LIVESTOCK

Many livestock producers and feeders complain about protection for the grain farmer, and none for the livestock man. Especially is this true when livestock feeding profits are low or nonexistent as the result of a poor corn-hog or cornslaughter steer ratio.

Many feeders at times complain about high-priced corn, but I doubt the wisdom of their complaint. While cheap corn is a temporary asset to the hog producer or feeder, it generally results as a liability. Cheap corn prompts increased hog production and increased cattle feeding, which results in excess supplies of pork and beef.

High-priced corn generally prevents surplus production in both cattle and hog feeding. Beef-cattle production is mostly by pasture and hay (not grain). The beef-cattle population cycle is wide in terms of years, regardless of war, drought, or business recession. The cattle-feeding cycle is mostly governed by the supply and price of corn, and the selling price of good beef.

Cheap corn creates an increased demand for feeders, and more livestock goes to the feed lot. This often leads to excess supplies of pork and beef later on. In seasons of high-priced corn, fewer feeders go to the feed lot, and feeder cattle are lower in price because of lack of demand for them. This generally results in lighter supplies of pork and beef. Prices and profits are higher. In other words, livestock prices are supported indirectly by the support price on corn.

One of the major livestock problems is the result of poor distribution, for which no satisfactory solution is in sight. It is a problem of marketing-a problem the livestock farmer can personally help to solve by producing and marketing around the calendar. This cannot only cut down the "peaks" and "valleys," in receipts and prices, but can be of major importance to the market, the packer, the retailer, and the housewife.

PRICE

Price does two things in general. It indicates what and how much to produce. This often results in hindsight instead of foresight in agriculture because of our eycle of production, but it is all that the farmer has for guidance. Again, nature and human nature both are unpredictable.

From experience with an agricultural control program, we know it is most difficult to control supply. We know through experience with OPA, OPS, and rationing, that consumption is uncontrollable and unpredictable.

THE NEED

Regardless of the foregoing statements, we do need a farm program. The need arises not necessarily from any particular fault or error on the part of the farmer. It is the result of the unfavorable price, business, and economywise relationship he is forced to accept in buying and selling. His standard of living suffers by comparison with many others.

Even with a farm program, it still behooves every farmer to put the emphasis on what and how much to produce, along with personal efficiency and economy in production.

COST OF PROGRAM

While many complaints are heard from both producer and consumer, relative to the cost of agricultural support programs, the national cost or loss would be much greater in case of a major price recession in farm products. Good, efficient, and economical management of a Government program is as important as the fundamentals of the program itself. The holding of grain in excess of a proper, normal supply, and the unloading of this on the United States market defeats the purpose of the support program.

MAJOR CONSIDERATIONS

1. The need for a farm program and its importance to the entire economy.

2. Problem of shift of crops and land use, and conservation.

3. Program must be flexible from time to time and subject to change.

4. A reasonable surplus is needed as protection to the consumer, but not as a detriment to the producer.

5. No simple solution, but an effort must be made.

6. A workable price-support program cannot be maintained without some control over production.

38490-54-pt. 10-6

RECOMMENDATIONS

1. No price-support program for perishable crops.

2. No price-support program for livestock or its products.

3. Continue supports on three basic commodities-cotton, wheat, and corn. 4. Revision and adjustment of tariffs and duties, and trade agreements when and where an advantage to the economy.

Mr. LEITNAKER. As a result of my comments I might summarize them as they are on page 3 as a group of major considerations:

1. The drastic need for a farm program and its importance to the entire economy.

2. Problem of shift of crops and land use, and conservation.

3. Acknowledgment that the program must be flexible from time to time, and subject to change.

4. A reasonable surplus is needed as protection to the consumer, but not as a detriment to the producer.

5. No simple solution, but an effort must be made.

6. A workable price-support program cannot be maintained without some control over production.

The majority of the discussion today has been philosophy, economics, and history. I think some of you gentlemen were thinking about where do we go from here. I offer these four brief recommendations:

1. No price-support program for perishable crops.

2. No price-support program for livestock or its products.

3. Continue supports on three basic commodities-cotton, wheat, and corn.

4. Revision and adjustment of tariffs and duties, and trade agreements when and where an advantage to the economy.

I thank you, gentlemen.

