This is signed by six different States: Clifton Chadwick, president, Vermont Poultry Association; Carroll Dunham, president, Connecticut Poultry Growers; Donald Fisher, secretary, Poultry Producers of Rhode Island; Oliver Hubbard, chairman of committee, New Hampshire Growers; Ralph Hunt, president, Maine Poultry Association; and Robert Wade, president, Massachusetts Federation of Poultry Associates.

Thank you, gentlemen.

The CHAIRMAN. Are you saying that you are opposed to any kind of price protection for the grain growers, such as oats and barley?

Mr. ANGEVINE. Let me put it this way: We feel that an orderly reduction is in order. What happens to the poultry industry if high supports are maintained it means that the poultry men have to pay higher prices for their feed. So in order to continue they have to get higher prices for their eggs.

In the reverse of that, if we buy cheap feed, naturally, to begin with it may encourage some overproduction of poultry products.

The CHAIRMAN. That was what I was coming to.

Mr. ANGEVINE. But poultry products are very competitive. The industry has been able to clear its own house in a very short time. My point is this, that with high prices for feed and higher prices for eggs, because of that we reduce the overall consumption of poultry products.

The CHAIRMAN. Of course, I have heard a different story from what you are giving in other parts of the country, that the poultry business is not too good. Where is your market here? Is it within the New England States?

Mr. ANGEVINE. My market is in Connecticut.

The CHAIRMAN. You have a big population there who are steadily employed, I presume, in factories?

Mr. ANGEVINE. That is right.

The CHAIRMAN. You have a good market?

Mr. ANGEVINE. That is right.

The CHAIRMAN. Do you think a price support would help-do you use much barley in your feed?

Mr. ANGEVINE. Very little.

The CHAIRMAN. Oats?

Mr. ANGEVINE. Mostly corn, wheat, and there is oats. It is mainly corn and wheat which are the two largest ingredients. There is some barley and oats that are used.

The CHAIRMAN. To what extent do the New England States produce poultry feed?

Mr. ANGEVINE. Very little.

The CHAIRMAN. So you are dependent on other areas for that?
Mr. ANGEVINE. That is right.

The CHAIRMAN. For your supply?

Mr. ANGEVINE. Yes.

The CHAIRMAN. You would want gradually to remove all price protections, price supports?

Mr. ANGEVINE. I think we have had a good program through the flexible program with the aim of reducing supports as far as it is possible to reduce them. The thing that most of us feel is that any support program of that type should be used as a type of disaster in:surance; in other words, from the war years, coming down to a peace

time basis, certain supports are needed to maintain an orderly reduction. In other words, so that it comes down gradually. We think this gradual reduction should continue.

The CHAIRMAN. Are there any questions?

Is there any difference of opinion as expressed by the witness from those whom he represents? Come forward and give us your name.

STATEMENT OF ROBERT L. WADE, MASSACHUSETTS

Mr. WADE. Mr. Chairman and gentlemen, the thing that I would like to add is not related to poultry as to what was said this morning. You made reference to the school-lunch program. That includes the charitable organizations and the underprivileged camps in the consumption of surplus foods?

The CHAIRMAN. The school program is a separate program altogether. This other is brought in incidentally.

Mr. STANTON. That is right. The School Lunch Act is a separate

act.

Senator HOLLAND. There is a permanent law now on the other. Senator AIKEN. Under section 416 the contributions may be made to charitable organizations.

The CHAIRMAN. That is only for specific amounts, and it may expire.

Senator AIKEN. That would be surplus.

The CHAIRMAN. In other words, it affects surplus only.

Mr. WADE. That is what I was thinking. In terms of using someof our surplus, instead of selling it abroad, we would use it here in this country to build a better America.

Senator AIKEN. That applies to commodities owned only by Commodity Credit Corporation.

The CHAIRMAN. It is not like the school-lunch program, which is a separate law altogether. Mr. Stanton, you are our lawyer here. Will you tell us what it is-what is the law?

Mr. STANTON. Section 32 funds can be used for charitable institutions. And section 416 of the Agricultural Act of 1949 provides for distribution to charitable institutions. Also, I believe section 407 provides for such distribution in appropriate cases.

