ment are sure it's much easier for Government to buy a given product that it is to sell or even give away the same product, either domestically or in foreign countries.

The immediate problem, then, is who shall handle the production that from time to time exceeds demand-industry or Government. Historically, this has been a function of industry-regardless of the commodity-food products or manufactured articles, a pound of butter or an automobile. It is my belief that the Government program that disturbs this function-the handling of temporary surplusesthe least will, in the long run, be the most useful to our own dairy industry. From the statistical evidence that can be obtained, we dairymen in California are following the national pattern of making our own individual operations more economical by (1) resorting to bulk handling of milk, (2) installing pipeline milking machines, (3) green feed chopping of summer feed, (4) barn driers for making better winter hay, and (5) increasing the size of our herd to reduce the unit labor cost. The above five points may not be a complete list, but that many of them have been adopted is borne out by the fact that in 1955 over a like period in 1954 for which figures are available, production per cow continued to increase.

It is my belief that no one can accurately state whether or not the grade B producers of California would favor high, rigid support for dairy products, generally considered 90 percent of parity, and the price tag that in all probability would quickly follow--namely, production allotments and/or marketing quotas. Grade B producers on a national basis now receive about 83 percent of parity. It could easily be that we dairy farmers in any program of retrenchment would fall back to a given prescribed minimum such as tobacco growers have done, where two-thirds of all the growers grow only the minimum acreage which is six-tenths of an acre per year. It is difficult to magine the personal inconvenience that would apply to a given dairy farm when fractions of a can of milk would be allocated to a farm, or when the dairy farmer had to reduce his production by any given percentage point. The end result from this situation would be a lessened farm income on that particular dairy farm and death to the cow holding the odd number for the given percentage reduction. Neither of these situations, a lessened farm income or a reduced number of dairy cows, is in the public interest.

Surely no dairy farmer ever had all the money that he desired for farm improvement; improvements on our farms are a continuing affair and our farms are always begging for more money. But as a rule a man, to be a successful dairy farmer, must be a hard workerand hard workers are always price-conscious of the things they buy. Whether or not the price tag on supports at 90 percent of parity would help our grade B producers by providing the increased farm income that many desire is questionable. The fact is that in California production has increased slightly, 1.6 percent and that some grade B producers are expanding while at the same time those with less economic units are seeing fit to go into other lines of agricultural production. Economics has a way of its own of regulating production on our own individual farms. During the past year and a half no significant marketing changes-either grade A or B-have occurred, hence with these prices and under these economic conditions. our industry has been a relatively stable one.

There is quite a general belief here in California that if the Federal Government would adopt as favorable policy toward promoting the use of butter for our Armed Forces as they have toward making fluid milk available to them, then such a policy on a national basis could materially eat into our butter stocks with the resultant benefits bestowed upon our own people. This is a matter that this committee could well look into and have the facts made available for dairy farmers the country over so that they might be seen and the figures evaluated.

Occasionally, headlines in our daily papers indicate a vast new field for the disposal of some of our surplus dairy products in some foreign country. We dairy farmers wonder if the Federal Government is giving all possible aid in the developing and promoting of every worthwhile project of this type. The development of such projects could be in the national interest as well as aiding and assisting our allies in maintaining a high level of nutrition among their peoples.

No one need be told that the human stomach is relatively inelastic and that a greater use of this food or that means a corresponding decrease in some other food products. However, the 5 to 7 percent of production of dairy products above our current rate of consumption might disappear if all those segments of our society that touch the dairy industry could combine into what might be described as a giant promotional effort to increase dairy products consumption. Who would these people be? Bankers, storekeepers, machinery companies, Government employees, those touching the dairy industry at the county, State, and national level, and last but surely not least the dairy farmer and his entire household. The part the Federal Government could play in this program should be organizational. For if those of us who will receive the main rewards of the program are not willing to put our talents and whatever funds we can spare into such a drive then we should be willing to turn the reins of direction of this great industry of ours over to those who will find the means to justify their ends.

