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I want to say this, in addition, we are presenting a domestic parity plan. We feel like that we wheatgrowers have a right to parity for that part which is domestically used. I don't care whether you call it that program or what you call it just so that we get it.
The CHAIRMAN. That is 100 percent.
Mr. PATTERSON. Full parity; yes. Because as you look around now, this particular year, all of the reports I get indicate, all of the economy has had the most prosperous year of any time in their life, excepting agriculture, and clear across the board on agriculture we are down and still going down.
We feel there has got to be something done there. There is a thing that we cannot understand.
I might say this: We have been 3 years working on this, a program which we want to try to implement ourselves, which will reduce Gorernment expense tremendously, which will be put on the honor of the wheatgrower, right down the line.
I don't believe you can ever get any program that will work if it is not on his honor, it will bring back to the man the responsibility of an American citizen, and it will take out the majority of Government regulations.
As long as we have this stock and so forth we have to have some Government regulations until it is disposed of. And we are unable to understand why we haven't been able to get some real consideration on it.
We think along with this soil bank that improves the program. We will be honest with you. That will have a tendency to take out of production these crops.
Of course, we talk about this billion bushels. This is my personal statement—this is not from our organization—but to me that is the greatest blessing God every gave us. We are setting up here now and we have had some comments here lately that we have been near war.
I don't know it, but they said we had. The thing I wanted to bring out is how touchy the American people are. That thing just blew
when that came out. Well now, if we are going to remain in that category, instead of having this 350 million bushels of stockpile, for goodness sakes let us have at least half a million bushels in there and let us not reduce that stockpile so long as we are in this danger.
Senator AIKEN. You would say 500 million bushels would be a fair carryover and you would like to reduce what we have down to about 500 million ?
Mr. PATTERSON. If we are at that dangerous point I don't care whether we reduce it or not. I know we are spending a lot of money for storage. To me, as I saw that account so much, I could not help but come back to the point where we do have that.
I am not questioning those figures, that we have that $714 billion worth of agriculture program and costing us a million dollars to
Goodness, check up and let us see what it is costing us for defense every day. If this is not a type of defense, I don't know what you call it. If I am wrong, straighten me out.
Senator Aiken. We do not have $742 billion in Government hands. There is a little over $6 billion and the rest is represented by loans.
Mr. PATTERSON. I am not questioning that. I did not exactly know on that figure. I think that is a good thing, regardless of what it is.
Senator BARRETT. I would like to get straightened out on the stockpile and pipeline, so far as this supply of wheat is concerned.
Take around, say, the first of June or the first of July, you have to have a lot of wheat that is normal carryover to take care of before the new crop comes down,
How do you figure the amount of wheat that ought to be on hand for our own purposes in addition to this stockpile that you mentioned ?
Mr. PATTERSON. Normally, the figure has been around 250 million bushels.
Senator BARRETT. Is your testimony to the effect that we ought to have 500 million bushels of wheat in stockpile and that 250 million that is in the pipeline for supplies-current supplies is that what you mean to say?
Mr. PATTERSON. My point is if I could clear it we should never be below 500 million bushels.
Senator BARRETT. Total pipelines and all?
Senator BARRETT. That would just be barely enough to take care of your normal demands, maybe a couple of hundred million bushels more for that year.
Senator AIKEN. That is a year's supply.
Senator BARRETT. If you have 500 million bushels on hand, why you should have enough for any emergency.
Senator AIKEN. We probably should get rid of around possibly five or six hundred million bushels of the total supply on hand at the present time. That would about bring it down to the proper level at the end of the year.
Senator Young. We would be in good shape.
Senator AIKEN. I had hoped we could reduce that 100 million bushels a year, then along comes good growing years and high-quality wheat. What did we do? Did we add a little or just shrink a little?
Senator YOUNG. Just about broke even this year.
Senator SCHOEPPEL. I would like to ask Mr. Patterson this final concluding question. Do you desire to have your resolution that was passed at your meeting incorporated into the record ?
Mr. PATTERSON. I would like to.
Senator SCHOEPPEL. I so move, Mr. Chairman, if you think it is agreeable.
The CHAIRMAN. Without objection, it will be made a part of the record.