Senator HOLLAND. In each case it is surplus commodities. Use of those that are found to be surplus is the objective.

Mr. STANTON. That is right.

Senator AIKEN. Mr. Randall of the Department is here. I would like to ask him. There have been some increases, have there not, in contributions to the people on relief and to charitable institutions? That has been gradually increasing?

Mr. RANDALL. That is correct.

Mr. WADE. I did not hear it mentioned here this morning. I thought it a very important thing, so I thought I would mention it. Senator AIKEN. It is. It is a big market there.

The CHAIRMAN. We are expanding quite a bit in that direction, I can tell you.

Mr. WADE. Thank you.

The CHAIRMAN. Is Mr. Dudley here yet?

Please come forward and give your full name for the record.

Are you speaking for yourself alone, or have you people in the audience whose names might be on this list?

Mr. DUDLEY. There is no one else connected with my testimony.

The CHAIRMAN. You stand alone?

Mr. DUDLEY. That is right.

The CHAIRMAN. You may proceed.

STATEMENT OF GEORGE C. DUDLEY, CONNECTICUT MILK
PRODUCERS ASSOCIATION, LITCHFIELD, CONN.

Mr. DUDLEY. Mr. Chairman, and gentlemen of the committee, my name is George C. Dudley of Litchfield, Conn., and I am a diary farmer.

I am speaking for myself and also the 1,800 members of the Connecticut Milk Producers Association, of which I am a director. We are in agreement in general with the various statements made by representatives of organized milk producers in upper New England. However, while about 9 percent of our milk comes from unregulated country plants in New York and Vermont and another 15 percent comes from producers' farms outside the State, we have been able to maintain a stable market with State milk control orders. We do appreciate the Federal order program and realize that their existence around us helps us to keep operating as we are. We believe they should be continued much as they are now operated.

We have a well-financed local unit of the National Dairy Council known as the Connecticut Dairy & Food Council that has been in operation for 35 years. For the past 3 years our association has been spending 3 cents a hundred on all milk for local direct consumer advertising on TV, radio, and newspapers. This program along with the council work has resulted in an increase in sales every month over the corresponding month of the year before ranging from 2 to 10 percent.

A Bangs disease control law was passed by the last session of the legislature which requires all farms to be signed up in the program by April 1, 1956, and no milk can be sold from infected cows after April 1, 1957. No Federal indemnity payments are to be paid for reactors found.

I mention that to show that we are doing this much to take care of ourselves, without calling on Federal help.

The CHAIRMAN. Do you want to give us the problem or the solution? Mr. DUDLEY. I am going into a flexible support-price program. The CHAIRMAN. Go ahead.

Mr. DUDLEY. Now I would like to touch on the national agricultural situation. I believe the whole trouble facing agriculture is overproduction caused by unwise pricing policies. We have built large supplies of surplus commodities under the high rigid price-support system. High price supports have made it profitable for people to raise these commodities and sell them to the Government. These stocks in storage have depressed prices in spite of high price supports. There is plenty of evidence to show that this program hasn't worked and cannot be made to work if continued.

In any other business when there is an oversupply, prices are reduced and the surplus is moved into market. How then can anyone honestly say that this system will not work in agricultural products?

The Connecticut Conference of Farm Organization which is made up of two representatives of all farm organizations in the State unanimously passed the following resolution:

The conference wishes to continue to support the present flexible price support program for agricultural commodities, with the hope that by this means it may eventually be possible for the Government to work itself out of agricultural supports.

Many people would have us believe that the flexible price-support system is the cause of the difficulty agriculture is in. They seem to forget that the flexible system has just begun to operate, and we should give it a chance to work to see if it will balance agricultural production

to use.

The CHAIRMAN. You heard me point out the figures of milk production under the flexible price supports for the past 2 years? Mr. DUDLEY. Yes, sir.

The CHAIRMAN. What have you to say about that?

Mr. DUDLEY. I will say that dairy products in storage have been reduced quite a bit, and agricultural prices over the past year are 2 percent over what they were before.

The CHAIRMAN. Do you know why they were reduced?