Our cows will keep on giving milk for sure. Ours is a stable industry. What to do about the trying situation of many dairy farmers bothers many people in public life, but the cow not at all.

I want to take this opportunity, Mr. Chairman, to thank you and the members of your committee for coming here and letting me present a statewide picture of the dairy situation in California.

The CHAIRMAN. Mr. Fulmor, I am glad to hear that at least one of your commodities is stable, according to your testimony.

I wonder what effect the price on dairy products for export would be if you did not have price supports of some kind?

Mr. FULMOR. It would be lower.

The CHAIRMAN. How is that?
Mr. FULMOR. It would be lower.
The CHAIRMAN. Certainly.

So the grade B producers of milk, that is, those who have an excess, would certainly suffer; would they not?

Mr. FULMOR. To that extent.

The CHAIRMAN. What percentage of your milk production do you export from California to other States in the nature of dried milk, canned milk, or products of that kind?

Mr. FULMOR. I think our production of evaporated and condensed is only a small fraction of our total production, and some of that, of course, is exported, as I stated. It is a small percentage.

The CHAIRMAN. When you say exported

Mr. FULMOR. Well, I meant exported and distributed to other parts of the United States.

The CHAIRMAN. Yes.

You do state though that you feel that except for the fact that we do have a price support program for milk and dairy products, your people might suffer more losses than they otherwise would if they did not have a price support program.

Mr. FULMOR. With price supports lower than they are today, that is correct.

The CHAIRMAN. Have you any advice to give us as to whether or not you want to continue the present program as now written or would you like to have it changed in any manner?

Mr. FULMOR. It seems to me the present program as it now is functioning is accomplishing the purposes that it was intended to accomplish, and that is to bring production more in line with our domestic needs.

The CHAIRMAN. That production has increased even under the 75 percent of parity instead of 90?

Mr. FULMOR. Yes; our population, of course, has shown some increase at the same time.

The CHAIRMAN. I am speaking nationwide.

Mr. FULMOR. Yes.

The CHAIRMAN. I think California is very fortunate in that its production seems to be in line with consumption requirements. But when you go to the Dakotas or Minnesota and Wisconsin you have a different picture there.

Mr. FULMOR. I think it is entirely necessary to look at our manufactured dairy products on a national basis rather than a local basis. The CHAIRMAN. Yes; are there any questions? If not, we thank you very much, Mr. Fulmor.

The next witness is Mr. Quist.

Mr. Quist, will you give your name and your occupation, please?

STATEMENT OF ALVIN J. QUIST, FRESNO, CALIF.

Mr. QUIST. Mr. Chairman and gentlemen of the committee, my name is Alvin J. Quist. I am a dairyman in this Fresno area, operating a dairy in this Fresno district."

My family has been in the dairy business in California since 1906. I would like to make a few observations on the dairy business in this State and comment briefly on a few things that I think might be of some interest to you gentlemen on the Agriculture and Forestry Committee.

I believe my expressions on supports, the need for Federal funds for dairy research work, diverted acres, and foreign outlets for dairy products will reflect much of the thinking of a great segment of California's dairymen.

I feel this to be so because, as the vice chairman of the California. Farm Bureau Federation Dairy Department, I have been in a position to follow and agree with the actions and policies developed by that group which represent so many of the producers.

First, let me say that I think Mr. Fulmor has very adequately summarized the California dairy situation and I think most of the dairy industry would concur in his statements.

The CHAIRMAN. Now, at this point, may I suggest this: You apparently agree with the statements that has been made by Mr. Fulmor?

Mr. QUIST. Yes, sir.

The CHAIRMAN. Have you anything new to add that would lead to the probable solution of the problem as you see it? If so, will you kindly confine yourself to that?

Mr. QUIST. Yes, sir.

The CHAIRMAN. Mr. Fulmor had quite a long statement.

Mr. QUIST. Yes, sir.

