41 22.00 20.08

169.00 169.00 169.00 169.00 164.29 150.00 150.00 NA NA ----

102.33 126.32 121.27 108.13 109.44 68.94 82.23 68.52 66.71 116.21

Consumer buying prices.

149

IRON AND STEEL Salient Statistics of Steel in the United States

Year

Producer Price Index for Steel Mill Pig Iron Products Production (1982=100)

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

54,426 56,097 54,485 54,679 53,164 51,002 52,787 46,424 44,341 43,122

Preliminary.

2

113.4 120.1 115.7 116.4 113.8 105.3 108.4 101.3 104.8 109.6

In Thousands of Short Tons

---------------------------------------- Raw Steel Production ---------------------------------------B a si c Oxygen

Open Hearth

Electric2

61,028 62,523 60,433 61,053 59,686 57,722 59,485 52,204 50,114 50,942

-------------------------------

39,551 42,407 44,876 47,508 49,067 49,673 52,756 47,118 51,564 48,751

I ncludes crucible steels.

Stainless

Carbon

Alloy

Total

2,022 89,535 2,265 92,656 2,061 93,649 2,382 95,933 2,214 97,054 2,086 98,694 2,104 102,141 1,836 92,946 1,894 92,518 1,952 98,772

9,022 10,009 9,599 10,246 9,484 5,421 5,379 4,666 4,779 4,901

100,579 104,930 105,309 108,561 108,752 107,395 111,903 99,322 101,679 99,693

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

1

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

87.7 93.8 92.2 85.3 90.0 77.2 89.7 77.6 84.5 83.1

92.2 95.6 92.6 89.3 95.2 79.5 89.4 82.3 88.4 87.3

91.3 96.0 93.8 89.6 93.1 81.7 91.2 81.8 86.7 85.0

91.4 92.9 90.5 89.2 92.5 81.8 92.0 82.9 90.3 87.8

91.2 91.6 89.7 87.9 89.1 81.7 91.3 81.5 89.4 81.1

88.7 90.1 91.3 87.0 86.1 79.7 89.6 81.6 92.5 86.2

87.1 86.8 86.6 85.1 83.0 79.4 85.3 79.8 86.8 78.9

87.7 88.3 87.1 86.4 86.4 82.8 83.5 80.4 91.0 78.3

90.0 93.6 87.7 91.2 83.0 82.3 82.7 80.5 94.0 80.7

92.0 90.3 88.0 86.9 81.0 88.2 81.0 77.5 90.8 82.8

92.6 92.1 87.0 89.6 74.4 89.1 75.1 73.5 86.8 83.9

94.3 90.2 87.9 86.3 74.8 88.5 72.0 65.9 83.9 81.9

93.0 91.7 89.5 89.4 85.7 82.7 85.2 78.8 88.8 83.1

2

Preliminary.

Sources: American I ron and Steel I nstitute (AI SI );

In Thousands of Short Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

8,003 8,918 8,981 8,735 9,510 8,422 9,838 8,475 8,050 8,617

7,598 8,211 8,438 8,266 9,087 7,837 9,170 8,122 7,609 8,175

8,323 9,131 9,136 9,175 9,839 8,854 10,009 8,932 8,261 8,817

8,180 8,548 8,588 8,882 9,524 8,643 9,843 8,685 8,214 8,692

8,437 8,696 8,798 9,048 9,483 8,914 10,097 8,832 8,401 8,047

7,941 8,286 8,661 8,662 8,863 8,413 9,592 8,550 8,414 8,534

7,996 8,308 8,585 8,692 8,832 8,619 9,411 8,459 8,510 8,163

8,053 8,455 8,627 8,818 9,194 8,993 9,213 8,525 8,918 8,096

7,993 8,668 8,407 9,006 8,548 8,650 8,830 8,263 8,916 8,026

8,477 8,685 8,702 9,128 8,681 9,574 8,978 8,125 9,015 8,514

8,256 8,574 8,276 9,116 7,710 9,357 8,054 7,226 8,340 8,347

8,684 8,678 8,689 9,071 8,013 9,604 7,982 6,695 8,329 8,414

100,579 103,142 104,356 107,488 107,643 105,882 111,015 98,889 100,976 100,442

Preliminary.

Year

1

In Percent

Mar.

Source: American I ron and Steel I nstitute (AI SI )

Shipments of Steel Products1 by Market Classifications in the United States

1994 1995 1996 1997 1998 1999 2000 2001 2002 20034

32,705 27,270 32,115 34,389 41,520 35,731 37,957 30,080 32,686 23,125

F eb.

Production of Steel Ingots in the United States 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

4,852 8,157 6,168 7,369 5,520 5,426 6,529 6,144 6,009 8,220

Jan.

1 Based on tonnage capability to produce raw steel for a full order book. U.S. Geological Survey (USGS)

Year

95,084 97,494 100,878 105,858 102,420 106,201 109,050 99,448 99,191 105,625

Sources: American I ron & Steel I nstitute (AI SI ); U.S. Geological Survey (USGS)

Production of Steel Ingots, Rate of Capability Utiliz ation1 in the United States Year

Total Net S t e e l Products ----Shipments Steel Mill Products Exports Imports

------ By Type of Furnace ------

Appliances Utensils & Cutlery

1,736 1,589 1,713 1,635 1,729 1,712 1,530 1,675 1,734 1,891

ConMachinery, Constainers, Industrial Con- Electrical Packaging truction Equipment EquipAuto- & Shipping Including tractors & Tools ment Export Maint. Products motive Materials

14,753 14,622 14,665 15,251 15,842 15,639 14,697 12,767 12,562 11,937

4,495 4,139 4,101 4,163 3,829 3,768 3,684 3,193 3,251 2,949

10,935 11,761 15,561 15,885 15,289 14,685 14,763 16,339 15,729 14,403

3,348 3,337 5 5 5 5 5 5 5 5

2,299 2,397 2,401 2,434 2,255 2,260 2,039 1,694 1,336 1,200

1,710 4,442 2,328 2,610 2,556 2,292 2,752 2,281 1,844 2,572

2,427 2,310 2,410 2,355 2,147 1,547 1,513 1,210 1,137 1,108

Rail Oil Transand Gas portaion

1,703 2,643 3,254 3,811 2,649 1,544 2,268 2,134 1,658 1,800

1,248 1,373 1,400 1,410 1,657 876 994 720 751 799

In Thousands of Short Tons

Steel for Converting & Processing2

Steel Service Center & D i stributors

10,502 10,440 10,245 11,263 9,975 7,599 7,753 7,462 7,201 6,798

24,153 23,751 27,124 27,800 27,751 21,439 22,537 23,887 22,828 24,266

All Other3

Total Shipments

15,775 95,084 14,690 97,494 15,676 100,878 17,241 105,858 16,741 102,420 32,840 106,201 35,093 109,624 26,086 99,448 29,160 99,191 35,905 105,628

All grades including carbon, alloy and stainless steel. 2 Net total after deducting shipments to reporting companines for conversion or resale. 3 I ncludes agricultural; bolts, nuts rivets & screws; forgings (other than automotive); shipbuilding & marine equipment; aircraft; mining, quarrying & lumbering; other domestic & commercial equipment machinery; ordnance & other direct military; and shipments of non-reporting companies. 4 Preliminary. Source: American I ron and Steel I nstitute (AI SI )

150

IRON AND STEEL Net Shipments of Steel Products1 in the United States

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20032 1

Cold Finished Bars

Rails & A cce ssories

1,786 1,782 1,685 1,809 1,780 1,775 1,756 1,369 1,404 1,426

631 630 722 875 938 646 783 630 789 739

Wire Tin Mill Drawn Products

788 654 652 619 725 611 579 481 733 684

4,137 3,942 4,108 4,057 3,714 3,771 3,742 3,202 3,419 3,513

Hot Rolled Bars

Structural Shapes Pipe & & Steel Piling Tubing

Reinforcing Bars

Hot Rolled Sheets

Cold Rolled Sheets

Carbon

Alloy

Stainless

8,556 9,043 8,672 8,855 8,864 8,200 8,898 8,349 8,769 9,230

7,088 6,902 6,999 8,153 8,189 8,078 7,901 7,032 6,581 6,486

4,966 5,437 5,895 6,548 5,409 4,772 5,385 5,377 4,809 4,597

4,929 5,048 5,762 6,188 5,909 6,183 6,893 6,976 6,359 7,970

15,654 16,978 17,466 18,221 15,715 17,740 19,236 18,866 19,243 22,218

13,016 12,347 14,089 13,322 13,185 13,874 14,802 12,352 12,673 13,485

88,505 90,485 93,019 97,509 94,536 98,694 102,141 92,314 92,518 98,772

4,859 5,115 5,948 6,282 5,847 5,421 5,379 4,789 4,779 4,901

1,720 1,894 1,912 2,067 2,037 2,086 2,104 1,837 1,894 1,952

10,943 11,329 11,456 12,439 13,481 14,870 14,917 14,310 14,944 15,221 2

All grades, including carbon, alloy and stainless steel.

Preliminary.

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Belgium

Brazil

China

France

Germany

8,178 8,974 9,199 8,628 8,077 8,730 8,472 8,472 7,732 8,053

23,982 25,177 25,090 23,978 25,336 25,111 25,060 27,723 27,441 27,781

87,390 97,410 105,293 107,225 115,110 118,600 125,390 131,010 155,540 170,750

12,679 13,293 12,860 12,108 13,424 13,603 13,854 13,621 12,004 13,217

26,970 29,923 29,828 30,012 30,939 30,162 27,931 30,846 29,184 29,419

Preliminary.

2

5,942 6,278 6,140 6,029 5,595 5,995 7,402 6,789 6,729 7,437

Source: American I ron and Steel I nstitute (AI SI )

World Production of Pig Iron (Excludes Ferro-Alloys) Year

In Thousands of Short Tons

Sheet & Strip Plates (Cut & Galv. (Hot D i pped) Coils)

In Thousands of Metric Tons

India

Italy

Ja p a n

Russia

Ukraine

United Kingdom

United States

World Total

15,674 17,808 18,626 19,864 19,898 20,194 20,139 21,321 21,900 22,000

11,066 11,157 11,684 10,347 11,348 10,704 10,509 11,223 10,650 9,736

73,738 73,776 74,905 74,597 78,519 74,981 74,520 81,071 78,836 80,979

40,871 36,116 39,762 36,061 37,327 34,827 40,854 44,618 44,980 46,060

26,999 21,200 20,000 18,143 20,561 20,840 21,937 25,700 26,400 27,560

11,534 11,943 12,238 12,830 13,057 12,574 12,399 10,891 9,861 8,579

48,200 49,400 50,900 49,400 49,600 48,200 46,300 47,900 42,100 40,200

531,000 544,000 536,000 549,000 577,000 572,000 578,000 616,000 616,000 642,000

Source: U.S. Geological Survey (USGS)

Estimate.

Production of Pig Iron (Excludes Ferro-Alloys) in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Thousands of Short Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

3,970 4,820 4,811 4,489 4,955 4,140 4,571 3,808 3,493 3,832

3,858 4,453 4,476 4,243 4,433 3,802 4,325 3,691 3,308 3,631

3,957 4,916 4,813 4,713 4,881 4,257 4,793 4,255 3,616 3,906

4,099 4,568 4,430 4,440 4,600 4,157 4,741 4,183 3,480 3,810

4,394 4,674 4,556 4,690 4,731 4,352 4,887 4,278 3,584 3,381

4,519 4,499 4,578 4,452 4,299 4,045 4,577 4,143 3,612 3,569

4,518 4,576 4,524 4,420 4,418 4,204 4,454 4,048 3,854 3,395

4,446 4,688 4,498 4,443 4,502 4,280 4,387 4,121 3,983 3,253

4,320 4,727 4,404 4,605 4,170 4,167 4,262 3,920 4,006 3,289

4,564 4,687 4,443 4,662 4,212 4,572 4,138 3,837 4,018 3,527

4,619 4,738 4,307 4,717 3,837 4,447 3,675 3,202 3,710 3,530

4,928 4,762 4,523 4,861 4,119 4,722 3,781 2,965 3,677 3,733

54,426 56,115 54,485 54,680 53,174 51,145 52,591 46,451 44,341 42,856

Preliminary.

Source: American I ron and Steel I nstitute

Salient Statistics of Ferrous Scrap and Pig Iron in the United States

In Thousands of Metric Tons

------------------------------- Consumption: Ferrous Scrap & Pig Iron Charged To ------------------------------Mfg. of Pig Iron & Steel

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

Mfg. of Steel -------------- All Uses -------------------- Ingots & Castings ------- -------- & Misc. Users -------Castings Ferrous Pi g Pi g Pi g Grand Scrap Iron Total Scrap Iron Total (Scrap) Scrap Iron Total

53,084 53,801 56,000 56,000 58,000 58,000 56,000 59,000 57,000 56,000

48,092 50,257 51,000 50,000 51,000 49,000 48,000 49,000 47,000 42,000

101,176 104,057 107,000 106,000 109,000 107,000 104,000 108,000 104,000 98,000

Stocks -- Dec. 31

Iron Foundries

12,658 14,000 13,000 13,000 13,000 13,000 13,000 13,000 12,000 11,000

676 1,000 1,100 1,100 1,200 1,200 1,100 1,200 1,100 1,500

Preliminary. 2 I ncludes tinplate and terneplate. Source: U.S. Geological Survey (USGS)

3

13,334 15,000 14,100 14,100 14,200 14,200 14,100 14,200 13,100 12,500

1,900 2,000 2,000 2,700 1,800 2,000 1,900 2,200 2,200 1,800

68,000 70,000 72,000 72,000 73,000 73,000 71,000 74,000 71,000 69,000

48,777 51,000 52,000 52,000 52,000 50,000 49,000 50,000 48,000 44,000

116,777 121,000 124,000 124,000 125,000 123,000 120,000 124,000 119,000 113,000

Ferrous Scrap & Pig Imports of Scrap2

Exports ---- Iron at Consumers ---of Pi g Total Scrap3 Scrap Iron Stocks

1,390 9,805 1,740 8,813 2,090 10,400 2,600 8,440 2,870 8,930 3,060 5,570 3,670 5,520 3,350 5,760 2,630 7,440 3,130 8,950

3,725 4,100 4,200 5,200 5,500 5,300 5,500 5,300 4,900 5,100

220 400 620 600 510 570 720 800 790 800

3,945 4,500 4,820 5,800 6,010 5,870 6,220 6,100 5,690 5,900

Excludes used rails for rerolling and other uses and ships, boats, and other vessels for scrapping.

151

IRON AND STEEL

USD Per Ton ----- No. 1 Heavy, Chicago (Dec. 1900 - date) - - - No. 1 Heavy, Pittsburg (Jan. 1907 - date)

Consumption of Pig Iron in the U.S., by Type of Furnace or Equipment Year

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1

Preliminary.

2

Open Hearth

Electric

Cupola

B a si c Oxygen Process

-------------------------------

519 1,700 1,700 2,200 2,400 4,000 3,100 2,900 2,700 3,200

292 520 500 530 400 590 520 530 500 520

47,848 49,138 50,000 49,000 50,000 46,000 45,000 47,000 45,000 40,000

Estimate.

W = Withheld.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Direct Casting

Total

34 4 W W W W W W W W

84 39 72 42 41 36 36 35 36 36

48,777 51,401 52,272 52,000 52,000 50,000 49,000 50,000 48,000 44,000

In Dollars Per Metric Ton

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

138.00 152.05 143.41 131.14 144.29 89.66 120.50 83.55 70.21 96.93

138.00 147.50 144.50 143.50 140.39 101.50 111.10 74.50 75.03 101.97

138.00 140.20 139.50 139.70 135.50 90.89 110.50 74.50 75.50 105.07

138.00 141.50 139.50 132.59 133.50 90.50 108.15 74.50 85.05 105.50

123.64 144.50 142.50 136.50 135.30 100.00 101.50 73.23 93.09 101.69

110.50 141.64 139.50 136.50 135.50 104.32 94.59 72.50 97.10 96.88

117.20 141.50 134.50 143.50 131.50 100.98 92.50 75.93 97.50 101.05

133.63 149.76 136.95 146.50 120.88 105.95 92.50 76.50 97.50 116.79

134.50 144.90 140.35 139.60 107.79 106.50 92.50 76.50 100.50 122.02

132.50 141.50 130.89 139.63 85.64 106.50 82.59 72.54 98.85 122.50

137.50 136.50 120.76 142.50 78.71 113.40 72.80 67.50 93.50 138.22

141.50 136.50 120.50 142.50 76.68 120.17 74.20 67.50 93.50 159.74

131.91 143.17 136.07 139.51 118.81 102.49 96.07 74.17 89.78 114.03

Source: American Metal Market (AMM)

152

Ai r & Other Furnace

Source: U.S. Geological Survey (USGS)

Wholesale Price of No. 1 Heavy Melting Steel Scrap in Chicago Year

In Thousands of Metric Tons

IRON AND STEEL World Production of Iron Ore3 Year

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 1

In Thousands of Metric Tons (Gross Weight)

Australia

Brazil

Canada

China

120,534 128,493 142,936 147,100 157,766 155,731 154,268 167,935 181,553 182,704

150,000 177,331 183,839 174,157 184,970 197,500 194,000 210,000 210,000 210,000

31,830 37,703 38,560 34,400 37,277 37,808 33,900 33,740 27,119 30,969

234,660 240,200 249,350 249,550 268,000 247,000 237,000 223,000 220,000 231,000

Preliminary.

2

Estimate.

3

Mauritania

Russia

South Africa

Sweden

Ukraine

United States

Venezuela

World Total

57,375 9,360 60,473 11,440 65,173 11,610 66,657 11,360 69,453 11,700 72,532 11,400 70,220 10,400 75,950 10,400 79,200 10,300 80,000 9,600

76,100 73,300 78,300 72,100 70,900 72,343 81,311 86,630 82,500 84,236

29,385 30,489 31,946 30,830 33,225 32,948 29,508 33,707 34,757 36,484

18,728 19,663 19,058 21,020 21,893 20,930 18,558 20,557 19,486 20,000

65,500 51,300 50,400 47,600 53,000 50,758 47,769 55,883 54,650 58,900

55,676 58,454 62,501 62,083 62,971 62,931 57,749 63,089 46,192 51,570

16,871 18,318 18,955 18,480 18,503 16,553 14,051 17,353 16,902 18,000

953,316 991,858 1,034,539 1,018,436 1,070,000 1,050,000 1,020,000 1,060,000 1,040,000 1,080,000

India

I ron ore, iron ore concentrates and iron ore agglomerates.

Salient Statistics of Iron Ore3 in the United States

Year

Net Import Reliance as a % of Apparent Consumption

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022

14 18 14 14 14 17 17 19 15 11

In Thousands of Metric Tons ----- Stocks -- Dec. 31 -----

---------- Production ----------

Total

55,661 58,215 60,898 62,132 63,000 62,900 57,410 62,983 46,100 51,500

L a ke Other Superior Regions

54,814 57,848 60,462 61,748 62,600 62,591 57,410 62,983 46,100 51,500

Source: U.S. Geological Survey (USGS)

Shipments

848 367 435 383 327 327 NA NA NA NA

56,300 57,600 61,100 62,200 62,800 63,200 58,500 61,000 50,600 51,500

Average Value Value $ MIllion $ at Mine (at Mine) Per Ton

1,380.0 1,410.0 1,700.0 1,750.0 1,860.0 1,970.0 1,550.0 1,560.0 1,210.0 1,340.0

24.50 24.49 28.00 28.07 29.60 31.14 26.47 25.57 23.87 26.04

Mines

C on suming Plants

L a ke Erie D o cks

Imports

Exports

2,500 2,790 4,240 4,650 4,860 6,020 5,710 9,150 3,800 3,210

16,500 16,300 17,100 18,800 20,200 20,500 17,900 16,800 12,300 12,400

2,290 2,230 2,140 2,260 2,890 4,080 2,770 2,860 1,960 1,820

14,100 17,500 17,600 18,400 18,500 16,900 14,300 15,700 10,700 12,500

5,060 4,980 5,270 6,260 6,340 6,000 6,120 6,150 5,610 6,750

Value Con- Million $ sumption Imports

76,800 80,200 83,100 79,600 79,500 78,200 75,100 76,500 67,300 59,000

419.0 499.0 491.0 556.0 551.0 517.0 399.0 420.0 293.0 313.0

1

Preliminary. 2 Estimate. 3 Usable iron ore exclusive of ore containing 5% or more manganese and includes byproduct ore. NA = Not available. Source: U.S. Geological Survey (USGS)

U.S. Imports (for Consumption) of Iron Ore2

In Thousands of Metric Tons

Year

Australia

Brazil

Canada

Chile

Mauritania

Peru

Sweden

Venezuela

Total

254 675 570 511 742 807 694 755 576 567

2,872 3,610 4,810 5,170 4,970 5,980 5,540 6,090 4,260 5,750

7,442 10,073 9,050 9,800 10,000 8,520 6,860 7,990 4,530 5,540

68 134 57 164 228 48 69 135 711 319

206 124 317 275 -------------------

1 2 54 43 252 126 63 40 71 86

60 45 47 48 149 373 421 250 70 44

3,170 2,778 2,500 2,140 2,090 970 327 349 87 ----

14,097 17,466 17,600 18,400 18,600 16,900 14,300 15,700 10,700 12,500

1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21 1

Preliminary.

2

I ncluding agglomerates.

Source: U.S. Geological Survey (USGS)

Total1 Iron Ore Stocks in the United States, at End of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

19,013 20,316 22,277 25,913 27,977 29,631 24,885 27,583 16,980 17,640

17,816 19,361 20,744 25,262 26,317 28,463 24,810 26,076 15,970 19,790

15,950 18,193 19,779 24,745 24,039 28,614 23,556 24,570 14,660 21,100

14,880 18,293 20,104 24,812 25,251 28,292 23,714 23,800 14,920 18,560

15,251 19,371 23,426 25,001 25,576 29,151 24,032 23,600 15,680 17,690

16,592 20,905 21,822 25,620 26,197 29,021 24,613 21,664 16,090 17,880

17,864 22,336 22,445 26,076 27,605 28,857 24,993 21,010 16,120 17,950

18,931 23,632 23,663 26,971 29,037 27,840 26,278 20,440 16,080 18,360

20,554 23,414 24,116 27,562 30,301 26,506 26,815 20,050 15,520 17,220

20,760 24,389 24,866 28,029 30,095 25,528 27,530 19,660 15,790 15,790

21,552 24,123 25,465 28,053 30,199 25,290 27,987 18,690 16,740

21,339 23,576 25,701 27,912 30,624 26,371 28,779 18,000 17,410

All stocks at mines, furnace yards and at U.S. docks.

2

Preliminary.

Source: U.S. Geological Survey (USGS)

153

Lard Lard is the layer of fat found along the back and underneath the skin of a hog. The hog’s fat is purified by washing it with water, melting it under constant heat, and straining it several times. Lard is an important byproduct of the meatpacking industry. It is valued highly as cooking oil because there is very little smoke when it is heated. However, demand for lard in cooking is declining because of the trend toward healthier eating. Lard is also used for medicinal purposes such as ointments, plasters, liniments, and occasionally as a laxative for children. Lard production is directly proportional to commercial hog production, meaning the largest producers of hogs are the largest producers of lard. Prices – The average wholesale price of lard in early 2003 fluctuated in the range of 16.7-18.6 cents/pound. That was higher than the average prices seen in the past 4 years but below the recent average yearly high price of 23.39 cents

World Production of Lard Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

Preliminary.

seen in 1997. Supply – World production of lard was 7.016 million metric tons in the latest reporting year, up 2.3% from the 2001/2 level of 6.858 million tons. China is by far the largest consumer of lard at 3.023 million metric tons, followed by the US (506 million tons), Germany (427 million tons), and the former USSR (343 million tons). US production of lard in 2001/2 was 1,058 million pounds, with about 963 million pounds of that production going to domestic use and about 103.0 million pounds to exports (down from 174 million in 2000/1). Demand – US consumption of lard was on track to hit about 330 million pounds in 2003, which would be up 9% from the 2002 level of 303.2 million pounds. Still, that is much lower than the levels over 400 million pounds seen prior to 1998.

In Thousands of Metric Tons

Brazil

Canada

China

France

Germany

Italy

Ja p a n

Poland

Romania

Spain

United States

Former USSR

World Total

181.6 194.3 197.4 214.3 234.3 250.5 262.1 270.3 277.8

86.3 83.0 83.1 91.5 99.3 109.2 113.7 119.7 121.7

1,931.8 2,136.6 2,400.2 2,624.8 2,665.5 2,771.4 2,832.1 2,918.6 3,022.6

153.2 154.6 157.3 162.3 167.4 164.7 155.7 157.1 159.3

404.8 405.6 396.5 413.4 444.5 423.5 415.2 422.4 426.6

191.3 198.5 197.6 194.0 201.3 200.9 195.9 199.3 202.5

83.8 76.3 74.1 67.9 66.4 65.1 62.3 61.8 63.5

267.9 284.9 259.4 266.4 270.1 254.7 240.1 244.1 249.6

106.9 105.1 99.1 96.9 92.9 81.1 72.7 69.5 69.0

196.7 206.5 211.8 238.5 258.1 262.0 264.9 266.9 276.8

471.2 449.3 437.0 478.9 501.7 491.6 488.6 508.1 506.0

414.0 385.0 351.5 339.7 337.4 346.3 334.9 338.9 342.9

5,640.7 5,860.4 6,065.0 6,406.1 6,597.9 6,680.1 6,690.3 6,857.6 7,016.0

2

Estimate.

3

Forecast.

Source: The Oil World

Supply and Distribution of Lard in the United States

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32

In Millions of Pounds

------------------------ Supply ------------------------ ------------------------------------------------------------ Disappearance -----------------------------------------------------------P er Total Baking Capita & Frying MarD i sa p Direct ProStocks Total (Lbs.) pearance Use Fats garine2 Exports duction Oct. 1 Supply Domestic

1,052.4 1,012.6 979.0 1,064.7 1,106.1 1,091.0 1,058.0 1,058.0 1,083.0

34.4 24.3 22.7 19.9 40.4 20.8 27.0 18.0 18.0

1,089.0 1,038.8 1,002.9 1,086.7 1,148.4 1,097.8 1,087.0 1,080.0 1,109.0

1 Preliminary. 2 Forecast. 3 I ncludes edible tallow. U.S. Department of Agriculture (ERS-USDA)

924.4 921.8 879.6 924.6 987.6 917.8 895.0 963.0 1,012.0

332.2 295.9 262.0 285.0 250.0 234.0 NA NA

NA = not avaliable.

43.0 33.0 15.0 17.0 26.0 14.0 5.0 14.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

154

1,064.7 1,016.1 982.9 1,046.4 1,127.5 1,072.8 1,069.0 1,066.0 1,096.0

561.9 593.0 602.4 623.3 654.0 675.0 644.0 661.0 706.0

3.4 3.5 3.5 3.4 3.6 3.5 2.3 2.3 2.4

Source: Economic Research Service,

Consumption of Lard (Edible and Inedible) in the United States Year

140.4 94.3 103.3 121.8 139.9 155.0 174.0 103.0 84.0

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

37.5 30.5 26.5 34.1 34.6 27.3 27.8 26.4 22.6

34.7 35.4 30.5 29.9 30.2 25.7 22.2 26.1 22.3

41.2 36.7 31.0 31.1 28.8 29.1 28.3 21.8 23.4

36.2 46.9 36.5 29.6 31.1 23.3 24.5 26.7 21.4

42.2 36.8 39.9 28.5 30.5 30.3 22.5 24.8 23.3

44.4 31.4 36.2 35.9 32.9 27.6 23.3 21.2 24.0

34.9 32.6 36.1 33.0 28.9 24.4 21.8 22.9 23.0

35.9 33.9 35.0 33.0 33.0 31.3 27.1 26.4 21.4

35.9 30.9 37.4 37.1 29.2 31.1 23.2 23.6 22.5

40.1 34.5 39.0 37.7 31.2 32.6 27.9 26.4 24.3

38.9 34.7 41.5 38.9 31.3 29.6 26.7 28.1 20.2

36.8 33.6 40.4 33.9 30.3 31.7 24.4 28.7 21.0

458.7 417.9 429.8 402.7 372.1 343.9 299.8 303.2 269.5

Source: Bureau of the Census, U.S. Department of Commerce

LARD

Cents Per Pound ----- Chicago (Jan. 1910 - date)

Average Wholesale Price of Lard, Loose, Tank Cars, in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

14.50 21.21 20.52 24.93 19.09 16.89 15.66 13.57 12.69 18.61

14.62 21.13 18.17 25.47 16.03 13.91 12.38 11.92 12.50 17.11

15.35 19.25 18.01 24.69 17.36 11.98 11.99 11.07 13.07 16.85

15.74 18.34 18.67 20.82 17.64 13.12 11.96 12.09 12.42 16.72

15.75 18.25 20.47 20.94 18.66 13.43 12.68 11.84 11.38 17.29

16.25 19.02 22.61 22.68 19.38 12.98 12.64 13.38 14.64 18.90

17.24 20.25 24.55 23.83 17.93 11.87 10.32 18.05 14.60 18.93

18.91 21.30 26.30 23.95 18.65 13.89 10.35 24.11 15.00 20.08

20.14 21.48 27.09 23.14 16.58 17.44 11.14 22.00 15.21 23.98

20.39 20.90 23.11 23.41 17.39 20.55 13.04 13.04 14.39 27.50

20.35 21.38 19.70 23.97 17.60 17.74 12.06 13.18 16.28 26.40

20.91 21.35 22.17 22.85 16.27 16.12 12.14 14.92 18.42 25.18

17.51 20.32 21.78 23.39 17.72 14.99 12.20 14.93 14.22 20.63

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

United States Cold Storage Holdings of all Lard1, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20032 1

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

37.7 40.6 38.4 18.9 22.2 28.4 26.7 16.0 13.2 10.5

38.0 50.3 38.6 16.3 30.1 30.4 27.8 14.9 18.0 14.0

31.8 46.4 25.8 18.5 38.3 30.6 29.2 14.9 16.4 19.6

28.8 43.0 28.8 19.2 42.5 34.0 30.1 17.9 16.5 18.7

25.1 36.8 21.5 18.9 41.6 27.1 20.2 13.7 20.3 16.5

27.4 27.1 23.2 18.7 47.6 39.9 22.5 13.1 22.4 13.5

27.0 25.8 23.7 23.0 43.7 30.7 18.9 10.3 18.9 11.9

25.5 22.1 30.5 23.2 44.8 25.5 19.3 12.4 18.3 9.7

29.7 30.2 20.7 21.5 38.8 29.4 17.3 11.8 12.0 8.4

34.4 24.3 22.7 19.9 40.4 20.8 17.4 13.6 10.5 9.3

34.0 19.9 20.1 21.3 34.8 19.1 16.3 13.0 14.6 10.1

35.8 21.6 18.8 19.7 26.3 22.8 16.8 11.7 11.3 12.4

Stocks in factories and warehouses (except that in hands of retailers).

2

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

155

Lead Lead is a dense, toxic, bluish-gray metallic element, and is the heaviest stable element. Lead was one of the first known metals. The ancients used lead in face powders, rouges, mascaras, paints, condiments, wine preservatives, and water supply plumbing. The Romans were slowly poisoned from lead because of its diverse daily usage. Lead is usually found in ore with zinc, silver, and most often copper. The most common lead ore is galena, containing 86.6% lead. Cerussite and angleside are other common varieties of lead. More than half of the lead currently used comes from recycling. Lead is used in building construction, bullets and shot, tank and pipe lining, storage batteries, and electric cable sheathing. Lead is used extensively as a protective shielding for radioactive material, i.e., X-ray apparatus, because of its high density and nuclear properties. Lead is also part of solder, pewter, and fusible alloys. Lead futures and options trade at the London Metal Exchange (LME). The lead futures contract calls for the delivery of 25 metric tons of at least 99.970% purity lead ingots (pigs). The contract is priced in terms of US dollars per metric ton. Lead first started trading on the LME in 1903. Prices – Lead prices took off in the latter half of 2003 along with the rest of the basic metals complex. Lead prices between 2000 and the middle of 2003 bounced back and forth within a range of approximately $400 to $520 per metric ton. However, in mid-2003, lead prices entered a major bull market and rallied from the $500 area all the way up to approximately $850 by the end of the year, a rally of about 70%.

Supply – World smelter production of lead (both primary and secondary) in 2002 fell –1.2% to 6.390 million metric tons from 6.470 million metric tons in 2001, but was only modestly lower than the record production level of 6.580 million metric tons in 2000. The world’s largest smelter producers of lead (both primary and secondary) in 2002 were the US with 21.6% of world production, followed by China with 20%, Germany with 6.1%, and the UK with 5.8%. US mine production of recoverable lead fell to a 6-year low of 440,000 metric tons in 2002 from 454,000 in 2001. Missouri was responsible for 97% of US production, with the remainder produced mainly by Idaho and Montana. Lead recovered from scrap in the US (secondary production) fell to a 6-year low of 1.106 million metric tons in 2002 from 1.113 million metric tons in 2001. That is more than twice the amount of lead produced in the US from mines (primary production). The value of US refined lead production in 2002 was $252 million, down from $279 million in 2001 and well below the record high of $668 million posted back in 1979. Demand – US lead consumption in 2002 rose slightly to 1.673 million metric tons from 1.652 million metric tons in 2001, and that was only slightly below the record consumption level of 1.680 million metric tons posted in 1999. Trade – The US relied on imports for 18% of its lead consumption in 2002. US imports of lead pigs and bars in 2002 fell to a 9-year low of 210,000 metric tons. US lead exports in 2002 were comprised by ore concentrate (241,000 metric tons), scrap (106,000 metric tons), unwrought lead (31,400 metric tons), and wrought lead (11,700 metric tons).

World Smelter (Primary and Secondary) Production of Lead Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

Belgium4

Canada3

China2

France

Germany

Italy

Ja p a n

Mexico3

243.0 237.0 241.0 228.0 238.0 206.0 272.8 251.8 303.0 211.0

131.1 123.5 122.0 125.0 110.8 91.5 103.2 118.0 96.0 96.0

217.0 251.6 281.4 309.4 271.4 265.5 266.4 284.8 230.9 251.3

412.0 467.9 608.0 706.0 707.0 757.0 918.0 1,100.0 1,200.0 1,250.0

258.7 260.5 296.7 302.8 302.3 318.0 279.0 258.0 238.0 204.0

334.2 331.7 311.2 238.1 329.2 380.2 373.6 415.0 374.0 390.0

182.8 205.9 180.4 209.8 211.6 199.3 215.3 235.0 203.0 205.0

309.5 292.2 287.6 287.4 296.8 302.1 293.4 311.7 302.4 280.4

188.0 171.0 176.0 160.0 178.0 173.0 121.0 153.0 154.0 155.0

2

Estimate.

3

Refinded & bullion.

4

I ncludes scrap.

Year

Ammun- Bearing ition Metals

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

65,100 62,400 70,900 52,100 52,400 52,800 58,300 63,700 53,600 57,600

4,830 5,560 6,490 4,350 2,490 2,210 1,570 1,490 837 406

P i p e s, Traps & Bends2

5,740 3,370 2,210 1,810 1,860 3,130 2,020 2,010 2,370 2,250

Cable Calking Covering Lead

17,165 16,000 5,640 W 4,930 4,630 2,410 W W W

961 764 935 767 1,390 1,350 971 1,140 927 1,060

United Spain Kingdom3

123.0 140.0 80.0 86.0 74.9 90.0 96.0 120.0 98.0 98.0

363.8 352.5 320.7 345.6 391.0 348.9 348.1 337.2 366.0 370.0

United States

World Total

1,230 1,280 1,390 1,400 1,450 1,450 1,460 1,470 1,390 1,380

5,420 5,360 5,590 5,630 5,880 5,970 6,170 6,580 6,470 6,390

Source: U.S. Geological Survey (USGS)

Consumption of Lead in the United States, by Products

1

In Thousands of Metric Tons

Australia3

In Metric Tons

Other Casting Metal Metals Products3

Total Other Oxides4

Sheet Lead

18,500 18,900 18,100 18,900 34,000 32,600 34,300 35,100 31,800 34,800

63,600 62,700 61,700 62,100 67,000 53,400 58,200 52,400 43,900 51,900

21,200 21,500 27,900 19,400 19,100 15,500 15,400 23,800 22,400 25,600

5,360 5,330 5,220 5,220 7,570 8,160 7,130 25,800 17,100 24,200

--- Storage Battery --- Brass Grids, and Total Solder Post, etc. Oxides Bronze Consumption

14,400 12,200 16,200 9,020 9,580 10,900 13,100 11,500 6,120 6,450

677,000 797,000 711,000 635,000 634,000 685,000 765,000 796,000 655,000 554,000

374,000 425,000 618,000 706,000 761,000 742,000 707,000 690,000 694,000 641,000

5,750 6,320 5,260 5,460 4,410 3,460 3,940 3,670 2,590 2,730

1,290,000 1,450,000 1,560,000 1,540,000 1,620,000 1,630,000 1,680,000 1,720,000 1,550,000 1,440,000

Preliminary. 2 I ncluding building. 3 I ncluding terne metal, type metal, and lead consumerd in foil, collapsible tubes, annealing, plating, galvanizing and fishing weights. 4 I ncludes paints, glass and ceramic products, and other pigments and chemicals. W = Withheld proprietary data. Source: U.S. Geological Survey (USGS)

156

LEAD Salient Statistics of Lead in the United States

Year

Net Import Reliance Production as a % of Apparent ---- of Refined Lead From ---Con- Domestic Foreign Total Ores3 sumption Ores3 Primary

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022

15 19 17 17 14 21 20 24 20 18

310.7 328.0 374.0 326.0 343.0 337.0 350.0 341.0 290.0 262.0

24.9 23.4 W W W W W W W W

Total Value of Refined Million $

335.6 351.4 374.0 326.0 343.0 337.0 350.0 341.0 290.0 262.0

234.4 288.0 348.0 351.0 352.0 336.0 337.0 328.0 279.0 252.0

In Thousands of Metric Tons

----- Secondary Lead Recovered ----As Soft Lead

In Antimonial Lead

In Other Alloys

444.0 527.0 584.0 625.0 663.0 667.0 635.0 651.0 734.0 754.0

417.0 371.0 400.0 420.0 411.0 417.0 444.0 428.0 291.0 289.0

17.0 16.1 19.2 9.2 14.2 16.1 18.1 36.8 75.9 71.9

Average Price Total Value of - Stocks, Dec. 31 - - Cents Per Pound Secondary ConNew Total Million $ Primary sumer4 York London5

893.0 931.0 1,020.0 1,070.0 1,110.0 1,120.0 1,110.0 1,130.0 1,100.0 1,120.0

625.0 763.0 951.0 1,150.0 1,130.0 1,110.0 1,070.0 1,090.0 1,060.0 1,070.0

14.3 9.3 14.2 8.1 11.9 10.9 12.3 18.6 W W

80.5 68.8 79.4 72.1 89.1 77.9 78.7 106.0 100.0 105.0

31.74 37.17 42.28 48.83 46.54 45.27 43.72 43.57 43.64 43.56

18.42 24.83 28.08 31.22 28.29 23.96 22.78 20.57 21.58 20.52

1

Preliminary. 2 Estimate. 3 And base bullion. 4 Also at secondary smelters. 5 LME data in dollars per metric ton beginning July 1993. W = Withheld Proprietary data. E = Net exporter. Source: U.S. Geological Survey (USGS)

United States Foreign Trade of Lead

In Thousands of Metric Tons

------------- Imports for Consumption ------------ --------------------- General Imports From: --------------------Ores, Ore, Flue ReFlue claimed Ash Dust or -------- Dust & Matte -------- --------- Pigs & Bars --------& Re- Fume & Base Pigs & Scrap, Value etc. Million $ Australia Canada Bars Peru Canada Mexico Peru Scrap sidues Mattes Bullion

------------------------- Exports -------------------------

Year

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022

Unwrought Wrought Lead3 Lead4

Ore Concentrate

41.8 38.7 65.5 59.7 42.2 72.4 93.5 117.0 181.0 241.0

51.4 48.2 48.2 44.0 37.4 24.1 23.4 21.4 17.0 31.4

7.1 5.3 9.0 16.7 15.9 15.4 13.9 27.2 17.7 11.7

54.1 88.1 105.0 85.3 88.4 99.2 117.0 71.6 108.0 106.0

1

1.7 20.6 8.0 19.4 16.8 9.0 1.4 11.3 14.2 ----

Preliminary. 2 Estimate. 3 And lead alloys. Source: U.S. Geological Survey (USGS)

4

0.5 0.5 2.6 6.6 17.8 32.7 12.3 31.2 2.2 0.0

---0.6 0.0 0.0 0.0 0.5 0.1 0.1 -------

195.6 230.8 264.0 268.0 265.0 267.0 311.0 356.0 271.0 210.0 5

Blocks, pigs, etc.

0.1 0.1 0.1 0.2 0.1 6

---0.0 10.2 2.6

99.4 146.6 191.7 217.0 200.3 191.9 196.5 217.1 166.8 124.9

Formerly drosses & flue dust.

Annual Mine Production of Recoverable Lead in the United States Year

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 1

Preliminary.

2

Year

1

Preliminary.

6

55.7 0.2 ---4.4 0.8 6.5 1.2 6

-------

13.6 ---0.1 ---3.4 18.5 8.8 10.8 -------

Less than 1/2 unit.

130.8 159.0 182.0 192.0 186.0 181.0 198.0 216.0 167.0 172.0

40.3 31.9 54.3 56.9 70.4 63.6 27.2 18.4 12.4 7.5

18.3 25.6 22.1 17.1 6.4 11.4 6.9 1.8 2.3 ----

NA = Not avaliable.

In Metric Tons

Total

Idaho

Missouri

Montana

Other States

Missouri's % of Total

353,607 363,443 386,000 426,000 448,000 481,000 503,000 449,000 454,000 440,000

W W W W W W W W W W

276,569 290,738 359,000 397,000 412,000 439,000 464,000 410,000 423,000 428,000

W 9,940 8,350 7,970 9,230 7,310 7,950 W W W

77,800 63,100 18,200 21,200 26,600 35,100 31,200 38,700 30,900 12,300

78% 80% 93% 93% 92% 91% 92% 91% 93% 97%

Estimate.

W = Withheld, included in Other States.

NA = Not Avaliable.

Mine Production of Recoverable Lead in the United States 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

---0.5 1.5 ------2.4 0.1 ----------

Source: U.S. Geological Survey (USGS)

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

27.6 29.6 36.9 36.7 37.4 41.2 35.1 42.9 39.5 39.0

28.8 30.3 36.4 36.7 35.4 42.1 36.7 37.8 35.5 34.9

33.0 35.2 35.6 37.2 37.8 44.4 43.0 39.4 41.2 38.5

31.3 28.9 35.9 38.6 37.3 43.1 37.5 33.7 36.1 36.2

32.4 32.7 37.5 38.6 35.7 41.7 37.4 35.0 39.3 38.8

29.1 34.8 33.8 35.1 34.7 42.6 37.8 32.2 36.1 39.2

29.4 32.5 35.6 33.4 34.3 47.2 33.0 38.2 35.0 41.3

30.4 33.5 34.1 33.7 35.6 43.6 36.8 39.6 39.6 38.0

31.2 29.9 26.9 34.4 36.1 41.5 36.8 32.4 33.2 38.3

28.0 34.1 35.2 35.4 40.3 41.2 32.4 39.5 34.8 37.2

31.7 31.6 33.6 31.7 37.8 37.8 38.8 32.1 34.1 37.7

29.9 32.1 35.7 32.8 39.2 38.1 36.9 35.4 34.2

363.4 385.0 426.0 448.0 449.0 505.0 447.0 450.0 438.6 457.2

Source: U.S. Geological Survey (USGS)

157

LEAD

Cents Per Pound ----- Pig, New York (Jan. 1910 - date) - - - Scrap, Smelters’ Heavy, Soft, New York (Dec. 1985 - date)

Average Price of Pig Lead, U.S. Primary Producers (Common Corroding)1 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

34.00 44.00 48.00 50.00 48.00 45.00 45.00 45.00 45.00 23.14

34.00 44.00 49.50 50.00 48.00 45.00 45.00 45.00 45.00 24.65

34.00 42.00 50.96 48.70 48.00 45.00 45.00 45.00 45.00 23.81

34.00 42.00 52.00 48.00 48.00 45.00 45.00 45.00 45.00 23.13

34.00 42.00 52.00 48.00 48.00 45.00 45.00 45.00 45.00 24.56

35.73 42.00 52.00 48.00 48.00 45.00 45.00 45.00 45.00 24.77

37.70 42.00 50.29 48.00 48.00 45.00 45.00 45.00 45.00 26.93

38.00 43.65 49.18 48.00 48.00 45.00 45.00 45.00 45.00 26.05

40.00 44.00 50.00 48.00 48.00 45.00 45.00 45.00 45.00 27.23

42.00 44.00 50.00 48.00 48.00 45.00 45.00 45.00 45.00 30.16

43.70 46.10 50.00 48.00 45.47 45.00 45.00 45.00 45.00 32.09

44.00 48.00 50.00 48.00 45.00 45.00 45.00 45.00 45.00 35.46

37.59 43.65 50.33 48.39 47.54 45.00 45.00 45.00 45.00 26.83

New York Delivery.

Source: American Metal Market (AMM)

Refiners Production1 of Lead in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

In Cents Per Pound

In Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

29,908 32,100 34,700 28,800 29,200 NA NA NA NA NA

30,685 29,100 30,400 28,500 25,900 NA NA NA NA NA

31,420 32,600 30,900 31,900 30,000 NA NA NA NA NA

29,059 32,300 28,600 30,400 29,700 NA NA NA NA NA

31,588 32,600 27,500 30,800 29,500 NA NA NA NA NA

31,707 28,300 21,700 28,700 20,300 NA NA NA NA NA

30,661 31,000 25,500 25,900 28,900 NA NA NA NA NA

27,335 29,300 24,700 28,000 NA NA NA NA NA NA

31,185 30,600 25,400 21,600 NA NA NA NA NA NA

32,874 34,200 25,300 30,500 NA NA NA NA NA NA

29,301 30,100 26,100 29,000 NA NA NA NA NA NA

30,447 31,500 25,500 28,700 NA NA NA NA NA

366,170 374,000 326,000 343,000 337,000 350,000 341,000 290,000 262,000

Represents refined lead produced from domestic ores by primary smelters plus small amounts of secondary material passing through these smelters. I ncludes GSA metal purchased for remelt. 2 Preliminary. Source: U.S. Geological Survey (USGS)

158

LEAD Total Stocks of Lead1 in the United States at Refiners, at End of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20032 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

11,964 8,200 15,000 8,460 13,000 NA NA NA NA NA

12,633 9,750 15,000 11,800 15,900 NA NA NA NA NA

12,048 11,500 15,000 21,400 18,700 NA NA NA NA NA

11,445 14,500 15,000 19,900 20,900 NA NA NA NA NA

11,598 16,700 15,000 15,000 11,400 NA NA NA NA NA

10,251 16,200 19,600 10,900 11,400 NA NA NA NA NA

12,368 21,300 19,900 6,530 13,700 NA NA NA NA NA

9,256 14,000 14,200 7,790 NA NA NA NA NA NA

8,897 12,800 12,200 5,370 NA NA NA NA NA NA

10,659 9,820 7,060 7,310 NA NA NA NA NA NA

9,060 9,830 7,830 8,710 NA NA NA NA NA NA

9,271 14,200 8,160 11,900 10,900 12,300 18,600 NA NA

Primary refineries.

2

Preliminary.

Source: U.S. Geological Survey (USGS)

Total1 Lead Consumption in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

107.0 119.0 107.0 139.0 116.0 128.0 139.0 145.0 132.0 134.0

115.2 119.0 100.0 138.0 115.0 129.0 139.0 135.0 131.0 129.0

112.8 119.0 106.0 138.0 119.0 130.0 139.0 133.0 133.0 126.0

111.6 109.0 111.0 140.0 128.0 127.0 139.0 130.0 142.0 120.0

113.5 110.0 113.0 137.0 127.0 128.0 140.0 138.0 142.0 121.0

115.2 113.0 106.0 141.0 129.0 130.0 140.0 136.0 144.0 121.0

114.3 115.0 104.0 116.0 128.0 137.0 135.0 135.0 143.0 121.0

115.5 105.0 146.0 119.0 128.0 136.0 141.0 136.0 145.0 122.0

115.9 115.0 140.0 122.0 129.0 141.0 139.0 142.0 141.0 123.0

121.2 116.0 147.0 123.0 129.0 136.0 139.0 146.0 145.0 127.0

118.7 118.0 163.0 117.0 134.0 140.0 136.0 138.0 142.0 120.0

113.0 116.0 143.0 117.0 125.0 133.0 132.0 138.0 133.0

1,384 1,370 1,530 1,600 1,550 1,680 1,660 1,652 1,673 1,488

Represents total consumption of primary & secondary lead as metal, in chemicals, or in alloys.

Lead Recovered from Scrap in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 2 1

2

Preliminary. Source: U.S. Geological Survey (USGS)

In Thousands of Metric Tons (Lead Content)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

74.0 82.5 75.7 88.0 95.0 89.5 91.0 90.3 89.3 95.7

76.0 80.8 76.2 89.8 92.0 89.1 88.0 90.4 82.3 83.6

84.2 84.4 84.2 91.7 92.6 88.9 91.1 86.7 88.2 86.2

81.7 72.8 83.7 86.0 94.1 91.0 91.4 92.6 93.1 85.1

81.1 73.7 84.7 88.2 92.5 90.2 90.5 93.7 93.9 94.0

79.0 72.5 80.7 85.7 89.7 91.1 91.3 93.6 93.6 94.8

78.9 79.9 81.2 86.7 89.3 81.3 88.6 90.4 88.0 95.7

79.8 71.5 89.0 94.7 95.7 91.9 95.1 95.1 96.1 93.9

78.4 82.3 92.1 97.3 94.4 91.6 94.0 93.9 93.3 93.3

76.4 80.0 98.8 96.2 95.0 93.5 96.0 96.7 97.5 102.0

81.0 82.3 97.3 95.2 95.1 91.4 95.4 94.6 95.0 93.7

80.4 82.1 93.2 91.7 90.7 93.1 93.7 94.6 95.7

949.0 945.0 1,100.0 1,110.0 1,110.0 1,110.0 1,110.0 1,112.6 1,106.0 1,110.5

Source: U.S. Geological Survey (USGS)

D o mestic S h ip men ts1 o f L ead in th e U n ited S tates, b y R efin ers Year

In Metric Tons

Jan.

In Thousands of Short Tons

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

33.5 29.3 39.3 35.4 31.3 24.6 35.9 36.5 37.2 31.5

29.5 28.5 33.9 33.8 23.9 23.6 32.8 30.3 32.4 27.8

39.2 32.2 39.1 34.3 30.4 32.5 35.2 35.1 29.5 24.7

33.0 35.7 33.5 39.8 26.3 30.0 32.7 31.1 30.2 35.2

41.4 45.1 38.4 33.9 25.6 31.3 34.7 33.7 29.4 39.2

44.7 36.4 32.9 26.0 27.2 35.1 36.7 31.9 26.7 36.1

32.0 32.8 32.6 31.8 27.3 28.9 31.6 28.6 27.7 33.4

34.7 41.5 38.9 37.9 28.7 34.0 33.4 40.3 33.5 29.4

33.7 40.0 36.6 35.1 26.3 35.5 34.8 34.9 30.1 26.4

43.0 44.2 38.9 35.7 28.5 35.5 34.3 40.9 33.5 31.5

38.5 40.2 37.9 28.7 26.3 31.7 34.0 33.2 28.1 30.4

35.5 31.1 31.7 26.7 21.7 33.5 33.3 29.8 27.6 28.1

438.7 437.1 433.7 399.2 323.5 376.2 409.3 406.4 366.0 377.8

I ncludes GSA metal.

2

P reliminary.

S ource: American Met al Market (AMM)

159

Lumber & Plywood Humans have utilized lumber for construction for thousands of years, but due to the heaviness of timber and the manual methods of harvesting, large-scale lumbering didn’t occur until the mechanical advances of the Industrial Revolution. Total world harvest, including softwood and hardwood, is currently around 4 billion cubic meters per year. Lumber is produced from both hardwood and softwood. Hardwood lumber comes from deciduous trees that have broad leaves. Most hardwood lumber is used for miscellaneous industrial applications, primarily wood pallets, and includes oak, gum, maple, and ash. Hardwood species with beautiful colors and patterns are used for such high-grade products as furniture, flooring, paneling, and cabinets and include black walnut, black cherry, and red oak. Wood from cone-bearing trees is called softwood, regardless of its actual hardness. Most lumber from the US is softwood. Softwoods, such as southern yellow pine, Douglas fir, ponderosa pine, and true firs, are primarily used as structural lumber such as 2 x 4s and 2 x 6s, poles, paper and cardboard. Plywood consists of several thin layers of veneer bonded together with adhesives. The veneer sheets are layered so that the grain of one sheet is perpendicular to that of the next, which makes plywood exceptionally strong for its weight. Most plywood has from thee to nine layers of wood. Plywood manufacturers use both hard and soft woods, although hardwoods serve primarily for appearance and are not as strong as those made from softwoods. Plywood is primarily used in construction, particularly for floors, roofs, walls, and doors. Homebuilding and remodeling account for two-thirds of US lumber consumption. The price of lumber and plywood is highly correlated with the strength of the US home-building market. The forest and wood products industry is dominated by Weyerhaeuser Company (ticker symbol WY), which has nearly $20 billion in annual sales and a market capitalization of over $13 billion. Weyerhaeuser is a forest products conglomerate that engages not only in growing and harvesting timber, but also in the production and distribution of forest products, real estate development, and construction of single-family homes. Forest products include wood products, pulp and paper, and containerboard. The timberland segment of the business manages 7.2 million acres of company-owned land and 800,000 acres of leased commercial forestlands in North America. The company’s Canadian division has renewable, long-term licenses on about

35 million acres of forestland in five Canadian provinces. In order to maximize its long-term yield from its acreage, Weyerhaeuser engages in a number of forest management activities such as extensive planting, suppression of nonmerchantable species, thinning, fertilization, and operational pruning. Lumber futures and options are traded on the Chicago Mercantile Exchange (CME). The CME’s lumber futures contract calls for the delivery of 111,000 board feet (one 73 foot rail car) of random length 8 to 12 foot 2 x 4s, the type used in construction. The contract is priced in terms of dollars per thousand board feet. Prices – Lumber futures prices rallied through most of 2003, with the market posting a new 2-1/2 year high late in the year. Lumber prices closed 2003 at $312.60, up 44% from the 2002 close of $217.70. The market was driven by the extremely strong US home-building market seen all year. Despite the rally, the market remained slightly below the 3-year high of $376.00 posted in May 2001 and well below the record high of $493.50 posted in March 1993. Supply – US softwood lumber production in 2003 was on track to fall 1.2% to 35.607 billion board feet from 36.025 billion in 2002. The US leads the world in the production of industrial round wood with 405 million cubic meters of production in 2002, followed by Canada with 197 million cubic meters and Russia with 128 million cubic meters. The US also leads the world in the production of plywood with 15.494 million cubic meters of production in 2002, followed by Canada with 2.475 million cubic meters and Russia with 1.808 million cubic meters. Trade – US imports of softwood in 2002 rose to 20.986 billion board feet from 20.075 billion board feet in 2001. US imports of hardwood in 2002 rose to 739 million board feet from 645 million board feet in 2001. Total US lumber imports in 2002 rose to 21.774 billion board feet from 20.737 billion in 2001. The majority of US imports were of spruce with 1.046 billion board feet in 2002, and cedar came in second with 648 million board feet. US exports of softwood in 2002 fell to 848 million board feet from 968 million board feet in 2001. US exports of hardwood in 2002 fell to 1.219 billion board feet from 1.222 billion board feet in 2001. Total US exports in 2002 fell to 2.312 billion board feet from 2.351 billion board feet in 2001. The largest US export of softwood was of southern pine with 205 million board feet in 2002, followed by Douglas fir with 111 million board feet.

World Production of Industrial Roundw ood by Selected Countries Austria

Canada

Czech Repulic

9,707 11,701 11,346 11,812 11,902 10,858 10,988 10,416 10,562 11,809

169,770 177,346 183,027 177,943 183,531 173,901 190,846 197,373 197,373 197,373

9,706 11,172 11,716 11,882 12,881 13,171 13,363 13,501 13,364 13,534

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

160

2

Estimate.

In Thousands of Cubic Meters

Finland

France

Germany

Poland

Romania

Russia

Spain

Sweden

Turkey

United States

38,083 44,644 46,124 42,178 47,757 49,541 49,593 50,147 47,727 48,529

29,563 32,442 33,561 30,643 32,162 32,718 33,237 43,440 37,471 33,500

29,357 36,018 36,914 34,538 35,488 36,441 35,063 51,088 36,502 37,755

15,940 16,711 19,240 18,824 20,097 21,793 22,842 24,489 23,375 25,040

7,740 9,640 10,015 9,441 9,837 8,629 9,484 10,116 9,806 12,092

136,030 83,650 83,050 73,005 67,508 77,400 94,600 105,800 118,700 128,100

11,419 12,990 12,997 12,433 12,433 13,164 13,160 12,721 13,276 13,850

50,200 52,100 59,800 52,500 56,400 54,700 52,800 57,400 57,300 61,600

9,408 9,211 10,745 10,229 9,773 9,979 10,065 10,429 9,976 11,305

401,520 410,781 408,948 406,625 416,092 422,034 425,659 427,654 398,225 404,735

NA = Not available.

Source: Food and Agriculture Organization of the United Nations (FAO-UN)

LUMBER & PLYWOOD Lumber Production and Consumption in the United States

In Millions of Board Feet

----------------------------------- Production ----------------------------------- -------------------------------------------- Domestic Consumption -------------------------------------

Year

1995 1996 1997 1998 1999 2000 2001 2002 I II III IV 2003 1 I II III 1

---------------------------- Softw ood ------------------------------------------------------- Softw ood ---------------------------California Inland Southern West Total Inland Southern West Softwood U.S. Hardwood Redwood Region Pine C o a st Total Hardwood Region Pine C o a st Imports Total Hardwood Imports

1,305 1,371 1,511 1,391 1,325 1,320 1,121 1,035 245 294 269 227 194 216 234

Preliminary.

7,015 7,079 7,383 7,298 7,580 7,078 6,563 6,760 1,650 1,767 1,730 1,613 1,752 1,656 1,675

14,708 15,262 16,113 16,151 16,922 16,672 16,094 16,686 4,068 4,526 4,333 3,759 3,985 4,383 4,152

7,452 7,745 7,772 7,797 8,625 8,782 8,764 9,244 2,264 2,401 2,356 2,223 2,370 2,397 2,496

32,233 33,266 34,667 34,677 36,605 35,967 34,577 35,831 8,741 9,549 9,230 8,311 8,819 9,193 9,091

12,434 NA NA NA NA NA NA NA NA NA NA NA NA NA NA

6,956 7,073 7,180 7,256 7,445 6,926 6,490 6,643 1,616 1,761 1,715 1,551 1,678 1,737 1,706

U.S. Housing Starts: Seasonally Adjusted Annual Rate 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

6,530 6,821 7,012 7,502 8,115 8,300 8,471 8,966 2,117 2,330 2,326 2,193 2,200 2,336 2,455

17,396 18,214 18,002 18,686 19,178 19,449 20,075 20,986 5,170 5,716 5,104 4,996 4,725 5,622 5,511

47,749 49,883 50,863 52,209 54,262 53,934 53,828 56,054 13,645 14,998 14,269 13,142 13,101 14,689 14,621

In Thousands of Units

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1,272 1,407 1,467 1,355 1,525 1,804 1,744 1,666 1,713 1,822

1,337 1,316 1,491 1,486 1,584 1,738 1,822 1,623 1,788 1,640

1,564 1,249 1,424 1,457 1,567 1,737 1,630 1,592 1,675 1,748

1,465 1,267 1,516 1,492 1,540 1,561 1,626 1,636 1,587 1,630

1,526 1,314 1,504 1,442 1,536 1,649 1,573 1,604 1,735 1,738

1,409 1,281 1,467 1,494 1,641 1,562 1,560 1,633 1,709 1,845

1,439 1,461 1,472 1,437 1,698 1,704 1,477 1,664 1,666 1,892

1,450 1,416 1,557 1,390 1,614 1,657 1,531 1,562 1,630 1,826

1,474 1,369 1,475 1,546 1,582 1,628 1,508 1,582 1,810 1,905

1,450 1,369 1,392 1,520 1,715 1,636 1,527 1,531 1,653 1,977

1,511 1,452 1,489 1,510 1,660 1,663 1,559 1,604 1,760 2,054

1,455 1,431 1,370 1,566 1,792 1,769 1,532 1,583 1,847

1,446 1,354 1,477 1,474 1,621 1,676 1,591 1,607 1,714 1,825

Year

Total Privately owned.

Source: American Forest & Paper Association (AF&PA)

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

4,207 4,403 4,293 3,973 3,884 3,519 3,639 3,919 4,784 3,175

4,512 4,336 4,435 4,019 3,970 3,595 3,704 3,864 3,735 3,177

4,656 4,344 4,459 4,113 4,048 3,688 3,811 4,013 3,826 3,202

4,816 4,653 4,357 4,067 4,062 3,726 3,887 3,951 3,756 3,249

4,883 4,352 4,251 3,963 4,158 3,698 3,960 4,095 3,273 3,308

4,649 4,663 4,153 4,017 4,084 3,581 2,738 3,955 3,316 3,211

4,738 4,508 4,156 3,915 NA 3,512 3,902 NA 3,242 3,075

4,432 4,323 4,038 3,871 NA 3,485 3,936 3,961 3,230 3,085

4,349 4,342 3,918 3,875 NA 3,533 3,878 3,938 3,136 3,081

4,539 4,359 3,965 3,927 NA 3,491 3,848 4,076 3,098 3,158

4,235 4,361 3,939 3,925 NA 3,562 3,957 4,100 3,173

4,294 4,335 3,906 3,865 NA 3,536 3,875 4,248 3,127

NA = Not available.

Source: American Forest & Paper Association (AFPA)

Lumber (Softw ood)2 Production in the United States Year

1

In Millions of Board Feet

Jan.

Preliminary.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

59,501 NA NA NA NA NA NA NA NA NA NA NA NA NA NA

F eb.

Stocks (Gross) of Softw ood Lumber in the United States, on First of Month

1

380 NA NA NA NA NA NA NA NA NA NA NA NA NA NA

Jan.

Preliminary.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31

11,372 NA NA NA NA NA NA NA NA NA NA NA NA NA NA

Source: American Forest & Paper Association (AFPA)

NA = Not available.

Year

14,384 15,112 15,993 15,788 16,525 16,374 15,937 16,571 4,060 4,420 4,343 3,748 3,897 4,336 4,258

Total Lumber

In Millions of Board Feet

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

3,839 4,084 2,600 3,012 2,767 2,783 3,020 2,832 3,019 2,971

3,662 3,577 2,606 2,791 2,760 2,921 3,128 2,457 2,761 2,801

4,097 3,931 2,757 2,866 2,928 3,190 3,474 2,918 3,074 2,937

3,735 3,675 2,903 3,149 3,084 3,227 3,058 2,928 3,284 2,994

3,972 3,805 2,833 2,890 2,647 3,071 3,276 NA 3,126 2,931

4,113 3,897 2,819 3,027 3,051 3,318 3,249 3,032 3,200 3,109

3,785 3,641 2,942 3,097 3,079 3,115 2,730 2,812 3,104 3,088

4,124 3,866 3,077 2,889 2,930 3,054 2,971 3,240 3,128 2,981

4,135 3,757 2,858 2,905 2,953 2,992 2,839 2,743 2,862 3,052

4,145 4,105 3,179 3,094 3,167 3,096 3,041 3,188 3,386 3,241

3,636 3,549 2,758 2,536 2,667 2,954 2,761 2,740 2,599

3,851 3,297 2,424 2,487 2,754 2,795 2,342 2,372 2,482

47,094 45,184 33,756 34,743 34,787 36,516 35,889 34,104 36,025 36,126

Preliminary.

2

Data prior to 1996 are Softwood and Hardwood.

Source: American Forest & Paper Association (AFPA)

161

LUMBER & PLYWOOD

Lumber: USD Per 1,000 Board Feet ----- White-Fir, 2x4 (Jan. 1959 - Dec. 1970) Spruce-Hem-Fir, 2x4 (Jan. 1971 - Mar. 1980) Spruce-Pine-Fir, 2x4 (Apr. 1980 - date) Plywood: USD Per 1,000 Square Feet - - - Sheathing, 1/2”-B (Aug. 1975 - date)

Lumber (Softw ood)2 Shipments in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Millions of Board Feet

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

3,576 3,971 2,460 2,966 2,685 2,689 2,953 2,859 3,032 3,018

3,663 3,584 2,581 2,697 2,685 2,829 3,039 2,372 2,815 2,742

3,912 3,855 2,863 2,890 2,863 3,177 3,394 2,981 3,049 2,843

3,761 3,831 3,002 3,253 3,019 3,227 2,974 2,974 3,212 3,134

4,192 3,765 2,934 2,834 2,684 3,071 3,292 NA 3,064 2,969

4,091 4,026 2,813 3,126 3,175 3,383 3,309 2,961 3,260 3,173

4,039 3,826 3,058 3,139 3,132 3,141 2,686 2,936 3,234 3,209

4,163 3,870 3,196 2,885 2,963 3,004 3,027 3,279 3,111 3,137

3,914 3,760 2,813 2,852 2,948 3,037 2,871 2,644 2,858 3,030

4,321 4,055 3,206 3,096 3,205 3,021 2,931 3,166 3,299 3,413

3,603 3,478 2,792 2,598 2,703 2,944 2,752 2,732 2,675

3,696 3,367 2,353 2,461 2,865 2,691 2,444 2,396 2,501

46,931 45,388 34,071 34,797 34,927 36,214 35,672 34,145 36,110 36,802

Preliminary.

2

Data prior to 1996 are Softwood and Hardwood.

Source: American Forest & Paper Association (AFPA)

Imports and Exports of Lumber in the United States, by Type

In Millions of Board Feet

------------------------------------------ Exports2 -------------------------------------------

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 I II III 1

------------------------------------------------ Imports2 ------------------------------------------------- -------------------------- Softw ood -------------------------Pond-------------------------------- Softw are --------------------------------erosa/ Douglas Total Total Douglas White Southern Total C edar Fir Hemlock Pine Spruce Total Hardwood Lumber Fir Hemlock Pine Pine Total Hardwood

703 768 727 586 514 591 694 667 648 140 157 131

336 395 264 264 417 426 455 471 385 65 98 110

399 258 257 250 268 259 184 199 69 11 12 14

97 97 133 314 363 449 450 365 445 108 134 118

2,949 2,828 1,989 1,040 849 803 812 838 1,046 186 225 208

16,380 17,395 18,214 18,014 18,686 19,178 19,449 20,075 20,986 4,725 5,622 5,511

394 380 397 465 589 708 795 645 739 184 191 191

16,787 17,787 18,641 18,506 19,306 19,903 20,268 20,737 21,774 4,923 5,826 5,711

592 638 685 436 252 249 232 168 111 31 23 20

283 227 195 105 39 54 46 26 19 6 4 4

Preliminary. 2 I ncludes sawed timber, board planks & scantlings, flooring, box shook and railroad ties. Source: American Forest & Paper Association (AFPA)

162

157 107 97 122 113 140 116 86 83 27 24 25

357 335 315 299 279 326 298 232 205 34 29 33

2,187 1,988 1,935 1,820 1,265 1,431 1,355 968 848 254 242 238

1,041 1,101 1,141 1,281 1,119 1,242 1,319 1,222 1,219 320 314 300

Total Lumber

3,333 3,193 3,173 3,189 2,601 2,867 2,822 2,351 2,313 621 613 593

LUMBER & PLYWOOD

Average Open Interest of Random Lumber1 Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

2,571 1,757 3,378 3,745 4,249 4,864 3,004 4,605 2,106 3,238

2,814 1,923 4,040 3,211 3,332 5,497 3,131 4,494 2,382 3,222

2,638 2,142 3,752 3,048 3,394 4,698 2,728 3,654 2,441 2,521

2,563 2,509 4,395 3,337 4,102 4,456 3,175 3,644 2,011 2,804

1,936 2,742 5,666 2,895 4,353 4,927 3,171 3,867 1,502 2,937

1,838 3,252 4,972 3,137 4,773 6,405 3,218 3,733 2,136 3,188

1,705 2,896 3,280 2,767 4,048 6,263 3,064 2,612 1,879 2,370

1,854 2,918 5,243 3,119 4,081 4,882 3,638 2,949 2,265 2,827

2,102 2,809 4,743 3,267 3,466 3,457 3,845 2,148 2,654 3,492

2,169 3,039 4,797 4,006 4,295 3,704 4,277 2,102 2,974 3,033

1,702 2,626 4,341 3,606 3,434 2,963 4,208 2,173 3,315 1,824

1,967 2,940 3,691 4,068 3,893 2,868 4,405 2,416 3,249 1,887

July 1995 thru March 1996, Lumber and Random Lumber.

Source: Chicago Mercantile Exchange (CME)

Volume of Trading of Random Lumber1 Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Contracts

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

16,837 12,150 22,954 28,561 19,556 25,962 19,871 21,567 15,328 24,241

15,204 12,909 19,960 20,946 20,339 22,184 19,486 15,076 13,239 17,533

17,323 15,088 20,956 21,071 20,881 28,151 18,936 24,561 16,401 17,027

17,380 12,139 27,094 24,624 24,673 22,618 16,136 22,458 13,910 11,573

14,996 14,536 28,271 18,248 20,519 23,835 21,003 23,681 12,427 20,132

14,348 20,126 26,100 24,797 24,112 30,410 18,057 18,878 11,950 21,840

11,542 13,766 19,302 20,308 21,763 30,791 16,636 15,210 12,046 21,097

13,327 16,919 27,792 18,503 20,453 25,683 16,563 16,440 10,154 22,418

14,856 15,718 31,982 21,736 19,412 24,177 19,037 12,882 13,518 22,891

13,032 18,981 32,042 24,416 19,578 18,125 17,155 11,608 13,442 19,387

10,997 15,551 25,236 15,131 22,002 20,802 20,706 11,989 15,828 12,480

13,121 14,803 22,525 21,977 16,559 15,118 17,582 12,490 16,180 13,272

172,963 182,686 304,214 260,318 249,847 287,856 221,168 206,840 164,423 223,891

July 1995 thru March 1996, Lumber and Random Lumber.

Source: Chicago Mercantile Exchange (CME)

163

LUMBER & PLYWOOD Production of Plyw ood by Selected Countries

In Thousands of Cubic Meters

Year

1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

Austria

Canada

Finland

France

Germany

Italy

Ja p a n

Poland

Romania

Russia

Spain

Sweden

United States

150 150 150 155 155 186 186

2,114 2,128 2,049 2,229 2,244 2,326 2,475

824 908 992 1,076 1,096 1,140 1,240

536 539 541 546 558 509 549

512 448 428 364 357 321 270

402 414 420 450 450 418 450

4,421 NA NA NA NA NA NA

173 226 178 223 261 242 270

98 87 76 65 72 79 90

666 884 1,102 1,324 1,484 1,590 1,808

210 210 382 382 380 380 360

132 123 114 105 110 106 79

18,554 17,554 17,468 17,551 17,271 15,417 15,494

2

Estimate.

NA = Not available.

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

Imports of Plyw ood by Selected Countries

In Thousands of Cubic Meters

Year

1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

Austria

Belgium

Canada

Denmark

France

Germany

Italy

Ja p a n

Netherlands

Sweden

Switzerland

United Kingdom

United States

99 110 121 136 151 150 167

586 684 539 530 534 526 500

239 256 273 222 230 520 490

168 226 302 222 247 270 270

347 353 359 365 348 358 347

975 1,095 1,105 1,021 1,149 1,088 935

295 312 378 367 422 425 488

5,314 5,326 NA NA NA NA NA

260 394 528 558 594 601 601

150 148 147 152 178 157 152

129 138 143 150 153 143 142

965 967 969 972 1,041 1,145 1,139

1,406 1,592 1,964 2,494 2,385 3,010 3,891

2

Estimate.

NA = Not available.

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

Exports of Plyw ood by Selected Countries Year

1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

In Thousands of Cubic Meters

Austria

Baltic States

Belgium

Canada

Finland

France

Germany

Italy

Netherlands

Poland

Russia

Spain

United States

163 172 180 192 246 297 288

187 198 NA NA NA NA NA

88 101 371 403 380 378 357

360 557 755 956 941 1,030 1,056

618 725 832 939 1,006 1,009 1,117

180 201 222 243 231 200 188

135 152 166 160 210 232 153

117 125 139 139 146 125 140

80 68 56 51 55 57 57

76 95 93 95 109 128 138

382 559 736 913 974 1,032 1,157

77 77 331 220 152 140 125

1,135 984 833 712 673 530 523

2

Estimate.

NA = Not available.

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

Imports of Industrial Roundw ood by Selected Countries

In Thousands of Cubic Meters

Year

Austria

Belgium

Canada

Finland

France

Germany

Italy

Norway

Poland

Portugal

Spain

Sweden

United States

1996 1997 1998 1999 2000 2001 1 20022

4,451 5,277 5,113 7,093 8,451 7,630 7,225

2,391 2,823 2,823 3,393 3,992 4,505 2,645

6,088 6,685 6,955 6,157 6,508 7,557 7,458

6,575 6,734 9,235 10,160 9,875 11,869 12,586

1,601 1,806 1,980 2,154 2,012 1,994 1,934

1,263 1,770 2,255 2,722 3,549 3,493 2,459

4,936 4,504 5,223 4,952 5,805 5,211 5,277

2,476 2,855 3,494 3,037 3,315 2,772 2,734

393 288 371 590 732 882 726

1,065 1,679 2,122 1,432 1,340 1,109 1,067

1,902 2,116 4,136 3,228 3,771 4,128 4,080

5,018 7,655 9,172 10,280 11,721 9,505 9,544

524 582 970 1,422 7,038 6,201 6,618

1

Preliminary.

2

Estimate.

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

Exports of Industrial Roundw ood by Selected Countries Year

Canada

Estonia

France

Germany

Hungary

Latvia

Lithuania

Russia

Slovakia

Sweden

Switzerland

United States

955 701 2,029 2,213 2,903 3,835 4,905

2,687 2,657 2,497 2,626 1,857 2,276 2,302

1,898 2,915 3,792 3,903 4,257 3,482 3,132

2,227 2,282 2,857 3,093 5,522 5,116 3,916

2,992 4,032 4,871 4,552 5,558 4,906 4,427

555 701 1,204 1,079 1,282 1,227 1,210

1,467 2,124 2,760 2,953 4,190 3,990 4,225

952 765 792 938 1,200 1,314 1,420

15,915 17,845 19,972 27,600 30,835 31,693 36,546

529 850 714 1,193 1,550 1,550 1,184

1,621 1,393 1,420 1,315 1,431 1,303 1,747

979 1,147 1,006 1,220 3,754 3,149 3,150

11,937 10,864 12,290 11,739 11,952 11,412 11,001

1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

164

In Thousands of Cubic Meters

Czech Republic

2

Estimate.

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

Magnesium Magnesium is a silvery-white, light, and fairly tough, metallic element and is relatively stable. Magnesium is one of the alkaline earth metals and has the atomic symbol Mg and atomic number 12. Magnesium is the eighth most abundant element in the earth’s crust and the third most plentiful element found in seawater. Magnesium is ductile and malleable when heated, and with the exception of beryllium, is the lightest metal that remains stable under ordinary conditions. First isolated by the British chemist Sir Humphrey Davy in 1808, magnesium today is obtained mainly by electrolysis of fused magnesium chloride. Magnesium compounds, primarily magnesium oxide, are used in the refractory material that line the furnaces used to produce iron and steel, nonferrous metals, glass, and cement. Magnesium oxide and other compounds are also used in the chemical, agricultural, and construction industries. Magnesium’s principal use is as an alloying addition for aluminum. These aluminum-magnesium alloys are used primarily in beverage cans. Due to their lightness and considerable tensile strength, the alloys are also used in structural components in airplanes and automobiles. Prices – The price of magnesium in 2002 fell into the range of $1.10-1.22 per pound from $1.21-1.28 in 2001. The 2002 level was a 22-year low going back to 1980 when the price range was $1.07-$1.25. Supply – World primary production of magnesium in 2002 rose slightly by +0.2% to a record high of 429,000 met-

ric tons from 428,000 metric tons in 2001. The world’s largest primary producers of magnesium are China with 230,000 metric tons of production in 2002, the US with production of 106,000 metric tons (in the latest data available for 1998), and Canada with 80,000 metric tons. World secondary production of magnesium in 2001 fell –18% to a 13-year low of 75,700 metric tons from 92,300 metric tons in 2000. The largest secondary producer of magnesium by far is the US with 87% of world production in 2001, followed by Japan with 10.3% of world secondary production. US secondary production of magnesium in 2001 fell 20% to 65,800 metric tons, which is about two-thirds that of US primary production. Demand – US consumption of magnesium for structural products in 2002 rose +0.6% to 48,302 metric tons from 47,992 metric tons in 2001. Of the structural product consumption category, 96% was for castings and the remaining 4% was for wrought products. US consumption of magnesium for aluminum alloys fell –0.3% to 34,900 metric tons from 35,000 metric tons in 2001. The consumption category for magnesium of “other uses” rose by +1.6% in 2002 to 12,900 metric tons. Trade – US exports of magnesium in 2002 rose +29.6% to 25,400 metric tons from 19,600 metric tons in 2001, which was a 26-year low going back to 1976. US imports of magnesium in 2002 rose +28.5% to 88,000 metric tons from 68,500 metric tons in 2001.

World Production of Magnesium (Primary and Secondary) Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Metric Tons

------------------------------------------------ Primary Production --------------------------------------------------- ---------------------- Secondary Production ---------------------United World United United Former World Brazil Canada China France Norway Russia States Total Japan Kingdom States USSR Total

9,700 9,700 9,700 9,000 9,000 9,000 8,000 5,700 5,500 6,000

Preliminary.

2

23,000 28,900 48,100 54,000 57,700 77,100 73,700 85,700 83,400 80,000

Estimate.

11,800 24,000 93,600 73,100 75,990 70,500 120,000 190,000 200,000 230,000

10,982 12,280 14,450 14,000 13,740 14,000 16,200 16,500 4,000 ----

27,300 27,635 28,000 37,800 34,200 35,400 40,800 41,400 36,000 10,000

W = Withheld proprietary data.

30,000 35,400 37,500 35,000 39,500 41,500 45,000 45,000 48,000 50,000

132,000 128,000 142,000 133,000 125,000 106,000 W W W W

269,000 282,000 395,000 378,000 384,000 396,000 341,000 428,000 428,000 429,000

13,215 19,009 11,767 8,175 10,934 7,807 7,732 7,900 7,800 ----

1,000 1,000 1,000 1,000 1,000 1,000 500 500 500 ----

58,900 62,100 65,100 71,200 77,600 77,100 86,100 82,300 65,800 ----

6,000 5,000 6,000 6,000 NA NA NA NA NA ----

80,700 88,700 85,500 88,000 91,100 87,500 96,000 92,300 75,700 ----

Source: U.S. Geological Survey (USGS)

Salient Statistics of Magnesium in the United States

In Metric Tons

------------------- Production ---------------------- Secondary ---Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Primary (Ingot)

New Scrap

Old Scrap

132,144 128,000 142,000 133,000 125,000 106,000 W W W W

28,313 32,500 35,400 41,100 47,000 45,200 52,000 52,200 38,600 47,100

30,577 29,600 29,800 30,100 30,500 31,800 34,200 30,100 27,200 26,400

Preliminary. Valasco, Texas.

2

Total Total Exports3

58,890 62,100 65,100 71,200 77,600 77,100 86,100 82,300 65,800 73,600

38,815 45,200 38,300 40,500 40,500 35,400 29,100 23,800 19,600 25,400

Imports for Consumption

Stocks D e c. 3 1 4

37,248 29,100 34,800 46,600 65,100 82,500 90,700 91,400 68,500 88,000

26,000 20,030 21,193 25,000 23,000 27,000 W W W W

$ Price -------- Domestic Consumption of Primary Magnesium -------Total Aluminum Per Castings Wrought Other Pound5 ----- Structural Products ----Alloys Uses6 Total

1.43-1.46 1.63 1.93-2.25 1.70-1.80 1.60-1.70 1.52-1.62 1.40-1.55 1.23-1.30 1.21-1.28 1.10-1.22

12,543 15,676 15,231 16,400 20,643 27,057 49,181 29,457 44,712 46,362

9,870 7,690 8,510 8,080 6,840 7,100 9,380 2,120 3,280 1,940

22,413 23,366 23,741 24,480 27,400 34,157 58,561 31,577 47,992 48,302

46,498 61,100 60,200 52,300 50,000 52,000 57,800 55,400 35,000 34,900

32,202 27,900 25,100 25,500 23,000 20,900 14,900 17,400 12,700 12,900

78,700 89,000 85,300 77,800 73,000 72,900 72,700 72,800 47,700 47,800

Estimate. 3 Metal & alloys in crude form & scrap. 4 Estimate of I ndustry Stocks, metal. 5 Magnesium ingots (99.8%), f.o.b. 6 Distributive or sacrificial purposes. W = Withheld proprietary data. Source: U.S. Geological Survey (USGS)

165

Manganese Manganese is a silvery-white, very brittle, metallic element used primarily in making alloys. Its atomic symbol is Mn and its atomic number is 25. Manganese was first distinguished as an element and isolated in 1774 by Johan Gottlieb Gahn. Manganese dissolves in acid and corrodes in moist air. Manganese is distributed over the world in the form of ores such as rhodochrosite, franklinite, psilomelane, and manganite. Pyrolusite is the principal ore of manganese. Pure manganese is produced by igniting pyrolusite with aluminum powder or by electrolyzing manganese sulfate. Manganese is used primarily in the steel industry for creating alloys, the most important ones being ferromanganese and spiegeleisen. In steel, manganese improves forging and rolling qualities, strength, toughness, stiffness, wear resistance, and hardness. Manganese is also used in plant fertilizers, animal feed, pigments, and dry cell batteries. Prices – The average price of ferromanganese (high carbon, FOB plant) in 2001 fell –9.1% to $447.44 per gross ton from $492.40 in 2000. The 2001 price of $447.44 was well below the 10-year average price of $522.73. Supply – World production of manganese ore in 2001 was unchanged from 2000 at 19.1 million metric tons. That was only moderately above the record low of 17.8 million

World Production of Manganese Ore

metric tons for the data series, which goes back to 1970. The world’s largest producers of manganese ore are South Africa with 17.1% of world production in 2001, Ukraine with 14.1%, China with 13.1%, Brazil with 11.5%, and Australia with 10.8%. China’s production has dropped sharply in the last several years from 6.0 million metric tons in 1997 to 2.500 million in 2001. Demand – US consumption of manganese ore in 2001 fell –12.6% to 425,000 metric tons from 486,000 metric tons in 2000. US consumption of ferromanganese in 2001 fell – 11.3% to 266,000 metric tons from 300,000 metric tons in 2000. Trade – The US relies on imports for 100% of its manganese consumption. It has been that way since 1985 when the percentage rose to 100% from 97-99% during the 1970s when the US still produced some manganese. US imports of manganese ore for consumption in 2001 fell –19.9% to 358,000 metric tons from 447,000 metric tons in 2000. US imports of ferromanganese for consumption in 2001 fell -19.6% to 251,000 metric tons from 312,000 metric tons in 2000. US imports of silico-manganese in 2001 fell –17.8% to 310,000 metric tons from 377,000 in 2000. The primary sources of US imports of manganese ore are Gabon with 65.4% of US imports in 2002, followed by South Africa with 19.5%, Australia (8.6%), and Brazil (6.0%).

In Thousands of Metric Tons (Gross Weight)

Year

Australia2 37-534

Brazil 30-50

China 30

Gabon 50-53

Georgia 29-30

Ghana 30-50

Hungary3 30-33

India 10-54

Mexico 27-50

Morocco 50-53

South Africa 30-48+

Ukraine 29-30

World Total

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

2,092 1,920 2,180 2,109 2,136 1,500 1,892 1,614 2,069 2,187

1,837 2,199 2,398 2,506 2,124 1,940 1,656 1,925 1,863 2,000

5,860 3,570 6,900 7,600 6,000 5,300 3,190 3,500 4,300 4,500

1,290 1,436 1,930 1,983 1,904 2,092 1,908 1,743 1,791 1,856

300 150 100 97 -------------------

295 270 217 448 437 537 639 896 1,077 1,136

59 55 -------------------------

1,655 1,632 1,764 1,797 1,596 1,557 1,500 1,550 1,600 1,700

363 307 472 485 534 510 459 435 277 233

43 31 -------------------------

2,507 2,851 3,199 3,240 3,121 3,044 3,122 3,635 3,266 3,322

3,800 2,979 3,200 3,070 3,040 2,226 1,985 2,741 2,700 2,736

20,500 18,000 23,300 24,300 21,900 19,900 17,800 19,600 20,800 21,900

1

Preliminary.

2

Metallurgical Ore.

3

Concentrate.

4

Ranges of percentage of manganese.

Salient Statistics of Manganese in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 1

Net Import Reliance as a % of Apparent Consumption

100 100 100 100 100 100 100 100 100 100

Source: U.S. Geological Survey (USGS)

In Thousands of Metric Tons (Gross Weight)

Manganese Ore ---------------- (35% or More Manganese) ---------------- ------------- Ferromanganese ------------Imports Imports for ConConStocks, for ConConsumption Exports sumption D e c. 3 1 3 sumption Exports sumption

232 331 394 478 355 332 460 447 358 427

16 15 15 32 84 8 4 10 9 15

389 449 486 478 510 499 479 486 425 360

302 269 309 319 241 163 172 226 138 151

347 336 310 374 304 339 312 312 251 275

18 11 11 10 12 14 12 8 9 9

341 347 348 326 337 290 281 300 266 253

Avg. Price Mn. Metallurgical ---- Silicomanganese ---Ore $ Lg. Ton Unit4 Exports Imports

2.60 2.40 2.40 2.55 2.44 2.40 2.26 2.39 2.44 2.30

Preliminary. 2 Estimate. 3 I ncluding bonded warehouses; excludes Gov't stocks; also excludes small tonnages of dealers' stocks. C.I .F. U.S. Ports. Source: U.S. Geological Survey (USGS)

166

9.4 6.8 7.8 5.3 5.4 6.7 3.7 1.9 3.6 0.5 4

316.0 273.0 305.0 323.0 306.0 346.0 301.0 378.0 269.0 247.0

46-48% Mn,

MANGANESE

USD Per Gross Ton ----- Baltimore, (Jan. 1908 - Dec. 1920) FOB Plant (Jan. 1921 - date)

No Quotes Oct. 1984 - Apr. 1987

Imports3 of Manganese Ore (20% or More Mn) in the United States Year

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1

Preliminary.

2

Australia

Brazil

Gabon

Mexico

Morocco

South Africa

30,171 23,200 31,600 48,900 16,400 18,700 23,500 18,100 18,000 18,400

5,573 4,530 7,080 5,640 9,100 12,100 1 3,250 3,480 12,900

66,659 112,000 104,000 140,000 99,400 94,900 142,000 188,000 158,000 140,000

7,317 13,700 23,600 16,100 30,100 14,600 9,130 3,250 1,720 1,100

43 56 37 9 37 ----------------

6,006 7,780 13,100 20,800 ---13,800 39,100 ---17,400 41,800

Estimate.

3

I mports for consumption.

Average Price of Ferromanganese Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Metric Tons (Mn Content) Total

Customs Value Thous. $

115,770 161,000 187,000 231,000 156,000 160,000 224,000 219,000 199,000 214,000

24,927 29,800 33,300 42,400 30,800 27,800 37,200 32,100 28,000 29,200

Source: U.S. Geological Survey (USGS)

In Dollars Per Gross Ton

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

610.00 500.00 560.00 477.50 175.00 510.00 482.50 473.93 430.00 509.52

610.00 500.00 552.50 467.50 175.00 510.00 482.50 467.89 430.00 510.00

610.00 500.00 550.00 470.00 175.00 510.00 482.50 460.00 437.14 502.38

610.00 500.00 550.00 482.50 190.00 510.00 482.50 454.29 447.73 497.61

610.00 500.00 541.00 490.00 190.00 510.00 482.50 450.00 449.55 492.50

527.50 500.00 535.00 490.00 510.00 498.75 482.50 450.00 456.75 481.79

500.00 500.00 533.13 490.00 510.00 482.50 501.63 446.90 481.82 477.27

500.00 518.75 527.50 492.50 510.00 482.50 505.00 444.57 556.14 470.00

500.00 525.00 527.50 475.00 510.00 482.50 509.00 430.79 597.00 478.57

500.00 525.00 527.50 475.00 510.00 482.50 510.00 430.00 589.67 497.83

500.00 542.50 501.25 475.00 510.00 482.50 510.00 430.00 552.89 516.67

500.00 560.00 477.50 475.00 510.00 482.50 477.50 430.00 518.93 559.76

548.13 514.27 531.91 480.00 497.92 495.21 492.40 447.44 495.64 499.49

Domestic standard, high carbon, FOB plant, carloads.

Source: American Metal Market (AMM)

167

Meats US commercial red meat includes beef, veal, lamb, and pork. Red meat is a good source of iron, vitamin B12, and protein, and eliminating it from the diet can lead to iron and zinc deficiencies. Today, red meat is far leaner than it was 30 years ago due to newer breeds of livestock that carry less fat. The leanest cuts of beef include tenderloin, sirloin, and flank. The leanest cuts of pork include pork tenderloin, loin chops, and rib chops. The USDA (United States Department of Agriculture) grades various cuts of meat. “Prime” is the highest USDA grade for beef, veal, and lamb. “Choice” is the grade designation below Prime for beef, veal, and lamb. “Commercial” and “Cutter” grades are one of the lower designations for beef, usually sold as ground meat, sausage, and canned meat. “Canner” is the lowest USDA grade designation for beef and is used primarily in canned meats not sold at retail. Supply – World meat production is led by China with 49.800 million metric tons of production in 2003, up 2.5% from 48.600 million metric tons in 2002. US meat production is the second largest in the world at 20.501 million metric tons in 2003, down –3.8% from 21.306 million metric tons in 2002. Brazil is the third largest producer with 9.815 million metric tons in 2003, up 3.4% from 9.492 million metric tons in 2002. US meat production involves mostly the production of beef which accounts for 56.5% of red meat production in

World Total Meat Production3 Year

1996 1997 1998 1999 2000 2001 2002 2003 1 20042 1 4

2003. Pork accounts for 42.6% of red meat production. Veal accounts for only 0.4% and lamb and mutton account for only 0.5% of US red meat production. Demand – US consumption of red meats in 2003 fell to 46.269 billion pounds from 47.596 billion pounds in 2002. US per capita consumption of red meat in 2003 was 116.0 pounds per year per person, down from 121.0 pounds in 2002 showing the trend toward healthier foods. Per capital red meat consumption in 2003 was an all-time record low for Americans going back to the beginning of data availability in 1970. The break-down on the per capita red meat consumption figures show per capita consumption of 64.0 pounds of beef (a record low), 1.0 pound of veal, 1.0 pound of lamb and mutton, and 50.0 pounds of pork (matching the record low posted in 2001). Trade – The world’s largest importers of red meat are Japan with 2.010 million metric tons, the US with 1.990 million metric tons, and Russia with 1.450 million metric tons. The world’s largest exporters of red meat are the US with 1.874 million metric tons of exports, Australia with 1.583 million metric tons, Canada with 1.415 million metric tons, and Brazil with 1.355 million metric tons. Brazil’s export figures have been rising sharply, having more than quadrupled from 6 years ago. The US export figure of 1.874 million metric tons of exports in 2003 were an all-time record high.

In Thousands of Metric Tons

Argentina

Australia

Brazil

Canada

China4

France

Germany

Italy

Mexico

Russia

United Kingdom

United States

World Total

2,636 3,033 2,648 2,890 2,928 2,640 2,700 2,650 2,750

2,650 2,914 2,973 2,940 2,986 2,428 2,496 2,307 2,325

7,750 7,590 7,830 8,105 8,530 9,125 9,805 10,130 10,520

2,223 2,332 2,487 2,788 2,884 2,979 3,149 3,120 3,370

36,947 42,500 45,982 47,670 48,292 47,333 49,112 50,120 51,198

3,973 4,046 4,065 4,086 3,966 3,740 NA NA NA

5,161 5,053 5,244 5,532 5,331 5,195 NA NA NA

2,668 2,632 2,595 2,707 2,692 2,475 NA NA NA

2,832 2,875 2,852 2,999 3,045 2,990 3,015 3,050 3,070

4,487 4,086 3,775 3,544 3,494 3,320 3,370 3,405 3,400

2,088 2,183 2,367 2,238 2,134 1,642 NA NA NA

19,634 19,667 20,541 20,994 20,992 20,674 21,356 21,157 20,627

123,100 128,993 134,134 138,496 138,658 132,116 137,063 136,993 138,350

Preliminary. 2 Forecast. 3 Data through 2000, includes beef, veal, pork, sheep and goat meat. Beginning 2001, excludes sheep and goat. Predominately pork production. Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Production and Consumption of Red Meats in The United States ----------------- Beef ----------------- --------------- Veal --------------- ------- Lamb & Mutton ------- ---- Pork (Excluding Lard) ---- ------------- All Meats -------------

Year

1996 1997 1998 1999 2000 2001 2002 1 20032 20043 1

CommerCommerCommerci a l ci a l ci a l -- Consumption -- Consumption - Consumption ProProProP er P er P er Total Capita duction duction Total Capita duction Total Capita

CommerCommerci a l ci a l -- Consumption --- Consumption -ProProP er P er duction duction Total Capita Total Capita

-- Million Pounds --

-- Million Pounds --

25,419 25,490 25,760 26,493 26,888 26,212 27,192 26,402 25,505

25,863 25,611 26,305 26,936 27,338 27,026 27,878 26,869 26,285

Lbs.4 - Million Pounds -

97.4 95.9 93.3 68.0 68.0 66.0 68.0 65.0 62.0

378 334 262 235 225 205 205 198 197

378 333 265 235 225 204 204 200 197

Lbs.4 - Million Pounds -

1.4 1.2 1.0 1.0 1.0 1.0 1.0 1.0 1.0

268 260 251 248 234 227 223 204 198

334 332 360 358 354 368 383 355 356

Lbs.4

1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0

17,117 17,274 19,011 19,308 18,952 19,160 19,685 19,890 19,772

16,795 16,823 18,309 18,954 18,643 18,492 17,147 19,424 19,452

Lbs.4 -- Million Pounds --

63.3 61.4 65.3 53.0 51.0 50.0 52.0 52.0 51.0

43,182 43,358 45,284 46,284 46,299 45,804 47,305 46,694 45,672

43,370 43,099 45,239 46,483 46,560 46,089 47,612 46,848 46,270

Preliminary. 2 Estimate. 3 Forecast. 4 Data through 1998, are for Carcass weight. Beginning 1998, data are for Retail-weight basis. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

168

Lbs.4

163.2 159.6 160.6 122.0 121.0 118.0 121.0 118.0 115.0

MEATS Total Red Meat Imports3 (Carcass Weight Equivalent) of Principal Countries Year

Canada

France

Germany

283 270 303 296 319 331 390 407 385 250

39 44 47 44 53 53 19 NA NA NA

150 139 132 125 135 138 72 NA NA NA

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 20042

Hong Kong

223 195 217 267 284 319 332 350 370

Italy

Ja p a n

Rep. of Korea

37 61 64 57 61 61 56 NA NA NA

1,840 1,993 1,767 1,784 1,980 2,110 2,065 1,832 1,975 885

239 271 303 191 398 498 369 575 580 435

Netherlands

25 31 56 32 25 21 32 NA NA NA

In Thousands of Metric Tons

Russia

Singapore

United Kingdom

United States

Total

1,084 1,584 1,951 1,429 1,705 1,033 1,210 1,338 1,410 705

28 38 36 31 39 38 32 NA NA NA

294 276 293 255 256 260 164 NA NA NA

1,284 1,249 1,383 1,557 1,729 1,865 1,866 1,939 1,801 1,556

6,465 6,452 6,707 6,645 8,405 8,465 7,984 5,228 5,151 5,462

1

Preliminary. 2 Forecast. 3 Data through 2000, includes beef, veal, pork, sheep and goat meat. Beginning 2001, excludes sheep and goat. Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Total Red Meat Exports3 (Carcass Weight Equivalent) of Principal Countries Year

In Thousands of Metric Tons

Argentina

Australia

Brazil

Canada

China

Denmark

France

India

Ireland

Netherlands

522 498 460 304 360 358 168 348 330 350

1,374 1,311 1,465 1,596 1,671 1,762 1,464 1,444 1,333 1,300

320 304 314 411 573 655 1,085 1,281 1,570 1,370

576 703 802 860 1,046 1,181 1,302 1,410 1,240 615

328 280 267 242 141 133 199 269 240 38

399 387 531 490 594 590 555 NA NA NA

302 290 282 214 333 222 185 NA NA NA

206 220 231 263 236 376 370 416 465 520

367 305 271 308 369 284 77 NA NA NA

136 195 202 150 209 214 147 NA NA NA

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 20042

New Zealand

United States

World Total

864 861 979 956 892 905 516 503 535 535

1,186 1,294 1,446 1,546 1,677 1,705 1,737 1,819 1,918 1,207

8,219 8,361 9,003 8,898 10,065 10,022 8,924 6,386 6,400 6,934

1

Preliminary. 2 Forecast. 3 Data through 2000, includes beef, veal, pork, sheep and goat meat. Beginning 2001, excludes sheep and goat. Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

United States Meat Imports by Type of Product ---------------- Beef and Veal ----------------

Fresh

Frozen

Other Prepared or Preserved

157,471 179,121 175,540 227,874 262,985 295,820 337,899 336,117 368,529

561,906 535,328 466,378 412,805 469,949 527,063 542,524 608,737 618,897

73,880 74,704 65,399 66,719 63,181 68,884 82,669 73,750 73,713

Year

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 1

Preliminary.

NSE = Not specified elsewhere.

Lamb, Mutton and Goat, Except Canned

24,468 23,276 29,844 33,009 37,848 51,630 50,209 59,968 66,785

------------------------- Pork -------------------------

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11

--------------- Beef and Veal --------------Prepared Fresh and and Chilled Frozen Preserved

1

181,282 242,391 262,381 273,276 316,534 346,403 370,184 395,588 393,105

Preliminary.

229,353 275,067 319,416 324,329 359,460 352,050 414,458 417,538 362,972

Fresh and Chilled

Frozen

Other Prepared or Preserved

126,831 130,648 133,101 125,220 126,061 146,965 188,556 229,395 240,275

80,821 78,378 61,286 58,336 65,000 70,227 77,638 91,446 84,687

94,238 94,013 79,155 72,650 72,903 76,230 84,207 92,672 83,724

Variety Meats, Fresh, hilled and Frozen

Other Livestock Meats NSE

Total

25,400 27,511 26,081 32,579 44,317 47,031 51,640 57,388 62,541

13,371 13,012 12,539 13,744 14,215 13,058 13,625 14,281 16,723

1,158,385 1,155,990 1,049,324 1,042,934 1,156,457 1,296,907 1,428,966 1,563,753 1,615,873

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

United States Meat Exports by Type of Product

Year

In Metric Tons

14,477 13,419 13,651 14,577 15,227 17,966 19,323 21,791 23,932

Lamb and Mutton, Fresh or Frozen

3,608 3,766 2,511 2,478 2,545 2,528 2,219 2,184 2,770

In Metric Tons

------------------------ Pork ---------------------------Prepared Fresh and and Preserved Chilled Frozen

59,479 80,609 100,235 101,975 134,684 147,006 160,910 208,055 227,807

69,562 68,805 127,835 166,058 151,121 209,134 225,492 185,241 247,461

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

19,230 27,960 35,766 38,481 38,301 43,789 47,898 44,836 52,788

Variety Meats, Fresh, Chilled or Frozen

Other Meats

Total

356,232 394,740 465,919 495,075 469,233 495,495 522,994 600,241 682,261

234,899 301,112 353,207 434,759 435,258 423,980 455,561 503,942 513,969

1,168,121 1,407,868 1,680,921 1,851,007 1,922,362 2,038,352 2,219,038 2,379,414 2,507,064

169

MEATS

Cents Per Pound ----- Choice, 1-3, 550-700 Pound (Jan. 1975 - date)

Exports and Imports of Meats in the United States (Carcass Weight Equivalent)4 Year

1994 1995 1996 1997 1998 1999 2000 2001 20021 20032

1,611 1,821 1,877 2,136 2,171 2,410 2,468 2,269 2,447 2,565

9 6 6 5 6 5 6 7 7 5

549 787 970 1,044 1,229 1,278 1,287 1,559 1,614 1,645

2,169 2,614 2,853 3,185 3,407 3,693 3,761 3,835 4,068 4,215

2,369 2,103 2,073 2,343 2,643 2,873 3,031 3,163 3,218 3,305

49 64 73 83 112 112 130 146 160 172

1 Preliminary. 2 Estimate. 3 Forecast. 4 I ncludes meat content of minor meats and of mixed products. U.S. Department of Agriculture (FAS-USDA)

Average Wholesale Prices of Meats in the United States

Pork

Net Farm Value of Pork5

C ow B eef Canner & Cutter, Central US

98.80 117.20 ----------------------

66.70 84.60 ----------------------

68.22 58.18 64.30 61.33 66.51 72.57 79.50 NA NA

106.68 103.09 103.26 99.82 111.06 117.51 122.61 114.42 143.58

Composite Wholesale

Year

of Beef, Choice, Grade 3

of Pork3

B eef

1995 1996 1997 1998 1999 2000 2001 2002 1 20032

284.30 280.20 279.53 277.12 287.77 306.42 337.78 331.54 374.62

194.80 220.90 231.54 239.18 241.44 258.19 269.38 265.76 265.82

163.90 158.10 ----------------------

4

---------- Value ----------

743 664 620 634 705 827 967 951 1,071 1,080

Source: Economic Research Service,

Pork Carcass Cut-out, US No. 2

59.98 72.39 70.87 52.80 53.45 64.07 66.83 53.49 58.87

Lamb Carcass, Pork ChoiceLoins, Prime, East Coast, Central US, 55-65 Lbs. 14-18 Lbs.

163.45 177.58 178.99 156.75 170.29 177.78 148.96 151.28 185.21

107.74 118.49 108.06 99.75 100.38 117.13 116.97 97.98 100.96

Preliminary. 2 Estimate. 3 Sold as retail cuts (ham, bacon, loin, etc.). 4 Quantity equivalent to 1 pound of retail cuts. minus farm by-product allowance. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

170

3,161 2,832 2,764 3,061 3,461 3,812 4,128 4,260 4,449 4,557

In Cents Per Pound

Boxed Beef Cut-out, Choice 1-3, Central US, 550-700 L b s.

------ Retail Price ------

1

In Millions of Pounds

------------------------------------------- Exports ------------------------------------------- ----------------------------------------------- Imports ----------------------------------------------All B eef Lamb and All B eef Lamb and Meat and Veal Mutton Pork4 Meat and Veal Mutton Pork4

5

Skinned Ham, Central US, 20-26 Lbs.

Pork Bellies, Central US, 12-14 Lbs.

58.56 72.41 62.75 44.75 45.18 52.02 56.86 41.14 45.48

43.04 69.97 71.41 51.94 57.12 77.46 78.61 69.91 86.42

Portion of gross farm value

MEATS Average Wholesale Price of Boxed Beef Cut-Out1, Choice, at Central Markets Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

112.11 112.17 101.71 101.90 100.26 101.37 114.74 129.78 111.99 128.59

112.23 111.12 98.86 98.98 96.27 99.37 112.59 128.87 111.53 128.77

115.03 107.87 96.36 104.87 95.34 103.62 118.42 129.58 120.54 126.35

114.98 103.03 96.01 104.17 98.32 107.55 123.45 128.93 116.61 133.03

108.85 104.21 96.90 105.97 102.09 110.89 124.88 129.03 115.14 141.44

102.92 107.65 100.70 101.83 100.38 115.39 123.30 126.82 114.06 141.16

104.19 103.03 101.53 102.38 99.96 111.14 115.85 118.93 109.88 130.13

108.38 102.55 104.43 105.14 104.28 114.00 111.20 120.20 110.93 139.91

105.49 105.82 105.93 104.06 99.28 115.13 108.68 119.30 111.83 156.64

103.63 107.77 109.10 103.72 102.08 119.21 112.58 115.93 111.64 176.06

106.66 108.88 117.53 104.63 102.61 117.38 118.05 110.95 116.41 167.15

107.22 106.08 108.03 101.50 97.49 117.71 126.41 113.04 122.45 153.71

108.47 106.68 103.09 103.26 99.86 111.05 117.51 122.61 114.42 143.58

Choice 1-3, 550-700 pounds.

