I do think that the outlook is slightly better, although I believe the officials in the Department of Agriculture think the last half of the year 1956 will be somewhat better than the first half of the year. Senator YOUNG. If there was any sizable drop, a further drop in feed grain prices, that would increase feeding operations.

Mr. MOLLIN. Except that the people that took a real licking last year, I think they are going to be a little shy on feeding.

Senator BARRETT. The situation so far as Senator Young is concerned and the situation I was discussing are entirely different matters, because out in our country we sell these feeder cattle that go down into eastern Nebraska and Iowa, Illinois, and places like that and they have the shipping costs and all of that to be considered.

Then if the market was down, for those $20.59, for those steers after being on feed, buying even at 182 cents-from 18 to 20-they paid that for that in our part of the country-they do not have a Chinaman's chance to make out on that, whereas if you are feeding right on your own lots up there you could come out.

Senator YOUNG. We have cheaper grain, too.

Senator BARRETT. Yes.

Mr. MOLLIN. J. C. Holbert of Iowa, who is a big feeder and sells lots of cattle to neighboring feeders spoke at our convention at New Orleans and stated that on the basis of present prices for fat cattle, he predicted that feeder cattle would have to sell next fall at $3 to $4 a hundred less than they brought last fall.

Senator BARRETT. You said that you represent pretty much the range cattleman. As a matter of fact, how did he come out when he got, say, 1812, as Senator Young said, for those steers a year ago. He did not do too well himself.

Mr. MOLLIN. We have a gentleman here from Nevada, Mr. Wright. What did you get for the 2-year-olds?

William B. Wright (honorary vice president, American National Cattlemen's Association, Deeth, Nev.). Eighteen cents for 900 pound

steers.

Senator YOUNG. Heifers or steers, or heifers and steers?
Mr. WRIGHT. Straight steers.

Mr. MOLLIN. He sold them to a feeder in Colorado. By the time they got down to Greeley, they would cost 19 cents delivered, at least. I am sure on the basis of the present market this feeder is bound to lose a little money on his cattle.

Senator BARRETT. Is it not a fact that all of these feeders really took a beating last year and the ones that fed the longest, and did the worst, of course, they had terrific losses. There is not any two ways about it.

Mr. MOLLIN. I would not say all of them. There are always exceptions to every rule. Some who fed heifers got off pretty good early. They have been able to buy them to put into feed lots at very substantial discounts.

Senator YOUNG. Two cents a pound.

Senator BARRETT. More than that.

Mr. MOLLIN. Three or four cents, at least.

Senator BARRETT. I was talking about the overall operation. You cannot get down to cases and take them one by one. They have had a pretty bad year and they will take it out on the growers next year.

Mr. MOLLIN. Unless this cattle market responds during the spring and summer we will have a much lower basis for feeder cattle. Senator AIKEN. Do the feeders generally use horomones in their feed now?

Mr. MOLLIN. To some extent; to a considerable extent.
Senator AIKEN. What does that do for them?

opinion?

What is your

Mr. MOLLIN. Better gains and a little quicker turn on the cattle. Senator AIKEN. I know they claim for 25 or 30 cents additional cost, they can add about the last 75 or 100 pounds.

Mr. MOLLIN. They are taking advantage of everything, Senator. Senator AIKEN. That helps offset

Mr. MOLLIN. That is right.

Senator AIKEN. The lower price they get, does it not?
The CHAIRMAN. All right, proceed.

Mr. MOLLIN. I would like to mention the supply situation. If there were any need of increasing cattle numbers or beef production at this time, we would feel differently about the soilbank plan, but our cattle numbers are at an alltime peak, about 95,400,000 head, and our beef production is at an alltime peak.

And as I said a minute ago, we have constantly oversupplied the market this year.

There is nothing wrong with the demand. We have a tremendous demand, the best we have ever had. But we have just simply oversupplied the market, so that the market just cannot shake it off.

Senator THYE. Mr. Mollin, if we do not have a conversion to the soil bank plan, we are going to have a feed crop of some kind grown on that land, are we not?

Mr. MOLLIN. Yes.

Senator THYE. And if you had an additional amount of feed grown, do we not have a problem possibly developing that there will be an increase of livestock in order to have the animal to consume that feedif not an increase in the population of cattle, you are apt to have a longer feeding period and get a heavier poundage on the carcass. Mr. MOLLIN. That is what we had this past year.