The CHAIRMAN. Mr. Earl J. Chaney, we will hear from you now. Following him we will hear Mr. James Lewis, of Hamilton, Ohio.

STATEMENT OF EARL J. CHANEY, TIFFIN, OHIO

Mr. CHANEY. Chairman Hope and gentlemen of the House committee, I am a dirt farmer from Seneca County. That is in north central Ohio. I operate about 700 acres of grainland up there.

I graduated from Heidelberg College with a bachelor of science degree in 1931. My plans were to become an engineer. As we can all remember, there was a depression-that economic incident which caused many changes in many plans and many lives. A great number of engineers resorted to door-to-door canvassing in an attempt to sell life insurance in order to stay off relief.

This economic incident changed my plans from being an engineer to going home to help save the homestead. Mortgages then were very, very burdensome, and people were more concerned with trying to save what they had rather than planning to accomplish something extra. The faith element, on which our economy operates when we are living what we like to call the American way, was absent. People were almost completely ruled by the defeatist attitude. Remember the old catchword: "Prosperity is just around the corner?" But nobody really expected to turn that corner.

During World War II our operation grew to the operating of 1,400 acres of productive land, doing our share of filling the war needs trans

lated to us by the Department of Agriculture. In the recession that followed World War II we retrenched to the operating of 700 acres which we have maintained since.

This gave us an opportunity to work out some solutions through soil management and machine-use management in order that we might operate successfully at the 90-percent-of-parity level. We necessarily are forced to curtail purchases, for income under this level does not justify the expenditures we had cheerfully made under the great wartime needs operation.

Enough on background.

A good farm program must embody four definite points:

First, it must guarantee the American economy that American agriculture will have sufficient income to purchase its share of the production of this great American economy.

Second, it must provide for and guarantee a bountiful sufficiency of food for every American citizen.

Third, it must provide for the necessary conservation of food-producing facilities so that future generations will never be faced with hunger.

Last-and very important-it must provide plans for and embody controls for the prevention of unneeded surpluses.

I am completely in favor of 100 percent of parity in order to get American farm agricultural income back where it ought to be.

That would keep the farmer participating fully in the American buyers' market. But in my own mind I do not believe that our citizenry is educated to the point where it will accept 100 percent of parity.

It is, therefore, politically expedient that farmers place their combined efforts behind a drive to maintain our support program at a 90-percent level of parity. The sliding-scale system scares me. If we ever allow the American farmer to get that far out of the buyers' market, a depressionary spiral will be set in motion that will make the depression of 1930 look like just a little old hard times.

The two-price system scares me even more. In my own mind I cannot see where it would guarantee us even 75 percent of parity, and I am fully convinced that it would have no control on agricultural production.

At the best, it would offer a tremendous field for graft and corruption. To approve such a system would be the same thing as dealing Russia four aces in this poker game we call a cold war.

The next point I wish to make is this: In my own mind I am positive that we cannot operate any support program without a definite set of production controls. Let's quit kidding ourselves. It is one of the unpleasant "musts" that we have to go along with in any type of support program, or surpluses of tremendous size will be accumulated and will bury the program in the same manner that the old Wheat Board was buried during Herbert Hoover's administration.

In our common, everyday experience how often do we say more or less laughingly of some individual, "He can't have his cake and eat it, too"-yet we farmers are just as foolish when we ask for a support program without controls.

Let's accept these controls and go on to improve other bothersome technicalities that hinder our program.

The next point I wish to call to your attention is, if the Government is going to stockpile food as a security measure in this cold war in which we are engaged, let's call it definitely a stockpile of "munitions" accumulated for every taxpayer's benefit and paid for from every individual's taxes, and let's remove it completely from the market.

Let's accept these controls and go on to improve other bothersome trucks and uniforms are stockpiled for future use, they are completely removed from the market and have no depressing effect upon it. The Army has a stockpile of jeeps, but Willys-Overland is not forced to sell its products at 90-percent parity. It is operating at a profit. If this stockpile of food-a similar stockpile to the one that carried America and her allies successfully through World War II— is not definitely defined and handled in this manner, it will, as an agricultural surplus, completely unbalance our American economyas the farmer is driven from the buyers' market. We will then have lost one of our most important battles in the cold global war. In order to win this war our economy dare not falter.