(The resolution is as follows:)
REPORT OF THE RESOLUTIONS COMMITTEE, KANSAS ASSOCIATION OF WHEAT GROW
ERS ANNUAL MEETING, HUTCHINSON, KANS., JANUARY 9, 1956, ADOPTED JANUARY 19, 1956
1. Kansas Association Wheat Growers believes agriculture commodity groups are necessary for the best promotion of each commodity. We believe each group must recognize the rights and needs of all other groups and all general farm organizations. We pledge ourselves to work in close and friendly cooperation with all such groups and organizations.
2. Kansas Association Wheat Growers is proud of the recognition and support which has been given them by both industry and producers in the past year. The association shall strive with complete integrity to merit increased recog. nition. We will represent the composite views of the wheatgrowers of Kansas as we are able to determine those views.
3. We believe the wheat grower must cooperate with others segments of the wheat industry to promote the expanded use of wheat, for food and in industry. We believe a small tax on each bushel of wheat as it crosses the scale is the fairest, the simplest and best method by which this promotion can be financed. We believe this assessment must not replace existing or future increased appropriations for wheat research.
4. We believe the ultimate aim of wheatgrowers should be a wheat council in which all segments of the wheat industry participate.
5. We believe the following basic essentials to be fundamental to a successful national wheat program:
(a) Assure full parity to wheat producers for the portion of the United States wheat crop used for domestic food consumption.
(6) Make available crop loans to producers at a price level designed to insure orderly marketing to protect producers of feed grains and of wheat against unduly low returns and not disrupt international trade.
(c) Stimulate maximum economic use and free movement of wheat on a competitive price basis through regular non-Government trade channels at home and abroad.
(d) Encourage the production of strong type wheat, with full recognition of gluten quality factors.
6. We recommend the enactment of the domestic parity plan, with use of cer. tificate as the national wheat program. We believe that this most nearly incorporates the above basic fundamentals.
7. We believe that a voluntary soil-bank program would work best if used in conjunction with the domestic parity plan.
8. We recognize the fundamental economic principle that any program which tends to dislocate production from a low cost area to higher cost areas is detrimental to the industry and costly to the consumer.
9. We recommend that there be no ad valorem tax on wheat.
10. There are many areas of research that can help the wheat farmer. We need more help from our State college and the USDA. Even with farm income down we do not approve of across the board cuts in appropriation to Kansas State College as a means of solving the tax problem facing the Kansas Legislaure. Their work needs to be expanded not cut back. We recommend the immediate appropriation by the legislature of funds to provide greenhouses for wheat research.
11. We recommend that the law be changed so that the selling price of surplus COC wheat be left to the discretion of the Secretary of Agriculture,
12. We recommend that our Secretary be instructed to express to the Hutchinson Chamber of Commerce and to the Reno County Wheat Committee and the program committee our heartfelt thanks for arrangements for this convention and the courtesies extended.
Senator AIKEN. What was the crop in Kansas this year, $140 million ?
Mr. PATTERSON. A little over that; I believe 171.
Senator AIKEN. The largest crop you ever had was about 2 or 3 years ago which ran almost $300 million.
Mr. PATTERSON. That is right. Our normal is around 210. That is our average, on a 10-year setup. With this allotment that we have, it won't be that high in the normal. It would have to be an exceedingly good year to get this high.
Senator ÅIKEN. You normally would produce what, 20 percent of the Nation's crop ?
Mr. PATTERSON. It produced about 25 percent of the hard red winter wheat of the Nation. I believe it is about 18 percent of the Nation's crop.
The CHAIRMAN. Thank you ever so much.
The CHAIRMAN. Our next witness is Mr. Mollin.
STATEMENT OF F. E. MOLLIN, TREASURER, AMERICAN NATIONAL
CATTLEMEN'S ASSOCIATION, DENVER, COLO. Mr. MOLLIN. My name is F. E. Mollin. For the past 27 years I have been the executive secretary of the American National Cattlemen's Association.
At our meeting at New Orleans last week, I retired from that position and was elected treasurer, and will serve for the time being in an advisory capacity.
The CHAIRMAN. If you desire to put your statement in the record you may and then highlight it.
Mr. Mollin. If you please, I would like to handle it that way.
