An Economic Appraisal of the U. S. Tung Oil Economy

Abstract

Tung has been a preferred natural drying oil because of the high gloss finish, durability and water resistance qualities which it imparts to paint, varnish and lacquer products. However, increased competition from chemical synthetics, combined with lower prices for other natural oils since the early 1950's, has brought a decline of domestic tung oil consumption from 72.4 million pounds in 1950-51 to around 32 million pounds in 1968–69.The mandatory support program, initiated in 1948, obligates the Commodity Credit Corporation to support tung oil prices to growers at a minimum 65 percent of parity or at 24.3 cents per pound in 1968. Large accumulations of CCC stocks, close to 63 million pounds in 1966, triggered a change in CCC inventory policy.

A Supply Response Model for Perennial Crops

“…The acreage falling into each age class then may be readily determined.'? (18) where A it = the acreage of the ith age in year t, k = the initial bearing age, H = a reasonable maximum age of the plant, T=time, and V5t = a disturbance term.…”

“…The yield relationship may also be estimated by ordinary least squares, as suggested by (18) or (19). Adding the identity equation Qt=AtY t completes the statistical estimation of the supply response system.…”

“…Prior to 1960 there were almost no attempts to estimate such supply functions.> Some new ground was broken in a 1962 study by French and Bressler [14] which developed supply response for lemons in terms of new planting and removal relationships. This type of model developmen t, with modifications or simplifications, was later applied by other researchers to United States apples [8], cherries [11], pears [24], and tung nuts [18], with varying success. Much of the recent research on perennial crop supply response has related to commodities typically produced in less developed areas-mainly coffee, cocoa, and rubber.…”