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based on No. 2 hard winter wheat—"if the grade is below that, we are going to cut you down."
But if the farmer was in that program they would say, "Well, if that is right, if we produce a higher quality of wheat, then we should get a premium on it.” That is the way the plan works.
The CHAIRMAN. Well, talking about the REA, there is no such partnership as you mention between the Government and REA. What happens is an authority is created in a certain area, and the Government furnishes cheap money.
Mr. Mason. That is right.
The CHAIRMAN. All right, but the management is under the REA, and the money has to be paid back.
How would you pay back to the Government if you would get the Government to borrow on the crops where there would be a failure or where there would be a huge surplus, how would you protect the Government?
Mr. Mason. I would set up a legal entity just as they do in REA and, in fact, the machinery is all set up now through the PMA or the ACP, whatever you
call the program now. The CHAIRMAN. What would you do with the farmers who have a big farm, and others have a small farm, some in debt, and some not in debt, where the carrying charges would not be so large?
Mr. Mason. You would have to take the average, and the man would have to provide for himself. He would have to look out for himself. In other words, you would make the price give the average farmer a decent living price, gentlemen. If he was not an average farmer, he would lose; if he was above that, it would be different. That works in all types of business.
Senator ANDERSON. If he was not quite as good a farmer, you would pay him anyhow?
Mr. Mason. No.
Mr. Mason. He would lose, not the Government the Government would not lose. But I would say set up this legal entity, just the same as REA. If we do not pay out on our local REA, we all go in and make up that deficit. Some of our members do, but that would be a local problem.
Senator ANDERSON. You never helped to make up a deficit for the REA?
Mr. Mason. I did not understand.
Senator ANDERSON. You said that if the REA loses, "we all pitch in and pay the deficit.” Have you ever paid a deficit to the REA?
Mr. Mason. We have not lost, but if it did, there are certain members that do not pay-certain members do not pay their bills.
Senator ANDERSON. Would you cut them off?
Mr. Mason. We could cut them off, but we have to stand that loss, but we stand it. The REA does not stand it, or the Government.
The same thing would work in our farm program. If a man could not produce up to the average standard, why he would just have to go out of business, but he will do that anyhow.
The CHAIRMAN. Thank you, sir.
STATEMENT OF NOBLE M. LOVE, LA SALLE, COLO. Mr. Love. Mr. Chairman, and Senator Anderson, my name is Noble Love. I am just a farmer, a cattle feeder. I live at La Salle, Colo. I am what might be called a middleman in this cattle business. I am a cattle feeder.
A cattle feeder is a man who takes the cattle from the range and finishes out to edible beef. That is, these prime steaks that we have for dinner.
We have a lot of problems. In fact, we have too many. We have gotten to the place where we thought 3 years ago, we were rugged individualists. Now we are just individualists. We lost the "rugged.”
We are individualists to this extent: We got in pretty bad shape with the banks. Ours is a big gambling proposition. It takes thousands of dollars to finish cattle. We are buying our grains produced in Nebraska, Iowa, and Illinois. We have diseases in these cattle, brucellosis, rhinitis, shipping fever, and on top of that calfie heifers, which are not at a declining price. They used to be 25 cents a hundred. Now it is $1.04 a hundred, which the packer deducts from our price of finished cattle.
Probably you know all of these things, all these things I am just telling you.
Our principal deal is trying to find a market for feed that we grow on our farms in excess of cash crops. What I mean by "cash crops"? is that I grow potatoes for cash. I grow my feed to keep the fertility of my land up and to create a market for it.
We do not grow corn, in the sense of selling the corn or putting it under padlock. We grow it as ensilage, put it into the cattle for productivity on the land.
We have had a little trouble with our price of feeders. Of course, there are a lot of buyers in the feeding business. The present price of feeder cattle for good steers, steer calves, is around 20 cents. The present price for fat cattle is about 20 cents. Thee is no margin left.