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production (Commercial) of All Red Meats in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Millions of Pounds (Carcass Weight)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

3,366 3,560 3,823 3,735 3,836 3,833 3,784 3,935 4,081 4,075

3,126 3,210 3,519 3,278 3,476 3,535 3,767 3,761 3,501 3,496

3,591 3,751 3,512 3,444 3,726 4,016 4,044 3,761 3,677 3,705

3,382 3,304 3,690 3,592 3,701 3,824 3,460 3,506 3,902 3,845

3,431 3,758 3,767 3,571 3,582 3,604 3,878 3,881 4,018 3,944

3,615 3,798 3,439 3,492 3,732 3,940 3,941 3,758 3,813 3,948

3,361 3,424 3,585 3,657 3,781 3,781 3,644 3,643 4,016 4,046

3,756 3,860 3,707 3,619 3,770 3,913 4,113 4,060 4,141 3,913

3,720 3,697 3,396 3,665 3,827 3,933 3,861 3,664 3,873 4,007

3,795 3,795 3,827 4,005 4,033 4,002 4,096 4,264 4,382 4,155

3,666 3,748 3,435 3,453 3,725 3,895 3,919 3,970 3,908 3,524

3,714 3,553 3,432 3,715 3,945 3,862 3,619 3,813 3,859 3,876

42,523 43,458 43,132 43,226 45,134 46,138 46,126 46,016 47,171 46,534

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Cold Storage Holdings of All2 Meats in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31

In Cents Per Pound

Jan.

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

726.7 802.0 749.7 621.3 722.4 821.0 748.3 836.2 946.8 1,011.5

807.7 838.7 779.5 655.9 802.8 833.0 853.1 907.8 982.6 1,015.2

800.5 833.8 781.6 669.9 825.8 863.1 913.9 852.6 970.7 978.5

842.5 834.0 729.3 719.5 816.3 883.5 934.3 787.9 961.9 951.9

858.0 852.7 748.6 752.5 849.3 936.4 951.3 771.4 996.6 926.7

837.5 831.2 716.2 719.7 814.3 901.2 963.5 772.5 973.0 901.5

822.6 820.8 687.9 742.9 771.0 843.9 926.7 742.2 918.0 842.5

816.2 803.6 642.7 726.3 747.2 810.4 896.2 717.4 912.6 825.0

771.9 733.4 657.4 731.5 728.2 834.9 881.0 732.6 950.7 817.3

788.5 711.3 678.4 728.2 738.8 746.3 871.1 775.3 997.8 832.2

822.7 732.3 655.5 739.1 794.9 780.3 868.0 849.0 1,038.9 836.9

827.5 757.0 627.1 741.0 794.1 750.5 883.0 880.9 997.7 828.1

1

Preliminary. 2 I ncludes beef and veal, mutton and lamb, pork and products, rendered pork fat, and miscellaneous meats. Excludes lard. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Cold Storage Holdings of Froz en Beef in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31 1

In Millions of Pounds

Jan. 1

F eb. 1

Mar. 1

Apr. 1

May 1

June 1

July 1

Aug. 1

Sept. 1

Oct. 1

Nov. 1

D e c. 1

401.0 411.2 389.6 284.9 350.2 296.4 314.2 401.7 460.7 524.6

430.2 420.3 367.9 290.3 331.1 301.1 350.9 410.9 455.5 482.4

414.4 407.7 362.6 261.7 334.9 300.1 369.0 360.2 439.0 442.1

423.2 385.4 347.3 290.4 329.7 309.2 378.2 332.6 410.5 403.1

399.5 392.2 335.6 285.4 335.5 316.8 396.1 315.3 405.7 389.6

367.9 359.1 307.4 278.7 310.2 306.7 401.1 325.1 401.8 385.1

379.4 352.3 306.7 305.6 316.5 293.1 405.1 340.8 396.9 371.5

388.9 359.3 291.1 302.8 303.0 292.7 391.5 351.4 416.5 368.2

377.2 344.9 305.2 324.6 306.7 377.9 398.8 373.2 461.8 371.0

406.8 347.7 312.2 349.1 323.1 294.4 405.7 382.8 494.9 379.8

410.6 381.6 295.9 351.6 358.2 322.5 404.4 395.1 525.2 375.2

419.5 381.4 288.1 378.2 328.2 308.9 411.8 427.6 512.6 373.8

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

171

Mercury Mercury was known to the ancient Hindus and Chinese, and was also found in Egyptian tombs dating back to the 1500s BC. The ancient Greeks used Mercury in ointments, and the Romans used it in cosmetics. Alchemists thought mercury turned into gold when it hardened. Mercury, also called quicksilver, is a heavy, silvery, toxic, transitional metal. Mercury is the only common metal that is liquid at room temperatures. When subjected to a pressure of 7,640 atmospheres (7.7 million millibars), mercury becomes a solid. Mercury dissolves in nitric or concentrated sulfuric acid, but is resistant to alkalis. It is a poor conductor of heat. Mercury has superconductivity when cooled to sufficiently low temperatures. It has a freezing point of about –39 degrees Celsius and a boiling point of about 357 degrees Celsius. The atomic symbol for mercury is Hg and its atomic number is 80. Mercury is found in its pure form or combined in small amounts with silvers, but is found most often in the ore cinnabar, a mineral consisting of mercuric sulfide. By heating the cinnabar ore in air until the mercuric sulfide breaks down, pure mercury metal is produced. Mercury forms alloys called amalgams with all common metals except iron and platinum. Most mercury produced is used for the manufacture of industrial chemicals and for electrical and electronic applications. Other uses for mercury include its use in gold recovery from ores, barometers, diffusion pumps, laboratory instruments, mercury-vapor lamps, pesticides, batteries, and catalysts. A decline in mercury production and usage since the 1970s reflects a trend for using mer-

World Mine Production of Mercury Year

1

Preliminary.

In Metric Tons (1 tonne = 29.008216 flasks)

Algeria

China

Finland

Kyrgyzstan

414 292 368 447 224 240 216 320 800

470 780 510 830 230 200 200 190 250

83 90 88 63 54 40 76 71 70

379 380 584 550 250 300 257 300 250

1994 1995 1996 1997 1998 1999 2000 20011 20022 2

Mexico

Spain

Tajikistan

Turkey

Ukraine

United States

World Total

12 15 15 15 15 15 15 15 15

393 1,497 862 389 675 433 500 500 300

55 50 45 40 35 35 40 40 20

----------------------------

50 40 30 25 20 NA NA -------

W W W W NA NA NA NA NA

1,960 3,190 2,560 2,410 1,580 1,310 1,350 1,490 1,800

Estimate. W = Withheld to avoid disclosing company proprietary data.

Salient Statistics of Mercury in the United States Year

1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1

cury substitutes due to its toxicity. Prices – The average free market price of mercury in 2003 rose sharply by 19.5% from 2002 to a 6-year high of $184.07 per flask (34.5 kilograms). That was right on the 10-year average price. Supply – World mine production of mercury in 2002 rose +20.8% to 1,800 metric tons from 1,490 metric tons in 2001. The world’s largest miners of mercury are Algeria with 44.4% of world production in 2002, followed by Spain (16.7%), and China and Kyrgyzstan (both with 13.9%). World mercury resources are estimated in excess of 500,000 tons, mostly in Kyrgyzstan and Spain, which if accurate, suggests a potential supply sufficient to last at least a century, based on declining world usage rates. Demand – The breakdown of domestic consumption of mercury by particular categories is no longer available, but the data as of 1997 showed that chlorine and caustic soda accounted for 46% of US mercury consumption, followed by wiring devices and switches (17%), dental equipment (12%), electrical lighting (8%), and measuring control instruments (7%). Substitutes for mercury include lithium and composite ceramic materials. Trade – US foreign trade in mercury is small. US imports of mercury in 2002 more than doubled to 209 metric tons from 100 metric tons in 2001. At the same time, the US exported 201 metric tons of mercury in 2002, up from 108 metric tons in 2000. The imports were mostly from Chile and Peru. Exports are scattered, but India and the Netherlands were generally the largest takers.

466 534 446 389 NA NA NA NA NA

----------------------------

Consumer & Dealer Stocks, Dec. 31

Industrial Demand

Exports

Imports

469 321 446 203 NA NA NA NA NA

483 436 372 346 NA NA NA NA NA

316 179 45 134 63 181 182 108 201

129 377 340 164 128 62 103 100 209

86 -------------------------

Preliminary. 2 Estimate. 3 Secondary mercury shipped from the Department of Energy. Source: U.S. Geological Survey (USGS)

172

Source: U.S. Geological Survey (USGS)

In Metric Tons

-------------------- Secondary Production -------------------Priducing GovernNDS4 Mines Industrial ment3 Shipments

7 8 6 5 NA NA NA NA NA

NA = Not available.

4

National Defense Stockpile.

NA = Not available.

MERCURY

USD Per 76 Lb. Flask ----- 75 Lb. Flask, New York (Dec. 1910 - Dec. 1931) 76 Lb. Flask, New York (Jan. 1932 - date)

Average Price of Mercury in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Dollars Per Flask of 76 Pounds (34.5 Kilograms)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

175.00 235.00 250.00 233.98 187.00 175.00 150.00 142.00 154.00 165.43

175.00 240.00 250.00 232.76 187.00 152.63 157.88 142.00 154.00 175.00

179.78 241.30 261.67 228.88 187.00 150.00 167.50 142.00 154.00 175.00

180.00 250.00 268.33 228.64 187.00 150.00 167.50 142.00 154.00 175.00

180.95 250.00 265.00 220.00 187.00 150.00 167.50 142.00 154.00 185.23

186.64 250.00 265.00 199.05 181.55 150.00 158.23 143.71 154.00 187.50

196.50 250.00 265.00 200.00 175.00 150.00 142.00 154.00 154.00 187.50

200.00 250.00 265.00 198.10 175.00 150.00 142.00 154.00 154.00 187.50

203.10 250.00 265.00 190.83 175.00 150.00 142.00 154.00 154.00 187.50

205.00 250.00 265.00 198.83 175.00 150.00 142.00 154.00 154.00 187.50

217.50 250.00 262.63 191.47 175.00 150.00 142.00 154.00 154.00 195.63

230.71 250.00 235.48 187.00 175.00 150.00 142.00 154.00 154.00 200.00

194.18 247.19 259.84 209.13 180.55 152.09 151.90 148.12 154.00 184.07

Source: American Metal Market (AMM)

Mercu ry C o n su med in th e U n ited S tates Year

Batteri es3

Catalysts, Mi sc.

Dental Equi p.

Electrical Li ghti ng3

General Lab Use

Measuri ng Contraol Instrument

448 250 106 18 13 10 6 -------------

354 379 247 184 209 180 135 154 136 160

86 40 29 26 20 18 25 -------------

53 39 44 41 42 35 24 32 31 40

31 31 33 39 55 38 27 30 29 29

26 18 32 30 28 26 24 -------------

77 87 108 90 80 65 53 43 41 24

1988 1989 1990 1991 1992 1993 1994 1995 19961 19972 1

In Metric Tons

Chlori ne & Causti c Soda

P reliminary.

2

E stimate.

W = Withheld proprietary data.

S ource: U.S . Geolog ical S urvey (US GS )

Pai nts

Wi ri ng Devi ces & Switches3

Other Uses

Total

197 192 14 6 -------------------------

176 141 70 71 82 83 79 84 49 57

55 32 38 49 92 103 110 93 86 36

1,503 1,212 720 554 621 558 483 436 372 346

173

Milk Evidence of man’s use of animal milk as food was discovered in a temple in the Euphrates Valley near Babylon, dating back to 3,000 BC. Humans drink the milk produced from a variety of domesticated mammals, including cows, goats, sheep, camels, reindeer, buffaloes, and llama. In India, half of all milk consumed is from water buffalo. Camels’ milk spoils slower than other types of milk in the hot desert. But the vast majority of milk used for commercial production and consumption comes from cows. Milk directly from a cow in its natural form is called raw milk. Raw milk is processed by spinning it in a centrifuge, homogenizing it to create a consistent texture (i.e., by forcing hot milk under high pressure through small nozzles), and then sterilizing it through pasteurization (i.e., heating to a high temperature for a specified length of time to destroy pathogenic bacteria). Condensed, powdered, and evaporated milk are produced by evaporating some or all of the water content. Whole milk contains 3.5% milk fat. Lower-fat milks include 2% low-fat milk, 1% low- fat milk, and skim milk, which has only 1/2 gram of milk fat per serving. The Chicago Mercantile Exchange has three different milk futures contracts: Milk Class III which is milk used in the manufacturing of cheese, Milk Class IV which is milk used in the production of butter and all dried milk products, and Nonfat Dry Milk which is used in commercial or consumer cooking or to reconstitute nonfat milk by the consumer. The Milk Class III contract has the largest volume and open interest. Prices – The average price received by farmers of all milk sold to plants was $12.51 per hundred pounds in 2003,

World Fluid Milk Production (Cow 's Milk)

1

In Thousands of Metric Tons

Brazil

France

Germany

India

Italy

Netherlands

New Zealand

Poland

Russia

Ukraine

United Kingdom

United States

World Total

19,480 20,600 21,630 21,700 22,134 22,300 22,635 23,000

25,795 24,893 24,793 24,892 24,890 24,890 NA NA

28,776 28,702 28,378 28,400 28,400 28,400 NA NA

69,000 72,000 74,500 77,000 79,250 81,000 82,000 85,000

11,621 10,818 10,736 10,444 10,350 10,350 NA NA

11,023 10,922 11,000 11,174 10,800 10,500 NA NA

10,405 11,500 11,640 11,070 12,235 13,162 13,925 14,204

11,720 12,010 12,530 12,099 11,830 11,924 12,030 12,230

35,800 34,100 33,000 32,000 31,900 33,000 33,250 33,200

16,000 14,730 14,550 13,362 12,658 13,444 14,000 14,300

14,672 14,857 14,218 14,584 14,200 14,300 NA NA

69,857 70,802 71,373 73,807 76,004 74,996 77,035 77,970

364,321 365,609 368,028 371,572 375,676 378,823 NA NA

Year

1996 1997 1998 1999 2000 2001 2002 1 20032

Preliminary.

2

Forecast.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Salient Statistics of Milk in the United States

Year

1997 1998 1999 2000 2001 20021 20032 1

up from $12.10 in 2002 but well below the record $15.43 in 1998. The average price received by farmers for fluid grade milk averaged $12.53 per hundred pounds in 2003, up from $12.10 in 2002 but much lower than the record high of $15.47 posted in 1998. The average price received by farmers for manufacturing grade milk was $11.73 per hundred pounds in 2003, up from $10.92 in 2002 but below the record of $14.36 in 1998. Supply – India is the world’s largest producer of milk with 85.000 million metric tons of production in 2003. The second and third largest producers are the US with 77.970 million metric tons of production and Russia with 33.200 million metric tons. US milk production in 2003 was forecast at 169.684 billion pounds, slightly below the 2002 level of 169.8 billion pounds. The number of dairy cows on US farms has fallen in the past 3 decades from the 12 million level seen in 1970, but has stabilized in the past 6 years in the range of 9.1-9.2 million. Dairy farmers have been able to increase milk production even with fewer cows because of a dramatic increase in milk yield per cow. In 2002, the average cow produced 18,573 pounds of milk per year, up sharply by 26% from 14,782 pounds in 1990, by 56% from 11,891 pounds in 1980, and by 90% from 9,751 pounds in 1970. Demand – Per capita consumption of milk has fallen in the past several decades and hit 208 pounds per year in 2001, down fairly sharply from 233 pounds in 1990 and 277 pounds in 1970. Trade – US imports of milk totaled 4.888 billion pounds in 2003, down from 5.104 billion in 2002.

In Millions of Pounds

Average Farm Price P er Number - Received Per Cw t. ----Capita of Milk Cows on -------------------------------- Supply -------------------------------- -------------------- Utiliz ation -------------------Milk, ConsumpMilk All Milk, Eligible Farms3 ----- Production ----Manution6 ----- Domestic ----(Thou- Per Cow4 Beginning Fed to Total Whole- for Fluid facturing (Fluid Milk Total sale Market Grade sands) (Pounds) Stocks5 Imports Humans Use in Lbs.) Total4 Supply Exports5 Calves

9,252 9,154 9,156 9,206 9,114 9,141 9,084

16,871 17,189 17,772 18,202 18,158 18,573 18,747

156,091 157,348 162,716 167,658 165,336 169,758 170,312

4,700 4,900 5,300 6,186 7,010 7,259 9,889

2,700 4,600 4,700 4,445 5,716 5,103 4,895

163,491 166,848 172,716 178,289 178,062 182,120 185,096

2,094 1,408 1,303 -------------

1,138 154,816 158,048 1,162 157,352 159,922 1,109 163,316 165,728 1,107 ------1,084 ------980 ----------------

13.33 15.43 14.37 12.33 14.98 12.10 12.51

13.38 15.47 14.43 12.38 14.99 12.10 12.53

12.78 14.36 13.78 10.54 14.78 10.92 11.73

216 213 213 210 208 -------

Preliminary. 2 Estimate. 3 Average number on farms during year including dry cows, excluding heifers not yet fresh. 4 Excludes milk sucked by calves. 5 Government and commercial. 6 Product pounds of commercial sales and on farm consumption. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

174

MILK Utiliz ation of Milk in the United States

In Millions of Pounds (Milk Equivalent) Bulk Condensed

Year

Butter from Whey Creamery Cream Butter2

Cottage Cheese Cheese3 (Creamed)

1996 1997 1998 1999 2000 2001 1

4,911 4,966 5,094 5,392 5,538 5,525

53,937 55,719 56,827 60,154 62,257 61,088

26,187 25,714 26,211 28,657 28,059 27,675

Canned Milk4

Unsweetened

Sweetened

Dry Whole Milk Products

1,013 1,208 1,017 1,037 965 991

242 227 222 216 180 171

266 314 186 171 163 163

983 898 1,050 868 815 304

------ Whole Milk ------

461 NA NA NA NA NA

Ice Cream5

Other Frozen Dairy Products

2,058 2,112 2,151 2,305 2,218 2,240

13,190 13,859 14,301 14,370 14,447 14,774

Other Manu- --- Used on Farms --factured FarmPor- Churned Butter Total ducts6

217 686 697 682 700 701

301 256 244 219 196 180

1,476 1,394 1,406 1,328 1,303 1,264

1

Preliminary. 2 Excludes whey butter. 3 American and other. 4 I ncludes evaporated and sweetened condensed. 5 Milk equivalent of butter and condensed milk used in ice cream. 6 Whole milk equivalent of dry cream, malted milk powder, part-skim milk, dry or concentrated ice cream mix, dehydrated butterfat and other miscellaneous products using milkfat. Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Milk-Feed Price Ratio1 in the United States Year

1996 1997 1998 1999 2000 2001 2002 2003 2

In Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

2.59 2.44 2.75 4.09 3.07 3.08 3.03 2.40

2.42 2.35 2.77 3.67 2.94 3.03 3.00 2.35

2.35 2.27 2.73 3.57 2.91 3.24 2.89 2.27

2.17 2.14 2.70 2.97 2.84 3.29 2.81 2.25

2.10 2.07 2.58 2.89 2.63 3.41 2.64 2.19

2.17 2.12 2.89 3.17 2.96 3.74 2.54 2.23

2.19 2.24 3.00 3.61 3.29 3.60 2.34 2.58

2.28 2.35 3.60 3.85 3.38 3.62 2.27 2.88

2.64 2.44 3.98 4.09 3.34 3.75 2.30 3.11

2.98 2.63 4.18 3.96 3.12 3.55 2.46 3.24

2.85 2.73 4.22 3.87 3.03 3.29 2.44 3.05

2.70 2.80 4.27 3.24 3.04 2.99 2.44 2.81

2.45 2.38 3.31 3.58 3.05 3.38 2.60 2.61

1 Pounds of 16% protein mixed dairy feed equal in value to one pound of whole milk. U.S. Department of Agriculture (ERS-USDA)

Milk Production1 in the United States Year

1997 1998 1999 2000 2001 2002 2003 2 1

2

Preliminary.

Source: Economic Research Service,

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

13,126 13,282 13,628 14,263 13,998 14,304 14,584

12,141 12,188 12,607 13,606 12,894 13,229 13,441

13,694 13,694 14,270 14,761 14,375 14,864 15,044

13,406 13,510 13,938 14,390 14,078 14,580 14,634

13,902 14,015 14,458 14,791 14,646 15,118 15,003

13,375 13,296 13,633 14,008 13,957 14,317 14,328

13,319 13,162 13,444 14,117 13,877 14,196 14,263

13,059 12,942 13,357 13,798 13,564 14,128 14,015

12,427 12,415 12,970 13,246 13,129 13,467 13,468

12,814 12,956 13,412 13,708 13,611 13,866 13,898

12,362 12,611 13,140 13,212 13,305 13,478 13,470

12,977 13,370 13,854 13,758 13,902 14,211 14,164

156,602 157,441 162,711 167,658 165,336 169,758 170,312

Excludes milk sucked by calves.

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by U.S. Farmers for All Milk (Sold to Plants) In Dollars Per Hundred Pounds (Cwt.) Year

1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

13.40 14.70 17.40 12.00 13.20 13.40 11.70

13.50 14.70 15.50 11.80 13.00 13.10 11.40

13.50 14.40 15.00 11.90 13.90 12.70 11.00

13.20 14.00 12.60 11.90 14.60 12.50 11.00

12.70 13.30 12.70 12.00 15.50 12.10 11.10

12.20 14.10 13.10 12.30 16.20 11.50 11.10

12.10 14.20 13.80 12.60 16.20 11.10 12.00

12.70 15.50 15.10 12.50 16.50 11.30 13.20

13.10 16.70 15.70 12.90 17.10 11.60 14.40

14.10 17.70 14.90 12.50 15.60 12.10 15.00

14.70 17.80 14.40 12.60 14.40 11.90 14.50

14.80 18.00 12.20 13.00 13.50 11.90 13.70

13.33 15.43 14.37 12.33 14.98 12.10 12.51

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Farm Price of Milk Eligible for Fluid Market Year

1997 1998 1999 2000 2001 2002 2003 1 1

In Dollars Per Hundred Pounds (Cwt.)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

13.40 14.70 17.50 12.00 13.20 13.40 11.80

13.50 14.80 15.60 11.90 13.10 13.10 11.40

13.60 14.50 15.10 12.00 13.90 12.70 11.00

13.20 14.00 12.60 11.90 14.60 12.50 11.10

12.80 13.30 12.80 12.10 15.50 12.10 11.10

12.30 14.10 13.20 12.30 16.20 11.50 11.10

12.20 14.20 13.90 12.60 16.20 11.10 12.00

12.80 15.50 15.00 12.50 16.50 11.30 13.20

13.10 16.80 15.70 13.00 17.10 11.60 14.40

14.10 17.80 15.00 12.60 15.60 12.10 15.00

14.70 17.80 14.50 12.60 14.50 11.90 14.50

14.80 18.10 12.30 13.10 13.50 11.90 13.80

13.38 15.47 14.43 12.38 14.99 12.10 12.53

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

175

Molasses Molasses, also called treacle, is a dark brown viscous liquid obtained as a by-product in the processing of both beet and cane sugar. Molasses is the syrup remaining from the crystallization of sugar cane and sugar beet juice. Sugar cane molasses accounts for approximately 80% of molasses production. Beet molasses is a product of the sugar beet industry, and accounts for approximately 20% of molasses production. In sugar refining, blackstrap molasses is obtained after the last of three boiling or extraction processes that sugar cane goes through to produce molasses. The third and final separation is called blackstrap molasses, which is a thick dark liquid syrup. Blackstrap molasses is used worldwide mostly as a feed supplement for livestock. Other uses for molasses include cooking or baking and the production of alcohol. Prices – The price of molasses fell in 2003 due to the plunge in sugar prices during the year, which closed the year near 20-year lows. Molasses and sugar prices show a

fairly high correlation since molasses is a by-product of sugar production. In fact, statistical analysis of CRB data shows a correlation factor of 0.64 between molasses and sugar prices over the past 3 decades. The wholesale price of blackstrap molasses (cane) at Orleans fell to $58.07 per ton in 2003 from $64.67 in 2002 and the 7-year high of 67.95 posted in 2001. The 2003 price of $58.07 per ton translates into a per gallon price of 34 cents per gallon (dollars per ton divided by 171 equals cents per gallon). Supply – The production of molasses is highly correlated with the production of sugar, and by extension sugarcane and sugar beets. The largest producers of sugarcane are India, Brazil, China, and Thailand. US production of sugarcane amounts to less than 3% of world production. However, when it comes to using sugar beets to produce sugar, the US is in the top tier of producers along with Germany and France.

Wo rld P ro d u ctio n o f S u g arcan e, b y S elected C o u n tries Crop Year

1990-1 1991-2 1992-3 1993-4 1994-5 1995-6 1996-71 1997-82 1

Australia

Brazil

Chi na

Cuba

25,140 75,000 21,306 87,000 29,400 90,000 31,951 91,000 34,860 110,000 37,378 93,000 39,878 101,000 40,878 105,000

57,620 67,898 73,011 63,549 60,300 65,417 68,500 69,400

67,500 62,000 47,150 46,000 39,000 45,500 45,000 45,500

P reliminary.

2

E stimate.

India Indonesi a

135,494 148,814 123,985 116,638 159,593 184,708 147,858 137,184

28,074 28,100 32,000 33,000 30,545 30,000 28,600 29,000

Mexi co

Paki stan

36,000 35,300 39,700 34,100 40,134 42,300 42,000

22,604 24,796 27,276 34,182 34,193 28,151 25,580 31,600

South Africa

18,600 22,816 23,850 22,753 18,415 22,774 23,500

18,083 20,078 12,955 11,244 15,683 16,750 22,512

1

24,018 26,272 26,264 26,680 25,485 25,835 24,055

707,497 753,303 719,671 706,433 783,373 842,937 845,645

Uni ted States

World Total

France

Germany

Italy

Poland

Russia

Spain

Turkey

Ukrai ne

United Ki ngdom

6,857 6,043 6,174 6,120 5,729 6,291 6,100 6,000

14,525 16,289 15,069 11,938 12,406 13,984 13,900 14,000

25,520 24,403 26,491 25,514 23,943 25,121 24,400 24,500

30,366 25,926 27,177 28,606 24,211 26,049 27,000 26,500

11,600 11,400 14,762 10,510 11,905 12,932 11,150 12,500

16,721 11,412 11,052 15,621 11,630 13,309 17,460 14,000

31,091 24,280 25,548 25,468 13,945 19,110 16,500 17,000

7,358 6,679 7,234 8,622 8,100 7,450 7,700 6,800

13,986 15,474 15,563 15,463 12,757 10,989 14,383 15,100

44,265 36,168 28,783 33,717 28,138 28,000 25,500 25,400

8,000 7,672 9,180 8,988 8,360 8,360 8,432 8,400

2

E stimate.

24,959 303,149 25,485 277,368 26,438 274,751 23,813 272,746 29,024 247,798 25,460 257,984 24,104 254,335 26,134 256,393

S ource: E conomic Research S ervice, U.S . Depart ment of Ag ricult ure (E RS -US DA)

In Dollars Per Short Ton2

---------------------------------------------------------------------- Blackstrap --------------------------------------------------------------------- ------------- Beet Molasses ------------Red Montana, River Wyoming New South Upper California Valley4 & Nebraska Orleans Florida Baltimore Mississippi Savannah Ports3 Houston

74.88 58.14 46.35 33.77 44.64 67.97 64.57 57.67

83.07 68.00 59.92 49.15 58.34 76.79 74.23 66.72

91.27 76.84 63.37 51.06 61.73 90.12 87.02 81.11

104.71 90.69 78.00 65.50 71.66 85.45 84.01 78.78

92.55 77.51 68.75 56.63 65.42 83.30 87.50 81.18

Preliminary. 2 To convert dollars per short ton to cents per gallon divide by 171. Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

176

40,563 47,505 34,711 37,569 50,459 57,693 59,000 60,000

In Thousands of Metri c Tons

U.S. Annual Average Prices of Molasses, by Types (F.O.B. Tank Car or Truck)

Year

World Total

Chi na

P reliminary.

1996 1997 1998 1999 2000 2001 2002 2 0 0 31

Uni ted States

Thai land

Belgi umLuxembourg

1990-1 1991-2 1992-3 1993-4 1994-5 1995-6 1996-71 1997-82 1

Phi li ppines

S ource: E conomic Research S ervice, U.S . Depart ment of Ag ricult ure (E RS -US DA)

Wo rld P ro d u ctio n o f S u g arb eet, b y S elected C o u n tries Year

In Thousands of Metric Tons

97.11 83.38 69.30 58.32 71.78 92.82 84.81 78.61 3

79.41 62.13 48.85 36.30 48.94 72.33 68.76 62.92

Los Angeles and Stockton.

4

------------------------North Dakota and Minnesota.

-------------------------

MOLASSES

-----

USD Per Ton Blackstrap, New York (Oct. 1925 - Dec. 1967) Blackstrap, New Orleans (Jan. 1968 - date)

S alien t S tatistics o f Mo lasses3 in th e U n ited S tates

In Metri c Tons

-------------------------------------- P ro d u ctio n --------------------------------------

Year

1989 1990 1991 1992 1993 1994 1995 1996 1 19972

------------------------ Main lan d -----------------------Refi ners Mai nland BlackPuerto Hawaii Hi lls4 strap Beet Ri co

218,009 228,968 188,252 182,849 187,915 180,884 146,000 ---------

808,355 741,749 807,652 782,566 831,661 824,453 886,826 NA 900,000

122,786 105,124 126,000 123,000 113,000 114,000 114,000 NA 100,000

974,179 948,820 1,165,962 950,312 692,465 1,200,000 1,040,000 NA 1,200,000

34,864 24,959 27,882 25,097 22,802 18,531 16,156 ---------

In Shi pments From Hawai i

169,270 214,045 184,337 183,657 190,371 151,172 146,000 NA 100,000

-------------- In ed ib le Imp o rts F ro m -------------Total Domi ni can Imports Brazi l Republi c Mexi co

926,870 107,109 1,078,924 70,986 1,258,637 10,342 1,115,863 0 1,040,858 0 1,556,640 0 1,048,726 0 NA ----1,583,755 -----

147,235 145,543 137,271 127,500 163,180 121,320 132,983 ---------

75,634 88,401 235,244 117,722 47,596 197,753 172,177 ---------

Mai nland Exports5

293,535 212,263 242,635 282,098 255,907 277,098 274,868 NA 300,000

Producti on of Edi ble Total Molasses (1,000 U.S. Supply Gallons)

2,707,925 2,876,399 3,299,953 2,873,300 2,612,448 3,459,167 2,960,684 NA 3,583,755

1,990 1,405 1,825 1,460 1,480 1,500 1,500 0 0

P reliminary. 2 E stimate. 3 F eed and industrial molasses. 4 I ncludes hig h-test molasses from froz en cane. 5 E x cluding ex ports from Hawaii and P uerto R ico. NA = Not av ailable. S ource: Ag ricult ural Market ing S ervice, U.S . Depart ment of Ag ricult ure (AMS -US DA)

1

Wholesale Price of Blackstrap Molasses (Cane) at New Orleans Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Dollars Per Short Ton

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

57.75 69.00 80.00 60.00 57.50 37.50 35.25 57.50 72.50 60.00

57.50 70.31 80.00 60.00 55.63 36.25 36.11 57.50 70.60 60.00

59.38 68.75 80.00 59.00 51.00 35.00 37.50 59.38 67.50 60.00

62.50 68.75 78.00 56.56 50.00 34.38 37.50 60.25 67.50 58.75

68.00 68.75 77.50 56.88 50.00 32.50 37.50 63.75 64.40 57.50

70.00 69.38 77.50 60.31 46.00 32.50 37.12 66.25 62.50 57.50

70.63 74.25 77.50 57.50 45.00 32.50 42.75 70.75 63.50 57.50

71.25 75.00 77.50 57.50 45.00 32.50 46.25 73.75 62.50 57.50

69.38 75.00 75.00 57.50 45.00 32.50 40.35 76.25 62.50 57.50

67.50 75.00 70.00 57.50 37.50 32.50 57.50 77.50 62.50 56.25

66.25 75.00 65.63 57.50 37.50 33.75 57.50 77.50 60.00 56.25

66.25 75.00 60.75 57.50 37.50 33.75 57.50 75.00 60.00 53.75

65.53 72.00 74.88 58.14 46.35 33.80 43.57 67.95 64.67 57.71

Preliminary.

Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

177

Molybdenum Molybdenum is a silvery-white, hard, malleable, metallic element with the symbol Mo and atomic number 42. Molybdenum melts at about 2610 degrees Celsius and boils at about 4640 degrees Celsius. Swedish chemist Carl Wilhelm Scheele discovered molybdenum in 1778. Molybdenum occurs in nature in the form of molybdenite and wulfenite. Contributing to the growth of plants, it is an important trace element in soils. Approximately 70% of the world supply of molybdenum is obtained as a by-product of copper mining. Molybdenum is chiefly used as an alloy to strengthen steel and resist corrosion. It is used for structural work, aircraft parts, and forged automobile parts because it withstands high temperatures and pressures and adds strength. Other uses include lubricants, a refractory metal in chemical applications, electron tubing, and a catalyst. Prices – The US merchant price of molybdic oxide in 2001 fell to $2.37 per pound from $2.74 per pound in 2000. That was well below the 10-year average price of $3.84. There was an upward spike in prices in the first half of 1995 to a peak of $17.00 per pound in February 1995, which skewed the 10-year average price figure higher. Supply – World production of molybdenum in 2001 fell

World Mine Production of Molybdenum Year

In Metric Tons (Contained Molybdenum)

Bulgaria

Canada3

Chile

China

Iran

Kazakhstan

Mexico

Mongolia

Peru

Russia

United States

Uzbekisten

World Total

400 -------------------

8,789 8,223 8,469 6,250 6,830 7,556 7,521

17,415 21,339 25,297 27,309 33,187 33,492 29,466

29,600 33,300 30,000 29,700 28,800 28,200 29,300

560 600 1,400 1,600 1,600 1,700 1,700

100 100 100 155 215 225 230

4,210 4,842 5,949 7,961 6,886 5,518 3,428

2,201 2,000 2,000 1,910 1,335 1,514 1,590

3,711 3,835 4,344 5,470 7,190 9,500 9,500

2,000 2,000 2,000 2,400 2,400 2,600 2,900

56,000 60,100 53,343 42,400 40,900 37,600 32,600

500 500 500 500 500 500 500

127,000 139,000 136,000 129,000 133,000 132,000 123,000

1996 1997 1998 1999 2000 2001 1 20022 1

–2.3% to 130,000 metric tons from 133,000 metric tons in 2000. The world’s largest producers of molybdenum are the US with 28.9% of world production, Chile with 25.4%, and China with 21.7%. Chile’s production has increased sharply in recent years and its 2001 production level of 33,000 metric tons was more than double that seen 10 years earlier. US production of molybdenum concentrate in 2001 fell –8.1% to an 8-year low of 37,600 metric tons. US production of molybdenum primary products in 2001 fell –20.3% to 15,700 metric tons, with 14,900 metric tons of that production in molybdic oxide and 771 metric tons in molybdenum metal powder. Demand – US consumption of molybdenum concentrate fell –1.5% to 33,300 metric tons in 2001 from 33,800 metric tons in 2000. US consumption of molybdenum concentrate has more than doubled over the last 10 years. US consumption of molybdenum primary products fell by 11.5% to 16,200 metric tons in 2001 from 18,300 metric tons in 2000. Trade – US imports of molybdenum concentrate for consumption in 2001 fell –1.8% to 6,010 metric tons from 6,120 metric tons in 2000.

Preliminary.

2

Estimate.

3

Shipments.

Source: U.S. Geological Survey (USGS)

Salient Statistics of Molybdenum in the United States

In Metric Tons (Contained Molybdenum) ---------------------------------------- Primary Products4 -----------------------------------------

Year

1996 1997 1998 1999 2000 20011 20022

--------------------------------------- Concentrate --------------------------------------- -------------- Net Production -------------- ----- Shipments ----Price MolyTo Oxide for ----------- Shipments ----------Imports Total Producer bolic Average Domestic Exports Pro- (Includes Value F or Con- For Con- Stocks, Value (Groos DestGrand Molybolic Metal Con- Stocks, duction Exports) Million $ Exports sumption sumption Dec. 313 Total Oxide5 Powder $ / Kg.6 inations Weight) sumption Dec. 31

56,000 60,100 53,300 42,400 40,900 37,600 32,600

35,800 32,100 52,100 42,800 40,400 37,000 32,300

456.0 19,700 406.0 20,000 200.0 ---251.0 ---210.0 ---192.0 ---236.0 ----

24,500 24,300 35,900 34,500 33,800 33,300 20,000

5,480 6,330 6,570 6,390 6,120 6,010 4,710

2,470 3,660 6,270 4,580 4,030 4,210 3,950

24,100 25,900 33,900 19,200 19,700 15,700 10,500

20,400 22,700 31,600 17,400 17,500 14,900 10,000

1,970 2,000 2,270 1,880 2,190 771 513

8.30 9.46 5.90 5.90 5.64 5.20 8.30

24,100 25,900 38,000 39,000 34,600 32,600 27,500

1,790 1,240 1,100 1,130 1,190 940 1,670

20,900 20,000 18,800 18,700 18,300 15,800 14,400

5,780 6,500 7,780 5,340 5,360 5,600 4,300

1

Preliminary. 2 Estimate. 3 At mines & at plants making molybdenum products. 4 Comprises ferromolybdenum, molybdic oxide, & molybdenum salts & metal. 5 I ncludes molybdic oxide briquets, molybdic acid, molybdenum trioxide, all other. 6 U.S. producer price per kilogram of molybdenum oxide contained in technical-grade molybdic oxide. W = Withheld proprietary data. Source: U.S. Geological Survey (USGS)

US Merchant Price of Molybdic Oxide

In Dollars Per Pound

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1997 1998 1999 2000 2001 2002 2003

4.25 4.10 3.53 2.86 2.38 2.33 3.63

4.60 4.10 2.73 3.55 2.38 2.33 3.74

4.57 4.17 2.73 3.40 2.38 2.33 4.62

4.55 4.51 2.73 2.55 2.38 2.75 5.20

4.55 4.05 2.73 2.55 2.38 2.99 5.20

4.55 4.00 2.73 2.55 2.38 6.93 5.77

4.55 4.00 2.73 2.55 2.38 5.32 5.86

4.55 4.00 2.73 2.64 2.38 4.75 5.60

4.55 4.00 2.73 2.70 2.38 4.73 5.84

4.38 4.00 2.73 2.70 2.40 4.70 6.25

4.33 4.00 2.73 2.70 2.33 3.82 6.25

4.20 4.00 2.73 2.39 2.33 3.48 6.25

4.47 4.08 2.79 2.74 2.37 3.87 5.35

Source: American Metal Market (AMM)

178

Nickel latest reporting year for the data series, rose +3.1% to a record 1.330 million metric tons. That is approximately double the production seen in 1970. The world’s largest mine producers of nickel in 2001 were Russia (with 24.4% of world production), Australia (14.8%), Canada (14.5%), New Caledonia (8.8%), and Indonesia (7.7%). In 2001, US secondary nickel production rose to a record high of 101,000 metric tons from 84,000 metric tons in 2000. Demand – US consumption of nickel in 2001 fell to 188,000 metric tons from 189,000 metric tons in 2000, but was only mildly below the record high production level of 191,000 metric tons posted in 1997. The primary US nickel consumption use is for stainless and heat-resisting steels, which accounted for 64% of US consumption in 2001. Other sectors were super alloys (9.8%), nickel alloys (9.7%), electroplating anodes (6.6%), alloy steels (4.1%), copper base alloys (3.7%), chemicals (0.9%), and cast irons (0.5%). Trade – The US relied on imports for 56% of its nickel consumption in 2001. US imports of primary and secondary nickel in 2001 fell to a 7-year low of 144,760 metric tons from 166,700 metric tons in 2000. US exports of primary and secondary nickel in 2001 were 57,050 metric tons, only mildly below the record high of 58,050 metric tons posted in 2001.

Nickel (atomic symbol Ni) is a hard, malleable, ductile metal that has a silvery tinge that can take on a high polish. Nickel is somewhat ferromagnetic and is a fair conductor of heat and electricity. Nickel is primarily used in the production of stainless steel and other corrosion-resistant alloys. Nickel is used in coins to replace silver, in rechargeable batteries, and in electronic circuitry. Nickel plating techniques, like electro-less coating or single-slurry coating, are employed in such applications as turbine blades, helicopter rotors, extrusion dies, and rolled steel strip. Nickel futures and options trade at the London Metal Exchange (LME). The nickel futures contract calls for the delivery of 6 metric tons of primary nickel with at least 99.80% purity in the form of full plate, cut cathodes, pellets or briquettes. The contract is priced in terms of US dollars per metric ton. Prices – Nickel prices in 2003 staged an impressive rally along with the rest of the basic metals complex, nearly quadrupling from the lows seen in late 2001. Nickel prices hit bottom in late 2001 at around $4500 per metric ton. But then the market really took off in mid-2003 with a rally from the $9,000 per metric ton area up to a high of nearly $18,000 by the end of the year. Supply – World mine production of nickel in 2001, the

World Mine Production of Nickel Year

Australia3 Botswana

1995 1996 1997 1998 1999 2000 1 20012

98,467 113,134 123,372 143,513 119,226 165,700 197,000

1

2

Preliminary.

21,107 21,910 19,860 21,700 33,733 34,465 26,200

Estimate.

3

In Metric Tons (Contained Nickel)

Brazil

Canada

China

Dominican Republic

29,124 25,245 31,936 36,764 41,522 45,317 45,400

181,820 192,649 190,529 208,201 186,236 190,793 193,361

41,800 43,800 46,600 48,700 49,500 50,300 51,500

46,523 45,168 49,152 40,311 39,997 39,943 31,000

Year

60 59 56 64 63 58 56

8,290 64,600 15,100 59,300 16,000 68,400 4,290 63,100 ---- 71,000 ---- 84,000 ---- 101,000

9,570 6,240 9,290 9,590 8,100 7,700 7,620

491 8,510 563 7,300 654 6,530 908 7,470 495 10,500 198 9,940 892 6,880

15,600 16,200 15,900 16,400 15,400 15,700 12,500

Average Price of Nickel1 in the United States

1

Russia

South Africa

World Total

15,075 14,539 18,137 23,713 20,689 17,388 27,359

251,000 230,000 280,000 290,000 300,000 315,000 325,000

29,803 33,861 34,830 36,679 36,202 36,616 36,443

1,040,000 1,060,000 1,140,000 1,180,000 1,160,000 1,290,000 1,330,000

Source: U.S. Geological Survey (USGS)

In Metric Tons (Contained Nickel)

21,800 103,000 19,700 94,000 19,400 105,000 17,500 93,000 15,200 102,000 18,200 108,000 18,200 121,000

Exclusive of scrap. 2 Preliminary. 3 Estimate. 4 Smelter & refinery. data. NA = Not avaliable. Source: U.S. Geological Survey (USGS)

1999 2000 2001 2002 2003

119,905 122,486 136,467 125,319 110,062 128,789 117,554

Phillippines

Net ----------------------------- Nickel Consumed1, By Uses ---------------------------------Import Stocks, Reliance Stainless ------ Dec. 31 -----as a % of & Heat Avg. Primary & Apparent At Con- At ProCopper ElectroApparent --- Production --RePrice Secon- Alloy Cast Base plating Nickel sisting Super Chemducer Secondary Nickel LME6 Con- sumers' Condary5 Sheets Irons Alloys Anodes Alloys sumption Plant4 Steels Alloys icals sumption Plants Plants Exports Imports $/Lb.

1

Year

19,947 88,183 21,600 87,911 18,419 71,127 16,985 74,063 16,050 89,111 19,535 98,200 20,830 102,000

Content of nickel sulfate and concentrates.

Salient Statistics of Nickel in the United States

1995 1996 1997 1998 1999 2000 2 20013

New Greece Indonesia Caledonia

5

14,100 12,600 19,000 18,600 18,900 19,400 18,400

5,210 5,310 3,720 1,970 1,580 991 1,630

181,000 183,000 191,000 186,000 190,000 189,000 188,000

12,300 12,900 16,070 15,960 10,050 14,260 13,900

12,700 13,300 12,600 13,100 12,700 12,300 12,600

From purchased scrap (ferrous & nonferrous).

51,550 46,700 56,600 43,540 38,840 58,050 57,050

156,930 150,060 158,000 156,500 148,480 166,700 144,760

3.73 3.40 3.14 2.10 2.73 3.92 2.70

W = Withheld proprietary

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

NA 403.00 344.00 266.00 376.67

NA 456.00 336.00 266.00 416.01

NA 493.00 316.00 266.00 408.76

NA 469.00 296.00 266.00 391.72

NA 474.00 339.00 295.00 409.63

NA 346.00 343.00 331.00 439.13

NA 399.00 295.00 341.00 438.50

316.00 385.00 278.00 342.00 464.67

339.00 413.00 252.00 332.00 492.62

353.00 380.00 243.00 321.00 540.81

381.00 360.00 253.00 354.00 583.21

390.00 358.00 266.00 363.00 674.78

355.80 411.33 296.75 311.92 469.71

Plating material, briquettes.

Source: American Metal Market (AMM)

179

Oats Oats are seeds or grains of a genus of plants that thrive in cool, moist climates. There are about 25 species of oats that grow worldwide in the cooler temperate regions. The oldest known cultivated oats were found inside caves in Switzerland and are believed to be from the Bronze Age. Oats are usually sown in early spring and harvested in mid to late summer, but in southern regions of the northern hemisphere, they may be sown in the fall. Oats are used in many processed foods such as flour, livestock feed, and furfural, a chemical used as a solvent in various refining industries. Oat futures and options are traded on the Chicago Board of Trade (CBOT) and the Winnipeg Commodity Exchange (WCE). Prices – Oat prices on the CBOT weekly nearest futures chart started the year near $2.18 per bushel, but then fell sharply in the first half of the year to post a 2-1/2 year low of $1.23 per bushel in late July. Oat prices then traded sideways in a narrow range between about $1.30-$1.50 through the remainder of the year, with an upturn at the end of the year producing a close for 2003 of $1.52, a 6month high. Prices were pressured early in the year by predictions of a large US crop harvest, lower US consumption figures, and lower export demand. However, prices recovered later in the year on short-covering, some foreign buying, and the weak dollar. Supply – World oat production in 2003/4 (June/May) was forecast at 26.848 million metric tons, up 4.6% from 25.660 million in 2002/3 but down from 27.096 million in 2001/2. World ending stocks for 2003/4 are forecasted at 4.026 million metric tons, up from 3.376 million in 2002/3. The world’s largest oat producing countries in 2002/3 were

World Production of Oats Year

In Thousands of Metric Tons

Argentina

Australia

Canada

China

France

Germany

Italy

Poland

Sweden

Turkey

United States

ExUSSR

World Total

357 260 310 517 383 555 645 645 485 400

924 1,875 1,653 1,634 1,798 1,118 1,050 1,439 926 1,600

3,638 2,858 4,361 3,485 3,958 3,641 3,389 2,691 2,911 3,700

600 640 600 400 650 600 600 600 600 600

681 617 622 564 658 550 460 490 770 560

1,663 1,421 1,606 1,599 1,279 1,340 1,090 1,150 1,020 1,200

355 301 350 311 280 350 460 310 330 300

1,243 1,495 1,581 1,630 1,460 1,446 1,070 1,305 1,480 1,200

991 947 1,200 1,275 1,136 1,200 1,150 960 1,180 1,090

300 275 275 280 310 250 250 250 250 250

3,322 2,338 2,224 2,428 2,409 2,122 2,171 1,699 1,722 2,100

13,903 10,843 10,430 11,560 6,490 5,740 7,500 6,580 7,340 6,740

32,967 28,663 30,637 30,903 25,911 24,000 26,170 27,040 25,630 26,160

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

the European Union with 7.228 million metric tons of production (28% of world production), Russia with 5.700 million (22%), Canada with 2.911 million (11%), and the US coming in fourth with 1.722 million metric tons (7%). US production of oats in 2003/4 was forecast at 2.100 million metric tons, up 22% from 1.722 million in 2002/3 and by an overall 24% from 1.699 million in 2001/2. US ending stocks for 2003/4 are forecasted at 1.081 million metric tons, up sharply from 723,000 in 2002/3. US farmers planted 4.601 million acres with oats in 2003/4, down from 4.995 million in 2002/3, but acres harvested rose to 2.224 million acres in 2003/4 from 2.093 million. Yields rose sharply in 2003 to 65.0 bushels per acre from 56.7 bushels in 2002/3. The largest US oat-producing states in 2003 were North Dakota (with 15% of US production), Minnesota (13%), South Dakota (10.8%), and Wisconsin (10.7%). Demand – World consumption of oats in 2003/4 was forecast at 26.198 million metric tons, down slightly from 26.226 million in 2002/3. The fact that consumption is lower than production suggests an oversupply of oats, a bearish factor for oat prices. Trade – Most of the world’s oats production is consumed domestically and world trade is small at only 7% of overall world production. World trade in oats in 2003/4 was forecast to rise to 26.848 million metric tons from 25.660 million in 2002/3. The world’s largest oat exporters are Canada with 1.057 million metric tons in 2002/3 and the European Union with 800,000 metric tons. The world’s largest importer is the US with 1.777 million metric tons, with most of those oats coming from Canada.

Preliminary.

2

Estimate.

3

Forecast.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Official Oats Crop Production Reports in the United States Year

1992 1993 1994 1995 1996 1997 1

July 1

256,381 262,860 248,151 181,508 154,968 182,672

Preliminary.

180

Aug. 1

Sept. 1

In Thousands of Bushels

Oct. 1

D e c. 1

Final

Year

July 1

Aug. 1

Sept. 1

Oct. 1

D e c. 1

Final

276,381 ------249,830 249,830 208,138 247,753 247,753 229,717 186,167 186,167 ---157,663 ------187,127 -------

-------------------

294,229 206,770 229,008 162,027 153,245 167,246

1998 1999 2000 2001 2002 2003 1

183,201 ---151,380 132,150 147,584 147,895

177,211 162,096 152,745 135,445 142,580 151,345

-------------------

-------------------

-------------------

165,981 146,218 149,545 117,024 118,628 145,000

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

OATS Oat Stocks in the United States

In Thousands of Bushels

-------------------------- On Farms -------------------------- -------------------------- Off Farms -------------------------- ------------------------- Total Stocks ------------------------Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 1

Mar. 1

June 1

Sept. 1

D e c. 1

Mar. 1

June 1

Sept. 1

D e c. 1

Mar. 1

June 1

Sept. 1

D e c. 1

85,050 78,400 57,350 56,200 58,800 61,700 53,300 55,800 40,200 35,000

53,940 46,750 32,600 33,100 34,500 40,700 36,000 32,050 28,650 20,600

144,300 107,200 93,400 107,950 110,300 97,300 101,200 74,800 70,500 82,100

113,400 87,200 80,650 83,200 81,500 79,800 86,900 58,100 52,500 64,300

61,502 70,575 55,268 39,362 52,418 50,850 48,500 54,128 53,158 47,879

51,583 53,848 33,708 33,576 39,498 40,678 40,031 40,677 34,552 29,233

75,551 72,967 38,716 48,972 51,502 51,151 49,177 41,592 41,212 49,637

78,664 65,804 45,218 61,051 61,835 53,872 57,237 56,117 51,284 54,918

146,552 148,975 112,618 95,562 111,218 112,550 101,800 109,928 93,358 82,879

105,523 100,598 66,308 66,676 73,998 81,378 76,031 72,727 63,202 49,833

219,851 180,167 132,116 156,922 161,802 148,451 150,377 116,392 111,712 131,737

192,064 153,004 125,868 144,251 143,335 133,672 144,137 114,217 103,784 119,218

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Supply and Utiliz ationof Oats in the United States

In Millions of Bushels

Findley F ood, Loan Target Total Ending Farm ProTotal Feed & Alcohol & Yield Per Use Stocks Price Planted Harvested Rate Price Acre duction Imports Supply Residual Industrial Seed Exports ----- 1,000 acres ----- (Bushels) -------------------------------------------- In Millions of Bushels -------------------------------------------- ----- Dollars Per Bushel ----------- Acreage -------

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

6,637 6,225 4,638 5,068 4,892 4,670 4,477 4,403 4,995 4,601

Preliminary.

2

4,008 2,952 2,655 2,813 2,755 2,453 2,329 1,905 2,093 2,224

Forecast.

57.1 54.6 57.7 59.5 60.2 59.6 64.2 61.4 56.7 65.0

228.8 161.1 153.2 167.2 166.0 146.2 149.5 117.0 118.6 145.0

NA = Not available.

93.2 80.5 97.5 98.4 108.0 99.0 106.0 96.0 95.0 90.0

427.6 342.2 317.1 332.3 347.7 326.0 332.0 286.0 277.0 284.0

242.6 194.9 171.7 184.6 195.6 180.0 189.0 148.0 152.0 135.0

Illinois

Iowa

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

5,490 5,360 4,620 5,550 3,920 4,260 4,015 3,200 3,450 4,450

26,660 14,625 12,920 16,790 10,915 11,375 12,060 9,100 13,300 10,790

1

Preliminary.

Michigan Minnesota Nebraska New York

6,270 5,130 3,600 4,880 4,800 4,875 4,800 3,520 4,160 5,250

24,750 18,000 15,120 17,400 19,530 17,700 22,320 12,600 15,960 18,815

13.4 12.0 13.1 12.6 12.0 11.2 11.0 13.0

1.0 2.1 2.5 2.1 1.7 1.8 1.7 2.8 2.7 2.0

327.0 275.9 250.4 258.3 266.3 250.0 259.0 223.0 227.0 210.0

100.6 1.22 66.3 1.67 66.7 1.96 74.0 1.60 81.4 1.10 76.0 1.12 73.0 1.10 63.0 1.59 50.0 1.81 74.0 1.40-1.50

.97 .97 1.03 1.11 1.11 1.13 1.16 1.21 1.35 1.35

1.45 1.45 NA NA NA NA NA NA 1.40 1.40

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production of Oats in the United States, by States Year

70.0 67.0 63.0 59.0 57.0 56.8 57.0 59.0

7,500 4,500 7,455 5,850 5,320 4,650 1,890 3,660 2,365 6,570

7,040 5,310 3,850 5,850 6,510 4,760 3,900 5,520 3,630 4,410

In Thousands of Bushels North Dakota

Ohio

Pennslyvania

South Dakota

33,550 21,600 19,000 18,700 25,200 16,830 19,845 14,880 12,760 21,240

6,720 6,900 5,130 6,660 6,500 7,000 6,840 6,205 3,720 3,960

8,480 9,440 7,560 8,990 8,480 7,975 8,265 7,475 7,015 6,490

31,360 11,500 21,600 14,850 20,100 12,800 13,420 7,800 4,500 15,640

Texas Wisconsin

5,200 5,040 3,400 6,760 6,890 4,840 4,300 7,200 7,040 6,300

25,380 18,700 17,400 20,160 18,300 18,600 19,040 12,480 15,000 15,410

Total

229,008 162,027 153,245 167,246 165,981 146,218 149,545 117,024 118,628 145,000

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Cash Price of No. 2 Heavy White Oats in Toledo

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

1.35 1.65 NQ 2.12 NQ NQ NQ NQ NQ NQ

1.26 1.76 2.45 1.79 NQ NQ NQ NQ NQ NQ

1.26 1.83 2.34 1.84 NQ NQ NQ NQ NQ NQ

1.32 1.90 2.19 1.80 NQ NQ NQ NQ NQ NQ

1.35 1.76 2.02 1.77 NQ NQ NQ NQ NQ NQ

1.28 1.91 1.96 NQ NQ NQ NQ NQ NQ NQ

1.27 2.21 1.96 NQ NQ NQ NQ NQ NQ NQ

1.34 2.14 1.99 NQ NQ NQ NQ NQ NQ

1.45 2.06 2.16 NQ NQ NQ NQ NQ NQ

1.43 2.17 2.26 NQ NQ NQ NQ NQ NQ

1.48 2.32 2.12 NQ NQ NQ NQ NQ NQ

1.59 2.05 2.08 NQ NQ NQ NQ NQ NQ

1.37 1.98 2.14 1.86 NQ NQ NQ NQ NQ

1

Preliminary.

NQ = No quotes.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

181

OATS

Volume of Trading in Oats Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

47,980 13,512 61,451 34,238 21,150 23,747 27,073 26,377 41,516 26,149

57,060 37,014 52,079 51,608 51,247 35,706 43,332 38,040 46,435 31,892

39,800 29,490 34,608 39,607 25,551 43,671 29,707 24,903 30,662 27,766

53,820 45,536 77,395 41,988 65,381 44,974 31,653 41,482 51,889 26,022

May

In Contracts June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

34,300 69,760 34,116 107,082 47,161 34,498 27,028 29,632 23,490 55,376 22,399 40,722 38,647 50,461 20,516 41,926 32,386 39,229 20,442 24,113

20,760 29,862 38,960 25,473 29,870 35,812 30,885 50,440 35,217 23,230

39,340 45,677 33,316 26,486 42,156 27,928 42,814 22,883 29,647 21,562

28,840 31,676 30,801 21,241 27,131 17,893 21,846 31,252 23,968 26,658

24,900 38,641 37,579 42,630 31,426 16,155 21,476 50,580 32,847 33,621

56,940 52,321 37,856 38,187 51,172 42,029 48,890 53,578 35,412 30,273

19,680 47,005 16,154 19,214 18,924 20,370 15,406 38,877 15,932 27,170

493,180 511,932 501,858 397,332 442,874 371,406 402,190 440,854 415,140 318,898

Source: Chicago Board of Trade (CBT)

Average Open Interest of Oats in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

21,193 13,133 13,253 8,088 12,782 17,126 15,343 14,093 12,640 6,929

20,137 13,231 14,095 9,650 15,368 17,019 17,521 15,060 13,137 6,715

20,194 13,000 14,231 12,649 16,553 16,677 17,719 14,873 11,833 5,945

19,882 15,426 14,497 11,024 17,748 15,398 18,183 14,962 10,976 6,135

18,312 16,054 13,897 9,830 17,441 13,491 176,686 14,875 9,047 5,833

14,575 13,611 11,697 9,395 16,437 12,705 16,178 13,695 10,381 5,640

11,710 11,019 11,336 8,131 14,255 11,927 15,550 11,861 10,230 5,811

13,923 11,348 11,803 8,606 15,052 11,670 15,225 11,707 10,970 5,958

14,743 11,012 11,457 8,618 14,771 9,802 13,176 10,059 9,881 6,261

16,266 11,970 11,918 10,953 16,263 10,638 13,985 12,111 9,550 6,194

15,354 12,542 11,150 11,816 18,466 12,754 14,377 14,453 9,134 6,268

13,376 13,003 8,550 10,964 17,048 12,360 14,119 12,142 6,008 5,122

Source: Chicago Board of Trade (CBT)

182

In Contracts

Jan.

OATS

-----

---

Cents Per Bushel No. 3 White, Chicago (Jan. 1901 - Dec. 1947) No. 2 White, Chicago (Jan. 1948 - Nov. 1948) No. 1 White, Heavy, Chicago (Dec. 1948 - Dec. 1974) No. 2 White, Heavy, Chicago (Jan. 1975 - Aug. 1999) No. 2 Milling, Minneapolis (Jan. 1975 to date)

Average Cash Price of No. 2 Heavy White Oats in Minneapolis

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

1.47 1.73 2.11 1.89 1.52 1.34 .73 .83 1.40 1.05

1.36 1.92 2.48 1.76 1.42 1.25 .72 .95 1.24 NQ

1.44 1.96 2.36 1.80 1.21 1.20 .69 1.08 1.23 .98

1.44 2.04 2.08 1.78 1.30 1.17 .68 1.04 1.36 1.01

1.44 2.11 2.06 1.75 1.29 1.20 .70 1.29 1.36 1.00

1.41 2.63 1.87 1.65 1.32 1.20 .72 1.41 1.33 .99

NQ 2.50 1.86 1.71 1.31 1.28 .70 1.48 1.36 1.04

1.46 2.40 1.89 1.68 1.33 1.21 .70 1.41 1.44

1.42 2.31 1.94 1.59 1.26 1.19 .75 1.47 1.28

1.54 2.47 1.99 1.65 1.35 1.34 .77 1.51 1.28

1.62 2.56 1.88 1.54 1.36 1.45 .80 1.31 1.22

1.76 2.68 1.81 1.58 1.39 NQ .82 1.29 1.08

1.36 2.28 2.03 1.70 1.34 1.26 .73 1.26 1.30 1.01

1

Preliminary.

NQ = No quote.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by U.S. Farmers for Oats

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

1.31 1.38 2.17 1.81 1.39 1.22 1.24 1.38 1.95 1.84

1.20 1.52 2.13 1.68 1.19 1.08 1.07 1.33 1.69 1.47

1.16 1.48 2.00 1.57 1.02 .97 .93 1.25 1.67 1.39

1.18 1.43 1.83 1.47 1.07 1.08 .95 1.39 1.80 1.38

1.21 1.50 1.84 1.62 1.09 1.06 1.08 1.64 1.80 1.44

1.18 1.72 1.85 1.66 1.10 1.12 1.22 1.79 1.91 1.32

1.18 1.91 1.72 1.57 1.19 1.18 1.14 1.92 1.95 1.58

1.22 1.93 1.83 1.60 1.20 1.20 1.21 1.93 2.04 1.46

1.22 1.96 1.81 1.60 1.20 1.27 1.28 1.91 2.11 1.51

1.33 2.04 1.91 1.64 1.20 1.28 1.24 1.99 2.08

1.36 2.13 1.87 1.61 1.18 1.35 1.28 1.99 1.99

1.41 2.48 1.86 1.53 1.31 1.31 1.28 1.99 1.95

1.22 1.46 1.96 1.61 1.18 1.18 1.16 1.71 1.91 1.49

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

183

Olive Oil Olive oil is derived from the fruit of the olive tree, which originated in the Mediterranean area. Olives designated for oil are picked before ripening in the fall and is usually done by hand. The olives are then weighed and washed in cold water. The olives, along with their oil-rich pits, are then crushed and kneaded until a homogeneous paste is formed. The paste is spread by hand onto metal plates, which are then stacked and pressed hydraulically to yield a liquid. The liquid is then centrifuged to separate the oil. It takes 1,300 to 2,000 olives to produce 1 quart of olive oil. The best olive oil is still produced from the first pressing, which is usually performed within 24 to 72 hours after harvest and is called extra virgin olive oil. Supply – World production of olive oil (pressed oil) in 2002/3 fell –11.2% to 2.471 million metric tons from the record-high production level of 2.784 million metric tons in 2001/2. The world’s largest producers of olive oil are Spain

World Production of Olive Oil (Pressed Oil) Year

Algeria Argentina

1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

23.0 46.0 6.5 54.5 33.5 26.5 25.5 25.0

Preliminary.

2

11.5 12.0 8.5 7.0 11.5 3.0 10.0 8.0

Estimate.

3

In Thousands of Metric Tons

Greece

Italy

Jordan

Libya

Morocco

Portugal

Spain

Syria

Tunisia

Turkey

World Total

362.0 469.8 405.0 511.0 454.0 467.0 390.0 378.0

540.0 317.0 585.0 427.2 670.0 508.0 490.0 550.0

15.5 25.5 16.0 23.5 7.0 29.5 16.0 28.0

4.0 10.0 6.0 8.0 7.0 4.0 7.0 6.5

40.0 121.0 75.0 71.0 45.0 39.5 66.0 55.0

48.6 48.8 45.5 40.3 58.3 28.5 38.7 46.0

320.0 1,027.5 1,212.0 804.0 694.1 1,040.0 1,468.0 890.0

84.0 138.0 78.0 129.0 88.0 183.0 104.0 162.5

64.5 288.5 99.0 231.0 225.0 141.0 40.0 54.0

45.5 222.0 45.0 188.0 61.0 197.5 71.0 192.5

1,598.4 2,771.6 2,615.5 2,537.1 2,412.4 2,731.7 2,783.6 2,470.7

Forecast.

Source: The Oil World

World Imports and Exports of Olive Oil (Pressed Oil) Year

In Thousands of Metric Tons

----------------------------------------------- Imports ----------------------------------------------- ------------------------------------------- Exports ------------------------------------------AustUnited World World ralia Brazil Italy Ja p a n Spain States Total Greece Italy Spain Tunisia Turkey Total

1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

(with 36% of world production), Italy (22%), Greece (15%), Turkey (8%), and Syria (7%). Production levels in various countries are highly volatile from year-to-year depending on various weather and crop conditions. Demand – World consumption of olive oil in 2002/3 rose +1.8% to 2.805 million metric tons. The US is the world’s largest consumer of olive oil with 7.9% of world consumption in 2002/3. US consumption of olive oil is on an upward trend, reaching a record 220,300 metric tons in 200203, up from 211,500 metric tons in 2001/2 and double that seen a decade earlier. Trade – World olive oil imports in 2002/3 fell –0.1% to 491,400 metric tons. The US was the world’s largest importer in 2002/3 with 220,200 metric tons, representing 45% of world imports. The world’s largest exporters are Italy (with 36% of world exports), Spain (21%), and Turkey (16%).

16.7 19.0 17.7 23.7 24.2 29.5 26.4 27.6

Preliminary.

2

18.8 26.3 28.9 23.5 25.6 24.7 24.0 24.9

Estimate.

47.0 108.1 89.4 150.4 105.2 110.5 51.4 38.0 3

Forecast.

16.1 24.3 35.5 28.1 27.2 29.6 31.2 32.0

26.4 35.2 28.0 76.8 23.4 13.3 6.6 16.2

113.6 148.1 161.0 169.9 189.3 212.5 218.1 220.2

318.4 461.8 467.8 570.7 504.8 551.6 492.0 491.4

7.8 9.3 9.3 6.3 9.4 6.7 9.9 9.5

Preliminary.

184

33.1 101.4 126.8 172.5 122.4 101.0 33.0 22.2

28.9 46.6 42.2 99.0 25.8 77.5 39.8 80.3

307.9 460.5 469.4 572.9 502.1 559.5 486.4 491.8

In Thousands of Metric Tons

------------------------------------------ Consumption ------------------------------------------ ------------------------------------- Ending Stocks ------------------------------------United World World Brazil Morocco Syria Tunisia Turkey States Total Greece Italy Spain Syria Turkey Total

1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

54.4 72.0 82.0 70.9 97.2 100.7 120.3 105.4

Source: The Oil World

World Consumption and Ending Stocks of Olive Oil (Pressed Oil) Year

98.0 136.8 140.2 141.6 180.0 198.1 204.9 175.0

18.8 26.3 28.9 23.5 25.6 24.7 24.0 24.9 2

32.9 57.2 61.3 62.5 55.7 46.6 66.5 57.3

Estimate.

98.5 103.9 106.9 107.8 99.0 114.6 115.9 120.1 3

Forecast.

32.4 89.1 61.0 64.8 66.3 65.3 35.3 29.9

64.7 83.4 82.9 74.3 76.3 79.9 71.1 84.8

Source: The Oil World

110.5 130.9 154.8 160.9 180.1 205.5 211.5 220.3

1,884.6 2,246.3 2,406.9 2,534.6 2,607.3 2,739.1 2,754.6 2,804.8

30.9 115.0 118.3 132.0 143.0 142.0 162.0 128.6

81.4 47.4 204.1 120.8 173.9 136.0 69.0 55.0

88.4 273.0 533.1 574.4 340.0 287.9 476.0 150.0

12.0 50.0 24.0 46.0 36.6 95.0 70.7 85.0

23.0 115.0 35.0 50.0 9.9 50.0 12.0 41.7

320.1 846.7 1,053.7 1,054.0 861.9 846.6 881.1 546.6

Onions Onions are the bulbs of plants in the lily family. Onions can be eaten raw, cooked, pickled, used as a flavoring or seasoning, or dehydrated. Onions, by value, rank in the top 10 vegetables produced in the US. Since 1629, onions have been cultivated in the US, but are believed to be indigenous to Asia. Onions that are planted as a winter crop in warm areas are milder in taste and odor than onions planted during the summer in cooler regions. The two main types of onions produced in the US are yellow and white onions. Yellow varieties comprise approximately 75% of all onions grown for bulb production in the US. Prices – Onion prices in 2003 rallied to a record yearly average of $19.53 per hundred pounds, up 66% from $11.73

in 2002. The record high yearly average price in 2003 was due to an upward spike in April to $39.80. Prices, however, fell back to the $14 area by late in 2003. Supply – US production in 2002 was little changed at 6.761 billion pounds. The farm value of the US production crop in 2002 was $716 million, up from $698 million in 2001. US farmers harvested 160,220 acres in 2002, which was a 9-year low. The yield per acre in 2002 was 42,200 pounds per acre. Demand – US per capita consumption of onions in 2003 rose to 19.5 pounds from 19.3 pounds in 2002. Trade – US exports of fresh onions in 2002 totaled 700 million pounds, and imports were not far behind at 610 million pounds.

Salient Statistics of Onions in the United States

Crop Year

1998 1999 2000 2001 2002 1 20032 1

Harvested Acres

Yield Per Acre

Production 1,000 Cwt.

Price Per Cwt.

Farm Value $1,000

171,340 173,400 166,170 161,590 160,220 159,490

393 424 432 419 424 437

67,282 73,562 71,721 67,653 67,928 69,727

13.80 9.78 11.30 11.40 12.40 15.00

838,441 635,128 736,369 697,950 767,913 958,032

Preliminary.

2

3

Forecast.

I ncludes fresh and processing.

Production of Onions in the United States Year

1998 1999 2000 2001 2002 20031 1

Per Capita3 Annual Jan. 1 Utiliz ation P a ck Imports Exports Imports P a ck Frozen Canned (Fresh) (Fresh) -- Lbs., Farm Weight -Frozen ---------------------- In Millions of Pounds ----------------------All Fresh

42.2 40.3 58.3 54.9 36.9

270.9 310.5 226.2

3.5 5.2 5.0 5.0

628.8 667.7 763.5 708.3 637.2

1,175 1,635 1,376 1,290 690 750

4,050 3,212 3,089 2,666 2,945 3,283

2,907 3,620 4,185 4,615 4,725 3,520

10,356 11,222 11,812 11,136 9,798 9,741

14,388 16,965 16,154 12,069 12,464 13,527

Year

18.3 18.4 18.3 18.3 18.3 18.3

Source: Economic Research Service, U.S. Department of Agiculture (ERS-USDA)

In Thousands of Hundredweight (Cwt.)

6,080 5,438 4,083 4,140 4,400 3,936

4,640 5,530 4,810 4,992 5,056 4,920

1,092 1,080 945 999 897 1,152

150 118 19 73 78 65

-------------------

3,750 3,528 4,674 4,224 2,829 3,808

6,120 8,643 6,960 7,006 7,800 7,080

-------------------

55,668 62,340 59,909 56,517 58,130 59,986

Grand Total

66,024 73,562 71,721 67,653 67,928 69,727

Source: Agricultural Statistics Board, U.S. Department of Agiculture (ASB-USDA)

Cold Storage Stocks of Froz en Onions in the United States, on First of Month

1

19.4 20.7 20.1 19.4 19.3 19.5

--------------------- Spring --------------------- ------------------------------------------------------------ Summer ------------------------------------------------------------------Total MinneNew New Oregon Total Arizona California Texas (All) California Colorado Idaho Michigan sota Mexico York (Malheur) Texas (All)

Preliminary.

1998 1999 2000 2001 2002 2 0 0 31

598.5 583.9 476.9 632.6 595.4 646.3

In Thousands of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

31,187 24,596 41,236 40,420 29,893 39,480

28,724 24,665 40,730 39,722 33,646 39,764

27,710 27,280 44,029 39,407 34,851 38,126

24,428 27,972 45,874 36,925 35,477 37,569

23,443 33,113 52,691 36,503 40,789 35,623

22,787 35,809 55,340 38,705 41,066 35,617

22,179 35,605 53,537 38,275 40,762 36,529

21,468 33,171 42,910 29,993 33,370 35,590

18,755 31,675 40,792 28,912 36,895 35,907

24,553 31,338 34,318 26,133 36,120 33,846

27,070 35,573 37,408 27,726 39,796 38,693

25,965 41,677 39,909 28,987 39,310 39,467

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agiculture (NASS-USDA)

Average Price Received by Grow ers for Onions in the United States In Dollars Per Hundred Pounds (Cwt.) Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

10.50 16.10 5.86 11.40 9.48 12.30

14.00 13.10 4.86 10.60 8.27 14.90

19.40 10.00 4.38 10.70 6.92 21.80

19.20 14.60 10.00 12.80 16.20 39.80

15.80 13.00 12.50 15.50 16.10 35.00

14.00 15.00 12.10 15.30 15.60 22.20

19.10 15.70 13.30 15.50 15.10 17.50

14.00 13.10 12.10 12.30 12.20 14.10

12.90 10.10 10.60 10.70 10.00 13.10

12.70 8.18 10.10 9.20 9.61 13.40

14.00 7.47 10.70 7.41 9.79 14.70

16.00 6.95 11.10 9.35 11.50 16.10

13.80 9.78 11.30 11.60 12.40 15.00

Year

1998 1999 2000 2001 2002 2003 1 1

Preliminary.

Source: Economic Research Service, U.S. Department of Agiculture (ERS-USDA)

185

Oranges and Orange Juice The orange tree is a semi-tropical, non-deciduous tree, and the fruit is technically a hesperidium, a kind of berry. The orange originated in India and was called na rangi in Sanskrit. The original fruit was bitter compared to modern varieties. The three major varieties of oranges include the sweet orange, the sour orange, and the mandarin orange (or tangerine). In the US, only sweet oranges are grown commercially. Those include Hamlin, Jaffa, navel, Pineapple, blood orange, and Valencia. Sour oranges are mainly used in marmalade and as an ingredient in liqueurs such as triple sec and curacao. Frozen Concentrated Orange Juice (FCOJ) was developed in 1945, which led to oranges becoming the main fruit crop in the US. The world’s largest producer of orange juice is Brazil, followed by Florida. Two to four medium-sized oranges will produce about 1 cup of juice, and modern mechanical extractors can remove the juice from 400 to 700 oranges per minute. Before juice extraction, orange oil is recovered from the peel. Orange oil is used to produce flavors, perfumes, wood furniture conditioners, and cleaning agents. Approximately 50% of the orange weight is juice, the remainder is peel, pulp, and seeds, which are dried to produce nutritious cattle feed. Frozen concentrated orange juice future and options are traded on the NYCE division of the New York Board of

Trade (NYBOT). The NYCE orange juice futures contract calls for the delivery of 15,000 pounds of orange solids and is priced in terms of cents per pound. Prices – NYCE orange juice futures in 2003 were locked in a sustained bear market that lasted all year and produced new 3-decade lows. Orange juice prices fell to levels not seen since the 1970’s, producing some serious financial problems for orange producers. Orange juice futures closed 2003 on the year’s low at 60.75 cents per pound, down 34% from the 2002 close of 92.20 cents. Bearish factors centered on weak demand with the emphasis on low-carbohydrate diets and a bumper crop in Florida in 2003. Supply – World production of oranges in the 2001/2 marketing year rose +7.1% to 48.301 million metric tons from 45.108 million in 2000-1. The world’s largest producers of oranges are Brazil with 37% of world production, followed by the US (24%), and Mexico (8%). US production of oranges in 2002/3 fell -5.9% 267.0 million boxes. Florida production fell -11.7% to 203.0 million boxes, while California production rose by 20.4% to 62.0 million boxes. California oranges go mostly to the fresh market while about 90% of Florida’s oranges are processed for frozen orange juice concentrate. Florida produces approximately 70% of US oranges. The orange juice yield in 2002/3 was 1.54 gallons per box, which was a 7-year low.

World Production of Oranges

In Thousands of Metric Tons

Year

Argentina

Australia

Brazil

Egypt

Greece

Italy

Mexico

Morocco

South Africa

Spain

Turkey

United States

World Total

1992-3 1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-001 2000-12 2001-23

660 746 712 703 640 921 660 789 913 780

578 651 416 589 543 448 515 624 437 591

14,484 13,710 16,520 16,973 16,450 15,912 17,952 17,136 14,729 17,993

1,771 1,324 1,513 1,360 1,360 1,350 1,442 1,637 1,610 1,642

1,042 854 865 838 850 987 795 1,040 1,100 800

2,111 2,100 1,710 1,770 1,770 2,100 1,422 1,750 1,800 1,935

2,913 3,174 3,500 2,600 2,600 3,331 2,903 3,385 3,885 3,800

874 916 657 870 870 1,131 900 845 693 680

712 739 770 850 850 961 1,048 1,119 1,150 1,220

2,926 2,509 2,644 2,440 2,440 2,744 2,442 2,828 2,688 2,807

820 840 920 880 880 740 970 1,100 1,070 1,040

10,074 9,462 10,641 10,454 10,747 12,493 8,989 11,875 11,225 11,337

41,582 39,595 43,539 43,066 42,932 46,300 43,768 48,391 45,108 48,301

1

2

Preliminary.

Estimate.

3

Forecast.

NA = Not available.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Salient Statistics of Oranges & Orange Juice in the United States Froz en Concentrated ----------- Florida Crop Processed ----------- --------------- Orange Juice - Florida --------------------------- Production4 -------------

Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

Total California Florida U.S. ------------ Million Boxes ------------

63.6 56.0 58.0 64.0 69.0 36.0 64.0 54.5 51.5 62.0

174.4 205.5 203.3 226.2 244.0 186.0 233.0 223.3 230.0 203.0

240.5 263.6 263.9 293.0 315.5 224.6 299.8 280.9 283.8 267.0

Farm Price $ P er B ox

Farm Value Million $

6.37 6.08 6.85 6.16 6.13 7.41 5.56 5.88 6.37 5.97

1,541.3 1,624.1 1,821.6 1,836.7 1,965.4 1,687.9 1,666.1 1,682.8 1,846.2 1,611.8

Yield Total Frozen Total Pro- Per Box ConcenChilled S e a so n Total cessed Gallons5 trates Products Carry-in P a ck Supply Movement ------------------- Million Boxes ------------------- ----- In Millions of Gallons (42 Deg. Brix) -----

111.7 144.7 132.9 153.8 160.9 97.2 134.2 124.1 136.0 102.1

51.0 54.8 64.5 65.7 74.8 80.1 90.1 89.6 85.9 92.5

174.4 199.8 197.7 220.4 236.6 175.1 226.7 215.9 223.2 196.1

1.6 1.5 1.5 1.6 1.6 1.6 1.5 1.6 1.6 1.5

Preliminary. 2 Estimate. 3 Forecast. 4 Fruit ripened on trees, but destroyed prior to picking not included. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA); Florida Department of Citrus

186

53.5 58.6 42.4 41.2 69.7 104.7 105.2 112.6 128.3 120.2 5

261.7 274.2 284.5 289.6 290.2 216.9 254.0 245.2 253.2 203.3

315.2 332.8 326.9 342.9 359.9 321.6 359.2 357.8 381.5 323.5

42 deg. Brix equivalent.

256.6 290.4 285.7 273.9 263.8 209.1 239.7 226.0 249.9 200.2

ORANGES AND ORANGE JUICE

Average Open Interest of Froz en Concentrated Orange Juice Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

17,544 27,439 22,943 29,171 38,885 25,917 23,727 28,852 15,716 25,080

18,137 25,885 21,670 26,929 37,893 28,965 24,647 28,011 16,593 26,588

19,073 26,407 25,232 26,331 36,843 28,707 19,684 28,073 18,515 22,707

21,607 30,172 23,788 28,955 33,146 31,199 22,475 27,794 22,328 21,466

21,450 27,057 21,724 29,868 35,749 26,669 23,456 24,199 23,498 20,634

23,530 26,844 20,934 33,639 32,608 28,362 27,087 24,428 26,581 23,794

24,829 23,537 20,159 31,799 25,503 28,087 27,386 22,591 28,137 25,467

21,874 17,881 19,834 34,339 26,394 30,021 30,272 22,073 33,206 26,518

22,739 20,918 18,029 36,057 28,017 28,922 30,090 17,789 27,323 27,788

23,385 22,460 18,000 40,365 26,506 27,498 32,328 18,026 23,758 30,767

26,859 26,303 22,513 41,811 21,984 26,893 30,192 21,506 22,651 31,575

26,413 24,202 26,405 46,169 24,562 25,887 30,757 19,275 23,461 36,371

Source: New York Board of Trade (NYBOT)

Volume of Trading of Froz en Concentrated Orange Juice Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

46,166 50,875 59,666 84,982 96,020 64,149 45,680 46,655 31,709 45,945

51,123 66,370 82,057 89,875 81,554 92,868 78,532 66,561 50,898 63,224

Mar.

Apr.

May

June

43,075 55,955 51,292 78,288 46,272 65,752 66,340 82,772 66,235 101,651 40,027 92,522 33,617 71,024 27,994 63,012 30,316 58,644 23,926 70,846

48,236 32,607 62,247 62,890 70,909 49,180 50,475 38,447 37,283 35,791

60,110 80,165 44,827 78,690 79,319 78,627 80,372 66,773 52,238 64,209

Source: New York Board of Trade (NYBOT)

July

Aug.

37,069 55,711 41,357 67,528 40,884 58,346 47,242 118,286 48,844 85,544 48,177 99,531 46,548 67,312 40,870 64,860 45,316 78,111 27,056 73,792

Sept.

In Contracts Oct.

Nov.

D e c.

Total

52,209 73,155 54,978 76,037 653,824 38,781 64,904 45,688 71,077 688,932 44,239 40,680 39,291 70,676 654,937 55,081 108,413 100,941 134,349 1,029,861 81,187 98,639 29,541 75,171 914,614 49,323 71,914 42,532 68,734 797,584 38,485 64,831 45,966 89,362 712,204 22,246 68,364 23,376 48,338 577,496 36,053 71,635 24,111 61,443 577,757 40,782 87,055 42,084 78,005 652,715

187

ORANGES AND ORANGE JUICE Cold Storage Stocks of Orange Juice Concentrate in the U.S., on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

955.5 1,353.1 1,050.6 1,069.4 1,503.4 1,791.9 1,330.7 1,382.0 1,571.7 1,673.6

1,248.9 1,704.0 1,295.4 1,522.6 1,945.9 1,999.4 1,540.6 1,610.8 1,721.3 1,851.9

1,429.0 1,685.1 1,353.0 1,677.6 2,029.7 2,204.2 1,632.7 1,825.1 1,770.9 1,833.4

1,273.8 1,773.3 1,322.3 1,752.9 2,025.0 2,191.3 1,857.9 1,735.5 1,794.4 1,856.6

1,499.6 1,864.6 1,443.9 1,993.4 2,487.0 2,485.7 1,812.5 1,872.2 1,886.0 1,936.9

1,615.2 1,833.8 1,596.9 2,176.0 2,627.5 2,115.6 1,965.6 2,061.8 1,982.8 2,102.6

1,521.8 1,631.6 1,535.0 1,977.7 2,457.7 1,969.7 2,037.9 2,035.6 1,934.0 2,021.2

1,449.1 1,424.1 1,423.6 1,761.8 2,249.0 1,823.0 1,843.7 1,913.2 1,870.9 1,848.9

1,257.5 1,233.7 1,238.6 1,571.8 2,025.1 1,618.5 1,457.7 1,691.1 1,680.9 1,672.2

1,119.6 1,038.3 965.6 1,287.8 1,803.9 1,443.4 1,346.6 1,537.7 1,543.6 1,529.8

1,026.1 830.3 732.7 1,140.9 1,470.7 1,182.0 1,169.4 1,398.9 1,409.6 1,335.6

1,055.9 897.7 691.0 1,214.4 1,540.2 1,102.7 1,202.0 1,406.7 1,471.2 1,428.5

Preliminary.

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Producer Price Index of Froz en Orange Juice Concentrate Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

1982 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

107.9 107.4 109.4 106.9 94.9 119.7 110.0 98.9 103.0 110.2

104.8 105.4 112.5 106.9 101.2 118.6 108.9 99.2 102.9 110.2

104.2 107.6 117.2 106.0 104.1 118.0 108.0 98.3 103.1 110.7

104.2 107.6 119.5 107.6 103.2 115.5 107.1 96.8 102.9 110.4

102.7 109.1 119.5 107.7 108.8 113.3 106.9 96.8 102.8 108.5

101.2 109.1 119.5 107.3 109.1 113.2 106.6 97.4 103.2 109.4

100.2 109.1 115.3 105.3 109.5 112.5 105.4 97.3 103.2 109.1

100.1 105.3 113.6 105.8 109.6 111.3 104.8 97.2 103.5 108.9

99.9 101.0 113.6 102.7 109.5 112.4 101.5 97.3 107.4 106.7

99.8 101.6 112.8 101.4 110.2 112.5 100.4 97.3 107.4 106.1

100.7 106.1 112.8 95.0 119.1 113.1 99.8 99.6 109.7 104.0

100.5 107.3 108.8 94.2 121.2 112.4 99.1 102.5 110.2 100.8

102.2 106.4 114.5 103.9 108.4 114.4 104.9 98.2 104.9 107.9

Preliminary.

Source: Bureau of Labor Statistics, U.S. Department of Labor (BLS)

Average Price of Oranges (Equivalent On-Tree) Received by Grow ers in the U.S. Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

188

In Millions of Pounds

Jan.

In Dollars Per Box

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

3.76 3.43 3.97 3.59 3.14 4.52 3.35 2.85 3.75 3.00

3.90 3.59 4.39 3.67 3.55 4.99 3.18 3.20 4.05 3.14

4.66 4.22 5.20 4.82 5.05 5.90 3.24 4.93 4.64 4.59

4.83 4.61 6.11 4.68 5.44 5.96 4.20 4.84 4.65 4.46

5.04 4.90 6.63 4.74 5.70 6.48 4.39 4.64 4.47 4.57

4.94 5.63 6.72 4.62 6.05 8.04 4.34 4.47 4.00 4.49

4.08 7.44 6.97 6.48 6.77 8.58 2.45 4.63 4.06 4.35

4.24 7.30 8.15 7.45 5.56 6.66 0.35 5.01 6.61 4.27

3.44 7.26 13.70 7.15 5.64 9.96 0.29 6.20 5.33 2.80

2.92 7.90 10.94 4.48 5.98 9.50 1.43 4.99 5.18 5.76

3.44 3.57 4.17 3.09 5.03 4.70 3.20 2.90 3.11 2.23

3.43 3.55 3.52 3.14 4.82 3.42 2.95 3.20 3.23 2.44

4.06 5.28 6.71 4.83 5.23 6.56 2.78 4.32 4.42 3.84

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Palm Oil Palm oil is an edible vegetable oil produced from the flesh of the fruit of the oil palm tree. The oil palm tree is a tropical palm tree that is a native of the west coast of Africa and is different from the coconut palm tree. The fruit of the oil palm tree is reddish, about the size of a large plum, and grows in large bunches. A single seed, the palm kernel, is contained in each fruit. Oil is extracted from both the pulp of the fruit (becoming palm oil) and the kernel (palm kernel oil), with 1 metric ton of palm kernel oil obtained for every 10 metric tons of palm oil. Palm oil is commercially used in soap, ointments, cosmetics, detergents, and machinery lubricants. It is also used worldwide as cooking oil, shortening, and margarine. Palm kernel oil is a lighter oil and is used exclusively for food use. Crude palm oil and crude palm kernel oil are traded on the Kuala Lumpur Commodity Exchange (KLSE). Prices – Palm oil prices in September 2003 were 32.25 cents/pound, slightly above the running average for calendar 2003 of 31.76 cents. That was sharply higher than 23.31 cents in 2002 and 15.73 cents in 2001. Supply – World production of palm oil in 2003/4 rose by 3% to 28.13 million metric tons from 27.21 million in

World Production of Palm Oil Crop Year

Preliminary.

In Thousands of Metric Tons

Brazil

Cameroon

Colombi a

Costa Rica

Ecuador

Ghana

Indonesia

Ivory C o a st

Malaysi a

Nigeria

Papua/N Guinea

Thailand

World Total

80 85 90 90 88 91 105 109 115 128

90 125 130 161 140 134 138 143 144 146

348 391 393 440 439 466 513 561 517 572

84 88 93 97 108 116 136 138 140 143

166 194 220 200 205 247 233 196 213 255

50 74 79 83 107 110 109 108 108 111

3,630 4,144 4,587 5,078 5,320 6,011 6,855 7,725 8,790 9,480

305 282 277 258 270 265 283 226 238 254

7,103 7,771 8,264 9,000 8,509 9,759 10,492 11,940 11,856 12,520

640 661 667 678 688 713 735 763 774 782

212 223 236 248 206 257 300 334 338 310

311 346 369 438 469 540 533 597 597 613

13,793 15,073 16,152 17,569 17,305 19,502 21,281 23,730 24,747 26,251

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

2002/3. Palm oil is the world’s second largest vegetable oil crop, running only slightly below soybean oil production of 31.98 million metric tons in 2003/4. The large production year in 2003/4 for palm oil outpaced demand and that led to an 11% increase in stocks to 2.31 million metric tons from 2.09 million in 2002/3, although that is still a relatively tight stocks level compared to the 1999 to 2002 period. The world’s largest producer of palm oil by far is Malaysia with 48% of world production and Indonesia is the second largest producer with 36% of world production. Together they account for 84% of world production. Malaysian production in 2002/3 rose by 6% to 12.520 million metric tons from 11.856 million in 2001/2. Indonesian production in 2002/3 rose by 8% to 9.480 million metric tons from 8.790 million in 2001/2. Trade – World palm oil exports in 2002/3 rose by 6.5% to 20.220 million metric tons. The world’s largest exporters are Malaysia with a 58% market share of world exports, followed by Indonesia with a 32% share. The world’s largest importers are India with a 16% share of world imports, followed by Germany (9%) and China (8%).

2

Estimate.

3

Forecast.

World Trade of Palm Oil

Source: The Oil World

In Thousands of Metric Tons

Crop Year

---------------------------------------------- Imports ---------------------------------------------- ----------------------------------------- Exports ----------------------------------------NetherUnited World Hong IndoMalay- Papua/N SingaWorld China Germany India lands Pakistan Kingdom Total Kong nesia si a Guinea pore Total

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

1,653 1,786 1,178 1,851 1,490 1,433 1,474 2,147 2,600 2,800

1

Preliminary.

2

Estimate.

427 412 446 498 370 406 431 497 592 644 3

200 480 970 1,300 1,684 2,762 3,482 3,856 3,233 3,750

Forecast.

443 443 544 649 670 738 780 907 1,071 1,123

1,080 1,215 1,166 1,020 1,210 1,053 1,086 1,191 1,333 1,315

Source: The Oil World

365 462 500 516 457 528 558 610 721 732

10,346 10,674 10,558 11,751 11,971 12,962 14,774 17,369 18,683 20,390

234 145 160 145 120 113 130 180 302 330

1,965 1,904 2,082 2,419 2,459 3,219 3,898 4,577 6,024 6,450

6,737 6,728 6,896 7,794 7,847 8,482 9,101 10,767 10,939 11,680

210 178 191 203 207 248 292 334 322 325

829 829 829 829 253 289 251 228 217 243

10,391 10,573 10,582 11,974 11,795 13,246 14,722 17,311 18,977 20,220

189

PALM OIL Supply and Distribution of Palm Oil in the United States

Year Beginning Oct. 1

Stocks Oct. 1

Imports

Total Supply

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

14.9 16.4 7.4 14.0 21.4 16.1 21.1 25.7 27.5 26.0

167.0 98.7 106.9 146.4 128.0 128.8 156.6 175.5 218.7 195.0

181.9 115.1 114.3 160.4 149.4 144.9 177.7 201.2 246.2 221.0

In Thousands of Metric Tons

------------- Consumption ------------Edible Inedible Total End Products Products Products ------- In Millions of Pounds -------

86.2 38.1 6.7 W W W W W W W

118.2 113.6 103.9 91.8 93.8 72.4 55.0 36.0 22.6 W

204.4 151.7 110.6 W W W W W 75.1 76.7

Total D i sa p pearance

Exports

162.0 101.8 91.1 164.6 155.3 173.2 183.4 167.7 215.9 185.0

3.6 5.9 9.2 4.2 4.4 5.2 3.4 6.0 6.2 7.1

---------------------- Prices ----------------------Palm Kernal U.S. Malaysia, Oil, Malaysia, Import F.O.B., Value4 RBD C.I.F. Rotterdam ----------- U.S. $ Per Metric Ton -----------

370 538 511 432 464 ----------------

451 647 545 544 640 514 338 272 359 438

566 680 729 680 653 708 533 313 379 455

1

Preliminary. 2 Estimate. 3 Forecast. 4 Market value in the foreign country, excluding import duties, ocean freight and marine insurance. Sources: The Oil World; Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Wholesale Palm Oil Prices, CIF, Bulk, U.S. Ports Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

21.91 34.26 27.08 28.68 29.30 31.06 18.65 18.05 17.75 31.75

21.67 33.82 26.52 29.25 29.59 28.58 17.66 18.05 17.06 31.75

21.72 36.18 26.33 28.00 30.53 25.52 17.73 13.50 17.30 31.35

23.08 35.56 27.52 28.18 32.10 25.52 18.21 13.50 17.75 31.25

26.27 32.80 28.57 28.93 31.11 24.50 18.12 12.50 18.85 31.25

28.94 33.06 25.43 27.25 31.42 21.30 16.52 13.00 21.44 31.75

27.44 33.68 24.78 26.17 32.33 18.15 16.85 15.50 20.50 32.25

30.18 32.59 24.46 25.55 33.14 18.70 16.23 18.00 21.85 32.25

32.15 30.86 27.24 25.37 33.14 21.00 15.90 16.75 32.00 32.25

31.93 31.45 26.13 27.33 33.06 20.00 13.19 15.60 31.75

34.95 31.96 26.95 27.28 33.30 20.00 13.56 16.85 31.75

36.83 30.00 27.45 25.05 34.00 20.00 12.75 17.45 31.75

28.09 33.02 26.54 27.25 31.92 22.86 16.28 15.73 23.31 31.76

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

190

In Cents Per Pound

Jan.

Paper The earliest known paper, still in existence, was made from cotton rags around 150 AD. Around 800 AD, paper made its appearance in Egypt but was not manufactured there until 900 AD. The Moors introduced the use of paper to Europe, and around 1150, the first papermaking mill was established in Spain, followed by England in 1495, and the US in 1690. During the 17th and 18th centuries, the increased usage of paper created a shortage of cotton rags, which were the only source for papermaking. The solution to this problem lead to the introduction of the ground-wood process of pulp making in 1840 and the first chemical pulp process 10 years later. Today, the paper and paperboard industries, including newsprint, are economically sensitive. As the economy strengthens, paper use increases, and as the economy weakens, paper use declines. Prices – The index price for paperboard was on track

to fall –0.6% to 163.3 in 2003, but remained above the 10year average of 160.4. The producer price index of standard newsprint paper was on track to rise +5.4% to 111.5 in 2003 from the 17-year low of 105.7 posted in 2002. The 2003 price was still well below the 10-year average price of 132.1. Supply – US production of paper and paperboard in 2002 rose slightly by +0.4% to 81.792 million metric tons from 81.438 million in 2001, which was an 8-year low. The US is by far the world’s largest producer of paper and paperboard, followed by Canada with 20.226 million metric tons and Germany with 18.526 million metric tons. US production of newsprint rose to 428,000 metric tons per month in 2003, up from 330,800 metric tons per month in 2002. US production of newsprint is second, next to Canada, which had production of 718,100 metric tons per month in 2003.

Production of Paper and Paperboard by Selected Countries Year

Austria

Canada

Finland

France

Germany

Italy

Netherlands

1997 1998 1999 2000 2001 2002 1

3,884 4,009 4,142 4,386 4,250 4,419

18,730 18,875 20,280 20,921 19,834 20,226

12,519 12,703 12,947 13,509 12,502 12,776

8,867 9,161 9,603 10,006 9,625 9,798

15,911 16,311 16,742 18,182 17,879 18,526

7,929 8,254 8,568 9,129 8,926 9,273

3,130 3,180 3,256 3,332 3,174 3,346

1

Preliminary.

In Thousands of Metric Tons Norway

Russia

Spain

Sweden

United Kingdom

United States

2,162 2,260 2,241 2,300 2,220 2,114

2,960 3,595 4,535 5,310 5,625 5,915

3,668 3,545 4,435 4,765 5,131 5,365

9,654 9,879 10,071 10,786 10,534 10,724

6,476 6,477 6,576 6,868 6,467 6,481

86,921 86,451 88,776 86,545 81,438 81,792

Source: Food and Agriculture Organization of the United Nations (FAO-UN)

Production of New sprint by Selected Countries (Monthly Average) Year

Australia

Brazil

Canada

China

Finland

France

Germany

India

Ja p a n

Rep. of Korea

34.0 33.9 31.8 32.7 32.3 34.0 34.5

22.1 22.7 20.2 22.2 19.2 15.0 15.3

767.1 718.6 767.0 768.0 697.8 705.0 718.1

68.7 70.8 93.4 121.0 127.4 117.0 171.2

122.5 123.6 124.2 116.1 108.0 88.7 78.1

65.3 75.7 79.2 86.6 86.0 82.0 31.6

134.8 135.8 136.9 150.5 170.5 173.5 177.2

23.3 28.8 32.4 48.9 53.0 49.6 57.0

266.0 272.0 274.6 284.9 288.7 299.7 290.8

132.7 141.7 144.8 151.5 136.6 137.9 132.0

1997 1998 1999 2000 2001 2002 1 20032 1

Preliminary.

2

Estimate.

Year

1

United States

99.8 116.2 135.0 141.5 144.3

200.9 206.5 209.0 211.5 205.3 153.3 211.0

545.3 541.7 543.0 547.5 480.8 330.8 428.0

1982 = 100

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

147.1 155.9 142.2 163.1 179.4 165.0 166.8

144.2 156.1 142.3 163.6 176.6 164.0 166.5

139.7 156.0 146.4 173.6 175.8 162.6 164.4

137.2 155.2 148.1 176.6 175.2 162.8 163.5

136.8 154.2 149.3 180.4 174.1 161.1 163.6

137.5 153.7 149.5 180.3 172.4 161.1 163.4

137.8 152.2 154.5 180.9 172.3 161.8 162.5

143.8 150.9 158.6 181.2 169.8 165.8 162.5

148.4 149.0 161.0 180.9 169.0 166.7 160.1

150.1 146.9 162.1 180.4 167.1 167.1 160.0

154.4 144.7 162.2 180.2 166.8 167.3 159.7

156.1 143.6 162.3 179.5 167.0 166.6 159.9

144.4 151.6 153.2 176.7 172.1 164.3 162.7

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS) (0914)

Producer Price Index of Standard New sprint Year

1

Sweden

Jan.

Preliminary.

1997 1998 1999 2000 2001 2002 2003 1

Russia

Source: United Nations

Index Price of Paperboard 1997 1998 1999 2000 2001 2002 2003 1

In Thousands of Metric Tons

1982 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

121.1 142.2 143.0 117.2 140.6 113.6 106.1

120.9 142.5 135.9 116.8 141.4 106.2 107.4

123.1 141.8 128.1 116.5 143.0 106.5 106.3

128.6 142.3 125.0 118.3 150.9 105.7 110.2

135.9 140.0 117.8 123.1 146.8 98.9 112.6

137.2 140.3 117.7 127.1 148.5 100.5 112.5

138.6 143.4 110.3 127.6 146.6 101.0 111.0

139.4 143.1 111.7 130.7 142.4 101.8 114.3

139.4 144.6 111.4 131.5 134.5 104.7 116.5

139.4 147.6 NA 139.4 130.1 112.2 117.0

141.3 147.6 NA 141.2 121.6 109.6 114.4

141.8 145.0 NA 140.5 117.3 107.9 113.3

133.9 143.4 122.3 127.5 138.6 105.7 111.8

Preliminary.

NA = Not available.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS) (0913-02)

191

Peanuts and Peanut Oil Peanuts are the edible seeds of a plant member of the pea family. Although called a nut, the peanut is actually a legume. Ancient South American Inca Indians were the first to grind peanuts to make peanut butter. The peanut originated in Brazil and was brought to the US via Africa. The first major use of peanuts was as feed for pigs. It wasn’t until the Civil War that peanuts were used as human food, when both Northern and Southern troops used the peanut as a food source during hard times. In 1903, Dr. George Washington Carver, a talented botanist who is considered the “father of commercial peanuts”, introduced peanuts as a rotation crop in cotton-growing areas. Carver discovered over 300 uses for the peanut including shaving cream, leather dye, coffee, ink, cheese, and shampoo. Peanuts come in many varieties, but there are four basic types grown in the US: Runner, Spanish, Valencia, and Virginia. Over half of Runner peanuts are used to make peanut butter. Spanish peanuts are primarily used to make candies and peanut oil. Valencia peanuts are the sweetest of the four types. Virginia peanuts are mainly roasted and sold in and out of the shell. Peanut oil is extracted from shelled and crushed peanuts through hydraulic pressing, expelled pressing, or solvent extraction. Crude peanut oil is used as a flavoring agent, salad oil, and light cooking oil. Refined, bleached and deodorized peanut oil is used for cooking and in margarines and shortenings. The by-product called press cake is used for cattle feed along with the tops of the plants, after the pods are removed. The dry shells can be burned as fuel. Prices – The average price received by farmers for peanuts (in the shell) as of December 2003 was very depressed at 18.9 cents/pound. That was just 0.1 cent above the 2002/ 3 average of 18.8 cents, which was the weakest average price seen since 1974/5. Peanut prices were hurt in 2003 by an oversupply situation due to a 10% boost in production. That led to a 25% increase in stocks as demand failed to keep up with supply. Supply – Peanut production in 2003/4 was forecast by the USDA at 33.45 million metric tons, up 10.4% from 30.31 million in 2002/3. The big boost in production led to a 25% increase in stocks in 2003/4 to 640,000 metric tons from

World Production of Peanuts (in the Shell) Argentina

Burma

China

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

238 462 300 625 340 420 400 360 220 220

445 501 593 559 540 560 640 730 700 710

9,682 10,200 10,140 9,648 11,886 12,640 14,440 14,420 14,900 15,100

1

2

Year

Preliminary.

192

Estimate.

510,000 in 2002/3. The world’s largest peanut producer is China with 45% of world production in 2003/4, followed by India with 22% and the US with 6%. India saw a sharp 44% jump in production to 7.50 million metric tons in 2003/ 4 versus 5.20 million in 2002/3, whereas Chinese production was only slightly higher by +1.3% to 15.10 million. World peanut oil production in 2003/4 rose by 13% to 4.91 million metric tons from 4.34 million in 2002/3. Peanut oil accounted for only about 5% of world vegetable oil production in 2003/4. US peanut production in 2003/4 rose sharply by 23% to 1.86 million metric tons from 1.51 million in 2002/3. The largest peanut producing states in the US are Georgia (with about 44% of US production), Texas (19%), Alabama (13%), Florida (8%), and North Carolina (7%). Demand – Of world peanut production, 47% of that production was forecast to go towards crushing of peanuts into oil and meal in 2003/4. Specifically, crush demand in 2003/4 was forecasted 15.82 million metric tons, up 13% from 14.04 million in 2002/3. World consumption of peanut meal in 2003/4 was forecast at 6.05 million metric tons, up 12% from 5.40 million in 2002/3. World consumption of peanut oil was forecast at 4.86 million in 2003/4, up 11% from 4.36 million in 2002/3. There are three main types of peanuts grown in the US. The most popular type is Runner peanuts with 82% of US production, followed by Virginia peanuts with 15% of production, and Spanish peanuts with 3% of production. The primary use for both Runner and Virginia peanuts is the production of peanut butter (55% for Runner and 46% for Virginia). The second largest use for Virginia peanuts is for peanut snacks (42%), while the second largest use for Runner peanuts is candy (24%). The main use for Spanish peanuts is for candy (44%). Trade – World exports of peanuts in 2003/4 was forecast at 1.54 million metric tons, up 16% from 1.33 million in 2002/3. Exports accounted for only 4.6% of overall world production, showing that peanuts are generally consumed where they are produced. US exports of peanuts in 2003/4 fell sharply to 141,000 metric tons from 269,000 in 2002/3.