I would like to call attention to the fact, unfortunately, there are some errors in the first paragraph on page 4. I have corrected some of them but I didn't have time to correct all.
And in the last two lines on page 4, the word “million” should be "billion.". My stenographer could not quite envision billions, so she dropped down to millions for convenience.
My first appearance before this committee, I might say, was 32 years ago when I testified for the association, before I was secretary, in the old Capper direct marketing bill.
So I have been here a good many times.
Our cattlemen are very much concerned about the soil-bank plan and the effect it might have on the cattle industry.
The resolution we adopted at New Orleans, is shown on page 2 of the statement.
I might say that Secretary Benson in a speech which he made at New Orleans stressed the fact that land taken out of corn or other major crops, good quality land, and put into grass produced much less feed for livestock than were it to remain in its original crop, such as corn or oats or barley or something of that kind.
That is, of course, true, but the fact remains that when we take it out of corn and put it into grass, the only way you can harvest that grass is with livestock. If it is left in corn, only about 8 or 9 percent of the corn produced in this country is consumed by cattle. More than twice that much is consumed by poultry, and about almost five times that much is consumed by hogs.
So actually land that is converted from corn to grass has a potential of a great deal more actual livestock feed than were it to remain in corn, because we don't anywhere near use our corn in feeding livestock
I'd like to call attention to the fact that our industry is getting along without Government supports. We do not want them. We never have wanted them. We dont want supports or direct subsidies of
Ỉ might say that in the year from January 1, 1955, to December 31, 1955, the average price of choice slaughtered steers, 900 to 1100 pounds,
which is the class in the strongest demand, declined at Chicago 24 e percent.
That is a terrific decline. But still with that decline we maintain our traditional position with regard to Government supports or subsidies.
The CHAIRMAN. How are your profits affected?
Mr. MOLLIN. The profits have been very lean. Cattle feeders have lost much money during the past year.
The CHAIRMAN. Is it not that class of cattle from 900 to 1,100 that are fed that are sold and get the better price!
Mr. MOLLIN. Yes; they have been in the best demand. Unfortunately, the market has been oversupplied all year. As the market gradually drifted lower the feeders have held back, hoping for a recovery and the result is that they made a lot of tonnage that was not needed, and made the situation worse, and really defeated their own purpose because some of these overfed cattle have sold at distressingly low prices.
Senator BARRETT. That is on the long pull?
Senator BARRETT. The feeders that produce these 900 to 1,100 pound steers, selling for a little over 20 cents, how do they come out on those!
Mr. MOLLIN. They haven't done well. Of course, some people who probably got off before the market declined so much, some made a small profit; others have taken small losses. As the season progressed there have been some bad losses.
Senator BARRETT. Supposing that the feeder bought these steers at 18 or 19 cents, along in there, maybe cost him, say 20 cents delivered, and they fatten them out and only got $20.59. They could not possibly come out on that operation.
Mr. MOLLIN. That would be a serious loss. They have to have a four to five dollar margin for any reasonably long feed.
Senator BARRETT. On the whole, all of these fellows that fed out these 900 to 1,100 pound steers are bound to have really lost money, if they figure labor and corn and feed in the transaction.
Mr. MOLLIN. That is right. But the fellows that held them too long lost the most.
Senator BARRETT. Those on the long term basis, he was the one that got hit heavily.
Mr. MOLLIN. So far the range cattle producer whom I largely represent
Senator Young. Before you go to that, may I say that it depends a whole lot on the area. My boys are in the cattle-feeding business. They fed about 160 last year. They raised some, and bought some. They paid around 181/2 cents. They topped the market in West Fargo 2 out of 3 times they marketed. They got around 221,2 cents.
Mr. Mollin. They did fairly well.
Senator Young. With our cheap feed in our area, they made good money. And that is why cattle feeding operations are going to increase in an area like North Dakota. If we lose money in North Dakota feeding cattle today they will lose more in Iowa.
Mr. Mollin. One reason was the fact that on October 1, there were 19 percent more cattle in the feed lots than a year ago, but they run these cattle hard during the last quarter of the year and as a result on January 1, 1956, the cattle on feed were only 1 percent above a year ago.