Senator THYE. I know you did. Will not that apt to be a trend into the future in the event that you have an abundance of cheap feed around the countryside?

Mr. MOLLIN. I think so, although, I would anticipate this year that feeders will be more cautious even if there is plenty of feed. Senator THYE. If they are cautious, however, then you get an accumulation of either CCC stock around in storage areas

Mr. MOLLIN. That is right.

Senator THYE. Or you have it in the farmer's feed bins which ultimately will again come out somewhere to go into the livestock. If it does not go into beef, you get it into turkeys and pork and if you get it cheap enough it has its reflection over into the beef.

Mr. MOLLIN. We are much concerned about the soil-bank plan but it is about the policing of it rather than being basically opposed to the plan.

Senator THYE. Then would you have an expression, or care to make a comment on whether we try to write restrictive measures into the law that would specifically provide some protection against the use of diverted acres into some competitive crop.

Mr. MOLLIN. That is what we want.

Senator THYE. That is the diversion acreas.

And then we have the

proposal for the voluntary set-aside in the soil bank, too. Mr. MOLLIN. Yes, that is what we think must be done.

I'd like to call attention to page 8, paragraph 4, line 10 of S. 2949. That purports to be a restriction on the use of grass that is diverted from the major crops until 1959, but actually it is no protection at all, because it says, unless the Secretary finds it in the public interest to do otherwise. You might just as well not have that in there.

Senator THYE. How would you amend that paragraph?

Mr. MOLLIN. I would amend it to provide some penalty for violation. I think there ought to be a strict prohibition for at least a 3year period and the penalty ought to be that they would not pay the incentive payment to a man who takes the payment and then goes and grazes the land. Because otherwise, it is sure to increase cattle production.

We are right at the ragged edge now where we are trying to get along desperately without asking for any special help. We don't want it.

Senator AIKEN. Suppose that was worded to provide that the Secretary could give that permission in the event of flood or natural disaster. It is conceivable that a man could lose his field one way or another. And if he had land that he could use, there should be some provision for it.

I am sure that is what that is in there for, in order to take care of emergency conditions. Maybe the committee could spell it out a little bit.

Mr. MOLLIN. It seems to me that you ought to have a provision that an area had to be declared a disaster area, something of that kind, because if you leave it to the discretion of the Secretary we do not know who will be Secretary of Agriculture next year.

Senator AIKEN. That might be spelled out. I am sure that the purpose of it is to take care of emergency conditions.

Mr. MOLLIN. It now leaves it wide open.

Senator AIKEN. If that is left in the bill, we can always take care of it in the report.

Senator BARRETT. I wonder if I could inquire here I appreciate everything that has been said here. The thing that is bothering me about this particular point is how are we going to get the word to the cattle that they are not supposed to graze these diverted acres. That is the thing that is bothering me.

I think it will be pretty nearly an impossible situation for the farmer himself to keep cattle off this land. That is the thing that is bothering me.

Senator AIKEN. I think the answer to that, if we do not divert some of it, is they will certainly use a large part of it for raising meat and dairy animals.

Senator BARRETT. I can see where it would be fair to penalize a man to take his payments away if he deliberately grazes that land. But supposing that the fellow is on a vacation for 2 or 3 weeks and those cows see that green grass over there-they will head for it. If I know anything about cows, that is the way they will operate.

Senator YOUNG. It is not going to be easy to enforce. I think it can be done and should be done, too.

Senator BARRETT. It has got to be if we are going to protect this. Senator SCOTT. They do not wait for them to go on vacation. They do it mostly on Sunday mornings.

Senator THYE. I was going to say to the Senator, you are not going to have many of them going on a 2 or 3 weeks' vacation that are out in the agricultural area in these times.

I ask this question of you, Senator Barrett, what could you conceivably recommend that we do with this farm plant in order to get it down?

Senator BARRETT. I agree with this one point about disaster where a fellow would, say, his corn crops were all washed out-under those conditions it might be well to have authority here to let him graze this land that is diverted, but on the other hands, we are just on the ragged edge, instead of my testifying here, I say we are on the ragged edge so far as the cattle situation of this country is concerned. We have the numbers up to the highest in the history, 95 million.

On the other hand, the people have increased their consumption of beef from 50 pounds on the average in 5 years to 81 pounds today. The production of beef, as Mr. Mollin points out in his statement, went up from 7 billion pounds in 1950 to 122 billion pounds today.