In Thousands of Metric Tons

India

Indonesia

Nigeria

Senegal

South Africa

Sudan

Thailand

United States

Zaire

World Total

8,255 7,400 9,024 7,580 7,450 5,500 5,700 7,600 5,200 7,500

1,085 1,055 985 990 930 1,020 1,040 1,030 1,040 1,040

650 800 950 1,250 1,430 1,450 1,470 1,490 1,510 1,510

720 827 646 506 541 760 1,000 900 260 450

105 193 140 97 138 170 150 150 150 150

390 370 370 370 370 370 370 370 370 370

150 147 147 130 135 140 140 130 130 130

1,927 1,570 1,661 1,605 1,798 1,740 1,480 1,940 1,510 1,860

581 585 570 400 410 400 380 370 360 410

27,366 27,467 28,958 27,289 29,765 28,990 31,110 33,630 30,310 33,450

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

PEANUTS AND PEANUT OIL Salient Statistics of Peanuts in the United States Crop Year

Acreage Agreage Harvested for Nuts Planted ----- 1,000 Acres -----

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

1,641.0 1,537.5 1,401.5 1,434.0 1,521.0 1,534.5 1,536.8 1,541.2 1,358.0 1,344.0

1

Preliminary.

2

Average Yield Per Acre In Lbs.

Production 1,000 Lbs.

S e a so n Farm Price Cents/Lb.

Farm Value Million Dollars

2,624 2,282 2,653 2,503 2,702 2,667 2,444 3,029 2,561 3,159

4,247,455 3,461,475 3,661,205 3,539,380 3,963,440 3,829,490 3,265,505 4,276,704 3,320,490 4,144,150

28.9 29.3 28.1 28.3 28.4 25.4 27.4 23.4 18.2 18.8

1,229.0 1,013.3 1,029.8 1,001.6 1,126.0 971.6 896.1 1,000.5 599.6 779.2

1,618.5 1,517.0 1,380.0 1,413.8 1,467.0 1,436.0 1,336.0 1,411.9 1,296.7 1,312.0

----- Thousand Pounds (Year Beginning August 1) ----------------- Exports -------------- ------------- Imports ------------Unshelled

Shelled

Unshelled

Shelled

878,000 826,000 668,000 682,000 562,000 727,000 527,000 713,000 490,000 500,000

583,142 564,021 440,438 455,264 -------------------

74,000 153,000 127,000 141,000 155,000 178,000 216,000 203,000 75,000 65,000

55,385 108,303 95,041 101,792 -------------------

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Estimate.

Supply and Disposition of Peanuts (Farmer's Stock Basis) & Support Program in the United States -------------------------------- Disposition --------------------------- -------- Government Support Program ------------------------------- Supply ------------------------Crop Year

Amount Put Total S eed, ProStocks Crushed Support Addi- --- Under Support --D i sa p L o ss & Total Exports Food pearance duction Imports Aug. 1 fior Oil Residual Price tional Quantity % of Pro-------------------------------------------------- In Millions of Pounds ----------------------------------------------------------- ---- Cents per Lb. ---- Mil. Lbs. duction

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

3,461 3,661 3,539 3,963 3,829 3,266 4,277 3,320 4,144

Preliminary.

2

153 127 141 155 178 216 203 75 65

1,198 758 795 848 1,392 1,233 1,097 1,476 875

4,812 4,546 4,475 4,966 5,399 4,715 5,576 4,872 4,892

826 668 682 562 727 527 713 490 500

999 692 544 460 713 548 693 857 656

238 363 303 374 493 364 483 422 378

1,993 2,029 2,099 2,153 2,233 2,179 2,211 2,228 2,283

4,054 3,750 3,627 3,574 4,166 3,618 4,100 3,997 3,817

Year

Alabama

Florida

Georgia

New Mexico

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31

446,220 483,360 449,805 372,490 432,415 448,050 271,180 532,325 379,250 508,750

207,480 193,590 236,160 228,060 233,100 260,380 213,710 250,100 197,800 345,000

1,862,630 1,414,880 1,433,770 1,333,830 1,511,655 1,400,800 1,328,400 1,711,620 1,313,000 1,863,000

51,660 43,000 37,950 46,710 62,040 61,600 54,990 67,044 54,000 45,900

Preliminary.

6.6 6.6 6.6 8.8 8.8 6.6 6.6 NA NA

818 320 417 -------------------

24.0 8.7 11.8 -------------------

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Estimate.

Production of Peanuts (Harvested for Nuts) in the United States, by States

1

33.92 30.50 30.50 30.50 30.50 30.50 30.50 NA NA

In Thousands of Pounds

North Carolina

Okla homa

South Carolina

Texas

Virgina

Total

485,465 347,040 367,500 329,640 397,155 298,840 338,250 356,475 210,000 320,000

261,000 201,880 195,210 184,800 159,750 189,600 120,600 197,890 159,600 98,000

36,250 30,800 32,550 30,450 28,175 25,300 29,500 30,600 19,140 57,800

605,570 540,000 689,000 822,150 917,900 926,800 698,500 895,900 868,000 810,000

291,180 206,925 219,260 191,250 221,250 218,120 210,375 234,750 119,700 95,700

4,247,455 3,461,475 3,661,205 3,539,380 3,963,440 3,829,490 3,265,505 4,276,704 3,320,490 4,144,150

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Supply and Reported Uses of Shelled Peanuts and Products in the United States In Thousands of Pounds Shelled Peanuts Crop Year Beginning Aug. 1

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31

Shelled Peanuts

---------------------------------- Reported Used (Shelled Peanuts -- Raw Basis) ----------------------------------C a ke & Shelled Crude Oil Meal Peanuts ProProOil Sandwich Other duction duction Stock2 Candy3 Snacks4 Spread Butter5 Products Total Crushed6

--- Stocks, Aug. 1 --- ------- Production ------- ----------------------------- Edible Grades Used In -----------------------------

Edible

Oil Stock2

Edible

679,639 752,814 370,431 498,954 580,370 855,572 707,672 680,850 504,131

42,054 58,188 126,318 41,000 14,091 16,587 14,463 16,648 20,512

1,741,824 1,253,451 1,692,581 1,694,016 2,227,037 2,157,828 1,939,736 2,090,776 1,982,254

511,635 491,818 305,674 290,882 310,459 448,875 337,324 485,092 574,817

349,630 350,663 360,846 351,017 380,177 354,953 355,610 349,729 354,115

301,548 277,089 290,102 306,908 349,806 394,121 361,516 360,916 344,639

----------------------------

709,823 728,076 727,531 760,230 744,706 772,104 753,239 818,927 827,163

36,854 32,015 33,825 35,471 22,131 20,227 19,998 17,284 25,036

1,397,855 1,387,843 1,412,304 1,453,626 1,496,820 1,541,405 1,490,363 1,546,856 1,550,953

738,221 751,281 520,413 409,249 345,825 536,164 411,558 521,173 585,642

314,189 320,909 220,877 175,853 145,254 228,839 178,523 230,791 259,360

415,394 420,919 294,590 228,276 192,425 291,491 230,099 296,874 322,998

1

Preliminary. 2 I ncludes straight run oil stock peanuts. 3 I ncludes peanut butter made by manufacturers for own use in candy. 4 Formerly titled Salted Peanuts. 5 I ncludes peanut butter made by manufacturers for own use in cookies and sandwiches, but excludes peanut butter used in candy. 6 All crushings regardless of grade. Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

193

PEANUTS AND PEANUT OIL Shelled Peanuts (Raw Basis) Used in Primary Products, by Type

In Thousands of Pounds

Year

------------------------- Virginia ------------------------- ------------------------------ Runner ------------------------------ ------------------------- Spanish ------------------------Snack Peanut Snack Peanut Snack Peanut Candy2 Total Candy2 Total Candy2 Total Peanuts Butter3 Peanuts Butter3 Peanuts Butter3

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31

26,857 25,176 24,158 48,428 36,178 23,173 19,101 26,640 26,924

97,389 51,354 93,041 71,310 91,882 64,274 80,309 59,228 99,401 57,864 100,384 73,926 100,650 102,050 97,046 106,573 75,091 78,394

190,916 203,183 193,166 182,100 196,935 200,804 225,072 233,356 184,596

302,697 304,285 318,924 302,791 321,838 315,467 320,304 303,668 312,090

185,377 169,142 176,851 206,718 234,486 278,440 247,739 250,079 257,095

644,711 634,350 634,387 676,839 670,705 690,564 643,229 702,454 732,103

1,152,110 1,123,719 1,149,347 1,206,946 1,244,748 1,300,393 1,227,156 1,269,776 1,321,490

20,076 21,202 17,764 19,798 22,161 16,313 16,205 19,421 15,101

18,782 14,906 21,369 19,581 15,919 15,297 13,127 13,791 12,453

13,758 22,416 28,870 24,163 16,137 7,614 7,960 9,900 16,666

54,829 60,941 69,791 64,580 55,137 40,208 38,135 43,724 44,867

1

Preliminary. 2 I ncludes peanut butter made by manufacturers for own use in candy. 3 I ncludes peanut butter made by manufacturers for own use in cookies and sandwiches, but excludes peanut butter used in candy. Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Production, Consumption, Stocks and Foreign Trade of Peanut Oil in the U.S. Crop Year Beginning Aug. 1

--------------- Production --------------- -------------- Consumption -------------- -------------- Stocks Dec. 31 -------------

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Preliminary.

2

Crude

Refined

In Refining

329.0 233.9 144.3 172.9 262.9 222.1 278.5 267.7 202.2

125.7 133.5 104.0 118.3 195.9 206.3 179.1 166.3 125.5

129.9 138.9 111.6 123.7 238.9 258.9 291.9 W W

Forecast.

In End Products

Crude

Refined

126.0 138.4 121.6 180.1 260.4 277.3 282.5 277.6 227.8

19.9 85.6 42.6 47.2 19.7 23.1 8.2 52.9 23.0

2.8 2.8 3.0 3.8 1.7 1.9 1.7 3.5 1.8

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 Preliminary.

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

47.8 35.1 8.8 4.3 5.8 5.5

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

18.3 28.6 31.9 16.1 14.5 18.2 32.1 15.7 25.5 16.6

21.2 42.7 36.8 18.8 14.3 15.8 27.4 20.1 32.8 19.4

18.7 36.9 36.8 17.9 13.0 18.2 31.9 15.3 28.5 20.5

25.6 39.2 36.7 13.3 10.8 16.4 30.4 12.4 33.8 20.0

15.4 29.2 33.3 15.9 10.0 20.7 28.0 19.1 24.3 23.2

21.7 26.9 31.4 9.9 9.5 20.8 24.1 16.3 22.6 19.8

16.8 26.3 31.5 12.1 6.3 17.8 28.8 16.7 27.7 17.3

17.2 17.4 27.1 6.1 5.8 16.3 21.5 12.9 27.2 18.3

11.9 13.2 21.1 12.2 6.9 13.5 25.4 17.1 26.5 24.1

18.4 19.5 20.6 11.6 13.6 22.6 16.4 13.8 24.9 15.6

24.2 24.3 21.8 14.0 13.9 22.7 15.2 25.6 20.2 13.2

227.5 332.0 358.2 167.7 134.5 219.2 316.3 202.4 319.0 229.6

Source: Bureau of the Census, U.S. Department of Commerce

In Dollars Per Short Ton

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Average

151.25 132.50 170.00 210.00 161.00 98.00 118.00 115.00 NA 147.10

147.50 175.00 146.13 210.00 100.00 103.00 118.00 111.25 130.00 161.00

127.00 204.00 172.67 210.00 103.75 103.00 118.00 100.00 122.50 163.25

105.00 220.00 221.00 210.00 105.00 104.00 142.50 102.50 118.50 163.35

107.50 215.00 228.13 210.00 102.50 104.75 120.00 100.00 114.25

119.00 210.00 225.00 210.00 91.25 110.00 118.00 105.00 124.00

125.00 210.00 233.75 210.00 94.50 115.00 110.75 110.00 125.00

123.75 212.00 222.00 210.00 93.75 115.00 112.50 105.00 135.00

134.00 210.00 235.00 210.00 100.00 119.60 NA NA 135.00

138.75 224.25 220.00 210.00 100.00 118.00 123.50 130.00 135.75

136.25 227.00 213.00 207.50 105.00 118.00 130.50 135.00 130.00

142.00 192.80 210.00 205.00 102.50 118.00 126.25 136.88 130.00

128.94 202.70 232.00 209.60 104.94 108.15 121.64 113.69 127.27 158.68

Preliminary.

194

Exports

3.2 1.6 6.6 30.3 9.6 19.5

18.1 27.9 29.2 19.9 16.0 16.2 35.2 17.3 24.8 21.7

Average Price of Peanut Meal 50% Southeast Mills Year

Imports for Consumption

Source: Bureau of the Census, U.S. Department of Commerce

Production of Crude Peanut Oil in the United States

1

In Millions of Pounds

NA = Not available.

Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

PEANUTS AND PEANUT OIL

-----

Cents Per Pound Received by Farmers, U.S. (Sept. 1930 - date)

Average Price Received by Producers for Peanuts (in the Shell) in the U.S.

In Cents Per Pound

Year

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Average1

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-42

NQ 30.6 NQ 23.3 NQ 25.7 NQ 24.1 NQ NQ

30.6 29.7 27.6 27.1 26.8 27.0 27.7 24.9 17.9 18.3

28.6 28.6 25.8 25.4 26.3 25.4 26.5 22.8 17.9 18.5

25.9 29.5 27.1 25.0 24.6 24.1 26.1 21.0 18.0 18.4

25.8 28.3 28.1 30.7 27.2 21.8 27.3 19.5 17.5 19.6

25.7 29.8 24.3 24.7 NQ 14.9 31.4 13.5 19.1 20.7

NQ NQ NQ NQ NQ NQ NQ 10.7 19.6 21.3

NQ NQ NQ NQ NQ NQ NQ NQ 22.5

NQ NQ NQ NQ NQ NQ NQ NQ 18.4

NQ NQ NQ NQ NQ NQ NQ NQ 19.6

NQ NQ NQ NQ NQ NQ NQ NQ 17.7

NQ NQ NQ NQ NQ NQ NQ NQ NQ

27.9 29.4 26.6 26.0 26.2 23.2 27.8 19.5 18.8 19.5

1 Weighted average by sales. 2 Preliminarly. U.S. Department of Agriculture (NASS-USDA)

NQ = No quote.

Source: National Agricultural Statistics Service,

Average Price of Domestic Crude Peanut Oil (in Tanks) F.O.B. Southeast Mills Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Cents Per Pound

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Average

46.00 42.50 41.50 49.63 45.40 40.40 34.63 36.25 NA 61.60

50.88 41.63 39.20 51.00 45.00 41.00 35.50 37.00 42.00 63.25

53.80 39.20 40.75 51.25 44.25 35.40 36.40 37.00 43.67 64.50

50.25 37.25 43.50 51.60 44.00 33.00 37.25 35.00 45.75 65.00

41.83 36.00 43.88 51.00 39.75 32.50 37.00 28.00 46.00

41.00 36.60 44.75 51.00 34.75 31.60 35.90 27.50 47.00

41.25 39.25 45.00 50.00 35.20 33.00 34.00 27.00 50.25

40.25 42.80 46.20 47.20 35.00 36.25 33.00 27.00 52.75

39.00 43.00 47.88 45.50 37.75 36.00 33.00 30.00 56.60

39.13 43.00 48.06 44.00 39.00 35.63 33.00 34.00 58.25

41.50 42.60 48.00 43.75 38.75 35.00 34.00 35.20 60.00

41.30 40.80 47.25 43.88 38.00 34.90 34.00 36.25 60.67

43.85 40.39 44.66 48.32 39.74 35.39 34.81 32.52 51.18 63.59

Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

195

Pepper The pepper plant is a perennial climbing shrub that originated in India and Sri Lanka. Pepper is considered the world’s most important spice and has been used to flavor foods for over 3,000 years. Pepper was once considered so valuable that it was used to ransom Rome from Attila the Hun. Black pepper alone accounts for nearly 35% of the world’s spice trade. Unlike many other popular herbs and spices, pepper can only be cultivated in tropical climates. The pepper plant produces a berry called a peppercorn. Both black and white pepper are obtained from the same plant. The colors of pepper are determined by the maturity of the berry at harvest and by the different processing methods. Black pepper is picked when the berries are still green and immature. The peppercorns are then dried in the sun until they turn black. White pepper is picked when the berries are fully ripe and bright red. The red peppercorns are then soaked, washed to remove the skin of the berry, and dried to produce a white to yellowish-white peppercorn. Black pepper has a slightly hotter flavor and stronger aroma than white pepper. Piperine, an alkaloid of pyridine, is the active ingredient in pepper that makes it hot. Black pepper oil is obtained from crushed berries using solvent extraction. Black pepper oil is used in the treatment of pain, chills, flue, muscular aches, and in some perfumes. It is also helpful in promoting digestion in the colon. The world’s key pepper varieties are known by their

place of origin. Some popular types of pepper are: Lampong Black and Muntok White from Indonesia, Brazilian black, and Malabar Black and Tellicherry from India. Prices – Average black pepper prices in 2002 fell sharply to 92.3 cents per pound from 116.2 cents in 2001 and the 1999 record high of 254.5 cents. Average white pepper prices in 2002 fell to 117.6 cents per pound from 132.6 cents in 2001, and were down sharply from the 1998 record of 356.5 cents. Trade – The world’s largest exporter of pepper by far is Indonesia with 47,502 metric tons of exports in 2000, the latest reporting year. After Indonesia, the largest exporters are Vietnam with 23,543 metric tons (5-yr average), Malaysia with 21,804 metric tons, Brazil with 20,469 metric tons, and India with 19,125 metric tons. US imports of black pepper in 2000 fell –8.6% to 43,479 metric tons from 47,591 metric tons in 1999, which was a record high. The primary source of US imports of black pepper was Indonesia, which accounted for 36% of US imports, followed by India with 25%, Brazil with 18%, and Malaysia with 10%. US imports of white pepper in 2000 rose +7.7% to a record high of 7,311 metric tons. The primary source of US imports of white pepper was Indonesia, which accounted for 87% of US imports, followed by 3% shares each from Singapore, Malaysia and China.

World Exports of Pepper (Black and White) and Prices in the United States

In Metric Tons

-------- New York Spot Prices (Cents Per Pound) ----------------------------------------------- Exports (In Metric Tons) ---------------------------------------- ------ Indonesian -----IndoMadaMalaySri Lampong Muntok Brazil India nesia g a sca r si a Mexico Lanka Vietnam Black White

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20021 1

26,254 22,231 22,158 24,178 13,962 17,249 19,617 20,469 36,975

Preliminary.

2

47,677 36,536 25,270 47,211 35,403 32,859 35,635 19,125 19,641

Extra bold.

27,684 36,036 57,781 36,849 33,386 38,723 36,293 47,502 53,432

2,001 2,066 1,274 1,570 894 339 619 588 635

16,737 23,275 14,869 28,124 29,000 18,717 21,804 23,684 25,537

2,430 2,615 3,085 4,200 4,210 3,365 4,026 4,534 4,658

5,032 1,850 2,082 2,612 3,485 5,493 3,754 4,855 2,161

20,138 16,000 17,900 25,300 24,713 15,000 34,800 -------

Year

1

62.3 95.0 116.8 114.8 206.7 239.5 254.5 228.1 116.2 92.9

62.3 95.0 116.8 114.8 206.7 239.5 254.5 228.1 116.2 92.9

84.0 110.7 150.9 140.0 225.8 286.6 296.3 282.6 179.3 127.8

In Metric Tons

------------------------------------------ B lack P ep p er ----------------------------------------------- ------------------------------------- Wh ite P ep p er ------------------------------------IndoMalaySi ngaSri IndoMalaySi ngaBrazil India nesia si a pore Lanka Total Brazil Chi na nesi a si a pore Total

15,069 6,601 4,580 8,215 3,165 4,267 4,328 5,806 7,093 7,853

P reliminary.

196

114.6 151.9 182.3 178.9 304.6 356.5 334.9 227.1 132.6 120.5

--------- Indian --------Malabar TelliBlack cherry2

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

U n ited S tates Imp o rts o f U n g ro u n d P ep p er fro m S p ecified C o u n tries

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1

62.5 95.3 116.8 114.8 206.7 239.5 254.5 228.1 116.2 92.9

Brazilian Black

2,308 9,892 21,985 21,097 10,836 18,350 23,404 15,540 24,931 10,981

11,330 20,768 7,666 11,877 19,630 17,213 13,610 13,045 8,429 15,713

8,154 2,073 209 829 268 1,084 2,203 422 2,392 4,148

391 52 ---90 30 101 678 185 525 306

396 310 539 386 327 411 285 578 441 516

38,860 40,590 35,969 43,011 34,465 41,602 45,319 36,508 47,591 43,479

2 51 322 312 414 519 75 32 32 15

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

7 2 114 756 280 54 522 108 451 210

4,938 5,089 4,304 3,974 4,037 4,370 3,755 4,571 5,202 6,345

37 29 137 228 164 150 199 195 420 185

96 261 363 302 211 391 750 203 342 215

5,174 5,544 5,481 6,102 5,266 5,765 5,751 5,393 6,789 7,311

PEPPER

-----

Cents Per Pound Brazilian Black, New York (Dec. 1919 - date)

Average Black Pepper in New York (Braz ilian) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

69.3 111.0 99.3 138.6 199.4 222.5 260.0 157.5 85.0 93.8

74.3 110.0 103.3 151.8 205.5 225.8 256.3 146.3 80.0 89.0

82.0 114.2 109.2 149.0 243.8 252.5 246.0 144.0 81.4 88.5

82.8 124.8 108.3 161.8 262.8 248.0 260.0 150.0 100.5 85.5

82.0 127.3 111.2 173.4 262.8 252.5 265.0 143.8 101.0 83.8

86.5 126.0 109.5 193.8 247.5 250.0 265.0 123.0 92.0 89.0

87.8 127.0 108.0 229.5 253.0 229.0 263.8 97.3 84.8 90.0

97.8 126.3 119.8 255.0 253.8 249.3 252.5 87.0 86.8 86.6

112.2 118.2 126.5 251.3 246.3 263.8 205.0 90.0 93.5 83.5

131.5 113.5 127.5 264.8 243.0 282.0 167.5 89.3 103.5 81.6

123.5 104.8 127.6 266.3 231.3 297.5 147.5 81.6 106.0 80.0

110.4 99.0 128.0 245.0 225.0 281.0 149.0 85.3 100.8

95.0 116.8 114.8 206.7 239.5 254.5 228.1 116.2 92.9 86.5

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Average White Pepper in New York (Indonesian)1 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

144.5 179.5 174.5 256.0 348.0 361.3 295.0 159.0 111.3 152.4

139.5 175.8 177.5 264.5 346.3 355.0 293.8 151.3 100.3 148.8

141.3 168.0 181.6 255.0 362.5 365.0 264.0 144.0 95.6 150.0

140.8 181.3 179.5 250.0 390.0 355.0 253.8 133.8 108.8 150.0

137.0 195.0 172.6 241.0 393.0 352.5 246.3 130.0 108.0 142.6

143.3 184.2 164.8 248.8 358.8 335.0 242.0 127.0 105.0 133.0

143.4 187.5 154.0 280.3 354.0 310.0 226.3 122.5 104.5 133.0

156.3 190.8 169.6 324.0 356.3 313.8 227.5 129.6 118.8 138.2

159.2 191.0 181.5 332.5 348.8 325.0 205.0 128.0 130.0 137.5

167.5 182.0 193.5 362.0 340.0 327.0 171.3 125.5 154.0 133.6

176.5 178.5 191.8 433.8 340.0 316.3 150.0 120.0 157.5 127.5

173.0 174.2 205.8 407.5 340.0 303.0 150.0 120.0 153.0

151.9 182.3 178.9 304.6 356.5 334.9 227.1 132.6 120.6 140.6

Muntok White.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

197

Petroleum Petroleum directly out of the ground is called crude oil. Crude oil was formed over millions of years ago from the remains of tiny aquatic plants and animals that lived in ancient seas. It was believed that crude oil had medicinal benefits by ancient Persians, 10th century Sumatrans, and pre-Columbian Indians. Around 4,000 BC in Mesopotamia, bitumen, a tarry crude, was used as caulking for ships, a setting for jewels and mosaics, and an adhesive to secure weapon handles. The walls of Babylon and the famed pyramids were held together with it, and Egyptians used it for embalming. During the 19th century, an oil find was often met with dismay. Pioneers who dug wells to find water or brine, were disappointed when they struck oil. It wasn’t until 1854, with the invention of the kerosene lamp, that the first large-scale demand for petroleum was created. Surprisingly, crude oil is an abundant commodity. The world has produced approximately 650 billion barrels of oil, but another trillion barrels of proved reserves have yet to be produced. Crude oil was the world’s first trillion-dollar industry and accounts for the single largest product in world trade. Futures and options on crude oil trade at the New York Mercantile Exchange (NYMEX) and at the International Petroleum Exchange in London (IPE). NYMEX trades two main types of crude oil: light sweet crude oil and Brent crude oil. The light sweet futures contract calls for the delivery of 1,000 barrels of crude oil in Cushing, Oklahoma. Light sweet crude is preferred by refiners because of its low sulfur content and relatively high yield of high-value products such as gasoline, diesel fuel, heating oil, and jet fuel. The Brent blend crude is based on a light, sweet North Sea crude oil. Brent blend crude production is approximately 500,000 barrels per day, and is shipped from Sullom Voe in the Shetland Islands. Prices – NYMEX crude oil prices on the weekly nearest-futures chart rallied early in 2003 and posted a 13-year high of $39.99 per barrel in late February 2003 due to the war with Iraq and concerns about supply disruptions in the Middle East. After it became clear that the war would be relatively short, crude oil prices fell sharply and hit a 1-1/4 year low of $25.04 in late April. Prices then rallied fairly steadily in the fourth quarter of 2003 and ended the year

World Production of Crude Petroleum Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

Canada

China

Indonesia

1,746 1,805 1,837 1,893 1,981 1,907 1,977 2,029 2,171 2,306

2,939 2,990 3,131 3,200 3,198 3,206 3,249 3,303 3,390 3,409

1,510 1,503 1,547 1,520 1,518 1,472 1,423 1,369 1,267 1,171

I ncludes lease condensate.

198

1

Preliminary.

2

near $33 per barrel, little changed from the close in 2002 but still at the upper end of the price ranges seen in the last two decades. Bullish factors supporting prices later in year included the weak dollar (which boosts the real value of crude oil priced in dollars), much stronger demand as the US economy revved up in Q3 and Q4, weak production from Iraq as the US struggled to revive the moribund Iraqi oil production machinery, OPEC’s relative discipline in limiting production, and tight inventories which dropped to the lowest level in decades. OPEC blamed the Q4 rally in crude oil prices on the weak dollar and stronger demand, rather than a shortage of supply. OPEC late in the year therefore refused to boost production even though prices rose above OPEC’s target range of $22-28 for a basket of OPEC crude. NYMEX crude oil trades about $2 higher than the OPEC basket price due to higher quality and transport costs. OPEC produces about one-third of world demand for oil. Supply – World crude oil production in 2002, the last full reporting year, fell –1.7% to 66.819 million barrels per day. The world’s largest oil producers in 2002 were Saudi Arabia (with 11.4% of world production in 2002), Russia (11.1%), the United States (8.7%), Iran (5.2%), and China (5.0%). US production in 2002 rose +0.3% to 5.817 million barrels per day, with Alaskan production of 984,000 barrels per day accounting for 17% of total US production. Production of oil in Alaska has been declining. In 1988 it was 2.02 million barrels per day, more than double current production levels. Demand – US demand for crude oil in 2002 fell –1.3% to 14.926 million barrels per day, which accounted for 22% of total world production even though the US only accounts for about 5% of world population. Most of that demand went for US refinery production into products such as gasoline and diesel fuel, aviation fuel, heating oil, kerosene, asphalt, and lubricants. Trade – The US is highly dependent on imports of crude oil to meet its energy needs. US imports in 2002, the latest full reporting year, fell –3.0% to 9.047 million barrels per day, accounting for 61% of US usage. US exports of crude oil have dropped sharply in the past several years and totaled a miniscule 9,000 barrels per day in 2002 versus 118,000 barrels as recently as 1999.

In Thousands of Barrels Per Day

Iran

Kuwait

Mexico

Nigeria

Russia

Saudi Arabia

United Kingdom

United States

Venezuela

World Total

3,618 3,643 3,686 3,664 3,634 3,557 3,696 3,724 3,444 3,778

2,025 2,057 2,062 2,083 2,085 1,898 2,126 2,026 1,894 2,178

2,685 2,618 2,855 3,023 3,070 2,906 3,012 3,127 3,177 3,371

1,931 1,993 2,188 2,317 2,153 2,130 2,144 2,256 2,118 2,241

6,135 5,995 5,850 5,920 2,854 6,079 6,479 7,049 7,408 8,182

8,120 8,231 8,218 8,562 8,389 7,833 8,404 8,031 7,634 8,848

2,375 2,489 2,568 2,517 2,616 2,684 2,275 2,282 2,292 2,073

6,662 6,560 6,465 6,452 6,252 5,881 5,822 5,801 5,746 5,738

2,588 2,750 3,053 3,315 3,167 2,826 2,949 2,880 2,604 2,335

60,991 62,335 63,711 65,690 66,921 65,848 68,342 68,057 66,842 69,430

Estimate.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

PETROLEUM Refiner Sales Prices of Residual Fuel Oil Year

1998 1999 2000 2001 2002 2003 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

35.2 27.5 55.3 64.5 50.8 86.1

30.7 21.8 59.2 61.9 51.2 95.6

29.4 27.2 53.2 57.2 53.2 97.4

32.9 30.9 52.3 57.3 59.1 78.1

31.9 34.6 58.9 58.2 64.0 74.9

29.3 35.0 65.8 53.0 63.5 71.9

30.7 38.6 65.1 50.0 63.9 74.5

26.9 44.8 61.5 50.4 67.4 75.4

29.9 49.8 71.9 51.2 67.8 72.0

31.0 47.3 73.7 44.8 72.7 70.7

27.3 48.5 71.3 40.5 73.6 76.7

24.0 50.3 66.6 40.0 73.9

29.9 38.2 62.7 51.7 63.9 79.4

Sulfur 1% or less, excluding taxes.

1

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Preliminary.

Refiner Sales Prices of No. 2 Fuel Oil Year

1998 1999 2000 2001 2002 2003 1

In Cents Per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

48.9 36.3 84.1 90.3 57.5 89.5

47.7 33.1 92.4 82.5 57.7 107.8

44.9 39.8 79.6 76.3 64.6 104.5

44.9 44.7 76.4 79.2 68.3 82.4

43.4 43.8 78.4 82.7 68.4 75.5

39.9 44.7 80.3 79.3 65.8 76.8

38.8 51.2 81.0 72.8 68.7 78.9

36.9 56.2 88.3 77.0 71.3 83.7

41.8 60.9 100.9 79.0 78.3 77.4

41.2 61.0 98.8 68.5 79.6 84.2

38.9 66.2 100.4 60.6 74.8 84.2

34.6 67.8 94.1 56.6 80.8

42.2 49.3 88.6 75.6 69.3 85.9

Excluding taxes.

1

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Refiner Sales Prices of No. 2 Diesel Fuel Year

1998 1999 2000 2001 2002 2003 1

In Cents Per Gallon

Jan.

In Cents Per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

49.6 36.2 77.7 90.7 54.6 89.2

48.3 35.1 85.2 85.8 56.8 108.1

45.8 43.2 85.1 78.1 66.7 102.1

48.2 48.8 79.9 82.6 70.9 86.7

47.0 47.9 81.4 89.8 70.6 79.3

43.6 50.4 82.4 85.3 68.2 81.1

42.6 56.4 83.6 75.5 71.0 83.8

41.4 61.6 92.1 80.8 75.7 88.9

45.6 64.9 105.0 84.1 83.6 80.7

45.5 65.0 104.0 71.4 86.1 87.1

41.4 69.9 103.2 61.6 78.7 86.5

35.6 70.5 93.8 54.7 82.0

44.4 54.6 89.8 78.4 72.4 88.5

Excluding taxes.

1

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Refiner Sales Prices of Kerosine-Type Jet Fuel Year

1998 1999 2000 2001 2002 2003 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

53.4 37.3 80.4 88.2 57.3 89.5

50.2 35.2 83.6 86.8 57.4 102.8

45.7 39.5 83.4 80.5 64.2 101.7

46.6 46.6 77.4 79.5 69.5 82.6

46.9 46.8 77.9 83.5 69.6 75.1

43.5 48.6 79.9 82.6 67.9 77.0

43.8 53.7 83.6 75.9 71.5 81.4

42.9 59.1 87.9 77.6 74.0 86.3

44.6 62.7 105.1 80.7 81.6 80.9

45.8 63.8 104.4 68.5 83.8 83.9

43.1 66.5 105.1 61.9 74.9 87.1

36.5 72.1 99.0 55.3 79.9

45.0 53.3 88.0 76.3 71.3 86.2

Excluding taxes.

1

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Refiner Sales Prices of Propane Year

1998 1999 2000 2001 2002 2003 1

In Cents Per Gallon

In Cents Per Gallon

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

35.4 26.5 49.4 86.4 37.6 60.5

33.1 26.1 60.2 66.9 36.6 72.8

31.2 26.8 52.9 60.1 39.9 69.1

30.3 28.7 48.8 58.6 41.7 53.9

29.3 29.1 49.3 56.2 40.8 54.3

26.6 29.1 53.9 48.7 37.9 57.5

25.7 34.7 54.8 43.6 37.5 55.9

25.7 38.3 60.3 45.6 41.5 58.5

26.3 42.6 65.9 46.4 47.0 56.6

27.6 43.7 64.3 46.1 48.9 59.7

27.7 42.6 63.3 41.6 49.4 58.7

25.7 41.8 76.7 38.1 53.2

28.8 34.2 59.5 54.1 43.1 59.8

Consumer Grade, Excluding taxes.

1

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Supply and Disposition of Crude Oil in the United States

In Thousands of Barrels Per Day

------------------------------------------- Supply -------------------------------------------- Field Production -Yearly Average

1996 1997 1998 1999 2000 2001 2002 20031

Unaccounted ---------- Stock ---------- ------ Disposition ------ ------------ Ending Stocks -------------------------- Imports --------------Withdraw al3 Refinery Other Total for Crude Alaskan Total SPR2 Inputs Primary Other SPR2 Other Exports Total SPR2 Domestic Oil -------------------------------------------------------- In Thousands of Barrels Per Day -------------------------------------------------------- ------- In Millions of Barrels -------

6,465 6,452 6,252 5,881 5,822 5,801 5,746 5,737

1,393 1,296 1,175 1,050 970 963 984 974

7,508 8,225 8,706 8,731 9,071 9,328 9,140 9,646

0 0 0 8 8 11 16 0

7,508 8,225 8,706 8,722 9,062 9,318 9,124 9,646

215 145 115 191 155 117 110 14

-71 -7 22 -11 -73 26 134 108

-53 57 52 -107 3 73 -94 -27

14,195 14,662 14,889 14,804 15,067 15,128 14,947 15,303

110 108 110 118 50 20 9 12

850 868 895 852 826 862 877 906

566 563 571 567 541 550 599 638

Preliminary. 2 Strategic Petroleum Reserve. 3 A negative number indicates a decrease in stocks and a positive number indicates an increase. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

284 305 324 284 286 312 278 268

1

199

PETROLEUM Crude Petroleum Refinery Operations Ratio1 in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

In Percent of Capacity

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

89.8 89.6 90.6 89.3 93.3 90.4 85.7 90.2 87.7 87.2

88.7 87.9 89.1 87.3 91.3 90.0 86.4 90.5 86.6 87.3

87.6 86.7 90.6 90.7 94.4 90.9 89.8 89.4 87.9 90.5

92.4 90.5 93.7 92.6 96.4 94.6 92.6 94.9 93.0 94.0

95.4 94.0 94.4 97.3 97.1 93.9 94.7 96.4 91.5 95.8

95.8 95.6 95.4 97.7 98.9 93.5 96.2 95.6 93.1 94.5

95.5 94.0 93.9 97.1 99.2 94.9 96.9 93.9 93.5 94.0

96.4 94.0 95.0 98.6 99.8 95.5 95.9 93.3 92.9 94.9

94.4 95.6 95.5 99.7 95.0 94.1 94.3 92.2 90.4 93.0

89.8 90.5 94.6 96.7 89.7 91.1 92.4 92.0 87.5 92.4

92.7 92.1 94.7 95.6 94.7 92.0 92.7 92.2 92.6 93.5

92.6 93.3 94.3 97.2 95.1 90.4 94.0 90.2 91.1

92.6 92.0 93.5 95.0 95.4 92.7 92.6 92.6 90.7 92.5

1

Based on the ration of the daily average crude runs to stills to the rated capacity of refineries per day. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Crude Oil Refinery Inputs in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

2

Preliminary.

In Thousands of Barrels Per Day

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

13,286 13,604 13,708 13,632 14,313 14,442 13,779 14,789 14,487 14,337

13,130 13,365 13,529 13,425 14,034 14,309 14,028 14,813 14,306 14,382

12,985 13,480 13,755 14,047 14,590 14,498 14,613 14,649 14,526 14,929

13,809 13,817 14,263 14,283 14,961 15,094 15,053 15,536 15,325 15,575

14,272 14,303 14,401 15,083 15,104 14,973 15,494 15,763 15,301 15,919

14,351 14,553 14,535 15,139 15,368 14,959 15,643 15,650 15,397 15,618

14,344 14,403 14,319 14,958 15,496 15,237 15,819 15,369 15,430 15,549

14,491 14,276 14,423 15,217 15,660 15,299 15,640 15,259 15,338 15,685

14,234 14,402 14,483 15,297 14,854 15,107 15,407 15,005 14,861 15,444

13,529 13,598 14,276 14,790 14,001 14,589 15,029 15,002 14,303 15,342

13,968 13,833 14,276 14,654 14,769 14,704 15,023 15,001 15,155 15,455

13,951 14,011 14,194 14,898 14,832 14,410 15,232 14,688 14,900 15,343

13,866 13,973 14,195 14,662 14,889 14,804 15,067 15,128 14,947 15,303

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Production of Major Refined Petroleum Products in Continental United States Gasoline

Je t Fuel

Kerosene

Natural Gas Plant Liquids

2,621 2,722 2,769 2,826 2,865 2,896 2,664 2,913 2,983 2,992

528.4 516.8 554.5 567.3 554.6 571.3 536.6 558.2 552.3 543.1

21.1 19.2 22.8 23.9 28.6 24.4 20.4 26.7 20.8 20.4

630.2 643.2 669.8 663.3 639.9 675.1 649.4 680.3 686.5 626.7

---------- Fuel Oil ---------Year

Asphalt

Aviation Gasoline

Distillate

Residual

164.8 170.4 167.8 177.0 179.7 184.3 180.6 177.3 179.9 181.0

7.9 7.8 7.3 7.2 7.3 7.5 6.2 6.5 6.4 5.8

1,169.7 1,151.7 1,213.6 1,238.0 1,248.6 1,240.8 1,189.9 1,348.4 1,309.8 1,355.5

301.4 287.6 265.5 258.3 278.0 254.8 234.3 262.8 218.8 241.8

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

2

Gas processing plants.

3

Refineries.

In Millions of Barrels

Lubricants

62.1 63.7 63.3 65.9 67.2 66.8 60.9 64.1 63.3 60.6

------------ Liquified Gasses -----------at at Total L.P.G.2 L.P.G.3

734.2 759.9 789.1 799.4 771.2 811.0 788.0 810.1 822.5 766.1

511.1 521.1 546.7 547.3 526.3 564.5 545.5 569.1 576.8 526.4

223.2 238.8 242.5 252.2 244.9 246.5 242.5 241.0 245.7 239.6

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Stocks of Petroleum and Products in the United States on January 1

In Millions of Barrels

------------------------------------------------------------------------- Refined Products ----------------------------------------------------------------------------Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

Crude Petroleum

Strategic Reserve

Total

922.5 928.9 895.0 849.7 868.1 894.9 851.7 826.2 862.2 876.7

587.1 591.7 591.6 565.8 563.4 571.4 567.2 540.7 550.2 599.1

465.8 468.0 401.2 452.6 451.6 407.1 407.1 415.7 445.6 425.1

----- Fuel Oil ----Aviation Asphalt Gasoline Distillate Residual

19.1 18.6 22.5 20.5 22.1 21.4 16.9 25.0 20.6 21.3

1.8 2.3 2.3 2.3 1.7 1.8 1.6 1.3 1.5 1.4

140.9 145.2 130.2 126.7 138.4 156.1 125.5 118.0 144.5 134.1

1 Preliminary. 2 I ncludes ethane & ethylene at plants and refineries. U.S. Department of Energy (EI A-DOE)

200

44.2 41.9 37.2 45.9 40.5 44.9 35.8 36.2 41.0 31.3 3

Finished Gasoline

Je t Fuel

Kerosene

Liduified Gases2

185.7 175.9 161.3 157.0 166.4 171.8 154.1 153.0 161.5 161.9

40.4 46.8 40.0 39.9 44.0 44.7 40.5 44.5 42.0 39.2

4.1 8.0 7.2 7.0 7.3 6.9 4.9 4.1 5.4 5.5

106.6 108.0 93.1 86.2 89.5 115.1 89.3 82.5 120.9 105.7

I ncludes oxygenated.

Lubri- --- Motor Gasoline --cants Total Finished3

11.8 11.5 13.0 12.7 12.9 13.2 11.8 12.1 13.8 12.0

226 215 206 202 213 219 196 207 214 199

Source: Energy I nformation Administration,

187 176 161 157 166 172 154 153 161 162

PETROLEUM Stocks of Crude Petroleum in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

922.5 922.2 894.9 849.7 868.1 894.4 851.6 826.2 862.2 876.7

925.3 920.8 894.7 865.9 884.3 896.6 852.4 836.0 874.9 872.2

922.6 931.0 892.9 862.1 885.7 897.4 855.2 824.2 887.4 869.6

932.6 929.4 888.8 877.6 899.8 908.0 866.5 850.8 895.0 879.7

930.6 924.1 889.7 883.9 914.6 902.3 873.2 873.0 891.3 889.8

922.7 919.6 889.7 890.5 916.1 914.8 864.1 871.7 898.3 886.7

919.6 907.3 898.9 885.3 896.4 902.8 859.5 851.5 894.1 891.7

924.2 899.5 891.3 873.0 902.6 906.0 852.6 856.6 882.8 895.6

920.2 897.5 890.8 864.2 893.5 889.1 858.7 851.6 878.5 896.0

927.0 902.8 875.8 866.6 873.0 878.0 848.2 854.1 857.8 908.9

934.9 910.6 881.5 879.3 897.4 875.7 842.4 858.4 881.1 924.6

938.0 894.9 869.1 886.9 906.2 866.2 833.9 859.5 884.0 913.9

Source: Energy I nformation Administration; U.S. Department of Energy (EI A-DOE)

Preliminary.

Production of Crude Petroleum in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Millions of Barrels

Jan.

In Thousands of Barrels Per Day

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

6,817 6,682 6,495 6,402 6,541 5,963 5,784 5,799 5,848 5,842

6,770 6,794 6,577 6,514 6,476 5,966 5,852 5,780 5,871 5,915

6,746 6,600 6,571 6,452 6,408 5,883 5,918 5,880 5,883 5,890

6,612 6,604 6,444 6,441 6,483 5,887 5,854 5,863 5,859 5,813

6,688 6,629 6,394 6,474 6,347 5,875 5,847 5,829 5,924 5,783

6,611 6,579 6,458 6,442 6,267 5,760 5,823 5,766 5,915 5,746

6,501 6,449 6,338 6,409 6,194 5,798 5,739 5,749 5,770 5,662

6,544 6,447 6,360 6,347 6,203 5,780 5,789 5,725 5,811 5,642

6,609 6,416 6,482 6,486 5,789 5,804 5,758 5,709 5,411 5,657

6,658 6,421 6,481 6,467 6,143 5,947 5,809 5,746 5,363 5,642

6,628 6,585 6,476 6,459 6,140 5,960 5,833 5,881 5,597 5,637

6,760 6,530 6,506 6,531 6,043 5,959 5,855 5,887 5,699 5,629

6,662 6,560 6,465 6,452 6,252 5,881 5,822 5,801 5,746 5,737

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Preliminary.

U.S. Foreign Trade of Petroleum and Products

In Thousands of Barrels Per Day

Year

----- Exports ----- ---------------------------- Imports ---------------------------PetroPetroleum Distillate Residual Net leum Crude Products Fuel Oil Fuel Oil Imports3 Total2 Products

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

722 781 785 764 815 859 857 1,001 950 1,003

541 577 631 613 661 717 748 885 861 904

3,426 3,201 4,178 4,674 5,107 5,843 5,894 5,782 6,083 6,787

2,011 1,866 2,045 2,004 2,295 2,217 2,123 1,844 1,805 1,833

1 Preliminary. 2 I ncludes crude oil. U.S. Department of Energy (EI A-DOE)

3

272 200 247 255 302 306 278 205 216 184

681 510 669 565 644 629 504 453 375 373

4,715 4,286 5,439 5,914 6,587 7,202 7,161 6,626 6,938 7,618

Equals imports minus exports.

------ Exports ------ ---------------------------- Imports ---------------------------PetroPetroleum Distillate Residual Net leum Crude Products Fuel Oil Fuel Oil Imports3 Year Total2 Products

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

942 949 981 1,003 945 940 1,040 971 984 1,017

843 855 871 896 835 822 990 951 975 1,005

7,063 7,230 7,508 8,225 8,706 8,731 9,071 9,328 9,140 9,646

1,933 1,605 1,971 1,936 2,002 2,122 2,389 2,543 2,390 2,608

In Dollars Per Barrel

Year

1

314 187 248 194 275 237 352 295 249 325

8,054 7,886 8,498 9,158 9,764 9,912 10,419 10,900 10,546 11,237

Source: Energy I nformation Administration,

Domestic First Purchase Price of Crude Petroleum at Wells1 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

203 193 230 228 210 250 295 344 267 335

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

10.49 14.00 15.43 21.76 13.48 8.57 23.53 24.58 15.89 28.35

10.71 14.69 15.54 19.38 12.16 8.60 25.48 25.27 16.92 31.85

10.94 14.68 17.63 17.85 11.53 10.76 26.19 23.02 20.04 30.09

12.31 15.84 19.58 16.64 11.64 12.82 23.20 23.41 22.14 25.46

14.02 15.85 17.94 17.24 11.49 13.92 25.58 24.06 23.51 24.96

14.93 15.02 16.94 15.90 10.00 14.39 27.62 23.43 22.59 26.83

15.34 14.01 17.63 15.91 10.46 16.12 26.81 22.94 23.51 27.53

14.50 14.13 18.29 16.21 10.18 17.58 27.91 23.08 24.76 27.94

13.62 14.49 19.93 16.44 11.28 20.03 29.72 22.37 26.08 25.23

13.84 13.68 21.09 17.68 11.32 19.71 29.65 18.73 25.29 26.52

14.14 14.03 20.20 16.84 9.65 21.35 30.36 16.49 23.38 27.22

13.43 15.02 21.34 15.06 8.05 22.55 24.46 15.54 25.29

13.19 14.62 18.46 17.23 10.87 15.56 26.72 21.84 22.51 27.45

Buyers posted prices.

2

Preliminary.

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

201

PETROLEUM

Volume of Trading of Crude Oil Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

2,296 2,133 2,260 1,950 2,468 2,534 3,139 3,035 3,481 4,553

1,933 1,657 1,928 1,974 2,208 2,326 3,077 2,855 3,150 4,039

2,228 2,290 2,399 2,087 2,903 3,768 3,380 3,449 3,790 4,151

2,382 2,220 2,490 2,034 2,451 3,167 2,579 3,312 4,315 3,355

2,602 2,409 2,161 2,135 2,604 3,038 3,002 3,469 4,317 3,329

2,576 2,172 1,602 2,099 3,079 3,307 3,232 3,572 3,429 3,534

2,187 1,749 1,732 2,221 2,375 3,471 2,750 3,170 3,466 3,401

2,544 1,794 1,657 2,054 2,067 3,355 3,149 3,316 3,883 3,732

1,897 1,968 1,913 2,028 2,618 3,388 3,712 2,773 3,939 3,826

2,195 1,835 2,098 2,574 2,592 3,571 3,418 2,913 4,397 4,248

2,196 1,739 1,643 1,770 2,553 3,465 2,824 3,210 3,478 3,624

1,778 1,647 1,604 1,847 2,577 2,470 2,620 2,455 4,034 3,646

26,812 23,614 23,488 24,771 30,496 37,860 36,883 37,531 45,679 45,437

Source: New York Mercantile Exchange (NYMEX)

Average Open Interest of Crude Oil Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

427,705 373,798 389,935 365,522 424,810 501,655 512,049 432,892 448,063 608,254

438,929 379,329 400,236 384,737 445,167 524,677 519,090 437,188 454,154 640,979

424,462 353,805 427,306 408,751 468,438 581,072 513,359 432,627 497,405 568,526

410,974 364,929 460,841 409,719 463,961 611,727 467,259 419,904 488,061 495,456

427,071 350,826 424,994 401,663 450,611 594,032 453,042 442,950 512,413 478,886

414,257 346,051 376,164 397,245 467,998 582,058 462,476 462,321 474,087 494,078

409,251 357,718 367,405 411,292 476,516 601,212 432,571 451,005 457,033 517,539

396,657 343,636 364,458 424,529 486,499 584,962 416,934 461,851 454,219 542,573

395,194 342,360 395,358 405,389 486,047 622,257 461,298 434,967 505,530 507,191

413,206 334,170 410,387 419,821 481,657 595,743 478,242 430,774 528,548 532,024

388,932 329,786 385,415 404,597 487,175 564,488 479,008 435,178 482,227 550,369

391,151 348,954 368,331 424,333 501,591 531,567 438,118 436,332 531,078 579,603

Source: New York Mercantile Exchange (NYMEX)

202

In Contracts

Jan.

Plastics Plastics are moldable, chemically fabricated materials produced mostly from fossil fuels, such as oil, coal, or natural gas. The word plastic is derived from the Greek plastikos, meaning to mold, and the Latin plasticus, meaning capable of molding. The first commercially successful thermosetting synthetic resin was created by Leo Baekeland in 1909, and over 50 families of plastics have been produced since then. All plastics can be divided into either thermoplastics or thermosetting plastics. The difference between the two is the way in which they respond to heat. Thermoplastics can be repeatedly softened by heat and hardened by cooling. Thermosetting plastics harden permanently after being heated once. Prices – Plastics prices in 2003 rebounded sharply higher along with the US economy after the weak prices seen in 2001 and 2002 during the US economic slump. Specifically, the average producer price index of plastic resins and materials in the US in 2003 (through Oct) rose +12.2% to 146.7 from the 4-year low of 130.7 posted in 2002. The average producer price index of thermoplastic resins in the US in 2003 (through October) rose +14.0% to 147.2 from the 4-year low of 129.1 posted in 2002. The average producer price index of styrene plastic materials (also a thermoplastic) in the US in 2003 (through October) rose +23.9% to 118.3 from the 23-year low of 95.5 posted in 2002. The average producer price index of thermosetting resins in the US in 2003 (through October) rose +5.3% to 154.3 from the

Plastics Production by Resin in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

3-year low of 146.5 posted in 2002. Supply – Total US plastics production in 2002 rose +6.2% to a record high of 108.262 billion pounds, despite weak US economic demand during 2001-2002. The 2002 production level was more than twice that seen as recently as 1986, which shows that plastics continue to represent a growth industry. By sector, the thermoplastics sector is by far the largest, with 2002 production of 86.762 billion pounds up +6.2% from 2001 and accounting for 80% of total US plastic production. The thermosetting plastic sector (polyester unsaturated, phenolic, and epoxy) production in 2002 rose +5.1% to 7.893 billion pounds and accounted for 7% of total US plastics production. The category of “other plastics” rose +12.6% to 13.607 billion pounds and accounted for 13% of total US plastics production. Demand – The breakdown by market for the usage of plastic resins shows that the largest single consumption category is packaging with 23.616 billion pounds of usage in 2002, accounting for 28.7% of total US consumption. After packaging, the largest categories are building and construction (16.8% of US consumption), and commercial and industrial (14.4%). Trade – US exports of plastics in 2002 totaled 9.820 billion pounds, up 8.1% from 9.084 billion pounds in 2001. US exports accounted for 11.9% of US supply disappearance in 2002.

In Millions of Pounds

------------------------------------------ Thermoplastics -----------------------------------------High Low ----------------- Thermosets ----------------Total Total Total ThermoPolyester Density Density plastic Polyvinyl PolyPolyThermoUnsatPolye- Thermo- Selected Polyesets Polyester Chloride styrene propylene Nylon thylene1 urated Phenlic Epoxy thylene plastics Plastics

1,264 1,468 1,577 1,557 1,621 1,713 2,985 3,149 3,021 3,197

3,078 3,229 3,204 3,476 3,734 3,940 4,388 3,965 3,894 4,076

I ncludes LDPE and LLDPE.

512 601 632 662 654 639 657 669 597 620

6,868 7,513 7,519 8,129 8,647 9,163 8,030 7,783 7,512 7,893

2,549 3,196 3,785 4,031 4,260 4,423 6,735 7,239 6,972 7,480

10,257 11,712 12,295 13,220 14,084 14,502 14,912 14,364 14,626 15,250

5,382 5,848 5,656 6,065 6,380 6,237 7,075 6,676 6,223 6,768

8,628 9,539 10,890 11,991 13,320 13,825 15,493 15,583 16,135 17,084

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

Adhesive, Inks & Coatings

Building & Construction

Consumer & Industrial

Electrical & Electronics

1,572 1,789 1,795 1,833 1,713 1,758 1,753 1,715 1,675 1,664

12,885 14,715 13,551 15,413 11,418 12,077 13,793 13,520 13,231 13,839

6,015 9,266 8,921 9,662 10,357 11,031 11,645 11,505 11,219 11,861

2,981 3,325 2,872 3,022 2,806 2,816 3,036 2,924 2,352 2,433

I ncluded in other.

12,067 12,600 12,886 14,145 14,579 14,805 15,807 19,588 18,389 19,515

9,941 11,117 11,211 12,373 12,557 12,924 13,864 16,439 15,195 16,190

51,159 56,794 59,331 64,526 67,872 71,209 78,457 84,553 81,726 86,762

58,027 64,307 66,850 72,655 76,519 78,659 86,487 92,336 89,238 94,655

Total Plastics

10,777 68,854 11,664 75,971 11,834 78,684 11,640 84,295 12,287 88,806 13,026 91,685 13,467 99,954 13,604 105,940 12,720 101,958 13,607 108,262

Source: American Plastics Council (APC)

Total Resin Sales and Captive Use by Important Markets Year

768 943 1,020 1,103 1,222 1,285 1,349 1,395 1,159 1,284

Other Plastics

Source: American Plastics Council (APC)

In Millions of Pounds (Dry Weight Basis)

Exports

Furniture & Furnishings

Industrial & Machinary

P a ckaging

Transportation

Other

Total

6,632 6,889 7,162 7,997 8,647 8,208 8,424 9,432 9,084 9,820

2,759 3,118 3,189 3,468 3,099 3,293 2,885 2,993 2,879 3,076

768 836 805 965 729 710 802 783 647 663

19,569 19,551 17,107 18,691 19,135 19,396 21,210 21,289 22,574 23,616

3,221 3,795 3,376 3,469 3,411 3,588 3,632 3,872 3,595 3,753

7,234 7,515 7,421 8,701 8,640 9,211 10,189 9,456 10,134 11,600

63,636 70,799 66,200 73,221 69,955 71,994 77,123 77,640 77,390 82,324

203

PLASTICS Average Producer Price Index of Plastic Resins and Materials (066) in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

115.0 142.5 129.9 137.0 134.0 115.9 133.2 137.8 122.0 137.2

114.7 144.1 128.4 137.5 132.2 115.8 135.7 139.3 121.3 141.8

114.5 145.9 128.4 138.7 131.0 117.3 139.4 141.4 123.1 149.6

116.5 148.5 127.7 138.9 130.7 118.6 143.7 141.9 125.4 153.2

117.7 149.0 130.6 139.1 128.8 122.1 147.4 139.9 128.0 152.4

119.1 148.9 132.1 139.6 126.8 123.1 147.8 137.6 130.1 149.2

119.6 147.0 133.2 139.3 125.0 127.9 146.4 135.1 135.3 144.9

121.5 144.8 135.2 137.4 123.7 130.0 146.3 131.3 136.4 143.6

126.3 142.7 137.9 136.0 119.6 133.8 142.4 126.8 136.7 144.8

131.9 139.2 138.0 135.9 118.6 135.6 140.7 128.3 138.2 145.4

134.1 135.8 138.0 134.6 117.1 135.8 138.8 126.6 137.0 145.8

138.1 132.2 137.7 133.9 115.9 134.3 137.3 123.9 135.3 145.4

122.4 143.4 133.1 137.3 125.3 125.8 141.6 134.2 130.7 146.1

Preliminary.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS)

Average Producer Price Index of Thermoplastic Resins (0662) in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

(1982 = 100)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

113.0 143.1 128.4 136.7 133.0 112.3 133.8 136.3 118.4 136.3

112.7 145.0 126.7 137.3 130.7 112.5 136.0 138.0 117.8 142.2

112.5 147.1 126.8 138.6 129.5 114.4 140.4 140.2 120.3 151.4

115.0 150.3 125.9 138.8 129.2 116.1 145.2 140.8 123.8 155.8

116.2 151.0 129.4 139.0 127.0 120.4 149.3 138.4 126.2 153.6

117.9 151.2 131.1 139.7 124.7 121.6 149.6 135.7 128.6 149.5

118.4 148.7 132.5 139.3 122.5 127.5 147.6 133.1 135.0 144.3

120.1 146.2 134.8 137.0 121.0 129.9 147.4 128.6 135.9 142.8

125.4 143.7 137.8 135.5 116.4 134.5 142.7 123.4 136.2 144.5

131.6 139.6 137.9 135.3 115.3 136.7 140.3 125.7 137.6 145.2

133.9 135.5 137.9 133.8 113.7 137.0 137.9 123.9 136.1 146.2

138.4 131.1 137.6 133.0 112.2 135.2 136.0 120.8 133.8 145.6

121.3 144.4 132.2 137.0 122.9 124.9 142.2 132.1 129.1 146.5

Preliminary.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS)

Average Producer Price Index of Styrene Plastics Materials (0662-06) in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

(1982 = 100)

Jan.

(1982 = 100)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

105.8 129.0 125.7 120.6 113.3 103.5 103.0 110.5 85.7 102.9

104.1 127.0 123.5 123.1 113.9 102.4 104.3 109.2 85.8 110.2

104.1 132.5 125.0 123.0 115.5 103.5 110.5 107.9 87.9 119.5

108.1 134.7 118.3 121.6 114.9 104.7 113.0 108.0 88.5 127.2

108.3 135.9 120.1 121.6 114.1 103.0 116.2 101.8 90.4 126.7

109.2 137.5 122.7 121.6 112.8 102.3 116.9 99.9 91.7 119.1

110.4 135.1 123.4 122.7 111.3 103.1 118.5 97.6 93.7 118.0

110.6 133.2 123.3 117.7 111.2 101.5 116.5 95.7 100.6 113.3

116.0 132.1 123.6 118.0 107.6 101.4 115.0 87.3 100.5 120.3

123.3 130.1 122.8 116.5 107.9 99.8 114.1 89.4 108.9 115.0

125.3 127.9 122.0 113.5 107.1 99.4 112.1 90.0 108.1 113.9

126.2 126.1 120.9 113.7 106.3 100.5 110.4 85.4 103.9 111.7

112.6 131.8 122.6 119.5 111.3 102.1 112.5 98.6 95.5 116.5

Preliminary.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS)

Average Producer Price Index of Thermosetting Resins (0663) in the United States

(1982 = 100)

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

128.2 144.3 141.8 142.1 143.6 139.9 136.8 152.1 146.2 150.4

128.1 145.1 141.9 142.3 144.0 138.1 141.1 152.9 144.6 149.7

128.1 145.4 141.2 142.7 143.2 137.7 141.3 154.5 143.8 151.7

127.8 145.2 141.3 143.1 142.9 137.4 142.8 154.4 141.2 152.0

128.7 144.7 141.4 143.2 142.6 136.9 144.9 154.2 144.1 156.8

129.1 143.5 141.2 143.0 142.7 136.5 146.0 154.2 145.5 157.9

129.7 144.0 140.6 142.8 142.5 136.2 147.6 152.3 145.8 157.1

132.1 143.5 141.5 142.9 142.2 136.5 147.8 151.3 147.6 156.4

134.9 142.9 141.7 143.0 141.2 136.5 147.5 150.4 148.4 155.4

137.7 142.3 142.0 143.1 140.9 136.5 149.5 148.2 150.3 155.6

140.1 142.4 142.0 142.9 140.1 136.3 150.3 146.3 150.3 153.9

141.5 142.1 142.2 142.9 140.3 136.2 151.0 146.1 150.6 154.1

132.2 143.8 141.6 142.8 142.2 137.0 145.6 151.4 146.5 154.3

Preliminary.

204

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS)

Platinum-Group Metals Platinum is a relatively rare, chemically inert metallic element that is more valuable than gold. Platinum is a grayish-white metal that has a high fusing point, is malleable and ductile, and has a high electrical resistance. Chemically, platinum is relatively inert and resists attack by air, water, single acids, and ordinary reagents. Weighing almost twice as much as gold, platinum is the heaviest of the precious metals. Platinum is the most important of the six-metal group, which also includes ruthenium, rhodium, palladium, osmium, and iridium. The word “platinum” is derived from the Spanish word platina meaning silver. Platinum is one of the world’s rarest metals with new mine production totaling only about 5 million troy ounces a year. All the platinum mined to date would fit in the average-size living room. Platinum is mined all over the world with supplies concentrated in South Africa. South Africa accounts for nearly 80% of world supply, followed by Russia, and North America. Because platinum will never tarnish, lose its rich white luster, or even wear down after many years, it is prized by the jewelry industry. The international jewelry industry is the largest consumer sector for platinum, accounting for 51% of total platinum demand. In Europe and the US, the normal purity of platinum is 95%. Ten tons of ore must be mined and a five-month process is needed to produce one ounce of pure platinum. The second major consumer sector for platinum is for auto catalysts, with 21% of total platinum demand. Catalysts in autos are used to convert most of vehicle emissions into less harmful carbon dioxide, nitrogen, and water vapor. Platinum is also used in the production of hard disk drive coatings, fiber optic cables, infra-red detectors, fertilizers, explosives, petrol additives, platinum-tipped spark plugs, glassmaking equipment, biodegradable elements for household detergents, dental restorations, and in anti-cancer drugs. Palladium is very similar to platinum and is part of the same general metals group. Palladium is mined with platinum, but it is somewhat more common because it is also a by-product of nickel mining. The primary use for palladium is in the use of automotive catalysts, with that sector accounting for about 63% of total palladium demand. Other uses for palladium include electronic equipment (21%), dental alloys (12%), and jewelry (4%). Rhodium, another member of the platinum group, is also used in the automotive industry in pollution control devices. To some extent palladium has replaced rhodium. Iridium is used to process catalysts and it has also found use in some auto catalysts. Iridium and ruthenium are used in the production of polyvinyl chloride. As the prices of these metals change, there is some substitution. Therefore, strength of platinum prices relative to palladium should lead to the substitution of palladium for platinum in catalytic converters. Platinum futures and options and palladium futures

are traded on the New York Mercantile Exchange (NYMEX). Platinum and palladium futures are traded on the Tokyo Commodity Exchange (TOCOM). The NYMEX platinum futures contract calls for the delivery of 50 troy ounces of platinum (0.9995 fineness) and the contract trades in terms of dollars and cents per troy ounce. The NYMEX palladium futures contract calls for the delivery of 50 troy ounces of palladium (0.9995 fineness) and the contract trades in terms of dollars and cents per troy ounce. Prices – NYMEX platinum futures prices in 2003 on the nearest-futures chart rallied sharply and fairly steadily during the year, finally closing the year at an all-time record high of $811.30 per ounce, up 33% from the 2002 close of $610.50. Palladium prices, by contrast, were relatively weak in 2003, moving generally sideways at the bottom of the plunge in prices seen from the peak of about $1,100 per ounce in early 2001 to the low of $145 seen in April 2003. However, palladium did recover somewhat along with the rest of the metals in late 2003 due to the stronger US economy and the weak dollar, closing the year at $197.50. That was up 36% from the year’s low of $145 but was still down 18% from the 2002 close of $241.55. Supply – World mine production of platinum in 2002, the latest reporting year, rose by 2.2% to 184,000 kilograms from 180,000 in 2001. That was a 17-year high in production, going back to 246,988 kilograms of production in 1985. South Africa is the world’s largest producer of platinum by far with 73% of world production, followed by Russia (19%), Canada (4%) and the US (2.4%). World mine production of palladium rose +2.3% to 181,000 kilograms in 2002 from 177,000 in 2001. The world’s largest palladium producers are Russia with 46.4% of world production, followed by South Africa with 35.5%, the US with 8.2%, and Canada with 6.4%. World production of platinum group metals other than platinum and palladium rose to 57,000 kilograms in 2003 from 51,100 in 2001. South Africa accounted for 73% of that production and Russia accounted for the bulk of the remainder. US mine production of platinum in 2002 rose by 21.6% to 4,390 kilograms from 3,610 in 2001. US mine production of palladium in 2002 rose by 22.3% to 14,800 kilograms from 12,100 in 2001. US refinery production of scrap platinum in 2002 fell 15.7% to 20,900 kilograms from 24,790 in 2001. Scrap platinum accounts for virtually all of US platinum refinery production since US mine production is miniscule. Demand – The US automotive industry accounted for 60.3% of US platinum usages in 2001, followed by 10.7% for the electrical industry, 7.6% by the petroleum industry, 7.3% for the jewelry industry, 4.8% by the chemical industry, and 1.8% by the dental and medical industry. Trade – US platinum imports for consumption rose 11.1% to 297,656 kilograms in 2002 from 267,957 in 2001. The US relied on imports for 93% of its platinum consumption in 2002. US exports of platinum rose 6.1% to 72,838 kilograms in 2002 from 68.625 in 2001.

205

PLATINUM-GROUP METALS World Mine Production of Platinum Year

Australia

1994 1995 1996 1997 1998 1999 2000 20011 20022

100 100 100 300 150 90 171 174 200

1

Preliminary.

2

In Kilograms

Canada

Colombi a3

Finland

Ja p a n

Russia

Serbia/ Montenegro

South Africa

United States

Zimbabwe

World Total

6,000 5,945 5,155 4,813 5,640 5,663 6,302 7,410 7,400

1,084 973 672 406 411 448 339 674 700

60 60 62 60 500 500 441 510 500

691 730 816 693 533 737 782 550 500

15,000 27,000 25,000 30,000 30,000 32,000 35,000 36,000 35,000

10 10 10 10 10 5 5 5 5

114,000 102,000 105,000 115,861 116,483 121,304 114,459 130,307 133,796

1,960 1,590 1,840 2,610 3,240 2,920 3,110 3,610 4,390

7 7 100 345 2,730 479 505 519 1,500

139,000 139,000 139,000 155,000 160,000 164,000 161,000 180,000 184,000

Estimate.

3

Placer platinum.

Source: U.S. Geological Survey (USGS)

World Mine Production of Palladium and Other Group Metals Year

1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Kilograms

------------------------------------------------------------------------ Palladium ------------------------------------------------------------------------- -------- Other Group Metals -------AustSerbia/ South United World South World ralia Canada Finland Ja p a n Russia Montenegro Africa States Zimbabwe Total Russia Africa Total

400 400 400 400 800 816 812 828 800

Preliminary.

2

7,000 9,319 8,082 7,545 8,905 8,939 9,949 11,700 11,500

Estimate.

100 95 182 180 150 150 ----------

1,277 2,174 2,182 1,899 4,151 5,354 4,712 4,830 5,000

40,000 85,000 80,000 70,000 70,000 75,000 84,000 85,000 84,000

50 50 50 50 50 25 25 25 25

47,800 51,000 52,600 55,675 56,608 58,164 55,818 62,601 64,244

6,440 5,260 6,100 8,430 10,600 9,800 10,300 12,100 14,800

17 17 120 245 1,855 342 366 371 1,080

103,000 153,000 150,000 144,000 153,000 159,000 166,000 177,000 181,000

3,000 3,600 3,500 13,500 13,500 13,700 14,100 14,500 14,500

22,100 29,797 30,363 25,068 26,862 37,011 36,493 35,839 41,721

27,100 34,200 34,800 39,200 41,300 51,500 51,400 51,100 57,000

Source: U.S. Geological Survey (USGS)

P latin u m-Gro u p Metals S o ld to C o n su min g In d u stries in th e U n ited S tates D e n ta l &

In Kilograms

Jew elry &

--- Au to mo tive --- ---- C h emical ---- ----- E lectrical ----- ----- Med ical ----- --- D eco rative --- ---- P etro leu m ---- ------ All P latin u m-Gro u p Metals -----Year

Plati num

1993 1994 1995 1996 1997 1998 1999 20001 20012

19,446 21,756 27,990 28,550 28,923 29,483 31,100 32,344 33,411

Other3 Plati num

10,124 11,413 12,440 19,282 20,402 26,528 29,390 31,100 34,832

2,364 3,104 2,022 2,115 2,239 2,301 2,364 2,457 2,644

Other3 Plati num

3,121 1,889 2,395 2,457 2,426 2,488 2,519 2,139 715

2,125 2,790 4,510 4,541 4,945 5,194 5,443 5,691 5,909

Other3 Plati num Other3 Plati num

12,699 7,961 18,225 17,665 19,997 20,215 21,148 19,282 17,354

687 902 778 778 840 902 933 964 995

5,562 5,092 6,158 6,285 6,376 6,376 6,065 3,732 3,670

1,024 1,345 1,337 1,493 2,115 2,333 3,110 3,670 4,043

Other3 Plati num

1,422 824 1,431 1,493 1,617 1,617 1,679 1,400 1,431

P reliminary. 2 E stimate. 3 I ncludes P alladium, iridium, osmium, rhodium, and ruthenium. American Met al Market (AMM)

1

Salient Statistics of Platinum and Allied Metals3 in the United States

Year

1994 1995 1996 1997 1998 1999 2000 20011 20022 1

Net Import Reliance as a % of Mine Apparent ---- Production ---Consumption Platinum Palladium

91 ---84 84 94 ---83 66 93

1,960 1,590 1,840 2,610 3,240 2,920 3,110 3,610 4,390

6,440 5,260 6,100 8,430 10,600 9,800 10,300 12,100 14,800

709 422 871 902 871 809 778 660 715

29,879 34,044 43,524 44,489 46,184 47,396 50,310 52,808 55,399

Other3

Total

26,840 8,544 65,063 21,509 7,387 62,940 45,188 ---- 88,712 45,157 ---- 89,646 50,227 ---- 96,411 61,827 ---- 109,223 65,248 ---- 115,558 61,889 ---- 114,697 62,293 ---- 117,692

S ources: U.S . Geolog ical S urvey (US GS );

In Kilograms

Refinery Production (Secondary)

Total Refined Platinum Palladium

Other4

Total

Refined

Total

Refined

Total

Apparent Consumption

63,000 NA NA NA NA 23,300 23,780 24,790 20,900

63,000 10,304 9,345 NA ------NA ------NA 14,100 39,300 NA 13,700 38,800 23,300 7,060 28,200 23,780 5,190 19,000 24,790 3,680 16,300 20,900 649 5,870

123 ------920 920 784 784 784 784

19,772 ------54,320 53,420 36,044 24,974 20,764 7,303

167,681 214,143 248,860 253,114 297,101 337,973 316,633 267,957 297,656

170,907 220,613 255,880 258,424 303,351 -------------

46,259 41,825 39,709 67,656 52,716 64,165 85,177 68,652 72,838

88,561 50,575 48,836 81,249 73,162 -------------

127,000 -------------------------

Refiner, Importer & Dealer Imports for ----------- Stocks as of Dec. 31 ----------- ---- Consumption ----- ------- Exports -------

Preliminary. 2 Estimate. 3 I ncludes platinum, palladium, iridium, osmium, rhodium, and ruthenium. ruthenium. W = Withheld proprietary data. Source: U.S. Geological Survey (USGS)

206

Other3 Plati num Palladi um

1,204 1,581 3,421 3,514 3,390 3,390 3,514 3,639 4,199

4

I ncludes iridium, osmium, rhodium, and

PLATINUM-GROUP METALS

-----

---

Platinum: USD Per Troy Ounce Producer, New York (Jan. 1910 - Dec. 1977) Merchant, New York (Jan. 1978 - date) Palladium: USD Per Troy Ounce Dealer, New York (Jan. 1968 - date)

Average Merchant's Price of Platinum in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

390.30 414.27 416.59 360.13 375.30 353.53 432.95 623.43 471.52 629.52

393.95 415.22 421.45 362.35 390.56 361.55 517.02 453.56 470.68 681.79

398.29 415.37 412.39 382.82 396.18 370.80 478.28 566.67 511.95 675.00

400.38 446.24 405.71 371.18 412.82 357.30 493.53 589.63 539.20 624.48

395.41 439.02 402.86 385.20 392.60 354.75 519.57 611.07 533.66 649.43

401.42 436.58 393.18 427.12 357.38 357.75 557.45 588.91 554.70 661.43

408.25 435.21 392.00 409.93 379.34 350.30 558.53 643.88 526.32 682.02

411.91 425.61 400.97 423.48 372.24 352.24 572.76 457.37 545.48 692.48

415.93 430.31 391.43 424.00 361.40 365.62 592.53 453.50 556.05 705.33

421.11 414.49 385.53 428.59 347.27 421.52 576.91 437.43 580.11 732.65

415.73 413.55 383.92 396.68 348.42 436.48 592.73 427.25 588.15 760.08

408.83 410.17 372.97 369.55 352.76 438.00 608.28 450.24 594.89 807.10

405.13 424.67 398.24 395.42 373.85 376.44 541.49 531.93 539.39 691.78

Preliminary.

Source: American Metal Market (AMM)

Average Dealer1 Price of Palladium in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

In Dollars Per Troy Ounce

In Dollars Per Troy Ounce

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

124.40 156.67 130.47 121.48 222.55 317.28 447.45 1054.10 412.62 258.19

130.92 157.53 138.77 134.26 237.25 351.38 607.33 984.37 377.79 255.68

132.43 161.18 138.77 151.13 258.01 351.78 687.72 792.68 377.15 226.38

133.22 170.91 137.10 152.75 310.81 358.83 580.00 699.15 372.50 164.76

135.76 160.87 132.83 167.52 353.58 330.70 574.89 663.41 360.00 168.90

137.03 158.59 129.70 203.62 284.34 339.84 640.80 619.67 339.20 181.76

145.28 156.27 132.69 176.84 307.53 333.17 686.63 525.90 325.41 174.91

151.83 138.81 128.12 210.90 287.48 341.64 759.63 459.83 327.55 185.76

152.99 143.76 122.55 190.17 283.88 358.55 731.15 444.47 330.50 213.24

154.90 137.36 118.35 206.52 277.89 387.05 734.91 340.52 319.09 204.17

158.10 135.57 118.21 209.93 281.82 400.38 778.73 333.14 289.20 200.17

153.80 132.37 117.91 200.70 306.73 420.17 887.33 405.95 243.57 200.86

142.56 150.83 128.79 177.15 284.32 357.50 676.55 610.27 339.55 202.90

Based on wholesale quantities, prompt delivery.

2

Preliminary.

Source: U.S. Geological Survey (USGS)

207

PLATINUM-GROUP METALS

Volume of Trading of Platinum Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

48,259 61,400 80,545 60,515 38,198 37,700 33,226 19,278 12,848 15,545

F eb.

In Contracts

Mar.

Apr.

May

June

July

65,297 94,426 38,594 131,294 70,260 86,258 83,325 86,242 35,538 65,871 53,698 68,350 31,352 35,013 12,885 31,617 13,807 24,434 15,157 38,170

62,600 69,892 54,151 57,719 36,169 36,900 28,057 14,961 11,066 13,472

65,140 60,382 47,929 67,000 36,208 26,507 22,741 15,714 12,294 18,968

88,300 75,353 88,806 72,481 47,464 75,444 47,197 23,245 27,176 30,961

84,182 53,422 53,312 37,836 35,223 57,536 16,527 14,494 14,198 10,852

Sept.

Oct.

Nov.

D e c.

Total

75,409 92,439 62,451 98,837 53,654 90,140 36,391 62,462 27,505 58,302 36,115 102,196 14,739 36,643 12,477 17,040 18,583 29,762 11,878 37,686

Aug.

60,878 55,919 47,116 46,188 44,381 30,637 12,122 9,957 11,834 19,275

77,264 56,339 41,970 28,913 42,658 32,176 12,662 11,401 9,878 14,040

81,611 82,810 88,327 58,625 60,752 40,009 30,645 22,890 33,891 42,301

895,805 846,693 802,468 698,597 528,629 597,268 320,924 205,969 219,771 268,305

Source: New York Mercantile Exchange (NYMEX)

Average Open Interest of Platinum Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

18,779 23,285 23,130 25,890 10,791 12,311 10,858 8,449 6,587 8,694

19,655 23,058 21,535 26,092 10,932 14,481 10,952 7,311 6,213 8,132

21,673 23,470 23,156 22,364 13,220 16,493 9,218 6,855 7,121 8,034

22,834 23,657 25,081 16,568 13,559 11,471 8,484 6,715 6,823 6,322

21,880 20,984 26,343 18,933 12,048 12,256 9,057 7,436 6,031 6,599

22,835 21,533 27,720 18,440 11,471 12,436 10,585 5,751 6,901 6,847

24,804 20,801 25,861 13,280 10,607 14,703 9,566 6,210 5,516 7,450

25,049 25,288 25,455 14,180 9,733 13,777 9,731 5,996 6,405 8,556

24,245 23,489 28,511 13,639 11,950 15,014 9,716 5,646 6,930 8,794

24,159 24,498 28,305 13,466 14,601 14,892 8,106 5,395 7,211 8,489

26,287 22,137 27,423 12,396 15,709 13,402 8,163 6,102 7,406 9,421

26,661 21,534 29,143 13,501 13,289 12,017 8,507 6,033 8,388 9,434

Source: New York Mercantile Exchange (NYMEX)

208

In Contracts

Jan.

PLATINUM-GROUP METALS

Volume of Trading of Palladium Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

8,250 10,684 13,725 13,908 11,506 3,092 4,584 2,171 1,275 4,200

14,953 17,092 33,519 43,160 17,786 11,614 13,976 6,090 3,372 7,266

6,067 21,001 11,931 22,796 18,678 4,082 2,803 1,397 1,538 3,256

6,676 12,775 16,416 21,604 14,042 7,097 1,833 1,121 1,527 3,971

15,481 17,413 27,467 36,422 17,942 8,890 7,034 3,325 6,126 8,420

6,514 9,615 8,989 17,647 7,370 3,411 2,622 1,013 2,166 3,430

9,024 11,816 9,896 18,097 4,241 5,053 3,120 1,173 2,154 4,221

21,741 18,948 23,740 18,751 8,737 6,868 5,169 3,221 8,971 15,645

15,690 9,754 10,721 8,331 6,214 5,826 2,523 523 1,452 8,152

9,603 9,320 8,149 13,094 4,962 3,722 2,460 1,255 1,710 7,587

21,384 16,662 28,870 13,143 12,839 10,670 3,041 3,261 8,118 18,323

8,390 11,633 12,187 11,763 6,933 5,069 1,601 1,375 2,644 11,142

143,773 166,713 205,610 238,716 131,250 75,394 50,766 25,925 41,053 95,613

Source: New York Mercantile Exchange (NYMEX)

Average Open Interest of Palladium Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

4,626 7,484 6,365 8,291 4,062 2,846 3,129 1,828 1,217 2,000

4,995 7,579 7,539 10,946 4,873 3,234 3,101 1,666 1,208 2,039

4,672 7,102 6,682 10,528 5,220 2,957 2,367 1,525 1,042 1,948

4,303 7,231 7,099 9,759 5,369 3,015 2,359 1,577 1,199 1,997

5,116 6,519 8,713 9,947 4,371 2,796 2,628 1,613 1,554 2,315

4,530 6,413 8,143 7,072 4,219 2,757 2,015 1,385 1,806 2,609

5,807 6,739 7,977 5,538 4,166 2,823 2,118 1,420 2,103 2,680

6,851 6,852 8,805 4,973 3,488 2,496 1,974 1,318 2,298 3,605

6,625 5,950 8,129 3,822 2,959 2,755 1,757 1,383 1,878 5,184

6,511 6,120 7,971 4,282 3,048 3,210 1,905 1,286 1,976 5,533

7,726 6,486 8,227 4,291 2,938 3,301 1,859 1,477 1,977 6,096

6,917 6,090 7,727 4,030 2,700 3,045 1,837 1,244 2,025 6,707

Source: New York Mercantile Exchange (NYMEX)

209

Pork Bellies Pork bellies are the cut of meat from a hog from which bacon is produced. A hog has two bellies, generally weighing 8-18 pounds, depending on the hog’s commercial slaughter weight. Slaughter weights average around 255 pounds, equal to a dressed carcass weight of about 190 pounds. Bellies account for about 12% of a hog’s live weight, but represent a somewhat larger percentage of 14% of the total cutout value of the realized pork products. Pork bellies can be frozen and stored for up to a year before processing. The pork belly futures contract at the Chicago Mercantile Exchange calls for the physical delivery of 40,000 pounds of frozen pork bellies, which have been slaughtered at USDA federally inspected slaughtering plants. Each deliverable belly typically weighs 12-14 pounds each. There are definite seasonal patterns in pork belly prices. Bellies are storable and the movement into cold storage builds early in the calendar year, peaking about mid-year. Net withdrawals from storage then carry stocks to a low around October. The cycle then starts again. Retail bacon demand also follows a time worn trend, peaking in the summer when consumer preference shifts to lighter foods and tapering off to a low during the winter months. While demand patterns would suggest the highest prices in the summer and the lowest in the winter, just the opposite is not unusual. Such contra-seasonal price moves can be partially attributed to supply logistics, notably the availability of frozen storage stocks deliverable against futures at CME exchange-approved warehouses. When stocks prove either too large or small, the underlying demand variables for bacon can be relegated to the backburner as a market-moving fac-

tor. The fact that no contract months are traded between August and the following February adds to the late fall futures price distortion. Belly prices (cash and futures) are sensitive to the inventory in cold storage and to the weekly net movement in and out of storage, which affords some insight to demand, although a better measure is the weekly quantity of bellies being sliced into bacon. Higher retail prices tend to encourage placing more supply into storage because of lower retail bacon demand. Bacon is not a necessary foodstuff so demand can be buoyed by favorable consumer disposable income. However, dietary standards have changed dramatically in recent years and do not favor the consumption of high fat and salt content food, like bacon. The U.S. economy stalled in 2002 at least relative to expectations, which would have been expected to reduce consumer bacon demand, but retail prices held firm, especially in the first half of the year. The anticipated 2002 average of $3.25/lb was unchanged from 2001, which was well above the annual average of the 1990’s. Prices – Pork bellies rallied in the first half of 2003 and posted a 7-year high of 103.30 cents/pound in late July on the weekly nearest futures chart. However, prices quickly fell back in August and then remained in the relatively narrow range between 80-94 cents/pound through the remainder of the year, closing at 86.90 cents. In the bigger picture, pork belly prices closed 2003 in the upper one-quarter of the range of roughly 40 cents to $1.00 seen in the past 7 years.

Average Retail Price of Bacon, Sliced

In Dollars Per Pound

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

2.04 1.93 2.14 2.66 2.64 2.52 2.75 2.99 3.27 3.20

2.02 1.93 2.20 2.65 2.62 2.52 2.87 3.07 3.32 3.28

2.02 1.91 2.20 2.66 2.54 2.51 2.93 3.16 3.27 3.22

2.06 1.89 2.24 2.66 2.44 2.45 2.95 3.11 3.26 3.29

1.99 1.92 2.35 2.63 2.44 2.47 3.01 3.26 3.18 3.09

1.99 1.90 2.49 2.69 2.46 2.50 3.13 3.25 3.19 3.14

2.00 1.91 2.54 2.72 2.52 2.50 3.17 3.32 3.23 3.16

1.99 1.97 2.68 2.76 2.51 2.93 3.20 3.47 3.29 3.23

1.97 2.04 2.81 2.75 2.58 2.58 3.21 3.49 3.16 3.22

1.97 2.12 2.72 2.73 2.57 2.57 3.07 3.34 3.24 3.16

1.92 2.16 2.66 2.67 2.62 2.66 3.05 3.30 3.21 3.23

1.89 2.17 2.64 2.61 2.58 2.75 3.03 3.30 3.24 3.18

1.99 1.99 2.47 2.68 2.54 2.58 3.03 3.25 3.24 3.20

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Froz en Pork Belly Storage Stocks in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

53,168 61,073 47,587 37,930 44,763 72,657 40,300 47,099 44,301 28,254

55,999 62,776 46,498 38,030 55,249 82,605 43,802 50,145 50,849 35,354

54,921 64,228 46,381 44,277 55,368 93,323 49,983 47,154 57,569 38,278

63,099 78,975 47,655 54,767 54,441 106,194 60,527 45,440 60,721 42,971

72,230 78,539 57,174 54,015 58,600 109,521 63,461 43,878 63,293 48,542

79,018 77,919 63,522 55,274 59,462 108,257 68,292 46,029 62,269 45,870

73,583 67,607 56,767 52,274 52,010 93,383 60,097 39,552 51,019 43,504

57,747 47,055 28,533 33,657 31,433 69,675 50,515 24,996 29,925 32,075

30,636 17,435 18,996 18,346 14,786 34,814 33,005 12,754 14,250 17,900

18,260 6,255 12,702 11,148 9,452 19,273 21,341 8,960 9,452 10,180

22,656 13,478 16,206 14,408 16,440 22,489 20,589 28,216 10,354 21,135

40,725 37,092 30,943 25,365 41,711 26,170 38,674 36,297 18,059 33,073

Preliminary.

210

In Thousands of Pounds

Jan.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

PORK BELLIES Weekly Pork Belly Storage Movement ------------------------- Stocks1 In Thousands of Pounds ------------------------Net 2002 Week On MoveEnding In Out Hand ment

Jan .

F eb .

Mar.

Apr.

May

Ju n e

July

A ug .

Sept.

Oct.

Nov.

Dec.

1

5 12 19 26 2 9 16 23 2 9 16 23 30 6 13 20 27 4 11 18 25 1 8 15 22 29 6 13 20 27 3 10 17 24 31 7 14 21 28 5 12 19 26 2 9 16 23 30 7 14 21 28

2,176 1,621 4,695 1,463 563 1,187 2,175 1,834 1,109 529 1,651 1,094 1,094 1,481 989 1,611 473 571 381 298 432 165 62 166 106 42 215 237 449 134 62 97 159 294 58 114 1,298 545 958 290 135 53 102 818 1,492 2,278 943 1,313 557 931 2,252 2,137

185 134 532 333 1,128 1,043 140 298 307 246 246 81 525 1,839 501 1,108 363 362 277 93 122 661 1,607 2,334 3,804 3,785 2,764 3,441 4,322 2,979 3,803 2,765 3,036 3,161 2,441 1,851 1,431 793 664 244 527 643 84 83 65 41 345 163 207 389 41 397

28,305 29,792 33,955 35,085 34,520 3,464 36,699 38,235 39,037 39,320 40,725 41,738 42,307 41,949 42,437 42,939 43,049 43,258 43,362 43,567 43,877 43,381 41,917 39,749 36,050 32,307 29,759 26,554 22,681 19,645 16,095 13,427 10,550 7,683 5,300 3,563 3,430 3,182 3,476 3,522 3,130 2,540 2,558 3,293 4,720 6,957 7,655 8,805 9,155 9,697 11,908 14,045

1,991 1,487 4,163 1,130 -645 144 2,035 1,536 802 283 1,405 1,013 569 -358 488 503 110 209 104 205 310 -496 -1,545 -2,168 -3,698 -3,743 -2,549 -3,204 -3,873 -2,845 -3,741 -2,668 -2,877 -2,867 -2,383 -1,737 -133 -248 294 46 -392 -590 18 735 1,427 2,237 698 1,150 350 542 2,211 2,137

------------------------- Stocks1 In Thousands of Pounds ------------------------Net 2003 MoveWeek On ment Ending In Out Hand

Jan . 4 11 18 25 F eb . 1 8 15 22 Mar. 1 8 15 22 29 Apr. 5 12 19 26 May 3 10 17 24 31 Ju n e 7 14 21 28 July 5 12 19 26 A ug . 2 9 16 23 30 Sept. 6 13 20 27 Oct. 4 11 18 25 Nov. 1 8 15 22 29 Dec. 6 13 20 27

57 Chicago and Outside Combined Chicago Mercantile Exchange approved warehouses.

2,260 2,316 1,189 1,033 486 617 345 626 1,004 1,299 860 125 245 316 440 1,719 1,905 279 75 40 637 56 102 251 345 168 51 2,770 50 159 106 65 124 184 155 82 242 116 53 145 297 1,840 3,446 2,074 1,811 1,534 2,243 2,308 1,828 1,736 1,359 2,816

344 82 251 381 239 134 187 48 142 172 408 186 42 205 370 127 166 157 634 770 882 955 890 643 568 735 771 2,218 2,890 3,455 2,701 2,778 2,496 2,385 2,520 2,635 1,613 1,063 881 198 302 62 40 138 130 158 80 41 40 40 123 119

15,961 18,195 19,133 19,755 19,969 20,485 20,622 21,221 22,083 23,210 23,662 23,601 23,805 23,916 23,986 25,578 27,317 27,439 26,880 26,150 25,905 25,006 24,218 23,826 23,603 23,036 23,316 25,868 24,761 21,465 18,870 16,157 13,785 11,584 9,219 6,667 5,296 4,349 3,520 3,467 3,462 5,240 8,646 10,582 12,263 13,668 15,832 18,099 19,887 21,658 22,898 25,595

1,916 2,234 938 622 247 483 158 278 862 1,127 452 -61 203 111 70 1,592 1,738 122 -559 -730 -245 -899 -788 -392 -223 -567 -710 3,552 -2,840 -3,296 -2,595 -2,713 -2,372 -2,201 -2,365 -2,553 -1,371 -947 -828 -53 -5 1,778 3,406 1,936 1,681 1,376 2,163 2,267 1,788 1,696 1,236 2,697

Source: Chicago Mercantile Exchange (CME)

211

PORK BELLIES

Average Open Interest of Pork Belly Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

11,053 10,294 7,094 7,504 9,187 7,217 5,872 2,719 2,574 2,842

10,426 9,080 8,028 7,930 9,145 6,192 6,011 2,908 2,768 2,805

9,375 7,809 10,521 7,260 9,082 4,623 6,320 2,935 2,879 2,915

9,894 7,367 10,753 7,165 7,825 5,113 6,563 3,138 3,271 3,082

8,092 8,017 10,018 8,950 6,786 6,030 5,836 2,808 3,224 3,383

8,248 7,036 8,136 7,203 5,406 6,639 5,306 2,354 2,821 3,410

7,836 5,666 6,432 5,905 4,185 5,003 3,650 2,526 1,885 2,858

7,841 4,271 6,296 4,791 3,493 2,415 1,877 2,579 986 1,632

8,398 6,246 6,056 5,242 2,933 2,320 1,860 2,695 1,116 1,899

10,072 7,007 6,395 7,520 3,841 3,206 2,093 2,321 1,329 1,885

10,141 7,103 6,050 8,302 4,987 4,011 2,409 2,441 2,020 2,075

10,216 7,282 6,480 9,009 7,085 4,868 2,610 2,451 2,548 2,484

Source: Chicago Mercantile Exchange (CME)

Volume of Trading of Pork Belly Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

60,316 62,994 48,563 60,761 41,894 39,925 37,650 15,861 16,495 13,635

67,250 54,330 56,623 53,604 50,105 36,293 38,943 16,200 16,650 13,956

58,183 59,324 61,669 56,750 47,249 33,322 39,061 16,675 14,279 13,137

53,839 43,501 61,703 76,072 61,910 31,558 31,464 18,274 17,758 18,279

56,575 49,453 61,868 62,190 36,058 31,321 40,311 18,708 13,648 18,112

58,424 53,571 55,337 54,043 48,913 45,030 31,229 16,989 15,764 16,993

50,450 45,869 55,121 55,043 41,133 36,513 25,051 20,187 16,773 19,540

47,626 36,623 45,399 36,153 33,832 23,536 17,875 18,823 7,490 9,967

38,375 31,112 39,182 31,154 24,006 16,544 10,711 12,719 6,857 7,909

45,525 35,444 48,973 44,277 30,538 20,392 11,854 12,905 8,107 10,235

49,280 47,061 42,709 31,663 30,093 28,920 11,737 15,984 8,659 8,542

47,803 42,631 35,502 33,609 35,521 24,955 13,690 13,034 9,574 11,024

633,646 561,913 612,649 595,319 481,252 368,309 309,576 196,359 152,054 161,329

Source: Chicago Mercantile Exchange (CME)

212

In Contracts

Jan.

PORK BELLIES

-----

Cents Per Pound 12-14 Lb., Chicago (Jan. 1949 - Sept. 1975) 12-14 Lb., Midwest (Oct. 1975 - date)

Average Price of Pork Bellies (12-14 Pounds) Midw est Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

50.63 36.03 52.33 72.04 43.00 48.80 80.45 66.61 70.87 78.02

51.66 35.80 56.33 68.42 45.89 50.76 82.40 66.68 70.75 79.54

49.68 36.30 64.50 59.05 42.28 46.51 85.00 78.04 72.55 85.80

46.84 33.83 69.86 80.54 54.65 49.23 93.70 85.80 63.48 84.94

41.40 31.70 79.50 82.58 57.87 53.76 97.85 77.91 58.65 96.58

40.39 37.94 72.64 80.68 63.10 53.41 91.99 91.50 65.90 97.05

38.64 43.10 89.49 86.70 68.46 47.78 90.38 102.42 81.06 102.37

39.60 52.42 88.40 85.43 72.99 67.29 75.64 98.39 67.98 85.65

31.50 54.43 68.12 72.25 57.49 57.87 63.94 81.91 57.05 83.15

31.33 56.20 63.07 57.97 42.05 70.83 57.83 61.30 76.24 84.46

29.09 47.28 65.27 53.77 39.13 67.81 51.97 63.68 75.50 78.53

29.29 51.45 70.07 47.52 36.31 71.37 58.36 69.13 78.92 81.00

40.00 43.04 69.97 70.58 51.94 57.12 77.46 78.61 69.91 86.42

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price of Pork Loins (12-14 lbs.)2 Central, U.S. Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Cents Per Pound

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

103.90 96.94 110.00 112.50 76.50 105.82 99.29 110.80 106.95 91.83

110.75 102.20 116.43 109.50 103.03 92.35 110.66 114.32 105.73 95.75

100.45 95.30 120.49 106.58 104.56 83.47 110.06 128.53 100.08 92.43

101.89 93.33 119.70 117.16 102.51 99.35 127.48 117.98 94.13 96.90

103.99 103.50 131.61 125.68 130.64 107.44 115.38 130.72 101.71 108.93

103.84 118.81 115.73 116.28 113.13 97.62 132.53 132.33 104.80 126.51

109.79 124.65 126.16 122.53 106.51 105.72 131.73 126.41 108.64 102.50

112.86 127.98 118.18 119.28 105.90 111.55 120.45 121.22 97.85 104.85

105.34 117.63 112.28 112.07 97.23 104.99 119.22 116.21 87.17 111.38

95.65 108.23 115.40 99.68 99.63 98.98 119.90 108.69 93.04 97.71

80.00 93.94 115.39 85.99 79.90 94.64 104.19 97.87 82.60 89.06

89.50 110.39 120.45 79.44 72.49 102.75 114.68 98.50 93.03 93.72

101.50 107.74 118.49 108.89 99.34 100.39 117.13 116.97 97.98 100.96

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

213

Potatoes The potato is a member of the nightshade family. The leaves of the potato plant are poisonous and a potato will begin to turn green if left too long in the light. This green skin contains solanine, a substance that can cause the potato to taste bitter and even cause illness in humans. In Peru, the Inca Indians were the first to cultivate potatoes around 200 BC. The Indians developed potato crops because their staple diet of corn would not grow above an altitude of 3,350 meters. In 1536, after conquering the Incas, the Spanish Conquistadors brought potatoes back to Europe. At first, Europeans did not accept the potato due to the fact that it was not mentioned in the Bible and therefore considered an “evil” food. But after Marie Antoinette wore a crown of potato flowers, it finally became a popular food. In 1897, during the Alaskan Klondike gold rush, potatoes were so valued for their vitamin C content that miners traded gold for potatoes. The potato became the first vegetable to be grown in outer space in October 1995. The potato is a highly nutritious, fat-free, cholesterolfree and sodium-free food, and is an important dietary staple in over 130 countries. A medium-sized potato contains only 100 calories. Potatoes are an excellent source of Vitamin C and provide B vitamins as well as potassium, copper, magnesium, and iron. According to the US Department of Agriculture, “a diet of whole milk and potatoes would supply almost all of the food elements necessary for the maintenance of the human body.” Potatoes are one of the largest vegetable crops grown in the US, and are grown in all fifty states. The US ranks about 4th in world potato production. The top three types of potatoes grown extensively in the US are white, red, and Russets (Russets account for about two-thirds the US crop). Potatoes in the US are harvested in all four seasons, but the vast majority of the crop is harvested in fall. Potatoes harvested in the winter, spring and summer are used mainly to supplement fresh supplies of fall-harvested potatoes and are also important to the processing industries. The four principal categories for US potato exports are frozen, potato chips, fresh, and dehydrated. Fries account for approxi-

mately 95% of US frozen potato exports. Prices – Potato prices in 2003 fell 9.5% to $6.18 per hundred pounds from $6.82 in 2002. Potato prices in 2003 weakened substantially after the strong run seen in 20002002 when prices hit a 14-year high of $6.99 in 2000. Bearish factors centered on weaker demand with the emphasis on lower carbohydrate diets and a 3-year high in stocks. Supply –The potato crop in 2003 fell slightly by –0.1% to 45.924 billion pounds, which was well below the record high of 51.362 billion pounds posted in 2000. The fall crop was estimated at 41.35 billion pounds, accounting for 90.0% of the total crop. Stocks of the fall crop were estimated at a 3-year high of 26.716 billion pounds. The spring crop in 2003 was estimated at 2.231 billion pounds (4.9% of the total crop), the summer crop at 1.936 billion pounds (4.2% of the total crop), and the winter crop at 403 million pounds (0.9% of the total crop). For the fall crop, the largest producing states are Idaho (with 29.8% of the fall crop in 2003), Washington (23.1%), Wisconsin (8.2%), North Dakota (6.5%), and Colorado (5.7%). For the spring crop the largest producing states are California (with 34.0% of the spring crop) and Florida (30.6%). Farmers harvested 1.253 million acres in 2003, which was below the 10-year average of 1.334 million acres. The yield per harvested acre was 36,700 pounds, which was well above the 10-year average of 35,300. Demand – Total utilization of potatoes in 2002 rose to 45.980 billion pounds from 43.789 billion in 2001. The breakdown shows that the largest consumption category for potatoes is table stock with 31.5% of total consumption, followed by frozen french fries (29.5%), chips and shoestrings (12.2%), and dehydration (12.1%). US per capita consumption of potatoes in 2002 fell to a 3-year low of 137.8 pounds from the 5-year high of 140.1 pounds posted in 2001. Trade – US exports of potatoes in 2001, the latest reporting year for the series, fell to 555.829 million pounds from 644.190 million in 2000. US imports fell to 420.167 million pounds from 502.706 million in 2000.

Salient Statistics of Potatoes in the United States -- Foreign Trade5 --

Farm Disposition Yield Per ------ Acreage ------- Harvested Crop Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 1

Planted Harvested ---- 1,000 Acres ----

1,416 1,398 1,455 1,384 1,417 1,377 1,384 1,248 1,305 1,275

1,380 1,372 1,426 1,354 1,388 1,332 1,348 1,222 1,270 1,250

Acre Cwt.

339 323 350 345 343 359 381 358 362 367

----- Value of ----Consumption5 Total ---- Used Where Grow n ----(Fresh) Per Capita Pro- Seed Shrinkage P r o D o m e s t i c Stocks on Farm duction & Feed Sold2 Price duction3 Sales Imports --- In Pounds --& L o ss Jan. 1 Exports ---------- In Thousands of Cw t. ---------- $/Cwt. ----- Million $ ----- 1,000 Cwt. -- Millions of Lbs.-Fresh Total

467,054 443,606 499,254 467,091 475,771 478,216 513,621 437,888 459,802 459,045

5,878 5,745 6,221 5,475 5,766 5,569 5,288 5,387 5,631

37,166 29,530 41,222 32,183 35,454 35,531 43,688 31,208 30,955

424,010 408,331 451,190 429,433 434,551 437,116 464,645 401,293 423,216

5.58 6.77 4.91 5.64 5.56 5.77 5.08 6.99 6.69 5.85

Preliminary. 2 For all purposes, including food, seed processing & livestock feed. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

214

2,590 2,992 2,425 2,623 2,635 2,746 2,591 3,058 3,064 2,687 3

2,367 2,762 2,220 2,421 2,416 2,522 2,360 2,805 2,832

238,560 223,550 261,320 246,550 246,230 239,910 275,270 224,680 231,690 233,880

655,026 583,938 564,010 670,270 650,918 599,066 676,577 636,176 693,196 589,756

405,899 458,926 690,768 512,321 737,223 610,538 502,706 487,889 621,475 634,971

49.6 49.2 49.9 48.5 47.0 48.0 47.3 46.4 44.5 46.8

Farm weight basis, excluding canned and frozen potatoes.

136.7 136.9 145.0 141.4 138.1 136.5 138.7 138.0 132.2 137.8

POTATOES Cold Storage Stocks of All Froz en Potatoes in the United States, on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31 1

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

1,006.4 1,096.6 1,123.7 1,098.4 1,163.5 1,151.3 1,165.4 1,189.7 1,239.8 1,131.2

1,019.9 1,156.0 1,147.2 1,111.5 1,147.2 1,219.7 1,140.9 1,228.6 1,274.2 1,173.1

1,057.1 1,179.9 1,172.5 1,180.1 1,235.7 1,272.9 1,270.1 1,254.7 1,271.5 1,209.6

1,054.4 1,169.0 1,164.6 1,177.1 1,278.3 1,278.8 1,283.4 1,220.9 1,271.4 1,217.4

1,050.5 1,138.0 1,112.1 1,195.8 1,225.1 1,236.2 1,239.4 1,280.4 1,222.7 1,150.5

1,118.9 1,125.4 1,076.4 1,213.3 1,282.8 1,255.5 1,250.4 1,270.3 1,182.3 1,106.6

1,099.9 1,116.5 1,059.7 1,271.4 1,316.5 1,234.1 1,186.3 1,355.0 1,223.5 1,181.8

979.8 992.4 907.1 1,214.3 1,234.7 1,142.3 1,180.3 1,282.6 1,106.6 1,130.4

1,028.2 992.6 957.8 1,130.8 1,204.5 1,169.8 1,185.7 1,197.5 1,040.6 1,070.4

1,108.7 1,145.3 1,124.9 1,270.0 1,266.8 1,235.5 1,291.5 1,323.8 1,141.4 1,153.7

1,189.0 1,225.6 1,225.2 1,354.7 1,341.0 1,307.8 1,351.5 1,338.5 1,252.2 1,253.9

1,163.5 1,174.5 1,146.3 1,313.5 1,290.5 1,254.5 1,285.9 1,297.4 1,214.4 1,232.8

Preliminary.

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Potato Crop Production Estimates, Stocks and Disappearance in the United States

In Millions of Cwt.