The CHAIRMAN. If all witnesses here today, 60 in number, were to be allowed that length of time, why, we might be here 2 or 3 days, and we can't give you that much time however much we would like to stay with you.

Mr. QUIST. I am certain, sir, that it will take me only 2 or 3 minutes. The CHAIRMAN. Thank you, sir.

Mr. QUIST. First I want to say that we who are producers of dairy products in this State is that we recognize our responsibility in marketing our own products-we feel that there must be necessary reserves of dairy products to insure an adequate supply of our healthgiving products, but I believe that governmental efforts to dispose of the surpluses over the reserves should be a temporary rather than a continuing program.

Continuing efforts are being made by dairymen in California, and throughout the United States, to fit their production to consumption needs.

If the incentives of high supports are not used to increase the production of dairy products in California, this State's increasing population will to a large degree use up our normal milk supply.

Members of the Farm Bureau's Dairy Department agreed in 1954 that the lowering of the supports on dairy products from 90 to 80 percent was the proper thing to do to cut down on the superabundances of milk, butter, cheese, and so forth, that would have been produced under a 90 to 100 percent support program.

Their decision to sanction this type reduction has, I believe, proven sound, today dairy products are all above support prices but are being produced in some moderation.

The Milk Stabilization Act in California is operated on a price plan dependent on production of fluid milk and the costs of producing manufacturing milk. We in California know that when a high price is set on milk more people go into the dairy business whether there is an outlet for their milk or not-when there is not a market, the result is surplus and the problem of disposing of same.

I believe that a minimum amount of Government support is ultimately the best solution to the dairy problem, however, it appears that some support program is called for a few years yet and I believe that in this adjustment period, flexible supports are preferable to high rigid supports. This is my conviction and I know that the Farm Bureau's Dairy Department has not changed their position.

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In the matter of a program for diverted acres, I feel that some lands are going to have to be taken out of production of the basic crops. A program of diverting acres can be beneficial to the national welfare if the practices are aimed at building the fertility in the soil-creating a soil fertility bank.

What the dairymen in California do not want to see happen (and which could happen if incentives induced new dairy production) is to have these diverted lands go into forage crops for the sole purpose of raising more dairy animals.

California dairymen would urge continued use of Federal funds to carry on and expand research work being done in the dairy field. There is still much work that needs to be done in farm management and animal disease and parasite control. Further development of efficient methods of producing and marketing dairy products will mean a greater net income to producers even though prices for dairy products are not raised to the consumer.

Dairy folks believe there is a limitless opportunity for both Government and private research in the field of developing new uses for animal products and byproducts. Dairymen are in the beef business to the extent of about 35 percent of this State's slaughter, the profitable disposition of tallow, hides, and so forth is important to their

economy.

There is still a great opportunity for research in the processing, handling, and merchandising fields of all dairy products. I believe that only a top quality product, handled as economically as possible, and sold with consumer need and appeal in mind will insure the future of the milk, butter, and cheese market.

In a period of national prosperity I believe the Government of this Nation and the producers of animal products have a golden opportunity to improve the eating habits of America's citizens. The nutritive values of meats, milk, eggs, cheese, and so forth are recognized by those people who are in the public health field-now, when the people of this country have incomes that allow for the purchasing of the most beneficial foods, the point of their tending to their dietary needs and requirements should be stressed. The United States Department of Agriculture could well work with all segments of the meat industry to do a real job of selling health through meat products and byproducts.

Government and industry alike must continue to develop new markets and marketing ideas for dairy products. We are convinced that we have a product that, in one form or another, should be used in larger amounts all over the world as well as here at home.

Government assistance should be offered in every way to find and survey new markets for dairy products on the American continent and abroad-private capital and enterprise should be encouraged in these foreign markets and as few obstacles as possible put in the way of our American companies that want to process and sell our domestic raw material abroad.

I believe that America's products should be well represented at foreign trade fairs and expositions and encouragement and assistance should be given by the United States Department of Agriculture and other governmental agencies to private enterprises that might wish to participate in such projects.