So that if we have more competition-in other words, if we divert 5 percent of the acreage from corn over to grass and it is grazed, we are in a terrible shape and you will upset the cattle market pretty fast.

I think we have to write some pretty strong language in this bill to see that that land is not grazed if they are paid the full amount there.

Mr. MOLLIN. I think that the real answer is control of the incentive payments.

do

The CHAIRMAN. That is what some of us suggest, on these acres that are taken out of the allotment, that the payments ought to be made if the farmer carried out the program and then if he fails to do that, deny him the right to collect on the support prices. Try it that way. I agree with you fully. You might as well not have it if you not do it that way. I mean as to that phase of the program. When it comes to the conservation part that may be a little different but on cultivating acres that you take out of production, the allotted acres that are taken out of further production, those ought to be tied in with the price support.

Senator AIKEN. You mean, Senator Ellender, that the man is found in violation of his contract, then when he harvests the crop he is not eligible for price support?

The CHAIRMAN. That is correct. If you do not do it that way you might as well not have it.

Senator YOUNG. I do not think it will be quite as tough to police as we think. Under some of our soil-conservation practices now you have to have the land plowed by a certain time in order to comply.

You could require that this grass be mowed at a certain time in order to be in compliance, or somewhere it might have to be mowed twice.

With sweet clover there is only one good time when it is good for feed. That is a short while. There are other practices that you might engage in in order to come in on the program.

I admit that it is difficult but not impossible.

Mr. MOLLIN. We had hoped that we had turned the corner on the cattle cycle. For the last 2 years the officials of the Department have predicted cattle numbers would be down. Both years they have been

up.

This year I do not think they are sure, the figures will not be out until about the 12th or so or the 14th of February, but there has been an increase in cow slaughter of 2 percent over the last year, cow and heifer slaughter, but there has been a decrease in calf slaughter.

Senator THYE. Your veal calves are down, and that is where you are getting not only a dairy heifer possibility but you are getting quite a number of crossbreeding in your dairy herds and you are getting some crossbred calves in the dairy section going toward your feet lot. You can see that.

Mr. MOLLIN. One reason they have held these calves back is because the heifer calves are selling at such a big discount from the steer calves.

Senator YOUNG. In my own State cattle numbers have increased 31 percent in the last 4 years. That is almost entirely because of the abundance of cheap feed, nothing else to do with it.

Mr. MOLLIN. In the South Atlantic States I have some figures on that. The cattle numbers between 1940 and 1955 have increased 112 percent; in the South Central States, it increased 70 percent; in the western region, 67 percent; in the entire United States, 83 percent. That is in a 15-year period going back before the start of World War II-about that time. Part of that is due to diversion.

Senator YOUNG. Part of it is due to doing away with horses and mules.

Mr. MOLLIN. Yes.

Senator YOUNG. Now we have less than 5 million.

Mr. MOLLIN. The point is that we have about reached the limit so that we cannot absorb any more increase.

Senator YOUNG. I agree with you.

Mr. MOLLIN. We are rather at the point where we are just barely getting by. If we have anything else come on that tends to increase cattle production we are going to have a bad situation in the cattle industry. I am sure that none of you want that.

The CHAIRMAN. Anything else, Mr. Mollin?

Mr. MOLLIN. That is all.

The CHAIRMAN. Thank you ever so much.

Senator BARRETT. I think the committee is all agreed that they are going to write some protective language in there on that point. (Mr. Mollin's prepared statement is as follows:)

I represent the American National Cattlemen's Association with headquarters at Denver, Colo. For the past 27 years I have been executive secretary of that organization, but retired from that position at our convention in New Orleans, La., last week. I am now serving as treasurer and in an advisory capacity. Previous commitments on the part of our new president, Don Collins of Kit Carson, Colo.; and our new executive secretary, Radford S. Hall of Denver, Colo., made it necessary for me to pinch-hit for them in this emergency.

There are 27 State associations affiliated in the American National, 4 national breed associations representing the principal beef breeds, and some 80odd local and regional associations. Also, there is a scattered individual membership in other States. We are truly the most representative national cattle organization in the United States.

The following resolution was unanimously adopted at the New Orleans convention with 1,647 cattlemen and cattlewomen present, coming from 37 States.