------------------------------ Fall Crop ------------------------------------------- 1,000 Cw t. --------------------- Crop Production Estimates -------- ------------------- Total Storage Stocks2 --------------------------- Total Crop --------- ---------- Fall Crop ---------- ------------------ Follow ing Year -----------------Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031 1

Oct. 1

Nov. 1

D e c. 1

Oct. 1

-------------------------------

467.9 444.8 491.5 459.4 471.0 481.5 509.4 441.8 459.7 459.2

-------------------------------

-------------------------------

Preliminary.

2

Nov. 1 Dec. 1

412.4 402.4 447.9 417.5 429.0 435.6 463.4 400.7 415.0 413.5

273.3 256.7 295.1 278.8 280.9 275.1 310.3 258.8 264.6 267.9

Jan. 1

F eb. 1

Mar. 1

238.6 223.6 261.3 246.6 246.2 239.9 275.3 224.7 231.7 233.9

202.5 189.4 226.1 212.6 209.6 207.2 234.3 192.2 199.3 200.5

169.6 156.0 189.2 175.9 173.7 169.6 197.7 158.6 165.3

Held by growers and local dealers in the fall producing areas.

Apr. 1

May 1

129.8 87.6 115.9 75.9 147.6 103.2 134.2 92.8 131.2 87.9 128.4 86.9 153.5 109.2 120.0 81.2 125.9 82.9

Year

1

410,839 394,785 443,704 413,513 423,170 420,567 467,504 393,750 414,317 411,386

380,818 370,679 408,247 387,089 392,922 390,210 420,279 358,954 379,491

Value of Sales $ 1,000

Average Dec. 1 Price Stocks $/Cwt.

273,290 256,710 295,100 278,830 280,910 275,100 310,300 258,750 264,585 267,860

5.06 6.43 4.35 5.20 5.07 5.29 4.55 6.54 5.91

1,914,311 2,372,983 1,772,037 2,011,004 1,994,030 2,064,564 1,910,833 2,349,036 2,243,100

Source: Agricultural Statistics Board, U.S. Department of Agriculture

Production of Potatoes by Seasonal Groups in the United States

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

D i sa p Pro- pearance duction (Sold)

In Thousands of Cwt.

- Winter - ------------- Spring ------------- --------- Summer ---------- ---------------------------------------------------------- Fall ----------------------------------------------------------CaliNew ColoMinneNorth WashingWisTotal fornia Florida Total Mexico Virginia Total rado Idaho Maine sota Dakota Oregon ton consin Total

2,372 2,473 3,273 3,431 2,980 4,070 4,960 4,115 4,206 4,027

Preliminary.

7,790 6,230 7,538 8,073 6,198 7,600 7,426 6,045 7,695 8,360

8,588 7,830 7,765 7,150 7,358 8,820 6,343 7,970 7,883 8,008

22,646 20,193 22,417 22,299 21,121 25,327 21,921 21,814 23,294 24,433

1,088 1,344 1,404 1,248 962 1,247 1,050 770 736 532

1,425 2,040 1,463 1,268 1,380 1,050 1,292 1,386 1,386 1,550

17,381 17,931 19,176 18,171 18,933 18,972 19,236 18,209 17,985 19,199

25,795 138,801 23,808 132,657 29,175 142,800 24,993 140,314 25,360 138,000 25,762 133,330 27,972 152,320 21,357 120,200 27,885 133,385 23,652 123,180

18,375 17,160 21,175 19,080 18,060 17,813 17,920 16,430 16,960 17,030

20,035 20,790 24,600 20,440 21,170 18,020 21,240 18,425 18,700 22,330

28,200 25,410 28,820 22,000 28,670 26,400 26,950 26,400 23,460 27,440

27,514 88,920 24,788 80,850 30,124 94,990 27,319 88,160 26,229 93,225 28,020 95,200 30,683 105,000 20,730 94,400 24,936 92,400 20,991 93,150

25,740 419,645 26,000 403,009 33,150 454,388 30,175 423,190 30,895 432,737 34,000 429,847 33,800 467,504 31,955 393,750 31,125 414,317 32,800 411,386

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Utiliz ation of Potatoes in the United States

In Thousands of Cwt.

Crop Year

---------------------------------------------------------------------- Sales -------------------------------------------------------------------------- ------------------ Non-Sales ------------------------------------------------------ For Processing ------------------------------------ ---------- Other Sales ---------- Used on Other Other Frozen F or Chips, Total ShrinkLiveFarms French Frozen Canned Canned Starch stock Shoe- DehydTable Nonage Total Where Fries Products Potatoes Products2 & Flour ration strings Stock Sales Total & L o ss F eed S eed Sales Grown

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021

123,802 133,989 124,875 131,446 131,670 125,413 134,130 139,146 122,843 133,298

1

Preliminary.

2

48,987 49,299 47,284 48,305 48,130 51,471 52,916 52,371 54,080 51,640

40,795 41,381 45,065 54,261 48,389 55,522 50,831 54,880 40,745 51,334

121,087 136,531 129,029 145,489 131,628 142,932 140,196 146,869 126,711 124,875

Hash, stews and soups.

25,190 26,362 27,073 28,972 33,397 24,964 23,593 26,723 23,598 28,951

1,879 2,503 3,342 2,785 2,822 2,730 3,311 2,368 2,590 2,744

2,458 3,006 2,385 2,167 2,675 1,964 2,394 2,709 1,722 2,085

1,691 2,498 2,176 4,147 1,668 3,224 1,956 12,073 1,311 3,603 1,585 3,111 1,310 3,141 1,966 10,096 1,015 3,496 1,050 3,104

24,223 24,616 25,769 24,341 25,808 24,859 25,294 23,353 24,493 24,135

392,610 424,010 409,714 451,795 429,433 434,551 437,116 464,645 401,293 423,216

4,808 30,152 4,732 37,166 4,792 29,630 4,797 41,238 4,167 32,183 4,358 35,454 4,415 35,531 3,792 43,688 4,146 31,208 4,164 30,955

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

36,083 43,044 35,385 47,459 37,658 41,220 41,100 48,976 36,595 36,586

428,693 467,054 445,099 499,254 467,091 475,771 478,216 513,621 437,888 459,802

215

POTATOES

-----

USD Per Cwt. No. 1 White, New York (Jan. 1913 - Dec. 1960) Received by Farmers, U.S. (Jan. 1961 - date)

Per Capita Utiliz ation of Potatoes in the United States

Year

1995 1996 1997 1998 1999 2000 2001 2002 20031 20042 1

Preliminary.

2

Total

Fresh

136.9 145.0 141.4 138.1 136.5 138.7 138.0 132.2 135.1 134.6

49.2 49.9 48.5 47.0 48.0 47.3 46.4 44.5 45.2 45.4

Forecast.

In Pounds (Farm Weight)

-------------------------------------------------------------- Processing ---------------------------------------------------------------Chips & ShoeDehystring drating Canning Total Freezing

56.2 60.2 59.3 58.2 58.5 57.8 57.9 55.1 55.5 55.2

16.4 16.4 15.9 14.8 15.9 16.0 17.6 16.4 16.7 16.8

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

216

1.9 1.8 1.8 1.5 1.8 1.7 1.5 1.4 1.6 1.5

87.7 95.1 92.9 91.1 88.5 91.4 91.6 87.7 89.9 89.2

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Average Price Received by Farmers for Potatoes in the United States Year

13.2 16.7 15.9 16.6 12.3 15.9 14.6 14.8 16.1 15.7

In Dollars Per Cwt.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

6.04 4.83 6.65 4.22 5.40 5.50 5.68 4.56 6.90 6.67

6.37 4.97 6.92 4.56 5.94 5.75 5.92 5.26 7.34 6.33

7.75 5.37 7.51 4.64 6.41 6.12 6.26 5.12 8.26 6.68

6.68 5.41 7.82 4.67 6.27 6.50 6.46 5.47 8.00 7.49

6.62 5.86 8.09 5.31 6.45 6.13 6.31 5.24 8.62 7.15

6.80 7.12 8.16 5.67 6.16 6.54 6.14 5.75 9.39 6.47

7.38 8.75 7.79 5.66 5.81 7.35 6.93 6.46 10.40 6.43

6.25 6.64 5.58 6.31 5.46 6.02 5.56 7.61 8.00 6.22

4.95 5.76 4.92 5.08 4.97 5.09 4.49 6.04 6.14 4.93

4.57 6.30 4.75 4.93 4.47 4.86 4.27 5.15 5.44 4.67

4.77 6.39 4.44 5.12 4.86 5.52 4.31 5.96 6.38 5.35

4.85 6.33 4.28 5.36 5.30 5.44 4.48 6.66 6.67 5.60

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

S e a so n Average

5.56 6.75 4.91 5.64 5.56 5.77 5.08 6.99 6.82

POTATOES Potatoes Processed1 in the United States, Eight States States

Storage S e a so n

In Thousands of Cwt.

to D e c. 1

to Jan. 1

to F eb. 1

to Mar. 1

to Apr. 1

to May 1

to June 1

Entire S e a so n

I daho and OregonMalheur Co

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-4

26,620 27,310 31,060 26,880 27,510 27,970 29,290 20,940 28,380 24,310

34,230 35,040 38,210 33,950 34,700 34,490 35,720 27,330 34,860 30,730

42,330 43,260 45,420 41,050 42,670 40,790 43,470 33,620 41,200 36,260

49,890 51,530 54,640 49,470 51,210 49,220 50,580 40,860 48,600

57,990 59,060 62,570 57,620 60,040 57,820 58,910 47,710 56,240

66,680 66,690 70,720 65,750 68,550 66,080 66,760 54,150 63,840

------------76,410 74,110 75,270 61,200 71,280

90,300 89,250 96,970 91,450 92,860 88,210 93,460 73,390 85,390

Maine2

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-4

1,505 1,455 1,790 1,250 1,430 1,270 1,845 1,975 2,230 1,590

1,840 1,850 2,115 1,720 1,935 1,700 2,475 2,440 2,715 2,095

2,265 2,430 2,820 2,265 2,530 2,385 3,105 3,110 3,345 2,725

2,540 2,850 3,280 2,735 2,985 3,070 3,695 3,700 3,905

2,985 3,435 3,820 3,355 3,595 3,765 4,225 4,285 4,505

3,330 3,965 4,420 3,900 4,180 4,560 4,760 4,775 5,225

------------4,705 5,150 5,340 5,515 5,905

4,770 5,725 6,495 5,870 5,945 6,670 7,015 7,195 7,835

Wash. & OregonOther

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-4

28,670 30,000 31,670 28,580 33,630 33,320 34,770 29,320 33,680 32,670

33,480 35,170 36,660 33,990 38,890 39,620 40,970 35,310 39,490 38,520

39,120 39,460 41,700 38,690 45,650 45,500 47,720 40,540 44,190 43,600

46,070 45,280 48,740 46,400 53,290 53,350 55,250 47,910 51,920

52,940 51,730 55,570 53,720 60,930 61,080 62,860 54,970 58,710

59,540 57,360 62,320 59,780 67,180 67,230 69,850 61,360 64,300

------------74,190 74,840 78,010 69,400 71,480

76,780 70,250 80,970 76,930 83,730 83,210 91,130 77,180 79,110

Other States3

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-4

9,725 12,650 13,720 11,645 11,570 12,455 12,665 13,170 12,190 12,570

13,110 15,630 17,000 13,960 14,465 15,035 16,215 14,925 14,865 15,410

15,630 18,815 20,645 17,115 18,030 17,950 18,975 19,000 17,865 18,760

18,260 21,985 24,085 19,905 20,850 20,855 22,095 22,115 20,740

21,115 25,510 27,650 23,515 24,850 24,305 25,410 24,655 23,580

24,060 28,610 30,830 26,365 28,190 27,220 28,695 27,815 26,000

------------31,365 30,410 31,765 30,460 29,075

32,260 33,580 43,100 37,842 39,865 36,435 39,020 37,740 36,705

Total

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-4

66,520 71,415 78,240 68,355 74,140 75,015 78,570 65,405 76,480 71,140

82,660 87,690 93,985 83,620 89,990 90,845 95,380 80,005 91,930 86,755

99,345 103,965 110,585 99,120 108,880 106,625 113,270 96,270 106,600 101,345

116,760 121,645 130,745 118,510 128,335 126,495 131,620 114,585 125,165

135,030 139,735 149,610 138,210 149,415 146,970 151,405 131,620 143,035

153,610 156,625 168,290 155,795 168,100 165,090 170,065 148,100 159,365

------------186,670 184,510 190,385 166,575 177,740

204,110 198,805 227,535 212,092 222,400 214,525 230,625 195,505 209,040

1

Total quantity received and used for processing regardless of the state in which the potatoes were produced. Excludes quantities used for potato chips in Maine, Michigan, Minnesota, North Dakota or Wisconsin. 2 I ncludes Maine grown potatoes only. 3 Michigan, Minnesota, North Dakota and Wisconsin. Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

217

Rayon and Other Synthetic Fibers World Cellulosic Fiber Production Year

Austria

Brazil

China

Czech Republic

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

134.3 139.4 145.0 145.0 -------------------

58.6 53.1 34.4 36.4 29.2 34.6 36.2 28.7 32.2 38.5

336.0 435.0 432.0 450.0 451.5 472.1 552.3 608.6 682.0 750.0

33.7 35.0 31.4 27.3 26.9 17.6 7.1 7.6 7.2 9.2

1

Preliminary.

2

Producing capacity.

In Thousands of Metric Tons Finland

Germany

India

Ja p a n

Taiwan

United Kingdom

United States

ExUSSR

World Total

58.5 57.5 49.8 62.0 -------------------

138.1 143.5 143.6 155.0 -------------------

239.7 262.1 251.9 242.4 264.4 248.5 297.5 251.9 285.9 386.9

218.9 212.7 198.2 184.1 164.5 135.5 126.2 107.1 68.1 105.0

149.3 139.6 144.7 148.4 142.6 143.7 141.5 127.4 114.2 145.2

67.0 67.1 62.3 70.0 -------------------

225.0 226.0 213.1 208.1 165.5 134.7 158.8 103.0 80.7 96.6

189.8 188.4 127.3 401.2 -------------------

2,308 2,423 2,270 2,314 2,227 2,074 2,215 2,084 2,118 2,523

Source: Fiber Economics Bureau, I nc. (FEB)

World Noncellulosic Fiber Production (Except Olefin) Year

China

West Germany

243.2 2,119.0 227.4 2,283.7 229.6 2,729.6 248.3 3,527.2 268.6 4,406.8 292.6 5,235.1 311.1 6,158.4 288.8 7,322.9 293.1 8,881.3 348.2 12,275.0

807.6 771.3 -------------------------

Brazil

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

India

Italy/ Malta

681.1 738.0 916.4 1,240.7 1,361.3 1,486.1 1,568.4 1,570.2 1,689.9 2,037.3

599.9 551.3 -------------------------

In Thousands of Metric Tons

Ja p a n

Rep. of Korea

Mexico

Spain

Taiwan3

United States4

ExUSSR

World Total

1,394.0 1,400.0 1,399.0 1,433.6 1,363.6 1,299.7 1,307.9 1,239.5 1,129.1 1,559.0

1,825.0 1,858.2 2,025.2 2,403.3 2,446.0 2,592.8 2,659.0 2,381.2 2,341.2 2,976.9

484.4 516.6 584.6 612.7 591.1 571.2 586.8 536.4 509.6 669.5

273.6 252.3 -------------------------

2,301.5 2,410.5 2,561.0 2,932.4 3,111.5 2,927.7 3,122.9 2,977.5 3,089.3 3,666.5

3,250.3 3,238.9 3,284.1 3,420.0 3,222.7 3,169.5 3,149.2 2,687.6 2,787.2 3,432.5

658.1 636.1 1,359.8 ----------------------

17,939 18,377 19,765 22,396 2,354 24,359 26,129 26,039 27,890 36,273

1

Preliminary. 2 Producing capacity. 3 Beginning 1995; data for S. Korea and Taiwan. Source: Fiber Economics Bureau, I nc. (FEB)

World Production of Synthetic Fibers

4

Beginning 1995; data for USA and Canada.

In Thousands of Metric Tons

------------ Noncellulosic Fiber Production (Except Olefin) ------------

Year

1994 1995 1996 1997 1998 1999 2000 2001 20021 20032 1

------------------- By Fibers ------------------Nylon Acrylic Other & & Modacrylic Aramid Polyester Fibers3

2,543 2,446 2,604 2,706 2,656 2,513 2,670 2,577 2,742 3,264

Preliminary.

2

3,706 3,740 3,858 4,028 3,792 3,800 4,072 3,740 3,905 5,039

11,468 11,945 13,047 15,406 16,539 17,879 19,073 19,381 20,956 27,521

Producing capacity.

222 247 256 256 268 294 313 335 349 449 3

---------- World Total ---------Yarn & Staple, MonofilTow & aments Fiberfill Total

9,087 9,684 10,529 12,093 12,959 13,660 14,645 14,725 15,813 21,199

8,852 8,693 9,236 10,303 10,295 10,825 11,484 11,308 12,139 15,074

------------------------------ Glass Fiber Production ------------------------------ Cigarette Other United Ex- Tow ProEurope Japan Americas States Total China USSR duction

17,939 18,377 19,765 22,396 23,254 24,485 26,129 26,033 27,952 36,273

545 567 585 610 660 674 728 701 718 724

Alginate, azion, spandex, saran, etc.

Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

218

169.3 168.9 145.9 111.2 111.0 109.9 81.3 66.3 57.0

7.8 6.3 4.1 3.5 3.0 5.1 6.7 2.3 2.0

177.1 175.2 150.0 114.7 114.0 115.0 88.0 68.6 59.0

34.0 39.3 42.9 38.1 28.2 23.2 14.5 12.7 11.7

Source: Fiber Economice Bureau, I nc. (FEB)

203.3 208.2 188.8 149.3 139.3 133.1 95.8 79.0 68.7

87 96 94 100 96 96 96 93 96 100

959 981 996 1,007 1,018 1,126 1,143 1,016 1,222 1,307

2,235 2,308 2,387 2,431 2,416 2,538 2,580 2,431 2,661 2,790

78 85 98 75 60 60 60 67 90 120

54 55 25 27 30 30 28 32 34 37

536 550 584 582 551 544 570 590 596 -----

Source: Fiber Economics Bureau, I nc. (FEB)

Artificial (Cellulosic) Fiber Distribution in the United States ------------------------------ Yarn & Monofilament ------------------------Domestic -------------- Producers' Shipments -------------ConDomestic Exports Total Imports sumption

313 318 316 328 300 300 280 273 251 250

In Millions of Pounds

------------------------------ Staple & Tow -----------------------------Domestic --------------- Producers' Shipments -------------ConDomestic Exports Total Imports sumption

259.8 225.4 205.3 184.4 168.8 162.3 117.2 91.1 86.7

28.7 20.0 60.1 31.4 29.9 69.3 35.5 12.6 13.1

288.5 245.4 265.4 215.8 198.7 231.5 152.7 103.7 99.8

40.8 35.3 51.6 47.4 47.5 37.5 33.9 56.2 44.5

300.6 260.7 256.9 231.8 216.3 199.7 151.2 147.4 131.2

Glass F i ber Shipments

2,163.0 2,196.0 2,275.0 -------------------

RAYON AND OTHER SYNTHETIC FIBERS Man-Made Fiber Production in the United States

In Millions of Pounds

-- Artificial (Cellulosic) Fibers --- Rayon & Acetate --

Year

Staple & Tow

Total Cellulosic

225 208 219 187 144 115 114 ----------

273 290 245 266 216 199 232 153 104 100

498 498 464 453 360 314 345 153 104 100

1994 1995 1996 1997 1998 1999 2000 2001 20021 20032 1

--------------------------------------------------------- Synthetic (Noncellulosic) Fibers ---------------------------------------------------------

Filament Yarn & Monofilament

2

Preliminary.

---------- Yarn & Monofilament ---------Total Nylon Polyester Olefin Yarn

1,805 1,829 1,917 2,039 1,887 1,896 1,947 1,642 1,772 1,762

1,492 1,597 1,571 1,644 1,541 1,595 1,509 1,188 1,218 1,145

1,839 1,870 1,951 2,058 2,212 2,278 2,406 2,238 2,235 2,289

5,136 5,296 5,438 5,740 5,640 5,769 5,860 5,067 5,225 5,195

---------------------- Staple & Tow ---------------------Acrylic Total & ModNylon Polyester Olefin Staple acrylic

935 874 883 797 799 787 733 606 681 697

2,366 2,290 2,260 2,446 2,357 2,291 2,405 2,040 2,050 1,886

442 432 465 461 346 316 339 280 260 220

549 521 610 623 712 797 816 721 749 680

Total Total ManuNoncel- factured lulosic Fibers

4,292 9,428 4,117 9,413 4,217 9,655 4,327 10,067 4,214 9,853 4,192 9,960 4,293 10,153 3,646 8,713 3,740 8,964 3,483 8,678

Total Glass F i ber

9,957 9,948 9,979 10,465 10,314 10,263 10,236 ----------

2,159 2,282 2,326 2,408 2,490 2,570 2,738 2,638 2,759 2,789

Source: Fiber Economics Bureau, I nc. (FEB)

Estimate.

Domestic Distribution of Synethic (Noncellulosic) Fibers in the United States

In Millions of Pounds

------------------------------------------- Staple & Tow -------------------------------------------------------------------------- Yarn & Monofilament ------------------------------------- ------------------------- Producers' Shipments ------------------------

Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

------------------ Domestic -----------------PolyNylon ester Olefin Total Exports

1,741 1,801 1,877 1,790 1,765 1,795 1,606 1,668 1,666

1,440 1,429 1,528 1,426 1,463 1,353 1,189 1,113 1,051

1,870 1,954 2,015 2,167 2,251 2,371 2,200 2,192 2,260

5,052 5,184 5,421 5,383 5,480 5,519 4,995 4,973 4,977

259 251 239 218 244 250 155 189 179

Dome- ---------------------- Domestic ---------------------Acrylic stic ConPoly- & ModTotal Imports sumption Nylon ester acrylic Olefin Total Exports

Domestic Consumption

-------------------- Producers' Shipments ---------------------

5,311 5,435 5,659 5,601 5,724 5,769 5,150 5,162 5,156

394 482 589 637 719 790 697 765 766

5,445 5,666 6,010 6,020 6,199 6,309 5,692 5,737 5,743

829 844 757 763 756 674 607 637 673

2,100 2,016 2,250 2,105 2,138 2,174 1,881 1,823 1,688

266 288 289 267 233 244 169 170 167

458 515 542 596 726 757 673 723 635

3,653 3,662 3,837 3,732 3,852 3,849 3,330 3,353 3,162

Mill Consumption of Fiber & Products and Per Capita Consumption in the U.S.

1994 1995 1996 1997 1998 1999 2000 2001 2002 1

Total Imports

4,052 4,128 4,229 4,072 4,190 4,176 3,638 3,706 3,409

625 608 673 777 788 727 757 875 829

4,278 4,270 4,510 4,509 4,640 4,576 4,087 4,227 3,991

Source: Fiber Economice Bureau, I nc. (FEB)

Preliminary.

Year

399 465 392 340 338 327 308 353 246

-------- Cellulosic Fibers Yarn & Monofil- Staple Net ament & Tow Waste

223 203 208 189 149 139 133 96 79

318 301 261 257 232 216 200 151 147

3.4 3.9 4.0 2.5 1.4 1.6 1.9 2.4 1.8

-------- ---- Noncellulosic Fibers ---Total Total Cellu- NoncelluNet Noncellulosic losic losic Waste

545 9,869 508 9,723 473 9,936 448 10,520 383 10,529 357 10,839 335 10,884 249 9,820 228 9,994

102 76 100 103 165 177 190 193 190

9,971 9,799 10,036 10,623 10,694 11,016 11,075 10,013 10,185

Total Manufactured Fibers2

Other Cotton Wool Fibers3

10,516 10,307 10,509 11,071 11,077 11,373 11,409 10,262 10,413

5,375 5,110 5,340 5,448 5,225 4,996 4,754 3,983 3,609

172 162 164 164 126 85 83 89 61

54.8 65.6 46.0 42.8 44.3 40.4 38.5 30.3 28.9

In Millions of Pounds

Per Capita4 Mill Consumption (Lbs.) ManTotal Other Grand made All Total Fibers2 Cotton Wool Fibers3 Fibers

16,117 15,645 16,059 16,726 16,472 16,495 16,285 14,365 14,111

44.5 43.7 44.1 46.5 47.4 49.1 49.7 45.8 46.3

30.9 29.8 30.2 32.5 34.4 35.3 35.8 33.9 34.2

1.4 1.4 1.4 1.4 1.3 1.2 1.3 1.4 1.4

2.7 2.5 1.8 2.0 1.8 1.9 2.2 1.7 2.0

79.6 77.4 77.5 82.4 84.8 87.5 89.0 82.7 83.8

1

Preliminary. 2 Excludes Glass Fiber. 3 I ncludes silk, linen, jute and sisal & others. 4 Mill consumption plus inports less exports of semimanufactured and unmanufactured products. Source: Fiber Economics Bureau, I nc. (FEB)

Producer Price Index of Grey Synthetic Broadw ovens Year

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1 1

(1982 = 100)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

114.3 115.6 115.7 119.0 119.6 113.5 114.8 114.3 117.9 120.1

112.0 115.7 114.7 119.9 119.1 112.8 116.8 114.1 118.3 120.4

112.2 115.6 114.4 120.3 119.1 112.9 116.7 116.9 118.3 119.7

112.2 115.7 114.1 120.9 119.2 113.2 116.3 117.9 117.9 120.2

112.1 115.5 114.3 121.8 117.1 113.2 116.6 116.8 118.4 119.8

113.1 115.6 113.9 122.0 118.4 113.3 117.1 115.7 119.0 119.7

114.7 115.7 114.8 122.6 118.0 113.1 115.4 116.1 118.8 118.0

115.0 115.2 116.4 122.0 118.0 113.3 114.8 117.1 118.5 118.1

115.0 115.3 116.5 121.7 116.9 114.1 116.9 116.9 119.4 116.7

115.8 115.6 116.5 120.8 117.3 111.8 116.4 117.2 118.7 114.2

115.9 115.8 116.8 119.4 115.2 112.9 114.7 116.6 117.6 115.1

115.3 116.1 118.2 119.9 114.5 113.8 116.2 117.0 119.6 115.0

114.0 115.6 115.5 120.9 117.7 113.2 116.1 116.4 118.5 118.1

Preliminary.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS) (0337-03)

219

Rice ric tons of production (accounting for 32% of world production), followed by Indian (75.700 million or 20%), and Indonesia (33.411 million or 9%). US rice production in 2003/4 was forecast at 6.324 million metric tons, down 3.2% from 6.536 million in 2002/3 and accounting for only about 2% of world production. Demand – World rice consumption in 2003/4 was forecast to rise to 413.927 million metric tons, up 0.9% from 410.132 million in 2002/3. Consumption in 2003/4 was forecast to exceed production for the third consecutive year, a factor that has led to the sharp drawdown in stocks and the sharp rise in rice prices. US rice consumption in 2003/4 was forecast to rise to 3.853 million metric tons, up 9% from 3.535 million in 2002/3. Trade – Rice is generally consumed where it is produced, with only about 6% of world rice production moving into world trade. World rice trade in 2003/4 was forecast to fall to 24.737 million metric downs, down 9% from 27.316 million in 2002/3. The world’s largest rice exporters in 2002/ 3 were Thailand (representing 27% of total world exports), India (16%), the US (14.1%), and Vietnam (13.9%). US exports in 2003/4 are forecasted to fall to 3.000 million metric tons from 3.850 million in 2002/3. There are many nations that import rice, the largest being Indonesia, Philippines, Nigeria, and Brazil.

Rice is a grain that is cultivated on every continent except Antarctica and is the primary food for half the people in the world. Rice cultivation probably originated as early as 10,000 BC in Asia. Rice is grown at varying altitudes (sea level to about 3,000 meters), in varying climates (tropical to temperate), and on dry to flooded land. The growth duration of rice plants is 3-6 months, depending on variety and growing conditions. Rice is harvested by hand in developing countries or by combines in industrialized countries. Asian countries produce about 90% of rice grown worldwide. Rough rice futures and options are traded on the Chicago Board of Trade (CBOT). Prices – Rough rice prices on the CBOT nearest futures chart started 2003 near $4 per 100 pounds (cwt or hundredweight). Prices then rallied fairly steadily during the year, more than doubling in price to hit a 5-year high of $9 by the end of the year. Bullish factors centered on strong consumption, a sharp drawdown in stocks, and the weak dollar. Supply – World rice production in 2003/4 was forecasted to rise to 391.023 million metric tons, up 2.8% from 380.263 million in 2002/3. World ending stocks in 2003/4 are forecasted at 83.997 million metric tons, down sharply from 106.901 million in 2002/3. The world’s largest rice producers in 2002/3 were China with 122.180 million met-

World Rice Supply and Distribution Year

---------------------------------------------- Imports ---------------------------------------------- ---------------- Utiliz ation ----------------- ------------ Ending Stocks -----------European Saudi UnacBrazil Indonesia Union Iran Arabia counted Total China India Total China India Total

1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

In Thousands of Metric Tons

781 700 673 548 1,200 600

Preliminary.

2

3,729 1,500 1,500 3,500 2,750 2,000

Estimate.

3

784 852 923 959 975 975 Forecast.

1,313 1,100 765 964 900 1,000

750 992 1,053 938 1,150 950

Year

Brazil

Burma

China

1998-9 1999-00 2000-1 2001-21 2002-32 2003-43

29,784 34,602 36,547 34,503 25,360 26,000

11,582 11,424 10,385 11,000 6,935 7,900

16,000 17,000 18,571 17,000 10,440 10,440

198,714 198,480 187,909 181,000 122,180 115,000

2

Estimate.

3

Forecast.

1

129,013 134,233 129,463 133,513 75,700 89,000

Australia

Burma

674 332 363 233 160 300

667 617 618 360 150 300

57 159 670 1,002 400 500

2,708 2,951 1,847 1,963 2,583 2,000

2

Estimate.

3

Forecast.

387,467 397,777 395,389 411,169 411,398 414,106

96,000 98,500 94,100 82,167 67,224 45,499

12,000 17,716 25,051 24,480 11,060 12,560

134,743 146,992 149,565 136,821 106,269 82,596

50,400 52,919 50,633 51,424 33,411 34,508

Ja p a n

Rep. of Korea

Pakistan

Philippines

Thailand

Vietnam

World Total

11,201 11,470 11,863 11,332 8,089 7,080

6,800 7,066 7,197 7,503 4,927 4,450

7,012 7,735 7,051 5,611 4,228 4,900

10,268 11,957 12,515 12,692 8,450 8,840

23,620 25,000 25,500 25,500 17,124 17,800

30,467 31,706 31,020 31,212 21,527 21,252

585,712 607,545 591,159 584,865 380,846 390,433

In Thousands of Metric Tons

Argentina

Preliminary.

220

India Indonesia

European China Union

1998-9 1999-00 2000-1 2001-21 2002-32 2003-43

81,154 82,670 75,851 87,351 83,680 85,000

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Exports of Rice (Milled Basis) Year

133,570 133,763 134,356 134,581 134,800 135,000

In Thousands of Metric Tons

Banglad e sh

Preliminary.

24,941 22,846 24,442 27,888 27,357 24,712

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Production of Rough Rice

1

1,659 1,628 1,449 2,332 1,843 1,401

348 308 264 358 325 350

Guyana

India

Pakistan

Thailand

Uruguay

Vietnam

United States

World Total

252 167 175 150 175 175

2,752 1,449 1,936 6,650 4,421 2,000

1,838 2,026 2,417 1,603 1,700 1,700

6,679 6,549 7,521 7,245 7,552 8,250

681 642 806 526 675 750

4,555 3,370 3,528 3,245 3,795 4,000

2,644 2,847 2,541 3,295 3,850 3,000

24,941 22,846 24,442 27,888 27,357 24,712

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

RICE

-----

---

USD Per Cwt. Fancy (Honduras), New Orleans (Oct. 1914 - Dec. 1924) Fancy (Blue Rose), New Orleans (Jan. 1925 - Dec. 1933) Medium to Good (Blue Rose), New Orleans (Jan. 1934 - July 1947) Fancy, No. 2 Zenith Milled, New Orleans (Aug. 1947 - Apr. 1972) No. 2 Medium, Southwest Louisiana (May 1972 - date) Received by Farmers, U.S. (Aug. 1982 - date)

Average Wholesale Price of Rice No. 2 (Medium)1 Southw est Louisiana Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-42 1

In Dollars Per Cwt. Bagged

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Average

18.30 15.44 19.50 18.25 18.35 18.60 13.00 11.06 11.13 16.75

15.88 17.50 19.50 18.35 18.75 17.50 12.34 11.50 11.50 17.70

15.00 20.25 19.25 18.63 19.00 14.88 12.48 11.50 12.25 19.00

15.00 20.13 19.25 19.00 19.00 14.70 12.41 11.50 12.25 19.75

14.00 20.00 19.00 19.00 20.00 14.67 12.38 11.08 12.25 21.08

13.80 20.00 18.81 19.00 20.00 14.35 12.38 11.50 12.63

14.16 19.88 19.19 19.00 20.00 14.00 12.25 11.50 13.50

14.38 19.25 19.25 18.20 20.00 13.83 12.00 11.44 14.05

14.38 19.13 19.25 18.00 20.00 13.75 11.82 11.03 14.25

14.70 19.38 19.25 18.13 20.00 13.40 11.53 11.13 14.44

14.75 19.40 18.40 18.50 20.00 12.50 11.25 11.13 14.50

14.55 19.50 19.00 18.50 20.00 12.63 11.25 11.13 14.88

14.91 19.15 19.14 18.55 19.59 14.57 12.09 11.29 13.13 18.86

U.S. No. 2 -- broken not to exceed 4%.

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Rice (Rough) in the United States Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Dollars Per Cwt.

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Average2

6.87 7.64 10.10 9.94 9.01 6.91 5.72 5.10 3.71 5.27

6.89 7.95 10.00 9.92 9.42 6.17 5.53 4.78 3.94 6.13

6.47 8.77 9.66 10.00 9.31 5.91 5.57 4.36 3.69 6.44

6.53 9.12 9.41 9.82 9.02 5.96 5.72 4.08 3.70 6.99

6.56 9.36 9.82 9.77 9.10 6.01 5.69 4.07 4.13 7.57

6.78 9.33 9.95 9.57 9.09 5.98 5.86 4.30 4.66 8.19

6.71 9.10 10.10 9.75 9.02 5.82 5.72 4.16 4.24 7.55

6.64 9.31 10.20 9.67 8.93 5.64 5.66 3.99 4.14

6.70 9.34 10.30 9.40 8.49 5.75 5.68 3.94 4.33

6.75 9.69 10.20 9.38 8.21 5.62 5.40 3.98 4.58

7.03 9.74 9.90 9.58 8.25 5.69 5.14 3.92 5.04

7.17 9.68 10.00 9.58 8.26 5.59 5.32 3.81 5.09

6.78 9.15 9.96 9.70 8.89 5.93 5.61 4.21 4.27 6.88

2

Weighted average by sales.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

221

RICE Salient Statistics of Rice, Rough & Milled (Rough Equivalent) in the United States

In Millions of Cwt.

-------------- Government Support Program ------------- Loan Rate ($ Per Cw t.) --------------------------------- Disappearance ----------------------------Put Crop 3 -------------------- Supply -------------------Total Under ---------- Rough ---------Year CCC Disap- Stocks Price ResiAll Milled Beginning Stocks ProTotal ------------- Domestic ------------Total dual Exports pearance July 31 Support Long Medium Classes Long Aug. 1 Aug. 1 duction Imports Supply Food Brewers Seed

1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

27.9 22.1 27.5 28.5 39.0 26.8

184.4 206.0 190.9 215.3 211.0 199.2

10.6 10.1 10.9 13.2 14.8 15.5

223.0 238.2 229.2 256.9 264.8 241.4

87.3 90.1 110.2 119.0 120.0 122.0

16.0 16.0

4.4 4.0 4.1 4.0 3.7 4.0

4 4 4 4

114.0 121.9 117.5 123.3 113.4 122.0

11.4 6.5

86.8 88.8 83.2 94.7 124.6 97.0

4 4 4 4

200.9 210.7 200.7 218.0 238.0 219.0

0 0 0 0 0 0

80.2 107.6 -------------

6.67 6.67 6.66 6.67 6.66 6.64

6.14 6.12 6.12 6.09 6.06 6.09

6.50 6.50 6.50 6.50 6.50 6.50

10.71 10.66 10.71 10.69 10.66 10.65

1

Preliminary. 2 Forecast. 3 Loan rate for each class of rice is the sum of the whole kernels' loan rate weighted by its milling yield (average 56%) and the broken kernels' loan rate weighted by its milling yield (average 12%). Source: Economic Research Service, U.S. Department of Agriculture (ERS)

Acreage, Yield, Production and Prices of Rice in the United States Yield Acreage Harvested

Milled Rice, Average

Per Harvested

Wholesale Prices ----- C.I.F. at Rotterdam ------

Production

Value U.S. of Pro- ---- ($ Per Cw t.) ---No. 24 Thai "A"5 Thai "B"5 duction ArkanHous$1,000 sa s2 ton3 ------ $ Per Metric Ton -------

---------- (1,000 Acres) ---------- --- Acre (In Lbs.) --- --------------- 1,000 Cw t. --------------Crop Year

Southern States California

1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

2,799 3,007 2,491 2,843 2,679 2,490

458 505 548 471 528 507

United States California

United States

Southern States California

3,257 3,512 3,039 3,314 3,207 2,997

5,663 5,866 6,281 6,496 6,578 6,645

153,057 169,337 147,351 176,780 167,971 160,533

6,850 7,270 7,940 8,170 8,140 7,620

31,386 36,690 43,521 38,490 42,989 38,624

United States

184,443 206,027 190,872 215,270 210,960 199,157

1,654,157 1,231,207 1,049,961 925,055 979,628 1,485,031

19.04 15.01 11.75 10.85 13.39 19.79

1

Preliminary. 2 F.O.B. mills, Arkansas, medium. 3 Houston, Texas (long grain). 4 Milled, 4%, container, FAS. NA = Not available. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

U.S. Exports of Milled Rice, by Country of Destination

18.05 15.33 14.92 12.88 11.76 16.01 5

368 272 274 208 221

----------------

333 278 234 225 NA

SWR, 100%, bulk.

In Thousands of Metric Tons

Year Beginning October

Canada

Haiti

Iran

Ivory C o a st

Jamaica

Mexico

Netherlands

Peru

Saudi Arabia

South Africa

Switzerland

United Kingdom

Total

1997-8 1998-9 1999-00 2000-1 2001-2 2002-31

175.8 174.9 181.1 182.4 174.5 167.0

160.0 219.9 221.0 212.3 247.1 324.3

---------------10.3

32.3 13.9 21.1 22.2 25.0 65.8

26.7 17.4 38.2 32.0 28.7 60.7

413.7 353.7 525.8 516.0 740.4 740.7

54.6 44.0 60.6 50.8 52.9 71.0

149.3 103.9 19.5 1.0 11.2 23.8

123.1 113.0 164.8 156.3 97.0 97.6

74.4 77.9 70.6 65.9 67.3 73.1

22.8 25.0 30.2 33.2 18.0 26.2

105.9 110.3 141.9 104.0 106.0 126.0

3,309 3,076 3,307 3,058 3,536 4,471

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

U.S. Rice Exports by Export Program

F i sca l Year

P L 480

Section 416

1998 1999 2000 2001 2002 20031

183 515 216 149 253 239

0 0 147 31 64 0

In Thousands of Metric Tons

CCC Credit Programs2

CCC African Reliel Exports

499 192 225 ----------

0 0 0 0 0 0

EEP3

Export Programs4

Exports Outside Specified Export Programs

Total U.S. Rice Exports

% Export Programs as a Share of Total Exports

0 0 0 0 0 0

194 561 394 231 374 309

3,116 2,505 2,913 2,827 3,162 4,162

3,310 3,066 3,307 3,058 3,536 4,471

6 18 12 8 11 7

1

Preliminary. 2 May not completely reflect exports made under these programs. 3 Sales not shipments. 4 adjusted for estimated overlap between CCC export credit and EEP shipments. Source: Economice Research Service, U.S. Department of Agriculture (ERS-USDA)

Production of Rice (Rough) in the United States, by Type and Variety

In Thousands of Cwt.

Long Grain

Medium Grain

Short Grain

Total

1994 1995 1996 1997 1998

133,445 121,730 113,629 124,485 139,328

63,390 51,241 56,901 57,091 43,404

944 900 1,069 1,416 1,711

197,779 173,871 171,599 182,992 184,443

1

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Year

Preliminary.

222

Year

Long Grain

Medium Grain

Short Grain

Total

1999 2000 2001 2002 20031

151,863 128,756 167,555 157,243 149,011

50,540 59,514 46,105 52,201 47,440

3,624 2,602 1,610 1,516 2,706

206,027 190,872 215,270 210,960 199,157

Rubber Rubber is a natural or synthetic substance characterized by elasticity, water repellence, and electrical resistance. Pre-Columbian Native South Americans discovered many uses for rubber such as containers, balls, shoes, and for waterproofing fabrics for coats and capes. The Spaniards tried to duplicate these products for many years but were unsuccessful. The first commercial application of rubber began in 1791 when Samuel Peal patented a method of waterproofing cloth by treating it with a solution of rubber and turpentine. In 1839, Charles Goodyear revolutionized the rubber industry with his discovery of a process called vulcanization, which involves combining rubber and sulfur and heating the mixture. Natural rubber is obtained from latex, a milky white fluid, from the Hevea Brasiliensis tree. The latex is gathered by cutting a chevron shape through the bark of the rubber tree. The latex is collected in a small cup, with approximately 1 fluid ounce per cutting. The cuttings are usually done every other day until the cuttings reach the ground. The tree is then allowed to renew itself before a new tapping is started. The collected latex is strained, diluted with water, and treated with acid to clump the rubber particles together. The rubber is then pressed between rollers to consolidate the rubber into slabs or thin sheets and is air-dried or smoke-dried for shipment. During World War II, natural rubber supplies from the Far East were terminated, and the rubber shortage accelerated the development of synthetic rubber in the US. Synthetic rubber is produced by chemical reactions, condensation or polymerization, of certain unsaturated hydrocarbons. Synthetic rubber is made of raw material derived from petroleum, coal, oil, natural gas, and acetylene and is almost identical to natural rubber in chemical and physical properties. Natural rubber and Rubber Index futures are traded on the Osaka Mercantile Exchange (OME). The OME’s natural rubber contract is based on the RSS3 ribbed smoked sheet No. 3 while the Rubber Index Futures Contract is based on a composite of 8 component grades from 6 component rubber markets in the world. Rubber futures are also traded on the Shanghai Futures Exchange (SHFE) and the Tokyo Commodity Exchange (TOCOM). Prices – Spot crude rubber prices (No.1 smoked sheets, ribbed, plantation rubber), basis in New York, rallied sharply to an average 49.14 cents per pound in 2003, up 8% from

41.12 cents in 2002 and up by 45% from the 3-decade low of 33.88 cents posted in 2001. Rubber prices recovered in 2002 and 2003 as the US economic recovery took hold and as auto demand remained strong. Supply – World production of rubber in 2001/2, the latest full reporting year, rose 5.5% to 7.130 million metric tons from 6.760 million metric tons in 2000/1. The world’s largest producers of rubber in 2001/2 were Thailand with 32.0% of world production, Indonesia (22.1%), India (8.9%), Malaysia (7.7%), China (6.3%), and Vietnam (4.4%). World production of synthetic rubber in 2001/2 fell by –3.5% to 10.490 million metric tons. The world’s largest producers of synthetic rubber in 2001/2 were the US with 19.7% of world production, Japan (14.0%), Russia (8.8%), and Germany (7.9%). US production of synthetic rubber in 2002 was set to rebound upward to about 2.2 million metric tons from the 8-year low of 2.064 million metric tons posted in 2001. US production of car and truck tires in 2001 fell to 255.700 million tires from 276.765 million tires in 2000. Demand – World consumption of natural and synthetic rubber in 2001 fell to 7.070 million metric tons from 7.340 million metric tons in 2000. The largest consumers of natural and synthetic rubber in 2001 were the US with 14% of consumption, Japan with 10%, and France and Germany with a combined 7.5%. US consumption of natural rubber in 2002 was set to rebound upward from the 9-year low of 974,000 metric tons posted in 2001. US consumption of synthetic rubber in 2002 was on track to increase to at least 1.914 million metric tons from the 11-year low of 1.840 million metric tons in 2001. Trade – World exports of natural rubber in 2001, the latest reporting year for the series, rose +2.4% to a record 5.070 million metric tons. The world’s largest exporters of natural rubber in 2001 were Thailand with 40% of world exports, Indonesia with 29% of world exports. Together, Thailand and Indonesia accounted for 69% of world exports. US imports of natural rubber in 2002 were on track to rise to 1.09 million metric tons from the 8-year low of 972,000 posted in 2001. US exports of synthetic rubber in 2002 were set to rise to about 875,000 metric tons from 844,400 metric tons in 2001, which would be only moderately below the record export figure of 886,000 seen in 2000 before the world recession hit.

U .S . Imp o rts o f N atu ral R u b b er (In clu d es L atex & Gu ayu le) Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

In Thousands of Metric Tons

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

95.3 87.5 81.7 105.4 94.2 104.4 91.8 127.4 85.2 104.8

79.9 74.7 86.9 86.1 92.0 76.6 90.7 88.2 69.1 71.2

93.9 102.6 102.3 82.2 93.9 102.8 93.4 114.1 93.9 79.2

86.3 78.9 90.2 90.6 88.2 81.0 101.6 107.9 80.0 90.8

74.1 88.3 94.1 65.1 93.0 98.0 84.8 114.9 74.9 106.1

81.2 77.8 93.4 70.4 65.1 92.9 80.0 120.1 63.8 92.2

83.6 66.7 78.0 79.0 76.8 96.4 76.6 65.9 101.1

77.8 85.0 81.0 81.0 90.1 100.8 112.2 96.2 109.2

69.2 78.8 81.5 82.1 87.5 123.2 88.7 79.2 69.9

73.4 89.3 89.2 113.6 86.8 104.8 127.5 96.2 92.4

86.0 70.0 79.1 73.5 87.6 84.5 83.1 92.2 69.2

86.9 76.0 68.7 85.0 89.0 111.4 85.9 89.3 63.4

987.6 975.6 1,026.1 1,014.0 1,044.2 1,176.8 1,116.3 1,191.6 972.1 1,088.6

P reliminary.

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

223

RUBBER Wo rld P ro d u ctio n 1 o f R u b b er Year

In Thousands of Metric Tons

---------------------------------------------------------- N atu ral ---------------------------------------------------------- -------------------------------- S yn th etic -------------------------------World IndoSri World GerUni ted Total Chi na India nesi a Malaysia Lanka Thai land Vi etnam Total many Japan States Russia3

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2

309.3 326.1 374.0 424.0 430.0 444.0 450.0 460.0 445.0 451.0

383.0 428.1 464.0 499.6 540.1 580.3 591.1 620.1 629.0 631.5

1,387.0 1,300.5 1,358.5 1,454.5 1,527.0 1,504.8 1,714.0 1,599.2 1,501.1 1,576.5

1,173.2 1,074.3 1,100.6 1,089.3 1,082.5 971.1 885.7 768.9 615.4 547.0

I ncluding rubber in the form of latex . 2 P reliminary. S ource: I nt ernat ional Rubber S t udy Group (I RS G)

1

106.1 104.2 105.3 105.7 112.5 105.8 95.7 96.6 87.6 86.2 3

1,531.0 1,553.4 1,717.9 1,804.8 1,970.4 2,032.7 2,075.9 2,154.6 2,346.4 2,283.9

114.0 114.0 156.0 155.0 220.0 212.0 218.0 230.0 291.0 317.0

123.4 131.7 144.7 155.2 160.7 161.0 185.3 177.6 226.8 217.8

P reliminary.

1,610.5 1,102.5 631.9 836.9 775.1 724.9 621.0 737.0 837.1 919.2

9,300 8,600 8,870 9,480 9,760 10,080 9,880 10,390 10,870 10,490

179.0 168.5 179.8 176.0 182.2 192.3 223.0 252.7 308.6 282.0

212.8 174.9 186.4 211.7 193.0 214.0 247.0 226.0 250.0 246.0

685.4 631.0 639.8 692.0 714.5 713.0 707.3 734.2 751.8 729.2

124.5 119.0 135.0 118.0 111.0 119.0 139.0 130.0 133.0 107.0

910.2 966.7 1,001.7 1,003.9 1,001.7 1,044.1 1,157.4 1,116.3 1,194.8 974.1

5,320 5,430 5,650 5,950 6,110 6,470 6,570 6,650 7,340 7,070

365.4 314.7 400.1 430.2 436.1 416.2 451.4 434.3 481.5 464.5

506.0 488.0 512.2 426.4 497.0 509.0 582.0 565.0 632.0 612.0

P reliminary.

1,080.6 1,022.0 1,026.2 1,085.0 1,124.5 1,163.0 1,115.7 1,132.9 1,137.5 1,085.1

231.0 211.0 220.0 226.0 230.0 235.0 177.0 189.0 188.0 167.0

1,959.6 2,001.0 2,117.6 2,172.0 2,186.6 2,322.7 2,354.4 2,217.5 2,190.3 1,839.5

9,360 8,630 8,820 9,270 9,590 10,010 9,870 10,280 10,830 10,340

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

Total Syntheti c

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

2,300.0 2,180.0 2,390.0 2,530.0 2,486.0 2,589.0 2,600.0 2,354.0 2,395.4 2,064.4

In Thousands of Metri c Tons

Wo rld S to cks1 o f N atu ral & S yn th etic R u b b er (b y C o u n tries) o n Jan u ary 1 Year

1,389.9 1,309.8 1,349.0 1,497.6 1,519.9 1,591.5 1,520.1 1,576.7 1,591.7 1,465.5

--------------------------------------------------- N atu ral -------------------------------------------------- ---------------------------------------- S yn th etic ---------------------------------------GerUni ted Uni ted World GerUni ted Uni ted World Brazil France many Japan Ki ngdom States Total France many Japan Ki ngdom States Total

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1 1

544.7 569.7 621.6 480.0 548.1 555.1 619.0 720.1 849.2 828.4

F ormerly part of the U.S.S.R ., data reported separately until 1992.

Wo rld C o n su mp tio n o f N atu ral an d S yn th etic R u b b er Year

5,440 5,310 5,720 6,070 6,440 6,470 6,850 6,810 6,760 7,130

1,004 949 915 988 1,057 1,081 1,116 1,103 1,196 1,189

In Thousands of Metric Tons

---------------------------------- In P ro d u cin g C o u n tries --------------------------------------- ------ In C o n su min g C o u n tries (R ep o rted S to cks) -----IndoSri Thai Total Uni ted Afri ca nesia Malaysia Lanka land Vi etnam Natural Brazil India Japan States Total

19.6 21.6 17.0 21.0 20.5 25.5 27.6 27.9 28.7 31.0

110 110 110 110 70 40 30 33 48 45

187.2 159.2 187.0 175.6 190.3 209.5 234.2 236.6 212.7 191.6

16.0 17.2 16.5 17.0 17.6 17.9 18.6 18.6 18.7 19.0

89.0 115.6 96.5 113.0 147.7 159.4 209.5 250.9 188.6 213.0

12.0 12.0 19.0 20.0 28.0 28.0 36.0 16.0 22.0 31.0

560 570 480 490 510 510 750 880 630 650

17.0 25.0 17.0 13.0 13.0 13.0 13.0 34.0 40.0 42.0

90.9 96.4 94.1 127.4 123.4 157.0 194.0 215.1 203.3 225.5

82.9 85.4 72.9 77.1 86.8 87.2 58.0 79.1 95.2 46.9

108.0 71.3 45.2 67.1 79.3 57.2 70.4 46.0 44.6 42.6

442 410 363 414 427 385 406 443 452 429

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

N et E xp o rts o f N atu ral R u b b er fro m P ro d u cin g Areas

In Thousands of Metric Tons

Year

Cambodia

Guatemala4

Indonesi a

Li beria

Malaysia

Ni geria

Sri Lanka

Thai land

Vi etnam

Other Afri ca2

Other Asi a3

World Total

1992 1993 1994 1995 1996 1997 1998 1999 2000 20011

20.0 21.0 32.0 30.0 31.0 32.0 33.0 34.0 35.0 35.0

15.7 16.9 22.3 23.2 29.2 28.3 25.2 26.7 30.0 32.0

1,268.1 1,214.3 1,244.8 1,323.8 1,434.3 1,403.8 1,641.2 1,494.6 1,379.6 1,453.1

30.0 45.0 10.0 13.0 30.0 67.2 75.0 100.0 105.0 109.0

939.1 769.8 782.1 777.5 709.7 586.8 424.9 435.5 196.4 162.1

70.4 79.7 49.6 99.2 48.8 53.0 74.0 38.0 36.0 30.0

78.6 69.6 69.1 68.2 72.1 61.4 41.4 42.7 32.6 32.0

1,412.9 1,396.8 1,605.0 1,635.5 1,763.0 1,837.1 1,839.4 1,886.3 2,166.2 2,006.4

80.9 96.7 135.5 138.1 194.5 194.2 190.6 230.0 269.0 292.0

135.0 136.0 145.0 140.0 166.7 186.1 182.2 196.5 202.9 208.1

25.9 32.6 28.9 31.1 65.3 58.6 62.8 59.6 54.9 69.5

4,010 3,880 4,250 4,340 4,380 4,580 4,720 4,660 4,950 5,070

P reliminary. 2 I ncludes C ameroon, C ote d'I v oire, Gabon, Ghana and Zaire. S ource: I nt ernat ional Rubber S t udy Group (I RS G)

1

224

3

I ncludes My anmar, P apua New Guinea and the P hilippines.

RUBBER

-----

Cents Per pound Smoked Sheets, New York (Jan. 1908 - date)

Average Spot Crude Rubber Prices (Smoked Sheets1) in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

44.92 85.68 80.25 65.06 40.21 38.99 38.16 35.98 32.21 47.95

46.11 92.61 79.90 64.76 43.96 38.58 40.36 35.66 34.45 49.25

49.62 94.15 79.76 63.53 41.70 36.34 38.17 34.78 36.50 49.25

50.83 93.43 75.08 59.97 41.23 34.98 37.80 34.50 36.38 49.25

51.43 89.50 76.99 57.71 42.65 35.75 37.76 34.80 36.93 49.25

55.13 80.57 75.10 57.30 41.28 34.64 37.07 35.00 43.53 49.25

62.49 72.13 71.03 51.96 40.03 33.60 36.65 34.80 44.32 49.25

66.35 68.54 69.13 52.45 38.58 33.63 37.90 34.48 45.20 49.25

67.15 70.70 68.75 51.89 38.62 34.45 37.35 33.07 47.90 49.25

73.51 73.59 66.32 51.36 40.26 37.58 37.61 31.98 45.70 49.25

71.76 83.19 66.32 47.99 39.96 42.57 37.02 31.14 44.97 49.25

77.35 83.39 66.14 40.53 38.20 38.88 36.90 30.35 45.39 49.25

59.72 82.29 72.90 55.38 40.56 36.67 37.73 33.88 41.12 49.14

No. 1, ribbed, plantation rubber.

Source: I nternational Rubber Study Group (I RSG)

N atu ral R u b b er P rices in L o n d o n Year

Jan.

Feb.

B uy ers' P rice R SS 1 (C I F ) 1999 495.8 463.3 2000 462.0 518.2 2001 490.5 494.0 2002 461.8 502.5 B uy ers' P rices R SS 3 (C I F ) 1999 466.4 451.6 2000 440.0 498.5 2001 464.2 467.3 2002 444.2 486.5 Sellers' P rices SMR 20 (C I F ) 1999 414.4 411.9 2000 471.9 504.4 2001 468.8 461.3 2002 428.0 461.3 1

In Cents Per Pound

In Euro1 Per Metri c Ton

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Average

430.0 487.6 477.3 522.1

414.4 496.0 479.9 511.9

442.4 500.5 498.8 518.9

435.7 501.8 509.5

410.2 494.5 493.3

404.5 529.5 471.3

419.9 526.2 443.9

455.4 537.4 440.2

509.8 518.4 430.3

484.7 502.4 409.1

446.4 506.2 469.8 503.4

417.9 464.8 450.2 511.3

394.0 481.0 455.6 500.2

418.8 483.0 482.5 515.4

425.3 479.3 497.3 959.9

391.1 472.0 477.3 893.4

384.8 509.5 450.7 932.2

398.6 507.3 423.6 981.1

439.0 519.9 418.3

489.5 498.4 411.4

453.3 477.9 389.4

427.1 486.0 449.0 691.6

380.5 472.5 433.8 510.6

375.0 466.3 411.9 500.6

396.9 465.0 414.5 503.5

393.5 447.5 418.8 921.3

373.8 435.0 416.3 864.6

388.8 477.0 422.5 898.5

417.0 478.1 400.0 978.9

453.1 486.3 400.0

518.8 487.0 406.3

480.0 483.8 397.5

415.8 472.9 421.0 674.1

Data prior to June 2002 are in B ritish P ound per metric ton.

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

225

RUBBER C o n su mp tio n o f N atu ral R u b b er in th e U n ited S tates Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

In Thousands of Metri c Tons

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

96.3 92.8 70.5 102.5 94.2 104.4 92.0 110.0 85.5 104.9

76.0 84.9 75.8 85.8 92.0 76.6 92.0 110.0 69.4 71.3

93.4 93.1 98.4 81.2 93.9 102.7 93.0 110.0 94.1 79.2

93.4 82.7 90.3 87.9 88.2 81.0 88.0 114.0 80.2 90.4

67.9 89.6 92.2 65.6 93.0 98.0 88.0 114.0 75.1 106.4

76.8 84.6 93.3 76.7 65.1 92.9 88.0 114.0 64.1 92.3

77.3 76.2 85.0 81.9 76.8 96.4 92.0 80.0 101.2 108.7

84.9 87.8 82.7 88.1 90.1 91.7 92.0 80.0 109.3

72.0 74.8 83.1 83.3 87.5 119.1 92.0 80.0 70.0

73.6 90.1 89.9 108.4 86.8 104.8 100.0 93.0 92.4

82.9 66.4 81.4 72.1 87.5 78.4 100.0 93.0 69.4

72.2 78.7 61.3 68.2 89.0 111.4 100.0 93.0 63.4

966.7 1,001.7 1,003.9 1,001.7 1,044.1 1,157.4 1,116.3 1,194.8 974.1 1,119.8

P reliminary.

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

S to cks o f N atu ral R u b b er in th e U n ited S tates, o n F irst o f Mo n th Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

108.0 71.3 45.2 67.1 79.3 57.2 70.4 46.0 46.6 42.6

49.4 65.9 56.4 70.0 74.2 61.2 68.0 63.4 44.3 42.5

53.3 55.7 67.5 70.3 74.2 65.5 66.0 41.6 44.0 42.4

53.7 65.2 71.4 71.2 76.9 63.5 64.0 45.7 43.8 42.4

46.7 61.4 71.2 73.9 77.5 60.9 62.0 39.6 43.6 42.8

52.9 60.0 72.6 73.4 62.2 66.7 60.0 40.5 43.4 42.5

57.3 53.2 73.0 67.1 55.2 53.6 58.0 46.6 43.1 42.4

63.6 43.8 66.0 64.2 53.6 57.9 56.0 32.5 43.0 42.3

56.5 41.0 64.4 57.2 52.1 54.7 54.0 48.7 42.9

53.7 45.0 62.8 56.0 51.2 58.3 52.0 47.9 42.8

53.4 44.2 62.1 61.1 52.4 58.9 50.0 51.1 42.8

56.5 47.8 59.8 62.4 55.2 66.5 48.0 50.3 42.6

P reliminary.

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

S to cks o f S yn th etic R u b b er in th e U n ited S tates, o n F irst o f Mo n th Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21 1

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

406.9 331.1 305.4 366.2 400.5 377.7 409.3 406.0 443.0 392.0

345.9 313.3 307.4 355.3 400.4 382.2 404.0 416.0 451.0 377.0

345.7 313.3 302.8 342.0 408.4 375.7 404.0 413.0 467.0 379.0

346.0 307.9 293.5 354.8 412.7 379.5 406.0 402.0 4,559.0 393.0

340.5 306.0 319.4 365.4 411.9 387.5 399.0 405.0 448.0 398.0

351.8 314.2 315.6 360.0 403.5 402.8 420.0 416.0 433.0 384.0

342.1 302.5 325.9 367.0 393.1 394.6 410.0 409.0 426.0 385.0

341.6 323.2 349.2 377.3 376.9 406.8 419.0 418.0 420.0

333.6 318.5 355.7 366.0 378.4 394.2 413.0 400.0 394.0

326.4 304.6 354.6 362.8 364.4 398.7 390.0 412.0 400.0

319.9 299.4 347.0 354.1 365.2 395.7 391.0 407.0 394.0

321.4 299.5 351.5 370.6 377.7 396.5 389.0 419.0 379.0

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

P ro d u ctio n o f S yn th etic R u b b er in th e U n ited S tates Year

1

In Thousands of Metric Tons

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

120.0 180.0 220.0 200.0 220.0 230.0 200.0 202.0 203.0 176.1

160.0 180.0 200.0 190.0 200.0 200.0 181.0 202.0 188.6 171.9

220.0 210.0 210.0 220.0 220.0 230.0 209.0 214.0 184.3 192.3

190.0 200.0 210.0 210.0 230.0 220.0 195.0 193.0 172.1 190.6

200.0 210.0 240.0 200.0 220.0 240.0 205.0 216.0 175.5 187.5

180.0 200.0 220.0 210.0 200.0 210.0 190.0 202.0 162.3 185.0

190.0 200.0 210.0 200.0 220.0 220.0 199.0 198.0 166.7

180.0 210.0 230.0 210.0 220.0 210.0 192.0 187.0 164.7

180.0 190.0 210.0 200.0 230.0 230.0 180.0 193.0 174.3

180.0 210.0 200.0 210.0 210.0 210.0 204.0 197.0 178.6

190.0 200.0 200.0 220.0 210.0 200.0 197.0 194.0 155.1

180.0 200.0 190.0 216.0 203.0 210.0 202.0 184.0 139.2

2,180 2,390 2,530 2,486 2,589 2,610 2,354 2,382 2,064 2,207

P reliminary.

226

In Thousands of Metric Tons

Jan.

P reliminary.

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

In Thousands of Metric Tons

Jan.

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

RUBBER C o n su mp tio n o f S yn th etic R u b b er in th e U n ited S tates Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

161.3 177.7 188.6 188.0 191.7 196.5 164.0 173.0 170.8 155.5

154.4 160.8 182.2 173.7 181.4 192.5 166.0 185.0 149.6 146.8

189.4 191.8 194.3 186.9 190.0 214.8 195.0 202.0 166.8 153.0

172.8 173.0 179.1 176.8 187.9 194.4 178.0 178.0 153.3 165.8

164.5 173.5 212.7 184.9 192.2 199.8 170.0 194.0 159.8 173.4

173.6 187.5 188.7 178.5 187.7 201.4 186.0 196.0 148.6 160.4

166.0 164.9 160.0 177.0 205.9 192.0 177.0 177.0 156.4 161.5

173.9 187.1 190.7 197.3 208.0 204.5 176.0 189.0 173.0

162.0 176.0 182.4 182.9 204.2 202.2 191.0 172.0 145.7

169.4 178.8 178.1 201.0 203.0 200.3 171.0 182.0 162.7

162.3 175.7 169.7 177.8 181.9 181.2 178.0 168.0 140.8

151.4 170.8 145.5 165.5 188.8 174.8 161.0 147.0 112.0

2,001 2,118 2,172 2,187 2,323 2,354 2,113 2,163 1,840 1,914

P reliminary.

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

U .S . E xp o rts o f S yn th etic R u b b er Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

In Thousands of Metric Tons

Jan.

P reliminary.

In Thousands of Metric Tons

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Total

47.1 48.8 54.9 61.1 63.1 61.1 57.6 64.3 74.6 67.9

34.1 46.4 51.6 57.7 58.2 60.8 63.3 73.4 67.3 71.6

57.7 55.4 62.7 64.0 57.5 62.8 65.0 83.8 76.4 69.5

47.4 57.0 55.6 68.0 74.2 59.8 70.5 70.2 78.2 74.9

52.4 52.4 58.6 48.2 66.9 66.9 64.7 73.2 75.1 78.5

46.9 49.6 58.6 66.8 61.6 61.8 66.0 72.3 69.6 73.6

46.9 50.2 50.0 62.3 64.1 60.1 61.5 72.4 70.6 74.5

43.8 62.8 54.9 57.1 70.0 64.4 68.2 78.6 71.6

48.8 60.7 53.0 63.9 65.6 63.7 65.1 78.6 68.1

46.6 59.9 60.4 65.2 65.6 62.3 79.0 75.2 70.7

49.0 56.9 53.9 58.6 63.0 59.2 70.2 73.3 62.4

41.9 55.0 52.6 58.6 58.7 59.2 65.7 70.7 59.4

562.6 655.1 666.8 731.5 768.5 742.1 796.8 886.0 844.4 875.1

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

P ro d u ctio n o f Tyres (C ar an d Tru ck) in th e U n ited S tates

In Thousands of Uni ts

Year

Fi rst Quarter

Second Quarter

Thi rd Quarter

Fourth Quarter

Total

Year

Fi rst Quarter

Second Quarter

Thi rd Quarter

Fourth Quarter

Total

1985 1986 1987 1988 1989 1990 1991 1992 1993

54,460 49,240 51,205 54,677 56,716 55,915 51,296 57,890 61,809

49,385 45,687 50,210 52,986 56,626 53,856 52,796 57,319 60,752

46,468 46,855 49,723 51,195 50,086 51,163 49,183 57,554 57,702

46,610 48,507 51,839 52,493 49,444 49,729 51,115 57,487 57,184

196,923 190,289 202,978 211,351 212,870 210,663 202,391 230,250 237,447

1994 1995 1996 1997 1998 1999 2000 2001 20021

63,586 63,800 64,000 ------------65,367 62,937

63,331 63,800 64,000 ------------62,809 64,362

57,018 63,800 64,000 ------------62,366

59,442 63,754 63,700 ------------56,106

243,696 255,521 255,723 263,860 270,905 267,652 276,765 255,700

1

P reliminary.

2

E stimate.

S ource: I nt ernat ional Rubber S t udy Group I RS G)

U .S . F o reig n Trad e o f Tyres (C ar an d Tru ck) Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 1

In Thousands of Units

-------------------------------------------- Imp o rts ------------------------------------------Fi rst Second Thi rd Fourth Quarter Quarter Quarter Quarter Total

P reliminary.

10,760 11,519 13,809 14,883 13,163 13,359 17,046 19,471 24,200 19,563 2

E stimate.

12,496 13,045 15,352 14,977 13,864 14,487 17,728 22,295 24,698 22,251

11,850 12,688 14,906 13,762 12,543 15,314 18,016 22,194 23,561 22,072

12,285 13,036 14,774 12,718 13,186 16,064 19,346 23,784 22,123 20,956

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - E x p o rt s - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Fi rst Second Thi rd Fourth Quarter Quarter Quarter Quarter Total

47,391 50,288 58,841 56,340 52,756 59,434 72,124 87,768 94,019 84,842

S ource: I nt ernat ional Rubber S t udy Group (I RS G)

6,243 7,266 7,444 8,438 8,244 9,466 12,840 9,874 11,200 10,087

6,475 6,930 8,035 8,502 10,013 11,386 10,678 9,580 10,200 10,362

7,125 7,163 7,945 8,478 8,672 10,456 10,018 10,480 10,200 11,004

6,646 7,133 8,678 9,174 9,401 11,085 10,372 10,537 10,100 10,691

26,489 28,492 32,102 34,592 36,330 42,452 43,923 40,945 44,164 42,144

227

Rye Rye is a cereal grain and a member of the grass family. Hardy varieties of rye have been developed for winter planting. Rye is most widely grown in northern Europe and Asia. In the US, rye is used as an animal feed and as an ingredient in bread and some whiskeys. About a third of the total supply is used as livestock feed, another third as a foodstuff, and the balance as seed and for whisky. The major producing states are North and South Dakota, Oklahoma, and Georgia. The crop year runs from June to May. Supply – World rye production was forecasted to drop sharply to 14.438 million metric tons in 2003/4, down 30% from 20.599 million in 2002/3. The drop in production should be spread fairly evenly across the major producers, but production in Russia (the world’s largest producer) is expected to plunge by 41% to 4.200 million in 2003/4 from 7.150 million in 2002/3. World rye stocks are forecasted to plunge 52% to 4.013 million metric tons in 2003/4 from 8.327 million in 2002/3. The world’s largest producers of rye in 2002/3 were Russia with 7.150 million metric tons of production (accounting for 35% of world production), the European Union (4.718 million or 23%), and Poland (3.822 million or 19%). US rye production in 2003/4 was forecast to rise sharply by 33% to 235,000 metric tons from 177,000 in 2002/3, but that still represents only 1.6% of world production. Demand – World rye consumption in 2003/4 was fore-

World Production of Rye Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Preliminary.

In Thousands of Metric Tons

Austria

Canada

Czech Republic

319 314 151 207 236 220 180 210 170 130

397 310 309 320 408 387 260 228 134 330

281 262 204 259 261 202 150 149 119 150

2

Estimate.

3

Denmark

France

Germany

Poland

Russia

Spain

Turkey

Ukraine

United States

World Total

380 500 343 453 538 250 260 330 230 180

182 198 225 207 216 190 150 120 140 120

3,451 4,521 4,214 4,580 4,775 4,330 4,150 5,130 3,670 2,300

5,300 6,287 5,652 5,300 5,664 5,181 4,003 4,863 3,822 3,200

6,000 4,100 5,900 7,500 3,300 4,800 5,450 6,600 7,150 4,200

217 174 295 212 207 220 210 110 170 190

250 255 245 235 237 250 250 250 250 250

941 1,208 1,100 1,348 1,140 919 966 1,822 1,500 800

288 256 227 207 309 280 213 177 177 235

21,571 21,939 22,050 24,433 20,306 19,290 19,140 22,610 20,290 14,110

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Forecast.

Production of Rye in the United States Year

1

Kansas

1,890 1,155 1,820 1,430 1,050 1,050 1,170 875 720 800

325 400 150 300 375 300

442 544 351 450 420 756

810 609 480 400 837 775

546 480 323 240 288 405

2

2

2

2

2

2

2

2

2

2

2

2

2

2

2

2

Preliminary.

228

In Thousands of Bushels

Georgia

1994 1995 1996 1997 1998 1999 2000 2001 2002 20031

2

cast at 18.752 million metric tons, significantly higher than the forecasted production of 14.438 million, a bullish factor for rye prices. In 2002/3, consumption of 20.253 million metric tons was just slightly below production of 20.599 million. The world’s largest consumers of rye are Russia with 6.150 million metric tons of consumption (or 30% of world consumption), the European Union (4.454 million or 22%), and Poland (4.100 million or 20%). US consumption in 2003/4 was forecast to rise by 2.5% to 331,000 metric tons from 323,000 metric tons in 2002/3. Trade – World trade in rye in 2003/4 was forecast to fall sharply by 39% to 985,000 metric tons from 1.604 million in 2002/3. There were only three regions with rye exports of consequence in 2002/3 – the European Union with 800,000 metric tons of exports (accounting for 50% of world exports), Russia (414,000 metric tons or 26%), and the Ukraine (265,000 metric tons or 17%). US exports of rye are forecasted at a negligible 5,000 metric tons in 2003/4, up from 2,000 in 2002/3 but accounting for less than 1% of world trade. The world’s main rye importers are Japan with 414,000 metric tons in 2002/3 (accounting for 26% of world imports), the European Union with 350,000 (22%), and the US with 109,000 (7%). US imports of rye in 2003/4 are forecasted to fall by 8% to 100,000 metric tons from 109,000 in 2002/3. The US imports about one-third of its rye consumption needs.

Michigan Minnesota Nebraska

Estimates not published beginning in 2000.

North Dakota Oklahoma

700 726 528 513 2,562 1,517 704 340 342 750

945 810 975 1,080 1,540 1,045 1,470 1,150 1,300 2,160

Pennsylvania

South Carolina

South Dakota

320 330 216 400 495 600

600 440 520 250 400 500

2

2

2

2

2

2

2

2

1,485 1,650 1,476 728 1,400 1,012 546 350 270 672

Texas Wisconsin

435 380 190 330 400 450

875 480 384 432 360 384

2

2

2

2

2

2

2

2

Total

11,341 10,064 8,936 8,132 12,161 11,038 8,386 6,971 6,955 9,254

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

RYE

-----

Cents Per Bushel No. 2 Minneapolis (July 1909 to Dec. 1997)

Salient Statistics of Rye in the United States Crop Year Beginning June 1

----------------------- Supply ----------------------- ----------------------- Domestic Use ------------------------

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

In Thousands of Bushels

-------------------------------------- Disappearance -------------------------------------- ------- Acreage --------

Preliminary.

Stocks June 1

Production

971 1,451 898 754 764 2,449 1,589 1,190 568 445

11,341 10,064 8,936 8,132 12,161 11,038 8,386 6,971 6,955 9,254

2

Estimate.

3

Imports

Total Supply

F ood

Industry

4,386 3,760 4,327 5,562 3,322 3,424 3,230 4,900 5,000

16,698 15,275 14,161 14,448 16,247 16,911 13,205 13,061 12,523

3,312 3,318 3,459 3,298 3,639 3,300 3,300 3,300 3,300

2,000 2,000 2,000 3,000 3,000 3,000 3,000 3,000 3,000

Forecast

F eed & Seed Residual

3,000 3,000 3,000 2,000 3,000 3,000 3,000 3,000 3,000

6,900 6,018 4,916 5,306 4,392 5,736 2,307 3,000 2,400

Total

15,212 14,336 13,375 13,604 14,031 15,036 11,607 12,300 11,700

Yield Per Harvested Harvested Total Disap- Planted for Grain Acre Exports pearance ----- 1,000 Acres ----Bushels

35 41 32 80 33 286 390 200 300

15,247 14,377 13,407 13,684 14,064 15,322 11,997 12,500 12,000

1,613 1,602 1,457 1,400 1,566 1,582 1,329 1,328 1,395 1,368

407 385 345 316 418 383 296 255 281 339

27.9 26.1 25.9 25.7 29.1 28.8 28.3 27.3 24.8 27.3

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price of Cash Rye No. 2 in Minneapolis

In Cents Per Bushel

Year

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

360 287 325 300 NQ NQ NQ NQ NQ NQ

336 298 364 327 NQ NQ NQ NQ NQ NQ

305 299 314 395 NQ NQ NQ NQ NQ NQ

305 300 300 395 NQ NQ NQ NQ NQ NQ

305 300 300 395 NQ NQ NQ NQ NQ NQ

305 350 300 395 NQ NQ NQ NQ NQ NQ

285 368 300 NQ NQ NQ NQ NQ NQ NQ

267 346 300 NQ NQ NQ NQ NQ NQ

270 290 300 NQ NQ NQ NQ NQ NQ

270 290 300 NQ NQ NQ NQ NQ NQ

270 290 300 NQ NQ NQ NQ NQ NQ

270 304 300 NQ NQ NQ NQ NQ NQ

296 310 309 382 NQ NQ NQ NQ NQ

1

Preliminary.

NQ = No quote.

Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

229

Salt Salt, also known as sodium chloride, is a chemical compound and is an essential element in the diet of humans, animals, and even many plants. Since prehistoric times, salt has been used to preserve foods and was commonly used in the religious rites of the Greeks, Romans, Hebrews, and Christians. Salt, in the form of salt cakes, served as money in ancient Ethiopia and Tibet. As long ago as 1450 BC, Egyptian art shows records of salt production. Evaporation of salt water from areas near oceans or seas is the simplest method of obtaining salt. In most regions, rock salt is obtained from underground mining or by wells sunk to the deposits. Salt is soluble in water, is slightly soluble in alcohol, but insoluble in concentrated hydrochloric acid. In its crystalline form, salt is transparent and colorless, shining with an ice-like luster. Prices – Salt prices in 2002 (vacuum and open pan, FOB mine) were unchanged from 2001 at $120.02 per ton, sustaining the recovery from the weak prices seen in 1999-

World Production of All Salt Year

In Thousands of Metric Tons

Australia

Canada

China

France

Germany

India

Italy

Mexico

Poland

Spain

United Kingdom

United States

World Total

8,148 7,905 8,883 9,033 9,888 8,778 9,536 9,887

10,957 12,248 13,264 13,296 12,686 12,164 13,725 12,313

29,780 29,035 30,830 22,420 28,124 31,280 34,105 32,835

7,539 7,860 7,085 7,000 7,000 7,000 7,000 7,000

15,224 15,907 15,787 15,700 15,700 15,700 15,700 15,700

12,544 14,466 14,251 11,964 14,453 14,453 14,503 14,503

3,552 3,541 3,510 3,600 3,600 3,600 3,600 3,600

7,670 8,508 7,933 8,412 8,236 8,884 8,501 8,500

4,214 4,163 3,859 4,005 4,212 4,307 4,200 4,200

4,776 4,000 4,000 3,500 3,200 3,200 3,200 3,200

6,650 6,610 6,600 6,600 5,800 5,800 5,800 5,800

42,200 42,300 41,500 41,300 45,000 45,600 44,800 40,300

199,000 204,000 221,000 200,000 210,000 212,000 217,000 210,000

1995 1996 1997 1998 1999 2000 2001 1 20022 1

2000 of $112.49 and $113.95, respectively. Supply – World production of salt in 2002 fell –3.2% to 210.000 million metric tons from the record high of 217.000 million metric tons in 2001. The world’s largest salt producers are the US with 19.2% of world production, China (15.6%), Germany (7.5%), India (6.9%), and Canada (5.9%). US production in 2002 fell -10.0% to 40.300 million metric tons from 44.800 million in 2001. Demand – US consumption of salt in 2002 fell –16.5% to 45.100 million metric tons from the record high of 54.000 million metric tons in 2001. Trade – The US relied on imports for 18% of its salt consumption in 2002, up from 17% in 2001. US imports of salt for consumption in 2002 fell 37% to 8.160 million metric tons. US exports of salt were 689,000 metric tons in 2002, with the bulk of those exports (585,000 metric tons) going to Canada.

Preliminary.

2

Estimate.

Source: U.S. Geological Survey (USGS)

Salient Statistics of the Salt Industry in the United States

Year

1995 1996 1997 1998 1999 2000 20011 20022 1

Net Import Reliance as a % of Apparent Consumption

14 19 17 17 16 15 17 18

Preliminary.

118.63 120.54 119.61 114.93 112.49 113.95 120.02 120.02 2

In Thousands of Metric Tons

Average Value ---------------------- Production ----------------------- ----- Sold or Used Producers -----FOB Mine Imports ---- Exports ---- Apparent Vacuum & Open & Open & Rock Total Value3 for ConConVacuum Open Pan Vacuum To Total Rock Brine Salt Brine Salt Million $ sumption $ Per Ton Pan Solar P an Total Canada sumption

Estimate.

42,100 42,200 41,400 41,200 44,900 45,600 44,800 40,300 3

3,950 3,920 3,980 4,040 4,190 4,200 4,120 4,100

3,540 3,270 3,170 3,190 3,580 3,810 3,310 3,390

14,000 13,500 12,900 12,900 14,400 15,000 17,000 13,500

20,600 21,500 21,400 21,100 22,700 22,500 20,400 19,300

3,920 3,900 3,990 4,040 4,190 4,190 4,090 4,070

13,000 14,500 12,200 12,700 14,700 13,600 14,600 11,400

20,500 21,500 21,400 21,100 22,700 22,500 20,400 19,300

40,800 42,900 40,600 40,800 44,400 43,300 42,200 37,700

1,000.0 7,090 670 1,060.0 10,600 869 993.0 9,160 748 986.0 8,770 731 1,110.0 8,870 892 1,040.0 8,960 642 1,110.0 12,900 1,120 1,010.0 8,160 689

Values are f.o.b. mine or refinery & do not include cost of cooperage or containers.

558 710 624 533 730 500 984 585

47,200 52,600 49,000 48,800 52,400 51,600 54,000 45,100

Source: U.S. Geological Survey

Salt Sold or Used by Producers in the U.S. by Classes & Consumers or Uses In Thousands of Metric Tons

Year

1995 1996 1997 1998 1999 2000 2001 20021 1

AgriF eed cultural DistriFeed ManuMeat Chem- Tanning Textile & ical2 Leather Dyeing Packers Canning Baking bution Dealers facturers Rubber

21,100 22,400 22,400 22,000 22,400 22,400 20,100 19,500

Preliminary.

230

2

74 83 78 93 103 82 87 79

290 288 273 250 235 209 172 155

410 407 416 440 405 402 411 395

332 336 334 275 225 220 213 229

155 169 167 219 234 234 242 215

Chloralkali producers and other chemical.

726 661 307 362 254 262 280 245

1,040 1,150 1,110 1,190 1,210 1,240 1,170 1,040

407 403 683 536 533 540 533 507

67 71 68 68 72 71 61 61

Metal ProP aper Oil & Pulp cessing

2,420 2,430 2,440 2,320 2,430 2,510 2,260 2,010

Source: U.S. Geological Survey (USGS)

152 122 107 115 112 106 100 93

236 199 177 170 153 112 124 118

Water Ice CondiWater Treat- Grocery tioning ment Stores Distrib.

413 534 471 531 899 589 512 662

847 855 800 807 831 823 824 781

563 719 624 598 600 568 560 525

Control and/or Stabilization

12,900 17,700 15,000 9,490 15,300 19,700 16,800 13,300

Sheep & Lambs Sheep and lambs are raised for both their wool and meat. In countries that have high wool production, there is also demand for sheep and lamb meat due to the easy availability. Production levels have declined in New Zealand and Australia, but that has been counteracted by a substantial increase in China. Prices – The average price received by farmers for lambs in the US in 2003 (through November) rose sharply by +28.6% to 94.28 cents per pound from 73.33 cents in 2002 and the 9-year low of 67.61 cents in 2001. The average price received by farmers for sheep in the US (through November) rose by +19.4% to 34.66 cents per pound from the 11-year low of 29.03 cents in 2002. The average wholesale price of slaughter lambs (choice) at San Angelo, Texas in

2003 rose sharply by 26.9% to a record high of 91.74 cents per pound. Supply – World sheep numbers in 2001 rose +0.7% to an 8-year high of 898.132 million sheep. The world’s largest producers of sheep are China with 280.420 million (or 31.2% of world totals), India (20.2%), Australia (13.2%), and New Zealand (5.1%). The number of sheep and lambs on US farms in 2003 (Jan 1) fell –5.0% to a record low of 6.350 million head, illustrating the downward trend in US sheep production. The US states with the most sheep and lambs were Texas (with 16.5% of the US total), California (12.4%), Wyoming (7.2%), South Dakota (6.0%), and Colorado (5.8%).

Wo rld S h eep an d Go at N u mb ers in S p ecified C o u n tries o n Jan u ary 1 Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 1 20012 1

Argenti na

Australia

Chi na

India

Kazakhstan

25,706 24,500 23,500 21,626 17,956 17,295 15,232 13,953 13,800 14,100

161,073 140,542 120,900 121,100 121,200 120,228 117,494 117,091 117,191 118,321

206,210 207,329 217,314 240,528 279,535 236,961 255,055 268,143 271,130 280,420

161,084 162,155 169,569 171,626 173,519 175,976 178,462 180,130 180,885 181,440

34,556 34,420 34,208 25,132 19,600 13,742 10,896 9,556 9,000 8,700

P reliminary.

2

F orecast.

New Zealand

Romania

55,162 52,568 50,298 50,135 48,816 47,394 46,970 46,150 45,800 46,000

13,879 12,079 12,276 12,119 11,086 10,317 9,747 9,167 8,700 8,500

In Thousands of Head

Russia

South Afri ca

Spain

Turkey

United Ki ngdom

World Total

55,255 51,368 43,700 34,500 28,336 23,519 20,697 18,213 15,698 15,700

36,076 35,770 33,800 33,385 35,145 35,830 36,821 34,910 35,000 35,220

24,625 24,615 23,872 23,058 21,322 23,981 24,857 24,199 23,700 23,600

44,700 44,600 44,000 43,000 42,400 41,100 39,500 37,300 34,400 31,000

28,932 29,493 29,333 29,484 28,797 28,256 30,027 31,080 30,800 30,600

931,903 900,400 881,258 874,912 897,009 842,179 853,061 897,310 891,751 898,132

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

Salient Statistics of Sheep & Lambs in the United States (Average Live Weight)

In Thousands of Head

-- Inventory, Jan. 1 --

Year

1995 1996 1997 1998 1999 2000 2001 2002 1 20032

With Without New Crop New Crop Lambs Lambs

8,989 8,465 8,024 7,825 7,215 7,032 6,965 6,685 6,300

8,886 8,461 8,024 7,825 7,215 7,032 6,965 6,685 6,300

---------- Slaughter ---------Lamb Crop

5,606 5,282 5,356 5,007 4,733 4,622 4,495 4,357 4,120

3 Total --- Marketings --Supply Sheep Lambs

14,492 13,743 13,380 12,832 11,948 11,654 11,460 11,042 10,420

1

990 1,024 1,011 977 790 788 711 869

Preliminary. 2 Estimate. 3 Excludes interfarm sales. U.S. Department of Agriculture (ERS-USDA)

4

6,228 6,023 5,709 5,510 5,208 4,827 4,795 4,810

Farm

Commercial

Total4

69 65 62 57 65 67 68 65

4,560 4,184 3,907 3,804 3,701 3,460 3,222 3,286

4,628 4,249 3,969 3,861 3,766 3,527 3,290 3,351

I ncludes all commercial and farm.

Sheep and Lambs3 on Farms in the United States on January 1 Year

1996 1997 1998 1999 2000 2001 2002 2003 1 20042 1

California

Colorado

Idaho

1,000 960 800 810 800 840 800 730 680

535 575 575 440 440 420 370 380 360

273 285 285 265 275 275 260 260 260

Iowa Minnesota

345 285 265 260 265 270 250 255 250

185 180 165 175 165 170 160 145 140

Total Net D i sa p Exports pearance

680 264 -------------------

5,807 5,488 5,946 ----------------

ProFarm Value duction --------- Jan. 1 --------(Live All Weight) $ P er Mil. Lbs. Million $ Head

599.4 565.7 591.3 555.7 533.6 508.9 495.6 484.0

663.4 732.2 761.7 797.8 637.6 668.8 694.5 618.1 657.7

74.7 86.5 96.0 102.0 88.0 95.0 100.0 94.0 104.0

Source: Economic Research Service,

In Thousands of Head

Montana

New Mexico

Ohio

South Dakota

Texas

Utah

Wyoming

Total

465 432 415 380 370 360 335 310 300

265 235 290 275 290 255 230 175 160

153 130 135 125 134 142 140 150 140

500 450 420 420 420 420 400 380 370

1,650 1,400 1,530 1,350 1,200 1,150 1,130 1,040 1,100

395 375 420 400 400 390 365 310 265

680 720 710 630 570 530 480 460 430

8,461 7,937 7,825 7,215 7,032 6,965 6,685 6,300 6,090

Preliminary. 2 Estimate. 3 I ncludes sheep & lambs on feed for market and stock sheep & lambs. U.S. Department of Agriculture (ERS-USDA)

Source: Economic Research Service,

231

SHEEP & LAMBS Average Wholesale Price of Slaughter Lambs (Choice) at San Angelo Texas Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Dollars Per Cwt.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

65.38 74.44 94.63 74.38 69.31 73.71 81.25 65.85 89.25

75.08 85.63 100.81 74.31 67.88 76.83 87.00 70.00 90.25

73.75 84.07 97.50 71.50 68.54 78.17 82.63 64.00 96.25

68.58 83.10 95.50 63.00 70.50 78.25 83.30 65.15 88.13

77.20 86.17 83.17 73.00 82.70 89.65 86.07 64.06 95.75

81.63 97.50 83.25 91.21 81.06 78.30 75.21 68.75 97.25

83.70 92.67 78.94 82.21 77.29 84.17 69.82 75.83 87.88

87.00 83.75 90.25 82.05 81.17 82.20 54.47 74.35 85.81

80.00 84.40 85.45 69.50 77.00 82.00 56.50 73.69 91.44

75.50 82.58 82.75 67.20 74.81 77.50 57.67 76.20 91.31

72.00 80.00 80.33 63.33 78.00 76.70 59.00 83.00 91.00

70.50 88.88 83.52 71.44 83.29 75.33 71.60 86.88 96.17

75.86 85.27 88.01 73.59 75.96 79.40 72.04 72.31 91.71

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Federally Inspected Slaughter of Sheep & Lambs in the United States

In Thousands of Head

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1995 1996 1997 1998 1999 2000 2001 2002 2003 1

373 352 294 301 260 271 258 244 227

363 353 317 300 291 284 236 244 211

456 403 386 377 411 334 316 311 252

420 374 321 367 295 330 275 263 280

355 313 308 270 260 248 227 267 209

347 271 293 283 259 247 221 216 216

296 313 295 269 253 229 229 241 225

355 315 288 263 283 269 258 246 226

344 313 310 295 294 257 230 259 241

356 365 324 312 293 266 274 284 251

364 324 299 290 317 286 273 255 223

358 336 337 344 341 287 266 262 246

4,388 4,032 3,771 3,671 3,557 3,308 3,065 3,092 2,805

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Cold Storage Holdings of Lamb and Mutton in the U.S., on First of Month Year

1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31 1

In Thousands of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

10,913 7,606 8,899 13,741 11,721 8,740 13,455 11,905 7,124

11,621 9,794 9,473 13,920 10,452 10,394 13,833 13,110 6,232

10,825 13,017 9,862 15,284 12,134 10,335 13,141 11,269 4,063

12,679 12,247 11,163 16,226 12,374 11,437 13,729 10,528 3,900

14,934 13,649 13,027 16,306 13,146 13,345 13,551 13,172 5,016

13,992 12,187 15,220 16,666 12,313 13,137 14,586 12,938 5,838

12,306 13,726 16,594 16,040 12,459 13,984 15,443 13,553 5,427

10,679 13,164 18,535 16,188 11,975 13,557 15,744 14,215 5,929

10,240 14,645 19,383 14,530 12,240 14,042 15,266 14,458 5,855

7,412 11,249 16,119 12,253 9,815 12,867 13,979 11,961 6,210

7,503 10,494 16,894 12,558 9,210 12,195 13,238 12,004 4,485

7,846 9,788 16,534 11,914 9,446 12,486 11,336 9,255 4,883

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Sheep in the United States

In Dollars Per Cwt.

Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

32.80 34.40 41.80 42.00 32.40 36.80 43.30 36.20 41.30

37.50 33.80 41.30 39.60 30.20 39.50 47.50 34.30 44.00

31.90 34.00 42.50 41.00 32.70 38.80 46.60 31.80 40.20

29.50 27.30 37.50 34.40 31.80 35.00 36.90 26.00 30.90

27.90 25.30 34.00 30.30 31.50 30.50 36.30 25.30 31.10

28.30 26.60 36.60 30.20 28.90 30.00 31.70 23.50 30.30

28.60 30.50 39.40 29.40 32.00 34.20 34.10 25.60 28.60

27.00 29.10 38.40 28.30 29.80 30.70 32.20 25.60 28.30

26.00 30.20 33.90 26.80 29.20 30.30 29.90 24.50 32.10

24.50 28.80 35.80 26.10 26.40 29.50 27.20 25.60 34.80

23.80 29.80 38.90 26.40 30.20 33.60 27.10 31.30 40.10

26.00 34.20 37.70 30.10 33.40 36.20 34.00 38.70 44.40

28.65 30.33 38.15 32.05 30.71 33.76 35.57 29.03 35.51

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Lambs in the United States

In Dollars Per Cwt.

Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

67.50 76.10 94.60 78.40 68.20 70.90 74.10 65.50 92.00

70.40 84.30 99.80 75.00 67.20 72.00 80.10 67.80 92.40

74.80 86.60 99.70 70.10 67.40 80.20 84.00 66.70 97.10

74.60 85.90 96.40 66.00 67.40 82.60 84.30 64.70 93.60

80.40 90.30 90.80 63.00 82.80 96.40 80.00 64.40 97.50

85.70 100.70 86.50 88.90 81.30 89.70 71.60 72.90 96.70

85.70 98.30 81.10 81.30 77.00 87.00 64.30 75.60 89.40

85.60 89.10 92.70 80.10 80.30 83.60 54.80 75.30 87.60

82.70 88.50 90.20 71.80 75.30 80.80 52.50 76.30 94.70

77.60 87.00 87.20 67.60 72.60 76.80 51.40 79.60 96.90

77.10 84.60 83.10 62.60 76.30 71.50 52.80 84.00 99.20

76.50 88.20 83.90 64.70 77.60 71.80 61.40 87.20 98.40

78.22 88.30 90.50 72.46 74.45 80.28 67.61 73.33 94.63

Preliminary.

232

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Silk Silk is a fine, tough, elastic fiber produced by caterpillars, commonly called silkworms. Silk is one of the oldest known textile fibers. Chinese tradition credits Lady HsiLing-Shih, wife of the Emperor Huang Ti, with the discovery of the silkworm and the invention of the first silk reel. Dating to around 3000 BC, a group of ribbons, threads, and woven fragments was found in China. Also found, along the lower Yangzi River, were 7,000 year-old spinning tools, silk thread, and fabric fragments. Silk filament was first woven into cloth in Ancient China. The Chinese successfully guarded this secret until 300AD, when Japan, and later India, learned the secret. In 550 AD, two Nestorian monks were sent to China to steal mulberry seeds and silkworm eggs, which they hid in their walking staffs, and then brought back to Rome. By the 17th century, France was the silk center of the West. Unfortunately, the silkworm did not flourish in the English climate, nor has it ever flourished in the US. Sericulture is the term for the raising of silkworms. More than 500 tiny eggs are laid by the blind, flightless moth, Bombyx mori. After hatching, the tiny worms eat chopped mulberry leaves continuously until they are ready to spin their cocoons. After gathering the complete cocoons, the first step in silk manufacturing is to kill the insects inside the cocoons with heat. The cocoons are then placed

World Production of Raw Silk Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Preliminary.

In Metric Tons

Brazil

China

India

Iran

Ja p a n

North Korea

South Korea

Kyrgyzstan

Thailand

Turkmenistan

Uzbekistan

V i et Nam

World Total

2,450 2,450 2,450 2,000 2,000 2,000 2,000 2,000 2,000 1,000

76,801 84,001 80,001 51,000 51,000 68,000 70,000 78,000 94,000 94,000

14,168 14,500 15,000 16,000 16,000 16,000 16,000 15,000 15,000 15,000

480 600 600 1,000 1,000 1,000 1,000 1,000 1,000 1,000

4,254 2,400 2,400 3,000 2,000 1,000 1,000 1,000 1,000 1,000

4,600 4,700 4,700 5,000 4,000 5,000 5,000 5,000 -------

683 700 700 ----------------------

1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 ----

1,500 1,600 1,600 1,000 1,000 1,000 1,000 1,000 2,000 2,000

500 500 500 5,000 5,000 5,000 5,000 5,000 5,000 4,000

2,000 2,000 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000

550 600 650 1,000 1,000 1,000 1,000 3,000 10,000 12,000

109,790 115,796 112,350 88,000 85,000 102,000 98,000 107,000 131,000 132,000

2

Estimate.

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

World Trade of Silk by Selected Countries Year

In Metric Tons

-------------------------------------------------- Imports -------------------------------------------------- ------------------------------------------ Exports -----------------------------------------Hong South World Hong North World France Kong India Italy Ja p a n Korea Total Brazil China Kong Ja p a n Korea Total

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1 1

in boiling water to loosen the gummy substance, sericin, holding the filament together. The filament is unwound, and then rewound in a process called reeling. Each cocoon’s silk filament is between 600 and 900 meters long. Four different types of silk thread may be produced: organzine, crepe, tram, and thrown singles. During the last 30 years, in spite of the use of man-made fibers, world silk production has doubled. Raw silk is traded on the Kansai Agricultural Commodities Exchange (KANEX) in Japan. Dried cocoons are traded on the Chuba Commodity Exchange (CCE). Raw silk and dried cocoons are traded on the Yokohama Commodity Exchange. Supply – World production of silk in 2000, the latest reporting year, rose +4.8% to 110,000 metric tons, recovering to a 5-year high after hitting a trough of 85,000 metric tons in 1997. China is the world’s largest producer of silk by far with 69% of world production. Other producers include India with 14.5% of world production, and North Korea and Turkmenistan, each with 4.5% of world production. Trade – The world’s largest exporters of silk are China with 45.0% of world exports, Hong Kong with 3.2%, and North Korea with 2.8%. The world’s largest importers of silk (1999) were Italy (with 15.3% of world imports), Japan (11.7%), India (8.8%), and South Korea (7.0%).

Preliminary.

693 1,001 1,047 663 675 582 592 579 481 452

4,400 5,475 6,165 4,775 3,978 4,320 2,030 1,258 866 256

2,843 4,977 5,750 4,276 2,980 2,437 2,846 5,120 4,732 6,929

4,337 5,634 9,235 5,612 4,400 5,482 4,088 4,985 5,906 4,506

5,137 5,982 5,772 4,331 6,098 4,229 3,357 3,792 4,020 2,823

3,627 4,494 4,128 3,513 3,737 2,796 1,510 2,265 1,843 1,628

28,239 36,086 44,136 37,854 37,615 45,817 31,908 35,352 32,974 27,789

1,552 1,495 1,739 966 1,071 905 780 408 370 232

Source: Food and Agricultural Organization of the United Nations (FAO-UN)

13,474 15,652 21,004 16,788 15,791 14,384 12,250 16,251 17,520 14,485

4,358 7,204 6,149 5,176 4,165 4,501 2,105 1,153 936 259

701 904 1,265 925 946 936 612 227 239 124

800 1,200 1,400 1,000 1,000 1,000 180 130 120 90

26,433 35,634 41,998 40,633 38,587 37,233 29,611 35,041 34,974 26,592

233

Silver Silver is a white, lustrous metallic element that conducts heat and electricity better than any other metal. In ancient times, many silver deposits were on or near the earth’s surface. Before 2,500 BC, silver mines were worked in Asia Minor. Around 700 BC, ancient Greeks stamped a turtle on their first silver coins. Silver assumed a key role in the US monetary system in 1792 when Congress based the currency on the silver dollar, but then discontinued the use of silver in coinage in 1965. Today Mexico is the only country that uses silver in its circulating coinage. Silver is the most malleable and ductile of all metals, with the exception of gold. Silver melts at about 962 degrees Celsius and boils at about 2212 degrees Celsius. Silver is not very chemically active, although tarnishing occurs when sulfur and sulfides attack silver, forming silver sulfide on the surface of the metal. Because silver is too soft in its pure form, a hardening agent, usually copper, is mixed into the silver. Copper is usually used as the hardening agent because it does not discolor the silver. The term “sterling silver” means silver that contains at least 925 parts of silver per thousand (92.5%) to 75 parts of copper (7.5%). Silver is usually found combined with other elements in minerals and ores. In the US, silver is mined in conjunction with lead, copper, and zinc. Most of the world’s mined silver comes from Mexico, the US, and Peru. Nevada, Idaho, Alaska, and Arizona are the leading silver-producing states. Industrially, silver is used for jewelry, photography, electrical appliances, glass, and as an antibacterial agent for the health industry. Silver futures and options are traded on the Comex division of the New York Mercantile Exchange, the Chicago Board of Trade (CBOT), and the London Metal Exchange (LME). Silver futures are traded on the Tokyo Commodity Exchange (TOCOM). The Comex silver futures contract calls for the delivery of 5,000 troy ounces of silver (0.999 fineness) and is priced in terms of dollars and cents per troy ounce. Prices – Comex silver futures prices showed some strength early in 2003 on the Iraq war but then fell into a trading range through summer. Silver then began a fairly steady bull market in July, rallying to finally post a 3-year high of $5.98 by the end of December. Silver futures closed

World Mine Production of Silver Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Thousands of Kilograms In Metric Tons

Australia

Bolivia

Canada3

Chile

China

Kazakhstan4

Rep. of Korea

Mexico

Peru

Poland

Sweden

United States

World Total2

1,092 1,045 939 1,013 1,106 1,474 1,720 2,060 2,100 2,077

333 352 425 384 387 404 422 434 408 450

896 768 1,285 1,309 1,224 1,196 1,174 1,212 1,265 1,344

970 983 1,041 1,047 1,091 1,340 1,381 1,242 1,348 1,350

840 810 910 1,140 1,300 1,300 1,320 1,600 1,910 2,500

500 506 489 468 690 726 905 927 982 892

215 257 299 254 268 339 489 591 665 650

2,136 2,215 2,324 2,528 2,679 2,686 2,467 2,620 2,760 2,748

1,671 1,768 1,929 1,970 2,090 2,025 2,231 2,145 2,353 2,687

767 1,064 1,001 935 1,038 1,108 1,100 1,148 1,194 1,200

255 276 268 272 304 299 284 329 306 299

1,640 1,490 1,560 1,570 2,180 2,060 1,950 1,980 1,740 1,420

14,100 14,000 14,900 15,100 16,500 17,200 17,600 18,400 19,300 20,000

Preliminary. 2 Estimate. 3 Shipments. Source: U.S. Geological Survey (USGS)

234

2003 at $5.95, up 22% from $4.89 in 2002. Although silver futures closed 2003 at a 3-year high, the market was still well below the 15-year high of $7.26 posted in February 1998. The highest month-end price ever reached for cash silver was $38 per troy ounce back in January 1980. Bullish factors for silver in the latter half of 2003 centered on the weak dollar and the rebound in the US economy, which boosted industrial use of silver. Supply – World production of silver in 2001, the latest full reporting year, rose +2.2% to 18.700 million metric tons from 18.300 million metric tons in 2000. There are many producing nations for silver, but the largest are Mexico (with 14.8% of world production in 2001), Peru (12.6%), Australia (11.2%), China (9.6%), and the US (9.3%). US production of refined silver in 2003 was on track to fall to 4,900 metric tons, down from 5,441 metric tons in 2002. Demand – US consumption of silver in 2001 fell 6.8% to 187.4 million troy ounces from 201.1 million in 2000. The largest demand for silver usage by far comes from photographic materials with 54.4% of total usage, followed by electrical contacts and conductors (15.7%), brazing allows and solders (4.5%), catalysts (3.3%), batteries (2.8%), jewelry (2.6%), sterling ware (2.5%), silver plate (2.1%), and mirrors (1.3%). The world’s largest consuming nation of silver for industrial purposes is the US with 20.2% of world consumption, followed by India and Japan (both at 14.7%), and Italy (6.5%). Trade – US exports of silver in 2001 rose to 707,000 troy ounces from 279,000 in 2000, but the 2000 and 2001 levels were sharply lower than the levels seen in the previous several years (e.g., 15.455 million troy ounces in 1999, 72.479 million troy ounces in 1998, and 96.039 million troy ounces in 1997). The largest destination for US silver exports is the UK with 615,000 troy ounces of exports in 2001. US imports of silver ore and concentrates were almost solely from Canada and rose sharply to 7.55 million troy ounces in 2001 from 1.420 million in 2000. US imports of silver bullion fell to 2.935 million troy ounces in 2001 from 3.810 million in 2000. The bulk of those imports came from Canada (1.370 million troy ounces) and Mexico (1.280 million).

4

Formerly part of the U.S.S.R.; data not reported separately until 1992.

