Review of 1965 Price Developments in the Foreign Agricultural Trade of the United States

Excerpts from the Report: Prices and their changes constitute a salient feature of an exchange economy. International commodity prices and their changes have long been a crucial element of trade analysis and projection, in both the private and the public sectors of the economy. Present concern about the U.S. balance of payments problem and the contribution agricultural trade makes to alleviate the problem have stimulated interest in price changes as they shape the terms of trade. As commonly measured, the terms of trade are the ratio of an export price index and an analogous import price index. A number of price indexes are in wide use. Some are made up exclusively or predominantly of agricultural commodity prices and can thus be considered agricultural price indexes. In this study, price developments during the past 2 years, as reflected in several widely used index numbers, are compared with specially constructed price index numbers computed from the 20 or 21 commodities or commodity groups making up a significant share (about two-thirds) of the foreign agricultural trade of the United States. The specially constructed U.S agricultural export price indexes summarize price developments which differ radically from all others.