The next point I wish to make has to do with our program of conservation. Food and the obtaining of food is vitally important to every American citizen. Therefore, the responsibility of conserving and maintaining our resources for the production of the food is shared by each and every citizen, and the moneys expended to obtain the desired result should be taken from the national tax funds and not charged to agricultural relief. About 10 percent of our population is involved in farming. This 10 percent of the population cannot pay the conservation bill for the whole 100 percent of our population. The other consuming 90 percent must pay its own way.

Gentlemen, I thank you.

The CHAIRMAN. Thank you, Mr. Chaney.

This morning we called on Mr. Earl Ash, of Amsden, Ohio, who did not respond at that time.

Is Mr. Ash present at this time?

(No response.)

The CHAIRMAN. We will pass his name over again.

After Mr. Lewis, the next witness will be Mr. Dwight Lifer, of Danville, Ohio.

We will now hear from Mr. Lewis.

STATEMENT OF JAMES M. LEWIS, HAMILTON, OHIO

Mr. LEWIS. Chairman Hope and members of the House AgricultureCommittee, I am a farmer from southwestern Ohio, farming in Butler, Ohio, in partnership with my brother doing general farming and with a main enterprise of production of milk and breeding of registered cattle.

I particularly am going to deal with the future of the dairy industry as we see it in southwestern Ohio.

I think that we will have to all admit that dairying is a phase of agriculture that requires much investment in cattle, land, and buildings; a great deal of labor and labor with much know-how is required. Many dairymen are young men with large debts acquired during the recent years of inflation. I feel we need young men in agriculture today. I am not saying that dairy farmers need or do they ask for

special benefits. However, I feel they must be given an equal chance to solve their problems and be kept on an even level with other members of their communities.

Today, in Ohio, we have mixed communities representing all methods of earning a living-agriculture, industry, labor, and professional people.

I feel that dairy products are one of our very best types of food. The dairy cow is a great consumer of forage, fibers, and grass products. These products are necessary for the farmer to raise in our everlasting battle to conserve or preserve the fertility of our soil for future generations.

I really feel that we need a new basis or new method for pricing of milk. I think we are going to have to realize that we are not going to continue basing the price of milk on fats.

We are going to have to base them on solids, not fats. We have got to admit that we have pretty much lost our butterfat market. It is a hard thing to admit, but we have to.

I think we are going to have to realize that the best sale of any dairy product has been the selling of fluid milk. That is the most number of dollars to the farmer down the road.

We are going to have to put more force, more emphasis, on the selling of this whole milk. Also, I think we are going to have to realize that we cannot figure the price of the farmers' milk on surplus products.

We are going to have to have a different system other than pricing on surplus. We are going to have to price again back toward the value of whole milk. I feel that it is unfair to ask a farmer to produce and then pay the great wages that we have to pay labor.

In our section of Ohio labor is getting practically as much for the manufacture of milk and setting this milk on the doorstep as the farmer receives for producing the milk and setting it on the platform of the handler.

We

e are going to have to realize if we support the prices of grain— and I am not here agreeing with some of the people on the program today-if we are going to support the prices of grain for farmers we are going to have to support the price of milk producers.

I am not saying we have to support either.

I think we must protect the dairy industry from fraud and misrepresentation of artificial products labeled dairy products and that these products are traveling on color reputation and taste advantages of pure dairy products.

I feel that the price of milk and all farm products should be tied very closely to the ability of the American consumer to pay. The cost of manufacturing and delivering dairy products to the consumer is an eye sore to the average dairy farmer.

Again may I say keep in mind the great investment that the average farmer has in buildings and cattle. This is a great investment. Do not be too rough on the dairyman. I might throw in one statement with regard to a two-price system. We in dairy farming have had a two-price system for the figuring of our price for some time. I do not think it will work, and you will find a lot of dairy farmers will tell you the same thing. We have been selling milk, class 1 and class 2 milk, class 3, whatever you want to call it.