SILVER

-----

Cents Per Troy Ounce Handy & Harman, New York (Jan. 1910 - May 1990) Composite (June 1990 to date)

Average Price of Silver in New York (Handy & Harman) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Troy Ounce (.999 Fine)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

513.14 476.36 547.03 483.70 584.58 511.61 523.47 470.19 450.17 485.62

527.24 469.53 562.75 508.76 672.61 554.55 529.65 457.34 444.79 468.11

545.11 464.83 551.38 519.88 617.18 519.85 510.15 439.93 457.00 454.74

530.87 552.42 540.14 476.41 628.86 509.21 510.37 439.25 460.50 453.40

543.64 555.25 536.02 475.80 558.65 529.83 504.30 443.59 473.55 475.29

539.34 535.27 513.58 474.60 526.05 507.73 505.20 436.79 492.13 455.62

528.65 517.58 502.95 435.96 546.82 522.81 501.82 425.45 494.57 486.48

519.54 539.59 510.50 451.36 516.45 529.36 492.76 420.72 456.16 502.90

552.88 540.78 501.57 472.69 502.67 527.86 494.50 441.09 458.93 520.62

544.10 534.48 492.76 501.15 500.18 541.67 488.14 441.87 442.28 503.91

519.60 529.30 481.69 507.30 498.39 519.20 471.93 412.35 453.87 520.64

476.88 514.75 480.14 571.53 476.85 521.95 466.40 437.98 465.78 565.33

528.42 519.18 518.34 489.07 552.68 524.75 499.89 438.88 462.39 491.06

Source: American Metal Market (AMM)

Average Price of Silver in London (Spot Fix) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Pence Per Troy Ounce (.999 Fine)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

344.48 302.80 359.20 287.63 359.62 312.69 316.08 315.87 315.08 297.21

354.77 300.36 367.64 311.95 416.55 340.46 327.90 312.57 310.55 289.23

364.74 290.35 362.03 323.99 375.76 320.27 320.87 304.50 318.27 287.39

358.95 341.95 392.85 293.08 378.77 315.12 319.61 304.36 316.61 285.06

360.86 248.74 354.25 291.43 339.42 326.80 330.53 310.19 322.58 292.05

353.28 336.31 334.68 289.16 319.05 315.51 331.24 309.54 329.32 272.79

341.86 323.80 325.81 272.73 331.87 328.86 329.35 300.97 316.07 295.53

336.67 343.72 330.93 280.36 317.74 327.98 327.80 277.97 295.93 313.01

353.15 348.99 322.98 295.67 297.40 322.20 340.75 297.93 292.38 320.30

339.73 340.29 310.78 308.69 295.41 326.42 332.24 289.21 282.49 298.01

326.64 339.90 290.51 300.76 298.72 317.53 327.71 286.92 286.93 306.53

306.49 336.05 289.77 348.90 291.77 319.87 317.47 306.25 291.52

345.14 329.44 336.79 300.36 335.17 322.75 326.94 302.43 306.48 296.10

Source: American Metal Market (AMM)

235

SILVER

Average Open Interest of Silver Futures in New York (COMEX) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

112,584 132,158 99,316 91,385 95,717 77,946 76,187 69,408 67,442 98,561

116,652 139,806 107,667 94,539 108,284 97,593 81,398 72,798 65,355 94,472

112,745 132,317 92,186 90,531 91,730 82,435 75,765 74,337 67,405 84,485

119,314 129,063 101,011 97,434 83,045 82,824 76,213 71,589 76,158 87,445

121,296 112,723 99,529 87,510 79,451 78,745 75,001 67,328 82,525 85,232

126,255 108,941 110,247 90,145 91,563 78,943 76,466 67,429 100,837 80,001

122,138 101,842 105,627 96,777 78,353 78,151 75,199 75,019 94,731 91,544

118,081 111,251 103,618 89,250 82,530 86,601 91,083 75,830 82,349 108,118

113,261 95,433 93,448 79,344 74,848 77,490 73,441 65,533 80,511 110,423

117,224 101,763 95,809 100,464 74,451 86,577 78,222 66,530 89,094 92,216

126,666 105,453 93,238 96,695 76,440 80,564 83,142 74,228 85,434 101,303

134,099 95,551 83,879 93,761 78,716 70,275 73,644 66,903 78,174 103,044

Source: New York Mercantile Exchange (NYMEX), COMEX Division

Volume of Trading of Silver Futures in New York (COMEX) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

489,055 390,453 415,801 401,995 352,688 315,165 258,053 175,026 265,773 291,120

555,136 501,454 583,767 530,514 550,800 550,271 425,910 302,035 271,293 409,737

484,134 541,807 368,175 360,871 368,127 355,559 231,336 155,658 163,898 216,660

585,058 592,620 547,629 493,999 360,130 424,822 318,752 252,486 325,889 315,240

516,396 500,522 334,973 280,536 310,130 274,002 216,938 204,552 243,475 251,096

729,414 476,481 549,631 472,306 393,971 373,662 407,455 281,846 389,798 352,729

339,298 280,651 296,905 340,245 278,774 288,480 175,235 112,956 281,214 407,931

535,722 655,854 460,686 425,471 367,257 422,653 370,739 267,711 296,579 442,762

377,540 344,182 316,366 335,400 283,475 328,907 146,007 160,329 164,537 335,508

455,049 272,362 321,781 430,397 280,066 318,256 149,252 210,266 209,249 373,493

589,220 447,095 415,441 488,024 319,216 344,289 303,673 266,077 292,861 464,244

348,323 179,755 259,653 333,762 229,982 161,434 113,667 180,256 230,998 250,835

5,994,345 5,183,236 4,870,808 4,893,520 4,094,616 4,157,500 3,117,017 2,569,198 3,135,564 4,111,355

Source: New York Mercantile Exchange (NYMEX), COMEX division

236

In Contracts

Jan.

SILVER Mine Production of Recoverable Silver in the United States Year

Arizona California

1997 1998 1999 2000 2001 20021 1

190 211 183 W W W

Preliminary.

23 11 8 8 8 3

New

South

Colorado

Idaho

Missouri

Montana

Nevada

Mexico

Dakota

Washington

States

Total

W W W 3 3 W

341 447 416 W W W

W W W W W W

W W W W W W

787 670 597 734 544 424

W W W W W W

4 2 W W W W

2 1 W 2 W W

833 723 748 1,240 1,180 994

2,180 2,060 1,950 1,980 1,740 1,420

Coi nage

Total Consumpti on

8.1 8.9 8.1 7.5 5.0 5.3 5.6 10.0 10.0 NA

127.0 130.0 138.2 143.7 151.7 165.8 177.9 188.5 201.1 187.4

W = Withheld proprietary data; included in Other States.

Brazi ng Alloy & Solders

Catalysts

Batteri es

7.1 7.2 7.5 7.7 8.2 8.9 9.3 9.1 8.6 8.5

3.8 4.0 4.2 4.9 5.5 5.7 5.9 5.9 6.3 6.1

3.1 3.3 3.6 4.1 4.5 4.8 4.9 5.0 5.2 5.3

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1 1

P reliminary.

In Mi lli ons of Troy Ounces

Mi rrors

Electrical ContactsConductors

Photographi c Materi als

Si lverplate

Jewerly

Sterli ng Ware

Total Net Industri al Consumpti on

1.2 1.3 1.5 1.7 2.1 2.4 2.6 2.6 2.6 2.5

18.3 18.8 19.5 20.9 22.3 26.5 28.4 29.2 32.7 29.5

64.4 65.0 71.0 72.9 78.3 84.6 91.0 96.0 104.0 102.0

2.9 3.0 3.1 3.5 3.9 4.1 4.5 4.4 4.5 4.0

3.0 3.3 3.7 4.1 4.4 4.9 5.5 5.7 6.1 4.9

3.9 4.0 4.2 4.4 4.8 5.1 5.7 5.8 5.6 4.6

118.9 121.1 130.1 136.2 146.7 160.5 172.3 178.5 191.1 NA

S ource: The S ilver I nst it ut e

Commodity Exchange, Inc. (COMEX) Warehouse of Stocks of Silver Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Other

Source: U.S. Geological Survey (USGS)

C o n su mp tio n o f S ilver in th e U n ited S tates, b y E n d U se

Year

In Metric Tons

In Thousands of Troy Ounces

Jan. 1

F eb. 1

Mar. 1

Apr. 1

May 1

June 1

July 1

Aug. 1

Sept. 1

Oct. 1

Nov. 1

D e c. 1

251,685 260,708 159,695 204,051 110,437 75,807 75,945 93,983 104,547 107,394

250,730 264,045 143,426 195,450 103,778 75,108 73,948 93,195 102,395 107,610

239,374 235,114 151,336 193,381 89,458 78,135 93,782 98,659 100,983 109,153

240,187 211,028 139,059 191,676 86,926 79,605 104,259 96,694 102,540 108,521

233,950 189,668 141,789 189,498 89,715 78,819 102,589 95,745 104,526 108,168

236,459 184,570 150,141 201,682 89,628 77,512 99,285 96,090 107,766 NA

246,291 181,269 168,079 184,691 85,911 73,514 102,713 98,700 105,938 107,222

249,417 175,764 155,441 169,079 79,136 77,592 102,291 100,494 105,563 105,406

255,198 156,544 151,283 164,296 78,681 79,606 97,879 102,770 108,090 104,862

259,634 156,529 141,673 138,775 73,142 79,391 99,552 101,538 107,495 106,283

265,710 156,110 129,911 133,470 74,260 79,155 95,749 103,982 107,440 118,238

258,618 156,932 148,451 128,252 76,818 78,416 95,717 105,235 107,090 124,498

Source: New York Mercantile Exchange (NYMEX), COMEX Division

Production2 of Refined Silver in the United States, from All Sources

In Metric Tons

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

278 279 373 343 338 424 436 405 544 483

327 273 299 262 486 420 1,177 343 387 426

319 340 332 296 426 441 551 405 465 320

307 281 321 331 372 356 399 360 532 412

209 381 327 250 377 368 431 360 509 357

371 355 316 326 374 394 390 331 398 431

239 331 354 292 394 404 361 395 398 430

288 404 314 344 324 316 402 380 419 373

273 364 333 331 463 354 400 338 473 361

254 340 344 281 443 371 469 403 437 810

297 384 304 340 469 364 386 442 394

281 351 403 382 447 396 401 383 485

3,443 4,083 4,020 3,778 4,860 4,608 5,780 4,545 5,441 5,283

1

Preliminary.

2

I ncludes U.S. mine production of recoverable silver plus imports of refined silver.

Source: U.S. Geological Survey (USGS)

237

SILVER U.S. Exports of Refined Silver to Selected Countries Year

Canada

France

4,910 3,138 1,665 489 1,861 669 2,180 1,906 1,598 466

2

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

Preliminary.

2

2

Germany

Hong Kong

34 8

1,002 456

431

2

2

2

2 2 347 1 2 ---1

646 797 45 ------11 4

2

2,205 2 22 -------

I ncluded in other countries, if any.

Ja p a n

3,414 10,385 5,819 4,662 6,044 585 585 3,504 1,202 466

Singapore

South Korea

Switzerland

United Arab Emirates

United Kingdom

2,500 16 2,209 3,601

1,492 2,701 2,932 383 547 ---31 ----------

38 14 1,177 2,413 5,369 604 624 727 354 727

4,403 4,823 10,288 15,850 16,750 3,569 4,244 ----------

3,673 4,212 63,980 35,366 62,693 62,693 7,716 3,311 20,029 14,532

2

210 37 1 2 10

Preliminary.

Other Countries

Total

Canada

Chile

Mexico

Peru

Uruguay

299 369 338 256 7 24 11 46 243 149

836 3,805 6,655 4,662 4,437 5,851 334 ------1,813

12 97 243 ---90 427 2 ----------

1,147 4,271 7,236 4,918 4,533 6,301 347 46 243 1,961

28,622 28,678 27,649 35,365 29,385 34,722 43,403 38,902 44,046 48,868

1,058 1,923 2,003 1,874 608 813 1,048 225 2,054 2,331

27,241 22,135 31,957 30,285 28,774 41,152 33,115 44,689 41,152 67,837

12,709 12,663 13,728 12,153 8,873 9,388 5,433 2,787 5,498 6,430

2

2

I ncluded in other countries, if any.

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2 1

44 14 5 40 57 38 5 1 -------

22,673 27,889 90,462 93,346 99,022 80,375 19,804 12,217 30,960 28,196

2 2 2

-------------------

Other Countries

Total

559 742 9,197 3,122 518 3,945 2,521 35,899 1,771 3,778

70,189 66,141 84,534 82,799 68,158 90,020 85,519 122,502 94,521 129,243

Source: American Bureau of Metal Statistics, I nc. (ABMS)

In Millions of Troy Ounces

--------------------------------------------- Industrial Uses ------------------------------------------------- -------------------------------- Coinage -------------------------------GerUnited United World GerUnited World Canada France many India Italy Japan Mexico Kingdom States Total Austria Canada France many Mexico States Total

1.6 1.6 2.0 2.0 2.2 2.3 2.1 2.0 2.0 2.1

28.1 27.2 30.0 26.9 28.3 28.4 26.6 28.8 28.7 27.1

45.7 45.7 43.6 41.0 42.3 38.4 35.1 31.8 32.4 29.4

Non-communist areas only.

238

World Total

In Thousands of Troy Ounces

Mexico

World Silver Consumption1 Year

530 1,489 939 624 402 688 180 109 105 ----

Canada

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

Other Uruguay Countries

Source: American Bureau of Metal Statistics, I nc. (ABMS)

U.S. Imports of Silver From Selected Countries Year

In Thousands of Troy Ounces

2

108.8 93.9 101.3 122.2 122.9 114.7 121.5 131.0 154.0 118.5

56.3 51.6 49.5 51.7 56.1 55.9 61.8 65.1 55.5 52.8

Preliminary.

105.5 108.4 112.7 112.1 119.9 112.8 122.5 135.0 119.3 118.6

14.9 14.6 16.9 20.3 23.3 21.7 22.3 17.7 16.8 17.9

27.7 30.4 31.6 33.8 34.9 38.6 39.3 42.7 46.0 43.6

131.6 140.4 148.7 155.0 166.3 162.2 173.5 180.0 157.3 162.9

Source: The Silver I nstitute

739.1 722.4 752.7 785.8 828.2 800.6 839.5 876.4 838.0 806.9

.5 .5 .5 .5 .4 .3 .3 .3 .3 .4

1.2 1.5 .7 .7 .6 1.1 1.4 1.0 .9 1.0

2.1 1.0 1.2 .3 .3 .3 .3 .4 .4 .5

2.8 7.1 2.4 4.6 3.7 10.0 7.0 8.8 8.1 6.0

17.1 13.0 .6 .5 .4 .2 .4 .6 1.1 1.1

9.2 9.5 9.0 7.1 6.5 7.0 10.7 13.4 12.3 14.2

Grand Total

41.5 780.6 43.8 766.2 24.7 777.4 23.3 809.1 28.5 856.7 27.8 828.5 29.2 868.6 32.2 908.6 30.5 868.5 31.3 838.2

Soybean Meal Soybean meal is produced through processing and separating soybeans into oil and meal components. By weight, soybean meal accounts for about 35% of the weight of raw soybeans (at 13% moisture). If the soybeans are of particularly good quality, then the processor can get more meal weight by including more hulls in the meal while still meeting the 48% protein minimum. Soybean meal can be further processed into soy flour and isolated soy protein, but the bulk of soybean meal is used as animal feed for poultry, hogs and cattle. Soybean meal accounts for about two-thirds of the world’s high-protein animal feed, followed by cottonseed and rapeseed meal, which together account for less than 20%. Soybean meal futures and options are traded on the Chicago Board of Trade (CBOT). The CBOT soybean meal futures contract calls for the delivery of 100 tons of soybean meal produced by conditioning ground soybeans and reducing the oil content of the conditioned product and having a minimum of 48.0% protein, minimum of 0.5% fat, maximum of 3.5% fiber, and maximum of 12.0% moisture. Soybean crush – The term soybean “crush” refers to both the physical processing of soybeans and also to the dollar-value premium received for processing soybeans into their component products of meal and oil. The conventional model says that processing 60 pounds (one bushel) of soybeans produces 11 pounds of soybean oil, 44 pounds of 48% protein soybean meal, 3 pounds of hulls, and 1 pound of waste. The Gross Processing Margin (GPM) or crush equals (0.22 times Soybean Meal Prices in dollars per ton) + (11 times Soybean Oil prices in cents/pound) – Soybean prices in $/bushel. A higher crush value will occur when the price of the meal and oil products are strong relative to soybeans, e.g., because of supply disruptions or because of an increase in demand for the products. When the crush value is high, companies will have a strong incentive to buy raw soybeans and boost the output of the products. That supply increase will eventually bring the crush value back into line with the long-term equilibrium. Prices – Soybean meal prices in 2003 rallied sharply by 38% to new 6-year highs, adding to the 15% rally seen in 2002. Despite that rally, the 2003 yearly close near $242

World Supply and Distribution of Soybean Meal

per ton was still well below the 15-year high of $308.5 posted in 1997 and the record high of $336.5 posted in 1988. Bullish factors centered on heavy Chinese buying and tight supplies. In addition, the emergence of mad cow disease in North America in 2003 (Canada in May and the US in December) seems destined to boost demand for soybean meal. Rendered beef was already banned from the feed of cattle due to mad cow disease. Then as 2003 ended, it appeared that widespread concern about mad cow disease might cause officials to also ban rendered beef from the feed of other animals including hogs, poultry and pets. That would sharply boost demand for soybean meal due to its high protein content and its ability to quickly fatten up animals. Supply – World soybean meal production in 2002/3 rose to a record 130.140 million metric tons, up 4.1% from the previous year’s 125.030 million tons. The world’s largest producers of soybean meal in 2002/03 were the US with 35.489 million tons of production (27%), Brazil with 20.909 million tons (16%), and the European Union with 17.880 million tons (14%). US soybean meal production in 2003/ 04 was forecasted at 35.340 million short tons, down 7.5% from the preliminary figure of 38.213 million in 2002/03 and down from the record high of 40.292 million short tons in 2001/02. Demand – World soybean meal consumption in 2002/ 03 of a record high 129.6 million tons compares with 124.2 million in 2001/02 and less than 100 million as recently as 1997/98. The US is the largest single consumer with about 30 million tons of annual consumption recent years, but collectively the European Union and especially Asia have closed the gap with 29 million and 36 million tons, respectively. Asia’s increasing use reflects the expansion in the region’s poultry production. Trade – US exports of soybean meal are forecasted at 4.08 million metric tons in 2003/4, down from 5.47 million metric tons in 2002/3. US exports of soybean meal in 2003/ 4 were down sharply by 42% from the recent peak of 6.99 million metric tons in 2000/01. The countries that import the largest volume of soybean meal from the US are Canada (17%), Philippines (11%), and Mexico (8%).

In Thousands of Metric Tons

Year Beginning Oct. 1

------------------------ Production ------------------------ ----------- Exports ------------ ----- Imports ------ --------- Consumption --------- --- Ending Stocks --European United United European United United Brazil China Union States Total Brazil States Total France Total Union States Total Brazil States Total

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

15,869 17,040 15,722 15,728 16,595 16,745 17,863 19,469 21,679 24,970

1

Preliminary.

2

6,958 6,051 5,963 6,717 10,023 11,975 15,050 16,300 21,500 24,050

Forecast.

11,984 11,220 11,428 12,126 12,354 11,231 13,229 13,906 12,635 13,910

30,182 29,508 31,035 34,633 34,285 34,102 35,730 36,552 34,666 31,529

89,302 87,895 89,607 103,681 107,540 107,470 116,420 125,300 131,370 138,780

10,445 11,941 10,660 9,588 9,830 9,932 10,679 11,975 13,750 16,500

6,092 5,446 6,344 8,464 6,461 6,652 6,988 6,811 5,455 3,856

32,389 32,220 32,593 41,495 38,980 35,370 37,230 42,360 44,030 48,130

3,792 3,343 3,266 3,647 4,106 4,154 4,416 4,610 4,695

31,588 32,823 34,389 37,602 38,970 36,240 38,330 43,990 45,800 48,780

25,412 23,719 22,340 24,562 27,258 26,670 28,541 30,919 30,682 32,517

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

24,081 24,140 24,785 26,213 27,812 27,529 28,706 30,001 29,380 28,123

87,812 984 88,754 973 91,785 835 99,924 975 106,340 1,190 109,350 903 117,880 721 126,630 645 133,550 649 139,410 669

203 193 191 198 300 266 348 218 200 181

3,729 3,473 3,091 2,955 5,100 4,150 3,790 4,100 3,700 3,720

239

SOYBEAN MEAL

Average Open Interest of Soybean Meal Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

87,612 97,661 95,903 86,204 114,243 123,041 115,285 111,880 146,674 154,821

91,142 101,253 90,010 97,618 122,979 130,473 124,822 108,047 137,425 168,036

82,193 101,846 87,468 107,763 131,390 121,435 120,157 107,253 134,880 157,670

89,453 99,898 101,204 111,413 137,251 112,155 123,957 116,888 130,138 163,532

85,553 90,237 91,453 113,848 136,212 104,176 123,691 119,644 132,376 163,096

81,721 86,090 88,641 110,780 136,216 108,134 112,425 135,046 143,956 154,985

84,461 83,712 77,961 114,372 126,108 116,464 105,230 134,982 142,728 152,121

82,691 74,233 80,727 108,923 139,239 121,202 94,469 129,536 132,996 146,582

85,508 79,450 93,373 111,447 140,904 120,462 105,240 123,644 137,799 153,505

94,483 85,290 88,969 118,409 141,426 112,426 103,263 121,845 131,249 169,709

101,030 103,824 90,007 125,201 134,095 117,523 120,164 145,996 137,836 170,707

98,717 110,193 84,399 116,760 122,788 104,246 127,529 147,576 140,902 176,191

Source: Chicago Board of Trade (CBT)

Volume of Trading of Soybean Meal Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

F eb.

Mar.

Apr.

May

June

July

405,590 283,623 496,414 479,001 458,519 420,240 455,335 530,193 610,275 639,628

339,834 307,477 442,937 481,841 454,310 509,348 537,527 431,822 398,294 551,401

330,694 404,387 435,764 509,515 449,806 476,104 556,010 470,608 424,684 527,723

380,736 410,860 655,984 576,564 592,614 477,102 467,698 485,106 618,880 676,739

467,223 532,694 439,212 581,886 499,468 390,527 566,607 584,352 567,221 599,614

456,279 479,589 442,370 569,760 749,765 646,806 606,190 625,089 664,687 749,844

384,508 610,833 507,240 579,748 675,104 710,110 488,172 709,973 806,395 772,104

I n thousands of contracts.

240

In Contracts

Jan.

Source: Chicago Board of Trade (CBT)

Oct.

Nov.

D e c.

Total1

354,372 366,263 317,438 491,775 481,949 449,009 490,349 425,850 581,126 452,188 531,299 589,542 536,650 504,088 553,224 597,026 568,859 511,503 469,017 484,617 483,174 630,909 491,398 652,931 673,705 581,155 613,701 692,778 677,194 896,429

370,377 523,440 491,917 561,133 521,231 572,194 690,313 659,328 657,822 700,676

420,500 625,606 452,139 512,471 559,067 447,078 513,328 472,063 557,688 674,315

4,593.8 5,601.2 5,861.3 6,424.9 6,553.8 6,326.9 6,318.0 6,743.8 7,174.5 8,158.4

Aug.

Sept.

SOYBEAN MEAL Supply and Distribution of Soybean Meal in the United States

In Thousands of Short Tons -------------------- $ Per Metric Ton ----------------$ Per Ton RotterBrazil FOB Decatur Decatur dam 45-46% 48% Protein 44% Protein CIF Protein Solvent Solvent

--------------------- Supply --------------------Year Beginning Oct. 1

F or Stocks Oct. 1

Production

Total Supply

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43

150 223 212 210 218 330 293 383 240 220

33,269 32,527 34,211 38,176 37,797 37,591 39,385 40,292 38,213 34,755

33,483 32,826 34,525 38,442 38,114 37,970 39,729 40,818 38,619 35,450

1

Preliminary.

2

3

Estimate.

Forecast.

------------------ Distribution -----------------Domestic

Exports

Total

26,542 26,611 27,321 28,894 30,662 30,346 31,643 33,070 32,386 31,000

6,717 6,002 6,994 9,330 7,122 7,331 7,703 7,508 6,013 4,250

33,260 32,613 34,316 38,224 37,784 37,677 39,346 40,578 38,399 35,250

162.55 236.00 270.90 185.28 138.55 167.70 173.60 167.73 181.57 225-245

Algeria

Australia

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

266.1 233.7 216.7 203.4 250.8 263.2 213.2 202.0 178.8 219.2

94.8 243.2 190.6 157.5 136.7 135.7 167.1 167.7 157.5 243.7

1

Preliminary.

172 256 289 201 150 182 187 174 198 274

Dominican Canada Republic

666.8 730.1 809.9 698.8 662.9 791.8 796.7 827.2 1,050.6 1,133.6

201.2 209.9 219.8 260.7 261.5 221.8 309.9 357.4 364.9 358.8

In Thousands of Metric Tons

Italy

Ja p a n

Mexico

Netherlands

108.1 29.3 95.4 96.1 295.8 227.7 60.9 19.0 132.8 34.4

203.2 78.1 247.4 234.1 288.1 267.1 209.6 219.7 279.1 116.0

338.6 481.6 425.8 374.1 220.1 198.6 425.4 264.5 419.8 506.5

829.6 651.4 879.3 501.3 508.5 298.2 231.5 94.6 241.1 107.4

Philippines

Russia

Spain

Venezuela

Total

295.7 257.9 593.6 423.4 483.2 758.7 825.5 851.8 689.0 756.2

697.7 159.5 11.5 5.8 8.3 ---289.4 90.1 102.2 112.8

360.7 234.9 212.8 51.9 345.0 296.9 77.7 96.5 132.4 79.7

425.1 259.0 181.5 274.9 337.1 447.1 359.6 248.1 137.8 60.3

6,313 5,406 6,370 6,133 7,309 8,230 6,839 6,462 7,426 6,672

Source: The Oil World

Production of Soybean Cake & Meal2 in the United States

In Thousands of Short Tons

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

2,812.5 2,893.2 2,992.8 3,344.0 3,365.1 3,573.4 3,573.9 3,534.4 3,499.3 3,462.1

2,903.5 2,948.9 3,151.8 3,390.6 3,368.4 3,400.4 3,432.8 3,538.7 3,424.7 3,465.9

3,027.8 2,972.3 3,263.8 3,624.2 3,422.4 3,413.5 3,399.4 3,655.3 3,526.8 3,483.7

3,007.5 2,945.2 3,251.7 3,592.1 3,214.4 3,332.8 3,521.6 3,703.1 3,358.4 3,423.4

2,755.0 2,652.1 2,966.8 3,279.2 3,027.7 2,998.2 3,083.0 3,313.2 3,048.4

3,048.5 2,757.5 3,089.1 3,484.0 3,302.7 3,123.6 3,412.5 3,589.7 3,360.1

2,829.8 2,683.1 2,709.1 3,172.5 3,044.2 2,906.1 3,152.3 3,315.7 2,994.7

2,697.9 2,534.6 2,618.1 2,956.7 3,024.4 2,882.5 3,181.0 3,344.2 3,072.4

2,492.1 2,566.2 2,573.2 2,795.2 2,844.0 2,845.4 3,091.6 3,194.1 2,873.4

2,565.4 2,656.3 2,517.4 2,941.5 3,011.9 3,118.8 3,256.6 3,085.4 3,064.4

2,589.8 2,513.4 2,465.2 2,665.6 3,003.5 2,906.8 3,203.6 3,106.7 2,966.6

2,535.8 2,404.1 2,611.0 2,930.7 3,167.8 3,089.7 3,076.8 2,911.3 3,023.5

33,269 32,527 34,211 37,176 37,797 37,591 39,385 40,292 38,213 41,505

Preliminary.

2

At oil mills; including millfeed and lecithin.

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 Preliminary.

Yield in lbs.

47.33 47.69 47.36 47.41 47.25 47.76 48.06 44.27 43.90

Sources: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Stocks (at Oil Mills)2 of Soybean Cake & Meal in the U.S., on First of Month

1

184 256 278 197 150 180 188 174 197 275

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

U.S. Exports of Soybean Cake & Meal by Country of Destination Year

179 260 289 204 153 185 191 180 200 257

In Thousands of Short Tons

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

149.6 223.4 212.4 206.6 218.1 330.2 292.9 383.3 240.0 219.9

240.9 196.9 200.2 218.2 271.9 467.6 317.4 305.5 285.2 317.8

231.6 241.3 291.8 412.2 352.3 460.2 343.8 302.9 371.7 432.4

241.1 394.8 254.4 262.0 313.9 436.5 423.7 393.7 337.0 280.7

197.7 302.2 263.0 269.3 380.5 489.8 333.9 289.7 299.1

227.1 229.9 198.5 280.7 436.4 482.5 325.8 272.0 259.5

173.1 369.3 322.6 238.0 341.0 350.2 309.1 336.5 335.7

382.7 382.1 280.1 210.4 316.0 441.2 313.3 253.8 263.5

337.6 306.8 256.5 290.2 447.7 325.0 286.9 212.7 311.8

222.6 406.2 317.3 193.1 284.2 260.2 341.3 343.3 271.6

252.0 298.8 303.2 205.3 394.8 305.8 338.1 202.4 228.4

203.8 218.3 257.4 187.2 279.4 225.9 273.9 256.5 266.9

2

I ncluding millfeed and lecithin.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

241

SOYBEAN MEAL

-----

USD Per Ton Chicago (Oct. 1929 - Oct. 1936) 41% Protein, Chicago (Nov. 1936 - June 1950) 44% Protein, Chicago (July 1950 - Sept. 1965) 44% Protein, Decatur (Oct. 1965 - Oct. 1992) 48% Protein, Decatur (Nov. 1992 - date)

Average Price of Soybean Meal (44% Solvent) in Decatur Illinois Year

1992-3 1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2

In Dollars Per Short Ton -- Bulk

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Average

168.6 180.6 156.4 183.4 238.0 216.0 129.4 147.2 166.0 157.7

170.9 195.7 150.9 194.1 242.7 231.6 139.3 148.1 173.7 157.2

176.4 192.5 145.4 213.6 240.9 214.9 139.6 145.4 187.9 146.6

175.6 185.9 145.1 220.5 240.7 193.1 131.0 155.0 175.6 Disc.

167.5 184.4 149.4 216.7 253.6 182.1 124.4 163.6 158.3 Disc.

172.4 182.0 145.7 215.7 270.4 165.3 127.2 166.6 149.1 Disc.

175.6 176.4 151.0 237.9 277.7 152.8 128.6 168.1 149.7 Disc.

181.7 191.1 148.1 232.3 296.0 150.3 127.0 180.1 155.6 Disc.

181.3 183.0 149.1 227.9 275.9 157.8 131.7 170.2 163.1 Disc.

217.6 168.1 160.1 242.3 261.5 173.3 125.7 156.8 183.9 Disc.

206.9 165.6 157.5 251.1 261.6 135.7 135.9 151.4 170.6 Disc.

186.5 162.5 171.8 265.5 265.7 126.9 144.1 166.9 163.5 Disc.

181.8 180.7 152.5 225.1 260.4 175.0 132.0 160.0 166.4 153.8

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price of Soybean Meal (48% Solvent) in Decatur Illinois Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-4

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Average

168.50 193.90 248.50 229.30 135.70 153.57 171.52 165.45 168.20 225.20

161.00 204.10 251.50 245.30 144.45 154.70 179.95 166.10 163.20 242.00

156.90 223.60 250.60 222.50 146.40 154.00 195.65 154.18 163.60 231.54

156.40 232.00 249.20 202.85 138.80 163.41 183.17 158.01 167.40 252.15

151.30 228.30 262.40 192.75 132.30 170.85 166.08 153.11 176.80 257.39

156.90 226.57 280.50 174.20 133.00 175.50 156.32 160.49 175.40

161.90 249.30 288.60 162.50 134.50 177.53 158.48 161.57 182.10

159.10 244.30 306.40 160.00 133.20 189.34 165.14 164.28 195.40

160.40 238.80 287.90 168.55 139.10 177.45 172.60 170.33 191.90

170.45 252.50 273.60 183.40 132.70 163.38 184.43 187.45 187.30

166.70 261.20 273.30 146.25 141.70 157.48 178.46 186.25 189.70

180.99 276.40 278.30 135.80 150.65 174.60 171.67 185.45 217.95

162.55 235.90 270.90 185.28 138.54 167.65 173.62 167.72 181.58 241.66

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

242

In Dollars Per Short Ton -- Bulk

Oct.

Soybean Oil Soybean oil is the natural oil extracted from whole soybeans. Typically, about 19% of a soybean’s weight can be extracted as crude soybean oil. The oil content of U.S. soybeans correlates directly with the temperatures and amount of sunshine during the soybean pod-filling stages. Edible products produced with soybean oil include cooking and salad oils, shortening, and margarine. Soybean oil is the most widely used cooking oil in the US. It accounts for 80% of margarine production and for more than 75% of total US consumer vegetable fat and oil consumption. Soy oil is cholesterol-free and high in polyunsaturated fat. Soy oil is also used to produce inedible products such as paints, varnish, resins, and plastics. Of the edible vegetable oils, soy oil is the world’s largest at about 32%, followed by palm oil and rapeseed oil. Soybean oil futures and options are traded on the Chicago Board of Trade (CBOT). Prices – Soybean oil futures staged a sharp 33% rally during 2003, matching the 33% rally seen in 2002. Specifically, soybean oil on the weekly nearest futures chart rallied early in the year, faded through the summer, but then staged a strong rally into the year-end to post a new 5-1/2 year high of 29.00 cents per pound in early December. At 28 cents per pound, soybean futures closed the year only mildly below the 14-year high of 30.80 cents seen in Janu-

World Supply and Demand of Soybean Oil

ary 1994 and the 20-year high of 33.70 cents seen in July 1988. Bullish factors in 2003 centered on aggressive Chinese buying, tight US and world supplies of both soybean oil and competing edible oils. Soy oil stocks in 2003 fell for the third consecutive year. Supply – World production of soybeans in 2002/03 was a record-high 30.07 million metric tons, up 4.3% from the previous year’s 28.82 million. The world’s largest producers are the US with 8.521 million tons of production (28%), Brazil with 5.062 million tons (17%), and the European Union with 3.190 million tons (11%). US production of soybean oil in 2003/04 was forecast by the USDA at 16.660 billion pounds, down from 18.438 billion in 2002/3 and the record high of 18.898 billion in 2001/02. Demand – World consumption of soybean oil was a record high 30.420 million metric tons in 2002-03, with the US accounting for 26% of world consumption at 2.768 million tons. Trade – Global soybean oil exports in 2002/03 hit a record 10.160 million tons, up 11% from the previous year’s 9.180 million tons. Argentina is the largest exporter with 4 million tons in 2002/03. Asia is the world’s largest importer followed by the Middle East.

In Thousands of Metric Tons

Year Beginning Oct. 1

---------------- Production ---------------- ----------- Exports ------------ ----- Imports ----- --------------------- Consumption --------------------- ----- Stocks3 ----European United United European United United Brazil Union States Total Brazil States Total India Total Brazil Union India States Total States Total

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

3,796 4,034 3,723 3,740 3,931 4,025 4,319 4,708 5,250 6,040

1

Preliminary.

2

2,708 2,529 2,582 2,746 2,753 2,513 2,982 3,114 2,810 3,106

Forecast.

7,082 6,913 7,145 8,229 8,202 8,085 8,355 8,572 8,363 7,430 3

20,161 19,860 20,318 23,562 24,650 24,640 26,750 28,870 30,490 32,010

End of season.

1,486 1,600 1,268 1,191 1,381 1,150 1,530 1,775 2,245 2,750

1,217 450 922 1,397 1,076 624 636 1,143 1,026 386

6,287 5,285 6,004 8,062 8,170 6,530 7,250 8,580 9,490 9,640

60 60 49 236 833 790 1,400 1,550 1,275 1,150

5,986 5,273 5,904 6,814 7,850 6,430 6,900 8,260 9,140 9,570

2,466 2,530 2,600 2,749 2,850 3,000 3,075 3,100 3,150 3,325

2,040 2,031 1,784 1,706 1,694 1,482 1,929 2,015 1,871 2,158

555 772 706 1,095 1,805 1,582 2,020 2,387 1,966 2,085

5,857 6,108 6,471 6,922 7,101 7,283 7,401 7,635 7,752 7,371

19,209 516 2,026 19,604 914 2,270 20,544 690 1,944 22,308 627 1,950 24,500 689 2,170 24,160 904 2,580 26,250 1,255 2,720 28,690 1,070 2,570 30,930 676 1,790 32,100 456 1,630

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Supply and Distribution of Soybean Oil in the United States

In Millions of Pounds

------------------------------------------------------- Domestic Disappearance -------------------------------------------------------Year Beginning Oct. 1

Production

Imports

Stocks Oct. 1

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

15,613 15,240 15,752 18,143 18,078 17,825 18,420 18,898 18,438 16,380

17 95 53 60 83 83 73 46 46 235

1,103 1,137 2,015 1,520 1,382 1,520 1,995 2,767 2,359 1,491

1

Preliminary .

2

Forecast.

Total Exports Domestic

2,680 992 2,033 3,079 2,372 1,376 1,401 2,519 2,261 850

12,916 13,465 14,267 15,262 15,651 16,057 16,210 16,833 17,091 16,250

------------------------------- Food ------------------------------- ---------------------- Non-Food ---------------------Total Cooking D i sa p Other Total Paint & Resins & Total ShortMar- & Salad Oils Edible F ood Varnish Plastics Non-Food pearance ening garine

4,714 4,702 4,578 4,688 4,842 7,153 8,044 8,572 8,393

1,693 1,699 1,667 1,623 1,589 1,481 1,294 1,242 1,179

5,546 5,317 6,119 6,188 6,191 7,075 7,310 7,880 7,912

222 159 68 78 120 132 125 125 119

12,175 11,877 12,432 12,576 12,743 15,841 16,772 17,818 17,604

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

49 48 51 49 37 65 60 60 64 65

124 119 132 128 117 96 86 85 88 75

287 297 333 490 576 586 535 519 520 607

15,597 14,457 16,300 18,341 18,023 17,433 17,611 19,352 19,352 17,100

243

SOYBEAN OIL Stocks of Crude Soybean Oil in the United States, at End of Month Crop Year

1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

1,195.0 1,378.3 1,873.6 2,553.4 2,097.1 1,236.8

1,142.0 1,422.9 1,961.8 2,606.0 2,114.3 1,329.7

1,041.1 1,516.5 2,035.0 2,658.1 2,197.2 1,390.1

1,066.2 1,742.4 2,140.0 2,815.7 2,186.9 1,733.0

1,209.5 1,829.7 2,262.4 2,686.6 2,062.5

1,318.6 1,847.2 2,304.1 2,741.9 2,028.7

1,462.0 1,847.5 2,321.7 2,661.2 1,916.0

1,499.5 1,760.3 2,455.2 2,757.5 1,843.0

1,411.8 1,802.9 2,587.4 2,529.3 1,706.4

1,441.8 1,903.7 2,718.3 2,350.9 1,595.1

1,417.8 1,831.3 2,698.2 2,338.2 1,458.4

1,316.1 1,773.4 2,692.4 2,176.7 1,282.4

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

Stocks of Refined Soybean Oil in the United States, at End of Month Crop Year

1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

221.7 238.1 187.2 171.4 197.1 175.0

264.4 240.7 205.7 181.4 212.0 200.8

246.5 250.0 263.1 210.0 202.3 189.9

246.7 271.3 239.3 222.9 209.8 208.3

296.1 270.1 211.5 209.8 209.5

289.0 245.6 199.9 210.8 215.9

254.2 251.8 184.1 195.6 204.1

267.8 231.6 200.9 185.7 210.8

235.6 225.5 189.3 206.5 222.1

229.4 216.7 177.2 178.7 199.1

213.0 186.3 171.7 183.5 196.0

203.4 222.0 184.8 183.2 208.3

Venezuela

Total

Source: Bureau of the Census, U.S. Department of Commerce

U.S. Exports of Soybean Oil1, by Country of Destination

In Metric Tons

Year Beginning Oct. 1

Canada

Ecuador

Ethiopia

Haiti

India

Mexico

Morocco

Pakistan

Panama

Peru

Turkey

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-32

26,178 43,912 58,756 26,711 11,316 22,715 54,909 87,047 123,907

12,698 1,155 6,587 10,897 4,858 0 9,849 0 0

8,392 4,426 19,492 4,175 2,933 13,627 5,224 2,225 11,997

49,793 15,041 36,436 14,191 44,957 25,214 5,793 9,452 1,973

28,948 20,841 26,675 38,610 71,685 23,413 54,062 88,529 42,727

58,624 46,644 81,902 102,950 99,112 118,079 72,456 161,760 196,031

29,053 0 46,682 30,493 43,346 14,091 0 39,439 18,112

25,500 0 0 0 0 0 62,999 59,999 38,215

13,342 9,512 3,623 13,591 1,369 299 4,558 12,616 2,241

8,691 35,999 37,726 49,426 62,085 66,686 60,606 37,677 20,349

5,750 1,960 6,952 2,452 8,497 15,680 0 85,199 26,500

1

Crude & Refined oil combined as such.

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production of Crude Soybean Oil in the United States Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

1,354 1,401 1,591 1,598 1,687 1,673 1,680 1,693 1,631

1,360 1,430 1,580 1,598 1,597 1,591 1,629 1,632 1,611

1,382 1,473 1,689 1,611 1,599 1,579 1,696 1,696 1,605

1,360 1,474 1,684 1,528 1,580 1,642 1,707 1,613 1,619

1,236 1,348 1,558 1,439 1,417 1,436 1,544 1,474

1,292 1,413 1,655 1,587 1,482 1,602 1,662 1,633

1,259 1,254 1,526 1,453 1,368 1,485 1,551 1,448

1,197 1,216 1,418 1,450 1,396 1,479 1,574 1,492

1,221 1,196 1,337 1,383 1,360 1,449 1,506 1,391

1,263 1,176 1,410 1,451 1,486 1,526 1,461 1,482

1,171 1,141 1,286 1,452 1,388 1,506 1,475 1,440

1,139 1,231 1,410 1,528 1,466 1,453 1,414 1,445

15,234 15,752 18,143 18,078 17,825 18,420 18,898 18,438 19,395

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production of Refined Soybean Oil in the United States Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

1,119.2 1,111.7 1,173.9 1,200.6 1,201.1 1,260.3 1,383.2 1,451.2 1,393.0

1,088.8 1,064.1 1,156.3 1,108.8 1,195.2 1,159.7 1,363.5 1,367.2 1,350.9

1,018.5 1,025.7 1,110.1 1,042.2 1,150.4 1,093.4 1,266.9 1,262.2 1,226.6

979.9 969.8 1,092.6 1,016.7 1,056.9 1,107.5 1,231.8 1,224.5 1,205.6

934.3 931.5 1,047.4 976.7 1,045.1 1,166.8 1,183.9 1,181.0

1,042.6 1,057.1 1,148.2 1,138.2 1,173.7 1,211.3 1,330.0 1,308.2

997.3 1,023.7 1,094.8 1,073.2 1,109.6 1,170.0 1,270.5 1,238.6

1,009.3 1,026.2 1,140.7 1,087.7 1,141.4 1,234.1 1,297.9 1,378.8

962.8 984.8 1,053.1 1,060.7 1,063.8 1,204.6 1,287.7 1,316.1

971.9 1,019.1 1,083.9 1,058.6 1,080.2 1,222.8 1,272.8 1,293.8

1,115.8 1,094.3 1,173.4 1,122.6 1,176.0 1,317.4 1,308.4 1,290.5

1,058.7 1,072.5 1,114.5 1,116.2 1,177.7 1,201.2 1,362.4 1,334.8

12,299 12,381 13,389 13,002 13,571 14,349 15,559 15,647 15,528

Preliminary.

244

2,017 1,217,079 1,877 449,876 517 922,336 654 1,396,755 1,464 1,075,699 414 623,651 577 635,493 635 1,142,755 311 1,025,528

Source: Bureau of the Census, U.S. Department of Commerce

SOYBEAN OIL

-----

---

Coconut Oil: Cents Per Pound Crude, New Orleans (Sept. 1918 - date) Corn Oil: Cents Per Pound F.O.B. Decatur (July 1924 - June 1985) Crude, Wet, Milling, Chicago (July 1985 - date)

Consumption of Soybean Oil in End Products in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

924.5 991.1 964.9 1,086.0 1,045.8 1,031.5 1,096.6 1,065.9 1,461.5 1,418.1

939.1 950.0 927.4 979.7 1,020.2 979.0 1,050.5 1,151.7 1,395.3 1,347.4

1,084.7 1,093.8 1,026.4 1,104.9 1,129.7 1,156.1 1,217.9 1,308.8 1,568.0 1,490.0

1,040.6 1,006.2 999.8 1,060.4 1,066.5 1,087.7 1,158.9 1,202.4 1,505.1 1,494.9

1,001.4 1,077.3 1,020.6 1,034.1 1,101.6 1,091.9 1,183.6 1,224.2 1,549.7 1,552.6

1,023.8 1,020.8 946.2 995.2 1,070.1 1,079.5 1,102.9 1,261.6 1,492.4 1,493.1

974.9 948.7 959.9 991.4 1,062.2 1,082.9 1,121.1 1,307.6 1,490.5 1,509.5

1,119.2 1,046.1 1,123.3 1,126.1 1,123.4 1,185.0 1,226.4 1,557.5 1,545.5 1,483.5

1,075.4 1,042.3 1,042.8 1,067.8 1,122.0 1,185.7 1,163.6 1,411.0 1,543.7 1,577.7

1,123.3 1,092.0 1,137.1 1,128.5 1,231.5 1,183.0 1,306.1 1,687.3 1,710.2 1,660.7

1,103.4 1,067.7 1,080.9 1,100.0 1,150.2 1,199.3 1,139.7 1,624.0 1,587.2 1,544.2

1,063.8 1,002.6 1,093.1 1,087.8 1,057.0 1,135.6 1,079.6 1,485.8 1,458.8 1,451.4

12,474 12,339 12,322 12,762 13,180 13,397 13,847 16,288 18,308 18,023

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

U.S. Exports of Soybean Oil (Crude and Refined) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Millions of Pounds

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

120.4 217.4 189.1 190.7 449.4 246.1 103.0 130.4 249.7 295.1

144.6 367.6 97.0 239.2 387.6 231.1 146.1 184.5 446.8 299.8

94.4 564.2 68.0 301.1 268.6 130.8 161.3 142.4 233.2 276.8

46.1 236.2 75.3 84.9 191.1 230.8 91.5 105.8 233.8 226.8

111.6 90.8 63.9 28.9 148.1 91.3 48.3 51.2 87.0 109.8

36.1 160.4 16.1 44.9 204.7 135.0 109.8 109.9 345.8 96.7

57.7 91.0 27.1 144.1 161.8 111.7 105.8 89.1 180.7 234.5

184.6 109.4 28.0 212.9 316.0 91.2 57.0 96.3 95.4 96.8

254.0 79.4 56.7 152.1 108.9 196.2 69.0 70.6 109.8 105.9

154.8 69.3 121.0 217.2 189.6 209.1 43.9 233.9 113.6 152.5

303.2 205.4 303.8 424.0 343.5 114.9 115.2 138.6 194.9 111.2

305.9 95.9 213.3 199.7 376.7 157.6 261.6 164.8 210.2 135.3

1,813 2,287 1,259 2,240 3,146 1,946 1,313 1,518 2,501 2,141

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

245

SOYBEAN OIL

Cents Per Pound Crude, New York (Jan. 1911 - Sept. 1929) Crude, Decatur (Oct. 1929 - date)

-----

Stocks of Soybean Oil (Crude & Refined) at Factories and Warehouses in the U.S. Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Oct. 1

Nov. 1

D e c. 1

Jan. 1

F eb. 1

Mar. 1

Apr. 1

May 1

June 1

July 1

Aug. 1

Sept. 1

1,103.1 1,136.7 2,015.4 1,520.2 1,382.4 1,519.6 1,995.3 2,877.2 2,358.6 1,490.6

1,055.5 1,195.9 1,992.9 1,525.6 1,416.8 1,616.4 2,060.8 2,724.9 2,280.1 1,411.8

1,026.9 1,132.0 1,898.4 1,525.5 1,406.5 1,663.6 2,167.5 2,787.4 2,326.1 1,530.4

1,055.2 1,408.9 2,027.1 1,679.6 1,312.9 1,791.1 2,298.0 2,868.1 2,398.0 1,579.9

1,116.8 1,512.6 2,172.3 1,787.9 1,505.6 2,013.7 2,379.7 3,038.5 2,395.7

1,128.8 1,521.5 2,203.2 1,711.2 1,607.6 2,099.8 2,474.0 2,896.4 2,271.9

1,059.5 1,653.5 2,171.3 1,762.6 1,716.2 2,092.7 2,504.0 2,952.7 2,244.6

1,089.6 1,747.4 2,163.8 1,857.6 1,640.5 2,099.2 2,505.8 2,856.8 2,120.2

1,130.4 1,758.9 2,143.2 1,857.0 1,767.3 1,991.9 2,656.1 2,943.2 2,053.9

1,111.6 1,888.5 2,137.9 1,712.6 1,647.4 2,028.3 2,776.7 2,735.9 1,928.5

1,142.0 2,156.5 1,978.1 1,779.1 1,671.2 2,120.4 2,895.5 2,529.7 1,794.2

1,100.0 2,091.4 1,699.9 1,453.2 1,630.8 2,018.1 2,869.9 2,521.7 1,654.4

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price of Crude Domestic Soybean Oil (in Tank Cars) F.O.B. Decatur Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

246

In Millions of Pounds

In Cents Per Pound

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Average

27.06 26.56 21.95 24.31 25.20 16.08 13.50 14.38 20.75 27.40

29.84 25.41 21.80 25.73 25.20 15.63 13.37 15.23 23.00 27.76

30.61 24.76 21.60 25.08 24.00 15.30 13.12 15.10 22.60 29.54

29.01 23.69 22.45 25.09 22.90 15.63 12.53 14.82 21.50 30.34

28.15 23.65 22.41 26.51 20.00 15.09 12.38 14.15 21.20 33.06

28.33 23.60 23.29 27.09 19.50 16.21 13.90 14.75 21.56

27.16 25.82 23.17 28.10 18.80 17.52 13.53 15.31 22.40

26.00 26.50 23.68 28.28 17.85 16.75 13.53 15.98 23.17

26.78 24.95 22.97 25.83 16.50 15.65 14.21 17.69 22.90

27.60 24.10 21.89 24.88 15.30 14.70 16.49 19.12 21.80

26.56 23.99 22.06 23.99 16.50 14.34 17.08 20.61 20.40

26.26 23.92 22.88 25.13 16.80 14.24 15.46 20.32 23.20

27.51 24.70 22.50 25.84 19.88 15.60 14.09 16.46 22.04 29.62

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

SOYBEAN OIL

Average Open Interest of Soybean Oil Futures in Chicago

In Contracts

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

97,198 101,171 87,214 89,112 105,798 115,407 131,948 134,677 149,103 143,607

99,640 103,856 85,611 89,348 121,657 131,875 135,196 133,497 158,157 140,272

100,334 97,715 87,859 102,388 142,100 136,967 143,699 123,770 149,913 131,323

98,659 87,300 95,954 101,191 160,004 133,404 155,114 128,360 136,198 142,123

97,595 76,175 95,422 101,544 159,248 131,993 134,093 142,877 128,707 147,584

83,165 75,171 86,366 104,433 139,934 147,749 140,582 151,713 129,480 143,218

93,994 81,650 81,440 105,346 117,487 157,999 134,392 162,395 135,762 147,610

88,196 77,064 80,090 95,282 112,177 147,280 135,506 166,318 143,144 157,066

81,735 70,410 83,211 94,521 115,879 146,239 136,590 159,467 146,759 141,596

86,901 71,652 98,514 107,471 115,260 155,768 135,584 164,521 139,626 161,556

108,327 85,241 97,496 119,877 110,386 163,439 142,712 167,803 169,978 183,747

114,928 84,138 86,119 106,406 104,738 144,798 134,873 154,589 155,871 191,176

Source: Chicago Board of Trade (CBT)

Volume of Trading of Soybean Oil Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total1

442,026 424,387 354,602 473,290 443,562 367,303 424,232 327,570 474,824 522,939

401,580 363,695 355,220 381,921 556,982 555,097 451,677 458,445 497,396 540,645

366,007 464,413 375,237 503,998 497,887 520,622 483,212 416,718 468,878 473,694

391,175 355,884 443,408 445,848 673,091 463,236 438,526 443,454 496,990 618,483

442,419 457,682 376,716 389,741 624,518 350,850 451,162 403,110 526,918 520,043

378,177 418,182 423,089 439,626 648,098 489,184 533,376 541,194 588,386 740,549

397,483 377,355 512,563 442,846 629,642 516,205 422,418 751,299 701,455 761,460

357,896 330,507 449,014 375,122 491,155 552,198 456,195 612,349 648,853 594,687

415,407 303,893 425,850 417,970 558,032 523,376 436,841 447,390 529,442 636,469

476,936 317,201 414,018 413,722 383,844 395,243 378,419 550,995 549,942 733,405

516,724 431,711 396,233 489,541 450,073 497,090 507,044 579,460 705,373 656,464

477,358 366,426 454,327 511,369 540,379 433,491 386,801 502,341 628,026 618,502

5,063.2 4,611.3 4,980.3 5,285.0 6,498.3 5,663.9 5,369.9 6,034.3 6,816.5 7,417.3

I n thousands of contracts.

Source: Chicago Board of Trade (CBT)

247

Soybeans Soybean is the common name for the annual leguminous plant and its seed. The soybean is a member of the oilseed family and is not considered a grain. The seeds are contained in pods and are nearly spherical in shape. The seeds are usually light yellow in color. The seeds contain 20% oil and 40% protein. Soybeans were an ancient food crop in China, Japan, and Korea and were only introduced to the US in the early 1800s. Today, soybeans are the third largest crop produced in the US behind corn and wheat. Soybean production in the US is concentrated in the Midwest and the lower Mississippi Valley. Soybean crops in the US are planted in May or June and are harvested in autumn. Soybean plants usually reach maturity 100-150 days after planting depending on growing conditions. Soybeans are used to produce a wide variety of food products. The key value of soybeans lies in the relatively high protein content, which makes it an excellent source of protein without many of the negative factors of animal meat. Popular soy-based food products include whole soybeans (roasted for snacks or used in sauces, stews and soups), soy oil for cooking and baking, soy flour, protein concentrates, isolated soy protein (which contains up to 92% protein), soy milk and baby formula (as an alternative to dairy products), soy yogurt, soy cheese, soy nut butter, soy sprouts, tofu and tofu products (soybean curd), soy sauce (which is produced by a fermentation process), and meat alternatives (hamburgers, breakfast sausage, etc). The primary market for soybean futures is at the Chicago Board of Trade. The CBOT’s soybean contract calls for the delivery of 5,000 bushels of No. 2 yellow soybeans (at contract par), No. 1 yellow soybeans (at 6 cents per bushel above the contract price), or Nov. 3 yellow soybeans (at a 6 cents under the contract price). Soybean futures are also traded at exchanges in Brazil, Argentina, China, and Tokyo. Prices – Soybean prices rallied sharply during 2003 by about 36% and closed the year at a 6-year high near $8 per bushel. Specifically, soybean prices on the weekly nearest futures chart traded in the $5.50-6.00 area in JanuaryMarch and then rallied up to $6.50 in May. The market took a steep dive to $5.32 in August, but then entered into a sharp $3 rally that took the market to the 6-year high of $8.02 in late October. February 2004 soybeans closed the year at $7.92. A key bullish factor during the year was large purchases by China. The USDA in late 2003 raised its estimate of Chinese imports for the next year to a record of 808 million bushels. That is more soybeans than China imported from all sources last year and accounts for more than onehalf of Chinese consumption. Looking ahead, the Brazilian soybean crop had a good start with plantings near 90%. Supply – World soybean production during 2002/03 reached a new high of 196.66 million metric tons, up from 184.87 million in 2001/02 and the late 1990’s average of less than 160 million tons. World production was forecasted

248

to rise further to 199.46 million metric tons in 2003/04. The U.S. soybean crop year begins September 1. Soybeans now account for about 60% of the world’s total oilseed production with cottonseed the closest competitor at a distant 33 million tons. The US is the world’s largest producer of soybeans by far with its 78.669 million metric tons of production in the marketing year 2001/02 accounting for 43% of world production. The runners up are Brazil with 41.8 million metric tons (23% of world production), Argentina with 30.20 million metric tons (16%), and China with 15.45 million metric tons (8%). Of US soybean production of 2.452 billion bushels in 2003, the largest producing states were Illinois (15.6%), Iowa (14.6%), Minnesota (9.4%), Indiana (8.3%), Nebraska (7.2%), and Ohio (7.0%). U.S. farmers harvested a near record high 72.437 million acres of soybeans in 2002/3, down from 72.975 million in 2001/02. The average yield of 38.0 bushels per acre was slightly lower than the 39.6 bushels in 2001/02. US farmers produced 2.729 billion bushels of soybeans in 2002/3, down from 2.891 billion in 2001/02. The USDA is forecasting a further decline to 2.619 billion bushels in 2003/4. Ending stocks in the US were 4.61 million metric tons, down from 5.66 million in 2001/02 and are forecasted to fall further to 3.39 million on 2003/04. Demand – The distribution tables for US soybeans for 2002/3 (preliminary) show that of 2.793 billion bushels of soybean consumption, 65% (1.615 billion bushels) went for crushing into soy meal and soy oil, 42% went to exports (1.045 billion bushels), and 5% went to seed, feed and residual (133 million bushels). For 2003/04, the USDA is forecasting a decline in crushings to 1.485 billion bushels (59%), a decline in exports to 890 million bushels (36%), and a slight reduction in seed/feed/residuals to 129 million bushels (5%). Trade – World soybean trade in 2002/03 hit a record high 64 million metric tons (up from 54 million in 2001/2) and was forecast to rise to 67 million metric tons in 2003/4. Soybeans account for about 80% of total world oilseed trade. Of the total 63.17 million metric tons of soybeans exported worldwide in 2002/03, the world’s largest exporter was the US with 28.44 million metric tons (45% of world total). The US was followed fairly closely by Brazil with 21.46 million metric tons (34%) and Argentina was a distant third with 8.71 million (14%). While US exports were little changed in the past few years, Brazil’s exports increased sharply to 21.46 million metric tons in 2002/03 from 15.00 million in 2001/02 and are expected to increase further to 25.80 in 2003/04. Of the world’s total imports in 2002/03 of 64.10 million metric tons, the world’s largest importer was China with 21.42 million metric tons (33%), followed by the European Union with 17.05 million (27%), Latin America with 7.44 million (12%), and the Middle East and North Africa with 3.13 million (5%). China’s imports in 2002/3 of 21.42 million metric tons dramatically increased from 10.39 in 2001/02 and 13.25 million in 2000/01.

SOYBEANS World Production of Soybeans Crop Year4

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

In Thousands of Metric Tons

Argentina

Bolivia

Brazil

Canada

China

India

Indonesia

Mexico

Paraguay

Thailand

United States

ExUSSR

World Total

12,400 12,500 12,430 11,000 19,800 20,800 21,200 27,400 30,100 34,800

735 810 900 862 1,038 1,071 974 1,198 1,245 1,300

24,700 25,900 24,150 27,327 32,665 31,377 34,127 39,058 42,769 50,000

1,851 2,251 2,293 2,170 2,738 2,737 2,781 2,703 1,635 2,335

15,310 16,000 13,500 13,234 14,737 15,153 14,251 15,411 15,450 16,400

4,000 3,236 4,476 4,028 5,150 5,300 5,160 5,010 5,350 3,850

1,565 1,680 1,517 1,517 1,357 1,306 1,383 1,019 863 909

497 523 190 56 185 150 133 102 122 84

1,800 2,200 2,400 2,670 2,856 3,053 2,980 3,511 3,300 4,400

480 450 368 359 338 321 319 324 292 310

50,885 68,444 59,174 64,781 73,177 74,599 72,225 75,055 78,672 74,291

557 451 320 303 305 344 399 424 442 521

117,767 137,696 124,915 131,910 158,458 160,587 160,197 175,265 184,687 193,494

1

Preliminary. 2 Estimate. 3 Forecast. 4 Spilt year includes Northern Hemisphere crops harvested in the late months of the first year shown combined with Southern Hemisphere crops harvested in the early months of the following year. Sources: Oil World; Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Crushings and Ending Stocks of Soybeans Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33 1

8,718 9,280 9,927 11,046 12,886 17,492 17,074 17,300 20,859 24,600

Preliminary.

2

18,736 21,599 20,154 20,022 19,946 21,174 21,084 22,742 24,692 28,100

Estimate.

3

7,605 8,590 7,470 8,500 10,210 11,340 15,870 19,250 20,580 24,400 Forecast.

2,781 3,286 3,242 3,550 3,816 3,869 3,589 4,124 4,199 4,030

3,600 2,750 4,046 3,410 4,460 4,670 4,440 4,270 4,620 3,300

Year

1

3,700 3,760 3,700 3,772 3,682 3,673 3,769 3,763 3,973 4,150

2,640 2,330 2,436 3,020 3,430 3,580 3,810 4,185 4,360 4,560

34,716 38,242 37,273 39,350 43,792 43,534 42,794 44,606 46,099 44,250

102,071 112,509 110,733 116,473 127,004 134,282 137,908 147,546 160,250 168,970

651 710 825 475 6,800 7,510 8,640 8,380 11,150 9,890

5,691 9,112 4,993 3,588 5,440 9,480 7,900 6,740 5,670 4,760

9,045 12,876 8,506 7,802 25,070 27,290 28,020 30,920 32,190 29,350

In Thousands of Metric Tons

------------------------------------------------ Imports ------------------------------------------------ ------------------------------------------ Exports -----------------------------------------NetherWorld ArgenUnited World China Germany Ja p a n Mexico lands Taiwan Total tina Brazil Canada Paraguay States Total

125 155 795 2,350 2,944 3,858 10,106 13,246 10,386 18,000

Preliminary.

2

2,785 3,363 3,249 3,384 3,472 3,587 2,543 3,420 3,474 3,470

Estimate.

3

4,855 4,837 4,776 5,043 4,870 4,807 4,907 4,767 5,023 5,180 Forecast.

2,200 1,867 2,401 3,288 3,489 3,848 4,107 4,309 4,480 4,720

4,137 4,624 4,300 4,538 4,799 4,836 5,214 5,495 5,351 4,760

2,500 2,598 2,646 2,632 2,387 2,214 2,318 2,331 2,578 2,540

29,077 32,686 32,904 36,600 39,334 39,548 46,276 53,125 53,825 61,410

------------------------------------------------ Supply ----------------------------------------------------Crop Year -------------------- Stocks, Sept. 1 -------------------Mills, Beginning ProTotal Farms Elevators3 Sept. 1 Total duction Supply

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 Preliminary.

59.1 105.1 59.5 43.6 84.3 145.0 112.5 83.5 62.7 58.0 2

Estimate.

150.0 229.7 123.9 88.2 115.5 203.5 177.7 164.2 145.3 120.3 3

2,957 2,614 2,014 484 2,842 3,059 4,126 7,156 5,950 9,100

5,395 3,492 3,633 8,425 8,759 8,932 11,100 15,469 15,004 20,400

489 542 599 437 738 814 901 752 430 530

1,200 1,450 1,600 1,786 2,271 1,996 1,934 2,553 2,226 2,720

16,006 22,867 23,108 24,418 23,828 23,890 26,621 26,505 29,204 27,650

27,982 32,251 31,969 36,480 39,392 39,763 45,891 53,184 53,745 61,470

Sources: Oil World; Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Supply and Distribution of Soybeans in the United States

1

3,582 3,991 3,940 3,996 4,108 4,068 4,153 4,148 4,023 3,600

Sources: Oil World; Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Imports and Exports of Soybeans

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-11 2001-22 2002-33

In Thousands of Metric Tons

--------------------------------------------------------------------- Crushings --------------------------------------------------------------------------- ---------- Ending Stocks ---------ArgenNetherUnited World United World tina Brazil China Germany India Ja p a n Mexico lands States Total Brazil States Total

209.1 334.8 183.5 131.8 199.8 348.5 290.2 247.7 208.0 178.3

Also warehouses.

2,514.9 2,174.3 2,380.3 2,688.8 2,741.0 2,653.8 2,757.8 2,890.7 2,749.3 2,417.6

2,729.5 2,513.5 2,572.6 2,825.6 2,945.0 3,006.0 3,052.0 3,141.0 2,962.0 2,604.0

In Millions of Bushels ----------------------------------- Distribution ----------------------------------Total S eed, DistriF eed & bution Residual Crushings Exports

1,405.0 1,370.0 1,436.0 1,597.0 1,590.0 1,578.0 1,640.0 1,700.0 1,615.0 1,455.0

840.0 849.0 886.0 874.0 805.0 973.0 996.0 1,064.0 1,045.0 900.0

149.0 111.0 118.0 155.0 202.0 165.0 168.0 169.0 124.0 124.0

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

2,394.0 2,330.0 2,440.0 2,626.0 2,597.0 2,716.0 2,804.0 2,933.0 2,784.0 2,479.0

249

SOYBEANS Salient Statistics & Official Crop Production Reports of Soybeans in the U.S.

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Acreage HarPlanted vested ---- 1,000 Acres ----

61,670 62,575 64,205 70,005 72,025 73,730 74,266 74,075 73,923 73,404

Preliminary.

2

60,859 61,624 63,409 69,110 70,441 72,446 72,408 72,975 72,437 72,321

Forecast.

Yield P er Acre (Bu.)

Farm Price ($ / Bu.)

Farm Value (Million Dollars)

41.4 35.3 37.6 38.9 38.9 36.6 38.1 39.6 38.0 33.4

5.48 6.72 7.35 6.47 4.93 4.63 4.54 4.38 5.53 7.25

13,781 14,611 17,495 17,396 13,513 12,287 12,548 12,606 15,215 17,465

Yield of Oil

In Millions of Bushels

Crop Production Reports Yield of -------------------------------- In Thousands of Bushels ---------------------------------Meal Aug. 1 Sept. 1 Oct. 1 Nov. 1 Dec. 1 Final

11.08 11.15 10.91 11.25 11.30 11.34 11.24 11.14 11.39

47.33 47.69 47.36 47.41 47.25 47.76 48.06 44.27 43.90

2,282,367 2,245,901 2,299,675 2,744,451 2,824,744 2,869,519 2,988,669 2,867,474 2,628,387 2,862,039

2,316,077 2,284,551 2,269,505 2,745,891 2,908,604 2,778,392 2,899,571 2,833,511 2,655,819 2,642,644

2,458,087 2,190,661 2,346,220 2,721,843 2,768,919 2,696,272 2,822,821 2,907,042 2,653,798 2,468,390

2,522,527 2,182,991 2,402,610 2,736,115 2,762,609 2,672,972 2,777,036 2,922,914 2,689,691 2,451,759

-------------------------------

2,516,694 2,176,814 2,380,274 2,688,750 2,741,014 2,653,758 2,757,810 2,890,682 2,749,340 2,417,565

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Stocks of Soybeans in the United States

In Thousands of Bushels

------------------------ On Farms ------------------------ -------------------------- Off Farms1 -------------------------- ------------------------- Total Stocks -------------------------Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Mar. 1

425,700 635,300 512,000 514,000 637,000 815,000 730,000 780,000 687,000 635,500

D e c. 1

Mar. 1

Jun. 1

Sept. 1

D e c. 1

Mar. 1

Jun. 1

Sept. 1

D e c. 1

195,000 59,080 985,800 348,800 105,130 861,500 234,100 59,523 935,100 216,000 43,600 1,048,000 318,000 84,300 1,187,000 458,000 145,000 1,150,000 370,000 112,500 1,217,000 365,000 83,500 1,240,000 301,200 62,700 1,170,000 272,500 58,000 820,000

Jun. 1

Sept. 1

595,917 734,898 678,356 541,754 565,922 642,338 665,986 623,908 648,987 565,528

360,260 443,072 388,701 283,890 275,654 390,573 404,425 343,180 383,721 329,862

150,037 229,684 123,935 88,233 115,499 203,482 177,662 164,247 145,320 120,329

1,116,156 971,929 889,984 951,417 999,440 1,032,666 1,022,791 1,035,713 943,641 866,381

1,021,617 1,370,198 1,190,356 1,055,754 1,202,922 1,457,338 1,395,986 1,403,908 1,335,987 1,201,028

555,260 791,872 622,801 499,890 593,654 848,573 774,425 708,180 684,921 602,362

209,117 334,814 183,458 131,833 199,799 348,482 290,162 247,747 208,020 178,329

2,101,956 1,833,429 1,825,084 1,999,417 2,186,440 2,182,666 2,239,791 2,275,713 2,113,641 1,686,381

1 I ncludes stocks at mills, elevators, warehouses, terminals and processors. U.S. Department of Agriculture (NASS-USDA)

NA = Not avaliable.

Source: National Agricultural Statistics Service,

Commercial Stocks of Soybeans in the United States, on First of Month

In Millions of Bushels

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

62.6 80.7 57.2 32.6 35.3 39.1 34.1 34.5 29.6 25.9

65.3 72.5 57.2 28.8 31.2 31.5 28.3 28.8 27.0 13.2

54.4 67.8 59.2 22.9 22.9 29.0 30.0 25.2 22.2 13.9

46.3 63.5 54.7 26.0 18.4 28.7 23.9 22.5 21.0 12.8

40.7 51.8 56.2 29.2 14.5 25.0 23.8 16.3 18.4 9.7

34.7 50.8 44.9 24.7 14.2 18.9 20.6 15.0 15.4 9.4

29.9 44.3 36.9 14.3 10.2 16.1 17.0 12.9 14.4 11.7

24.3 35.7 32.7 12.8 9.7 17.3 12.3 13.4 10.2 7.6

19.8 33.6 12.0 6.3 8.7 14.1 8.6 11.9 4.6 4.5

11.5 23.0 5.3 4.5 18.6 19.5 15.5 9.6 8.4 7.0

68.1 60.8 55.2 50.2 43.5 46.9 38.2 34.7 26.9 33.0

83.4 61.7 50.6 49.4 40.6 42.3 37.9 38.2 28.4 36.7

Source: Livestock Division, U.S. Department of Agriculture (LD-USDA)

Stocks of Soybeans at Mills in the United States, on First of Month

In Millions of Bushels

Year

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31

42.0 47.9 52.8 40.7 28.3 32.8 41.7 52.1 69.0 46.4

28.0 46.8 54.2 23.4 37.0 66.5 70.8 56.8 41.3 36.3

108.6 114.1 125.6 101.1 126.4 175.0 162.9 179.4 152.8 114.5

114.9 124.3 129.1 117.4 124.3 154.3 144.7 166.8 137.1 113.5

120.9 108.0 120.0 106.0 110.3 131.0 144.2 137.8 121.4 106.0

126.1 114.7 123.3 112.6 98.7 109.6 140.3 143.3 129.6 109.2

118.5 114.3 121.9 122.2 93.4 102.5 137.8 127.0 128.2 103.5

119.7 112.6 110.6 104.9 72.0 93.7 129.6 120.6 112.9 91.5

98.7 94.1 104.2 89.2 56.9 80.5 98.7 94.9 104.2 91.6

97.8 81.2 92.5 78.2 41.0 56.9 78.7 86.1 88.2 76.1

90.0 69.1 70.4 64.0 42.5 55.5 78.4 79.3 67.9 64.9

63.5 55.1 57.4 43.6 44.1 48.1 52.1 69.0 65.4 55.6

1

Preliminary.

250

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

SOYBEANS Production of Soybeans for Beans in the United States, by State Year

Arkansa s

Illinois

Indiana

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

115.6 88.4 112.0 109.8 85.0 92.4 80.3 91.2 96.5 109.8

429.1 378.3 398.9 427.9 464.2 443.1 459.8 477.9 453.7 374.1

215.3 196.7 203.7 230.6 231.0 216.5 252.1 273.9 239.5 203.3

1

Preliminary.

In Millions of Bushels

Iowa

Kentucky

Michi gan

Minnesota

Missi ssi p p i

Missouri

Nebraska

Ohio

Tenne sse e

Total

442.9 407.4 415.8 478.4 496.8 478.4 464.6 480.5 499.2 337.6

42.4 41.4 44.8 42.1 36.0 24.4 45.2 48.8 41.6 53.3

57.0 59.6 46.7 71.6 73.7 77.6 73.1 63.9 78.5 53.7

224.0 234.9 224.2 255.5 285.6 289.8 293.2 266.4 308.9 229.4

57.0 37.8 54.3 64.2 48.0 44.7 34.8 37.0 43.8 55.8

173.3 132.8 149.9 174.6 170.0 147.1 175.0 186.2 170.0 143.3

134.4 101.0 135.5 143.8 165.0 180.6 173.9 223.0 176.3 179.6

173.6 153.1 157.2 191.0 193.2 162.0 186.5 187.8 146.3 162.6

38.3 34.6 38.5 40.8 35.1 22.8 28.8 35.4 34.7 45.9

2,516.7 2,176.8 2,380.3 2,688.8 2,741.0 2,653.8 2,757.8 2,890.7 2,749.3 2,417.6

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

United States Exports of Soybeans

In Millions of Bushels

Year

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Total

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31

30.1 42.3 70.7 41.6 42.6 27.9 69.4 51.4 31.7 30.9

73.6 99.9 77.4 95.8 174.3 135.6 122.8 141.4 158.9 136.7

72.4 78.5 65.5 152.4 150.4 106.3 104.5 123.0 158.0 152.8

73.9 104.2 89.6 121.6 121.2 90.4 109.1 106.6 133.2 114.7

71.0 89.3 106.2 106.5 91.1 84.3 104.0 103.3 157.2 157.0

67.8 91.4 82.9 105.7 94.8 66.8 103.1 126.5 132.0 154.0

53.6 83.1 93.5 68.2 56.9 72.4 109.7 135.2 63.8 91.5

34.8 80.7 52.9 58.8 36.7 52.5 50.6 52.8 46.0 66.4

27.5 45.2 42.1 43.0 27.3 37.8 45.6 39.8 45.6 38.6

26.7 35.5 51.8 32.4 24.7 36.4 46.0 39.5 43.2 30.8

17.1 41.2 46.0 23.2 27.9 36.7 50.3 33.1 56.0 39.0

40.7 46.7 52.6 36.5 26.6 57.5 58.4 43.4 38.0 32.7

589.1 838.1 851.2 885.9 874.3 804.7 973.4 995.9 1,063.7 1,045.0

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Spread Betw een Value of Products and Soybean Price in the United States Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3

In Cents Per Bushel

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

95 117 68 84 177 53 48 81 102 77

108 134 82 92 96 53 61 76 108 73

105 114 58 105 108 38 64 77 106 52

92 107 64 92 87 40 58 89 83 60

93 104 53 74 57 33 75 85 86 53

99 103 48 74 51 30 61 59 65 52

88 85 53 62 35 35 70 65 65 61

85 72 67 54 33 37 70 72 65 53

89 58 44 82 33 34 80 67 57 62

88 74 50 67 29 36 81 81 63 59

94 62 52 94 53 47 69 96 64 72

118 65 47 123 43 45 62 92 89 74

96 91 57 83 67 40 66 78 79 62

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Soybean Crushed (Factory Consumption) in the United States Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31

In Milions of Bushels

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Total

98.4 105.9 107.4 100.9 110.8 123.9 133.8 128.9 128.2 122.3

113.7 119.3 120.6 127.0 142.2 142.4 150.2 149.1 150.2 149.5

114.4 122.5 123.4 133.1 142.8 143.0 142.8 143.1 149.1 145.7

114.1 128.5 125.1 138.1 153.1 144.6 143.0 142.3 153.4 150.2

110.7 127.3 122.8 137.3 151.8 136.4 139.2 146.7 155.1 142.7

103.3 116.5 111.2 125.1 138.3 127.6 125.4 128.9 139.0 129.2

113.3 128.1 115.5 130.1 147.0 140.0 130.4 141.8 149.8 142.7

105.6 119.4 112.1 114.8 134.0 128.4 121.5 131.1 139.2 127.0

103.0 114.2 106.3 110.7 123.9 128.0 121.0 132.7 140.6 130.5

97.2 105.6 107.5 108.9 117.5 121.2 117.9 128.0 134.6 121.4

101.0 108.4 111.9 106.1 123.8 127.3 130.2 133.6 129.8 129.3

101.0 109.5 105.7 103.8 111.9 126.9 122.2 133.5 130.6 125.1

1,276 1,405 1,370 1,436 1,597 1,590 1,578 1,640 1,700 1,615

One Bushel = 60 Pounds.

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

251

SOYBEANS

Average Open Interest of Soybean Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

177,648 138,345 198,731 157,728 135,340 152,757 149,468 160,730 156,898 201,536

167,217 138,794 199,150 176,242 142,778 166,003 172,494 164,017 169,242 217,680

156,059 137,843 192,927 189,352 147,900 162,690 174,465 148,190 169,882 226,421

147,569 138,624 207,284 188,617 152,732 166,565 195,189 156,781 164,388 251,314

145,798 133,533 191,989 186,792 143,994 164,777 193,500 137,227 156,548 230,325

150,203 143,119 179,548 159,720 149,563 163,663 167,678 153,190 188,692 222,185

132,010 143,671 180,817 141,658 133,532 157,433 140,894 181,194 220,758 190,206

121,126 135,584 182,324 133,732 140,236 134,105 126,952 165,630 201,494 190,533

126,947 144,409 196,361 150,606 158,627 146,087 149,074 167,677 201,808 232,030

147,198 167,200 178,872 172,098 163,759 174,583 183,734 195,366 210,033 265,088

137,187 174,775 155,937 148,760 143,814 164,306 168,023 175,522 208,099 241,320

136,351 194,021 152,966 150,201 146,463 153,693 177,324 173,116 213,868 252,874

Source: Chicago Board of Trade (CBT)

Volume of Trading of Soybean Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

1,134.6 614.0 1,302.6 1,119.8 875.7 871.1 1,071.9 935.0 1,078.8 1,267.3

898.5 572.0 1,122.9 1,254.2 971.2 1,025.3 1,099.3 947.4 899.9 1,222.9

922.0 799.6 1,009.4 1,405.9 935.9 1,440.1 1,191.6 843.1 1,065.7 997.1

919.3 698.3 1,683.2 1,585.5 1,116.2 963.5 1,079.1 916.3 1,238.6 1,588.9

1,158.4 949.4 1,149.3 1,391.1 973.6 823.6 1,321.6 909.5 1,048.3 1,368.2

1,197.0 1,050.8 989.5 1,355.6 1,378.8 1,149.5 1,302.0 1,155.6 1,311.8 1,723.4

892.4 1,196.7 1,295.9 1,217.4 1,286.3 1,502.5 883.4 1,508.1 1,762.2 1,385.7

688.4 817.0 989.8 835.0 884.5 1,669.8 801.4 1,122.0 1,346.4 1,193.5

622.6 800.2 1,050.2 852.3 864.4 903.0 860.9 648.7 1,002.9 1,308.5

857.0 1,127.8 1,002.7 1,505.8 1,264.6 1,158.6 1,188.8 1,356.1 1,486.1 2,416.3

825.8 840.4 1,695.6 1,010.7 867.0 839.4 932.5 964.7 1,070.9 1,535.4

633.2 1,145.4 940.1 1,006.6 1,012.9 872.3 895.3 844.1 1,163.5 1,538.5

10,749 10,612 14,231 14,540 12,431 12,482 12,628 12,150 14,475 17,546

Source: Chicago Board of Trade

252

In Thousands of Contracts

Jan.

SOYBEANS

-----

Cents Per Bushel U.S. Farm Price (Jan. 1913 - Sept. 1947) No. 2 Yellow, Chicago (Oct. 1947 - Dec. 1956) No. 1 Yellow, Chicago (Jan. 1957 - Mar. 1982) No. 1 Yellow, Central Illinois (Apr. 1982 - date)

Average Cash Price of No. 1 Yellow Soybeans at Illinois Processor Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 1

Preliminary.

In Cents Per Bushel

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

643 557 632 820 703 533 485 484 469 579

606 531 656 711 684 536 470 468 430 541

664 566 686 704 727 572 464 483 441 575

694 567 717 708 699 558 460 506 438 566

701 558 737 737 679 532 473 477 437 570

686 560 730 769 680 490 500 457 440 590

692 574 726 833 662 475 513 451 464 580

670 578 791 854 649 480 529 441 471 611

689 580 808 878 649 468 542 457 492 640

685 577 778 837 640 462 510 474 519 635

603 623 795 769 642 425 474 517 575 601

576 602 816 741 556 465 463 510 567 589

659 573 739 780 664 500 490 477 479 590

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Soybeans in the United States

In Dollars Per Bushel

Year

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

5.47 5.98 7.79 6.72 5.25 4.57 4.59 4.53 5.39 6.06

5.30 6.15 6.94 6.50 5.18 4.48 4.45 4.09 5.20 6.61

5.36 6.40 6.90 6.85 5.40 4.45 4.55 4.16 5.46 7.05

5.41 6.76 6.91 6.71 5.37 4.43 4.78 4.20 5.46 7.17

5.47 6.77 7.13 6.69 5.32 4.62 4.68 4.22 5.51 7.34

5.40 7.01 7.38 6.57 4.80 4.79 4.46 4.22 5.55 7.99

5.51 7.00 7.97 6.40 4.61 4.91 4.39 4.38 5.60

5.55 7.43 8.23 6.26 4.63 5.00 4.22 4.47 5.82

5.56 7.69 8.40 6.26 4.51 5.19 4.33 4.64 6.07

5.68 7.41 8.16 6.16 4.44 4.93 4.46 4.88 6.09

5.90 7.62 7.52 6.14 4.20 4.53 4.79 5.35 5.83

5.83 7.82 7.25 5.43 4.39 4.45 4.85 5.53 5.68

5.48 6.72 7.35 6.47 4.93 4.63 4.54 4.38 5.64 7.04

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

253

Stock Index Futures, U.S. A stock index is simply a group of underlying stocks. Indexes can be either price-weighted or capitalizationweighted. In a price-weighted index, like the Dow Jones Industrials Average, the prices of each of the stocks are simply added up and divided by some divisor, meaning that stocks with higher prices have a higher weighting in the index value. In a capitalization-weighted index, such as the Standard and Poor’s 500 index, the weighting of each stock corresponds to the size of the company as determined by its capitalization (i.e., the total dollar value of its stock). Stock indexes cover a variety of different sectors. For example, the DJIA contains 30 blue-chip stocks. The S&P 500 index includes 500 of the largest blue-chip US companies. The NYSE index includes all the stocks that trade at the New York Stock Exchange. The Nasdaq 100 includes the largest 100 companies that trade on the Nasdaq Exchange. The most popular US stock index futures contract is the S&P 500 at the Chicago Mercantile Exchange (CME). Prices – The US stock market showed an impressive rally during 2003 and posted positive annual returns for the first time since 1999. The S&P 500 was up 26% on the year and posted a new 1-3/4 year high in December. The Dow Jones Industrials index rallied 25% during 2003 and also posted a new 1-3/4 year high in December. The Nasdaq Composite rallied 50% during the year and closed at a new 2-year high. The Russell 2000 index of small cap stocks rallied sharply by 46% in 2003, far out-pacing the gains in the large-cap stocks. The US stock market rally in 2003 was driven by a sharp improvement in corporate earnings and by the fact that the US economy finally appeared to be emerging from its 2000-

2003 slump. Stock market investors were also encouraged that the Federal Reserve at the end of 2003 was still talking about rates remaining low for a “considerable period,” meaning that the Fed did not plan to slam on the brakes in response to the late year economic rebound. In addition, the Bush Administration on May 28 signed a tax bill into law that reduced taxes on dividends, thus making dividendpaying stocks more favorable investments. Earnings for the S&P 500 companies were up +20% year-on-year in Q3-2003, much better than market expectations earlier in the year. That was the fifth consecutive quarter of year-on-year growth in S&P 500 earnings. Over 64% of companies in Q3 reported positive earnings surprises. Earnings growth was expected to remain very strong in Q4, near +19% year-on-year. Revenue growth in Q3 was up +1.4% year-on-year and +3.5% quarter-on-quarter. The boost in revenue was helpful, but the extent of the earnings surge shows that companies were squeezing out more profits through ongoing cost-cutting and productivity enhancements. Despite the sharp rally during 2003, the stock market at the end of 2003 did not appear to be over-priced. The price/earnings (P/E) ratio for the S&P 500 fell to 27 at the end of 2003 from 32 at the beginning of the year. The lower P/E ratio was due to the fact that earnings soared during the year, outstripping even the rally in prices. Still, the P/ E of 27 was higher than the post-war average of 16 and some market participants were therefore skeptical about whether stocks might be able to rally as much in 2004 as they did in 2003.

Dow Jones Industrial Average (30 Stocks) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

Mar.

Apr.

3,868.4 3,905.6 3,817.0 3,872.5 3,953.7 4,062.8 5,179.4 5,518.7 5,612.2 6,707.0 6,917.5 6,901.1 7,808.4 8,323.6 8,709.5 9,345.9 9,323.0 9,753.6 11,281.3 10,541.9 10,483.4 10,682.7 10,774.6 10,081.3 9,923.8 9,891.1 10,501.0 8,474.4 7,916.2 7,977.7

Jan.

F eb.

3,661.5 4,230.7 5,579.9 6,657.5 9,037.4 10,443.5 10,944.4 10,234.5 10,165.2 8,332.1

D e c.

Average

3,708.0 3,737.6 3,718.3 3,797.5 3,880.6 3,868.1 3,792.5 3,770.3 4,391.6 4,510.8 4,684.8 4,639.3 4,746.8 4,760.5 4,935.8 5,136.1 5,616.7 5,671.5 5,496.3 5,685.5 5,804.0 5,995.1 6,318.4 6,435.9 7,242.4 7,599.6 7,990.7 7,948.4 7,866.6 7,875.8 7,677.4 7,909.8 9,080.1 8,873.0 9,097.1 8,478.5 7,909.8 8,164.3 9,005.8 9,018.7 10,853.9 10,704.0 11,052.2 10,935.5 10,714.0 10,396.9 10,809.8 11,246.4 10,580.3 10,582.9 10,663.0 11,014.5 10,967.9 10,441.0 10,666.1 10,652.4 11,005.0 10,767.2 10,444.5 10,314.7 9,042.6 9,220.8 9,721.8 9,979.9 10,080.5 9,492.4 8,616.5 8,685.5 8,160.2 8,048.1 8,625.7 8,526.7 8,623.4 9,098.1 9,154.5 9,284.8 9,492.5 9,683.6 9,762.2 10,124.7

May

June

July

Aug.

Sept.

Oct.

Nov.

3,793.8 4,493.8 5,742.8 7,441.1 8,625.5 10,464.9 10,734.9 10,189.1 9,226.4 8,993.7

Source: New York Stock Exchange (NYSE)

Dow Jones Transportation Average (20 Stocks) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

254

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1,812.1 1,515.8 1,932.7 2,295.0 3,275.8 3,172.0 2,812.2 3,029.9 2,735.3 2,297.3

1,810.4 1,547.2 2,030.0 2,341.4 3,456.8 3,188.3 2,483.4 3,010.2 2,719.1 2,102.5

1,719.9 1,584.6 2,136.0 2,427.8 3,521.5 3,296.4 2,534.5 2,792.5 2,942.9 2,094.6

1,614.7 1,648.9 2,180.0 2,464.0 3,586.5 3,477.7 2,823.9 2,776.6 2,776.0 2,278.7

1,602.2 1,646.2 2,229.1 2,635.1 3,401.9 3,628.2 2,813.2 2,908.2 2,734.8 2,429.9

1,619.2 1,699.3 2,213.4 2,711.4 3,373.2 3,396.1 2,717.2 2,770.4 2,702.2 2,459.6

1,596.2 1,852.1 2,053.1 2,858.0 3,459.3 3,423.7 2,822.3 2,887.3 2,432.1 2,554.5

1,602.8 1,883.9 2,060.4 2,925.8 3,021.1 3,207.0 2,835.6 2,852.1 2,318.5 2,617.3

1,553.7 1,961.4 2,050.8 3,086.0 2,763.0 3,006.2 2,641.5 2,344.8 2,216.0 2,744.7

1,485.8 1,922.9 2,100.1 3,239.9 2,647.8 2,928.7 2,491.0 2,217.3 2,216.6 2,841.3

1,473.7 2,008.3 2,224.3 3,155.7 2,953.4 2,988.7 2,792.3 2,404.6 2,321.6 2,920.0

1,415.3 2,029.5 2,273.9 3,233.5 3,027.6 2,902.1 2,822.9 2,603.0 2,331.7 2,969.3

1,608.8 1,775.0 2,123.7 2,781.1 3,207.3 3,217.9 2,715.8 2,716.4 2,537.2 2,525.8

Source: New York Stock Exchange (NYSE)

STOCK INDEX FUTURES, U.S.

Dow Jones Industrial Average (30 Stocks) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

Mar.

Apr.

3,868.4 3,905.6 3,817.0 3,872.5 3,953.7 4,062.8 5,179.4 5,518.7 5,612.2 6,707.0 6,917.5 6,901.1 7,808.4 8,323.6 8,709.5 9,345.9 9,323.0 9,753.6 11,281.3 10,541.9 10,483.4 10,682.7 10,774.6 10,081.3 9,923.8 9,891.1 10,501.0 8,474.4 7,916.2 7,977.7

Jan.

F eb.

3,661.5 4,230.7 5,579.9 6,657.5 9,037.4 10,443.5 10,944.4 10,234.5 10,165.2 8,332.1

D e c.

Average

3,708.0 3,737.6 3,718.3 3,797.5 3,880.6 3,868.1 3,792.5 3,770.3 4,391.6 4,510.8 4,684.8 4,639.3 4,746.8 4,760.5 4,935.8 5,136.1 5,616.7 5,671.5 5,496.3 5,685.5 5,804.0 5,995.1 6,318.4 6,435.9 7,242.4 7,599.6 7,990.7 7,948.4 7,866.6 7,875.8 7,677.4 7,909.8 9,080.1 8,873.0 9,097.1 8,478.5 7,909.8 8,164.3 9,005.8 9,018.7 10,853.9 10,704.0 11,052.2 10,935.5 10,714.0 10,396.9 10,809.8 11,246.4 10,580.3 10,582.9 10,663.0 11,014.5 10,967.9 10,441.0 10,666.1 10,652.4 11,005.0 10,767.2 10,444.5 10,314.7 9,042.6 9,220.8 9,721.8 9,979.9 10,080.5 9,492.4 8,616.5 8,685.5 8,160.2 8,048.1 8,625.7 8,526.7 8,623.4 9,098.1 9,154.5 9,284.8 9,492.5 9,683.6 9,762.2 10,124.7

May

June

July

Aug.

Sept.

Oct.

Nov.

3,793.8 4,493.8 5,742.8 7,441.1 8,625.5 10,464.9 10,734.9 10,189.1 9,226.4 8,993.7

Source: New York Stock Exchange (NYSE)

Standard & Poor's 500 Composite Price Index Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

473.0 465.3 614.4 766.1 963.4 1,248.7 1,425.6 1,335.6 1,140.2 895.8

471.6 481.9 649.5 798.4 1,023.7 1,246.6 1,388.9 1,305.8 1,100.7 837.6

463.8 493.2 647.1 792.2 1,076.8 1,281.7 1,442.2 1,185.9 1,153.8 846.6

447.2 507.9 547.2 763.9 1,112.2 1,334.8 1,461.4 1,189.8 1,112.0 890.0

451.0 523.8 661.2 833.1 1,108.4 1,332.1 1,418.5 1,270.4 1,079.3 936.0

454.8 539.4 668.5 876.3 1,108.4 1,322.6 1,462.0 1,238.8 1,014.1 988.0

451.4 557.4 644.1 925.3 1,156.6 1,381.0 1,473.0 1,204.5 903.6 992.5

464.2 559.1 662.7 927.7 1,074.6 1,327.5 1,485.5 1,178.5 912.6 989.5

467.0 578.8 674.9 937.0 1,020.7 1,318.2 1,468.0 1,047.6 867.8 1,019.4

463.8 582.9 701.5 951.2 1,032.5 1,300.0 1,390.1 1,076.6 854.6 1,038.7

461.0 595.5 735.7 938.9 1,144.5 1,391.0 1,375.0 1,129.7 909.9 1,049.9

455.2 614.6 743.3 962.4 1,190.0 1,428.7 1,330.9 1,144.9 899.2 1,080.6

460.3 541.6 662.5 872.7 1,084.3 1,326.1 1,426.8 1,192.3 995.6 963.7

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

255

STOCK INDEX FUTURES, U.S. Composite Index of Leading Indicators Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

(1992 = 100)

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

101.2 101.5 100.5 102.8 104.8 104.5 110.7 108.9 111.0 111.0

101.0 101.1 101.4 103.3 105.2 104.7 110.3 109.0 111.0 110.6

101.5 100.7 101.6 103.4 105.4 104.8 110.5 108.7 111.0 110.4

101.4 100.6 101.8 103.3 105.4 104.7 110.5 108.6 110.8 110.5

101.4 100.4 102.1 103.6 105.4 105.0 110.5 109.3 111.4 111.6

101.4 100.5 102.3 103.6 105.2 105.3 110.4 109.5 111.2 112.0

101.2 100.7 102.3 103.9 105.6 105.6 109.8 109.8 111.0 112.8

101.5 101.0 102.4 104.0 105.6 105.5 109.9 109.7 110.9 113.2

101.4 101.1 102.5 104.3 105.6 105.4 109.9 109.1 110.4 113.3

101.5 100.9 102.5 104.4 105.7 105.5 109.5 109.2 110.4 113.9

101.6 100.9 102.5 104.7 106.2 105.7 109.2 110.1 111.0 114.1

101.6 101.2 102.6 104.6 106.4 110.3 108.8 110.5 111.1 114.3

101.4 100.9 102.0 103.8 105.5 105.6 110.0 109.4 110.9 112.3

Preliminary.

Source: The Conference Board (TCB) Copyrighted.

Consumer Confidence, The Conference Board Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

82.6 101.4 88.4 118.7 128.3 128.9 144.7 115.7 97.8 78.8

79.9 99.4 98.0 118.9 137.4 133.1 140.8 109.3 95.0 64.8

86.7 100.2 98.4 118.5 133.8 134.0 137.1 116.9 110.7 61.4

92.1 104.6 104.8 118.5 137.2 135.5 137.7 109.9 108.5 81.0

88.9 102.0 103.5 127.9 136.3 137.7 144.7 116.1 110.3 83.6

92.5 94.6 100.1 129.9 138.2 139.0 139.2 118.9 106.3 83.5

91.3 101.4 107.0 126.3 137.2 136.2 143.0 116.3 97.4 77.0

90.4 102.4 112.0 127.6 133.1 136.0 140.8 114.0 94.5 81.7

89.5 97.3 111.8 130.2 126.4 134.2 142.5 97.0 93.7 77.0

89.1 96.3 107.3 123.4 119.3 130.5 135.8 85.3 79.6 81.7

100.4 101.6 109.5 128.1 126.4 137.0 132.6 84.9 84.9 92.5

103.4 99.2 114.2 136.2 126.7 141.7 128.6 94.6 80.7 91.7

90.6 100.0 104.6 125.4 131.7 135.3 139.0 106.6 96.6 79.6

Preliminary.

Source: The Conference Board (TCB) Copyrighted.

Capacity Utiliz ation Rates (Total Industry) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

In Percent

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

82.6 84.9 82.4 82.4 83.0 80.4 81.9 79.3 75.0 75.2

82.8 84.5 83.2 82.6 82.6 80.4 82.0 78.9 75.1 75.4

83.2 84.3 82.6 82.5 82.6 80.5 82.2 78.5 75.3 74.8

83.3 83.9 83.1 82.6 82.6 80.4 82.5 77.8 75.6 74.2

83.7 83.7 83.2 82.4 82.6 80.5 82.7 77.5 75.7 74.1

83.9 83.6 83.5 82.3 81.5 80.5 82.7 76.7 76.4 74.0

84.1 83.4 83.2 82.6 81.1 80.7 82.3 76.7 76.4 74.5

83.9 83.8 83.2 82.8 82.0 80.7 82.6 76.4 76.1 74.6

83.8 83.9 83.1 82.7 81.3 80.6 82.4 75.5 76.0 74.9

84.1 83.3 83.0 83.4 81.5 81.0 81.2 75.0 75.4 75.1

84.4 83.2 82.5 83.4 80.9 81.5 80.7 75.1 75.4 75.8

84.9 83.0 82.5 83.4 80.6 81.7 80.2 74.6 74.9 75.8

83.9 83.4 82.4 82.9 81.8 81.4 81.8 77.4 75.6 74.9

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

Manufacturers New Orders, Durable Goods Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

(1985 = 100)

Jan.

In Billions of Constant Dollars

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

142.23 153.42 158.86 171.73 184.33 211.18 225.14 197.36 190.08 194.21

138.88 151.82 155.10 174.80 183.87 203.31 221.12 205.41 194.99 192.26

140.91 151.72 157.67 170.02 184.17 209.39 230.44 209.56 191.78 194.57

141.21 146.32 156.01 173.13 187.35 204.68 217.17 198.11 192.65 190.00

142.61 149.74 162.59 177.05 181.58 206.78 232.76 201.86 193.48 189.13

146.15 148.21 162.67 176.93 182.22 207.27 254.20 196.99 184.76 194.23

142.60 147.45 168.25 175.82 186.22 216.02 220.74 196.53 200.59 197.42

145.92 152.12 162.76 181.08 190.39 218.02 227.27 194.41 198.62 197.20

146.93 156.78 170.45 181.15 193.18 214.83 232.41 174.92 189.66 201.28

145.72 154.37 170.59 181.33 189.33 212.77 217.30 199.09 192.67 208.75

149.89 154.09 169.34 189.71 190.21 215.34 221.14 187.14 190.66 203.51

152.88 158.89 166.02 181.44 197.11 229.47 220.90 188.34 190.01

144.66 154.10 163.48 177.03 194.42 209.76 220.55 195.44 192.80 196.59

Preliminary.

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

Corporate Profits After Tax -- Quarterly

In Billions of Dollars

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Average

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

1992 1993 1994 1995 1996 1997

314.2 325.6 349.4 440.1 493.5 530.7

320.9 340.8 379.8 456.6 501.0 549.4

281.9 343.5 401.0 464.8 500.9 573.8

316.8 370.1 416.6 468.5 515.4 566.9

308.5 345.0 386.7 457.5 502.7 555.2

1998 1999 2000 2001 2002 2003 1

491.8 501.3 526.1 489.7 437.0 490.2

485.0 506.9 533.3 507.1 444.3 465.9

480.1 507.1 523.2 458.1 453.8 515.4

472.2 542.0 509.2 428.5 472.5

1

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

Preliminary.

256

Average

482.3 514.3 523.0 470.9 451.9 490.5

STOCK INDEX FUTURES, U.S. C hange in Manufacturing and Trade Inventories Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Bi lli ons of D ollars

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

15.3 127.4 66.2 107.0 27.8 10.4 69.5 1.7 -0.9 36.3

45.1 78.5 14.2 103.4 86.1 36.8 59.5 -40.5 -31.5 91.8

-8.1 100.6 -27.7 76.3 85.7 66.7 17.5 -73.0 -47.8 45.8

42.1 97.6 61.5 56.2 38.5 31.2 38.8 -36.6 -20.1 0.1

114.2 54.4 -8.4 25.2 5.5 44.4 82.8 -38.9 33.6 111.8

56.3 48.1 80.3 76.8 11.4 61.6 129.5 -105.1 27.8 5.0

60.8 42.9 123.6 20.9 -91.6 67.2 8.7 -68.2 78.5 -26.4

98.6 50.6 -272.1 19.1 47.9 42.5 87.4 -34.2 3.5 -54.8

60.3 51.4 90.6 91.5 67.6 58.0 10.1 -75.3 -106.8 57.0

71.8 61.8 143.4 55.2 36.3 50.4 77.7 -200.6 18.5 59.7

65.3 24.1 86.1 43.1 51.0 121.1 26.4 -139.2 33.0 49.5

64.5 -39.7 72.0 28.2

57.2 58.5 19.9 47.1 34.0 50.6 63.7 -65.2 23.8 34.2

Preliminary.

Source: B ureau of E conomic Analysis, U.S. Department of C ommerce (B E A)

Productivity: Index of Output per Hour, All Persons, Nonfarm Business -- Quarterly Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Average

1992 1993 1994 1995 1996 1997

99.3 100.1 100.2 100.5 101.5 103.4

99.9 99.7 100.5 100.9 101.7 104.0

99.7 100.1 101.0 101.3 102.0 105.6

101.1 100.8 101.2 101.1 102.4 105.9

100.0 100.2 100.7 100.7 103.7 107.2

1

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

Preliminary.

70.9 5.8 -78.7 -86.0

(1992 = 100)

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

1998 1999 2000 2001 2002 2003 1

106.6 112.2 116.2 117.8 121.8 126.7

106.6 112.4 118.0 118.4 122.3 128.9

107.3 113.6 116.7 117.2 123.8 131.8

111.5 115.8 117.8 119.3 126.0

110.2 113.2 117.2 118.2 123.5 129.1

Average

Civilian Unemployment Rate Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

6.7 5.6 5.7 5.4 4.6 4.3 4.0 4.2 5.6 5.7

6.6 5.5 5.5 5.3 4.6 4.4 4.1 4.2 5.5 5.8

6.5 5.4 5.5 5.2 4.7 4.2 4.1 4.3 5.7 5.8

6.4 5.7 5.5 4.9 4.3 4.3 3.9 4.5 6.0 6.0

6.0 5.6 5.5 4.8 4.4 4.2 4.1 4.4 5.8 6.1

6.1 5.6 5.3 5.0 4.5 4.3 4.0 4.5 5.9 6.4

6.1 5.7 5.4 4.9 4.5 4.3 4.0 4.5 5.9 6.2

6.1 5.7 5.2 4.9 4.5 4.2 4.1 4.9 5.7 6.1

5.9 5.7 5.2 4.9 4.5 4.2 3.9 4.9 5.6 6.1

5.8 5.5 5.2 4.8 4.5 4.1 3.9 5.4 5.7 6.0

5.6 5.6 5.3 4.6 4.4 4.1 4.0 5.7 6.0 5.9

5.4 5.6 5.3 4.7 4.3 4.1 4.0 5.8 6.0 5.7

6.1 5.6 5.4 5.0 4.5 4.2 4.0 4.8 5.8 6.0

1

Preliminary.

Source: Bureau of Economic Analysis, U.S. Department of Commerce (BEA)

257

STOCK INDEX FUTURES, U.S.