Mr. DUDLEY. More have been used, production has lowered.

The CHAIRMAN. No, no. You have less on hand. You have used more because we have given away more. You have sold more, yes, and you have used some more for hog feed and cattle feed.

Mr. DUDLEY. That is true.

The CHAIRMAN. You knew that?

Mr. DUDLEY. The dairy farmers have been instrumental in working out their own problems by advertising, getting more into use. The CHAIRMAN. No; only in the last 2 years you have sold more of what you had previously.

Mr. DUDLEY. Sure.

The CHAIRMAN. You sold almost three-quarters of a billion dollars. worth. That is one reason why you have less on hand.

Mr. DUDLEY. Is that the purpose of production, to sell it, to get it into use?

The CHAIRMAN. The way you did it, though, was to pay 17 cents, I think it was, or 14 or 15 cents for dried milk, and to sell it for 1 cent to feed the hogs. That is how we got rid of a lot of it.

Senator AIKEN. The amount purchased this year has dropped well below the amount purchased last year. The production this year is possibly 2 or 3 million pounds more than last year, but this promotion

program

The CHAIRMAN. You mean 3 billion pounds.

Senator AIKEN. One hundred and twenty-four billion pounds in all, roughly. The promotion program has resulted in this year's production being used up, whereas last year there was a 4-billion surplus of milk produced in the country, and a good share of it was purchased by the Federal Government. The total owned by CCC has been reduced now about to 100 million pounds of butter and 20 million pounds of powder and about 270 million pounds of cheese.

Mr. DUDLEY. I think that points out just what I have been saying here, under the high price support system we built up surpluses and lowered the prices on dairy products. And we have reduced

Senator AIKEN. May I interrupt? Speaking on the New England situation, when supports were dropped from 90 to 75 percent in April of 1954, where was a sharp drop in price. By August or SeptemberI think it was August-the price of milk had risen to a little above what it was for the month of the previous year when the support was 15 percent higher. All through that year the price of milk in the Boston milkshed was higher than it was under the period when they had 90-percent support the previous year. I believe that is true today. One reason there has not been a sharper increase in the price this year is that we got an increase last year and got it earlier than the rest of the country.

I believe it is estimated there has been about 15 percent incretase in consumption in New England, something like that.

Mr. DUDLEY. Something like that.

Senator AIKEN. During those 5 or 6 years when the milk producers were depending on the Government to be their market, they lost 14 percent of their per capita consumption, and they have recovered some of it-I do not know how much but quite a little of it since.

Mr. DUDLEY. That is what I tried to point out, that the dairy farmers have tried to solve their own problem by advertising and increasing consumption. The price has gone up along with it.

Senator AIKEN. Butter went down. The consumption of butter went down to just over 1 billion pounds, where it previously had been up to nearly 2 billion pounds. It will probably be up to 1,350 million or possibly 1,400 million this year, which is a big increase.

Cheese consumption has increased 14 percent, they tell me, over last year. As for milk and ice cream and the other products, I have not the figures in mind. So while we produced a little bit more, our consumption has gone up about 42 billion pounds of milk equivalent in the last 18 months.

Mr. DUDLEY. Yes.

Senator AIKEN. I give credit principally to the promotion program. The CHAIRMAN. Let us hope it continues. I merely want to read in the record here that the loss sustained on butter for this year, 1955, from sales was $173,314,388. The losses that year were the biggest any year since the program.

Then in the case of dried milk the loss sustained this year, 1955, was $117,784,928, which is the biggest year of any of the years in which the program was in force.

Mr. DUDLEY. Produced this year or in the past?

The CHAIRMAN. Produced in the last 2 years.

Mr. DUDLEY. That still proves my point, I feel.

The CHAIRMAN. But some of it was under flexible price supports— not all under the rigid.

Mr. DUDLEY. If you have the supplies, the surpluses built up under the high price support program, and then the support price lowers, you are bound to have to market them under the lower price-support period.

The CHAIRMAN. I am not arguing the point with you, except to indicate, as I said a while ago, that the theory behind flexible price supports, as I understand, is that a lower price will mean less production.

Mr. DUDLEY. Over a period of time, yes, not immediately.