258

STOCK INDEX FUTURES, U.S. Volume of Trading of S&P 500 Stock Index Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

2,130 2,703 3,520 3,371 2,270 1,994 1,911 1,552 1,459 1,443

2,605 2,733 3,872 2,857 1,878 2,145 1,917 1,631 1,677 1,343

4,173 4,449 4,011 4,163 3,018 3,018 2,956 2,781 2,251 2,900

2,781 2,473 2,722 3,608 2,237 1,960 1,651 1,624 1,473 1,257

2,808 3,497 3,456 3,203 2,253 2,007 1,685 1,653 1,585 1,416

3,805 3,732 3,530 3,955 3,524 2,768 2,226 2,154 2,721 2,782

2,187 2,565 3,215 2,617 2,139 1,756 1,079 1,320 2,206 1,223

2,789 3,018 2,577 2,848 3,019 2,200 1,358 1,598 1,615 1,079

3,837 3,701 3,739 3,556 3,802 3,017 2,149 2,571 2,943 2,412

3,364 3,250 3,298 3,136 2,598 2,150 1,681 1,798 1,931 1,118

3,517 2,966 2,916 1,994 1,831 1,675 1,636 1,692 1,374 921

3,749 3,452 3,751 2,982 2,835 2,322 2,212 2,124 2,465 2,281

37,745 38,539 40,607 38,290 31,404 27,013 22,461 22,498 23,700 20,175

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of S&P 500 Stock Index Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

376,450 427,004 406,400 393,086 394,410 399,093 369,295 488,284 495,352 596,064

391,648 442,628 428,058 396,528 408,851 406,516 374,365 495,621 519,023 619,738

420,130 445,584 419,688 417,542 417,721 410,164 400,089 517,666 542,358 658,749

401,636 420,104 368,620 377,100 365,746 381,402 379,651 498,594 513,048 622,917

438,218 443,296 399,070 392,034 371,732 391,035 383,677 490,148 542,839 643,030

599,134 453,364 407,914 417,006 412,739 400,503 409,448 505,063 592,888 691,003

434,056 420,024 369,248 372,274 370,410 372,455 380,118 485,839 594,727 611,564

455,742 422,608 382,266 392,812 385,820 385,809 391,867 501,281 621,558 611,578

475,868 417,812 413,944 423,449 434,838 408,176 416,600 556,737 644,806 631,509

461,188 402,794 374,726 391,922 405,395 394,316 413,912 529,730 607,848 582,111

487,162 441,780 416,102 402,044 421,928 408,751 447,245 550,201 631,224 589,392

502,740 447,528 448,382 417,717 435,907 416,425 498,049 551,175 647,022 633,997

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Volume of Trading of S&P 400 Midcap Stock Index Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

15,619 12,097 25,322 13,698 13,622 18,752 16,918 21,527 22,322 18,827

12,126 13,983 21,781 14,968 12,896 20,938 15,298 19,884 22,814 18,392

40,906 36,531 46,382 33,860 42,781 43,395 45,942 58,286 43,819 44,454

13,598 8,674 13,417 16,993 15,623 27,664 23,892 18,061 23,019 15,841

19,158 11,263 19,190 15,463 17,023 16,574 19,863 19,258 22,484 15,194

46,608 31,526 33,720 33,287 38,656 42,709 42,514 50,331 51,775 40,597

11,323 10,076 20,338 12,162 15,345 17,790 12,140 22,029 30,607 15,153

23,590 15,921 17,112 14,923 19,967 18,188 12,515 23,805 23,075 12,082

41,851 42,147 37,149 39,164 44,913 39,723 42,658 50,706 52,375 43,112

14,572 18,905 12,510 18,063 23,591 18,341 21,701 23,741 25,593 15,253

21,223 20,464 12,459 10,776 16,713 19,974 25,334 19,591 21,262 13,109

43,438 46,907 36,798 43,242 48,870 42,073 59,265 51,641 48,105 50,797

304,012 268,494 296,178 266,599 310,000 326,121 338,040 378,860 387,250 302,811

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of S&P 400 Midcap Stock Index Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

13,183 13,787 11,088 11,215 12,688 16,191 12,810 15,246 13,691 13,793

11,999 13,355 10,474 11,825 13,319 16,309 13,119 15,461 14,109 13,498

12,748 11,130 11,375 11,258 14,363 14,573 13,965 17,235 14,954 14,530

10,801 9,275 8,700 9,721 14,130 12,154 12,495 16,953 14,340 13,120

10,829 9,329 9,254 10,807 13,352 12,705 13,355 15,623 16,402 13,353

11,902 9,929 10,403 10,877 13,940 14,422 14,040 16,606 16,611 13,986

11,970 11,198 9,763 11,292 12,964 14,263 12,957 16,334 15,121 13,123

12,369 11,708 10,867 12,346 13,589 13,496 13,162 16,132 16,213 13,029

15,002 13,107 11,168 13,505 14,893 13,182 15,026 16,718 17,006 13,726

13,702 11,702 9,641 11,595 16,645 12,699 16,143 15,109 14,695 14,014

13,896 12,341 10,596 11,874 16,768 13,933 16,510 15,307 15,394 15,465

14,494 12,863 11,107 13,329 17,569 14,902 17,479 15,337 16,432 17,446

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

259

STOCK INDEX FUTURES, U.S. Volume of Trading of NASDAQ 100 Index Futures in Chicago Year

1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

---49,939 65,660 111,120 349,813 422,811 380,076 360,307

---57,417 60,471 132,436 366,408 416,445 367,561 301,454

---82,118 96,694 169,368 575,942 650,488 436,495 487,716

13,106 81,402 68,574 181,776 503,064 498,026 378,294 301,395

25,201 72,027 70,704 172,840 460,085 487,334 443,579 330,640

34,672 90,522 111,933 226,193 432,062 542,305 529,496 519,597

41,166 63,757 106,791 164,822 296,944 369,731 454,630 350,514

25,872 62,095 107,509 176,429 310,549 369,845 334,242 251,058

66,157 61,425 97,099 242,149 445,334 474,133 466,898 488,363

67,868 72,595 100,156 209,007 490,863 516,469 367,750 322,898

54,275 48,929 71,441 218,672 400,412 391,042 315,925 259,960

73,107 79,626 107,995 317,418 464,454 434,690 428,341 447,119

401,424 821,852 1,065,027 2,322,230 5,095,930 5,573,319 4,903,287 4,421,021

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of NASDAQ 100 Index Futures in Chicago Year

1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

---6,610 6,918 10,669 27,242 46,582 49,992 71,219

---7,064 8,184 14,766 34,555 49,495 52,883 79,905

---8,073 9,314 19,786 37,795 59,916 52,617 87,252

1,364 7,627 7,652 21,286 36,512 56,328 51,157 71,636

3,336 7,587 8,833 23,028 37,578 49,337 65,219 77,717

6,182 8,270 11,128 26,938 35,314 54,394 73,151 88,914

5,977 6,346 9,991 21,646 29,974 50,854 60,625 80,002

4,737 8,255 9,507 22,765 32,922 55,234 67,760 83,940

7,957 8,444 9,233 21,808 34,754 61,665 84,317 91,685

10,999 6,235 8,187 19,946 35,559 51,977 72,229 75,191

10,465 8,831 9,176 23,429 44,022 61,196 77,451 85,651

8,897 8,210 10,838 27,876 48,757 67,769 76,660 86,480

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Volume of Trading of Dow Jones Industrials Index Futures in Chicago Year

1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

---260,628 284,341 322,046 275,814 409,009 452,579

---244,907 262,932 340,377 310,088 472,893 426,198

---293,651 341,744 472,179 594,326 538,804 559,372

---284,515 365,209 321,026 411,767 467,571 428,972

---259,720 364,417 284,005 377,620 456,210 410,967

---358,647 365,429 270,374 389,919 616,754 473,432

---298,254 279,381 215,234 320,335 811,518 368,277

---366,874 342,753 211,612 410,927 539,507 286,508

---381,320 386,373 277,620 573,479 639,154 367,845

300,771 344,732 378,531 319,636 520,885 699,005 218,394

203,534 224,397 266,183 267,051 375,793 427,235 157,726

249,191 246,441 257,805 268,010 329,898 407,665 266,032

753,496 3,564,086 3,895,098 3,569,170 4,890,851 6,485,325 4,416,302

Source: Chicago Board of Trade (CBT)

Average Open Interest of Dow Jones Industrials Index Futures in Chicago Year

1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

---14,853 16,794 13,713 21,830 23,862 27,032

---15,558 19,401 16,331 23,423 35,588 30,429

---14,421 19,807 20,443 28,340 37,582 34,371

---13,846 20,492 18,157 32,497 28,714 31,160

---14,464 25,890 19,253 33,767 32,810 34,936

---16,226 22,198 17,394 29,357 34,482 36,352

---15,707 21,556 14,367 26,792 32,412 36,773

---17,586 25,333 15,748 33,015 32,272 43,974

---18,569 23,977 14,840 35,451 34,665 41,747

5,249 17,416 24,847 15,087 31,997 31,923 34,066

11,542 17,795 22,342 19,113 30,598 34,045 37,835

15,952 17,597 17,299 20,966 27,018 31,892 39,727

Source: Chicago Board of Trade (CBT)

Volume of Trading of E-mini NASDAQ 100 Index Futures in Chicago Year

1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

---304 1,845 3,719 5,200

---382 1,942 3,649 4,620

---604 2,603 3,652 5,749

---628 2,873 4,227 5,132

---745 2,908 4,625 5,075

29 762 2,969 4,713 6,323

62 756 2,529 5,789 6,369

83 883 2,568 4,225 4,816

90 1,508 2,387 4,337 7,095

105 1,589 3,935 6,252 6,601

113 1,446 3,151 4,812 5,254

193 1,512 2,595 4,490 5,655

675 11,118 32,304 54,491 67,889

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of E-mini NASDAQ 100 Index Futures in Chicago Year

1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

---8,582 45,370 78,070 169,160

---9,250 65,061 94,150 227,905

---11,117 79,962 98,159 258,023

---15,625 78,094 100,849 196,739

---23,465 90,822 153,348 240,759

894 26,095 95,236 176,394 257,390

2,410 23,863 90,803 130,337 262,564

4,320 31,506 131,259 171,043 316,032

3,867 30,956 132,349 162,133 287,936

3,037 33,123 75,686 110,952 214,659

5,051 58,709 115,350 154,104 279,379

8,685 54,420 124,023 155,987 244,333

Source: Chicago Board of Trade (CBT)

260

In Contracts

Jan.

STOCK INDEX FUTURES, U.S. Volume of Trading of E-mini S&P 500 Index Futures in Chicago Year

1997 1998 1999 2000 2001 2002 2003

In Thousands of Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

---269 576 1,306 2,226 4,933 13,584

---221 636 1,388 2,231 5,337 12,631

---285 775 1,489 3,191 5,609 15,820

---298 602 1,462 3,067 7,165 13,520

---285 843 1,676 2,931 7,564 12,846

---371 868 1,550 2,905 9,772 15,040

---380 887 1,403 2,925 14,277 14,854

---569 1,065 1,439 3,478 11,200 10,860

190 430 1,144 1,683 3,601 11,765 15,354

282 519 1,237 2,109 5,255 17,175 14,558

194 431 1,072 1,843 4,021 11,054 11,002

220 492 964 1,673 3,289 9,892 11,108

886 4,551 10,669 19,021 39,119 115,742 161,177

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Average Open Interest of E-mini S&P 500 Index Futures in Chicago Year

1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

---8,986 16,215 17,180 55,514 86,278 265,170

---15,144 24,969 25,282 68,516 120,099 356,616

---17,540 20,971 29,645 79,934 139,965 490,037

---12,134 44,037 28,738 91,866 156,392 567,591

---16,341 20,790 38,257 110,788 225,593 741,790

---16,337 22,077 39,918 91,638 246,288 718,511

---8,600 16,960 33,696 97,093 291,654 399,502

---29,003 25,551 45,619 126,197 349,037 492,470

6,122 14,201 24,960 42,442 152,253 319,341 513,398

10,749 13,003 25,056 49,468 134,662 312,885 460,938

16,652 15,376 30,013 66,143 224,754 418,964 467,668

15,594 15,842 26,544 63,052 178,681 385,220 525,310

Source: I ndex and Option Market (I OM), division of the Chicago Mercantile Exchange (CME)

Volume of Trading of NYSE Composite Stock Index Futures in New York Year

1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

77,273 39,823 30,430 15,324 5,490 20,273 3,917

69,896 33,856 31,482 16,603 4,307 21,056 5,622

92,672 46,307 49,055 21,235 19,300 26,949 8,815

93,051 36,316 29,219 14,394 6,594 27,801 7,622

83,200 35,765 26,201 10,637 4,091 24,166 2,699

94,033 47,905 27,103 11,210 10,353 22,325 3,746

83,893 61,862 15,653 4,307 23,855 21,873 592

85,435 93,694 22,556 5,574 32,182 14,561 481

89,010 73,646 28,433 5,085 23,399 13,193 527

80,398 50,314 23,058 6,145 22,276 10,821 408

35,278 27,106 16,528 5,170 19,231 5,897 726

45,144 50,457 17,848 9,974 34,661 7,564 3,282

929,283 597,051 317,566 125,658 205,739 216,479 38,437

Source: New York Futures Exchange (NYFE)

Average Open Interest of NYSE Composite Stock Index Futures in New York Year

1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

3,126 4,803 8,299 3,653 2,387 4,341 1,255

3,232 5,216 8,661 3,715 2,648 4,215 1,496

3,194 5,252 5,457 3,747 3,510 5,147 1,781

2,801 4,754 4,050 3,285 3,694 4,141 1,494

3,154 4,888 4,169 2,533 2,929 3,605 1,194

2,744 5,990 3,849 2,597 2,408 3,178 933

2,316 10,154 3,419 2,452 5,271 5,157 593

2,823 12,249 3,882 2,793 5,802 5,772 665

2,780 10,574 3,730 2,463 5,451 3,649 640

2,384 8,554 3,958 1,690 6,448 1,567 533

3,005 7,977 4,447 1,943 6,884 2,209 604

4,354 9,806 4,260 2,406 6,617 2,065 752

Source: New York Futures Exchange (NYFE)

Volume of Trading of Mini-Value Line Stock Index Futures in Kansas City Year

1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

12,598 7,086 2,938 1,397 1,248 1,513 376

10,997 4,989 3,241 1,097 1,470 1,237 181

14,706 6,893 4,800 1,468 2,441 1,598 721

17,397 6,590 3,958 1,054 1,650 1,283 264

12,881 7,307 1,915 1,280 902 1,794 90

12,138 7,537 3,546 811 1,325 1,511 88

12,159 5,067 1,792 698 1,183 1,878 46

15,974 8,700 1,739 642 1,071 1,113 153

14,037 7,170 2,184 1,003 1,982 974 80

13,415 5,959 1,908 1,328 1,591 1,472 94

6,191 3,894 1,225 1,526 1,104 1,467 94

11,987 4,978 1,547 1,460 1,387 1,530 204

154,480 76,170 30,793 13,764 17,354 17,370 2,391

Source: Kansas City Board of Trade (KCBT)

Average Open Interest of Mini-Value Line Stock Index Futures in Kansas City Year

1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

1,459 1,739 746 273 233 299 376

1,354 1,442 738 284 333 348 328

1,338 1,433 699 246 377 367 169

1,448 1,498 725 135 233 372 89

1,326 1,549 900 155 275 359 45

1,686 1,390 967 148 285 229 33

2,160 697 515 155 283 142 26

2,523 839 503 216 268 161 33

1,980 667 381 179 222 100 48

1,477 696 314 182 125 127 36

1,213 914 300 181 249 300 40

1,675 780 283 185 368 417 46

Source: Kansas City Board of Trade (KCBT)

261

Stock Index Futures, Worldwide World stocks – World stock markets in 2003 put in a stellar performance, shaking off the bear market that plagued the markets since late 2000. The MSCI World Index, a benchmark for large companies based in 23 developed countries, rallied 33.2% in 2003, shaking off three consecutive years of declines (2002 –19.5%, 2001 –16.5%, 2000 –12.9%). That three-year decline in 2000-2002 was the longest string of losses in the MSCI World Index since the introduction of the index in 1970. Still, the rally in 2003 was only enough to retrace 50.5% of the 1,747-point plunge seen from the record high of 3772.659 posted in March 2000 to the 7-year low of 2025.606 posted in September 2002. In addition, the total return from the MSCI World Index at the end of 2003 was still negative at –0.47% on a 5-year horizon. The world stock markets took off in 2003 after the war with Iraq concluded and business and consumer confidence began to recover. The 3-year slump in the world economy and stock markets finally came to a close in response to heavy doses of monetary stimulus in all major regions of the world and with fiscal stimulus from the US. The stocks that benefited the most in 2003 were IT stocks, commoditybased stocks, cyclical stocks, and the emerging markets. However, sectors such as cyclical stocks and the emerging markets could stall in 2004 if interest rates rise as expected and cause concern about slower world economic growth and higher financial risks for the emerging markets. Small-Capitalization Stocks – World small-cap stocks did better than the large-cap stocks in 2003. The MSCI World Small-Cap Index, which tracks companies with market caps between $200 million and $1.5 billion, rallied +55.5% in 2003, performing much better than the MSCI World Index of +33.2%. Small-cap stocks typically perform better than large-caps in the early stages of a bull market because they typically get beaten down much more during bear markets when risks are higher and therefore have farther to rebound once economic conditions improve. World Industry Groups – World stocks were led higher in 2003 by a sharp advance in technology stocks, which finally snapped back after their bubble burst back in 2000. The technology industry in 2000-2003 was plagued by severe overcapacity and a sharp drop in profits. The MSCI World Information Technology Index in 2003 rallied +47.6%, outperforming the World Index increase of +33.2% by more than 14 percentage points. The IT sector has a long way to go, however, before overcoming the losses in the 2000-2003 period (2002 –39%, 2001 –30%, 2000 –42%). The second best performing industry group in 2003 was World Materials stocks, which benefited from the extremely sharp rally in basic commodity prices in the second half of 2003. The MSCI World Materials Index, which tracks the world’s largest companies producing cement, chemicals, lumber, and metals, rallied +41.9% in 2003, more than overcoming the losses seen in the previous three years (2002 – 6.3%, 2001 –6.8%, 2000 –14.9%). Emerging markets – Emerging stock markets did very well in 2003 as the prospects greatly improved for emerging economies with the sharp upward turn in world economic growth. In addition, many of the emerging market

262

economies are dependent on commodity exports and that was a sector that soared in the second half of 2003 along with commodity prices. The MSCI Emerging Markets Free Index, which tracks companies based in 26 emerging countries, rallied +51.6% in 2003, doing much better than the stock markets in developed countries. Emerging market stock funds saw a heavy influx of investor capital in 2003 totaling more than $11 billion in 2003, according to EmergingPorfolio.com Fund Research, which was the highest inflow since the firm started keeping records in 1996. North America – In North America, Mexico’s stock market smartly beat both the US and Canadian stock markets. The Mexican Bolsa index closed 2003 up +43.55%, beating the S&P 500 gain in the US of +26.38%, and the gain in the Toronto Exchange Composite index of +24.29%. Latin America – In Latin America, there were some very impressive gains. Venezuela did the best with a +177% gain, followed by Argentina at +104%, Brazil (+97%), Peru (+74%), Jamaica (+49%), Chile (+48%), and Columbia (+42%). The only losses in Latin America were in Ecuador and Costa Rico, which each saw 8% declines. Europe – Europe put in a weaker performance than other world stock markets mainly because of the lagging improvement in the European economy in 2003 and the strength in the euro, which depressed export growth. The Dow Jones European Stoxx 50 index in 2003 showed a gain of only +10.50%. Within Europe, the German Dax index did well at +37%, followed by Italy’s Ibex 35 index, which closed +28%. The French CAC40 index closed +16% and the UK FTSE 100 index lagged with a +14% gain. While the strong euro hurt the profit of export-oriented European companies, it greatly helped dollar-based investors in European stocks. The Dow Jones European Stoxx 50 index rallied +10.5% in euro terms in 2003, but rallied nearly three times as much by +32.6% in dollar terms. That meant that a dollar-based investor did better in European stocks than in US stocks, after taking into account the sharp rally in the euro against the dollar. Asia – Asia saw some sharp stock market gains like the rest of the world. The Japanese Nikkei index closed the year up +24.5% as it finally appeared that Japan was starting to come out of its decade-long slump. Japan was helped by banking system reforms, exports to China, and by the Bank of Japan’s stepped-up monetary stimulus efforts. The Morgan Stanley Capital International China index closed +77% in 2003. Thailand’s SET index led Asian stocks as a whole with a 117% rally, with India coming in second at +73%, and Pakistan third at +67%. The MSCI Far East index rallied 34% as the Far East countries were all boosted by the sharp growth in China. China’s imports from its nearby trading partners lifted all boats in the Far East. In addition, global investors poured capital into the Far East in a play on China. US mutual funds bought more than $12 billion of Asian stocks in 2003, a dramatically better performance than the net selling of $2.4 billion in 2002, according to figures from EmergingPorfolio.com. Asian stocks are expected to do well again in 2004 due to the ongoing dramatic growth in China and a recovery in Japan.

STOCK INDEX FUTURES, WORLDWIDE Comparison of International Stock Price Indexes Year

Jan.

United States 1997 236.3 1998 294.7 1999 384.6 2000 419.2 2001 410.6 2002 339.7 257.2 2003 1 Canada 1997 178.6 1998 195.8 1999 196.7 2000 247.9 2001 272.5 2002 223.6 192.0 2003 1 France 1997 138.5 1998 174.5 1999 233.9 2000 311.4 2001 330.0 2002 245.5 161.6 2003 1 Germany2 1997 147.0 1998 204.9 1999 305.1 2000 404.2 2001 401.8 2002 302.0 162.5 2003 1 I taly 1997 119.8 1998 184.0 1999 231.7 2000 276.8 2001 303.3 2002 223.6 162.6 2003 1 Japan 1997 63.6 1998 57.7 1999 50.3 2000 67.8 2001 48.0 2002 34.7 28.9 2003 1 United Kingdom 1997 192.8 1998 234.3 1999 249.0 2000 274.9 2001 279.9 2002 230.6 159.1 2003 1

(1990 = 100)

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

237.7 315.4 372.2 410.7 372.7 332.7 252.8

227.6 331.2 386.7 450.5 348.8 344.9 255.0

240.9 334.2 401.3 436.6 375.6 323.7 275.6

255.0 327.9 391.3 427.0 377.5 320.8 289.6

266.1 340.8 412.6 437.2 368.0 297.5 292.9

286.8 336.9 399.4 430.1 364.1 274.0 297.7

270.4 287.7 396.9 456.2 340.7 275.4 303.0

284.7 305.7 385.6 431.8 312.9 245.1 299.4

274.9 330.2 409.7 429.7 318.6 266.2 315.8

287.2 349.8 417.5 395.3 342.5 281.4 318.1

291.7 369.5 441.6 396.9 345.1 264.5 334.2

263.3 327.0 400.0 426.8 356.4 297.2 290.9

180.0 207.3 184.5 266.8 236.1 223.2 191.6

171.0 220.9 192.9 276.6 222.4 229.5 185.4

174.7 224.0 205.0 273.2 232.3 224.0 192.5

186.6 221.9 200.0 270.4 238.6 223.8 200.5

188.2 215.3 204.9 298.0 226.1 208.9 204.1

201.0 202.6 207.0 304.2 224.8 193.1 212.2

193.3 161.7 203.8 328.8 216.3 193.3 219.5

205.8 164.0 203.4 303.3 199.9 180.7 216.9

200.0 181.5 212.1 281.8 201.3 182.7 227.2

190.4 185.4 219.9 257.8 217.1 192.1 229.7

195.8 189.6 245.9 261.1 224.7 193.3 240.3

188.8 197.5 206.3 280.8 226.0 205.7 209.3

143.5 188.3 225.2 340.6 295.3 245.6 151.5

146.2 213.3 231.0 345.9 285.0 257.9 144.1

145.2 213.5 242.4 353.2 310.3 245.5 162.5

142.2 222.4 239.4 353.6 300.1 235.2 164.6

157.3 231.3 249.6 354.7 287.5 214.5 169.7

169.2 229.8 241.1 360.0 279.8 187.9 176.6

152.4 200.9 252.5 364.5 258.0 185.2 182.2

165.5 176.0 252.6 344.8 224.4 152.8 172.5

150.7 193.8 269.0 352.0 238.9 173.3 185.6

157.3 211.5 293.9 326.2 246.3 183.0 188.4

165.0 216.9 327.8 326.1 254.5 168.6 195.8

152.8 206.0 254.9 344.4 275.8 207.9 171.3

157.8 217.5 290.4 452.0 367.1 297.9 150.6

167.8 234.9 288.8 449.3 344.7 319.1 143.3

167.1 302.0 318.9 438.4 370.4 298.1 173.9

172.2 329.3 299.8 420.4 362.0 284.9 176.4

183.8 348.7 318.0 407.9 358.2 259.1 190.4

209.6 347.3 301.6 425.1 346.5 218.8 206.2

184.1 285.8 311.6 426.7 306.8 219.5 206.0

195.3 264.6 304.5 401.9 254.7 163.7 192.6

177.8 276.2 326.7 418.5 269.6 186.4 216.2

186.0 297.0 348.6 376.8 295.0 196.3 221.5

196.3 295.8 411.4 380.4 305.1 171.0 234.4

221.4 299.1 318.8 416.8 331.8 243.1 189.5

115.4 194.3 234.1 330.7 276.4 220.8 166.3

115.3 239.3 245.4 308.7 267.4 233.9 157.2

119.5 220.9 245.9 303.1 278.1 227.6 173.3

117.9 236.1 237.1 307.1 266.1 214.5 180.5

130.0 222.1 237.5 309.0 254.1 196.7 181.1

144.5 240.5 221.5 308.5 249.1 182.7 181.6

136.6 208.1 230.4 320.5 237.9 183.2 184.4

155.0 184.6 231.0 307.2 197.7 157.1 181.5

144.6 194.1 226.5 318.8 208.7 170.0 189.0

149.4 223.7 241.3 316.3 220.9 185.9 196.3

164.0 231.5 282.8 298.3 223.1 170.0 195.6

134.3 214.9 238.8 308.8 248.6 197.2 179.1

64.4 58.4 49.8 69.2 44.7 36.7 29.0

62.5 57.3 54.9 70.6 45.1 38.2 27.7

66.4 54.3 57.9 62.4 48.3 39.9 27.2

69.6 54.4 55.9 56.7 46.0 40.8 29.2

71.5 54.9 60.8 60.4 45.0 36.8 31.5

70.5 56.8 62.0 54.6 41.1 34.3 33.2

63.2 48.9 60.5 58.5 37.2 33.4 35.9

62.1 46.5 61.1 54.6 33.9 32.6 35.5

57.1 47.1 62.2 50.4 36.0 30.0 35.5

57.7 51.6 64.4 50.8 37.1 32.0 35.0

52.9 48.0 65.7 47.8 36.6 29.8 37.0

63.5 53.0 58.8 58.7 41.6 34.9 32.1

194.7 247.9 261.0 276.2 264.9 227.9 162.5

194.0 257.0 267.4 287.3 250.5 236.2 160.3

197.3 257.6 279.8 277.3 265.0 232.1 174.7

203.3 258.9 266.9 278.7 259.7 228.7 181.9

201.8 253.4 272.2 279.9 252.0 209.1 182.1

212.0 252.6 270.2 282.9 246.1 189.4 189.0

210.3 225.5 271.5 296.3 239.3 189.0 190.7

226.8 216.6 261.1 279.8 216.2 166.4 187.3

211.9 231.4 268.3 284.4 222.9 179.1 196.3

211.4 242.7 285.2 272.1 232.2 185.0 198.3

222.7 247.0 299.5 275.6 233.1 174.9 203.9

206.6 243.7 271.0 280.5 246.8 204.0 182.2

1 Preliminary. 2 Federal Republic of Germany. U.S. Department of Commerce (ESA)

Not Seasonally Adjusted.

Source: Economic and Statistics Administration,

263

STOCK INDEX FUTURES, WORLDWIDE

264

STOCK INDEX FUTURES, WORLDWIDE

265

Sugar The white crystalline substance called sugar is the organic chemical compound sucrose, one of several related compounds all known as sugars. These include glucose, dextrose, fructose, and lactose. All sugars are members of the larger group of compounds called carbohydrates and are characterized by a sweet taste. Sucrose is termed a double sugar because it is composed of one molecule of glucose and one molecule of fructose. While sucrose is common in many plants, it occurs in the highest concentration in sugarcane (Saccharum officinarum) and sugar beets (Beta vulgaris). Sugarcane is about 7 to 18 percent sugar by weight while sugar beets are 8 to 22 percent. Sugarcane is a member of the grass family and a perennial. It is thought to have originated in New Guinea several thousand years ago, migrating toward Asia and India to the west and into the islands of Polynesia to the east. Sugarcane is cultivated in tropical and subtropical regions around the world roughly between the Tropics of Cancer and Capricorn. It grows best in hot, wet climates where there is heavy rainfall followed by a dry season. On a commercial basis sugarcane is not grown from seeds but from cuttings or pieces of the stalk. Sugar beets, which are produced in temperate or colder climates, are annuals grown from seeds. Sugar beets do best with moderate temperatures and evenly distributed rainfall. The beets are planted in the spring and harvested in the fall. The sugar is contained in the root of the beet but the sugars from beets and cane are identical. Sugar beet production takes place mostly in Europe, the US, China, and Japan. Sugar beets are refined to yield white sugar and very little raw sugar is produced. Sugar beets and sugar cane are produced in over 100 countries around the world. Of all the sugar produced, about 25 percent is processed from sugar beets and the remainder from sugar cane. The trend has been that production of sugar from cane is increasing relative to that produced from beets. The significance of this in that sugarcane is a perennial plant while the sugar beet is an annual, and due to the longer production cycle, sugarcane production and the sugar processed from that cane, may not be quite as responsive to changes in price. Brazil is currently the largest producer and exporter of sugar in the world. U.S. production is about evenly divided between beet sugar and cane sugar production. The largest sugar beet producing states are Minnesota, Idaho, North Dakota, and Michigan and the largest cane producers are Florida, Louisiana, Texas, and Hawaii. Sugar futures are traded on the Bolsa de Mercadorias & Futuros (BM&F), Kansai Commodities Exchange (KANEX), the Tokyo Grain Exchange (TGE), the London International Financial Futures and Options Exchange (LIFFE), and the CSCE Division of the New York Board of Trade (NYBOT). Options are traded on the BM&F, the TGE, the LIFFE and the NYBOT. Raw sugar is traded on the CSCE Division of the New York Board of Trade while white sugar is traded on the London International Financial Futures Exchange (LIFFE). The most actively traded contract is the No. 11 (World) sugar

266

contract at the CSCE. The No. 11 contract calls for the delivery of 112,000 pounds (50 long tons) of raw cane centrifugal sugar from any of 28 foreign countries of origin and the United States. The CSCE also trades the No. 14 sugar contract (Domestic), which calls for the delivery of raw centrifugal cane sugar in the United States. Futures on white sugar are traded on the London International Financial Futures Exchange and call for the delivery of 50 metric tons of white beet sugar, cane crystal sugar, or refined sugar of any origin from the crop current at the time of delivery. Prices – World sugar prices on the CSCE No.11 sugar nearest-futures chart showed a downtrend during most of 2003 and remained in a generally depressed state not much above the 20-year lows. Specifically, world sugar prices in early 2003 rallied to a 2-1/2 year high of 9 cents/pound, but then entered a bear market that lasted the rest of the year. World sugar closed the year near 5.5 cents/pound, only onehalf cent above the 3-1/2 year low near 5 cents posted in mid-2002 and only about 1 cent above the 20-year low of 4.4 cents posted in May 1999. The main bearish factor during 2003 was another very high production year in 2003/4 that was only slightly lower than the record posted in 2002/3. In addition, Brazilian exports hit a record high and Chinese imports dropped due to continued high domestic production. Supply – World production of centrifugal (raw) sugar in 2003/4 was forecast by the USDA to drop to 144.635 million metric tons, down 1.8% from the record production level of 147.336 seen in 2002/3. Brazil was the world’s largest producer of centrifugal sugar with 16% of world production in 2002/3, followed by India (14%), China (6%), and the US (5%). US centrifugal sugar production in 2003/4 was forecast at 8.070 million metric tons, up 6.2% from 7.6 million in 2002/3. Brazil’s centrifugal sugar production in 2003/4 was forecast at a record 24.780 million metric tons, up 4.1% from 23.81 million in 2002/3. India’s 2003/4 production was forecast at 19.88 million metric tons, down 10.0% from 22.10 million in 2002/3. Chinese production in 2003/4 was forecast to remain very high at 10.07 million, although down 5.3% from 10.637 million in 2002/3. World ending stocks of centrifugal sugar were forecast to drop to 34.499 million metric tons, down 6.9% from 37.045 million in 2002/3. Demand – World consumption of centrifugal (raw) sugar was forecast by the USDA to rise slightly by 1.1% to 139.311 million metric tons in 2003/4 from 137.725 million in 2002/3. US consumption was forecast to drop to 8.778 million metric tons, down 4% from 9.135 million in 2002/3. Exports – World exports of centrifugal sugar were forecast to fall slightly to 45.107 million metric tons from 45.724 million in 2002/3, although that is still a high level of exports on an historical basis. Brazil is the world’s largest exporter of sugar with about 30% of world exports. Brazilian exports in 2003/4 were forecast to rise to a new record 14.250 million metric tons, up 1.8% from 14.000 million in 2002/3. The import of sugar into the US is restricted by tariff-rate quotas and US sugar imports in 2003/4 were forecast at 1.437 million metric tons, down 7.5% from 1.554 million in 2002/3.

SUGAR World Production, Supply & Stocks/Consumption Ratio of Sugar Marketing Year

Beginning Stocks

Production

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

19,288 22,756 26,569 26,276 26,901 32,372 36,133 37,424 33,989 37,045

115,920 122,212 122,496 124,997 130,880 136,531 130,495 134,888 147,336 144,635

1

Preliminary.

2

Forecast.

Imports

Total Supply

31,317 32,457 32,803 32,494 36,032 36,073 38,646 37,695 39,169 37,237

167,553 179,250 184,990 186,659 193,813 204,976 205,274 210,007 220,494 218,917

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Preliminary.

Australia

Brazil

China

Cuba

5,196 5,049 5,659 5,567 4,997 5,448 4,162 4,662 5,371 5,114

12,500 13,700 14,650 15,700 18,300 20,100 17,100 20,400 23,810 24,780

6,299 6,686 7,789 8,631 8,969 7,525 6,849 8,305 10,637 10,070

3,300 4,400 4,200 3,200 3,760 4,060 3,500 3,700 2,000 2,000

2

Forecast.

Exports

Domestic Consumption

Ending Stocks

Stocks/ Consumption Percentage

30,289 34,282 35,925 35,386 37,357 41,448 37,686 41,228 45,724 45,107

113,716 116,574 119,667 122,918 124,193 127,395 130,164 134,790 137,725 139,311

22,520 26,569 26,276 26,901 32,263 36,133 37,424 33,989 37,045 34,499

19.8 22.8 22.0 21.9 26.0 28.4 28.8 25.2 26.9 24.8

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Production of Sugar (Centrifugal Sugar-Raw Value) Year

In 1000's of Metric Tons (Raw Value)

NA = Not available.

In Thousands of Metric Tons

France

Germany

India

Indonesia

Mexico

Thailand

United States

Ukraine

World Total

4,363 4,564 4,594 NA NA NA NA NA NA NA

3,991 4,159 4,558 NA NA NA NA NA NA NA

16,410 18,225 14,616 14,592 17,436 20,219 20,480 20,475 22,100 19,880

2,450 2,090 2,094 2,190 1,492 1,690 1,800 1,725 1,755 1,900

4,556 4,660 4,835 5,490 4,982 4,979 5,220 5,169 5,229 5,464

5,448 6,223 6,013 4,245 5,386 5,721 5,107 6,397 7,303 7,690

7,191 6,686 6,536 7,276 7,597 8,203 7,956 7,174 7,600 8,070

3,600 3,800 2,935 2,032 2,000 1,720 1,687 1,790 1,550 1,400

115,920 122,212 122,496 124,997 130,880 136,531 130,495 134,888 147,336 144,635

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Stocks of Centrifugal Sugar at Beginning of Marketing Year In Thousands of Metric Tons (Raw Value) Year

Australia

Brazil

China

Cuba

France

Germany

India

Iran

Mexico

Philippines

United Kingdom

United States

World Total

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

125 152 101 228 253 183 518 634 507 463

455 710 510 860 560 1,010 710 860 210 270

1,168 3,215 2,684 2,784 2,515 2,548 1,851 1,004 869 2,070

170 647 567 484 568 488 438 238 128 78

784 437 684 NA NA NA NA NA NA NA

511 271 331 NA NA NA NA NA NA NA

2,776 5,990 8,455 6,979 5,850 7,374 10,710 11,985 11,670 11,090

400 270 300 330 350 350 398 368 NA NA

575 601 714 634 991 941 1,063 1,548 1,172 1,193

412 100 511 345 183 454 330 322 239 277

450 453 457 NA NA NA NA NA NA NA

1,213 1,126 1,354 1,350 1,523 1,487 2,013 1,978 1,294 1,184

19,288 22,756 26,569 26,276 26,901 32,372 36,133 37,424 33,989 37,045

1

Preliminary.

2

Forecast.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

NA = Not available..

Centrifugal Sugar (Raw Value) Imported into Selected Countries Year

Algeria

Canada

China

France

Iran

Rep. of Korea

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

990 1,000 920 925 925 930 955 950 NA NA

1,020 1,174 1,057 1,061 1,188 1,207 1,211 1,239 1,190 1,350

4,110 1,775 1,014 420 543 687 1,083 1,375 600 585

361 523 553 NA NA NA NA NA NA NA

800 940 1,200 1,110 1,075 1,315 1,200 1,200 NA NA

1,345 1,411 1,497 1,424 1,403 1,514 1,520 1,545 NA NA

1

Preliminary.

2

Forecast.

NA = Not available.

In Thousands of Metric Tons

Malaysia

Morocco

Nigeria

Russia

United Kingdom

United States

World Total

1,030 1,120 1,166 1,065 1,188 1,158 1,257 1,400 NA NA

455 477 513 586 470 590 497 455 NA NA

490 542 555 660 700 825 714 760 NA NA

2,700 3,200 3,600 4,210 5,400 5,170 5,650 4,850 3,900 3,800

1,261 1,361 1,260 NA NA NA NA NA NA NA

1,664 2,536 2,517 1,962 1,655 1,484 1,443 1,393 1,554 1,437

31,317 32,457 32,803 32,494 36,032 36,073 38,646 37,695 39,169 37,237

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

267

SUGAR

Cents Per Pound Spot Raw (cif) New York (Jan. 1901 - Jan. 1961) No. 8 World Raw, New York (Feb. 1961 - Dec. 1970) No. 11 World Raw, New York (Jan. 1971 - date) Refined Beet, Midwest (Jan. 1975 - date)

-----

---

Centrifugal Sugar (Raw Value) Exported From Selected Countries Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Preliminary.

Australia

Brazil

4,321 4,242 4,564 4,554 4,076 4,123 3,056 3,594 4,220 3,893

4,300 5,800 5,800 7,200 8,750 11,300 7,700 11,600 14,000 14,250

2

Estimate.

3

Dominican Cuba Republic

2,600 3,830 3,598 2,426 3,120 3,400 2,980 3,100 1,350 1,250 Forecast.

295 325 364 270 191 185 185 185 185 185

France

Mauritius

Mexico

South Africa

Swaziland

Thailand

United Kingdom

Total

3,004 2,735 2,730 NA NA NA NA NA NA NA

1,417 1,180 1,430 NA NA NA NA NA NA NA

508 560 602 613 626 346 554 635 NA NA

235 587 750 1,224 524 318 155 413 46 66

369 399 1,056 1,160 1,355 1,410 1,580 1,235 1,565 1,300

296 307 293 272 271 304 251 267 NA NA

3,809 4,537 4,194 2,839 3,352 4,147 3,394 4,157 5,100 5,800

263 327 388 NA NA NA NA NA NA NA

30,289 34,282 35,925 35,386 37,357 41,448 37,686 41,228 45,724 45,107

NA = Not available.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Average Wholesale Price of Refined Beet Sugar1--Midw est Market Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

25.75 25.50 28.69 29.00 25.50 27.20 23.38 23.13 26.75 27.80

25.50 25.50 29.00 29.00 25.50 27.13 22.25 22.75 26.00 26.50

25.50 25.50 29.50 28.13 25.50 27.00 21.50 22.00 25.95 27.13

24.50 25.50 29.50 28.00 25.50 27.00 21.00 20.50 24.63 27.63

24.75 25.13 29.70 28.00 26.00 27.00 19.75 21.38 24.50 28.00

25.25 25.10 29.50 27.50 26.00 27.00 19.00 21.90 24.00 28.00

25.00 24.75 29.50 27.00 26.00 27.00 19.00 22.50 24.00 27.63

25.00 24.75 29.00 26.65 26.00 27.00 19.00 22.50 25.40 25.50

24.70 25.50 29.00 26.38 26.50 27.00 20.70 24.63 26.25 24.00

25.00 25.75 29.00 24.90 26.90 26.00 21.25 25.75 26.75 24.70

25.38 28.13 29.00 25.00 27.00 26.00 21.00 26.20 27.40 23.94

26.50 28.85 29.00 25.50 27.00 25.20 21.80 26.50 27.88 23.63

25.15 25.83 29.20 27.09 26.12 26.71 20.80 23.31 25.79 26.21

These are f.o.b. basis prices in bulk, not delivered prices.

268

In Thousands of Metric Tons

Germany

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS)

SUGAR Average Price of World Raw Sugar1 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

10.29 14.87 12.57 11.13 11.71 8.40 5.64 10.63 7.96 8.56

10.80 14.43 12.97 11.06 11.06 7.05 5.51 10.26 6.81 9.14

11.71 14.58 13.07 11.17 10.66 6.11 5.54 9.64 7.27 8.50

11.10 13.63 12.43 11.50 10.27 5.44 6.48 9.27 7.12 7.92

11.79 13.49 11.94 11.54 10.17 5.83 7.33 9.96 7.33 7.41

12.04 13.99 12.54 12.02 9.33 6.67 8.72 9.80 7.07 6.85

11.73 13.46 12.83 12.13 9.70 6.11 10.18 9.48 8.02 7.18

12.05 13.75 12.33 12.54 9.50 6.39 11.14 8.77 7.86 7.30

12.62 12.72 11.87 12.65 8.21 6.98 10.35 8.60 8.54 6.70

12.75 11.94 11.65 12.86 8.24 6.90 10.96 7.15 8.84 6.74

13.88 11.96 11.29 13.19 8.73 6.54 10.02 7.80 8.87 6.83

14.76 12.40 11.38 12.90 8.59 6.00 10.23 8.02 8.81 6.95

12.13 13.44 12.24 12.06 9.68 6.54 8.51 9.12 7.88 7.51

1 Contract No. 11, f.o.b. stowed Caribbean port, including Brazil, bulk spot price. U.S. Department of Agriculture (ERS-USDA)

2

Preliminary.

Source: Economic Research Service,

Average Price of Raw Sugar in New York (C.I.F., Duty/Free Paid, Contract #12/#14) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

22.00 22.65 22.39 21.88 21.85 22.41 17.70 20.81 21.03 21.62

21.95 22.69 22.68 22.07 21.79 22.38 17.24 21.18 20.69 21.91

21.95 22.46 22.57 21.81 21.74 22.55 18.46 21.40 19.92 22.14

22.08 22.76 22.71 21.79 22.14 22.57 19.43 21.51 19.73 21.87

22.18 23.10 22.62 21.70 22.31 22.65 19.12 21.19 19.52 21.80

22.44 23.09 22.48 21.62 22.42 22.61 19.31 21.04 19.93 21.62

22.72 24.47 21.80 22.04 22.66 22.61 17.64 20.64 20.86 21.32

21.84 23.18 22.51 22.21 22.19 21.24 18.12 21.10 20.91 21.26

21.78 23.21 22.38 22.30 21.92 20.10 18.97 20.87 21.65 21.34

21.58 22.67 22.37 22.27 21.67 19.50 21.15 20.90 21.94 20.92

21.57 22.60 22.12 21.90 21.83 17.45 21.39 21.19 22.22 20.91

22.35 22.63 22.14 21.93 22.19 17.87 20.56 21.43 22.03 20.37

22.04 22.96 22.40 21.96 22.06 21.16 19.09 21.11 20.87 21.42

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Supply and Utiliz ation of Sugar (Cane and Beet) in the United States

In 1,000's of Short Tons (Raw Value)

----------------------------------------- Utiliz ation -------------------------------------------------------------------------------------- Supply ------------------------------------------------------ Offshore Receipts -------------- Production ----------Cane

B eet

Total

Foreign

Territories

Total

Beginning Stocks

Total Supply

3,454 3,191 3,631 3,952 4,076 4,089 3,985 3,965 4,106

3,916 4,013 4,389 4,423 4,956 4,680 3,915 4,415 4,824

7,370 7,205 8,020 8,375 9,032 8,769 7,900 8,380 8,930

2,777 2,774 2,163 1,824 1,636 1,591 1,535 1,732 1,584

0 0 0 0 0 0 0 0 0

2,777 2,774 2,163 1,824 1,636 1,591 1,535 1,732 1,584

1,241 1,492 1,488 1,679 1,639 2,216 2,180 1,419 1,259

11,388 11,471 11,671 11,878 12,317 12,576 11,615 11,531 11,773

Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Preliminary.

2

Estimate.

3

Forecast.

4

I ncludes feed use.

- Domestic Disappearance Net Changes Refining In Polyhydric Total P er in Invisible Loss AdUse Exports Total Capita Stocks justment Alcohol4

9,896 9,983 9,992 10,238 10,090 10,396 10,196 10,273 9,835

385 211 179 230 124 141 137 142 160

-43 30 -2 -58 -144 125 -24 157 0

0 0 0 0 0 0 0 0 0

13 21 20 25 32 34 33 24 25

65.1 65.8 65.6 66.5 66.0 65.3 NA NA NA

9,441 9,564 9,672 9,872 9,993 9,998 9,894 9,767 9,465

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Sugar Cane for Sugar & Seed and Production of Cane Sugar and Molasses in the United States

Year

1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

Acreage Harvested 1,000 Acres

932.3 888.9 914.0 947.1 993.3 1,023.3 1,027.8 1,023.2 997.8

Preliminary.

2

Yield of ------------ Production -----------Sugar Cane Per for for Yield Per Harvested Sugar S eed Total Acre Acre Net Tons ------------ 1,000 Tons ------------ Short Tons

33.0 33.1 34.7 36.6 35.5 35.0 33.7 34.7 34.6

Estimate.

29,155 27,687 30,003 32,743 33,577 34,291 32,775 33,903 32,506 3

1,641 1,777 1,706 1,964 1,722 1,823 1,812 1,650 1,997

30,796 29,464 31,709 34,707 35,299 36,114 34,587 35,553 34,503

Excludes edible molasses.

3.90 -------------------------

Farm Price $ P er Ton

29.5 28.3 28.1 27.3 25.6 26.1 29.0 28.4 ----

------ Farm Value ------ ----- Sugar Production ------of Cane ---- Raw Value ---Used for of Cane Refined --- Molasses Made --Sugar Used for Total Per Ton B a si s Edible Total3 & S eed Sugar 1,000 of Cane 1,000 ----- 1,000 Dollars ----1 , 0 0 0 G a l l o n s ---Tons in Lbs. Tons

859,604 906,956 784,113 833,297 842,840 890,257 893,049 944,562 859,175 901,900 895,917 941,791 951,813 1,003,046 961,896 1,007,142 -------

3,489 -------------------------

----------------------------

----------------------------

----------------------------

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

195,429 -------------------------

269

SUGAR U.S. Sugar Beets, Beet Sugar, Pulp & Molasses Produced from Beets and Raw Sugar Spot Prices ------- Acreage --------

Year of Harvest

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

Yield Per Harvested Planted Harvested Acre ----- 1,000 Acres ----Ton

1,476 1,445 1,368 1,459 1,498 1,561 1,564 1,371 1,427 1,365

1,443 1,420 1,323 1,428 1,451 1,527 1,373 1,243 1,361 1,348

1 Preliminary. 2 Estimate. 1.07. 5 F.O.B. Europe.

22.1 19.8 20.2 20.9 22.4 21.9 23.7 20.7 20.4 22.7

Production 1,000 Tons

Sugar Yield Per Acre Sh. Tons

Price3 Dollars

31,853 28,065 26,680 29,886 32,499 33,420 32,541 25,764 27,718 30,605

3.17 2.78 3.06 3.00 -------------------

38.80 38.10 45.40 38.80 36.40 37.20 34.20 39.80 39.30 ----

- Sugar Production EquivRefined Farm alent Raw Value4 B a si s Value $1,000 -- 1,000 Short Tons --

1,234,470 1,070,663 1,211,001 1,160,029 1,181,494 1,242,895 1,113,030 1,025,306 1,089,287 ----

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

Quota Allocation

---2,413.1 2,339.1 1,791.3 1,289.7 ----------------

---2,308.0 2,276.9 1,733.3 1,254.2 ----------------

Bakery & Cereal Products Beverages

1,952 1,905 1,993 2,161 2,301 2,312 2,264 2,273 2,069 2,043

4,929 4,808 5,539 5,553 5,349 5,419 5,508 5,172 5,407 5,229

4,170 4,486 3,923 3,997 4,313 4,536 4,433 4,680 4,291 4,260

78 44 33 27 24 41 36 58 109 56

12 15 14 ---------------------4

9,177 9,337 9,496 9,578 9,686 9,996 9,977 9,911 9,808 9,545

22.04 22.96 22.40 21.96 22.06 21.16 19.09 21.11 20.87 21.42

20.17 15.63 14.46 10.70 10.58 11.71 11.32 11.90 13.05 13.24

9,177 9,337 9,496 9,578 9,684 9,996 9,977 9,917 9,836

156 169 196 158 165 179 168 158 189 209

Hotels, Restaurant Ice Cream & Dairy & InstiConfectutions Products tionery2

1,313 1,372 1,335 1,350 1,336 1,361 1,328 1,316 1,221 1,086

93 103 80 78 79 72 71 59 53 51

218 185 195 196 212 255 208 262 288 298

0 6 0 0 0 0 0 767 634 246

438 448 334 323 322 332 356 274 351 299

All Other F ood Uses

Retail Grocers3

Wholesale Grocers4

Non-food Uses

Nonindustrial Uses

322 279 318 308 331 346 330 310 297 298

704 863 849 793 907 862 817 800 736 614

1,269 1,236 1,263 1,281 1,230 1,263 1,242 1,255 1,322 1,266

2,039 2,173 2,241 2,283 2,223 2,257 2,241 2,250 2,374 2,551

77 64 66 66 76 71 85 74 99 99

3,598 3,701 3,759 3,828 3,761 3,804 3,893 3,927 4,114 4,224

4

Jobbers, sugar dealers.

Year

Second Quarter

Third Quarter

Fourth Quarter

Total

1992 1993 1994 1995 1996 1997

1,985 2,039 2,121 2,105 2,191 2,143

2,178 2,172 2,265 2,311 2,355 2,401

2,390 2,432 2,532 2,542 2,519 2,591

2,273 2,277 2,260 2,379 2,430 2,443

8,259 8,420 8,646 8,801 8,964 9,100 2

3,512 3,139 2,909 3,195 3,377 3,421 3,855 4,337 4,525 3,432

Preliminary.

Industrial Total Uses Deliveries

4,977 5,103 5,202 5,272 5,556 5,630 5,491 5,414 5,141 4,884

8,575 8,804 8,962 9,100 9,317 9,434 9,383 9,341 9,255 9,108

Source: Economic Research Service,

Deliveries1 of All Sugar by Primary Distributors in the U.S., by Quarters First Quarter

1,160 906 996 1,156 1,308 1,335 1,737 1,533 1,781 1,289

In Thousands of Short Tons

Canned, Bottled & Frozen F oods

453 452 445 436 438 499 499 484 530 534

Raw Value. 1 I ncludes for domestic consumption and for export. U.S. Department of Agriculture (ERS-USDA)

1,696 1,594 1,383 1,520 1,535 1,499 1,554 1,500 1,472 1,300

Source: Economic Research Service,

Refined.

1 Preliminary. 2 And related products. 3 Chain stores, supermarkets. U.S. Department of Agriculture (ERS-USDA)

270

12.13 13.44 12.24 12.06 9.68 6.54 8.51 9.12 7.88 7.51

In Thousands of Short Tons (Raw Value)

Sugar, Refined--Deliveries to End User in the United States

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

15.66 17.99 16.64 14.33 11.59 9.10 9.97 11.29 10.35 9.74

----------- Deliveries by Primary Distributors ----------Importers ------------------------------ Stocks , Jan. 1 -----------------------------of Direct Mainland Total Cane ConCane B eet Cane Mainland Domestic B eet Sugar Sugar sumption Sugar Sugar Refiners' Cane Con- Sugar ReActual Total Mills3 Deliveries sumption Sugar fineries4 Factories CCC Raw Mills Total Imports Refineries Factories

1 Preliminary. 2 Estimate. 3 Sugar for direct consumption only. U.S. Department of Agriculture (ERS-USDA)

Year

4,090 ----------------------------

3 I ncludes support payments, but excludes Government sugar beet payments. 4 Refined sugar multiplied by factor of Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Sugar Deliveries and Stocks in the United States

Year

4,578 3,944 3,900 ----------------------

-------- Raw Sugar Prices -------- Wholesale World5 ----- CSCE ----- List Price #11 N.Y. Duty Refined HFCS World P ai d #5 (42%) ------- In Cents Per Pound ------ Midwest

In Thousands of Short Tons

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

1998 1999 2000 2001 2002 20032

2,233 2,208 2,318 2,225 2,116 2,093

2,428 2,553 2,484 2,353 2,299 2,271

2,565 2,655 2,611 2,419 2,602 2,700

2,458 2,580 2,564 2,344 2,241

Source: Economic Research Service,

Total

9,213 9,434 9,383 9,341 9,258 9,419

SUGAR

Average Open Interest of World Sugar No. 11 Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

108,936 186,893 156,047 155,156 206,100 165,717 191,464 157,478 184,096 244,036

123,148 167,451 159,563 147,198 212,072 176,465 199,031 158,192 205,138 265,758

137,582 149,027 150,093 143,623 183,472 168,624 193,554 158,448 194,541 220,971

115,060 152,600 142,773 166,143 182,770 188,324 187,810 167,555 187,415 192,497

117,030 127,978 137,897 150,480 171,555 196,864 201,756 131,640 157,738 170,867

126,843 121,877 148,447 175,139 186,978 177,266 200,973 126,426 158,276 184,257

106,749 114,027 144,527 165,884 149,536 142,416 172,361 112,483 149,202 180,898

118,057 119,787 153,845 197,331 152,754 151,621 171,808 128,181 170,667 196,857

141,361 114,069 153,202 187,477 155,076 189,606 160,809 139,915 202,144 195,200

140,011 119,561 144,830 158,065 138,762 161,760 154,101 146,058 207,456 185,917

171,843 140,008 150,866 200,486 139,896 167,549 148,035 163,358 207,598 200,605

191,801 157,779 150,573 201,922 148,983 175,125 145,760 170,710 217,904 207,768

Source: New York Board of Trade (NYBOT)

Volume of Trading of World Sugar No. 11 Futures in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

289,593 591,861 550,780 436,935 601,378 683,891 422,527 410,492 568,789 566,040

486,222 489,274 544,514 493,199 688,036 543,477 609,793 545,538 629,533 797,616

360,787 472,519 341,940 268,343 431,818 452,485 501,115 380,640 417,314 443,842

472,388 478,757 526,255 618,176 551,628 688,181 617,633 567,921 693,589 729,453

407,343 352,000 384,302 308,563 364,203 361,895 523,939 426,987 412,150 489,195

443,002 485,131 496,745 575,264 686,997 762,271 717,700 515,561 610,338 719,819

252,012 298,756 279,707 400,150 294,354 346,534 376,769 356,483 529,509 535,892

349,079 402,358 290,732 427,082 370,179 408,289 420,611 419,123 381,027 545,886

471,899 360,086 562,082 580,551 527,270 657,572 622,350 447,349 756,038 760,213

316,330 246,584 264,290 440,208 303,951 344,434 507,562 348,896 402,811 475,322

484,943 278,906 203,921 323,286 358,096 405,495 371,824 413,965 432,100 403,091

Source: New York Board of Trade (NYBOT)

D e c.

Total

387,620 4,719,218 254,850 4,711,082 306,584 4,751,852 413,214 5,284,971 346,201 5,524,111 256,775 5,911,299 242,027 5,933,850 317,374 5,150,329 340,558 6,173,756 674,355 7,140,724

271

Sulfur Sulfur is an odorless, tasteless, light yellow, nonmetallic element. Its atomic symbol is S and its atomic number is 16. As early as 2000 BC, Egyptians used sulfur compounds to bleach fabric. The Chinese used sulfur as an essential component when they developed gunpowder in the 13th century. Sulfur is widely found in both its free and combined states. Free sulfur is found mixed with gypsum and pumice stone in volcanic regions. Sulfur dioxide is an air pollutant released from the combustion of fossil fuels. The most important use of sulfur is the production of sulfur compounds. Sulfur is used in skin ointments, matches, dyes, gunpowder, and phosphoric acid. Supply – World production of sulfur (all forms) in 2001, the latest reporting year, fell –1.4% to 57.300 million metric tons from the 12-year high of 58.100 million metric tons seen in 2000. The world’s largest producers of sulfur are

Canada with 16.3% of world production in 2001, the US (16.1%), Russia (10.9%), and China (9.4%). US production of sulfur in 2001 fell by –10.2% to a 30-year low of 9.250 million metric tons. Demand – US consumption of elemental sulfur in 2001 fell –16.2% to a 30-year low of 9.300 million metric tons. US consumption of sulfuric acid in 2001 fell –0.9% to 9.530 million metric tons. The main usage for sulfuric acid is for phosphate fertilizers, which accounted for 72% of total usage in 2001. Other usages include petroleum refining (6.2%), pulp mill and paper products (2.0%), inorganic chemicals (1.7%), and synthetic rubber and plastic (0.7%). Trade – US exports of recovered sulfur in 2001 fell – 9.1% to 48.800 million metric tons from the 6-year high of 53.700 million metric tons in 2000. US imports of sulfur in 2001 fell sharply by –25.8% to 1.730 million metric tons from 2.330 million metric tons in 2000.

World Production of Sulfur (All Forms)

In Thousands of Metric Tons

Year

Canada

China

France

Germany

Iraq

Ja p a n

Mexico

Poland

Russia

Saudi Arabia

Spain

United States

World Total

1995 1996 1997 1998 1999 2000 2001 1 20022

8,953 9,490 9,480 9,694 10,116 9,946 8,916 8,538

7,030 7,260 7,670 6,170 5,770 5,560 5,380 5,730

1,170 1,090 1,060 1,110 1,100 1,110 1,100 1,000

1,110 1,110 1,160 1,180 1,190 1,240 1,240 1,240

475 475 450 450 -------------

3,110 3,150 3,391 3,428 3,462 3,486 3,773 3,200

1,241 1,280 1,340 1,387 1,334 1,325 1,450 1,450

2,591 1,982 1,985 1,675 1,524 1,831 1,352 1,220

3,840 3,800 3,750 4,651 5,265 5,900 6,250 6,350

2,400 2,300 1,750 2,050 1,940 2,101 2,350 2,230

786 943 967 993 955 708 668 685

11,800 11,800 12,000 11,700 11,500 10,500 9,470 9,270

54,000 55,200 56,900 57,400 57,400 58,300 57,700 57,700

1

Preliminary.

2

Estimate.

Source: U.S. Geological Survey (USGS)

Salient Statistics of Sulfur in the United States

In Thousands of Metric Tons (Sulfur Content)

--------------------------------------- Production of ------------------------------------------------------------ Elemental Sulfur ----------------Native ----- Recovered ----Year

1995 1996 1997 1998 1999 2000 20011 20022 1 6

- Sulfur3 - Petroleum Frasch & C o ke

3,150 2,900 2,820 1,800 1,780 900 -------

5,040 5,370 5,230 6,060 6,210 6,360 6,480 6,750

Natural Gas

Total

2,210 2,100 2,420 2,160 2,010 2,020 2,000 1,760

7,250 7,480 7,650 8,220 8,220 8,380 8,490 8,500

Other BySulfuric product Sulfuric Acid Compounds A ci d

1,400 1,430 1,550 1,610 1,320 1,030 982 772

-------------------------

Production (All Forms)

Imports Sulfuric A ci d 4

11,800 11,800 12,000 11,700 11,500 10,500 9,470 9,270

1,920 2,070 2,010 2,040 1,370 1,420 1,410 1,060

Year

1995 1996 1997 1998 1999 2000 2001 20021 4

170 117 118 155 155 191 210 147

583 646 761 283 451 208 232 181

14,300 13,600 13,900 14,200 13,800 12,700 10,900 11,400

4 Preliminary. 2 Estimate. 3 Or sulfur ore; Withheld included in natural gas. Basis 100% H2SO4, sulfur equivalent. Data 1996 to date includes Frasch. W = Withheld proprietary data. Source: U.S. Geological Survey (USGS)

Sulfur Consumption & Foreign Trade of the United States

1

Exports Producer Sulfuric Stocks A ci d 4 D e c. 3 1 5

Apparent Con- Sales Value of Shipments sumption --------- F.O.B. Mine/Plant --------Frasch Recovered Average (All Forms) --------- $ Per Metric Ton ---------

W W W W W ---------5

W W W W W ----------

Frasch & recovered.

In Thousands of Metric Tons (Sulfur Content)

---------- Consumption ---------- ---------- Sulfuric Acid Sold or Used, by End Use2 ----------- ----------------------------- Foreign Trade -----------------------------Total Pulpmills Inorganic Synthetic Petro- ------------- Exports ------------- ------------- Imports ------------Total PhoReNative Chem- Rubber sphatic leum Sulfur covered Elemental Sulfuric & Paper ReValue ReValue icals3 & Plastic Fertilizers Refining4 Frasch covered Acid Product Form Sulfur Frasch 1,000 $ Frasch covered 1,000 $

W 12,300 12,300 W 11,500 11,500 W 11,800 11,800 W 11,900 11,900 W 11,700 11,700 W 11,100 11,100 W 9,520 9,520 W 10,400 10,400

11,500 10,900 10,700 10,600 10,400 9,620 9,530 8,760

319 343 334 134 138 136 194 122

170 152 232 174 174 152 158 27

245 270 85 69 68 68 68 66

8,200 7,380 7,000 7,590 7,770 7,110 6,840 7,160

479 525 610 632 508 497 591 90

-------------------------

906 855 703 889 685 762 675 687

66,200 51,700 36,000 35,400 35,800 53,700 48,800 40,000

-------------------------

2,510 143,000 1,960 70,200 2,060 64,900 2,270 58,400 2,580 51,600 2,330 39,400 1,730 22,100 2,560 26,800

Preliminary. 2 Sulfur equivalent. 3 I ncluding inorganic pigments, paints & allied products, and other inorganic chemicals & products. I ncluding other petroleum and coal products. W = Withheld proprietary data. NA = Not available. Source: U.S. Geological Survey (USGS)

272

44.46 34.11 36.06 29.14 37.81 24.73 10.11 25.00

Sunflowerseed, Meal and Oil Sunflowers are native to South and North America, but are now grown almost worldwide. Sunflowerseed oil accounts for approximately 14% of the world production of seed oils. Sunflower varieties that are commercially grown contain from 39% to 49% oil in the seed. Sunflower crops produce about 50 bushels of seed per acre on average, which yields approximately 50 gallons of oil. Sunflowerseed oil accounts for around 80% of the value of the sunflower crop. Refined sunflowerseed oil is edible and used primarily as a salad and cooking oil and in margarine. Crude sunflowerseed oil is used industrially for making soaps, candles, varnishes, and detergents. Sunflowerseed oil contains 93% of the energy of US No. 2 diesel fuel and is being explored as a potential alternate fuel source in diesel engines. Sunflower meal is used in livestock feed and when fed to poultry, increases the yield of eggs. Sunflower seeds are also used for birdfeed and as a snack for humans. Prices – The average price received by US farmers for sunflower seeds was $12.00 per hundred pounds in December 2003, which was slightly lower than the $12.16 average seen in the marketing year 2002/3 (Sep/Aug) but sharply higher than the trough of $7.39 seen in 2000/1. Supply – World sunflowerseed production in 2003/4 was forecast to rise by 7.6% to 25.73 million metric tons

World Production of Sunflow erseed

from 23.92 million. Despite the higher production level, demand was strong and stocks in 2003/4 were forecast to drop 8% to 830,000 metric tons. The world’s largest producer of sunflowerseeds is the former Soviet Union with 37% of the crop in 2003/4, followed by Argentina (13%), Eastern Europe (12%), and the European Union (10%). World production of sunflowerseed oil rose 8% to 9.03 million metric tons from 8.37 million in 2002/3. US production of sunflowerseeds in 2003/4 was forecast at 1.19 million metric tons, up 5.3% from 1.13 million 2002/3. Demand – In 2003/4, a forecasted 87% of the sunflowerseed production went into crushing for oil and meal products, little changed from 2002/3. Consumption of sunflowerseed meal was up 9% to 8.97 million metric tons in 2003/4 while consumption of sunflowerseed oil was up 7% to 9.80 million metric tons. Trade – World exports of sunflowerseeds in 2003/4 was forecast at 3.38 million metric tons, up sharply by 48% from 2.28 million in 2002/3. Exports account for 13% of world production. The world’s largest exporters in 2002/3 were Argentina (with 21% of world exports), Hungary (15.2%), the former Soviet Union (15.1%), and the US (10%). The world’s largest importers were the Netherlands (with 17.4% of world imports), Turkey (17.4%), Spain (10.2%), and Germany (9.5%).

In Thousands of Metric Tons

Crop Year

Argentina

Bulgaria

China

France

Hungary

India

Romania

South Africa

Spain

Turkey

United States

ExUSSR

World Total

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32

3,850 5,900 5,600 5,450 5,630 7,180 5,760 2,970 3,750 3,750

440 595 650 527 438 524 660 423 405 523

1,282 1,370 1,270 1,333 1,176 1,465 1,765 1,954 1,750 1,900

1,640 2,050 1,900 1,996 1,995 1,713 1,868 1,833 1,581 1,496

700 665 730 905 540 718 793 484 632 779

1,400 1,204 1,400 1,250 890 944 801 730 870 1,320

696 767 933 1,096 869 1,073 1,301 721 824 880

390 450 755 560 585 1,109 531 638 929 708

1,215 979 575 1,178 1,373 1,097 579 848 871 757

700 600 750 670 672 850 820 630 530 820

1,167 2,193 1,819 1,614 1,668 2,392 1,969 1,608 1,551 1,133

5,251 4,356 7,368 5,316 5,442 5,762 7,394 7,820 5,444 7,234

20,600 23,342 25,720 24,410 23,452 27,405 26,846 23,140 21,649 23,891

1

Preliminary.

2

Forecast.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

World Imports and Exports of Sunflow erseed Crop Year

1993-4 1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 1

In Thousands of Metric Tons

------------------------------------------Imports ------------------------------------------ -------------------------------------------------Exports ------------------------------------------------NetherWorld ArgenExUnited World France Germany lands Spain Turkey Total tina France Hungary USSR States Uraguay Total

Preliminary.

194 109 300 338 208 395 130 176 46 134 2

331 279 366 406 278 364 261 300 146 205

Forecast.

427 543 617 496 439 477 650 477 341 426

170 472 681 296 312 576 443 369 200 297

100 550 500 532 554 766 466 326 223 140

2,615 3,287 3,972 3,343 3,049 3,995 3,128 2,740 1,707 2,336

580 884 550 65 504 940 265 94 342 280

516 628 480 78 64 29 27 11 25 6

250 260 249 212 104 152 236 188 228 365

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

755 708 1,750 2,422 1,744 1,944 1,414 1,850 223 570

99 287 224 117 265 291 168 153 176 129

---------91 60 106 28 21 130 200

2,545 3,173 3,647 3,310 3,049 4,050 3,048 2,748 1,689 2,346

273

SUNFLOWERSEED, MEAL AND OIL Sunflow erseed Statistics in the United States Crop Year Beginning Sept. 1

Harvested Acres 1,000

Harvested Yield Per Cwt.

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

2,479 2,792 3,492 3,441 2,647 2,555 2,180 2,197

14.36 13.17 15.10 12.62 13.39 13.38 11.42 12.13

1

Preliminary.

2

Forecast.

In Thousands of Metric Tons

--------------------- Disappearance --------------------Value of Pro- ---------------------------- Supply --------------------------Non-oil duction Stocks, ProUse & Million $ Sept. 1 duction Imports Total Crush Exports S eed Total

Farm Price $ P er Metric Ton

258 256 225 166 152 215 220-250

416.4 426.5 559.0 326.9 244.2 326.0 299.6 312.6

205 196 92 231 231 156 108 199

1,614 1,668 2,392 1,969 1,608 1,551 1,129 1,209

2,000 2,159 2,166 2,356 2,143 1,463 1,308 1,534

Preliminary.

2

593 689 543 591 614 645 471 499

Forecast.

470 550 617 612 527 503 444 444

482 503 544 628 520 400 314 383

1,920 1,229 1,258 1,467 2,221 2,374 2,066 2,650

Crop Year Beginning Oct. 1

Preliminary.

9,016 9,109 8,440 9,264 9,539 8,617 7,472 8,599

2,100 2,260 2,300 2,426 2,111 1,441 1,268 1,515

720 838 697 759 749 797 604 614

485 639 717 711 613 585 516 516

2

458 456 507 624 555 464 364 201

1,805 1,235 1,306 1,477 2,207 2,310 2,088 2,575

Minneapolis, Crude $ Per Metric Ton

------------------------- Disappearance ------------------------Imports

Total

Exports

Domestic

Total

67 42 27 55 71 62 10 12

381 435 534 474 396 305 156 263

10 3 2 2 4 16 28 14

458 480 563 531 471 383 194 289

322 370 363 286 247 205 52 91

94 83 145 174 162 168 130 180

458 480 563 531 471 383 194 289

497 608 446 364 357 529 496-562

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

In Thousands of Metric Tons

Total

Exports

Domestic

Total

28% Protein $ P er Metric Ton

445 499 622 554 463 389 177 304

21 13 41 21 8 26 3 5

419 481 576 528 450 358 169 294

445 499 622 554 463 389 177 304

122 90 72 83 100 96 95 102-132

------------------------- Disappearance -------------------------

Preliminary.

2

Stocks, Oct. 1

Production

Imports

5 5 5 5 5 5 5 5

440 494 617 549 458 358 172 299

---------------26 -------

Forecast.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Sunflow er2 in the United States Year

10,155 10,804 10,056 10,962 10,970 9,925 8,667 9,776

In Thousands of Metric Tons

Production

Forecast.

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

In Dollars Per Hundred Pounds

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Average

11.50 8.76 6.31 8.64 13.10 10.40

10.80 6.99 5.76 8.19 12.00 11.40

10.70 6.87 6.20 9.10 12.00 11.60

11.00 7.52 6.49 9.71 12.30 11.60

11.50 7.34 6.92 9.52 12.10 12.10

12.00 8.72 7.29 10.00 12.50 12.40

10.80 8.53 7.46 10.20 12.50

9.62 7.93 7.67 10.50 12.50

9.80 9.63 7.99 10.50 12.20

9.54 8.09 8.40 11.80 12.00

9.09 8.16 8.71 13.80 11.80

8.28 7.82 9.48 12.90 10.90

10.39 8.03 7.39 10.41 12.16 11.58

Preliminary.

274

430 561 607 701 583 449 353 430

------------------------------------------ Supply ------------------------------------------

Crop Year Beginning Oct. 1

1

1,641 1,801 2,287 2,010 1,749 1,675 1,136 1,411

In Thousands of Metric Tons

Stocks, Oct. 1

Sunflow er Meal Statistics in the United States

1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

648 551 849 666 625 680 653 627

----------------------------------------- Supply ------------------------------------------

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

1

149 189 260 205 201 235 164 178

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Sunflow er Oil Statistics in the United States

1

844 1,061 1,178 1,139 923 760 319 606

----------------------------------- Sunflow erseed Oil ------------------------------ ---------------------------------------- Sunflow erseed Meal ---------------------------------------ArgenExWorld ArgenUnited ExWorld tina France Spain Turkey USSR Total tina France Spain Turkey States USSR Total

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 1

1,837 1,893 2,518 2,241 1,905 1,783 1,335 1,513

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

World Production of Sunflow erseed Oil and Meal Year

18 29 34 41 66 76 98 105

2

KS, MN, ND and SD average.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Tall Oil Tall oil is a product of the paper and pulping industry. Crude tall oil is the major byproduct of the kraft or sulfate processing of pinewood. Crude tall oil starts as tall oil soap which is separated from recovered black liquor in the kraft pulping process. The tall oil soap is acidified to yield crude tall oil. The resulting tall oil is then fractionated to produce fatty acids, rosin, and pitch. Crude tall oil contains 40-50 percent fatty acids such as oleic and linoleic acids; 5-10 percent sterols, alcohols, and other neutral components. The

demand is for the tall oil rosin and fatty acids which are used to produce adhesives, coatings, and ink resins. The products find use in lubricants, soaps, linoleum, flotation and waterproofing agents, paints, varnishes, and drying oils. Since tall oil and its production are derived from the paper and pulping industry, the amount of tall oil produced is related in part to the pulp industry and in part to the U.S. economy.

Consumption of Tall Oil in Inedible Products in the United States Year

1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

99.8 93.1 111.5 86.7 99.4 91.7 97.7 93.4 136.1

93.6 103.4 89.0 114.4 115.1 88.1 96.4 132.9 119.9

96.9 89.2 91.0 113.2 111.0 106.4 104.4 115.0 136.9

95.8 104.1 99.5 120.0 114.0 97.5 101.6 121.3 126.3

87.3 100.5 97.0 108.0 99.9 90.9 105.1 109.3 121.7

96.5 96.6 105.8 101.8 109.2 98.8 100.7 121.6 121.9

93.1 85.4 103.7 117.2 119.1 91.8 99.9 128.5 119.3

102.3 100.7 94.4 114.8 113.0 106.6 98.3 130.2 111.6

89.4 94.9 84.7 120.3 103.9 94.9 102.4 121.5 131.4

91.6 111.5 87.2 111.6 108.4 93.7 81.4 141.9 124.1

100.5 101.4 87.3 119.0 106.4 89.4 87.7 115.5 104.9

88.9 98.8 88.4 121.0 102.2 96.2 74.4 118.6 120.1

1,136 1,180 1,139 1,348 1,302 1,146 1,150 1,450 1,474

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

Production of Crude Tall Oil in the United States Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Total

109.8 119.2 122.7 118.4 93.8 92.3 99.1 102.5 102.1

105.2 113.9 115.4 113.4 101.6 91.6 100.7 87.3 87.9

105.2 114.5 135.4 119.3 107.8 81.4 86.5 101.8 109.0

115.5 119.9 137.7 118.0 101.3 94.9 101.8 108.7 106.3

123.3 125.1 126.6 115.2 104.6 83.7 93.7 89.8

126.9 125.1 127.5 134.6 115.2 103.7 105.5 111.5

108.9 118.5 132.3 121.0 95.4 99.7 104.2 108.3

120.3 116.6 131.2 103.8 91.8 99.9 96.0 99.6

120.3 116.4 131.1 100.7 99.5 95.1 88.5 91.8

120.5 135.0 132.0 103.2 94.5 94.1 94.7 109.2

124.9 132.9 120.2 103.5 97.0 105.4 103.6 100.8

112.9 130.8 121.1 113.6 86.5 93.0 91.4 97.1

1,281.0 1,337.2 1,540.6 1,364.8 1,202.6 1,134.8 1,165.6 1,208.6 1,215.6

Source: Bureau of the Census, U.S. Department of Commerce

Stocks of Crude Tall Oil in the United States, on First of Month Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 Preliminary.

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

120.9 172.3 208.6 268.7 146.8 110.5 132.7 160.2 210.7

117.5 192.1 187.9 219.8 130.9 102.4 125.6 154.1 207.3

112.9 167.4 209.7 200.3 135.3 105.4 142.1 155.7 203.0

100.7 182.4 202.1 197.5 121.5 117.0 127.9 160.5 210.2

105.7 173.0 202.8 164.8 131.8 118.9 135.8 176.0 209.6

120.3 196.0 219.4 156.9 153.5 118.2 155.2 167.4

146.0 200.8 256.8 163.3 136.6 134.4 165.6 156.3

131.8 220.6 254.1 177.5 138.5 139.6 177.4 173.4

127.0 187.3 239.1 183.0 154.6 171.7 190.7 163.7

130.5 237.5 259.1 180.7 130.5 132.0 175.4 180.3

138.7 248.5 278.4 183.6 136.7 160.5 161.8 199.3

147.3 242.2 245.2 152.7 117.1 145.4 155.1 209.5

Source: Bureau of the Census, U.S. Department of Commerce

Stocks of Refined Tall Oil in the United States, on First of Month

1

In Millions of Pounds

Jan.

In Millions of Pounds

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

10.1 8.3 32.3 15.1 7.5 9.6 22.4 13.3 13.1

11.6 7.0 25.6 14.9 7.0 9.0 17.2 16.5 20.1

7.9 7.5 34.9 17.0 8.5 9.9 17.1 18.7 19.6

6.0 8.9 21.4 12.5 9.1 10.2 19.9 20.1 19.9

7.9 6.5 30.4 14.8 9.8 10.7 20.7 20.1 19.2

9.7 26.5 17.0 9.9 11.0 12.5 20.9 18.6

8.5 17.4 14.2 7.2 9.8 11.8 21.5 20.4

10.4 31.7 13.0 7.6 13.7 13.9 22.7 19.7

8.5 20.9 13.1 7.2 10.4 12.6 20.9 15.8

6.0 32.0 15.1 7.3 7.8 19.5 18.6 14.5

6.1 13.2 14.7 6.3 11.9 13.4 18.4 13.5

7.2 16.6 15.3 7.0 8.2 21.6 16.0 13.9

Source: Bureau of the Census, U.S. Department of Commerce

275

Tallow and Greases Tallow and grease come from processing (rendering) the fat of cattle. Tallow is used to produce both edible and inedible products. Edible products include margarine, cooking oil, and baking products. Inedible tallow products include soap, candles, and lubricants. The months with the highest levels of edible tallow use are May through August. Per capita use of edible tallow has been increasing over the last several years. In 1991, per capita use of tallow was 3.9 pounds while in 2000 it was 5.8 pounds. Production of tallow and greases is directly related to the number of cattle produced. Those countries that are the leading cattle producers are also the largest producers of tallow. The American Fats and Oils Association provides specifications for a variety of different types of tallow and grease, including edible tallow, lard (edible), top white tallow, all beef packer tallow, extra fancy tallow, fancy tallow, bleachable fancy tallow, prime tallow, choice white grease, and yellow grease. The specifications include such things as the melting point, color, density, moisture content, insoluble impurities, and others. Prices– Tallow prices (edible) rallied sharply in 2003, along with the price of cattle. Tallow prices rallied to 23.08 cents/pound in December 2003, producing an average price for the year of 18.30 cents/pound. That was the highest average yearly price seen since 1997. The price of inedible

tallow and grease rallied to an average price of 18.3 cents in 2003, up from 13.5 cents in 2002. Supply – World production of tallow and greases (edible and inedible) has averaged over 8 million metric tons since 1993. The U.S. is by far the world’s largest producer of tallow and greases with about 43 percent of the world total. The next largest producer was Australia with about 6 percent of the world output. Brazil had about 6 percent of global tallow production. Other large producers include Canada, Argentina, France, and South Korea. U.S. production of edible tallow in 2001 was 1.84 billion pounds, virtually the same production level as in the year 2000. The general trend has been an increase in the production of edible tallow. The total supply of edible tallow in 2001 was estimated at 1.91 billion pounds. US production of inedible tallow and greases in 2003 was 6.333 billion pounds, down from the 7.156 billion in 2002. US exports of inedible tallow and grease in 2003 were 330 million pounds, down from 384 million pounds in 2002. Demand – US usage of tallow in 2001 was estimated at 1.52 billion pounds, down 5 percent from 2000. Of total US production in 2001, exports were 365 million pounds, up 47 percent from 2000. Mexico is the largest importer of tallow.

Wo rld P ro d u ctio n o f Tallo w an d Greases (E d ib le an d In ed ib le) Year

Argenti na

Australi a

Brazi l

Canada

285 268 260 250 248 240 265 220 235 230

530 472 526 446 423 397 456 560 565 540

340 336 429 435 46 467 460 467 480 505

193 212 209 213 217 242 250 265 285 290

1991 1992 1993 1994 1995 1996 1997 1998 1999 1 20002 1

P reliminary.

2

F orecast.

In Thousands of Metric Tons

France

Germany

Rep. of Korea

Netherlands

New Zealand

Russia

United Ki ngdom

Uni ted States

World Total

185 275 240 206 220 220 220 220 220 220

270 197 178 167 166 168 167 166 165 165

85 121 115 120 118 198 209 235 230 230

150 150 163 159 158 161 200 190 168 192

132 134 145 135 147 155 161 150 135 142

386 352 706 437 377 400 340 340 330 310

230 225 212 215 230 165 160 170 180 195

3,180 3,309 3,650 3,851 3,756 3,581 3,467 3,694 3,855 3,562

6,968 7,077 8,492 8,258 8,312 8,184 8,342 8,374 8,584 8,312

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

Salient Statistics of Tallow and Greases (Inedible) in the United States

Year

1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21 20032

------------------------- Supply ------------------------ProStocks, duction Jan. 1 Total

6,364 6,481 6,242 6,249 6,644 7,079 7,035 6,870 7,156 6,246

320 350 373 266 339 437 405 347 327 240

6,684 6,831 6,615 6,515 6,983 7,516 7,440 7,217 7,482 6,486

In Millions of Pounds

--------------------- Consumption ---------------------Exports

S oap

F eed

Total

3,039 2,486 1,807 775 1,041 877 791 616 384 307

301 264 245 245 228 229 146 107 W W

2,183 2,071 2,389 2,401 2,533 2,847 2,727 2,834 2,886 2,434

3,246 2,334 2,634 2,646 2,761 3,076 2,849 2,843 2,886 2,434

Wholesale --------- Prices, Cents/Lb. -------Inedible, Edible, No. 1 (Loose) Chicago Chicago

18.4 21.4 22.0 23.5 19.1 15.1 11.6 13.7 14.8 20.3

1 Preliminary. 2 Estimate. Sources: Economic Research Service, U.S. Department of Agriculture (ERS-USDA); Bureau of the Census, U.S. Department of Commerce

276

17.4 19.2 20.1 20.8 17.5 13.0 10.0 12.0 13.5 18.3

TALLOW AND GREASES

-----

Cents Per Pound Inedible Prime, Chicago (Jan. 1910 - Dec. 1948) Bleachable, Chicago (Jan. 1949 - date)

Supply and Disappearance of Edible Tallow in the United States

Year

-------------------------- Supply -------------------------Stocks Jan. 1 Production Total

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022

33 33 36 43 33 47 39 33 40 40

1,425 1,510 1,536 1,520 1,416 1,537 1,729 1,840 1,844 1,969

In Millions of Pounds, Rendered Basis

--------------------------------------------------------- Disappearance -----------------------------------------------------------P er Baking Diret Capita or Frying Domestic Exports Total Use (Lbs.) Fats

1,470 1,606 1,590 1,568 1,455 1,586 1,775 1,881 1,915 2,018

1,127 1,275 1,268 1,317 1,223 1,301 1,425 1,593 1,511 1,482

310 295 279 218 185 246 317 248 364 511

1,437 1,570 1,548 1,535 1,408 1,547 1,742 1,841 1,875 1,993

412 639 533 602 585 868 998 1,137 978 968

404 405 374 320 312 259 262 283 NA NA

4.4 4.9 4.9 5.0 4.6 4.8 5.2 5.8 4.5 4.5

1 Preliminary. 2 Forecast. Sources: Economic Research Service, U.S. Department of Agriculture (ERS-USDA); Bureau of the Census, U.S. Department of Commerce

Wholesale Price of Tallow, Inedible, No. 1 Packers (Prime), Delivered, Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

15.00 21.75 19.45 23.40 18.20 16.30 11.89 12.17 10.00 17.13

15.00 18.86 17.00 22.88 16.88 12.53 10.14 9.46 10.54 15.65

15.22 18.00 17.03 19.35 17.58 11.18 10.67 9.62 12.64 16.60

15.19 17.75 17.54 17.39 17.70 11.38 10.21 10.26 11.06 16.54

15.25 17.50 19.37 18.09 20.35 10.40 11.60 10.19 11.59 16.48

15.63 17.89 19.50 19.64 19.63 11.49 10.74 12.35 15.47 17.30

16.67 19.61 20.98 19.65 17.31 11.50 9.19 15.44 14.80 16.08

18.64 19.81 22.40 20.10 17.57 11.69 9.48 16.83 14.00 15.85

19.50 19.53 25.98 20.88 16.69 14.38 10.07 13.75 14.23 18.70

19.78 19.46 21.05 22.13 16.98 16.37 10.05 11.24 13.98 22.78

20.38 19.75 19.65 22.88 16.90 14.95 9.35 10.60 15.91 23.37

22.48 20.08 21.63 22.60 16.70 13.88 11.23 12.34 18.08 23.08

17.40 19.17 20.13 20.75 17.71 13.00 10.39 12.02 13.53 18.30

Preliminary.

Sources: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

277

Tea Tea is the common name for a family of mostly woody flowering plants. The tea family contains about 600 species placed in 28 genera and they are distributed throughout the tropical and subtropical areas, with most species occurring in eastern Asia and South America. The tea plant is native to Southeast Asia. There are more than 3,000 varieties of tea, each with its own distinct character, and each generally named for the area in which it is grown. Tea has been consumed in China since perhaps the 28th century BC and certainly since the 10th century BC. In 2737 BC, the Chinese Emperor Shen Nung, according to Chinese mythology, was a scholar and herbalist. While his servant boiled drinking water, a leaf from the wild tea tree he was sitting under dropped into the water and Shen Nung decided to try the brew. Today, half the world’s population drinks tea, and tea is the world’s most popular beverage next to water. Tea is a healthful drink and contains antioxidants, fluoride, niacin, folic acid, and as much vitamin C as a lemon. The average 5 oz. cup of brewed tea contains approximately 40 to 60 milligrams of caffeine (compared to 80 to 115 mg in brewed coffee). Decaffeinated tea has been available since the 1980s. Herbal tea contains no true tea leaves but is actually brewed from a collection of herbs and spices. Tea grows mainly between the tropic of Cancer and the tropic of Capricorn, requiring 40 to 50 inches of rain per year and a temperature ideally between 50 to 86 degrees Fahrenheit. In order to rejuvenate the bush and keep it at a convenient height for the pickers to access, the bushes

World Tea Production, in Major Producing Countries Year

1996 1997 1998 1999 2000 2001 2002 1

Argentina

Bangladesh

China

47.0 54.0 57.0 56.0 53.0 63.0 63.0

48.0 53.0 51.0 56.0 46.0 52.0 52.0

617.0 637.0 688.0 697.0 704.0 722.0 760.0

must be pruned every four to five years. A tea bush can produce tea for 50 to 70 years, but after 50 years, the yield is reduced. The two key factors in determining different varieties of tea are the production process (the sorting, withering, rolling, fermentation, and drying methods) and the growing conditions (the geographical region, growing altitude, and soil type). Black tea, often referred to as fully fermented tea, is produced by allowing picked tea leaves to wither and ferment for up to 24 hours. After fermenting, the leaves are fired, which stops oxidation. Green tea, or unfermented tea, is produced by immediately and completely drying the leaves and omitting the oxidization process, thus allowing the tea to remain green in color. Supply – World production of tea in 2001, the latest full reporting year, rose +1.5% to 2.991 million metric tons from 2.948 million metric tons in 2000. The world’s largest producer of tea in 2001 was India with 25.0% of world production, followed closely by China with 24.1% of world production. Other key producers include Sri Lanka (9.5%), Kenya (8.0%), Turkey (6.0%), and Indonesia (5.6%). Trade – US tea imports in 2002 fell to 171,829 metric tons in 2002 from 172,829 metric tons in 2001. The world’s largest tea importers in 2000 were Russia with 12.6% of total world imports, the United Kingdom (12.4%), Pakistan (8.9%), and the US (7.0%). The world’s largest exporters are Sri Lanka with 19.4% of world exports in 2000, China (15.6%), Kenya (14.7%), and India (13.6%).

In Thousands of Metric Tons

India

Indonesia

Iran

Ja p a n

Kenya

Malawi

Sri Lanka

Turkey

ExUSSR2

World Total

780.0 811.0 870.0 870.0 835.0 848.0 826.0

166.0 149.0 166.0 161.0 162.0 163.0 163.0

62.0 69.0 60.0 80.0 50.0 51.0 51.0

89.0 91.0 83.0 88.0 85.0 85.0 85.0

257.0 221.0 294.0 249.0 236.0 217.0 287.0

37.0 44.0 40.0 48.0 45.0 37.0 38.0

258.0 277.0 280.0 284.0 306.0 295.0 310.0

115.0 140.0 178.0 178.0 139.0 143.0 150.0

42.0 39.0 52.0 65.0 27.0 25.0 23.0

2,710 2,791 3,040 3,078 2,947 2,980 3,100

1

Preliminary. 2 Mostly Georgia and Azerbaijan. Sources: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA); Food and Agriculture Organization of the United Nations (FAO-UN)

World Tea Exports from Producing Countries Argentina

Bangladesh

Brazil

China

41,175 35,042 56,806 58,987 52,144 50,000 58,068

26,445 20,981 21,740 25,049 21,494 14,300 6,400

7,252 3,891 3,404 3,208 2,914 3,714 4,082

169,788 173,145 205,381 219,325 202,681 230,696 252,204

Year

1995 1996 1997 1998 1999 2000 1 20012 1

Preliminary.

2

Estimate.

1998 1999 2000 2001 2002 2003 1 1

Malawi

P. New Guinea

Sri Lanka

158,333 79,227 138,360 101,532 191,472 66,843 201,798 67,219 177,507 97,847 200,868 105,581 177,603 99,797

258,564 260,819 199,224 263,685 245,716 217,282 211,592

32,600 36,700 39,824 40,518 30,000 69,600 69,600

4,200 9,300 6,500 6,600 8,200 8,500 8,800

178,005 218,714 267,726 270,938 268,330 287,005 293,524

Vietnam Zimbabwe

18,800 20,800 32,901 33,000 37,300 -------

9,156 11,540 13,057 11,076 15,722 16,916 6,162

World Total

1,179,705 1,234,708 1,315,534 1,415,223 1,372,179 1,491,846 1,473,395

In Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

11,024 11,017 10,831 14,596 14,785 15,045

10,214 9,796 13,475 11,917 14,237 13,556

17,269 14,737 18,217 15,237 16,029 15,649

15,938 15,041 15,929 16,772 17,326 17,806

17,479 17,271 19,861 15,802 18,747 18,793

13,672 17,007 18,367 16,426 15,158 15,094

16,276 14,794 14,396 16,041 15,189 15,285

14,318 15,743 13,008 14,415 11,977 13,850

7,852 9,468 10,725 11,917 9,777 11,228

8,758 11,935 10,873 14,072 14,384 16,420

8,649 10,628 11,662 14,548 12,148 11,427

9,839 10,604 10,611 11,150 12,073 13,059

151,287 158,040 167,952 172,893 171,829 177,211

Preliminary.

278

Kenya

India

Source: Food and Agriculture Organization of the United Nations (FAO-UN)

Imports of Tea in the United States Year

In Metric Tons Indonesia

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Tin Tin is a silvery-white, lustrous gray metallic element. Tin is soft, pliable and has a highly crystalline structure. When a tin bar is bent or broken, a crackling sound called a “tin cry” is produced due to the breaking of the tin crystals. People have been using tin for at least 5,500 years. Tin has been found in the tombs of ancient Egyptians, and tin and lead were considered different forms of the same metal. Tin was exported to Europe in large quantities from Cornwall, England, during the Roman period, approximately 2100 to 1500 BC. Cornwall was one of the world’s leading sources of tin for much of its known history and into the late 19th century. The principal ore of tin is the mineral cassiterite, which is found in Malaya, Bolivia, Indonesia, Thailand, and Nigeria. About 80% of the world’s tin deposits occur as unconsolidated placer deposits in river beds and valleys or on the sea floor, with only about 20% occurring as primary hardrock lodes. Tin deposits are generally small and almost always found closely allied to the granite from which it originates. Tin is also recovered as a by-product of mining tungsten, tantalum, and lead. After extraction, tin ore is ground and washed to remove impurities, roasted to oxidize the sulfides of iron and copper, washed a second time, and is then reduced by carbon in a reverberatory furnace. Electrolysis may also be used to purify tin. Pure tin, rarely used by itself, was used as currency in the form of tin blocks and was considered legal tender for taxes in Phuket, Thailand, until 1932. Tin is used in the manufacture of coatings for steel containers used to preserve food and beverages. Tin is also used in solder alloys, electroplating, ceramics, and in plastic. The world’s major tin research and development laboratory, ITRI Ltd., is now over six years old as a private institution. The laboratory is funded by companies that produce and consume tin. The focus of the research efforts have been on possible new uses for tin that would take advantage of tin’s relative non-toxicity to replace other metals in various products. Some of the replacements could be lead-free solders, antimony-free flame-retardant chemicals, and lead-free shotgun pellets. No tin is mined in the U.S. currently. Tin futures and options trade on the London Metal Exchange (LME). Tin has traded on the LME since 1877

and the standard tin contract began in 1912. The futures contract calls for the delivery of 5 metric tons of tin ingots of at least 99.85% purity. The contract trades in terms of US dollars per metric ton. Prices – The average price of tin (straights) in 2003 rose to $3.31 per pound from the 20-year year low of $2.83 per pound seen in 2002 (i.e., since 1973). The average price of ex-dock tin in New York rose to $2.32 per pound from the 21-year low of $1.99 per pound in 2001 (i.e., since 1972). Tin prices in 2003 recovered along with the rest of the basic metal complex. Supply – World mine production of tin in 2002 fell sharply by 19% to a 3-year low of 249,000 from 308,000 as the marketplace reacted to lower prices. The world’s largest mine producers of tin are China with 32% of world production in 2002, Peru (26%), and Indonesia (22%). Mine production in Peru has risen sharply in the last few years and recent production levels in the 65,000-70,000 metric ton range are more than double the levels seen in 1997. World smelter production of tin fell –5.8% in 2002 to 278,000 metric tons from 295,000 in 2001. The world’s largest producers of smelted tin are Malaysia with 16% of world production, China (14%), Indonesia (12%), and Brazil (10%). The US does not mine tin, and therefore supply consists only of scrap and imports. US tin recovery in 2002 fell to 7,750 metric tons from 7,800 in 2001. Demand – US consumption of tin (pig) in 2003 was on track to fall to about 45,800 metric tons from 46,655 metric tons in 2002 and post a new 6-year low. The breakdown of US consumption of tin by finished products in 2002 shows that the largest consuming industry of tin is solder (with 35% of consumption), followed by chemicals (21%), tin plate (20%), and bronze and brass (8%). Trade – The US relied on imports for 79% of its consumption in 2002. US imports of unwrought tin metal rose to 42,200 metric tons in 2002 from 37,500 in 2001. The largest sources of US imports in 2002 were China (with 7,600 metric tons of imports), Bolivia (6,150 metric tons), Brazil (4,840 metric tons), and Indonesia (3,340 metric tons). US exports of tin fell to 2,940 metric tons in 2002 from 4,350 metric tons in 2001.

World Mine Production of Tin

In Metric Tons (Contained Tin)

Year

Australia

Bolivia

Brazil

China

Indonesia

Malaysia

Nigeria

Peru

Portugal

Russia

Thailand

United Kingdom

World Total

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022

8,057 7,495 8,656 8,828 10,169 10,204 10,011 9,146 9,602 6,268

18,634 16,169 14,419 14,802 12,898 11,308 12,417 12,464 12,298 15,242

26,500 16,619 17,317 19,617 19,065 14,238 13,202 14,200 12,500 13,000

49,100 54,100 61,900 69,600 67,500 70,100 80,100 99,400 95,000 80,000

29,000 30,610 46,058 52,304 55,175 53,959 47,754 51,629 90,000 54,000

10,384 6,458 6,402 5,174 5,065 5,754 7,340 6,307 4,972 4,215

200 278 357 139 150 200 200 300 200 200

14,310 20,275 22,331 27,004 27,952 49,574 59,191 70,501 69,696 65,400

5,334 4,332 4,627 4,637 2,667 3,100 2,200 1,200 1,200 1,000

13,100 10,460 9,000 8,000 7,500 4,500 4,500 5,000 4,500 2,900

6,363 3,926 2,201 1,300 746 1,656 2,712 2,166 2,522 1,104

2,232 1,922 1,973 2,103 2,396 376 -------------

190,000 178,000 201,000 220,000 217,000 231,000 245,000 278,000 308,000 249,000

1

Preliminary.

2

Estimate.

Source: U.S. Geological Survey (USGS)

279

TIN World Smelter Production of Primary Tin Year

Australia

Bolivia

222 315 570 460 605 655 600 775 1,171 611

14,541 15,285 17,709 16,733 16,853 11,102 11,166 9,353 11,300 10,976

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

Preliminary.

In Metric Tons

China

Indonesia

Ja p a n

Malaysia

Mexico

Russia

South Africa

Spain

Thailand

World Total

26,900 52,100 20,400 67,800 16,787 67,700 18,361 71,500 17,525 67,700 14,900 79,300 12,787 90,800 13,773 112,000 12,300 105,000 12,500 93,000

30,415 31,100 38,628 39,000 52,658 53,401 49,105 46,432 53,470 53,000

804 706 630 524 507 500 568 593 668 659

40,079 37,990 39,433 38,051 34,822 27,201 28,913 26,228 30,417 30,000

1,640 768 770 1,234 1,188 1,078 1,258 1,107 ---1,200

13,400 11,500 9,500 9,000 6,700 3,000 3,400 3,700 3,100 3,150

452 43 -------------------------

500 500 500 150 150 100 50 ----------

8,099 7,759 8,243 10,981 11,986 15,353 17,306 17,076 21,357 21,500

215,000 216,000 223,000 211,000 241,000 247,000 266,000 288,000 295,000 278,000

Brazil

Source: U.S. Geological Survey (USGS)

United States Foreign Trade of Tin

In Metric Tons

----------------------------------------------------------------------------- Imports for Consumption ----------------------------------------------------------------------------Exports (Metal)

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

2,600 2,560 2,790 3,670 4,660 5,020 6,770 6,640 4,350 2,940

Preliminary.

2

------- Concentrates2 (Ore) ------- -------------------------------------------------------- Unw rought Tin Metal -------------------------------------------------------Total Total IndoSingaUnited All Ore Bolivia Peru All Metal Bolivia Brazil China nesia Malaysia pore Thailand Kingdom

----------------57 ---------------------

Tin content.

-----------------------------------------

-----------------------------------------

33,682 32,400 33,200 30,200 40,600 44,000 47,500 44,900 37,500 42,200

8,027 7,260 6,630 6,290 6,680 5,160 3,850 6,330 6,040 6,150

11,366 9,990 8,070 9,460 8,610 4,710 4,700 5,860 5,510 4,840

Year

1

----------------600 540 20 -------------

6 666 97 243 20 790 60 514 118 2

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

3,700 3,600 3,938 4,025 4,493 4,667 4,466 4,185 3,866 3,808

3,700 3,680 3,940 4,023 4,445 4,790 4,430 4,095 3,868 3,851

3,600 3,726 3,878 4,067 4,508 4,790 4,377 4,141 3,819 3,891

3,600 3,877 3,894 3,999 4,388 4,760 4,466 4,148 4,087 3,701

3,700 3,833 3,976 4,079 4,483 4,700 4,470 4,128 3,887 3,814

3,500 3,544 3,926 3,936 4,273 4,254 4,398 4,055 3,887 3,841

3,400 3,895 3,996 3,912 4,300 4,396 4,476 4,163 3,842 3,850

2,500 3,825 3,687 4,050 4,404 4,340 4,397 4,153 3,835 3,803

3,600 3,823 3,779 4,098 4,402 4,316 4,460 4,197 3,966 3,816

3,600 3,735 3,908 3,964 4,348 4,275 4,244 4,129 3,822 3,764

3,400 3,770 3,730 4,250 4,268 4,227 4,157 3,974 3,811 3,887

42,700 44,808 48,800 44,350 52,720 55,100 47,040 49,620 46,655 45,840

Year

Source: U.S. Geological Survey (USGS)

In Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

3,651 2,741 4,580 4,670 6,100 5,620 8,300 8,140 7,700 7,280

4,635 3,931 6,000 5,100 5,570 8,120 8,330 8,330 7,320 6,980

3,775 3,850 5,200 5,610 5,390 7,770 7,960 8,360 7,020 6,690

3,967 2,780 4,390 5,600 5,840 7,760 7,580 8,460 6,990 6,640

3,471 3,000 4,880 5,070 6,170 7,760 7,810 8,270 6,870 6,390

3,470 3,080 5,590 5,270 5,940 7,510 7,930 8,640 6,600 6,400

3,825 3,210 5,760 5,180 5,830 7,750 8,090 8,760 6,540 6,380

3,027 3,910 5,640 5,650 5,580 7,560 8,240 8,760 6,590 6,420

2,891 3,800 4,790 5,590 6,660 7,870 7,820 8,920 6,670 6,250

2,980 3,880 4,580 5,420 6,270 7,790 8,210 9,030 7,130 6,180

2,844 4,380 4,810 5,290 5,880 8,390 7,200 7,630 6,880 6,190

2,908 4,290 6,810 5,590 5,710 8,800 7,970 7,470 6,950 6,340

Preliminary.

280

220 142 40 120 120 822 60 20 145 -----

In Metric Tons

Tin Stocks (Pig-Industrial) in the United States, on First of Month

1

846 1,390 3,810 965 1,640 1,870 944 214 674 122

3,500 3,500 3,862 4,953 4,410 4,660 4,362 4,252 3,965 3,814

Preliminary.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31

5,678 6,620 7,230 7,550 7,610 7,880 7,930 5,320 3,880 3,340

Source: U.S. Geological Survey (USGS)

Consumption (Total) of Tin (Pig) in the United States 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

4,202 3,230 5,610 2,760 4,710 9,870 13,900 10,200 6,360 7,600

Source: U.S. Geological Survey (USGS)

TIN

-----

Cents Per Pound Composite, New York (Jan. 1910 - date)

Average Price of Ex-Dock Tin in New York1 Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

249.55 374.77 299.55 281.91 249.39 244.46 283.63 249.32 189.23 201.53

267.55 260.25 297.45 281.34 252.65 251.04 271.70 246.91 183.23 217.98

261.20 266.45 296.68 281.51 262.36 255.13 263.42 243.14 187.65 219.58

258.49 288.00 308.49 274.36 271.65 256.97 259.59 238.33 195.36 217.90

264.18 283.62 306.71 274.23 279.50 269.42 259.70 238.53 201.95 225.40

264.45 314.33 296.20 267.31 284.27 253.64 260.16 231.14 208.01 223.69

254.83 316.06 298.47 261.03 268.87 251.09 257.77 210.17 211.51 225.81

249.18 331.64 291.30 259.85 270.98 251.32 255.92 188.42 188.36 229.58

255.10 304.12 292.13 262.56 260.79 256.38 262.54 179.53 193.79 233.59

262.46 297.77 285.11 266.77 259.17 260.70 254.56 181.38 206.67 248.22

293.72 304.47 285.87 268.33 261.82 278.24 253.64 194.77 205.94 252.93

284.99 300.28 280.61 262.61 251.75 274.51 252.19 195.90 206.63 285.40

263.81 303.48 294.88 270.15 264.43 258.73 261.24 216.46 199.15 231.80

Source: American Metal Market (AMM)

Average Price of Tin (Straights) in New York Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

334.38 415.05 418.68 396.18 356.97 348.77 400.90 356.37 271.59 304.44

362.81 379.08 415.65 395.50 359.76 356.50 384.13 352.87 263.91 312.32

361.86 378.61 414.71 395.64 370.96 361.11 372.50 348.19 270.54 314.52

363.65 395.99 429.34 386.52 381.99 363.01 368.42 341.59 280.98 312.26

371.63 399.17 427.24 386.58 392.16 372.62 370.13 340.61 288.74 321.92

372.59 433.75 413.65 377.83 397.36 359.05 370.81 329.68 296.02 319.67

360.45 438.04 416.63 369.97 377.72 359.96 366.49 302.57 299.39 322.10

353.85 458.66 409.12 369.01 380.02 357.35 364.65 276.55 269.30 327.16

362.48 423.71 407.79 372.45 368.89 366.06 375.25 263.17 277.60 332.21

371.82 417.23 400.25 377.39 366.87 370.68 363.54 264.88 293.79 350.90

411.63 425.41 400.65 378.00 370.49 392.04 362.94 281.23 292.40 356.46

401.31 419.75 394.46 371.35 357.69 288.77 360.68 279.46 292.95 396.46

369.04 415.37 412.35 381.37 373.41 357.99 371.70 311.43 283.10 330.87

Source: U.S. Geological Survey (USGS)

281

TIN Tin Plate Production & Tin Recovered in the United States

In Metric Tons

------ Tin Content of Tinplate Produced ------------- Tinplate (All Forms) -------- --------------------------------- Tin Recovered from Scrap by Form of Recovery --------------------------------Tin Per Anti- Chemical Tonne Tin Tin Bronze Type Commonial of Plate Content Grand ---- Gross Weight ---- (Tonne) (Kilograms) Metal & Brass Solder Metal Babbitt pounds Misc.2 Lead Total

Tinplate Waste Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

196,874 188,921 205,000 181,100 157,000 W W 119,000 97,800 45,900

1,625,132 1,528,303 1,660,000 1,551,000 2,010,000 1,700,000 1,750,000 1,320,000 2,000,000 2,450,000

9,945 9,396 9,600 9,617 9,300 8,900 9,080 8,800 7,800 7,750

6.0 6.1 5.8 6.2 4.6 5.2 5.2 6.7 3.9 3.2

112 NA W W W NA NA NA NA NA

10,670 NA 11,200 11,400 12,200 NA NA NA NA NA

W NA W W W NA NA NA NA NA

1

Preliminary. 2 I ncludes foil, terne metal, cable lead, and items indicated by symbol W. Source: U.S. Geological Survey (USGS)

43 NA 39 37 W NA NA NA NA NA

Year

Industry Stocks Jan. 12

84 83 84 83 85 85 85 86 88 79

8,556 9,540 8,480 9,300 9,180 9,280 9,290 8,910 8,830 8,500

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021 1

Preliminary.

2

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1 1

Primary

Secondary

Scrap

Total

Available Supply

Stocks Dec. 31 (Total Available Less Total Processed)

37,700 35,400 39,400 39,200 39,000 39,900 40,500 41,400 34,500 34,300

3,280 4,210 5,020 2,750 2,360 2,490 2,790 2,990 2,180 1,610

8,768 4,940 6,240 6,140 6,010 6,240 6,360 6,050 4,770 4,320

49,700 44,500 50,600 48,100 47,300 48,600 49,700 50,400 41,400 40,300

58,300 54,100 59,100 57,300 56,500 57,900 58,900 59,300 50,200 48,800

11,566 11,600 13,000 12,500 11,900 12,000 11,900 12,200 8,220 8,730

---------------------------- Net Receipts -----------------------------

I ncludes tin in transit in the U.S.

W NA W W W NA NA NA NA NA

11,672 NA 11,600 11,600 12,300 NA NA NA NA NA

Total Processed

Consumed in Manufacturing Products

46,700 42,500 46,100 44,900 44,600 45,800 47,000 47,100 42,000 40,000

46,600 42,200 46,000 44,700 44,400 45,700 46,900 47,000 41,900 39,800

Source: U.S. Geological Survey (USGS)

Tinplate2

Solder

Babbitt

Bronze & Brass

Tinning

Chemicals3

9,650 9,480 9,670 9,340 9,350 8,900 9,150 8,800 7,800 7,750

19,000 15,100 17,700 15,600 15,900 16,900 18,700 18,800 17,000 13,800

823 831 871 851 909 1,020 1,610 1,660 770 1,310

3,093 3,080 2,830 2,760 3,160 3,610 3,410 3,360 3,430 3,040

1,249 1,230 1,110 2,050 1,210 1,100 905 1,200 1,070 679

6,446 5,740 7,060 7,520 8,170 8,180 8,220 8,040 7,590 8,400

In Metric Tons (Contained Tin)

Tin Bar Tin Powder & Anodes

608 625 W 573 W W W W W W

946 1,190 1,200 1,150 684 704 721 714 570 617

Preliminary. 2 I ncludes small quantity of secondary pig tin and tin acquired in chemicals. Source: U.S. Geological Survey (USGS)

282

W NA W W W NA NA NA NA NA

In Metric Tons

Consumption of Tin in the United States, by Finished Products Year

796 NA 335 171 149 NA NA NA NA NA

W = Withheld Proprietary data.

Consumption of Primary and Secondary Tin in the United States Net Import Reliance as a % of Apparent Consumption

51 NA W 34 W NA NA NA NA NA

3

------------ Total ------------

White Metal

Other

Total

Primary

Secondary

789 992 965 1,340 754 778 943 1,260 1,390 1,320

3,927 3,990 4,550 3,230 3,980 4,260 3,220 3,210 2,230 2,920

46,600 42,200 46,000 44,700 44,400 45,700 46,900 47,000 41,900 39,800

34,600 33,700 35,200 36,500 36,200 37,100 38,000 38,100 34,200 34,000

11,900 8,530 10,800 8,180 8,250 8,620 8,890 8,940 7,630 5,830

I ncluding tin oxide.

W = Withheld proprietary data.

Titanium Supply – World production of titanium ilmenite concentrates in 2001 rose +1.0% to a new record high of 5.060 million metric tons. The largest producer of titanium ilmenite concentrates is Australia with 40.5% of world production in 2001, followed by Norway with 14.8%, Ukraine with 11.9%, and India with 8.5%. World production of titanium rutile concentrates in 2001 fell –2.3% to 378,000 metric tons from 387,000 metric tons in 2000. The world’s largest producers are Australia with 55% of world production, followed by South Africa with 24% and the Ukraine with 16%. Demand – US consumption of titanium dioxide pigment in 2001 fell -4.3% to 1.100 million metric tons from 1.150 million metric tons in 2000. US consumption of ilmenite in 2001 fell -5.6% to 1.180 million metric tons from 1.250 million metric tons in 2000. US consumption of rutile in 2001 fell sharply by -10.1% to 483,000 metric tons from 537,000 metric tons in 2000. Trade – US imports of titanium dioxide pigment in 2001 fell –4.1% to 209,000 and accounted for 19% of US consumption. US imports of ilmenite in 2001 rose +15.5% to 1.060 million metric tons and accounted for 90% of US consumption. US imports of rutile in 2001 fell –25.8% to 325,000 and accounted for 67% of US consumption.

Titanium is a silver-white, metallic element used primarily to make light, strong alloys. Its atomic symbol is Ti. It ranks ninth in abundance among the elements in the crust of the earth but is never found in the pure state. It occurs as an oxide in various minerals. It was first discovered in 1791 by Rev. William Gregor and was first isolated as a basic element in 1910. Titanium was named after the mythological Greek god Titan. Pure titanium is soluble in concentrated acids but insoluble in water. Titanium is extremely brittle when cold, but is malleable and ductile at a low red heat, thus easily fabricated. Due to its strength, low weight, and resistance to corrosion, titanium is used in metallic alloys and as a substitute for aluminum. It is used extensively in the aerospace industry, in desalinization plants, construction, medical implants, paints, pigments, and lacquers. Prices – The price of the mineral ilmenite, a primary source of titanium, has generally risen over the past decade and hit new highs of $90-110 per metric ton in 2001. The price of titanium metal sponge in 2001 fell to $3.58 per pound from $3.95 in 2000. The price of titanium dioxide pigments (Anatase) was unchanged in 2001 at 92-94 cents per pound. The price of titanium dioxide pigments (Rutile) rose to $1.001.09 in 2001 from $0.99-1.02 in 2000.

Average Prices of Titanium in the United States

Year

Average Price of Grade A Rutile Rutile Slag, 85% Ilmenite Titanium Dioxide Titanium Titanium Bagged F.O.B. Large Lots TiO2 F.O.B. F.O.B. Pigments, F.O.B. Metal Sponge, F.O.B. Australian Bulk, F.O.B. Richards Bay, Australian Sponge --------------- U.S. Plants ----------------Shipping Point Ports South Africa U.S. East Coast Ports --------------------------------- Dollars Per Metric Ton --------------------------------- -------------------------------------- Dollars Per Pound --------------------------------------

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1

61-64 74-80 81-85 82-92 68-81 72-77 90-103 83-105 90-110 85-100

Preliminary.

2

Estimate.

330 334 349 353 391 386 406 425 419 445

NA 410-430 550-650 525-600 500-550 470-530 435-510 470-500 450-500 430-470

370-400 450-480 650-800 700-800 650-710 570-620 500-530 480-570 475-565 400-540

3.75 3.96 4.06 ----------------------

3.50-4.00 3.75-4.25 4.25-4.50 4.25-4.50 4.25-4.50 4.25-4.50 3.70-4.80 3.95 3.58 3.64

.99 .94-.96 .92-.96 1.06-1.08 1.01-1.03 .96-.98 .92-.94 .92-.94 .92-.94 .85-.95

.92-.95 .92-.94 .99-1.03 1.08-1.10 1.04-1.06 .97-.99 .99-1.02 .99-1.02 1.00-1.09 .85-.95

Source: U.S. Geological Survey (USGS)

NA = Not available.

Salient Statistics of Titanium in the United States

In Metric Tons

Year

----- Titanium Dioxide Pigment -------- Exports of Titanium Products ---Ingots, Apparent ---------- Ilmenite ---------- ---- Titanium Slag ---- ---------- Rutile4 ---------- Ores & ProConConCon- ConcenDioxide & Billets, Conduction Imports3 Etc. trates sumption Imports3 sumption Imports3 sumption Scrap Pigments sumption Imports3

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022

1,161,561 1,250,000 1,250,000 1,230,000 1,340,000 1,330,000 1,350,000 1,400,000 1,330,000 1,410,000

1

171,939 176,000 183,000 167,000 194,000 200,000 225,000 218,000 209,000 231,000

1,028,311 301,000 1,090,000 808,000 1,130,000 861,000 1,070,000 939,000 1,130,000 952,000 1,140,000 1,010,000 1,160,000 1,070,000 1,150,000 918,000 1,100,000 1,060,000 1,120,000 840,000

Preliminary. 2 Estimate. 3 For consumption. Source: U.S. Geological Survey (USGS)

4

693,940 W 1,410,000 1,400,000 1,520,000 1,300,000 1,280,000 1,250,000 1,180,000 1,300,000

476,000 545,809 472,000 583,000 388,000 582,000 421,000 ----------------------------------------

Natural and synthetic.

5

371,481 332,000 318,000 324,000 336,000 387,000 344,000 438,000 325,000 390,000

464,825 510,000 480,000 398,000 489,000 421,000 494,000 537,000 483,000 487,000

1994 to date includes Slag.

15,202 19,000 32,300 15,500 23,800 59,700 9,380 18,900 7,800 3,810

3,893 4,120 3,420 3,410 5,500 7,010 8,130 5,060 7,500 6,000

261,000 313,000 306,000 292,000 362,000 356,000 344,000 423,000 349,000 485,000

1,511 1,559 2,560 3,130 3,860 3,780 3,390 2,980 3,260 3,460

W = Withheld proprietary data.

283

TITANIUM World Production of Titanium Illmenite Concentrates Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

Australia2

Brazil

China

India

Malaysia

1,804 1,817 2,011 2,061 2,265 2,409 2,008 2,173 2,047 1,956

90.6 97.4 102.1 98.0 97.2 103.0 96.0 123.0 111.1 115.0

155.0 155.0 160.0 165.0 170.0 175.0 180.0 185.0 185.0 185.0

320.0 300.0 290.0 330.0 332.0 378.0 378.0 380.0 430.0 460.0

279.0 116.7 151.7 244.6 167.5 124.7 127.7 124.8 129.8 106.0

In Thousands of Metric Tons

Norway

Sierra Leone

Sri Lanka

Thailand

Ukraine

World Total

713.0 826.4 833.2 746.6 750.0 590.0 600.0 750.0 750.0 750.0

62.9 47.4 -------------------------

76.9 60.4 49.7 62.8 18.0 34.1 -------------

20.82 1.68 .03 ----------------------

450 530 359 250 500 507 537 577 650 670

3,990 3,970 4,010 4,010 4,470 4,530 4,150 5,010 5,110 4,950

-- Titaniferous Slag4 -South Canada Africa

653 764 815 825 850 950 950 950 950 900

892 744 990 1,000 1,100 1,100 1,168 1,057 1,090 1,150

1

Preliminary. 2 I ncludes leucoxene. 4 Approximately 10% of total production is ilmenite. Beginning in 1988, 25% of Norway's ilmenite production was used to produce slag containing 75% TiO2. NA = Not available. Source: U.S. Geological Survey (USGS)

World Production of Titanium Rutile Concentrates Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21 1

Preliminary.

Australia

Brazil

India

Sierre Leone

186,000 233,000 195,000 180,000 233,000 238,000 179,000 208,000 206,000 218,000

1,744 1,911 1,985 2,018 1,742 1,800 4,300 3,162 1,791 2,000

13,900 14,000 14,000 15,000 14,000 16,000 16,000 17,000 19,000 18,000

152,000 137,000 -------------------------

NA = Not available.

In Metric Tons South Africa

Sri Lanka

Thailand

Ukraine

World Total

85,000 78,000 90,000 115,000 123,000 130,000 100,000 100,000 90,000 100,000

2,643 2,410 2,697 3,532 2,970 1,930 -------------

87 49 -------------------------

60,000 80,000 112,000 50,000 50,000 50,000 49,000 58,600 60,000 70,000

501,000 545,000 416,000 366,000 425,000 438,000 348,000 387,000 377,000 408,000

Source: U.S. Geological Survey (USGS)

World Production of Titanium Sponge Metal & U.S. Consumption of Titanium Concentrates -- U.S. Consumption of Titanium Concentrates, by Products (In Metric Tons) ----------------- Rutile (TiO2 Content) ----------------

Production of Titanium (In Metric Tons) ---------------------------------- Sponge Metal2 ---------------------------------Year

China

Ja p a n

1993 1994 1995 1996 1997 1998 1999 2000 2001 20021

2,000 2,000 2,000 2,000 2,000 ----------------

14,400 14,400 16,000 21,100 24,100 ----------------

1

United Russia Kingdom

20,000 12,000 12,000 18,000 20,000 ----------------

1,000 ----------------------------

Total

Pigments

Misc.

27,938 29,510 W W W ----------------

37,000 33,000 35,000 51,000 58,000 ----------------

434,097 W 1,010,000 1,010,000 1,410,000 1,290,000 1,270,000 1,240,000 1,160,000 1,280,000

451 637

Preliminary. 2 Unconsolidated metal in various forms. Source: U.S. Geological Survey (USGS)

284

3

Total

Welding Rod Coatings

Pigments

Misc.

Total

434,548 W 1,010,000 1,010,000 1,410,000 1,300,000 1,280,000 1,250,000 1,180,000 1,300,000

W W W W W W -------------

405,784 460,000 417,000 341,000 406,000 384,000 469,000 513,000 455,000 464,000

30,223 18,500 22,300 24,200 27,600 37,300 25,800 24,100 28,500 22,900

436,007 478,500 439,300 365,000 434,000 421,000 494,000 537,000 483,000 487,000

------- Ilmenite (TiO2 Content) -------

United States

I ncluded in Pigments.

3 3 3

14,000 13,400 13,900 15,400 16,000

NA = Not available.

W = Withheld proprietary data.

Tobacco Tobacco is a member of the nightshade family. It is commercially grown for its leaves and stems, which are rolled into cigars, shredded for use in cigarettes and pipes, processed for chewing, or ground into snuff. Christopher Columbus introduced tobacco cultivation and use to Spain after observing natives from the Americas smoking loosely rolled tobacco-stuffed tobacco leaves. Tobacco is cured, or dried, after harvesting and then aged to improve its flavor. The four common methods of curing are: air cured, fire cured, sun cured, and flue cured. Flue curing is the fasted method of curing and requires only about a week compared with up to 10 weeks for other methods. Cured tobacco is tied into small bundles of about 20 leaves and aged one to three years. Virginia tobacco is by far the most popular type used in pipe tobacco. It is the mildest of all blending tobaccos. Approximately 60% of the US tobacco crop is Virginia. Burley tobacco is the next most popular tobacco and is an air-cured tobacco. It burns slowly and is a cool smoke. Other tobacco varieties include Perique, Kentucky, Oriental, and Latakia. Prices – Tobacco prices (Types 11-37) half way through the 2003/4 marketing year (July-June) rallied to an average of $1.89 per pound from $1.84 in 2002/3. Average yearly tobacco prices have remained in the tight range of $1.83$1.90 over the past four marketing years, up from the $1.78$1.80 range seen in the previous three years. Supply – World production of tobacco in 2001, the last full reporting year for the series, fell -3.6% to 6.582 million metric tons from 6.826 million metric tons. The world’s largest producer of tobacco in 2001 by far was China with 39.3% of world production, followed at a distance by India (with 8.9% of world production), Brazil (8.2%), and the US (6.2%). US production in 2001 of 408,236 metric tons was down by nearly 50% from the 2-decade high of 810,154 metric tons in 1997. US tobacco is primarily grown in the mid Atlantic states which account for more than 86% of US production. Specifically, the largest tobacco producing states in the US are North Carolina (with 39.9% of US production in 2002), Kentucky (25.6%), Tennessee (8.0%), South Carolina (6.6%), and Georgia (6.2%). Flue-cured tobacco (type 11-14) is the most popular type grown in the US with production of 525.940 million pounds in 2002, down from 579.091 million pounds in 2001. The

World Production of Leaf Tobacco Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Brazil Canada

608,000 442,000 398,000 439,000 576,600 447,000 595,000 589,000 542,400 674,000

Preliminary.

2

86,094 71,500 79,287 65,320 71,110 69,300 64,864 64,864 64,864 64,864

Estimate.

second most popular type is burley tobacco (type 31) that had a production of 303.895 million pounds in 2002, down from 334.066 million pounds in 2001. US production of tobacco in 2002 fell to 886 million pounds, down 10.6% from 992 million pounds in 2001 and down 50% from the 2-decade high of 1.787 billion pounds posted in 1997. US farmers have sharply reduced the planting acreage for tobacco. In the last two years, farmers have planted about 430,000 acres of tobacco, much less than the 600,000+ acres planted in the 1988-99 period. Yields have been fairly constant and have averaged about 2,100 pounds per acre in the past 10 years, with a variation of plus or minus 10%. The farm value of the US tobacco crop fell to $1.726 billion in 2002 from $1.952 billion in 2001 and $2.002 billion in 2000. US production of flue-cured tobacco (Types 11-14) in 2002/3 rose to 565.0 million pounds from 544.4 million pounds in 2001/2. US production of burley tobacco (Type 31) in 2002/3 fell to 300.0 million pounds from 343.7 million pounds in 2001/2, and was down by more than 50% since the 10-year high of 628.2 million pounds in 1997/8. US production of cigarettes in 2002 was unchanged from 2001 at 580.0 billion, although that was down sharply by 19% from 10-years earlier (718.5 billion in 1992). US production of cigars fell slightly to 2.900 billion from 2.993 billion in 2001, but that was up by 67% from 10 years earlier (1.741 billion in 1992). US production of chewing tobacco in 2002 was unchanged from 2001 at 47.2 million pounds, which was down sharply by 31% from 10-years earlier. Demand – US per capita consumption of tobacco products in 2001, the last full reporting year, fell to 4.14 pounds per person per year, down from 4.22 pounds in 2000 and 5.60 pounds 10 years earlier (1990). Per capita cigarette consumption in 2002 rose to 3.60 pounds from 3.40 pounds in 2001, but per capita consumption of cigars fell to .58 pounds from .65 pounds in 2001 and chewing tobacco per capita consumption fell to .40 pounds from .47 pounds in 2001. Per capita consumption of loose smoking tobacco was unchanged at 0.15 pounds. Trade – US tobacco exports in 2002/3 fell sharply to 261.9 million pounds from 386.5 pounds in 2001/2. Meanwhile, US tobacco imports in 2002/3 were little changed from 2001/2 at 566.6 million pounds. The US exported 135.0 billion cigarettes and 270 million cigars in 2002/3.

In Metric Tons

China

Greece

India

Indonesia

Italy

Ja p a n

Pakistan

Turkey

United States

Zimbabwe

World Total

3,451,000 2,238,000 2,317,700 3,076,000 4,251,000 2,365,000 2,469,300 2,552,000 2,349,627 2,328,978

148,000 135,400 131,875 131,000 132,450 132,200 129,700 126,700 126,000 126,200

580,600 528,000 587,100 562,750 623,700 633,200 648,600 661,600 585,600 635,500

152,800 160,000 171,400 177,000 184,300 148,980 156,882 185,121 172,200 170,150

135,698 131,010 124,492 130,590 140,634 132,030 130,762 129,937 130,487 130,400

67,430 79,503 78,212 66,031 68,504 63,959 64,727 60,803 60,565 60,000

105,966 100,351 80,917 80,760 86,279 92,728 103,430 104,096 82,854 93,400

338,068 187,733 204,900 229,400 310,850 260,750 250,484 250,495 207,261 160,476

731,914 717,990 575,380 688,258 810,154 802,014 586,355 453,600 449,745 418,439

235,286 177,816 209,042 207,767 192,144 223,977 198,967 245,214 200,096 200,096

8,261,069 6,391,977 6,376,704 6,962,473 8,822,851 6,788,827 6,868,133 6,855,093 6,774,308 6,754,505

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

285

TOBACCO Production and Consumption of Tobacco Products in the United States

Year

---- Chew ing Tobacco ----------------------------- Consumption5 of Per Capita6 -------------------------CigarCigarSmoking Chewing Total L o o se Smoking Cigarettes Cigars3 ettes Cigars3 Tobacco Tobacco Products Plug Twist leaf Total Tobacco Snuff4 ettes Cigars3 - Billions - - Millions - ---------------------- In Millions of Pounds ---------------------- ------ Number ------ -------------------------- In Pounds --------------------------

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032

725.5 746.5 754.5 722.8 679.7 606.6 594.6 562.4 532.0 500.0

1,942 2,058 2,413 2,324 2,751 2,938 2,825 3,743 3,816

4.6 4.1 3.9 3.5 3.1 2.8 2.5 2.4 2.2 1.8

1.1 1.1 1.1 1.0 1.0 0.9 0.8 0.8 0.8 0.7

56.8 57.7 56.0 53.7 49.2 47.2 46.0 43.9 42.7 39.2

62.5 62.9 61.1 58.1 53.3 50.9 49.4 47.0 45.7 41.7

13.4 12.2 12.0 11.4 11.7 14.7 13.6 12.7 15.5 18.9

15.1 60.2 61.5 64.3 65.5 67.0 69.5 70.9 72.7 74.7

2,524 2,505 2,482 2,423 2,320 2,136 2,092 2,026 1,979 1,903

25.3 27.5 32.7 36.9 38.0 39.5 38.1 40.5 40.1 40.3

4.23 4.22 4.20 4.10 3.70 3.60 3.50 3.40 3.50 3.30

.41 .45 .54 .61 .62 .65 .63 .66 .66 .66

.16 .13 .12 .12 .12 .14 .15 .15 .15 .11

.67 .67 .64 .64 .64 .52 .49 .47 .40

4.90 4.67 4.70 4.55 4.49 4.32 4.14 4.11 4.23 4.10

1

Preliminary. 2 Estimate. 3 Large cigars and cigarillos. 4 I ncludes loose-leaf. 5 Consumption of tax-paid tobacco products. Unstemmed processing weight. 6 18 years and older. Source: Economic Research Service, U.S. Department of Agriculture (ERS)

Production of Tobacco in the United States, by States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Florida

Georgia

Indiana

Kentucky

Maryland

16,575 17,676 20,100 19,053 17,102 15,312 11,475 11,700 11,960 11,000

80,660 84,000 113,620 89,225 90,200 64,020 68,820 64,206 55,650 60,480

15,265 13,601 14,972 18,690 17,000 11,700 7,980 9,450 8,000 8,400

453,687 328,581 395,542 497,928 443,628 408,492 283,065 254,653 222,991 229,840

12,750 11,475 10,000 12,000 9,100 9,100 8,265 3,300 2,380 2,175

Preliminary.

In Thousands of Pounds

North Carolina

Ohio

599,853 484,599 585,542 731,199 551,730 448,980 406,500 386,920 347,920 310,695

18,360 15,015 12,640 22,230 17,934 17,052 13,200 11,956 9,625 9,010

Pennsylvania

South Carolina

Tenne sse e

Virginia

Wisconsin

Total

18,360 108,100 132,289 106,092 15,685 105,000 92,907 81,269 16,817 117,810 109,888 103,543 17,020 126,360 114,292 117,576 15,720 92,250 111,100 95,898 11,170 78,000 122,601 88,855 10,170 81,260 95,958 56,613 6,166 78,400 86,893 63,415 6,815 59,475 75,261 64,407 7,880 63,000 72,870 42,679

5,866 6,220 5,162 5,690 4,230 2,818 2,255 3,619 3,817 4,277

1,582,896 1,268,538 1,518,704 1,787,399 1,479,867 1,292,692 1,052,999 991,223 878,592 831,204

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

Salient Statistics of Tobacco in the United States Stocks of Tobacco5 ----- Tobacco ----- ---------------- U.S. Exports of ---------------- --------------- Various Types ---------------

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1 6

ProAcres (July - June) Cigar MaryCigar- Cigars & All Smoking All Fire Farm Farm Harvested Yield Per duction 2 3 Filler7 land ettes Cheroots Tobacco Tobacco Tobacco Cured6 Value Exports Imports Price Acre Million 1,000 M i l l i o n P o u n d s M i l l i o n s I n M i l l i o n s o f P o u n d s ------------------Acres Pounds Pounds Cents/Lb. Million $

671.1 663.1 733.1 836.2 717.7 647.2 472.4 432.3 428.7 416.2

2,359 1,913 2,072 2,137 2,061 1,997 2,229 2,293 2,049 1,997

1,583 1,269 1,519 1,787 1,480 1,293 1,053 991 879 831

177.4 182.0 188.2 180.2 182.8 182.8 191.0 195.7 193.8 196.7

2,779 2,305 2,854 3,217 2,701 2,356 2,002 1,940 1,703 1,635

Preliminary. 2 Domestic. 3 For consumption. Kentucky-Tennessee types 22-23. 7 Types 41-46.

4

442.1 432.6 533.1 450.1 461.9 394.7 351.4 386.7 325.6 274.8

537.5 623.3 717.2 565.8 529.6 480.2 457.8 568.0 549.3 691.7

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

434 462 486 487 467 423 397 411 338 326

77.0 91.8 110.4 118.2 142.5 151.1 136.1 118.2 144.0 132.3

2,588 2,541 2,225 2,031 2,250 2,301 2,388 1,893 1,738 1,584

69.7 80.5 80.2 83.3 84.8 86.7 87.8 93.8 99.5 100.5

24.1 20.5 17.9 13.2 13.0 11.4 9.5 12.1 12.3 12.3

8.4 9.7 11.7 15.0 18.7 20.6 16.0 13.4 14.4 15.4

In Thousands of Pounds (Farm-Sale Weight)

11-14

21

22

23

31

32

35-36

37

41

41-61

51

54

55

61

869,920 746,616 908,345 1,047,438 812,797 656,752 598,915 579,091 517,035 468,830

2,403 1,540 1,738 1,968 2,340 2,672 2,548 2,202 1,471 845

31,723 26,609 29,461 27,952 25,922 24,773 34,167 30,720 23,292 23,600

14,205 11,041 13,029 12,342 11,573 10,630 14,920 12,377 10,145 9,720

612,398 436,343 520,483 648,633 582,336 555,185 362,788 334,066 297,711 298,105

19,770 17,935 16,545 18,240 15,370 14,350 13,395 5,346 4,785 4,775

11,797 8,488 8,550 8,196 9,663 11,640 15,896 13,949 10,570 10,950

124 79 112 119 122 155 165 154 116 84

11,340 9,225 10,272 10,780 9,450 5,920 5,040 4,120 4,410 5,280

20,680 19,887 20,441 22,511 19,744 16,535 10,205 13,318 13,467 14,295

1,808 2,441 2,901 3,637 3,633 4,169 1,070 3,822 4,021 3,216

4,180 4,513 3,610 4,194 3,270 2,252 1,825 3,042 3,151 3,500

1,686 1,707 1,552 1,496 960 566 430 577 666 777

1,666 2,001 2,106 2,404 2,431 3,628 1,840 1,757 1,219 1,522

Preliminary.

286

74 94 67 86 93 84 113 124 236 97

I n bulk. 5 Flue-cured and cigar wrapper, year beginning July 1; for all other types, October 1. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Tobacco Production in the United States, by Types Year

220,200 231,100 243,900 217,000 201,300 151,400 148,300 133,900 127,200 119,600

Source: Agricultural Statistics Board, U.S. Department of Agriculture (ASB-USDA)

TOBACCO U.S. Exports of Unmanufactured Tobacco

In Millions of Pounds (Declared Weight)

Australia

BelgiumLuxem.

Denmark

France

Germany

Italy

Ja p a n

Netherlands

Sweden

Switzerland

Thailand

United Kingdom

Total

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

5.7 6.4 4.8 5.6 4.2 5.0 3.2 3.6 3.4 4.5

12.8 12.3 17.9 39.7 38.9 25.2 18.3 23.2 49.7 29.4

15.5 14.9 14.6 15.1 15.5 14.8 14.9 15.7 12.2 13.6

4.3 3.1 3.9 3.2 7.0 6.6 5.6 5.5 11.5 10.3

52.1 54.1 70.7 60.1 72.2 84.6 71.9 86.1 94.8 59.5

7.3 11.3 14.8 17.3 18.3 13.6 15.1 15.8 6.2 8.6

124.7 126.2 106.9 88.7 80.5 85.3 60.3 63.6 51.6 49.6

38.1 30.9 39.2 40.4 30.2 43.9 64.5 19.7 21.6 10.3

8.1 7.3 3.0 3.7 5.2 2.6 3.9 3.5 3.6 1.2

6.1 6.0 14.4 14.9 11.4 10.3 16.1 9.5 14.4 27.3

17.8 19.0 19.0 15.9 21.6 14.2 6.8 7.3 7.7 12.6

20.8 14.7 14.2 34.4 18.2 15.6 9.0 7.3 1.6 6.0

458.0 433.9 461.8 485.5 487.4 466.3 417.5 402.4 409.7 338.0

1

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Year

Preliminary.

U.S. Salient Statistics for Flue-Cured Tobacco (Types 11-14) in the United States

Crop Year

Acres Harvested 1,000

Yield Per Acre Pounds

Marketings

Stocks July 1

Total Supply

360.0 386.2 422.2 458.3 368.8 303.8 250.0 238.1 245.6 234.4

2,420 1,933 2,151 2,285 2,204 2,162 2,396 2,432 2,105 2,000

807 854 897 1,014 815 654 564 544 565 508

1,295 1,187 1,166 1,117 1,253 2,162 1,189 1,036 916 838

2,102 2,041 2,063 2,130 2,068 2,816 1,754 1,581 1,481 1,345

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Preliminary.

2

Estimate.

346 345 391 336 341 262 238 276 220 190

569 531 555 541 492 437 479 389 423 410

346 345 391 336 341 262 238 276 220 190

Acres Harvested 1,000

Yield Per Acre Pounds

Marketings

Stocks Oct. 1

Total Supply

266.0 234.2 268.3 335.3 307.1 303.6 193.8 167.6 158.6 156.2

2,300 1,863 1,940 1,934 1,896 1,829 1,957 2,033 1,877 1,908

568 483 516 628 590 551 315 344 300 290

1,014 959 890 751 832 901 1,040 689 648 578

1,582 1,441 1,407 1,379 1,422 1,453 1,355 1,033 948 868

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Preliminary.

2

Estimate.

Preliminary.

111,636 107,411 123,040 112,797 116,457 110,435 86,838 84,980 89,242 72,838 2

Forecast.

158.3 159.7 160.1 162.1 162.8 163.2 164.0 166.0 165.6 166.3

298.5 157.6 181.0 145.3 311.5 318.3 256.9 93.2 17.8 70.6

396.5 62.3 .0 .0 182.7 144.9 135.9 65.0 12.8 68.7

3

Before Christmas holidays.

159 165 209 168 169 139 142 140 149 135

464 386 446 379 349 273 524 245 221 206

623 551 656 548 520 413 666 385 370 341

184.1 185.5 192.2 188.5 190.3 182.9 196.3 197.3 197.9

Price ----- Loan Stocks ----Support Gross Level UncomSales3 Cents/Lb. Nov. 30 mitted

455.7 341.6 422.6 337.9 431.6 356.6 169.7 258.5 217.7 197.3

752,646 749,305 866,208 786,473 832,381 776,640 611,054 606,145 653,795 530,580 NA = Not available.

51,892 49,859 47,129 52,202 56,803 50,167 49,398 36,649 41,254 39,083

171.4 172.5 173.7 176.0 177.8 178.9 180.5 182.6 183.5 184.9

345.2 212.5 216.8 105.6 183.8 226.6 420.7 119.3 124.2 91.7

380.8 50.8 27.1 38.5 142.2 186.7 336.5 74.8 46.1 26.5

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

In Metric Tons

----------------------------------------------------------------- Unmanufactured ---------------------------------------------------------------FlueValue Value Value Cured 1,000 USD Burley 1,000 USD Total 1,000 USD

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1

97.7 12.0 1.8 195.5 82.4 136.4 27.4 15.0 24.8

In Millions of Pounds

Farm Total Domestic Price D i sa p D i sa p Exports pearance pearance Cents/Lb.

Exports of Tobacco from the United States (Quantity and Value) Year

169.8 179.4 183.4 172.0 175.5 173.7 179.3 185.7 182.5 185.2

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Salient Statistics for Burley Tobacco (Type 31) in the United States Crop Year

In Millions of Pounds

Placed Price ----- Loan Stocks ----Under Support Gov't Total Farm Domestic Level UncomLoan Price D i sa p D i sa p Exports pearance pearance Cents/Lb. Million Lb. Cents/Lb. Nov. 30 mitted

389,964 380,993 365,206 380,012 454,849 409,773 404,564 306,883 352,256 326,580

207,747 196,792 209,481 222,316 221,510 211,930 191,975 179,892 186,300 153,427

1,306,067 1,302,744 1,399,863 1,390,311 1,553,314 1,458,877 1,311,643 1,204,085 1,268,839 1,049,709

Manufactured

Value 1,000 USD

49,669 63,837 77,135 83,383 85,734 ----------------

4,253,286 5,367,220 5,221,487 5,238,340 4,956,392 4,517,500 3,232,862 4,012,711 2,734,378 1,948,161

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

287

Tung Oil Tung oil is a yellow drying oil produced from the seed of the tung tree. The seeds or nuts of the tung tree are harvested and pressed to yield the tung oil. Tung oil is mostly used as an industrial lubricant and drying agent, in fact it is the most powerful drying agent known. It is also used in paints and varnishes as well as in soaps, inks, and electrical insulators. Tung oil is poisonous, containing glycerol esters of unsaturated fats. The oil is also used as a substitute for linseed oil in paints, varnishes, and linoleum and as a waterproofing agent. Prices – The price of tung oil in 2002 (through Oct) fell sharply by –29% to a 13-year low of 43.53 cents per pound from 61.63 cents in 2001. Demand – US consumption of tung oil has fallen

World Tung Oil Trade Year

In Metric Tons

---------------------------------------------------------- Imports ---------------------------------------------------------- --------------------------------- Exports --------------------------------Hong NetherSouth United World ArgenHong ParaWorld Germany Kong Ja p a n lands Korea Taiwan States Total tina China Kong guay Total

1996 1997 1998 1999 2000 2001 1 20022 1

steadily and sharply over the past decade. In 2003 (through Oct), US consumption plunged 42% to 4.362 million pounds from 7.547 million pounds in 2002. The 2003 consumption level was down by 80% from the peak year of 21.645 million pounds in 1996. Trade – US imports of tung oil in 2001 rose 25% to 4,429 metric tons. The US in 2001 was the largest importer of tung oil, accounting for 18% of world imports. Other major importers are South Korea (with 14% of world imports), the Netherlands (11%), and Japan (7%). The world’s largest exporter of tung oil by far is China with 17,615 metric tons of exports in 2001, accounting for 79% of total world exports.

863 733 601 1,002 885 582 325

Preliminary.

2

1,247 1,404 1,101 470 416 36 702

Estimate.

3,619 6,807 3,813 2,455 2,225 1,647 1,930

1,926 1,702 2,738 2,488 2,700 2,700 1,793

7,317 6,345 4,410 3,560 4,900 3,390 6,968

4,244 5,931 5,730 6,699 4,346 2,113 5,185

3,944 6,264 3,880 5,822 3,554 4,429 4,166

31,142 38,013 31,657 31,771 29,085 24,291 30,166

1997 1998 1999 2000 2001 2002 2003 1 1

19,718 30,012 21,743 24,172 24,213 17,615 23,334

In Thousands of Pounds

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

934 935 862 1,065 1,044 427 685

1,922 1,146 797 1,083 842 476 276

2,720 1,342 967 1,064 533 583 508

2,170 1,103 1,071 1,193 366 410 317

1,335 1,536 2,137 1,159 281 471 322

2,034 1,255 1,140 1,176 431 454 233

2,618 1,248 1,519 1,107 253 428 270

1,262 1,172 1,043 1,224 430 877 349

1,267 1,214 1,012 733 399 695 406

1,099 1,216 933 711 411 978 269

857 1,037 962 700 243 862 376

1,157 1,112 937 648 235 886 228

19,375 14,316 13,380 11,863 5,468 7,547 4,239

Year

Source: Bureau of the Census, U.S. Department of Commerce

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

2,373 2,484 2,010 691 685 W 490

2,754 3,116 3,427 910 2,438 W W

3,417 4,548 5,427 611 2,181 W 858

2,808 3,949 3,740 2,555 2,131 W 763

2,134 3,357 3,078 2,254 1,881 1,341 722

2,230 3,300 2,788 1,982 1,727 1,206 790

2,230 2,435 2,710 1,658 1,578 885 398

1,561 2,409 2,346 1,381 1,168 516 W

2,525 3,578 2,047 1,262 1,046 483 W

2,535 2,523 1,959 1,217 714 551 W

2,311 2,501 1,359 1,011 W 560 W

2,326 2,272 1,002 827 W 478 W

W = Withheld proprietary data.

Source: Bureau of the Census, U.S. Department of Commerce

Average Price of Tung Oil (Imported, Drums) F.O.B. in New York Year

1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

74.00 110.00 100.00 59.00 60.50 60.50 45.00

92.00 110.00 100.00 59.00 62.00 44.50 45.00

92.00 110.00 100.00 59.00 62.00 44.50 52.80

103.00 110.00 100.00 59.00 62.00 42.00 84.75

103.00 100.00 100.00 59.00 62.00 40.00 85.00

103.00 100.00 74.00 59.00 62.00 40.00 85.00

103.00 100.00 74.00 59.00 62.00 40.00 85.00

108.00 100.00 74.00 59.00 62.00 40.00 85.00

110.00 100.00 74.00 59.00 62.00 40.00 85.00

110.00 100.00 74.00 59.00 62.00 43.75

110.00 100.00 74.00 59.00 60.50 45.00

110.00 100.00 74.00 59.00 60.50 45.00

101.50 103.33 84.83 59.00 61.63 43.77 72.51

Preliminary.

288

In Thousands of Pounds

Jan.

Preliminary.

1997 1998 1999 2000 2001 2002 2003 1

28,726 41,851 28,933 31,240 31,049 22,411 30,502

F eb.

Stocks of Tung Oil at Factories & Warehouses in the U.S., on First of Month

1

3,156 4,260 2,161 2,303 2,799 1,974 4,390

Jan.

Preliminary.

1997 1998 1999 2000 2001 2002 20031

1,266 991 552 560 494 108 589

Source: The Oil World

Consumption of Tung Oil in Inedible Products in the United States Year

2,427 3,976 2,205 1,425 1,870 1,061 916

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Tungsten Tungsten is a grayish-white, lustrous, metallic element. The atomic symbol for tungsten is W because of its former name of Wolfram. The atomic number is 74. Tungsten has the highest melting point of any metal at about 3410 degrees Celsius and boils at about 5660 degrees Celsius. In 1781, the Swedish chemist Carl Wilhelm Scheele discovered tungsten. Tungsten is never found in nature but occurs in wolframite, scheelite, huebnertite, and ferberite. Tungsten has excellent corrosion resistance qualities and is resistant to most mineral acids. Tungsten is used as filaments in incandescent lamps, electron and television tubes, alloys of steel, spark plugs, electrical contact points, cutting tools, and in the chemical and tanning industries. Prices – The average price of tungsten at US ports in

World Concentrate Production of Tungsten Year

2001, the latest reporting year, rose +36% to a 19-year high of $87.72 per ton from $64.67 in 2000. Supply – World concentrate production of tungsten in 2002 rose by 31% from 2001 to a 12-year high of 59,100 metric tons. The world’s largest producer of tungsten by far is China with 49,500 metric tons of production in 2002 representing 84% of total world production. The only other producer of consequence is Russia with 3,400 metric tons of production representing 6% of world production. Trade – The US in 2002 relied on imports for 70% of its tungsten consumption, up from 59% in 2001. US imports for consumption in 2002 rose to 4,090 metric tons from 2,680 metric tons in 2001. US exports were negligible at 94 metric tons.

In Metric Tons (Contained Tungsten3)

Australia

Austria

Bolivia

Brazil

Burma

China

Kazakhstan

Mongolia

Peru

Portugal

Rep. of Korea

Russia

World Total

----------------------

1,413 1,400 1,423 1,610 1,600 1,237 1,400

582 513 497 334 382 533 500

99 40 ---13 14 31 30

334 272 178 87 74 71 70

26,500 25,000 30,000 31,100 37,000 38,500 49,500

----------------------

17 26 35 27 52 63 60

332 280 76 -------------

776 1,036 831 434 743 700 700

----------------------

3,000 3,000 3,000 3,500 3,500 3,500 3,400

34,700 33,200 37,400 37,900 44,000 45,300 59,100

1996 1997 1998 1999 2000 20011 20022 1

Preliminary. 2 Estimate. 3 Conversion Factors: WO3 to W, multiply by 0.7931; 60% WO3 to W, multiply by 0.4758. Source: U.S. Geological Survey (USGS)

Salient Statistics of Tungsten in the United States

Year

Net Import -------------------- Consumption of Tungsten Products by End Uses -------------------Reliance Cutting Products as a % of --------------- Steel --------------Stainless Chemical Apparent & Wear Made from & Heat Alloy and Metal MiscelCon- Total ConSuper- Resistant Tool Assisting Steel3 Powder laneous Ceramic alloys Materials sumption sumption

1996 1997 1998 1999 2000 20011 20022 1

In Metric Tons (Contained Tungsten)

89 84 78 81 68 59 70

Preliminary. Miscellaneous.

2

5,260 6,590 3,210 2,100 W W W

434 361 4

W W W W

107 151 532 486 408 389 313

Estimate. 3 Other than tool. Source: U.S. Geological Survey

177 277 219 189 W W W 4

371 366 333 306 498 599 426

5,960 6,280 6,640 5,910 5,960 5,650 4,820

687 828 1,270 1,860 W W W

I ncluded with stainless & heat assisting.

Averag e P rice o f Tu n g sten at E u ro p ean Market (L o n d o n ) Year

1997 1998 1999 2000 2001

0 151 532 -------------

97 123 97 93 89 80 133

Exports

Consumers

Producers

18 12 10 26 70 220 94

4,190 4,850 4,750 2,870 2,370 2,680 4,090

569 658 603 376 W W W

44 44 W W W W W

In Dollars Per Metric Ton

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

Average

48.00 46.00 37.38 43.00 66.56

49.00 46.00 38.50 43.00 70.00

50.00 46.00 38.50 43.50 70.50

50.00 46.00 38.50 44.00 70.50

50.00 46.00 38.50 44.00 70.50

50.00 46.00 38.50 44.00 70.50

50.00 45.00 38.50 42.75 70.50

43.00 43.00 40.36 41.43 68.06

43.00 43.00 43.00 44.00 64.07

43.00 43.00 43.00 45.63 59.39

46.00 43.00 43.00 51.06 50.99

46.00 43.00 43.00 52.50 48.72

47.33 40.00 40.25 44.93 58.43

Average Price of Tungsten at U.S. Ports (Including Duty) 1999 2000 2001 2002 2003

--- Concentrates --Imports for Consumption

W = Withheld proprietary data; included with

65% W O3 B asis, C .I .F., combined wolframite and scheelite quotations; data thru 1970 are for 60% W O3.

Year

Stocks at End of Year

S ource: U.S . Geolog ical S urvey (US GS )

In Dollars Per Short Ton

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

49.50 53.75 83.50 ---60.25

49.50 53.75 86.00 70.00 61.55

49.50 53.75 90.00 70.00 63.00

49.50 53.29 93.00 70.00 63.00

48.57 50.50 96.15 70.00 63.00

48.75 50.50 96.50 68.13 63.00

49.16 51.88 93.88 57.88 63.00

50.88 53.50 92.88 59.88 63.00

51.50 69.00 91.00 60.25 63.00

54.44 74.00 89.89 60.25 63.00

54.75 76.00 83.84 60.25 63.00

54.75 78.92 79.57 60.25 63.00

52.00 64.67 87.72 64.26 62.65

U.S. Spot Quotations, 65% WO3, Basis C.I .F.

Source: U.S. Geological Survey (USGS)

289

Turkeys During the past three decades, the turkey industry has experienced tremendous growth in the US. Turkey production has more than tripled since 1970, with a current value of over $7 billion. Turkey was not a popular dish in Europe until a roast turkey was eaten on June 27, 1570, at the wedding feast of Charles XI of France and Elizabeth of Austria. The King was so impressed with the birds that the turkey subsequently became a popular dish at banquets held by French nobility. The most popular turkey product continues to be the whole bird, with heavy demand at Thanksgiving and Christmas. The primary breeders maintain and develop the quality stock, concentrating on growth and conformation in males and fecundity in females, as well as characteristics important to general health and welfare. Turkey producers are divided into large companies that produce turkeys all year round, and relatively small companies and farmers who produce turkeys primarily for the seasonal market. Prices – The average price received by farmers for turkeys in the US in 2003 fell –2.4% to 35.5 cents per pound from 36.4 cents in 2002 which was substantially lower than the 7-year high of 41.4 cents posted in 2000. The average retail price of turkeys (whole frozen) in the US in 2003 rose +3.0% to 108.4 cents per pound from 105.3 cents in 2002.

That was only slightly below the record yearly high of 109.7 cents posted in 2001. Turkey prices have more than doubled from the low 40-cent area seen in the early 1970s. Supply – World production of turkeys in 2003 rose by +0.8% to a record high of 4.937 million metric tons from 4.896 million metric tons in 2002. World production of turkeys has grown by more than two and one-half times since 1980 when production was 2.090 million metric tons. The US is the largest producer of turkeys by far with 2.541 million metric tons of production in 2003, representing 44% of world production. The value of US turkey production in 2002 was $2.700 billion. Demand – World consumption of turkeys in 2003 rose +0.9% to 4.718 million metric tons, which was just below the record high of 4.744 million metric tons posted in 2001. US turkey consumption of 2.319 million metric tons in 2003 accounted for 49% of world consumption. US per capita consumption of turkeys in 2003 was unchanged from 2002 at 17.7 pounds per year. US per capital consumption of turkeys has been in the range of 17-18 pounds since 1990, which marks a substantial increase from the 1970 level of 8.1 pounds and the 1980 level of 10.3 pounds.

P ro d u ctio n an d C o n su mp tio n o f Tu rkey Meat, b y S elected C o u n tries Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

In Thousands of Metri c Tons (RTC)

------------------------------------------ P ro d u ctio n ------------------------------------------ ------------------------------------------ C o n su mp tio n -----------------------------------------GerUni ted United World GerUnited Uni ted World Canada France many Italy Ki ngdom States Total Canada France many Italy Ki ngdom States Total

133 141 146 142 139 139 152 149 147 152

P reliminary.

2

568 650 671 708 725 682 720 735 -------

F orecast.

180 206 217 243 256 271 272 272 -------

269 294 315 338 361 343 330 350 -------

266 289 293 293 268 264 265 268 -------

2,239 2,299 2,450 2,455 2,366 2,372 2,419 2,490 2,533 2,541

4,055 4,292 4,372 4,503 4,571 4,734 4,758 4,847 4,896 4,937

128 126 123 126 139 136 137 135 143 146

330 353 352 332 360 369 376 394 -------

295 327 361 386 396 410 412 412 -------

245 262 277 295 302 310 303 317 -------

271 287 298 277 276 255 250 250 -------

2,110 2,133 2,225 2,141 2,214 2,223 2,223 2,269 2,288 2,319

3,894 4,121 4,185 4,155 4,532 4,707 4,668 4,744 4,678 4,718

S ource: F oreig n Ag ricult ural S ervice, U.S . Depart ment of Ag ricult ure (F AS -US DA)

Salient Statistics of Turkeys in the United States

Poults Placed3 Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

Number Raised4

---- In Thousands ----

308,871 317,468 320,882 325,375 305,612 297,798 297,387 298,094 301,721 296,877

287,650 286,585 292,356 302,713 301,251 285,204 270,494 269,969 272,059 272,429

----- Livew eight ----Produced Price Mil. Lbs. Cents/Lb.

6,432.6 6,540.3 6,761.3 7,222.8 7,225.1 7,050.9 6,886.4 6,942.8 7,154.8 7,406.1

39.0 40.4 41.0 43.3 39.9 38.0 40.8 40.7 39.0 36.5

Value of Production Million $

2,509.1 2,643.1 2,769.4 3,124.5 2,884.4 2,679.3 2,809.9 2,822.7 2,790.3 2,700.3

Wholesale ------------------- Ready-to-Cook Basis -------------------- Ready-to-Cook -Production B e3-Region --- Consumption --- ---------- Costs ---------Pro- ginning Pro- Weighted P er F eed Total duction Stocks Exports Total duction Average Capita ----------- In Millions of Pounds ----------Price5 Costs Lbs. -- Livew eight Basis --

4,798 4,937 5,069 5,466 5,478 5,281 5,297 5,402 5,524 5,600

272 249 254 271 328 415 304 254 241 252

244 280 348 438 606 446 378 445 494 495

4,577 4,652 4,705 4,907 4,720 4,880 4,902 4,902 4,975 5,009

17.7 17.8 17.9 18.5 17.6 18.0 18.0 17.0 17.5 17.7

22.20 24.00 21.90 31.60 28.20 22.96 19.00 19.98 20.55 20.85

35.86 37.70 35.60 45.30 41.90 36.66 32.70 33.68 34.25 34.55

61.12 63.40 60.80 72.90 68.70 62.12 57.17 58.40 59.11 59.48

62.83 65.90 66.20 66.80 63.80 62.15 67.81 68.06 63.63 61.09

Preliminary. 2 Estimate. 3 Poults placed for slaughter by hatcheries. 4 Turkeys place August 1-July 31. 5 Regions include central, eastern and western. Central region receives twice the weight of the other regions in calculating the average. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

290

TURKEYS Turkey-Feed Price Ratio in the United States

In Pounds1

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2

5.4 6.8 5.3 5.4 5.4 6.5 7.6 7.3 7.2 5.7

5.4 6.4 5.2 5.1 5.2 7.1 7.2 7.5 7.2 5.9

5.5 6.5 5.1 5.0 5.4 7.5 7.6 7.7 6.8 5.9

5.8 6.4 4.8 5.1 5.7 7.8 7.9 8.0 6.8 5.8

5.9 6.3 4.6 5.3 5.8 8.2 7.8 8.1 7.3 5.6

6.1 6.3 4.9 5.6 6.1 8.7 8.5 8.3 7.3 5.7

6.9 6.0 4.9 6.0 6.5 9.7 9.5 7.9 6.9 5.8

7.4 6.3 4.8 5.9 7.6 9.5 10.0 7.8 6.3 5.6

7.4 6.4 5.3 6.1 8.1 9.6 10.1 8.3 6.0 5.9

7.9 6.4 6.2 6.2 8.3 10.0 10.0 9.6 6.1 6.2

7.9 6.5 6.4 6.2 8.2 9.9 9.8 9.6 6.5 6.2

7.3 5.7 6.1 5.8 7.5 9.2 8.1 8.1 6.4 5.6

6.6 6.3 5.3 5.7 6.7 8.6 8.7 8.2 6.7 5.8

1

Pounds of feed equal in value to one pound of turkey, liveweight. 2 Preliminary. 3 New data series due to NASS switching to basing ration costs on raw ingredient prices (corn and soybeans) rather than commercial feed prices. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price Received by Farmers for Turkeys in the United States (Livew eight) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

37.0 39.3 40.9 38.6 35.5 34.8 36.4 36.6 34.1 34.6

37.3 37.2 42.4 36.4 34.0 35.7 35.7 36.3 34.1 34.5

38.4 38.3 41.8 37.8 34.6 37.0 38.2 37.1 32.9 35.1

39.2 38.3 42.2 39.7 35.7 38.7 40.0 37.6 32.9 35.1

39.9 38.4 43.2 41.3 35.5 39.4 40.8 38.2 35.8 34.4

40.3 39.3 44.4 41.6 35.9 41.3 41.8 38.3 37.2 34.4

40.6 39.6 45.0 41.1 37.5 42.0 42.2 38.5 38.6 33.1

42.1 41.9 44.3 41.0 38.6 43.0 43.2 38.7 38.2 32.2

43.1 43.6 44.2 41.1 40.2 44.3 44.8 40.5 37.2 35.7

44.5 45.2 45.1 41.0 42.7 45.3 46.1 44.2 37.2 38.6

44.3 47.3 45.5 41.9 43.8 45.3 47.1 44.5 39.8 40.7

42.2 44.0 43.2 38.7 40.3 42.2 40.5 38.7 38.7 37.7

40.7 41.0 43.5 40.0 37.9 40.8 41.4 39.1 36.4 35.5

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Preliminary.

Average Wholesale Price of Turkeys1 (Hens, 8-16 Lbs.) in New York

In Cents Per Pound

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

60.09 60.71 64.60 59.71 55.65 57.67 61.58 61.50 60.86 61.04

59.32 58.54 64.65 57.84 54.04 58.84 61.84 61.18 60.03 61.13

60.98 60.04 65.07 59.30 55.49 61.69 65.35 62.38 59.00 61.24

61.58 60.05 64.82 62.93 55.49 63.02 67.38 63.45 59.52 61.43

63.14 60.57 65.39 66.64 58.68 65.55 69.18 65.65 63.52 60.36

64.61 62.76 65.85 68.60 58.14 68.89 70.36 66.00 65.68 60.12

65.26 64.78 65.66 68.59 58.68 71.62 71.55 66.10 66.52 58.18

66.39 68.52 64.94 68.20 63.17 73.57 73.61 66.38 66.56 57.74

68.98 72.92 64.16 67.89 65.65 76.28 76.53 68.81 67.15 61.52

73.13 76.73 69.09 67.33 71.52 79.30 78.74 72.86 67.75 66.08

74.01 80.31 73.58 70.07 72.95 78.99 79.58 73.48 69.79 69.33

70.35 70.35 70.05 62.18 69.00 72.39 70.31 67.71 66.96 66.85

65.65 66.36 66.49 64.94 61.54 68.98 70.50 66.29 64.45 62.09

Ready-to-cook.

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Certified Federally Inspected Turkey Slaughter in the U.S. (RTC Weights) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

347.8 386.3 412.4 439.7 430.5 408.9 396.9 458.3 477.2 473.6

342.0 368.9 426.5 389.5 407.7 361.0 412.4 405.9 442.1 427.1

400.9 433.1 422.3 399.6 437.8 428.8 466.2 458.7 447.8 464.6

380.6 369.6 430.9 448.8 444.0 435.8 413.5 425.1 487.2 471.1

415.6 441.4 483.0 465.8 419.1 438.6 489.2 485.1 496.7 475.8

457.9 478.4 454.7 481.4 454.2 452.4 479.4 460.7 448.0 478.0

405.6 409.1 484.8 488.8 456.0 434.7 422.8 465.1 474.7 483.9

483.6 447.3 476.6 453.0 409.9 464.3 481.6 481.7 475.9 449.3

447.7 419.5 440.9 457.6 425.3 451.3 423.0 409.2 439.4 453.6

459.1 480.2 518.1 510.0 470.5 468.7 494.7 536.2 519.0 522.8

453.9 463.0 465.9 450.6 459.5 487.6 478.2 477.7 488.2 450.3

397.5 394.4 406.1 457.9 428.2 425.4 396.5 413.2 457.9 436.1

4,992 5,091 5,422 5,443 5,243 5,257 5,354 5,477 5,654 5,586

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

291

TURKEYS Per Capita Consumption of Turkeys in the United States Year

Second Quarter

Third Quarter

Fourth Quarter

Total

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

3.5 3.6 3.6 3.7 3.5 3.9

3.7 3.9 3.9 3.9 4.0 3.9

3.9 4.4 4.2 4.6 4.2 4.2

6.5 6.2 6.2 6.2 6.0 6.0

17.7 17.8 17.9 18.5 17.6 18.1

1999 2000 2001 2002 20031 20042

3.8 3.7 3.9 3.5 3.6 3.7

3.8 4.2 3.8 3.9 3.9 3.8

4.4 4.4 4.3 4.4 4.6 4.2

5.8 5.5 5.6 5.9 5.3 5.6

18.0 17.8 17.5 17.7 17.4 17.3

Estimate.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

1993 1994 1995 1996 1997 1998 1

Preliminary.

In Pounds

First Quarter

2

Storage Stocks of Turkeys (Froz en) in the United States on First of Month Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2 0 0 31 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

249.1 254.4 271.3 328.0 415.1 304.3 254.3 241.3 240.5 333.0

279.8 312.9 339.2 401.0 497.6 363.8 319.4 291.4 327.1 451.9

304.8 359.5 423.1 446.4 512.7 375.6 353.9 333.5 413.2 468.9

346.5 432.1 445.4 496.5 527.0 374.9 391.4 355.8 457.6 539.1

399.1 466.2 514.5 543.3 579.7 455.4 416.9 392.6 515.2 573.5

461.4 536.3 587.4 611.8 614.1 494.3 480.3 456.0 578.2 658.8

539.2 598.8 679.7 667.9 656.5 556.1 506.8 506.7 644.1 718.2

588.1 651.1 718.2 714.3 701.8 599.0 524.0 534.2 706.2 722.5

623.4 678.2 723.2 742.0 706.8 580.3 524.9 545.3 685.6 706.5

648.6 686.0 721.0 770.7 699.5 596.4 528.1 542.0 672.4 647.5

636.2 644.2 658.3 736.6 658.7 494.5 473.9 497.9 624.9 582.7

280.7 270.1 347.8 438.6 310.4 252.3 261.1 260.0 334.3 350.7

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Retail2 Price of Turkeys (Whole froz en) in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

In Millions of Pounds

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

70.3 69.5 103.5 106.3 103.4 96.9 101.3 108.8 102.2 106.6

69.4 67.1 104.7 106.7 100.1 100.1 102.5 112.5 105.1 105.8

70.6 68.5 106.9 104.7 99.6 98.4 101.5 112.7 106.6 105.5

70.9 68.6 101.4 103.2 97.2 93.6 99.7 109.7 104.0 100.1

72.0 70.1 104.3 104.5 95.7 97.5 102.9 109.4 102.5 106.0

72.6 72.5 104.1 107.8 99.1 100.5 106.5 110.9 107.3 110.6

72.8 74.2 104.4 107.4 100.8 103.1 109.5 111.0 108.0 113.4

74.8 77.8 108.6 109.2 102.4 101.5 104.5 113.5 106.8 116.2

77.3 81.6 106.5 108.9 105.2 101.8 104.4 116.2 106.6 116.7

79.9 84.9 107.4 106.2 102.5 102.5 106.7 114.6 111.7 111.2

83.3 86.5 98.1 97.6 93.4 96.4 98.1 98.0 103.8 100.6

77.3 77.5 102.0 98.2 95.4 97.6 99.4 99.5 98.8 105.4

74.3 74.9 104.3 105.1 99.6 99.2 103.1 109.7 105.3 108.2

Preliminary.

2

Data prior to 1996 are prices to selected retailers.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Retail-to-Consumer Price Spread of Turkeys (Whole) in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

292

In Cents Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

27.5 28.5 30.4 38.3 38.8 29.9 32.1 39.5 34.2 38.4

29.7 32.0 30.7 40.7 37.2 32.7 33.9 43.3 37.9 37.6

28.1 33.7 33.6 37.5 35.2 28.6 29.1 42.5 40.7 36.8

25.1 32.1 28.0 32.0 31.2 21.3 25.9 39.1 38.3 31.2

27.1 32.7 29.3 29.6 29.4 22.5 27.6 37.7 32.9 38.1

28.8 32.8 28.0 32.0 30.7 22.6 29.5 38.7 35.9 42.9

28.7 30.8 27.9 32.0 29.6 23.2 30.9 38.6 35.9 47.1

27.6 28.2 32.1 34.5 29.0 29.1 23.7 40.5 34.9 50.0

27.1 27.0 30.3 34.3 29.3 18.5 21.1 41.0 35.4 47.2

25.5 20.1 28.9 31.9 21.3 17.6 21.7 35.6 40.2 37.8

13.9 10.6 18.0 20.0 10.3 12.0 13.4 18.7 29.8 25.1

20.3 21.2 26.6 26.9 19.0 19.6 23.1 27.0 24.6 33.2

25.8 27.5 28.7 32.5 28.4 23.1 26.0 36.9 35.1 38.8

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Uranium Uranium is a chemically reactive radioactive, steel-gray, metallic element and is the main fuel used in nuclear reactors. Uranium is the heaviest of all the natural elements. Its atomic symbol is U and its atomic number is 92. Traces of uranium have been found in archeological artifacts dating back to 79 AD. Uranium was discovered in pitchblende by German chemist Martin Heinrich Klaproth, in 1789. Klaproth named it uranium after the recently discovered planet Uranus. French physicist Antoine Henri Becquerel discovered the radioactive properties of uranium in 1896 when he produced an image on a photographic plate covered with a light-absorbing substance. Following Becquerel’s experiments, investigations of radioactivity led to the discovery of radium and to new concepts of atomic organization. The principal use for uranium is fuel in nuclear power plants. Demand for uranium concentrates is directly linked to the level of electricity generated by nuclear power plants. Uranium ores are widely distributed throughout the world and are primarily found in Canada, DRC (formerly Zaire), and the US. Uranium is obtained from primary mine production and secondary sources. Two Canadian companies are the primary producers of uranium from deposits in the Athabasca Basin of northern Saskatchewan. Specifically, the companies Cameco accounted for 19% of global mine production in 2000 and Cogema Resources accounted for 15% of world production. Secondary sources of uranium include excess inventories from utilities and other fuel cycle participants, used reactor fuel, and dismantled Russian nuclear weapons.

Prices – The average price of delivered uranium in 2002 rose by +2.1% to $10.36 per pound from $10.15 in 2001. The 2001 price of $10.15 was a record low for the data series that goes back to 1981. The price of delivered uranium in 2002 of $10.36 was roughly one-third of the price of $30 per pound and above seen in the 1980s through 1986 when the price started falling. Supply – World production of uranium oxide (U308) concentrate in 2001 rose +9.0% to a 10-year high of 47,395 short tons from 43,475 short tons in 2000. The world’s two largest uranium producers are Canada with 16,270 short tons of production in 2001, representing 34% of world production, and Australia with 10,035 short tons of production in 2001, representing 21% of world production. Smaller producers include Niger (with 8.0% of world production), Namibia (6.1%), the US (2.8%), South Africa (2.4%), the Ukraine (2.2%), China (1.4%), the Czech Republic and Slovakia (1.3%), and France (0.4%). US uranium production in 2001 fell 30% to a record low of 1,315 short tons from 1,890 short tons in 2000. US production reached a peak of 21,850 short tons in 1980 and production has fallen steadily since then to the record low in 2001. Trade – US imports of uranium in 2001 rose +13% to a record high of 52.7 million pounds from 46.7 million pounds in 2000. The US is being forced to import more uranium as domestic production steadily declines. US exports of uranium rose +31% in 2001 to 15.4 million pounds from 11.7 million pounds in 2000.

Wo rld P ro d u ctio n o f U ran iu m Oxid e (U 3O8) C o n cen trate Year

1992 1993 1994 1995 1996 1997 1998 1999 2000 1 20012 1

Australia

Canada

Chi na

Czech Rep. & Slovaki a

3,032 2,949 3,050 4,900 6,450 7,150 6,350 7,875 9,830 10,035

12,087 11,990 11,950 13,600 15,250 15,650 14,200 10,680 13,875 16,270

1,039 1,300 ------------------655 650

2,040 911 ------------------795 595

P reliminary.

2

E stimate.

In Short Tons (Uranium Content)

France

Gabon

Germany

Nami bia

Ni ger

South Afri ca

United States

ExUSSR

World Total

2,755 2,220 1,700 1,250 1,200 940 660 450 525 195

702 769 750 800 750 600 950 380 -------

325 195 ------------------45 ----

2,199 2,168 2,500 2,600 3,150 3,770 3,590 3,495 2,430 2,910

3,855 3,786 3,800 3,750 4,300 4,500 4,850 3,790 3,270 3,795

2,449 2,261 2,250 1,850 2,200 1,065 1,250 1,195 1,305 1,135

2,822 2,587 1,950 3,050 3,150 2,900 2,435 2,325 1,890 1,315

11,205 10,491 ------------------655 1,050

46,124 43,027 41,750 43,050 46,650 46,550 44,110 39,640 43,475 47,395

S ource: American B ureau of Met al S t at ist ics, I nc. (AB MS )

Commercial and U.S. Government Stocks of Uranium, End of Year

Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1

------------------ Utility -----------------Natural Enriched Uranium Uranium1

57.9 42.4 41.2 42.2 47.1 42.1 44.8 36.0 34.4 32.1

23.3 23.0 17.5 23.9 18.8 23.7 13.5 18.9 21.2 21.2

---------- Domestic Supplier ---------Natural Enriched Uranium Uranium1

19.1 17.4 13.2 13.0 10.3 35.0 29.5 12.6 9.2 15.0

5.4 4.1 .5 1.0 30.1 35.7 39.4 43.8 39.0 32.9

I ncludes amount reported as UF6 at enrichment suppliers. DOE = Department of Energy Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

In Millions of Pounds U3O8 Equivalent Total Commercial Stocks

105.7 86.9 72.5 80.0 106.2 136.5 127.1 111.3 103.8 101.1

DOE Ow ned --------------- & USEC Held --------------Natural Enriched Uranium Uranium1

52.4 57.2 82.0 83.2 53.2 24.5 53.1 53.1 53.1 51.8

26.9 28.0 28.8 25.3 -------------------

USEC = U.S. Energy Commission

293

URANIUM Reported Average Price Settlements for Purchases by U.S. Utilities and Domestic Suppliers Year of Delivery

1993 1994 1995 1996 1997

14.96 10.68 10.58 13.40 13.33

9.57 9.76 10.19 13.66 11.20

14.87 20.03 17.86 16.13 14.52

11.03 10.57 12.05 14.91 12.11

In $/Pound

Contract Market Price & Contract Price Price1 Cost Floor Total & Market Year of Delivery ---------------------- Averages of Reported Prices ----------------------

Contract Market Price & Contract Price Price1 Cost Floor Total & Market ---------------------- Averages of Reported Prices ----------------------

13.14 10.63 10.79 13.72 13.13

1998 1999 2000 2001 2002

12.53 12.72 12.31 11.72 10.73

9.33 9.52 9.11 8.04 9.79

13.50 14.75 ----------

10.31 11.16 11.04 10.15 10.36

12.37 12.57 ----------

1

No floor. Note: Price excludes uranium delivered under litigation settlements. Price is given in year-of-delivery dollars. Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Uranium Industry Statistics in the United States ----- Production -----

Year

Mine

Concentrate

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

2.0 2.5 3.5 4.7 4.7 4.8 4.5 3.1 2.6 2.4

3.063 3.352 6.000 6.300 5.600 4.700 4.600 4.000 2.600 2.300

1

Average Price Concent- ----------------- Employment -- Person Years -----------------Deliveries Delivered rate to U.S. Uranium ShipExplorProUtilities1 $/Lb. U3O8 ments ation Mining Milling cessing Total

3.374 6.319 5.500 6.000 5.800 4.900 5.500 3.200 2.200 3.800

From suppliers under domestic purchases.

36 41 27 27 30 30 7 1 0 W

133 157 226 333 413 518 310 157 81 W

65 105 121 155 175 160 201 106 42 104

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

145 149 161 175 175 203 132 137 122 100

871 980 1,107 1,118 1,097 1,120 848 627 423 426

15.5 38.3 43.4 47.3 42.0 42.7 47.9 51.8 55.4 52.7

13.14 10.40 11.25 14.12 12.88 12.14 11.63 11.04 10.15 10.36

Avg. Price Delivered Uranium Imports Imports $/Lb. U3O8

41.9 36.6 41.3 45.4 43.0 43.7 47.6 44.9 46.7 52.7

10.53 8.95 10.20 13.15 11.81 11.19 10.55 9.84 9.51 10.05

Exports

3.0 17.7 9.8 11.5 17.0 15.1 8.5 13.6 11.7 15.4

Source: Energy I nformation Administration, U.S. Department of Energy (EI A-DOE)

Month-End Uranium (U3O8) Transaction Values1 Year

In Millions of Pounds U3O8

In Dollars Per Pound

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

8.58 8.30 10.20 15.33 10.63 9.03 9.03 6.78 9.58 10.20

8.45 8.45 10.48 15.08 10.63 9.08 8.70 6.83 9.72 10.10

8.25 8.65 10.93 14.85 10.60 9.20 8.55 6.83 9.90 10.10

8.25 8.78 11.70 14.75 10.05 9.20 8.50 7.25 9.76 10.16

8.23 9.18 13.03 14.43 10.00 9.53 8.40 7.38 9.90 10.84

8.25 9.48 13.25 10.95 9.80 9.48 8.18 7.45 9.90 10.90

8.23 9.50 14.93 10.68 9.80 9.48 8.13 7.83 9.88 10.90

8.15 9.83 15.18 10.45 9.73 9.40 7.98 7.95 9.85 11.13

8.13 9.83 15.40 10.55 9.55 9.35 7.88 9.00 9.79 11.47

8.10 9.83 15.53 10.48 9.35 9.23 7.40 9.47 9.85 12.32

8.13 9.95 15.48 10.43 9.25 9.18 7.15 9.44 9.86 13.18

8.25 10.05 15.38 10.53 9.05 9.13 6.80 9.50 9.97 13.98

8.25 9.32 13.45 12.37 9.87 9.27 8.06 7.97 9.83 11.27

1

Transaction value is a weighed average price of recent natural uranium sales transactions, based on prices paid on transactions closed within the previous three-month period for which delivery is scheduled within one year of the transaction date; at least 10 transactions involving a sum total of at least 2 million pounds of U3O8 equivalent. Source: American Metal Market (AMM)

-----

294

USD Per Pound U.S. Spot Market (Jan. 1976 - date)

Vanadium Vanadium is a silvery-white, soft, ductile, metallic element with the atomic symbol V and the atomic number 23. Discovered in 1801, but mistaken for chromium, vanadium was rediscovered in 1830, by Swedish chemist Nils Sefstrom, who named the element in honor of the Scandinavian goddess Vanadis. Never found in the pure state, vanadium is found in about 65 different minerals such as carnotite, roscoelite, vanadinite, and patronite, as well as in phosphate rock, certain iron ores, some crude oils, and meteorites. Vanadium is one of the hardest of all metals. It melts at about 1890 degrees Celsius and boils at about 3380 degrees Celsius. Vanadium has good structural strength and is used as an alloying agent with iron, steel, and titanium. It is used in aerospace applications, transmission gears, photography, as a reducing agent, and as a drying agent in various paints. Prices – The price of vanadium in 2001 fell to the range of $3.60-4.50 per pound from $3.85-6.60 in 2000, and hit the lowest level in 5 years. Supply – Nearly all (99.7%) vanadium is produced from ores, concentrates, and slag, with the remainder coming from petroleum residues, ash, and spent catalysts. World pro-

World Production of Vanadium

duction of vanadium in 2002 rose +4.9% to a record high of 60,200 metric tons from 57,400 metric tons in 2001. The world’s largest producer of vanadium is China with 33,000 metric tons of production in 2002, representing 55% of world production. The two other major producers are South Africa with 30% of world production, followed by Russia with 13% of world production. Production in Russia and South Africa has been relatively stable in recent years, while China’s production has grown very rapidly. China’s production level of 33,000 metric tons in 2002 was more than double that in 1998 and more than 7 times the amount produced in 1991. Japan is the only significant producer of vanadium from petroleum residues, ash, and spent catalysts with 245 metric tons of production in each of the last 8 years. Trade – The US exports very little vanadium. US imports of vanadium were mainly in the form of ore, slag and residues with 3,330 metric tons of imports in 2002, up 12% from 2,980 metric tons in 2001. Other key import categories of vanadium were ferro-vanadium (2,520 metric tons), vanadium pent-oxide, anhydride (406 metric tons), and oxides and hydroxides (42 metric tons).

In Metric Tons (Contained Vanadium)

------------------------------------- From Ores, Concentrates and Slag ------------------------------------------------- Republic of South Africa -------------

Year

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 11 20022 1 6

China3

Russia

Content of Pentoxide & Vanadate Products

5,000 5,400 13,700 14,000 15,000 15,500 26,000 30,000 30,000 33,000

12,800 11,900 11,000 11,000 9,000 9,000 7,000 7,000 8,000 8,000

6,650 6,050 6,500 ----------------------

Total

8,400 9,600 9,000 ----------------------

15,051 16,350 16,297 14,770 15,590 18,868 17,612 18,021 18,184 18,000

--------------- Ash, Spent Catalysts ----------United States6 Total4 Japan3 Total

33,900 34,700 42,100 40,900 40,700 44,500 51,600 56,000 57,200 60,000

252 252 245 245 245 245 245 245 245 245

2,867 2,740 1,990 3,730 -------------------

3,120 2,990 2,240 3,980 245 245 245 245 245 245

World Total

37,000 37,700 44,400 45,800 40,900 44,700 51,900 56,300 57,400 60,200

5 Preliminary. 2 Estimate. 3 I n vanadiferous slag product. 4 Excludes U.S. production. I n vanadium pentoxide product. I n vanadium pentoxide and ferrovanadium products. Source: U.S. Geological Survey(USGS)

Salient Statistics of Vanadium in the United States

Year

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 1

From Petroleum Residues,

Content of Vanadiferous Slag Products

In Metric Tons (Contained Vanadium)

Con- ----------- Vanadium Consumption by Uses in the U.S. ----------High Stainless sumer & Strength, & Heat Producer Re- SuperFull Low Stocks, Tool Cast Total Alloy sisting alloys Carbon Alloy Dec. 31 Steel Irons

900 1,110 1,100 1,070 1,000 336 348 303 251 221

Preliminary.

2

373 424 443 433 481 269 344 225 146 270 Estimate.

21 31 40 W W W W W W W

981 979 1,070 890 944 950 865 944 797 900

33 26 32 22 20 42 W W W W

13 16 20 16 24 20 14 17 18 12

------------ Exports ----------- ------------------ Imports -----------------Ores, Vanadium Vanadium Pent- Oxides FerroPent- Oxides Ferro- Slag, Average oxide, & Hydr- VanaReoxide, & Hydr- Vana$ P er Lb. dium V2O5 Anhydride oxides dium sidues Anhydride oxides

1,413 789 3,973 1.45 1,680 777 4,290 1.55 1,870 833 4,640 4.63 1,820 1,030 4,200 3.11 1,800 908 4,730 7.40-11.00 1,650 891 4,380 5.25-15.50 1,050 861 3,620 4.35-6.25 1,090 773 3,030 3.85-6.60 1,030 689 2,660 3.60-4.50 731 748 2,690

W = Withheld proprietary data.

126 895 335 1,050 229 1,010 241 2,670 614 385 681 232 747 70 653 100 670 385 453 443

Source: U.S. Geological Survey (USGS)

219 374 340 479 446 579 213 172 70 142

1,454 1,900 2,530 2,270 2,950 2,400 1,650 1,890 2,980 3,330

70 19 294 3 547 36 485 11 711 126 847 33 208 ---902 14 600 1,080 406 42

1,630 1,910 1,950 1,880 1,840 1,620 1,930 2,510 2,550 2,520

295

Vegetables Vegetables are the edible products of herbaceous plants, which are plants with soft stems. Vegetables are grouped according to the edible part of each plant: leaves (lettuce), stalks (celery), roots (carrot), tubers (potato), bulbs (onion), fruits (tomato), seeds (pea), and flowers (broccoli). Each of these groups contributes to diet in its own way. Fleshy roots are high in energy value and good sources of the vitamin B group, seeds are relatively high in carbohydrates and proteins, while leaves, stalks, and fruits are excellent sources of minerals, vitamins, water, and roughage. Vegetables are an important food for the maintenance of health and prevention of disease. Higher intakes of vegetables have been shown to lower the risks of cancer and coronary heart disease. Vegetables are best consumed fresh in their raw state in order to derive the maximum benefits from their nutrients. On the other hand, canned and frozen vegetables, often thought inferior to fresh vegetables, are sometimes nutritionally superior to fresh produce because they are usually processed immediately after harvest when nutri-

ent content is at its peak. When cooking vegetables, aluminum utensils should not be used, because aluminum is a soft metal that is acted upon by both food acids and alkalis. Scientific evidence shows that tiny particles of aluminum from foods cooked in aluminum utensils enter the stomach and can injure the sensitive lining of the stomach. Prices – The index of prices received by growers in the US rose moderately in 2003 to about 150 from 137.7 in 2002. Vegetable prices have been on the upswing since the 11year low of 117.7 was established in 1999. Demand – The leading vegetable in terms of US per capita consumption in 2003 was the potato with 135.8 pounds of consumption. Runner-up vegetables were tomatoes (87.9 pounds), sweet corn (27.1 pounds), lettuce (23.0 pounds), and onions (19.5 pounds). Total US per capita consumption of vegetables (excluding potatoes) in 2003 was 293.3 pounds, up from 289.2 pounds in 2002. Including potatoes, US total per capital vegetable consumption was 445.7 pounds.

Index of Prices Received by Grow ers for Commercial Vegetables1 in the United States Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1998 1999 2000 2001 2002 2003 2

122 105 98 122 158 115

116 112 86 148 190 112

125 121 107 138 270 121

156 130 135 137 121 136

129 118 131 143 120 141

110 110 117 119 111 153

121 104 119 124 117 118

114 106 129 144 120 140

114 105 143 134 118 145

133 97 125 102 106 145

113 98 144 101 116 184

117 116 115 151 154 162

123 110 121 130 142 139

Not seasonally adjusted. 1990-92=100. 1 I ncludes fresh and processing vegetables. Service, U.S. Department of Agriculture (NASS-USDA)

2

Source: National Agricultural Statistics

Preliminary.

Index of Prices Received by Grow ers for Fresh Vegetables (0113-02) in the United States Year

1998 1999 2000 2001 2002 2003 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

133.1 131.9 111.3 147.0 146.1 147.8

136.6 93.1 100.5 168.6 188.7 127.5

148.2 117.4 122.3 178.7 242.5 153.0

162.9 144.4 126.8 145.6 101.7 167.7

123.2 111.3 152.0 144.9 107.2 165.0

106.5 125.8 128.1 129.4 123.2 138.8

153.7 103.4 127.2 109.7 127.1 133.3

114.9 113.7 136.7 127.2 125.4 136.6

135.0 117.5 155.9 132.3 116.7 173.9

161.9 101.6 165.0 112.3 126.9 156.9

131.2 100.9 173.9 105.9 127.4 148.2

148.1 151.6 120.3 121.0 119.0 185.4

137.9 117.7 135.0 135.2 137.7 152.8

Not seasonally adjusted.

1990-92=100.

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS)

Producer Price Index of Canned1 Processed Vegetables (0244) in the United States Year

1998 1999 2000 2001 2002 2003 2

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

121.2 120.6 121.3 121.4 128.3 128.8

121.9 120.6 120.8 121.4 128.2 129.0

121.8 120.9 121.2 121.3 128.0 128.9

121.8 120.9 120.9 121.3 128.2 129.3

121.9 121.0 121.2 121.4 128.3 129.4

121.9 121.0 121.5 121.9 128.0 129.3

122.0 120.8 121.1 124.1 127.7 129.4

122.0 120.9 120.9 124.9 129.4 129.1

120.0 120.7 121.1 125.3 128.7 129.2

119.6 120.7 121.6 126.5 129.5 130.9

120.0 121.3 121.7 128.0 129.1 131.0

120.0 121.3 121.3 128.1 129.1 131.4

121.2 120.9 121.2 123.8 128.5 129.6

Not seasonally adjusted. 1 I ncludes canned vegetables and juices, including hominy and mushrooms. Statistics, U.S. Department of Labor (BLS)

2

Preliminary.

Producer Price Index of Froz en Processed Vegetables (0245) in the United States Year

1998 1999 2000 2001 2002 2003 1

Source: Bureau of Labor

1982 = 100

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

125.2 125.8 125.4 127.6 130.0 133.4

126.0 126.6 126.2 128.5 131.1 134.1

124.8 125.6 125.7 127.7 130.1 133.3

125.7 126.7 126.3 128.7 131.2 134.0

125.0 125.9 126.3 128.4 130.7 134.1

124.6 126.0 124.9 127.7 129.7 133.9

125.5 126.8 125.9 128.9 131.4 134.9

125.6 126.1 126.4 128.8 131.3 134.2

125.3 126.0 126.2 128.8 131.5 133.9

125.6 126.4 126.9 130.0 132.2 135.2

125.5 125.5 126.1 129.2 131.9 135.0

125.2 125.3 126.2 129.1 132.6 134.7

Not seasonally adjusted.

296

1982 = 100

1

Preliminary.

Source: Bureau of Labor Statistics, U.S. Department of Labor (BLS)

125.3 126.1 126.0 128.6 131.1 134.2

VEGETABLES Per Capita Use of Selected Commercially Produced Fresh and Processing Vegetables in the U.S. In Pounds, farm weight basis Crop Asparagus, All Fresh Canning Freezing Snap beans, All Fresh Canning Freezing Broccoli, All1 Fresh Freezing Cabbage, All Fresh Canning (kraut) Carrots, All2 Fresh Canning Freezing Cauliflower, All1 Fresh Freezing Celery Sweet Corn, All3 Fresh Canning Freezing Cucumbers, All Fresh Pickling Melons Watermelon Cantaloupe Honeydew Lettuce, All Head lettuce Romaine & Leaf Onions, All Fresh Dehydrating Green Peas, All4 Canning Freezing Peppers, All Bell Peppers, All Chile Peppers, All Tomatoes, All Fresh Canning Other, Fresh5 Other, Canning6 Other, Freezing7 Subtotal, All8 Fresh Canning Freezing Potatoes, All Fresh Processing Sweet Potatoes Mushrooms Dry Peas & Lentils9 Dry Edible Beans

1993 1.0 0.6 0.3 0.1 7.2 1.5 4.0 1.7 5.6 3.3 2.3 10.7 9.3 1.4 14.6 10.8 1.0 2.8 2.8 2.1 0.7 7.3 27.8 7.0 11.1 9.7 9.5 5.2 4.3 24.5 14.2 8.6 1.7 29.4 24.4 5.0 19.2 17.2 2.0 3.5 1.6 1.9 11.3 6.1 5.2 92.1 16.3 75.8 8.4 1.9 2.7

1994 0.9 0.6 0.2 0.1 7.2 1.5 3.8 1.9 6.7 4.4 2.3 10.3 9.1 1.2 16.9 12.7 1.4 2.8 2.6 2.0 0.6 7.2 27.4 8.2 10.1 9.1 10.2 5.4 4.8 25.4 15.0 8.4 2.0 30.7 25.0 5.7 17.8 16.9 0.9 3.5 1.4 2.1 10.7 6.4 4.3 92.5 16.2 76.3 8.9 2.6 2.9

1995 1.0 0.6 0.3 0.1 6.8 1.6 3.5 1.7 6.9 4.3 2.6 9.5 8.1 1.4 15.4 11.2 1.6 2.6 2.2 1.6 0.6 6.9 28.5 7.8 10.4 10.3 10.6 5.6 5.0 26.1 15.2 9.0 1.9 28.1 22.2 5.9 19.1 17.8 1.3 3.7 1.6 2.1 9.9 6.2 3.7 91.4 16.8 74.6 8.4 2.4 2.8

1996 0.9 0.6 0.2 0.1 7.2 1.5 3.8 1.9 7.0 4.5 2.5 9.3 8.3 1.0 16.9 12.4 1.7 2.8 2.2 1.7 0.5 7.0 29.1 8.3 10.4 10.4 10.0 5.9 4.1 28.9 16.6 10.3 2.0 27.4 21.6 5.8 19.1 18.3 0.8 3.4 1.5 1.9 11.7 7.1 4.6 90.5 17.4 73.1 8.8 2.2 3.1

1997 1.0 0.7 0.2 0.1 6.7 1.3 3.6 1.8 7.3 5.0 2.3 10.4 9.0 1.4 18.2 14.1 1.5 2.6 2.2 1.8 0.4 6.5 27.5 8.3 9.1 10.1 11.6 6.4 5.2 28.2 15.5 10.5 2.2 30.5 23.9 6.6 19.7 18.8 0.9 3.5 1.5 2.0 10.9 6.4 4.5 89.4 16.8 72.6 9.2 2.3 3.0

1998 1.0 0.7 0.2 0.1 7.5 1.7 3.8 2.0 7.2 5.1 2.1 9.9 8.5 1.4 16.9 12.7 1.4 2.8 2.3 1.5 0.8 6.5 28.3 9.3 9.2 9.8 10.5 6.5 4.0 27.3 14.3 10.7 2.3 28.3 21.6 6.7 19.4 18.3 1.1 3.3 1.4 1.9 11.1 6.4 4.7 91.5 17.5 74.0 10.0 2.1 2.9

1999 1.2 0.9 0.2 0.1 7.6 1.9 3.7 2.0 8.6 6.5 2.1 8.8 7.6 1.2 14.7 10.9 1.4 2.4 2.4 1.9 0.5 6.6 28.3 9.1 9.1 10.1 11.0 6.8 4.2 29.4 15.4 11.5 2.5 31.6 23.9 7.7 20.4 18.1 2.3 3.4 1.4 2.0 11.4 6.7 4.7 89.0 17.8 71.2 10.5 2.5 3.2

2000 1.3 1.0 0.2 0.1 7.8 2.0 4.0 1.8 8.4 6.1 2.3 10.4 9.0 1.4 14.3 10.5 1.1 2.7 2.6 2.0 0.6 6.4 27.2 9.2 9.0 9.0 11.3 6.4 4.9 26.9 13.9 10.8 2.2 32.0 23.4 8.6 20.1 18.3 1.8 3.6 1.5 2.1 12.0 7.0 5.0 87.7 17.6 70.1 18.8 2.6 3.2

2001 1.2 0.9 0.2 0.1 7.9 2.2 3.8 1.9 7.6 5.6 2.0 10.4 9.1 1.3 14.0 10.6 1.9 1.5 2.1 1.6 0.5 6.6 27.4 9.4 8.7 9.3 10.1 6.4 3.7 28.3 15.1 11.2 2.0 31.8 23.5 8.3 18.9 17.8 1.1 3.4 1.4 2.0 11.7 6.7 5.0 82.9 17.4 65.5 17.3 2.7 3.1

2 0 0 2 10 1.3 1.0 0.2 0.1 7.3 2.1 3.5 1.7 7.1 5.0 2.1 9.7 8.4 1.3 12.5 9.5 1.2 1.8 1.8 1.5 0.3 6.5 26.1 8.9 7.8 9.4 11.5 6.7 4.8 27.4 13.9 11.3 2.2 30.7 22.4 8.3 19.9 18.7 1.2 2.9 1.2 1.7 12.1 7.0 5.1 87.3 18.3 69.0 17.9 2.3 3.7

200311 1.3 1.0 0.2 0.1 7.6 2.1 3.7 1.8 7.6 5.5 2.1 9.9 8.6 1.3 12.7 9.5 1.5 1.7 2.1 1.7 0.4 6.5 27.1 9.4 8.0 9.7 11.2 6.7 4.5 28.0 14.8 11.0 2.2 31.0 22.3 8.7 18.8 17.4 1.4 3.2 1.3 1.9 12.2 7.1 5.1 88.9 18.6 70.3 18.3 2.6 3.5

279.5 149.0 106.6 21.9

284.4 155.6 106.1 21.8

279.7 151.1 104.5 22.8

284.7 158.1 102.6 23.2

288.1 163.0 101.9 22.3

286.0 160.3 102.2 22.4

290.6 166.3 99.6 22.4

296.5 173.2 99.8 21.7

287.4 171.7 94.2 20.3

288.1 169.6 96.4 20.9

292.4 171.4 98.5 21.1

136.7 50.1 86.6 3.7 3.7 0.2 7.3

136.7 49.6 87.1 4.5 4.0 0.6 7.7

136.9 49.2 87.7 4.2 3.8 0.7 7.6

145.0 49.9 95.1 4.3 3.9 0.5 7.3

141.4 48.5 92.9 4.3 4.0 0.5 7.4

138.1 47.0 91.1 3.8 3.9 1.5 7.3

136.5 48.0 88.5 3.7 4.1 1.4 7.5

138.7 47.3 91.4 4.2 4.1 1.2 7.5

138.0 46.4 91.6 4.4 3.9 0.6 7.2

132.2 44.5 87.7 3.8 4.1 0.9 7.4

135.1 45.2 89.9 4.0 4.1 1.0 7.3

Total, All I tems 431.1 437.9 432.9 445.7 445.7 440.6 443.8 452.2 441.5 436.5 443.9 All production for processing broccoli and cauliflower is for freezing. 2 I ndustry allocation suggests that 27 percent of processing carrot production is for canning and 73 percent is for freezing. 3 On-cob basis. 4 I n-shell basis. 5 I ncludes artichokes, brussels sprouts, eggplant, endive/escarole, garlic, radishes, and spinach. 6 I ncludes beets, chile peppers (1980-94, all uses), and spinach. 7 I ncludes green lima beans, spinach, and miscellaneous freezing vegetables. 8 Fresh, canning, and freezing data do not add to the total because onions for dehydrating are included in the total. 9 Preliminary. 10 Forecast. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

1

297

VEGETABLES Average Price Received by Grow ers for Broccoli in the United States Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

34.60 36.80 34.90 27.70 22.60 22.70 55.30 25.20

22.00 27.80 27.10 20.10 20.10 32.30 44.40 40.90

30.90 25.90 31.70 23.20 27.40 24.70 33.80 28.10

25.20 24.20 40.50 20.20 23.20 26.90 24.00 27.10

28.20 23.10 27.10 18.60 44.30 25.50 20.80 29.70

30.60 30.30 29.60 23.10 30.00 27.00 28.40 24.60

24.10 27.50 23.30 18.70 31.50 23.60 27.00 27.00

24.10 23.30 27.60 27.40 25.20 27.10 29.60 29.80

23.90 31.20 29.20 29.30 27.70 22.90 40.60 49.10

24.30 40.70 32.80 23.00 34.10 24.20 24.00 38.90

31.10 27.00 25.80 21.60 56.00 22.20 37.10 42.40

28.60 30.20 31.20 39.20 34.10 20.00 35.00 52.80

27.10 29.10 30.20 24.10 31.00 26.50 31.20 32.50

Year

1996 1997 1998 1999 2000 2001 2002 20031 1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Price Received by Grow ers for Carrots in the United States

1

In Dollars Per Cwt.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

12.60 15.00 14.00 16.10 9.49 15.90 19.30 19.30

13.80 14.70 13.00 19.60 11.60 16.70 19.70 19.10

15.90 13.40 13.00 21.50 11.80 17.30 21.10 18.70

15.70 12.60 12.60 26.50 12.30 17.30 21.20 19.40

12.00 12.60 12.00 25.40 13.80 17.60 21.30 19.90

11.00 12.60 11.90 22.80 14.70 20.10 21.60 19.90

10.50 12.60 10.60 17.20 15.70 22.00 20.60 19.90

14.50 13.10 10.80 13.30 14.50 19.90 20.10 20.40

12.60 12.70 10.60 10.10 14.00 15.70 18.10 20.10

12.00 12.10 10.90 10.50 14.20 17.50 17.90 19.40

16.00 12.50 11.60 11.30 14.30 18.50 18.70 21.40

17.20 16.80 11.00 11.50 15.50 19.50 19.50 24.30

13.40 12.90 12.00 16.80 13.10 17.20 19.00 19.10

Year

1996 1997 1998 1999 2000 2001 2002 20031

In Dollars Per Cwt.

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Price Received by Grow ers for Cauliflow er in the United States Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

35.20 30.40 39.10 29.40 22.90 25.70 65.50 24.60

36.10 34.70 43.20 31.10 30.20 37.00 30.80 30.70

52.80 32.90 49.10 42.80 32.00 23.50 44.10 30.80

37.00 27.90 44.70 46.40 34.80 46.50 25.10 27.60

37.70 20.70 35.50 23.40 46.00 26.30 26.40 39.50

35.70 31.20 26.40 25.50 31.20 37.40 32.70 46.30

24.30 38.90 23.20 19.60 37.50 25.60 27.80 27.40

27.20 23.40 26.10 25.40 25.20 25.50 24.00 24.90

23.80 34.60 32.30 21.70 25.40 24.80 24.70 40.40

29.20 47.10 25.90 22.30 21.60 21.70 22.50 25.80

30.00 27.60 33.20 35.10 65.30 20.10 37.60 56.90

31.10 36.20 37.50 55.50 28.00 20.00 50.00 81.50

33.00 32.30 34.50 30.00 32.00 29.20 32.00 33.00

Year

1996 1997 1998 1999 2000 2001 2002 20031 1

In Dollars Per Cwt.

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Price Received by Grow ers for Celery in the United States

In Dollars Per Cwt.

Year

1996 1997 1998 1999 2000 2001 2002 2003 1 1

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

7.90 16.20 11.20 9.51 19.20 14.60 10.10 8.29

8.50 16.20 11.40 8.47 16.00 15.00 19.50 11.80

12.20 12.30 16.40 8.35 12.90 15.80 23.50 12.60

11.60 10.50 13.80 10.20 21.20 19.10 18.60 17.00

8.90 15.40 15.40 12.80 25.60 24.00 12.30 11.00

11.50 9.89 12.40 18.30 29.10 33.70 9.37 9.34

11.50 19.30 10.60 14.00 18.30 13.50 10.80 12.50

10.30 17.00 10.30 10.30 20.30 9.33 10.90 11.80

11.60 14.30 10.50 10.60 15.30 9.43 11.70 13.00

9.79 13.40 10.40 9.14 12.90 8.22 9.98 15.90

12.40 18.40 11.90 12.80 19.40 9.01 15.30 20.60

13.40 19.10 14.00 17.20 21.50 13.00 9.50 15.30

10.50 14.70 12.30 12.00 18.50 14.40 12.80 13.60

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Price Received by Grow ers for Sw eet Corn in the United States Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

29.90 29.00 18.70 19.60 31.50 32.70 24.80 29.00

30.20 25.80 31.60 23.30 25.10 34.00 23.50 24.00

28.90 33.90 24.20 21.80 19.30 26.10 26.30 18.90

21.90 26.10 20.10 18.90 18.70 18.10 19.40 15.10

17.50 21.20 17.10 18.50 14.40 24.60 20.80 16.30

14.00 17.10 14.00 15.00 18.00 18.60 18.80 15.40

18.90 18.60 16.40 17.30 22.00 19.80 27.90 19.70

17.40 18.00 16.40 16.60 20.70 19.20 21.80 19.00

16.70 16.60 18.10 17.30 20.10 19.00 22.50 18.70

17.90 15.20 25.30 16.50 24.00 23.80 25.80 18.50

19.40 18.90 24.80 28.40 16.80 24.80 15.50 25.90

17.70 19.90 14.30 40.70 33.00 22.60 18.30 29.90

16.90 17.70 17.20 17.20 18.20 19.50 19.20 19.10

Year

1996 1997 1998 1999 2000 2001 2002 20031 1

Preliminary.

298

In Dollars Per Cwt.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

VEGETABLES Average Price Received by Grow ers for Head Lettuce in the United States Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

7.91 13.40 11.30 14.90 19.00 10.30 14.60 13.60 26.20 12.10

11.80 9.32 14.90 9.58 10.90 15.50 9.28 22.80 44.10 11.80

9.71 27.00 16.50 13.50 12.50 16.30 14.10 15.10 86.40 9.64

11.70 48.20 13.20 15.70 27.20 20.20 22.80 21.60 14.10 14.10

11.40 47.00 13.30 10.40 14.30 14.00 23.60 18.80 10.20 21.20

13.80 15.60 15.20 14.90 11.80 11.40 13.50 12.10 10.60 32.20

10.60 12.60 12.70 17.10 15.50 12.70 15.00 16.40 11.30 11.90

10.90 15.20 23.50 22.80 16.40 12.00 19.20 26.90 14.60 21.50

17.30 25.60 13.70 22.30 14.00 13.10 29.40 26.20 14.30 23.90

22.10 13.30 15.40 34.80 21.00 13.10 16.20 11.50 13.50 26.30

22.40 11.50 17.70 22.20 10.80 10.70 19.90 10.90 11.90 45.20

37.20 16.10 8.87 25.10 12.50 16.20 12.00 10.00 30.00 25.70

13.30 23.50 14.70 17.50 16.10 13.30 17.40 17.90 21.20 18.20

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Price Received by Grow ers for Tomatoes in the United States

1

In Dollars Per Cwt.

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

S e a so n Average

41.50 41.10 18.40 32.10 26.40 33.50 21.40 43.80 40.50 47.20

19.30 29.80 40.00 45.90 44.00 23.40 21.10 29.10 26.60 31.70

24.50 37.10 81.70 57.40 34.00 22.30 33.00 56.40 38.50 53.30

16.50 20.50 50.50 24.90 37.20 23.70 34.80 19.00 34.30 30.10

20.60 14.70 24.40 32.20 36.50 21.00 23.10 37.80 29.60 22.60

31.30 35.70 24.20 30.30 29.00 29.00 21.80 28.50 33.00 45.30

26.90 24.40 26.00 29.20 40.90 23.10 24.60 27.40 28.50 37.70

30.60 19.60 22.10 27.60 25.10 25.00 33.90 27.60 25.80 49.50

22.70 19.50 23.40 25.90 28.40 26.50 29.50 23.50 23.70 34.70

28.50 22.50 28.30 26.50 43.00 21.30 42.60 28.60 27.60 31.20

31.20 33.10 29.70 43.60 42.10 26.00 47.80 28.50 40.10 34.60

37.40 25.00 30.40 40.80 42.20 28.90 37.60 25.00 38.00 33.70

27.40 25.50 28.10 31.70 35.20 25.90 30.80 30.40 32.30 37.00

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

In Dollars Per Cwt.

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Froz en Vegetables: January 1 and July 1 Cold Storage Holdings in the U.S. Crop

Asparagus Limas, Fordhook Limas, Baby Green Beans, Reg. Cut Green Beans, Fr. Style Broccoli, Spears Broccoli, Chopped & Cut Brussels sprouts Carrots, Diced Carrots, Other Cauliflower Corn, Cut Corn, Cob Mixed vegetables Okra Onion Rings Onions, Other Blackeye Peas Green Peas Peas and Carrots Mixed Spinach Squash, Summer/Zucchini Southern greens Other Vegetables

1999 July 1

2000 Jan. 1

15,712 4,924 33,466 61,831 20,694 49,485 139,675 15,145 46,993 115,576 32,894 147,339 108,050 46,699 51,951 13,397 35,605 5,598 226,888 10,062 142,617 49,942 39,455 243,759

12,076 15,302 56,691 150,310 36,080 34,354 123,021 25,649 94,465 212,732 57,812 330,204 255,662 51,537 39,837 17,026 41,236 6,517 276,154 11,314 73,349 58,254 26,944 272,866

July 1

2001 Jan. 1

15,494 4,670 24,550 48,483 16,481 35,731 99,478 14,913 46,718 133,499 37,597 121,653 105,327 47,855 53,942 12,284 53,534 3,517 254,497 7,512 99,820 41,097 36,237 280,841

11,359 14,353 32,577 147,391 28,568 33,295 74,665 19,632 110,335 185,041 44,974 315,297 255,615 46,312 47,217 14,485 40,420 4,438 295,784 7,770 50,765 42,572 38,934 340,043

In Thousands of Pounds

July 1

2002 Jan. 1

July 1

2003 Jan. 1

July 1

20041 Jan. 1

14,705 6,742 17,169 49,355 8,955 35,926 89,062 12,244 60,047 101,103 26,866 97,601 74,548 47,647 42,863 7,799 38,277 3,257 240,139 8,571 97,278 31,839 28,131 248,289

10,686 14,304 50,358 140,311 20,517 38,035 76,491 17,595 89,361 186,831 36,443 351,820 263,457 51,453 35,939 6,978 29,893 4,473 224,715 8,847 63,368 43,198 35,861 336,555

10,954 7,323 30,017 48,312 7,398 56,679 66,486 10,645 47,110 91,705 25,589 137,242 85,566 45,248 35,964 8,619 32,143 5,896 198,452 6,746 106,198 36,878 26,478 24,187

6,988 13,068 45,544 167,669 19,726 49,326 67,727 20,220 99,188 143,368 35,635 402,164 262,338 41,396 46,616 9,636 29,844 6,323 171,161 6,597 56,193 44,617 22,986 313,421

10,977 4,646 20,570 55,559 7,272 53,689 81,782 11,053 36,340 90,741 16,083 176,505 108,477 42,360 35,847 7,772 28,757 5,340 162,836 7,897 104,522 33,549 20,243 265,556

7,368 5,984 46,383 126,175 23,166 30,185 47,135 18,961 98,398 154,404 28,146 494,490 288,957 43,537 37,596 6,915 31,717 3,292 180,850 6,581 46,492 43,614 18,749 329,499

Total

1,657,757 2,279,392 1,595,730 2,201,842 1,388,413 2,137,489 1,369,523 2,081,751 1,388,373 2,118,594

Potatoes, French Fries Potatoes, Other Frozen Potatoes, Total

965,960 945,637 929,810 959,035 1,083,484 1,010,098 937,933 877,292 900,194 869,521 268,166 219,752 256,500 230,628 271,650 229,659 285,605 253,920 281,594 250,897 1,234,126 1,165,389 1,186,310 1,189,663 1,355,134 1,239,757 1,223,538 1,131,212 1,181,788 1,120,418

Grand Total

2,891,883 3,444,781 2,782,040 3,391,505 2,743,547 3,377,246 2,593,061 3,212,963 2,570,161 3,239,012

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

299

Wheat Wheat is now a cereal grass but was originally a wild grass. It has been grown in temperate regions and cultivated for food since prehistoric times. Wheat is believed to have originated in southwestern Asia. Archeological research indicates that wheat was grown in the Nile Valley about 5,000 BC. Wheat is not native to the US and was first grown here in1602 near the Massachusetts coast. The common types of wheat grown in the US are spring and winter wheat. Wheat planted in the spring for summer or fall harvest is mostly red wheat. Wheat planted in the fall or winter for spring harvest is mostly white wheat. Winter wheat accounts for nearly three-fourths of total US production. Wheat is used mainly as a human food and supplies about 20% of the food calories for the world’s population. The primary use for wheat is flour, but it is also used in brewing and distilling, and to make oil, gluten, straw for livestock bedding, livestock feed, hay or silage, newsprint, and other products. Wheat futures and options are traded on the Mercado a Termino de Buenos Aires (MAT), Sydney Futures Exchange (SFE), London International Financial Futures and Options Exchange (LIFFE), Marche a Terme International de France (MATIF), Budapest Commodity Exchange (BCE), the Chicago Board of Trade (CBOT), the Kansas City Board of Trade (KCBT), the Minneapolis Grain Exchange (MGE), the Mid America Commodity Exchange (MidAm) and the Winnipeg Commodity Exchange (WCE). The Chicago Board of Trade’s wheat futures contact calls for the delivery of soft red wheat (No. 1 and 2), hard red winter wheat (No. 1 and 2), dark northern spring wheat (No. 1 and 2), No.1 northern spring at 3 cent/bushel premium, or No. 2 northern spring at par. Prices – Wheat prices on the CBOT nearest futures chart showed weakness in early 2003 and dipped to a 1-1/2 year low of $2.73 per bushel in late April. However, wheat prices then showed strength through the remainder of the year and closed the year at $4.06, just below the 1-year high of $4.09 posted in early December. In the bigger picture, wheat prices in 2003 closed just 28 cents below the 6-1/2 year high of $4.34 posted in September 2002. Bullish factors for 2003 in the latter three quarters of the year centered on (1) a short-fall in production as consumption in 2003/4 is expected to exceed production for the sixth consecutive year, (2) very tight world inventories which are at their lowest since the 1980s, and (3) strong import demand for US wheat exports with the smaller 2003 crops in Europe and China. China became a net importer of wheat in the latter part of 2003 for the first time since 1999/2000 due to lower domestic production. US sales of wheat to China in 2003 posted a 7-year high. Supply – World wheat production in 2003/4 was forecast to fall by 2.5% to 552.660 million metric tons from 566.843 million in 2002/3 and by 5.0% from 581.859 million in 2001/2. World ending stocks in 2003/4 are expected at 127.263 million metric tons, down sharply by 23% from 165.442 million in 2002/3 and by an overall 37% from

300

201.108 million in 2001/2. The world’s largest wheat producers in 2002/3 were the European Union with 103.872 million metric tons of production (or 18% of world production), China with 90.290 million (16%), India with 71.810 million (13%), Russia with 50.550 million (9%), and the US coming in fifth with 44.062 million (8%). US wheat production in 2003/4 was forecast at 63.590 million metric tons, up from the very low 2002/3 wheat production of 44.062 million in 2002/3 and 53.262 million in 2001/2. The US 2003/4 wheat crop (June/May) was forecast at 2.337 billion bushels, up sharply from 1.619 billion in 2002/3. US stocks for the 2003/4 marketing year (June 1) were forecasted at 491.4 million bushels, down sharply from 777.1 million in 2002/3. US farmers planted 61.7 million acres with wheat in 2003, up from 60.468 million in 2002. Yields were very strong in 2003 at 44.2 bushels per acre, up from a poor 35.3 bushels in 2002. The breakdown of US production in 2003 was 1.707 billion bushels of winter wheat (73% of total), 533 million bushels of other spring wheat (23%), and 97 million bushels of durum wheat (4%). The largest US wheat producing states in 2003 were Kansas (with 28% of US production), Oklahoma (11%), Washington (7%), and Texas (6%). Demand – World wheat consumption in 2003/4 was forecast at 590.839 million metric tons, down from 602.509 in 2002/3 but above 586.482 million in 2001/2. The world’s largest consumers of wheat in 2002/3 were China with 105.200 million metric tons of consumption (accounting for 17% of world consumption), the European Union with 97.100 million (16%), India with 74.644 million (12%), Russia with 39.320 million (7%), and the US coming in fifth with 30.695 million metric tons of production (5%). In the US, total disappearance (consumption) in 2003/4 was forecast at 2.320 billion bushels, with a breakdown of 910.0 million bushels for food (accounting for 39% of total disappearance), 85.0 million bushels for seed (4%), 225.0 million bushels for feed and residuals (10%), and 1.100 billion bushels for exports (47%). Trade – World trade in wheat in 2003/4 is expected to decline to 99.450 million metric tons, down from 108.402 million in 2002/3 and 110.362 million in 2001/2. The largest exporters of wheat in 2002/3 were the US with 22.969 million metric tons of exports (accounting for 21% of world exports), the European Union with 16.315 million (15%), Russia with 12.621 million (12%), and Australia with 10.946 million (10%). US exports in 2003/4 are expected to grow to 31.000 million metric tons, up sharply by 35% from 22.969 million in 2002/3. Many countries are importers of wheat, with the largest in 2002/3 being the European Union with 12.000 million metric tons (accounting for 11% of world production), Brazil with 6.631 million (6.1%), Egypt with 6.300 million (5.8%), and Algeria with 6.000 million (5.5%). US wheat imports in 2003/4 are forecasted to rise slightly to 2.000 million metric tons from 1.960 million in 2002/3.

WHEAT World Production of Wheat Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

In Thousands of Metric Tons

Argentina

Australia

Canada

China

France

Germany

India

Pakistan

Russia

Turkey

United Kingdom

United States

World Total

11,300 8,600 15,900 14,800 13,300 16,400 16,230 15,500 12,300 13,500

8,903 16,504 22,925 19,224 21,465 24,757 22,108 24,854 10,058 24,500

23,122 25,037 29,801 24,280 24,076 26,941 26,519 20,568 16,198 23,500

99,300 102,215 110,570 123,289 109,726 113,880 99,640 93,873 90,290 86,000

30,549 30,862 35,940 33,764 39,793 37,000 37,560 31,570 38,930 30,700

16,481 17,763 18,922 19,827 20,188 19,620 21,620 22,840 20,820 19,300

59,840 65,470 62,097 69,350 66,350 70,780 76,369 69,680 71,810 69,300

15,212 17,002 16,907 16,650 18,694 17,854 21,079 19,023 18,226 18,200

32,100 30,100 34,900 44,200 27,000 31,000 34,450 46,900 50,550 34,000

14,700 15,500 16,000 16,000 18,000 16,500 18,000 15,500 16,800 16,800

13,314 14,310 16,102 15,018 15,470 14,870 16,700 11,580 15,970 14,290

63,167 59,404 61,980 67,534 69,327 62,569 60,758 53,262 44,062 63,590

523,966 538,410 581,912 609,185 589,697 585,348 581,546 581,569 566,392 551,768

Preliminary.

2

Estimate.

3

Forecast.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

World Supply and Demand of Wheat Crop Year

Yield

Production

World Trade

Utilization Total

Ending Stocks

Stocks as a % of Utilization

214.3 218.8 230.2 228.4 225.0 215.4 218.6 214.8 214.2 208.5

2.44 2.46 2.53 2.67 2.62 2.72 2.66 2.71 2.64 2.65

523.1 538.0 582.6 610.0 589.9 585.3 581.5 581.6 566.4 551.8

101.5 99.2 104.0 104.4 102.0 112.7 103.6 110.4 108.9 100.6

542.4 544.8 573.4 578.3 579.0 584.5 583.7 586.3 601.8 591.4

162.1 155.3 164.5 196.1 207.1 207.9 205.7 201.0 165.6 125.9

29.9 28.5 28.7 33.9 35.8 35.6 35.2 34.3 27.5 21.3

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32 2003-43 1

Preliminary.

2

In Millions of Metric Tons/Hectares

Area Harvested

Estimate.

3

Forecast.

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

Salient Statistics of Wheat in the United States -------------- Acreage Harvested -------------Crop Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

Planting Intentions Winter Spring All ------------------------------ 1,000 Acres ------------------------------

70,349 69,132 75,105 70,412 65,821 62,714 62,629 59,597 60,468 61,700

41,335 40,972 39,574 41,340 40,126 35,486 35,072 31,295 29,751 36,541

20,415 19,973 23,245 21,500 18,876 18,337 18,061 17,338 16,166 16,186

61,770 60,945 62,819 62,840 59,002 53,823 53,133 48,633 45,917 52,839

Average - All Yield Per Acre in Bushels

37.6 35.8 36.3 39.5 43.2 42.7 42.0 40.2 35.3 44.2

------- Foreign Trade5 ------Domestic Value of Exports2 Imports3 Production $1,000 -- In Millions of Bushels --

7,968,237 9,787,213 9,782,238 8,286,741 6,780,623 5,593,989 5,782,107 5,440,217 5,679,400 7,954,899

1

Preliminary. 2 I ncludes flour milled from imported wheat. 3 Total wheat, flour & other products. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Supply and Distribution of Wheat in the United States Crop Year Beginning June 1

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42

1,188.3 1,241.1 1,001.5 1,040.4 1,046.0 1,086.5 1,062.0 962.3 854.2 1,150.0 4

Civilian only.

Per Capita4 ------- Consumption ------Flour Cereal ---------- In Pounds----------

91.9 67.9 92.3 94.9 103.0 94.5 89.8 107.6 77.4 75.0 5

143.0 140.0 147.0 147.0 143.0 144.0 146.0 ----------

5.2 5.4 5.4 5.4 5.4 5.3 5.1 ----------

Year beginning June.

In Millions of Bushels

-------------------------------------------- Supply -------------------------------------------- --------------------------------- Domestic Disappearance --------------------------------F eed & Total ----------- Stocks, June 1 ----------On Mills, ResDisappearTotl Total Farms Elevators3 idual5 ance Stocks Production Imports4 Supply F ood S eed Total Exports4

175.3 163.4 74.6 154.6 224.2 277.7 226.8 197.3 216.8 132.1

393.2 343.2 301.4 289.0 498.3 668.2 723.0 678.9 560.3 359.3

568.5 506.6 376.0 443.6 722.5 945.9 949.7 876.2 777.1 491.4

2,321.0 2,182.7 2,277.4 2,481.5 2,547.3 2,299.0 2,232.5 1,957.0 1,619.0 2,336.5

91.9 67.9 92.3 94.9 103.0 94.5 89.8 107.6 77.4 75.0

2,981.4 2,757.2 2,745.7 3,020.0 3,372.8 3,339.4 3,272.0 2,940.8 2,473.5 2,902.9

853.0 882.9 890.7 914.1 909.7 921.0 949.6 926.4 917.5 910.0

89.0 103.5 102.3 92.5 80.5 91.8 79.8 83.8 83.8 84.0

344.5 153.7 307.6 250.5 391.3 288.3 304.4 191.2 126.4 225.0

1,286.6 1,140.1 1,300.6 1,257.1 1,380.9 1,301.1 1,333.8 1,201.4 1,127.8 1,219.0

1,188.3 1,241.1 1,001.5 1,040.4 1,046.0 1,088.6 1,062.0 962.3 854.2 1,125.0

2,474.8 2,381.2 2,302.1 2,297.5 2,426.9 2,389.7 2,395.9 2,163.7 1,982.1 2,344.0

1

Preliminary. 2 Estimate. 3 Also warehouses and all off-farm storage not otherwise designated, including flour mills. 4 I mports & exports are for wheat, including flour & other products in terms of wheat. 5 Mostly feed use. Source: Economic Research Service, U.S. Department of Agriculture

301

WHEAT Stocks, Production and Exports of Wheat in the United States, by Class Year Beginning June 1

In Millions of Bushels

---------- Hard Spring ----------- ------------ Durum2 ------------- ---------- Hard Winter ----------- ------- Soft Red Winter -------- ------------- White -------------Stocks ProStocks ProStocks ProStocks ProStocks ProJune 1 duction Exports3 June 1 duction Exports3 June 1 duction Exports3 June 1 duction Exports3 June 1 duction Exports3

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

201 193 106 166 220 233 218 210 230 145

515 475 631 491 486 448 502 476 354 500

292 230 300 240 247 230 230 216 258 153

28 26 25 31 26 55 50 45 33 28

97 102 116 88 138 99 110 84 79 97

40 39 38 57 40 44 50 50 37 30

227 194 154 143 307 435 458 411 363 188

971 825 759 1,098 1,180 1,051 846 767 612 1,063

422 384 286 358 453 486 403 349 307 270

45 37 35 45 80 136 133 135 78 55

1 Preliminary. 2 I ncludes Red Durum. 3 I ncludes four made from U.S. wheat & shipments to territories. U.S. Department of Agriculture (ERS-USDA)

434 456 420 472 443 454 471 400 332 379

212 250 140 180 105 170 176 199 105 46

67 57 55 59 90 87 91 75 73 75

304 325 352 332 301 247 303 232 241 298

222 238 237 205 198 160 203 147 147 83

Source: Economic Research Service,

Seeded Acreage, Yield and Production of all Wheat in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

----------- Seeded Acreage -- 1,000 Acres ----------- ----- Yield Per Harvested Acre (Bushels) ----- ----------- Production (1,000,000 Bushels) ----------Other Other Other Winter Spring Durum All Winter Spring Durum All Winter Spring Durum All

49,197 48,686 51,445 47,985 46,449 43,331 43,393 41,078 41,845 44,945

Preliminary.

18,329 17,010 20,030 19,117 15,567 15,348 15,299 15,609 15,714 13,840

2,823 3,436 3,630 3,310 3,805 4,035 3,937 2,910 2,909 2,915

70,349 69,132 75,105 70,412 65,821 62,714 62,629 59,597 60,468 61,700

40.2 37.7 37.1 44.6 46.9 47.8 44.7 43.5 38.5 46.7

31.8 32.2 35.1 29.9 34.9 34.1 38.4 35.2 29.3 39.7

35.6 30.5 32.6 27.6 37.0 27.8 30.7 30.0 29.4 33.7

Year

Colorado

Idaho

Illinois

Kansas

Missouri

Montana

Nebraska

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

76,500 102,600 70,400 86,400 99,450 103,200 68,150 66,000 36,300 77,000

56,880 58,520 68,800 68,800 63,140 53,960 65,700 51,830 54,510 57,600

50,400 68,110 41,800 66,490 57,600 60,600 52,440 43,920 31,850 52,650

433,200 286,000 255,200 501,400 494,900 432,400 347,800 328,000 267,300 480,000

50,400 47,970 48,750 58,320 57,500 44,160 49,400 41,040 34,200 53,070

64,750 54,800 61,380 55,100 48,750 36,860 44,550 19,140 21,000 63,640

71,400 86,100 73,500 70,300 82,800 81,600 59,400 59,200 48,640 83,720

Preliminary.

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

302

562.3 535.7 691.7 548.2 528.5 503.1 556.6 512.0 393.9 532.8

96.7 102.3 116.1 87.8 138.1 99.3 109.8 83.6 79.5 96.6

2,321.0 2,182.6 2,277.4 2,481.5 2,547.3 2,299.0 2,232.5 1,957.0 1,619.0 2,336.5

In Thousands of Bushels Ohio

Oklahoma

Oregon

Texas

Washington

Total

68,440 73,810 51,870 68,670 74,240 72,100 79,920 60,300 50,220 68,000

143,100 109,200 93,100 169,600 198,900 150,500 142,800 122,100 100,800 179,400

55,680 57,750 58,680 53,790 52,930 29,610 45,260 28,000 29,110 47,940

75,400 75,600 75,400 118,900 136,500 122,400 66,000 108,800 78,300 96,600

124,200 133,300 164,500 141,900 136,500 96,860 131,400 106,750 103,250 117,000

1,661,943 1,544,653 1,469,618 1,845,528 1,880,733 1,696,580 1,562,733 1,361,479 1,145,602 1,707,069

Source: Crop Reporting Board, U.S. Department of Agriculture (CRB-USDA)

Official Winter Wheat Crop Production Reports in the United States Crop Year

1,661.9 1,544.7 1,469.6 1,845.5 1,880.7 1,696.6 1,562.7 1,361.5 1,145.6 1,707.1

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Production of Winter Wheat in the United States, by State

1

37.6 35.8 36.3 39.5 43.2 42.7 42.0 40.2 35.3 44.2

In Thousands of Bushels

May 1

June 1

July 1

August 1

September 1

Current December

Final

1,657,938 1,638,211 1,363,851 1,561,470 1,706,784 1,614,799 1,648,805 1,341,381 1,300,726 1,563,314

1,674,563 1,608,396 1,369,861 1,603,580 1,743,294 1,611,559 1,621,966 1,321,126 1,237,671 1,626,376

1,658,426 1,529,950 1,484,836 1,780,554 1,898,719 1,673,222 1,588,376 1,366,192 1,178,320 1,715,912

1,670,436 1,552,230 1,494,716 1,855,474 1,914,359 1,688,582 1,594,321 1,385,048 1,158,710 1,712,150

1,670,436 1,552,230 ---------------------------------

-----------------------------------------

1,661,043 1,544,653 1,477,058 1,845,528 1,880,733 1,696,580 1,562,733 1,361,479 1,145,602 1,707,069

Source: Crop Reporting Board, U.S. Department of Agriculture (CRB-USDA)

WHEAT Production of All Spring Wheat in the United States, by State Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

8,554 8,514 14,760 8,010 15,120 7,275 8,075 7,917 8,455 11,500

Preliminary.

5,605 6,800 13,800 13,680 15,750 8,925 9,700 8,505 9,000 11,500

5,340 7,950 7,000 7,540 12,040 9,450 13,160 11,880 12,995 14,490

76,375 598 77,760 896 79,380 720 57,860 513 94,400 624 72,000 1,512 78,300 468 54,600 576 48,750 110 58,410 621

96,747 102,280 116,090 87,783 138,119 99,322 109,805 83,556 79,450 96,637

Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 Preliminary.

43,400 70,000 44,800 70,400 50,400 105,000 45,030 75,200 39,270 78,720 50,560 78,000 42,750 95,550 33,320 79,200 33,150 61,200 29,700 104,400

100,500 133,000 106,600 118,900 108,000 108,000 77,500 65,550 75,900 59,400

278,775 221,400 313,500 210,000 211,200 168,000 230,400 234,600 165,200 252,800

2,900 5,928 6,405 6,600 4,560 5,049 5,750 4,650 4,900 5,600

51,480 33,600 83,250 63,000 59,200 59,850 60,040 64,350 24,000 56,280

9,800 20,470 18,170 23,220 20,925 27,280 33,480 25,830 26,445 22,345

562,291 535,658 691,680 548,155 528,469 503,108 550,902 512,008 393,949 532,820

Source: Crop Reporting Board, U.S. Department of Agriculture (CRB-USDA)

Grindings of Wheat by Mills in the United States

1

In Thousands of Bushels

-------------------------------- Durum Wheat -------------------------------- --------------------------------------------- Other Spring Wheat ---------------------------------------------MonNorth South Total MinneMonNorth South WashTotal Arizona California tana Dakota Dakota Durum Idaho sota tana Dakota Oregon Dakota ington Other

In Millions of Bushels (60 Pounds Each)

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

Total

68.9 69.8 73.6 76.4 -------------------------

78.7 77.8 77.4 75.8 224.7 234.0 244.7 230.2 230.3 228.4

76.3 74.2 75.1 78.4 -------------------------

77.9 78.4 82.7 82.7 -------------------------

75.9 74.8 73.7 75.3 238.6 242.2 247.7 238.7 228.1 220.5

71.1 70.0 71.3 74.8 -------------------------

69.0 70.1 69.6 -----------------------------

65.2 72.4 66.9 215.5 213.5 225.6 223.8 217.0 213.7

76.9 72.1 70.3 -----------------------------

66.6 69.4 73.2 -----------------------------

74.7 72.6 72.5 216.6 228.0 226.8 221.3 217.6 213.4

71.9 67.7 72.2 -----------------------------

873.1 869.1 878.6 895.5 904.9 928.7 937.5 903.6 885.6 897.9

Source: Bureau of the Census, U.S. Department of Commerce

Wheat Stocks in the United States

In Millions of Bushels

------------------------ On Farms ------------------------ ------------------------- Off Farms -------------------------

--------------------------- Total Stocks ---------------------------

Year

Mar. 1

June 1

Sept. 1

D e c. 1

Mar. 1

June 1

Sept. 1

D e c. 1

Mar. 1

June 1

Sept. 1

D e c. 1

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1

363.2 335.3 220.6 320.8 399.9 471.2 424.7 384.8 338.5 236.3

175.3 163.4 74.6 154.6 224.2 277.7 226.8 197.3 216.8 132.1

859.8 743.6 824.5 794.4 885.7 888.1 808.4 696.9 580.2 687.3

575.6 477.0 584.2 604.0 680.2 647.4 623.4 517.9 384.8 491.9

664.8 633.8 602.9 501.1 766.6 979.2 991.8 953.6 871.3 670.3

393.2 343.2 301.4 289.0 498.3 668.2 723.0 678.9 560.3 359.3

1,209.7 1,137.5 899.7 1,282.0 1,499.6 1,557.0 1,544.3 1,459.0 1,170.8 1,351.7

920.6 861.3 634.7 1,015.2 1,215.5 1,236.3 1,182.7 1,105.6 935.1 1,029.2

1,028.0 969.1 823.5 821.8 1,166.6 1,450.4 1,416.5 1,338.4 1,209.8 906.6

568.5 506.6 376.0 443.6 722.5 945.9 949.7 876.2 777.1 491.4

2,069.5 1,881.1 1,724.2 2,076.3 2,385.3 2,445.0 2,352.7 2,155.8 1,751.0 2,039.0

1,491.1 1,338.3 1,218.8 1,619.2 1,895.7 1,883.7 1,806.1 1,623.5 1,319.9 1,521.1

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Wheat Supply and Distribution in Canada, Australia and Argentina

In Millions of Metric Tons

--------- Canada (Year Beginning Aug. 1) --------- --------- Australia (Year Beginning Oct. 1) --------- ------- Argentina (Year Beginning Dec. 1) -------------------- Supply ------------Crop Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-31 2003-42 1

Stocks Aug. 1

New Crop

11.1 5.7 6.7 9.0 6.0 7.4 7.3 9.7 6.7 5.7

23.1 25.0 29.8 24.3 24.1 26.9 26.5 20.6 16.2 23.5

Preliminary.

2

Forecast.

------------- Supply -------------

Total -- Disappearance -- Stocks Supply Domestic Exports3 Oct. 1

34.2 30.7 36.5 33.3 30.1 34.4 33.8 30.2 22.9 29.2 3

7.8 7.8 8.2 7.3 8.1 8.1 7.0 7.6 8.3 7.7

I ncluding flour.

20.9 16.3 19.5 20.1 14.7 19.2 17.3 16.3 9.4 16.0

3.7 2.4 2.0 2.4 1.3 1.9 3.6 4.5 7.6 2.7

New Crop

8.9 16.5 22.9 19.2 21.5 24.8 22.1 24.9 10.1 24.5

------------ Supply -------------

Total -- Disappearance -Supply Domestic Exports3

12.7 18.9 24.9 21.6 22.8 26.6 25.7 29.4 17.7 27.2

3.9 3.7 3.3 5.0 4.5 5.2 5.3 5.4 6.1 6.2

6.4 13.3 19.2 15.3 16.5 17.8 15.9 16.4 9.1 17.5

Stocks D e c. 1

New Crop

.4 .2 .2 1.0 .8 .7 .6 .6 1.1 1.5

11.3 8.6 15.9 15.7 13.3 16.4 16.2 15.5 12.3 13.5

Total -- Disappearance -Supply Domestic Exports3

11.7 8.8 16.1 16.7 14.1 17.1 16.8 16.1 13.4 15.0

Source: Foreign Agricultural Service, U.S. Department of Agriculture (FAS-USDA)

4.3 4.2 4.9 4.8 4.9 4.9 5.0 4.9 5.2 5.3

7.3 4.5 10.2 11.2 8.6 11.6 11.3 10.1 6.8 8.0

303

WHEAT Quarterly Supply and Disappearance of Wheat in the United States Crop Year Beginning June 1

1993-4 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 1994-5 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 1995-6 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 1996-7 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 1997-8 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 1998-9 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 1999-00 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 2000-1 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 2001-2 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 2002-3 1 June-Aug. Sept.-Nov. Dec.-Feb. Mar.-May 2003-42 June-Aug. Sept.-Nov. 1

In Millions of Bushels

---------------------------------- Disappearance ---------------------------------Total ----------- Ending Stocks ----------------------------------- Supply ------------------------- ------------------ Domestic Use ------------------Beginning Total F eed & Gov't Privately Total D i sa p Supply F ood Seed Residual7 Owned4 Owned5 Stocks Stocks Production Imports3 Total Exports3 pearance

530.7 530.7 2,132.6 1,585.7 1,028.0 568.5 568.5 2,069.5 1,491.1 969.1 506.6 506.6 1,881.1 1,338.3 823.5 376.0 376.0 1,724.2 1,218.8 821.8 443.6 443.6 2,076.3 1,619.2 1,166.6 722.5 722.5 2,385.3 1,895.7 1,450.4 945.9 945.9 2,445.0 1,885.6 1,415.3 949.7 949.7 2,353.0 1,805.0 1,340.0 876.2 876.2 2,155.8 1,623.5 1,209.8 777.0 777.0 1,751.0 1,320.0 905.0 491.0 491.0 2,039.0

2,396.4 2,396.4 ------------2,321.0 2,321.0 ------------2,182.6 2,182.6 ------------2,277.4 2,277.4 ------------2,481.5 2,481.5 ------------2,547.3 2,547.3 ------------2,299.0 2,299.0 ------------2,232.0 2,232.0 ------------1,957.0 1,957.0 ------------1,619.0 1,619.0 ------------2,337.0 2,337.0 ----

108.8 14.6 30.1 26.9 37.2 92.0 30.7 21.4 17.7 22.2 67.9 22.7 16.3 11.8 17.2 92.3 14.9 20.7 27.1 29.7 94.9 22.7 22.8 23.8 25.7 103.0 24.4 23.9 27.7 27.0 94.5 30.6 19.5 19.4 25.0 90.0 20.0 25.0 21.0 23.0 107.5 25.7 29.0 27.6 25.2 78.0 27.0 23.0 13.0 15.0 78.0 16.0 23.0

3,035.9 2,941.7 2,162.7 1,612.6 1,065.2 2,981.4 2,920.2 2,090.9 1,508.8 991.2 2,757.1 2,711.9 1,897.4 1,350.0 840.7 2,745.7 2,668.3 1,744.9 1,245.9 851.6 3,020.0 2,947.8 2,099.1 1,643.0 1,192.2 3,372.8 3,294.2 2,409.2 1,923.4 1,477.4 3,339.4 3,275.5 2,464.5 1,905.1 1,440.3 3,272.0 3,203.0 2,378.0 1,828.0 1,631.0 2,940.8 2,858.9 2,184.9 1,651.0 1,235.0 2,474.0 2,423.0 1,774.0 1,333.0 922.0 2,906.0 2,844.0 2,062.0

871.7 211.3 225.3 211.0 224.1 852.5 213.2 229.3 201.5 208.5 882.9 215.3 232.2 215.8 219.6 890.7 223.7 233.8 212.7 220.5 914.1 227.9 238.7 219.2 228.3 909.7 225.7 240.7 213.2 230.1 924.7 230.5 241.1 220.9 232.2 956.0 239.0 253.0 231.0 234.0 926.3 233.8 245.1 220.7 226.7 917.0 233.0 240.0 217.0 227.0 934.0 227.0 240.0

96.3 1.3 60.9 2.3 31.8 89.2 1.6 61.1 2.2 24.3 104.1 8.0 64.9 3.0 28.2 102.3 8.7 59.9 1.8 31.8 92.5 3.1 58.6 2.1 28.7 80.5 1.0 54.9 1.4 23.2 91.6 6.4 54.6 2.3 28.4 80.0 1.0 50.0 3.0 25.0 83.6 3.5 51.7 2.0 26.4 84.0 3.0 54.0 3.0 24.0 110.0 2.0 53.0

271.7 295.8 -38.5 39.0 -24.7 344.9 376.3 -28.8 25.6 -28.2 153.0 305.0 -98.7 13.3 -66.5 307.6 377.5 -76.0 30.3 -24.2 250.5 352.2 -113.4 .3 11.4 542.1 424.9 73.8 11.6 31.8 283.8 270.0 -8.0 30.7 -8.8 298.0 324.0 -24.0 5.0 -7.0 192.5 247.5 -23.2 -7.2 -24.6 126.0 196.0 -75.0 12.0 -7.0 498.0 309.0 -60.0

1,239.7 508.4 247.7 252.3 231.2 1,286.6 591.1 261.6 229.3 204.6 1,139.9 528.3 198.3 232.1 181.3 1,300.6 610.0 217.8 244.7 228.1 1,257.1 583.2 183.9 221.6 268.4 1,532.4 651.6 369.5 226.2 285.1 1,300.1 506.9 287.7 253.9 251.8 1,334.0 564.0 279.0 239.0 252.0 1,202.4 484.8 273.6 215.5 228.5 1,127.0 432.0 219.0 232.0 244.0 1,542.0 538.0 233.0

1,227.8 300.7 329.2 332.3 265.5 1,188.3 259.6 338.2 310.4 280.1 1,241.1 302.5 360.8 294.5 283.4 1,001.5 334.1 308.3 179.3 179.8 1,040.4 288.2 296.0 254.9 201.3 1,042.2 257.3 291.8 246.8 246.3 1,089.5 323.6 291.3 235.9 238.8 1,061.0 286.0 293.0 250.0 233.0 961.3 218.3 287.8 225.7 229.4 855.0 240.0 235.0 194.0 186.0 1,146.0 266.0 307.0

2,467.4 809.1 577.0 584.6 496.7 2,474.9 850.7 599.8 539.7 484.7 2,381.1 830.8 559.1 526.6 464.6 2,302.1 944.1 526.1 424.1 407.9 2,297.5 871.4 479.9 476.4 469.8 2,574.6 908.9 661.2 473.0 531.5 2,389.6 830.5 579.0 489.8 490.6 2,395.0 850.0 572.0 489.0 485.0 2,163.7 703.1 561.4 441.2 457.9 1,982.0 672.0 454.0 426.0 430.0 2,688.0 804.0 540.0

150.3 149.9 150.3 150.4 150.3 142.1 146.4 142.8 142.3 142.1 118.2 141.5 141.2 137.5 118.2 93.0 109.5 96.1 95.3 93.0 94.2 93.2 93.1 93.0 94.2 127.9 99.8 126.6 124.2 127.9 103.9 132.2 115.0 108.7 103.9 96.9 108.9 102.9 104.4 96.9 96.9 97.7 96.9 96.9 96.9

418.2 1,982.7 1,435.4 877.6 418.2 364.5 1,923.1 1,348.3 826.8 364.5 257.8 1,739.6 1,197.1 686.0 257.8 350.6 1,614.7 1,122.7 726.5 350.6 628.3 1,983.1 1,526.1 1,073.6 628.3 818.0 2,285.5 1,769.1 1,326.2 818.0 845.8 2,312.8 1,770.6 1,306.6 845.8 779.3 2,243.8 1,703.2 1,234.0 779.3 680.2 2,058.1 1,526.5 1,112.9 680.2

91.4 80.9

1,659.6 1,239.0

568.5 2,132.6 1,585.7 1,028.0 568.5 506.6 2,069.5 1,491.1 969.1 506.6 376.0 1,881.1 1,338.3 823.5 376.0 443.6 1,724.2 1,218.8 821.8 443.6 722.5 2,076.3 1,619.2 1,166.6 722.5 945.9 2,385.3 1,895.7 1,450.4 945.9 949.7 2,445.0 1,885.6 1,416.5 949.7 876.2 2,352.7 1,806.1 1,338.4 876.2 777.1 2,155.8 1,623.4 1,209.8 777.1 491.0 1,751.0 1,320.0 907.0 491.0 559.0 2,039.0 1,521.0

Preliminary. 2 Forecast. 3 I mports & exports include flour and other products expressed in wheat equivalent. 4 Uncommitted, Government only. I ncludes total loans. 6 Less than 50,000 bushels. 7 I ncludes alcoholic beverages. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA) 5

304

WHEAT Wheat Government Loan Program Data in the United States

Loan Rates (Cents Per Bushel)

----------------- Farm Loan Prices ------------------

Crop Year Beginning June 1

National Average

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21 2002-32

258 258 258 258 258 258 258 280

----------------- Stocks Ending May 31 ----------------Acquired ---- Outstanding ---Central & FarmerTotal by C C C Placed Southern Northern Owned Total CCC CCC Under Under % of Corn Belt Pacific Plains Plains Stocks Loans Reserve "Free" Stocks Loan Production Program Target (Soft Red (Spring Northwest (Hard Winter) Rate (White) ----------------------------------------- In Millions of Bushels ----------------------------------------Winter) & Durum)

400 NA NA NA NA NA NA 386

254 253 253 253 253 253 255 NA

258 257 257 257 257 257 254 NA

258 258 258 258 258 258 264 NA

276 271 271 271 271 271 270 NA

114 194 248 ----------------

5.2 8.1 -------------------

0 0 0 0 0 0 0 0

376 444 723 946 950 876 777 491

118 93 94 128 104 97 99 66

13 72 134 140 62 42 78 32

0 0 0 0 0 0 0 0

245 279 494 678 784 737 600 359

1

Preliminary. 2 Estimate. 3 The national average loan rate at the farm as a percentage of the parity-priced wheat at the beginning of the marketing year. 4 Beginning with the 1996-7 marketing year, target prices are no longer applicable. NA = Not avaliable. Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

Exports of Wheat (Only)2 from the United States Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

June

July

Aug.

78,355 88,649 119,797 73,715 108,437 145,840 65,654 92,465 123,141 67,372 86,605 96,664 90,594 110,814 107,168 88,581 82,739 104,944 59,190 64,911 89,582 63,219 78,013 92,345 54,665 88,042 115,869

Preliminary.

2

Grains.

Sept.

Oct.

In Thousands of Bushels Nov.

D e c.

Jan.

131,424 117,679 105,535 125,910 98,302 75,245 119,029 89,331 79,528 90,507 109,168 81,913 91,438 96,154 89,211 113,785 82,716 86,034 86,941 94,598 99,800 73,606 78,866 75,678 125,312 101,168 76,222

99,175 50,979 80,906 96,486 84,460 94,705 81,369 69,485

96,085 63,431 97,090 73,017 71,763 60,743 72,114 62,769

Mar.

Apr.

May

Total

91,876 108,800 59,039 55,936 68,972 63,914 63,794 65,522 64,198 68,836 85,797 71,502 63,446 78,070 48,618 65,990

F eb.

90,373 69,821 64,623 86,066 73,815 83,157 84,211 55,764

78,303 47,640 68,359 85,057 87,789 68,908 58,449 59,438

1,206,051 974,295 1,013,012 1,002,171 1,036,240 1,023,611 932,681 823,791 1,122,556

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

United States Wheat and Wheat Flour Imports and Exports

In Thousands of Bushels

------------------------------------ Imports ------------------------------------ ----------------------------------------------------- Exports ------------------------------------------------------

Crop Year Beginning June 1

--------- Wheat --------Unfit for Flour & Human Suitable Grain Products2 Confor Milling sumption --- Wheat Equivalent ---

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-21

70,561 47,753 71,727 73,245 79,766 72,408 66,313 82,615

-------------------------

70,562 47,753 71,727 73,245 79,766 72,408 66,313 82,615

Foreign Donations P.L. 480 Sec. 416

A i d3

CCC Export Credit

Total Concessional

Export Exhancement Programs

Total U.S. Wheat Exports

Total ------------------------------------- In Thousands of Metric Tons -------------------------------------

21,386 20,180 20,605 21,556 23,220 22,103 23,512 24,930

91,946 67,933 92,333 94,801 102,987 94,510 89,825 107,545

1,491 1,530 1,009 1,453 556 674 1,294 1,093

0 0 0 0 4,682 2,635 1,638 875

NA NA NA NA NA NA NA NA

1,948 1,530 1,155 1,727 5,334 3,436 3,109 2,035

4,202 5,662 4,844 5,460 3,621 3,691 4,026 4,441

18,073 570 0 0 0 0 0 0

32,088 33,708 24,526 25,791 28,806 27,838 25,275 25,353

1

Preliminary. 2 I ncludes macaroni, semolina & similar products. 3 Shipment mostly under the Commodity I mport Program, financed with foreign aid funds. NA = Not available. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Comparative Average Cash Wheat Prices

Crop Year Beginning June 1

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

In Dollars Per Bushel

--- Minneapolis --No. 1 No. 1 Hard Red No. 1 Dark No. 2 No. 2 Ordinary Hard Received Soft Red Protein, Soft Red Northern Spring Amber Winter, by U.S. Winter, Kansas 14% Durum City St. Louis Farmers Chicago

4.30 3.38 2.65 2.48 2.62 2.78 3.56 3.30-3.40

Preliminary.

2

3.92 3.29 2.46 2.19 2.39 2.69 3.40 3.52

Calendar year.

4.88 3.71 3.08 2.87 3.30 3.25 4.22 3.84

4.10 3.43 2.40 2.39 2.39 2.80 3.50 3.65

4.97 4.31 3.83 3.65 3.62 3.61 4.47 4.23

NA = Not available.

5.59 5.97 4.06 4.22 4.59 4.99 4.25 5.30

-------- Export Prices2 (U.S. $ Per Metric Ton) -------No. 2 No. 1 Western Soft White White, Pacific Portland, Oregon Northwest

4.54 3.81 3.02 3.02 2.99 3.48 3.95 3.79

4.26 3.41 2.64 2.72 2.72 3.67 4.58 4.07

Canada Aust- Vancouver No. 2 U.S. Gulf No. 1 Argentina ralian Soft No. 2 CWRS White, Standard Hard F.O.B. 13 1/2% Wheat Toledo Winter B.A.

3.71 3.12 2.27 1.94 2.98 2.67 3.34 3.42

229 192 154 143 145 157 192

230 181 163 152 149 149 199

218 157 120 114 118 121 158

207 160 126 112 114 125 160 148

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Rotterdam C.I.F. U.S. No. 2 Hard Winter

239 209 181 NA 163 161 190

305

WHEAT

-----

Cents Per Bushel No. 2 Red, Chicago (Jan. 1901 - Mar. 1982) No. 2 Soft, Red, St. Louis (Apr. 1982 - date)

Average Price of No. 2 Soft Red Winter (30 Days) Wheat in Chicago

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

3.21 3.91 4.94 3.38 2.72 2.20 2.41 2.40 2.81 3.11

3.14 4.41 4.64 3.30 2.51 1.94 2.14 2.56 3.19 3.23

3.37 4.28 4.49 3.52 2.39 2.09 2.08 2.57 3.42 3.63

3.75 4.53 4.33 3.49 2.32 2.12 2.13 2.57 3.92 3.46

3.83 4.72 3.96 3.51 2.56 1.98 2.36 2.68 3.89 3.42

3.63 4.85 3.57 3.44 2.58 1.96 2.42 2.75 3.85 3.87

3.76 5.04 3.54 3.31 2.49 2.12 2.47 2.83 3.53 3.92

3.68 4.92 3.47 3.27 2.46 2.34 2.57 2.96 3.32

3.55 5.10 3.29 3.26 2.28 2.38 2.49 2.74 3.44

3.39 4.99 3.49 3.25 2.63 2.34 2.56 2.76 3.14

3.40 5.65 3.77 2.91 2.31 2.30 2.52 2.75 3.08

3.56 5.57 3.57 2.87 2.24 2.45 2.51 2.73 3.25

3.52 4.83 3.92 3.29 2.46 2.19 2.39 2.69 3.40 3.52

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price1 Received by Farmers for Wheat in the United States

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-42

3.21 3.84 5.25 3.52 2.77 2.50 2.50 2.74 2.92 3.07

3.04 4.10 4.73 3.23 2.56 2.22 2.32 2.70 3.21 2.95

3.25 4.26 4.58 3.56 2.39 2.53 2.41 2.73 3.63 3.34

3.57 4.53 4.37 3.67 2.41 2.58 2.44 2.85 4.21 3.39

3.76 4.72 4.18 3.55 2.79 2.57 2.68 2.87 4.38 3.45

3.75 4.81 4.14 3.50 2.97 2.66 2.83 2.87 4.25 3.59

3.74 4.88 4.06 3.45 2.87 2.52 2.87 2.88 4.06 3.69

3.69 4.83 4.03 3.33 2.80 2.51 2.85 2.87 3.89 3.68

3.61 4.98 3.88 3.27 2.74 2.54 2.83 2.83 3.70 3.68

3.52 5.07 3.93 3.32 2.65 2.59 2.87 2.87 3.54

3.48 5.32 4.11 3.15 2.62 2.57 2.86 2.83 3.37

3.66 5.73 4.09 3.06 2.53 2.59 2.98 2.81 3.33

3.45 4.55 4.28 3.38 2.68 2.53 2.70 2.82 3.71 3.43

1

I ncludes an allowance for unredeemed loans and purchases.

306

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture

WHEAT Average Price of No. 1 Hard Red Winter (Ordinary Protein) Wheat in Kansas City

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

3.60 4.72 6.12 4.08 3.16 2.93 3.07 3.32 3.55 3.63

3.48 4.98 5.34 3.57 3.02 2.68 2.97 3.20 3.92 3.34

3.70 4.76 5.01 3.84 2.74 2.85 2.89 3.15 4.29 3.87

4.05 5.00 4.70 3.86 2.81 2.92 3.13 3.18 5.04 3.74

4.31 5.28 4.76 3.88 3.30 2.80 3.41 3.28 5.10 3.79

4.24 5.34 4.78 3.87 3.42 2.89 3.45 3.37 4.76 4.21

4.27 5.51 4.70 3.72 3.31 2.81 3.47 3.26 4.40 4.31

4.06 5.40 4.61 3.61 3.27 2.90 3.54 3.29 4.06

3.98 5.67 4.52 3.64 3.05 2.94 3.35 3.25 4.08

3.87 5.63 4.58 3.61 3.02 2.91 3.45 3.23 3.80

3.86 6.60 4.78 3.39 2.94 2.84 3.41 3.24 3.79

4.22 7.02 4.61 3.41 2.89 2.95 3.49 3.21 3.87

3.97 5.49 4.88 3.71 3.08 2.87 3.30 3.25 4.22 3.84

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Price of No. 1 Dark Northern Spring (14% Protein) Wheat in Minneapolis

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

4.20 4.89 6.73 4.44 4.01 3.73 3.78 3.81 3.64 4.12

4.14 5.52 6.04 4.36 3.89 3.68 3.50 3.72 4.03 4.00

4.00 5.06 5.29 4.49 3.58 3.58 3.29 3.54 4.37 4.15

4.27 5.27 4.63 4.36 3.53 3.55 3.17 3.52 5.24 4.03

4.40 5.52 4.69 4.35 4.03 3.70 3.69 3.71 5.20 4.31

4.41 5.63 4.64 4.42 4.15 3.78 3.77 3.69 4.99 4.59

4.37 5.80 4.51 4.27 3.97 3.64 3.52 3.59 4.47 4.43

4.21 5.62 4.62 4.12 3.92 3.37 3.79 3.55 4.34

4.09 5.82 4.45 4.15 3.78 3.59 3.68 3.51 4.52

4.11 5.81 4.62 4.26 3.79 3.65 3.63 3.51 4.36

4.30 6.53 4.78 4.29 3.65 3.69 3.73 3.55 4.22

4.61 7.14 4.58 4.24 3.61 3.80 3.88 3.59 4.20

4.26 5.72 4.97 4.31 3.83 3.65 3.62 3.61 4.47 4.23

1

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Farm Prices of Winter Wheat in the United States

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

5.14 3.42 2.68 2.32 2.43 2.68 2.90 2.93

4.67 3.16 2.47 2.12 2.23 2.67 3.19 2.89

4.52 3.39 2.25 2.35 2.31 2.71 3.63 3.28

4.28 3.47 2.29 2.46 2.37 2.81 4.15 3.32

4.07 3.42 2.66 2.47 2.63 2.82 4.32 3.37

4.05 3.31 2.76 2.42 2.70 2.82 4.18 3.55

4.04 3.25 2.68 2.27 2.76 2.78 3.87 3.63

4.02 3.16 2.70 2.32 2.77 2.81 3.66 3.66

3.90 3.16 2.55 2.37 2.74 2.75 3.52 3.60

3.98 3.15 2.53 2.37 2.85 2.81 3.29

4.14 2.94 2.48 2.32 2.77 2.75 3.19

4.14 2.90 2.34 2.44 2.94 2.73 3.19

4.25 3.23 2.53 2.35 2.63 2.76 3.59 3.36

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Farm Prices of Durum Wheat in the United States

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

5.58 4.21 3.98 2.93 2.71 3.37 3.41 3.99

5.13 4.61 3.39 2.89 2.90 2.74 3.44 3.85

5.03 5.23 3.23 2.76 2.33 2.38 3.54 3.78

4.69 5.35 3.03 2.29 2.32 3.02 4.18 3.94

4.78 5.09 3.04 2.30 2.42 2.91 4.43 3.90

4.56 5.25 3.08 2.64 2.97 3.04 4.52 3.91

4.59 5.17 3.05 2.96 3.03 3.41 4.26 3.96

4.47 5.02 3.20 2.90 2.94 3.44 4.23 3.97

4.31 4.71 2.84 2.88 2.60 3.49 4.28 4.03

4.32 4.68 2.82 2.63 2.40 3.33 4.14

4.40 4.45 2.80 2.89 2.52 3.33 3.98

4.50 4.29 2.84 3.02 2.53 3.41 3.99

4.70 4.84 3.11 2.76 2.64 3.16 4.03 3.93

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

Average Farm Prices of Other Spring Wheat in the United States

In Dollars Per Bushel

Year

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Average

1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41

5.48 3.74 3.22 3.01 2.90 3.03 2.98 3.46

5.30 3.66 3.08 2.93 2.74 2.78 3.31 3.29

4.63 3.75 2.69 2.86 2.59 2.84 3.66 3.39

4.41 3.64 2.62 2.86 2.59 2.87 4.30 3.42

4.23 3.49 3.04 2.79 2.80 2.96 4.45 3.54

4.11 3.55 3.23 2.94 2.97 2.91 4.26 3.67

4.01 3.51 3.19 2.87 2.98 2.96 4.15 3.75

3.95 3.45 3.12 2.82 2.96 2.88 4.03 3.66

3.80 3.34 3.09 2.82 2.99 2.86 3.82 3.75

3.83 3.42 3.00 2.85 2.99 2.90 3.71

4.04 3.41 2.95 2.89 3.05 2.91 3.49

3.94 3.31 2.92 2.92 3.13 2.91 3.55

4.31 3.52 3.01 2.88 2.89 2.90 3.81 3.55

1

Preliminary.

Source: National Agricultural Statistics Service, U.S. Department of Agriculture (NASS-USDA)

307

WHEAT

Average Open Interest of Wheat Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

In Contracts

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

53,912 66,715 102,718 63,388 96,870 119,096 127,419 145,802 118,192 92,679

48,013 67,768 104,807 71,304 99,103 131,961 135,316 146,927 118,484 99,882

45,110 55,973 91,378 76,747 97,585 118,503 123,980 137,377 112,469 95,464

47,430 55,612 98,260 85,516 114,193 117,905 128,462 138,876 112,870 99,500

44,552 67,875 93,378 84,721 115,199 111,541 130,938 134,051 96,050 97,750

54,622 90,208 81,211 83,675 116,008 117,075 133,527 151,951 98,047 96,230

57,151 101,351 69,222 92,815 121,794 120,365 139,194 142,399 118,041 92,484

65,388 90,800 66,128 105,320 127,240 129,748 144,953 143,574 131,303 119,817

73,200 91,505 65,561 104,587 125,747 128,403 141,803 136,514 129,913 110,703

78,419 103,987 65,639 108,480 131,322 135,884 150,592 126,772 114,544 109,449

70,815 102,475 60,810 101,089 130,186 140,798 153,287 113,456 101,354 125,335

67,150 99,422 58,533 90,386 116,249 124,063 134,997 104,975 82,934 120,376

Source: Chicago Board of Trade (CBT)

Volume of Trading of Wheat Futures in Chicago Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

288,321 353,603 628,340 312,680 363,511 426,524 467,050 551,756 602,956 438,021

211,703 302,950 510,138 373,411 473,114 597,448 691,068 595,312 593,112 526,001

187,617 316,330 455,981 368,547 452,186 710,375 522,394 536,141 501,142 411,017

244,544 279,099 660,722 567,099 514,557 559,211 490,694 579,992 563,072 496,770

300,324 345,455 531,979 422,935 432,167 444,696 627,722 537,836 419,272 638,590

370,135 598,762 512,883 469,158 601,149 674,580 759,371 720,350 689,807 661,840

272,492 507,876 452,690 470,992 401,508 523,516 461,068 695,339 586,449 585,073

330,758 527,716 345,626 493,225 490,242 665,897 572,879 600,341 651,607 689,593

343,548 436,145 305,448 401,277 475,766 536,014 388,237 385,930 682,906 536,452

398,041 472,794 362,047 405,978 543,680 437,689 466,328 629,479 609,435 778,863

354,975 454,352 359,005 432,621 539,488 613,633 596,581 614,734 594,373 739,791

318,173 359,985 261,108 340,722 394,201 380,442 364,139 354,331 378,760 465,405

3,620,631 4,955,067 5,385,967 5,058,645 5,681,569 6,570,025 6,407,531 6,801,541 6,872,891 6,967,416

Source: Chicago Board of Trade (CBT)

308

In Contracts

Jan.

WHEAT Commercial Stocks of Domestic Wheat1 in the United States, on First of Month Year

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-4

In Millions of Bushels

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

145.7 92.3 86.3 80.1 209.8 248.6 285.5 271.0 193.9 133.3

203.9 161.7 112.9 186.3 265.0 294.9 310.3 296.6 207.7 171.9

243.0 201.1 128.0 235.2 314.9 335.8 335.3 318.7 237.2 212.0

269.7 234.3 145.3 268.1 325.6 354.0 335.5 321.9 241.0 226.3

268.6 228.3 117.2 258.1 307.3 334.6 306.2 291.9 237.7 220.7

238.2 200.2 94.9 231.4 291.3 301.5 286.6 251.8 218.8 198.1

199.5 178.7 89.0 196.8 272.9 277.4 263.7 224.5 195.1 145.0

181.0 170.8 80.4 178.1 265.7 273.7 251.7 224.6 179.7 126.3

162.5 156.6 77.0 170.6 256.8 267.8 243.2 217.2 158.3 113.1

150.2 137.7 75.6 158.0 251.5 266.3 243.7 195.6 133.1

108.7 107.6 68.1 146.4 236.7 247.6 224.5 177.3 107.2

91.8 87.2 64.6 145.7 218.3 240.3 221.0 176.0 93.8

1

Domestic wheat in storage in public and private elevators in 39 markets and wheat afloat in vessels or barges at lake and seaboard ports, the first Saturday of the month. Source: Livestock Division, U.S. Department of Agriculture (LD-USDA)

Stocks of Wheat Flour Held by Mills in the United States

In Thousands of Sacks -- 100 Pounds

Year

Jan. 1

April 1

July 1

Oct. 1

Year

Jan. 1

April 1

July 1

Oct. 1

1992 1993 1994 1995 1996 1997

5,660 5,487 5,611 7,060 6,869 6,671

5,210 4,863 5,904 6,496 6,927 6,040

5,841 6,197 5,834 6,312 6,400 5,820

5,864 5,882 6,020 6,582 6,350 6,330

1998 1999 2000 2001 2002 20031

6,343 7,544 5,099 5,241 5,377 4,265

6,245 5,920 5,217 5,506 5,164 4,233

6,210 5,697 5,062 5,178 4,632 4,308

7,345 4,265 5,244 5,393 4,184 4,028

1

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

Average Producer Price Index of Wheat Flour (Spring) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

111.8 110.7 130.4 119.4 106.8 104.8 99.9 104.7 109.6 119.4

110.5 108.5 138.0 119.3 108.1 102.7 99.9 105.1 109.6 121.6

108.9 107.9 136.6 116.6 111.5 105.0 100.2 106.2 110.6 120.2

107.9 109.8 137.6 121.8 110.1 100.5 99.4 105.7 106.5 120.3

109.4 113.5 160.1 120.8 109.9 102.2 100.1 106.9 108.2 122.6

106.4 118.6 146.8 117.4 106.4 102.7 101.7 108.2 108.8 121.6

100.8 127.4 138.0 112.1 105.5 100.7 100.2 107.9 112.6 119.2

101.2 126.7 127.0 113.5 101.8 103.5 100.4 106.8 115.5 122.2

109.1 129.5 121.5 115.1 100.9 101.4 101.2 107.4 120.9 120.0

112.0 132.6 125.7 112.6 106.6 99.8 105.2 110.0 123.0 116.3

110.9 132.3 121.7 111.5 107.8 101.4 103.6 109.5 119.3 122.5

111.4 133.5 121.4 111.1 104.8 96.8 104.4 108.8 116.6 124.8

108.4 120.9 133.7 115.9 106.7 101.8 101.4 107.3 113.4 120.9

Standard patent.

2

Preliminary.

Source: Bureau of Labor Statistics, U.S. Department of Commerce (BLS) (0212-0301)

World Wheat Flour Production (Monthly Average) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 20032 1

June 1983 = 100

Jan.

Preliminary.

In Thousands of Metric Tons

Australia

France

Germany

Hungary

India

Ja p a n

Kazakhstan

Rep. of Korea

Mexico

Poland

Russia

Turkey

United Kingdom

116.9 112.6 123.8 129.7 146.8 154.8 NA NA NA NA

470.8 473.1 450.0 NA NA NA NA NA NA NA

378.8 382.3 394.2 404.8 407.5 423.6 405.5 403.1 415.3 419.3

62.9 84.0 75.1 77.7 70.1 69.1 73.9 84.4 79.2 67.6

400.0 400.0 400.0 412.5 430.6 182.2 202.5 197.2 211.6 224.3

387.2 389.3 389.6 388.1 382.0 386.7 386.0 407.9 382.0 378.2

157.0 131.0 132.7 127.3 128.8 105.2 79.5 78.2 128.6 132.2

132.6 139.9 141.2 145.9 143.5 152.8 155.9 142.8 151.2 147.5

219.8 210.7 215.9 216.0 213.2 204.8 206.0 221.1 218.1 215.2

150.5 156.9 164.1 175.3 172.1 125.0 125.4 126.8 135.2 143.8

348.0 274.6 309.7 361.9 347.8 360.0 405.0 450.9 136.2 439.1

104.9 119.7 132.1 159.1 152.6 156.6 162.0 145.2 140.4 145.0

353.0 358.0 371.0 369.0 377.0 NA 381.0 372.5 NA NA

2

Estimate. NA = Not available.

Source: United Nations (UN)

309

WHEAT Production of Wheat Flour in the United States Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

Preliminary.

In Millions of Sacks (100 Pounds Each)

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

June

Total

31.0 33.9 34.0 -------------------------

34.5 35.6 34.3 100.2 104.2 108.8 102.1 102.1 102.4

33.0 34.6 35.1 -------------------------

35.1 37.5 37.2 -------------------------

33.4 33.1 33.8 106.5 108.2 109.7 105.8 100.3 100.8

31.2 32.0 33.5 -------------------------

31.6 31.3 -----------------------------

32.3 30.0 96.0 96.1 101.1 99.4 96.0 95.1

32.2 31.8 -----------------------------

31.2 33.1 -----------------------------

33.2 32.6 96.2 103.5 101.6 97.2 96.3 96.0

30.6 32.5 -----------------------------

389.3 397.9 400.1 406.3 415.2 415.1 400.2 393.5 406.3

Source: Bureau of the Census, U.S. Department of Commerce

United States Wheat Flour Exports (Grain Equivalent2) Year

1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 2003-41 1

In Thousands of Bushels

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Jan.

F eb.

Mar.

Apr.

May

Total

2,822 2,006 1,803 1,971 4,160 3,620 1,412 1,474 824

5,018 2,008 2,900 1,740 3,638 3,805 661 1,547 1,074

7,520 1,669 1,621 2,027 2,586 1,623 1,990 753 3,444

2,249 3,133 3,101 2,914 6,503 3,174 1,005 1,373 1,087

2,080 2,496 2,524 3,812 4,576 4,165 3,226 2,437 765

1,221 2,748 1,634 2,354 2,332 2,332 2,534 2,854 1,295

3,458 2,240 3,118 6,838 3,023 2,741 2,479 4,645

808 1,347 1,426 2,551 2,924 2,236 2,207 1,049

2,537 1,920 2,725 3,341 6,108 2,365 3,294 884

1,230 2,521 1,309 4,126 2,615 2,200 2,301 1,146

2,415 1,259 1,269 3,105 3,193 3,868 2,802 1,083

1,831 2,125 963 1,948 1,286 2,163 2,759 541

33,189 25,472 25,393 36,728 42,944 34,292 26,670 19,786 16,978

Preliminary.

2

I ncludes meal, groats and durum.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Supply and Distribution of Wheat Flour in the United States

Year

1994 1995 1996 1997 1998 1999 2000 2001 2 0 0 21

Wheat Ground - 1,000 Bu. -

884,707 869,296 878,070 885,843 902,532 917,797 944,868 914,036 893,107

Domestic Flour & ---------- Exports ---------Product Total DisappearMillfeed Flour Flour Products ance Production Production2 Imports Supply - 1,000 Tons - -------------------------------------------------- In 1,000 Cw t. --------------------------------------------------

7,186 7,144 7,042 6,886 7,301 7,040 7,374 7,275 6,908

392,519 388,689 397,776 404,143 403,880 411,968 421,270 404,521 394,700

8,425 8,918 8,574 8,684 9,830 9,295 9,666 10,130 11,289

400,944 397,607 406,350 412,827 413,625 416,354 403,936 414,651 411,747

23,801 23,615 10,651 11,038 12,574 21,297 16,005 10,507 9,266

811 857 881 1,167 1,353 1,633 1,693 1,695 1,729

Total Population July 1 - Millions -

Per Capita Disappearance - P ounds -

263.2 266.4 269.5 272.8 276.0 279.3 282.4 285.6 288.6

143.0 140.1 146.5 146.9 145.9 142.6 146.3 140.9 138.9

376,332 373,135 394,818 400,622 394,817 393,377 413,238 402,449 400,752

1

Preliminary. 2 Commercial production of wheat flour, whole wheat, industrial and durum flour and farina reported by Bureau of Census. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Wheat and Flour -- Price Relationships at Milling Centers in the United States

In Dollars

-------------------------------------- At Kansas City ---------------------------------------

--------------------------------------- At Minneapolis ---------------------------------------

------------------------ Wholesale Price of -----------------------Cost of Wheat By-Products ------- Total Products ------Obtained Crop Year to Produce Bakery Flour Over Cost Actual of Wheat (June-May) 100 lb. Flour1 100 lb. Flour2 100 lb. Flour3

------------------------ Wholesale Price of -----------------------Cost of Wheat By-Products ------- Total Products ------to Produce Bakery Flour Obtained Over Cost 100 lb. Flour1 100 lb. Flour2 100 lb. Flour3 Actual of Wheat

1994-5 1995-6 1996-7 1997-8 1998-9 1999-00 2000-1 2001-2 2002-3 June-Aug. Sept.-Nov. Dec.-Feb.

9.25 12.97 11.22 9.03 7.91 7.74 7.95 7.63 9.94 8.98 11.32 9.52

10.50 13.35 11.89 9.99 9.06 8.86 9.36 8.98 11.21 10.35 12.57 10.70

1.21 1.93 1.92 1.43 1.08 .98 1.06 1.13 1.22 1.01 1.29 1.34

11.71 15.28 13.81 11.41 10.15 9.84 10.42 10.11 12.42 11.36 13.86 12.04

2.46 2.31 2.60 2.38 2.23 2.10 2.48 2.48 2.48 2.38 2.54 2.52

9.71 13.04 11.32 9.83 8.76 8.29 8.24 8.20 9.82 9.15 10.19 10.13

11.01 13.03 11.68 10.62 9.80 9.30 9.28 9.11 11.08 9.88 12.45 10.92

1.04 1.68 1.87 1.34 1.02 .95 .97 1.09 1.21 1.07 1.40 1.16

12.05 14.71 13.54 11.96 10.82 10.24 10.24 10.21 12.29 10.95 13.85 12.08

2.34 1.67 2.22 2.12 2.06 1.95 2.01 2.01 2.47 1.80 3.66 1.95

1 Based on 73% extraction rate, cost of 2.28 bushels: At Kansas City, No. 1 hard winter 13% protein; and at Minneapolis, No. 1 dark northern spring, 14% protein. 2 quoted as mid-month bakers' standard patent at Kansas City and spring standard patent at Minneapolis, bulk basis. 3 Assumed 5050 millfeed distribution between bran and shorts or middlings, bulk basis. Source: Agricultural Marketing Service, U.S. Department of Agriculture (AMS-USDA)

310

Wool the data series, of 1.343 million metric tons was only 1,000 tons above the record low of 1.342 metric tons posted in 1999. The world’s largest produces of degreased wool in 2000 were Australia with 33% of world production, followed by New Zealand (14%), and China (11%). US wool production of 12,000 metric tons in 2000 accounted for less than 1% of world production. US production of wool goods fell to a record low of 24.1 million yards, which represents an 87% drop from production of 184 million yards 10 years earlier in 1993. The US sheep herd fell to a record low of 5.700 million sheep in 2001, which is roughly half the herd seen 10 years ago. Demand – US consumption of wool has dropped sharply, along with production, and fell to a record low of 37.3 million pounds in 2002. The breakdown of US mill consumption in 2001 showed that wool usage for carpets was 13.31 million pounds, which was on the lower end of the range seen in the past decade. However, the real plunge in wool usage is due to lower wool apparel consumption which fell to a record low of 52.969 million pounds in 2001, and that is sharply lower than the figure of 120 million seen 10 years earlier. Trade – US exports of domestic wool totaled 6.200 million pounds in 2001, while imports were double that at 15.817 million pounds.

Wool is light, warm, absorbs moisture, and is resistant to fire. Wool is also used for insulation in houses, for carpets and furnishing, and for bedding. Sheep are sheared once a year and produce about 4.3 kg of “greasy” wool per year. Greasy wool is wool that has not been washed or cleaned. Wool fineness is determined by fiber diameter, which is measured in microns (one millionth of a meter). Fine wool is softer, lightweight, and produces fine clothing. Merino sheep produce the finest wool. Wool futures and options are traded on the Sydney Futures Exchange (SFE), where there are futures and contracts on greasy wool, and futures on fine wool and broad wool. All three contracts call for the delivery of merino combing wool. Wool yarn futures are traded on the Chubu Commodity Exchange (CCE), the Osaka Mercantile Exchange (OME) and the Tokyo Commodity Exchange (TOCOM). Prices – Average wool prices at US mills in 2003 rose sharply to $2.42 per pound from $1.90 in 2002, and were sharply higher than the 3-decade low of $1.09 posted in 2000. The value of US wool production was only $15 million in 2001. Supply – World production of wool has been falling in the past decade due to the increased use of polyester fabrics. Wool production in 2000, the latest reporting year for

World Production of Wool Year

1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Metric Tons--Degreased

Argentina

Australia

China

Kazakhstan

New Zealand

Pakistan

Romania

Russia

South Africa

United Kingdom

United States

Uruguay

Total

48,000 44,000 39,000 36,000 34,000 36,000 32,000 32,000 31,000

570,000 475,000 457,000 472,000 452,000 437,000 452,000 416,000 395,000

130,000 141,000 152,000 130,000 141,000 144,000 146,000 149,000 152,000

55,000 35,000 25,000 21,000 15,000 13,000 14,000 14,000 14,000

214,000 214,000 199,000 228,000 219,000 220,000 202,000 199,000 199,000

31,000 32,000 32,000 34,000 23,000 23,000 23,000 24,000 24,000

17,000 16,000 16,000 13,000 12,000 13,000 11,000 10,000 12,000

73,000 56,000 46,000 36,000 29,000 24,000 20,000 20,000 20,000

40,000 35,000 37,000 34,000 32,000 34,000 32,000 32,000 32,000

47,000 48,000 46,000 46,000 48,000 47,000 45,000 39,000 42,000

16,000 15,000 13,000 13,000 12,000 11,000 11,000 10,000 10,000

50,000 46,000 43,000 46,000 42,000 34,000 32,000 32,000 27,000

1,693,000 1,512,000 1,459,000 1,440,000 1,388,000 1,369,000 1,356,000 1,310,000 1,292,000

Preliminary.

2

Estimate.

Source: Food and Agriculture Organization of the United Nations (FAO-UN)

Production of Wool Goods1 in the United States Year

1994 1995 1996 1997 1998 1

In Millions of Yards

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

49.1 46.8 44.8 42.7 38.8

51.1 45.9 43.6 49.7 37.5

39.4 35.2 30.8 42.3 29.6

39.0 34.3 32.8 40.5 26.3

178.6 162.2 152.0 175.2 132.2

1999 2000 2001 2002 20032

25.0 17.9 20.8 7.4 6.6

20.9 18.0 12.4 8.6 6.3

17.4 13.4 11.0 6.2 5.2

14.6 17.4 9.0 5.5 4.7

77.9 66.7 53.2 27.7 22.8

Woolen and worsted woven goods, except woven felts.

2

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

Consumption of Apparel Wool in the United States Year

1994 1995 1996 1997 1998 1

In Millions of Pounds--Clean Basis

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

Year

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Total

36.3 36.3 39.1 33.1 29.3

35.6 35.5 36.2 33.8 29.6

32.7 29.4 27.4 30.6 21.9

34.0 28.1 26.8 32.8 17.5

138.6 129.3 129.5 130.4 98.4

1999 2000 2001 2002 20032

17.3 17.4 17.0 11.0 W

16.8 16.1 13.5 10.5 W

15.8 14.6 11.6 6.5 W

13.6 13.9 10.9 W W

63.5 62.0 53.0 37.3 W

Woolen and worsted woven goods, except woven felts.

2

Preliminary.

Source: Bureau of the Census, U.S. Department of Commerce

311

WOOL Salient Statistics of Wool in the United States

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 1

Shorn Sheep Weight & Lambs Per Wool Production Shorn4 Fleece -1,000's- -In Lbs.- 1,000 Lbs.

8,877 8,138 7,279 7,032 6,428 6,150 6,100 5,700 5,500

7.73 7.80 7.79 7.70 7.70 7.60 7.60 7.60 7.60

Price P er Lb.

68,577 78.0 63,513 104.0 56,669 70.0 53,889 84.0 49,255 60.0 46,549 38.0 46,400 33.0 43,000 36.0 41,200 53.0

Value of Production 1,000 $

52,377 64,277 39,659 45,172 29,415 17,860 15,377 15,311

---------------- Raw Wool (Clean Content) ---------------Dutiable Imports for Total Duty Free Mill Wool Domestic Exports ConsumpImports -- Consumption -ProPro- Domestic tion3 48's Total New (Not Finer Payment Wool Support Rate duction duction & Finer Supply2 than 46's) Apparel Carpet --Cents Per Lb.-- -------------------------------------- In Thousands of Pounds --------------------------------------

209 212 ------------------100

131.0 108.0 ---------20.0 40.0 -------

68,577 63,513 56,159 53,578 49,255 46,549 46,446 43,016

36,209 33,535 29,921 28,630 30,321 24,800 24,500 22,700 21,700

2,863 6,042 5,715 4,732 1,700 3,694 6,629 6,154 8,500

64,889 122,880 63,781 116,313 54,063 99,575 51,484 100,003 45,760 94,814 21,251 63,955 23,874 62,785 15,817 52,128 10,526

24,645 25,039 20,971 24,295 23,121 20,723 20,003 18,667 14,012

138,563 129,299 129,525 130,386 98,373 63,535 62,041 52,969 36,015

14,739 12,667 12,311 13,576 16,331 13,950 15,205 13,310 6,891

1

Preliminary. 2 Production minus exports plus imports; stocks not taken into consideration. 3 Apparel wool includes all dutiable wool; carpet wool includes all duty-free wool. 4 I ncludes sheep shorn at commercial feeding yards. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Shorn Wool Prices

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002

U.S. Farm ----------------------- Australian Offering Price, Clean2 -----------------------Grade Grade Grade Grade Grade Price Shorn Market 60/62's 58's-56's 64/70's 64's 70's Wool Greasy 433-34 Indicator3 Type 62 Type 64A Type 63 B a si s1 Type 61 -Cents/Lb.- ----------------------- In Dollars Per Pound ----------------------- -Cents/Kg.-

78.0 104.0 70.0 84.0 60.0 38.0 33.0 36.0 53.0

3.72 3.22 2.81 3.56 2.60 2.53 2.80 2.42 2.87

2.43 2.81 2.34 2.57 1.84 1.48 1.50 1.66 2.68

3.01 3.01 2.54 2.90 1.92 1.66 1.69 1.69 2.70

1.96 2.49 1.96 2.06 1.64 1.36 1.37 1.60 2.63

1.86 2.33 1.84 1.95 1.60 1.33 1.30 1.54 2.55

----------- Graded Territory Shorn Wool, Clean Basis4 -----------64's Staple 60's Staple 58's Staple 56's Staple 54's Staple 2 3/4" & up 3" & up 3 1/4" & up 3 1/4" & up 3 1/2" & up ---------------------------- In Dollars Per Pound -----------------------------

547 888 619 615 663 524 625 764 841

2.12 2.49 1.93 2.38 1.62 1.10 1.08 1.21 1.90

1.50 1.93 1.54 1.78 1.31 .85 .75 .91 1.41

1.26 1.77 1.43 1.64 1.21 .74 .65 .77 1.40

1.27 1.63 1.31 1.43 1.06 .66 .57 .66 1.19

1.21 1.53 1.22 1.14 .94 .59 .53 .65 1.02

1

Annual weighted average. 2 F.O.B. Australian Wool Corporation South Carolina warehouse in bond. 3 I ndex of prices of all wool sold in Australia for the crop year July-June. 4 Wool principally produced in Texas and the Rocky Mountain States. Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Wool Prices1 --Australian-- 64's, Type 62, Duty Paid--U.S. Mills

In Cents Per Pound

Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

204 281 240 234 218 158 154 160 218 344

216 297 237 261 225 150 146 168 243 346

205 302 238 254 247 157 144 164 250 326

223 302 234 261 205 156 156 158 251 333

249 307 242 279 214 150 156 164 249 299

258 308 245 287 179 149 154 166 259 326

243 292 236 NA NA 152 155 167 255 316

248 284 234 270 144 148 151 172 254 308

259 266 228 262 144 139 149 169 268 306

256 236 220 250 140 139 146 159 312 292

273 242 225 245 156 143 140 166 322 285

297 237 232 240 147 137 148 183 328 290

244 280 234 258 184 148 150 166 267 314

1

Raw, clean basis.

NA = Not available.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

Average Wool Prices --Domestic1-- Graded Territory, 64's, Staple 2 3/4 & Up--U.S. Mills In Cents Per Pound Year

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

140 245 188 190 236 115 95 95 134 236

150 252 192 190 195 115 95 100 150 260

170 265 197 208 195 115 101 108 170 258

201 288 197 228 188 110 110 129 181 250

226 295 195 248 177 117 125 137 189 223

230 285 192 255 170 122 125 125 200 234

230 261 192 255 170 116 125 127 200 239

235 250 192 255 150 110 120 122 200 243

250 235 192 255 115 105 107 126 198 243

238 185 192 255 115 100 105 130 204 243

238 208 190 260 115 110 105 122 223 232

252 192 190 260 115 95 97 127 233 233

213 247 192 238 162 111 109 121 190 241

1

Raw, shorn, clean basis.

312

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

WOOL

-------

Cents Per Pound 64’s (Jan. 1910 - date) Tops (Jan. 1924 - date)

Wool: Mill Consumption, by Grades in the U.S., Scoured Basis

In Millions of Pounds

-------------------------------------------------------------------------------- Apparel Class1 -------------------------------------------------------------------------------

Year

1993 1994 1995 1996 1997 1998 1999 2000 2 0 0 13 20024

------------------------- Woolen System ------------------------ ------------------------- Worsted System ------------------------60's & Coarser 60's & Coarser Finer Than 60's Total Finer Than 60's Total

40,895 35,960 30,211 42,141 49,038 31,258 18,379 18,503 16,062 9,627

26,624 26,038 27,089 27,575 21,303 15,079 10,772 13,432 9,849 8,482

1

Domestic & duty-paid foreign. Agriculture (ERS-USDA)

2

67,519 61,998 57,300 69,716 70,341 46,337 29,151 31,935 25,911 18,109

Duty-free foreign.

3

58,834 59,599 54,980 46,057 48,153 42,243 27,429 NA NA NA

Preliminary.

4

15,027 16,966 17,019 13,752 11,892 9,793 6,955 NA NA NA

Estimate.

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2 1

Carpet Wool2

141,380 138,563 129,299 129,525 130,386 98,373 63,535 62,041 52,969 36,015

15,431 14,739 12,667 12,311 13,576 16,331 13,950 15,205 13,310 6,891

Source: Economic Research Service, U.S. Department of

United States Imports1 of Unmanufactured Wool (Clean Yield) Year

73,861 76,565 71,999 59,809 60,045 52,036 34,384 30,106 27,058 17,906

All Total

In Millions of Pounds

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

10.0 10.4 9.6 5.1 8.8 6.2 4.9 4.9 1.9 2.5

7.7 7.7 9.1 5.8 5.4 3.6 3.8 4.3 1.8 2.8

7.7 10.8 8.8 5.8 5.4 3.9 3.8 4.3 2.6 2.3

12.7 6.0 5.6 6.6 7.2 7.9 4.6 1.5 2.4 2.2

7.5 11.5 7.0 5.8 5.9 3.5 5.1 2.9 2.3 2.1

7.7 5.2 5.9 4.2 5.5 3.0 2.7 2.8 1.5 1.8

6.9 7.3 5.3 4.9 5.7 3.7 3.2 4.0 1.6 1.2

6.5 7.3 6.6 4.2 4.4 3.1 3.7 1.9 1.2 1.1

4.1 4.9 3.1 4.8 3.3 2.6 4.3 2.0 1.9 0.8

5.7 7.9 4.6 8.5 7.3 3.8 3.2 2.8 2.4 1.6

8.1 7.7 4.6 7.3 4.9 2.8 3.5 1.3 2.1 1.1

7.0 4.1 5.1 8.6 4.3 2.5 2.4 1.3 3.1 1.2

91.7 90.6 75.3 71.5 68.0 46.3 45.0 34.1 24.6 20.8

For consumption.

2

Preliminary.

Source: Economic Research Service, U.S. Department of Agriculture (ERS-USDA)

313

Zinc secondary production rose to 113,000 metric tons in 2002 from 108,000 in 2001. Demand – US consumption of slab zinc in 2002 rose slightly to 1.180 million metric tons from the 9-year low of 1.1140 million posted in 2001. US consumption of all classes of zinc in 2003 rose to 1.43 million metric tons from the 9year low of 1.410 million metric tons in 2001. Consumption of slab zinc by fabricators in the US was on track to rise to 420,300 metric tons in 2003, up 16.7% from 403,600 metric tons in 2002. The 2002 production level was a record low going back to the beginning of the data series in 1979. The breakdown of consumption by industries for 2002 showed that galvanizers accounted for 53% of slab zinc consumption, 21% by the zinc-base industry, 18% for brass products, and the rest for other miscellaneous industries. The consumption breakdown by grades showed that 59% was special high grade, 23% prime western, 12% high grade, and 6% re-melt and other. Within that grade breakdown, high grade has been rising while prime Western consumption has fallen by nearly half in the past 3 years. Trade – The US relies on imports for 60% of its consumption of zinc, up sharply from the 35% average seen in the 1990s. US imports for consumption of slab zinc rose to 874,000 metric tons in 2002 from 813,000 metric tons in 2001, while imports of zinc ore rose to 122,000 metric tons from 84,000 metric tons in 2001. The dollar value of US zinc imports in 2002 fell to an 8-year low of $888 million from $937 million in 2001. The breakdown of imports in 2002 versus 2001 shows gains in the imports of (1) ore, (2) blocks, pigs and slabs, (3) dross, ashes and fume, and (4) dust, powder and flakes. Declines were seen in the imports of (1) sheets, plates, and other, and (2) waste/scrap. Regarding zinc exports, US exports of zinc ore and concentrates rose to 822,000 metric tons in 2002 from 696,000 metric tons in 2001. US waste/ scrap exports in 2002 rose to 47,700 from 44,000 metric tons, and zinc dust (blue powder) exports rose to 5,600 from 4,690 metric tons.

Zinc is utilized as a protective coating for other metals, such as iron and steel, in a process known as galvanizing. Zinc finds use as an alloy with copper to make brass and also as an alloy with aluminum and magnesium. There are, however, a number of substitutes for zinc in chemicals, electronics, and pigments. For example, with aluminum, steel and plastics can substitute for galvanized sheets. Aluminum alloys can also replace brass. Zinc futures and options are traded on the London Metals Exchange (LME). The LME zinc futures contract calls for the delivery of 25 metric tons of at least 99.995% purity zinc ingots (slabs and plates). The contract trades in terms of US dollars per metric ton. Zinc first started trading on the LME in 1915. Prices – Zinc prices in 2003 rose to an average 40.36 cents per pound from the 23-year low of 39.64 cents in 2002. Zinc prices were depressed in 2002 due to the weak economy and were able to rally along with the other metals in 2003 due to the weak dollar and stronger economy. Still, the 40.36-cent-price of zinc in 2003 was well below the 51-56 cent area seen in 1998-2000 before the US economic slowdown began in 2000. Supply – World smelter production of zinc in 2002 fell –4.7% to a 3-year low of 8.910 million metric tons from 9.350 million metric tons in 2001. The world’s largest producer of zinc is Canada with 8.9% of world smelter production in 2002, followed by Japan with 7.5%, and Australia with 6.4%. US smelter production accounted for only 3.3% of world production in 2002. Australia’s production has been rising rapidly in recent years and in 2002, production of 271,500 metric tons was up 75% from just four years earlier. Mexico’s production has also been rising rapidly and 2002 production of 320,000 metric tons was up nearly 50% from three years earlier. US mine production of recoverable zinc was on track to fall to 745,100 metric tons in 2003, down from 754,600 in 2002, but above the 10-year US production average of 698,000. US production of slab zinc on a primary basis fell to 182,000 metric tons in 2002 from 203,000 in 2001, while

Salient Statistics of Zinc in the United States

Primary

Secondary

Imports for ----- Consumption ----Ore Mine (Zinc Slab Production (Recovered) Zinc Content)

240,000 216,600 232,000 226,000 226,000 234,000 241,000 228,000 203,000 182,000

141,000 139,000 131,000 140,000 141,000 134,000 131,000 143,000 108,000 113,000

488,374 723,563 33,093 570,000 793,000 27,374 603,000 856,000 10,300 586,000 827,000 15,100 605,000 876,000 49,600 722,000 879,000 46,300 808,000 1,060,000 74,600 805,000 915,000 52,800 799,000 813,000 84,000 754,000 874,000 122,000

Slab Zinc ----- Production ----Year

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Metric Tons ----- Exports -----

Net Import HighReliance Grade, as a % of Price All ConClasses3 sumption -Cents/Lb.-

---------- Consumption ---------Slab Zinc

Ore (Zinc Content)

1,410 6,310 3,080 1,970 3,630 2,330 1,880 2,770 1,180 1,160

311,278 389,000 424,000 425,000 461,000 552,000 531,000 523,000 696,000 822,000

Slab Consumed Zinc as Ore

1,120,000 1,180,000 1,230,000 1,210,000 1,260,000 1,290,000 1,430,000 1,330,000 1,140,000 1,180,000

2,200 2,400 2,400 1,400 -------------------

1,340,000 1,400,000 1,460,000 1,450,000 1,500,000 1,590,000 1,700,000 1,630,000 1,410,000 1,430,000

36 35 35 33 35 35 30 60 60 60

46.15 49.26 55.83 51.11 64.56 51.43 53.48 55.61 43.96 38.64

Preliminary. 2 Estimate. 3 Based on apparent consumption of slab zinc plus zinc content of ores and concentrates and secondary materials used to make zinc dust and chemicals. Source: U.S. Geological Survey (USGS)

314

ZINC World Smelter Production of Zinc3 Year

Australia

Belgium

Canada

France

Germany

Italy

Ja p a n

Kazakhstan

Mexico

Poland

Spain

United States

World Total

321.0 328.0 325.0 331.0 317.0 322.0 348.5 494.5 558.5 571.5

299.6 306.2 301.1 234.4 243.6 205.0 232.4 251.7 259.3 260.0

659.9 691.0 720.3 715.6 703.8 745.1 776.9 779.9 661.2 793.5

310.0 306.0 300.0 324.3 346.1 321.0 333.1 350.0 347.0 350.0

380.9 359.9 322.5 327.0 251.7 334.0 333.0 350.0 347.0 350.0

182.0 203.6 180.4 269.0 227.7 231.6 152.8 170.3 177.8 176.0

744.6 713.0 711.1 642.3 650.2 652.7 683.6 698.8 684.1 670.6

263.0 172.4 169.2 190.0 189.0 240.7 249.3 262.2 277.1 286.3

209.9 209.2 222.7 221.7 231.4 230.3 218.9 303.8 320.0 320.0

149.1 154.4 162.7 163.1 171.0 175.0 178.9 173.0 174.7 175.0

341.6 294.7 358.0 360.8 364.2 360.0 393.0 386.3 418.0 488.0

382.0 356.0 363.0 366.0 367.0 368.0 371.0 371.0 311.0 294.0

7,360 7,330 7,370 7,610 7,920 8,170 8,550 9,190 9,350 8,910

1993 1994 1995 1996 1997 1998 1999 2000 2001 1 20022 1

In Thousands of Metric Tons

2

Preliminary.

3

Estimate.

Secondary metal included.

Source: U.S. Geological Survey (USGS)

Consumption (Reported) of Slab Zinc in the United States, by Industries and Grades

Year

1993 1994 1995 1996 1997 1998 1999 2000 20011 20022 1

1,035,000 859,000 1,240,000 788,000 672,000 647,000 614,000 640,000 543,000 496,000 2

Preliminary.

532,400 395,000 390,000 398,000 347,000 320,000 308,000 293,000 281,000 265,000

Estimated.

3

139,500 107,000 91,500 87,400 76,800 60,300 78,200 82,800 74,400 86,800

Die casters.

4

Year

1

222,000 196,000 194,000 142,000 107,000 122,000 105,000 123,000 91,200 103,000

I ncluded in other.

United States Foreign Trade of Zinc

1993 1994 1995 1996 1997 1998 1999 2000 20012 20023

Zinc content.

2

723,563 793,482 856,000 827,000 876,000 879,000 966,000 915,000 813,000 874,000 Preliminary.

135 475 332 16,900 19,200 16,900 22,600 9,380 7,240 1,640 3

38,079 51,676 42,300 31,900 29,600 29,200 26,600 36,500 39,300 31,200

Estimate.

141,100 92,400 90,800 161,000 141,000 145,000 124,000 NA NA NA

4 4 4 4 4 4 4

Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 Preliminary.

403,696 486,000 135,000 385,000 319,000 331,000 317,000 332,000 294,000 294,000

116,500 112,000 98,200 111,000 88,700 72,800 58,400 60,600 54,000 61,400

71,202 68,400 54,400 54,000 57,200 51,700 55,400 41,500 30,300 28,000

182,309 192,000 251,000 238,000 207,000 192,000 184,000 206,000 165,000 113,000

Source: U.S. Geological Survey (USGS)

In Metric Tons

-------------------------------- Imports for Consumption Dross, Blocks, Sheets, Waste Ashes, Pigs, Plates, Fume Slabs Other & Scrap Ores1

33,093 27,374 10,300 15,100 49,600 46,300 74,600 52,800 84,000 122,000

63,448 68,300 70,900

11,862 12,152 10,900 14,500 ------20,000 15,500 12,000 15,500

---------------------------- Zinc Ore & Manufactures Exported ----------------------Blocks, Pigs, Wrought & -------------------------------- --- Anodes, etc. --- ---------- Alloys ---------Zinc Ore Angles, Dust Un- Sheets, Dust, Total (Blue & ConBars, Waste Plates Powder Value Un- wrought $1,000 wrought Alloys & Strips Rods, etc. & Scrap Powder) centrates & Flakes

16,218 11,954 11,700 10,300 11,700 17,600 21,300 26,700 26,700 30,900

NA = Not available.

799,999 8,765 878,100 13,220 1,018,620 ---1,001,800 ---1,340,390 ---1,098,690 ---1,133,890 ---1,272,750 ---937,110 ---887,785 ----

-------------------------------

-------------------------------

-------------------------------

46,385 6,727 58,297 6,603 55,900 8,840 45,500 11,100 46,100 9,980 35,000 5,530 28,200 5,050 36,100 4,830 44,000 4,690 47,700 5,660

311,278 389,488 424,000 425,000 461,000 552,000 531,000 523,000 696,000 822,000

Source: U.S. Geological Survey (USGS)

Mine Production of Recoverable Zinc in the United States

1

In Metric Tons

--------------------------------- By Grades ---------------------------------Remelt Special ----------------------------------------- By Industries -----------------------------------------GalBrass Zinc-Base and High Zinc High Prime Total vanizers Products Alloy3 Other Grade Oxide Other Grade Western

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

43.2 49.8 52.4 46.2 50.1 61.4 64.4 68.4 61.3 65.2

40.2 48.1 48.9 45.7 48.3 57.6 56.6 60.5 60.4 60.2

48.4 52.8 49.7 45.8 56.5 63.0 68.5 62.2 67.8 62.7

44.0 45.6 45.5 47.9 56.2 67.0 64.5 65.2 55.2 54.0

47.9 54.5 50.7 49.7 56.7 61.7 70.2 66.9 63.4 65.2

47.1 50.0 49.9 45.3 55.0 62.8 65.3 66.1 63.8 64.0

52.5 50.2 53.7 45.9 59.5 68.2 68.1 66.7 66.0 64.5

47.1 55.0 48.1 49.8 57.2 72.1 71.4 67.6 67.2 59.6

50.1 48.1 46.8 53.0 60.1 60.8 59.6 60.9 54.4 63.3

41.6 52.0 43.4 47.6 55.7 67.8 62.3 67.1 68.3 58.6

46.0 47.8 43.1 44.2 62.0 61.2 63.5 54.0 61.3 61.0

48.0 48.1 42.6 48.4 61.9 65.9 67.2 55.4 65.5 60.5

557.0 601.0 600.0 574.0 722.0 808.0 814.0 799.0 754.6 738.8

Source: U.S. Geological Survey (USGS)

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ZINC

-----

Cents Per Pound Prime Western, East St. Louis (Jan. 1910 - Dec. 1970) Prime Western, Domestic (Jan. 1971 - date)

Consumption of Slab Zinc by Fabricators in the United States Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1 1

Preliminary.

In Thousands of Metric Tons

Jan.

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Average

50.8 51.3 56.3 47.2 46.3 40.5 41.8 45.4 31.2 33.1

53.7 57.8 55.6 43.1 45.2 45.4 44.6 43.5 31.3 33.1

55.7 56.3 59.3 48.6 47.4 43.8 47.7 44.1 30.4 34.4

58.5 57.9 55.7 50.1 44.8 40.3 45.6 42.7 33.1 35.2

58.7 53.4 56.3 48.1 45.4 42.5 44.4 43.6 34.9 34.7

52.7 58.0 55.9 45.3 49.0 47.1 49.1 38.2 34.4 38.2

48.0 44.0 48.9 45.1 46.0 37.8 42.0 30.6 34.3 34.2

53.2 44.0 48.1 45.5 45.0 40.1 43.3 39.2 35.8 35.5

53.6 58.8 54.4 50.9 45.9 42.0 42.6 37.7 36.1 36.8

53.9 57.0 56.4 49.6 45.9 42.8 47.5 35.7 36.1 36.8

52.5 56.0 54.2 44.3 40.5 41.1 43.8 32.1 32.7 35.3

45.0 54.5 53.1 46.2 43.9 39.7 40.2 27.3 33.3 36.1

623.0 838.0 788.0 588.0 647.0 614.0 640.0 543.0 403.6 423.4

Source: U.S. Geological Survey (USGS)

Average Price of Zinc, Prime Western Slab (Delivered U.S. Basis) Year

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

F eb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

D e c.

Total

49.64 60.11 51.38 55.64 55.43 47.29 58.44 51.82 40.98 38.88

48.29 55.44 51.86 59.82 51.86 51.11 54.67 51.29 39.97 38.46

46.70 54.84 52.66 63.28 51.98 51.68 55.60 50.55 42.15 38.48

46.16 56.08 51.03 62.62 54.31 51.07 56.14 48.95 41.66 36.99

47.66 54.61 50.76 65.65 52.77 52.20 57.44 47.54 39.97 37.86

48.42 53.08 49.75 67.78 50.78 50.35 55.67 45.56 39.70 38.57

48.81 53.75 49.86 75.29 52.23 53.73 56.52 43.62 41.01 40.30

48.26 52.00 50.86 80.89 51.64 56.28 58.04 42.53 38.91 39.77

50.55 50.77 51.22 78.96 50.29 59.12 60.53 41.14 39.26 39.84

53.81 50.42 51.76 62.55 47.63 57.07 54.67 39.53 39.08 43.44

58.64 52.52 53.81 57.83 48.74 56.91 53.07 39.99 36.99 44.11

57.41 51.60 53.39 54.45 48.44 58.75 53.00 39.25 38.52 47.60

50.36 53.77 51.53 65.40 51.23 53.84 56.15 45.15 39.64 40.36

Source: American Metal Market (AMM)

316

In Cents Per Pound

Jan.

CRB Yearbooks CD Table of Contents Chapter 1: Installation QuickSearch .................................................. Chapter 2: Searching and Browsing Selecting Text to Search ............................... Types of Searches ......................................... Search Operators .......................................... Conducting a Search .................................... Search Results .............................................. Reader Preferences ...................................... Table of Contents Browsing ......................... Chapter 3: Viewing Images Finding Images ............................................. Finding Embedded Images .......................... Zooming Hyper-linked Images ....................

317 317 317 318 318 319 319 319

Chapter 4: Printing Print Hints .................................................... Printing Text or Images ............................... Print Setup ................................................... Page Layout .................................................. Chapter 5: User Annotations Using Bookmarks ......................................... Using Notes ..................................................

321 321 322 322 322 322

320 320 320

CRB Yearbooks CD Copyright © Commodity Research Bureau All rights reserved. QuickSearch is a trademark of dataDisc, Inc. Segments of this manual reprinted with permission by dataDisc, Inc. Factual information contained in the CRB Yearbooks CD has been obtained from sources believed to be reliable but are not necessarily inclusive and are not guaranteed in any way and should not be construed as a representation by us.

Chapter 1: Installation Installing QuickSearch To run QuickSearch, you will need: • 386/25 processor or faster • Windows 3.1, Windows NT or Windows 95/98/00 • 5 MB of memory • 5 MB of hard disk space • CD-ROM drive • Mouse or compatible pointer To Install: 1) Place the disc in the CD-ROM drive. If installation does not start automatically proceed to step 2. 2) Click Start; Select Run 3) Type D:\Autoplay, where D is the letter representing your CD-ROM drive. Press the enter key and follow the instructions.

Chapter 2: Searching and Browsing Selecting Text to Search Searches can be conducted across all the text in a QuickSearch document (full-text), restricted to a specific field (fielded search), or restricted to a selected table of contents section. Everywhere in text - searches the full text of the QuickSearch document (except for user-defined notes and bookmarks). Choose Everywhere in text in the Search dialog box to specify a full-text search.

Fielded Search - searches a specific field and ignores all text outside of that field. To specify a fielded search: 1) Click Selected field under Select where to search. 2) Select a field from the list of available fields. Current Table of Contents section - restricts a research only to a Table of Contents (TOC) section. 1) Click the TOC section in the TOC window. 2) Click the Search button on the toolbar OR select Search/Search from the main menu. 3) Click Current Table of Contents section under Select where to search. Note: Search results will represent the selected TOC Section and its sublevels. Types of Searches Search for Phrase Type an exact phrase you wish to find, e.g. “Business is the key.” Use quotation marks around the search text to distinguish a phrase search from a word search or choose Search for phrase in the Search/More>> dialog box. The QuickSearch default setting is a phrase search. Search for Words Two types of word searches may be conducted - single words or words in proximity as determined by Search Operators. To conduct a word search, choose Search for word(s) in the Search/More>> dialog box.

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1) Single Word - Enter any single word, e.g. BUSINESS, to find all occurrences in the document. 2) Words in Proximity - Enter any series of words that you wish to find near each other (e.g. BUSINESS INCREASE). Before conducting a proximity search, define a search range/proximity in the Search/ More>> dialog box. The default setting is 4 words. A typical sentence has 10 words, a typical paragraph has 25 words, and a typical page has 500 words. Refine Last Search The Refine last search feature can be used to modify your most recent search. (See the Advanced Searching section of this chapter.) Search Operators Boolean, wildcard and phrase search operators are available by selecting MORE>> in the Search dialog box. Double-click on any operator to add it to the Search command line or type the operator in the Type the text to find box. To see example of each operator: • Click the Search button and then the More>> button. OR • Select Search/Search from the main menu and More>>. • Click once on the operator you wish to view. The following operators are available for a word search: AND (&) - BUSINESS AND INCREASE - Returns all occurrences of BUSINESS and INCREASE in the specified search range that are near each other. “Near” is defined using the Word Proximity setting in the Search/ More>> dialog box. OR (|) - BUSINESS OR INCREASE - Returns all occurrences of the words in the specified search range without regard to proximity. NOT (~) - BUSINESS NOT INCREASE - Returns all occurrences of the word BUSINESS that are not near the word INCREASE in the specified search range. “Near” is defined using the Word Proximity setting in the Search/ More>> dialog box. Wildcard (*) - Use the asterisk (*) at the end of any part of a word to represent any character or combination of characters. For example, BUSI* may return hits such as business, businesses, busing, and Businowski. The wildcard operator cannot be used in a phrase search.

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Conducting a Search Basic Searching 1) Click the Search button on the Reader toolbar OR select Search/Search from the main menu. 2) In the Search dialog box, select where to search choosing one of the following: • Everywhere in text • Selected field* • Current Table of Contents *Note: Click a field or a TOC entry before choosing Selected field or Current Table of Contents section. 3) Type the search text (word, words within proximity or phrase) in the Type the text to find box or double click on any entry in the Word Wheel to select it as search text. 4) Click Search in the dialog box. “Hits” will be highlighted in the text and displayed in context in a separate Hit List window. The number of hits also will be displayed on the status bar at the bottom of the screen. Advanced Searching Search for Words 1) Begin a search by completing steps 1-3 of a Basic Search. 2) Select More>> to expand the Search dialog box and change to a Search for Word(s) and/or select other Search Operators which alter the nature of the search to be conducted. A Search for Phrase is conducted unless you select another type of search. 3) Specify the Word Proximity in the Search/ More>> dialog box, if you are conducting an AND or NOT search. The default proximity is 4 words. 4) Click Search in the dialog box. “Hits” will be highlighted in the text and displayed in context in a separate Hit List window. The number of hits also will be displayed on the status bar at the bottom of the screen. Refine Last Search To refine the last research: 1) Begin a search by completing steps 1-3 of a Basic Search. Click the More>> button on the Search dialog box to access all search parameters. 2) Click the Refine last search box in the lower left corner of the Search dialog box. 3) Select the Boolean operator to be applied to the refined search (just to the right of the Refine last search check box). 4) Preview the format for the refined search in the Refined Search box at the bottom of the Search dialog box. 5) Type the [New text to Find] word(s) in the Type the text to find box at the top of the Search dialog box. 6) Click Search.

Example: Your first search in the Constitution was for the word “House.” If you want to narrow the search results to include only hits of “House” which are not near “senate,” you can return to the Search dialog box, select Refine last search, select the NOT operator, specify the word proximity, type “Senate” in the Type the text to find box at the top of the Search dialog box and click the Search button. The Hit List will display only hits of “House” which were not located near “Senate” (“near” depends on the proximity that you specified). The final search command would look as follows: (House) ~ (Senate) This search could be further refined by selecting Refine last search and repeating the steps above. Example: If you want to find only occurrences of “House NOT Senate” which are near “Representative,” return to the Search dialog box, select Refine last search, select the AND operator, specify the word proximity, type “Representatives” in the Type the text to find box at the top of the Search dialog box and click on the Search button. The Hit List would display only hits of “House” which were near “Representatives” but not located near “Senate” (“near” depends on the proximity that you specified). The final search command would look as follows: [(House) ~ (Senate)] & (Representatives)

Reader Preferences Select Edit/Preferences from the main menu to open the Document Preference dialog box. The box includes three tabs: Reader, Author, and Stopper Word List. Reader Preferences include: CD-ROM Drive Letter Every CD-ROM player is assigned a drive letter. (It is usually the last drive letter after your other drives.) Default Word Search Proximity Set the default proximity (the number of words between selected words) to be applied in multiple word (non-phrase) searches. Show Hit List? Click Show Hit List? to open a Hit List automatically after conducting a Search. The Hit List shows “hits” items found - when you do a search. Browse hits by clicking the Next/Previous Hit buttons on the toolbar or selecting Search/Search from the main menu. All hits will be highlighted in the text even if a Hit List is not activated. TOC Window Color Click the TOC Window Color button to open a dialog box containing table of Contest background color options. Select from a present color chart, or create a custom color and select it. Click OK. SAVE YOUR DOCUMENT after you select preferences!

Search Results Table of Contents Browsing Browsing Search Results Hit List After conducting a search, each occurrence of the e search text in the document will be displayed in context in a separate Hit List window. Double click on any entry in the Hit List to move to the corresponding section of text. Highlighted Hits in the Text After conducting a search, each occurrence of the search text is highlighted in the text of the document. 1) Click the First/Previous/Next/Last (Hit) buttons to move between highlighted hits in the text. 2) The number of the current hit being viewed and the total number of hits are displayed in the Status bar at the bottom of the screen. Removing the Hit List 1) Click the Clear button on the toolbar OR select Search/Clear Search from the main menu to remove the current Hit List window and the highlighting from the hits in the text. 2) Turn off the Hit List for future searches by selecting Edit/Preferences to open the Document Preferences dialog box. Click the Reader tab to open Reader Preferences. Deselect Show Hit List?.

Hyperlinks The Table of Contents (TOC) provides a convenient method for accessing any section of the QuickSearch document. Each TOC entry is hyper-linked to the corresponding section of text; just click on an entry and QuickSearch automatically will move the corresponding section to the text window. Multiple Levels QuickSearch TOC’s may include up to 32 levels. If there are sublevels in a TOC section, a “+” will appear in front of the TOC entry. To open the next level, click on the “+”. Automatic Tracing As you move through a QuickSearch document (scroll, Next Hit, Previous Hit, etc.) the Table of Contents will “track” your location in the document automatically. A box outline indicates the current TOC section.

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Chapter 3: Viewing Images A QuickSearch document may contain hyperlinked or embedded images. Different methods are used for finding and viewing each type of image Finding Images Finding Hyperlinked Images You can find hyperlinked images in a QuickSearch document by using any of the following options: • List of images • Next/Previous Image buttons or menu selections • Search feature • Special formatting/camera icon Image List - Open a comprehensive list of hyperlinked images in the document. 1) Click the Image List button on the Toolbar OR select Search/Image List from the main menu. 2) Double click on an image title in the Image List to open the image. Browsing Images - You can browse through images using the Next/Previous Image buttons or menu selections. 1) Select Nest/Previous Image buttons OR Search/ First (Nest, Previous, Last) Image from the main menu. 2) The Next and Previous Image buttons or menu selections move the reader sequentially through images in the document. 3) The First and Last Image menu selections move only to the first or last image in the document. Searching for Words in Hyperlinked Image Titles - As each hyper-linked image file is added to a QuickSearch document, it is given an Image Title. The Image Title appears with an optional camera icon at the point you have chosen in the text window. The Image Title is indexed with other text and may be found using a word or phrase search (see Chapter 1 - Searching & Browsing). Look for Special Formatting/Camera Icon – Hyperlinked images can be found by looking for words that have special formatting (the default is double-underlined text). Double click on the specially formatted text to open the image. A camera icon may precede the specially formatted image title. The image can also be opened by clicking on the camera icon. Finding Embedded Images Embedded images appear in the text at the point you have chosen. They may be found by: • Scrolling through text • Conducting a search for words/phrases that appear near the image. Scrolling for an Embedded Image Use the vertical scroll bar to scan text and locate embedded images.

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Searching for an Embedded Image* Search for text that has been placed near an image and marked as hidden. *Note: Titles of embedded images will NOT appear on an Image List. The Image List feature is only for hyperlinked images. Zooming Hyper-linked Images Marquee Image Zooming* Marquee Image Zooming allows you to select a portion of a hyper-linked image and enlarge it to the size of the image window. QuickSearch allows you to zoom to a single pixel. *Note: Marquee Image Zooming is available ONLY for hyper-linked images. 1) Click a hyperlinked image title or camera icon to open the image window. 2) Click on and hold the left mouse button and drag a box around the image area you want to enlarge. 3) When the area is defined, release the mouse button. The area selected will fill the Image Window. 4) Steps 2 and 3 may be repeated to continuing zooming. 5) To return the image to its original size, click once on the image with the left mouse button. Image Panning Image Panning allows you to use the horizontal/vertical scroll bars* to move around a hyperlinked image that has been enlarged by Marquee zooming. Click an arrow on the scroll bar OR click and drag the horizontal or vertical scroll bar button to move the image across the screen. *Note: Scroll bars do not appear on-screen until an image has been zoomed. Scale to Gray Some 1 bit (black & white) hyperlinked images can be sharpened by using the Scale to Gray feature. Scale to Gray will fill in missing pixels to improve the quality of an image. This feature is particularly useful for viewing scanned document images. To use Scale to Gray: 1) Open a hyperlinked image 2) Select View/Scale to Gray from the main menu 3) Scale to Gray will remain active until it is deselected.

Chapter 4: Printing The Print feature will print text and images in the following forms: • Highlighted lines or blocks of text • Selected Tables of Contents section(s) • Search results (“hit” lists) • Embedded images • Hyper-linked images • Zoomed portions of Hyper-linked images Print Hints Highlighted text, images and TOC sections will print in order as they are found in the document. The printed size of Zoomed and Hyper-linked images may vary between portrait and landscape page orientation settings (found via File/Print Setup). You can print multiple TOC sections by: • Using the Shift key to select a series of adjacent TOCs. • Using the CTRL key to individually select specific TOCs. • Using the Shift and CTRL keys alternately to select specific TOC groupings. Printing specifications can be set from the Windows Print Manager utility. Make Print Setup modifications before you Print. Printing Text or Images To Print portions of a document: 1) Highlight lines and/or block(s) of text. 2) Click the Print button on the toolbar. OR Select the File/Print from the main menu. OR Press CTRL+P. To Print a Single TOC section: 1) Click the TOC heading in the Table of Contents window. 2) Click the Print button on the toolbar. OR Select the File/Print TOC selection(s) from the main menu. OR Click the right mouse button and select Print TOC selection(s). OR Press CTRL+P. *Note: All the sublevels in the TOC section will be printed.

To Print Multiple TOC sections: 1) Click the first TOC section you want to print from the Table of Contents window. 2) Press and hold the CTRL key while you click the order TOC sections you want to print. They do not have to be adjacent. 3) When you have finished selecting TOCs, click the Print button on the toolbar. OR Select File/Print TOC selection(s) from the main menu. OR Click the right mouse button and select Print TOC selection(s). OR Press CTRL+P. To Print adjacent TOC sections: 1) Click the first TOC section you want to print from the Table of Contents window. 2) Press and hold the Shift key, and click the last TOC section in the series (all TOC sections between the first and last will be selected automatically). 3) Click the Print button on the toolbar. OR Select File/Print TOC selection from the main menu. OR Click the right mouse button and select Print TOC selection(s). OR Press CTRL+P. *Note: Multiple TOC Selection functions (highlighting using the Shift and/or CTRL keys) can be used in combination to select specific TOC groupings. To Print Embedded Images: 1) Highlight (double click) the embedded image(s) you want ant to print. 2) Click the Print button on the Toolbar. OR Select File/Print from the main menu. OR Press CTRL+P. To Print a Hyperlinked Image: You can print a Hyperlinked Image or a zoomed portion of a Hyperlinked Image. 1) Open the image by double clicking the Image title and/or the camera icon. OR Click the Image List button on the toolbar and double click the Image title from the list. 2) Click the Print button on the Toolbar. OR Select File/Print from the main menu. OR Press CTRL+P.

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Print Setup The Print Setup option allows you to select printer type, page orientation, paper size, paper source, and printer properties (paper, graphics, fonts, device options). Make these selections before you print. To change the Print Setup: 1) Select File/Print Setup from the main menu. 2) In the Print Setup dialog box, click the down arrow in the Name pull down menu, select a printer type and enter it in the Name window (or click Network to access Network printer options). 3) To select new printer properties select Properties and make modifications. 4) Select Landscape or Portrait. 5) Select OK to exit. Page Layout You can adjust the top, bottom, left, and right margins of a printed page as follows: 1) Select File/Page Layout from the main menu. 2) In the Page Parameters dialog box, set margins (in inches) and click OK.

Chapter 5: User Annotations The reader may customize a QuickSearch document by adding “margin” Bookmarks and Notes. Annotate functions enable the reader to make customized Bookmarks in the text and make private, unsearchable comments about a document with Notes. The Bookmark feature enables the reader to “save his place,” while the Notes feature allows the reader to “write in the margins” of the text. Using Bookmarks To add a Bookmark to a document: 1) Highlight a portion of text or place the cursor where you would like to add the Bookmark. 2) Click on the Bookmark icon on the Reader toolbar OR select Annotate/Bookmark from the main menu or select Insert Bookmark from the right mouse button menu. If text has been highlighted, it is shown in the Edit Bookmark/Name text box. If not, enter a name for the bookmark in the text box. 3) Click Add to place the selected text in the Current Bookmarks list. 4) Click Go to to scroll text to the point where the bookmark appears. 5) Click Close to close the Bookmark dialog box. To go to a Bookmark: 1) Click on the Bookmark button on the toolbar OR select Insert Bookmark from the right mouse button menu to open the list of Current Bookmarks. 2) Highlight the bookmark you want to move to in the text. 3) Click Go to. The selected text will move to the top of the text window.

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To edit a Bookmark: 1) Click on the Bookmark icon on the toolbar OR select Annotate/Bookmark from the main menu OR select Insert Bookmark from the right mouse button menu to open the dialog box containing current bookmarks. 2) In the Current Bookmarks list, click on the bookmark you wish to edit. It will appear in the Edit Bookmark/Name window. 3) Make changes and click Add. To remove a Bookmark: 1) Click the Bookmark icon on the Reader toolbar or select Insert Bookmark from the right mouse button menu to open the dialog box containing current bookmarks. 2) In the Current Bookmarks list, click on the bookmark you wish to remove. It will appear in the Edit Bookmark/Name text box. 3) Click Remove. Using Notes To add a Note to a document: 1) Place the cursor in the text window where you want the note to appear. 2) Click on the Notepad button OR select Annotate/ Notes/Insert from the main menu OR select Insert Note from the right mouse button menu to open the Notepad dialog box. 3) Type in the note and click Save; a Notepad icon appears in the left margin next to the specified line of text. To View a Note: 1) Double click the Notepad icon in the left margin. 2) The Notepad dialog box displays the note. To Edit a Note: 1) Double click the icon of the note you want to edit. 2) Make changes to text. 3) Click Save. To Remove a Note: 1) Place the cursor on the Notepad icon and select Annotate/Note/Delete from the main menu OR select Delete Note from the right mouse button menu. 2) A dialog box will ask you to confirm the note deletion. 3) Click Yes. The icon will disappear after scrolling in the document.