The last 2 months we have had quite a considerable drop in our fat cattle market. I have been told this is attributable to the chain store buying
We had a monopoly so far as chain store buying was concerned. The boys will buy in large quantities; instead of buying 1,000 quarters, or such a matter, there are a lot of chain stores that will buy 2,000 and 3,000 quarters each Monday morning, and then accordingly down the trade demand for it.
Senator ANDERSON. You do not think the drop in fat cattle prices has had any relationship to the drop in pork prices?
Mr. Love. I do not; no, sir. Actually, I am no hog man. I am a cattle man.
Senator ANDERSON. I am not either, but when I see one type meat going down, I
Mr. Love. I think it does. I will go with you on that, because I think it does. We can advertise beef, and we can get them to eating 10 pounds more beef, but the average human stomach will only consume so much. I think if they eat more beef, they will eat less pork, and possibly eat less poultry.
I cannot go with these big advertising campaigns too much, because, after all, we live in the United States and we have to market fish, and everything as it goes along. It is all a segment of our living.
Getting back to cattle, there must be some reason, and my idea is that there are too many cattle. There are 95 million cattle and 180 million people, 2 feet on the human people and 4 feet on the cows. They could run over us in a stampede.
What has brought this about? I think capital gains in the cattle industry. I will get called on this, I am sure, but nevertheless I am going to speak my piece. Capital gains probably in the cattle deal has been a protection for the small cattleman to increase his herd without income taxation.
In our country I have noticed a lot of herds that have increased 100 percent. They will keep their heifer and sell the steer calves, and sell a few old cows, but they have accumulated more breeding stock. Our numbers have come up. Possibly we are going to have trouble in the beef market because we are getting too much beef.
What is the answer to it? Capital gains will probably be a part of it. Taxation usually makes people get back in line a little bit.
Parity prices on cattle would be pretty hard to figure out.
There is something in my mind that keeps going around. I cannot think of Government only as a business. It is an enlarged peanut business, in other words. The peanut stand is small, and Government is millions times larger. There are more people involved, of course. But it is nothing to be frowned at.
I have heard people here today talk of the enormous subsidies they are paying out and how people will scream. I think it is a business. We have hired tax experts to come out here, and they examine 5 years back on each one of our income taxes, and if they find there is $1.98 short, they will drag us up and say, “You will have to pay up."
Back when they supported the potato program and all of the rest of these programs, there were $400 million, I think the chairman said, spent on potatoes in one year.
Senator ANDERSON. No.
Mr. Love. We have our tax experts that dig into these things. Why do they not see what the expenditure was compared to the investment, and what the return was in income tax and extra tax?
I talk to my neighbors a lot. I have got good friends in my county. The other day I went in and talked to the implement dealer. He said, “Golly, Noble, this is getting pretty rough. I have nine new tractors out there, and I have not had a buyer. I have got combines. I am still advertising them. The season is over. What is your idea on this?"
I said, “Well, Jim, when we had high supports and subsidies, you sold those tractors.'
“Yes," he said, “but that was not right. Why should I pay you a subsidy?"
And I said, “Jim, you have got the subsidy.”
I think that is something the American people kind of forgot. We farmers did not keep any money. That money was paid to us and it was sent to the little dealers, the clothing-store man, the druggist, the dentist, the doctor, and all of those people, clear on down the line.
Why should a subsidy worry people?
That is about all I have got to say on cattle. I would be glad to answer any questions.
I have been in business a long time. In fact, I grew up on the farm. And my father before me.
The CHAIRMAN. What size is your place?
Getting back to this potato deal, we live in an early section, what is known as the early section. At the present time there are 13,000 acres in there. There is no storage to speak of. There are possibly 150,000, 200,000 sacks of storage in that district.
We have a problem that has come up. When we had cross compliance, the crops of California, and our big producing States, Idaho, Maine, were pretty much stabilized.
When cotton was cut in California, the boys went into potatoes, and they raised last year to the extent of 23 percent. That started a pyramid.
As it came down the line, Arizona came in. Hereford, Tex., I think, I think they increased almost-well, with the new wells and things like that, possibly 30 or 40 percent. And it has pyramided the early crop clear down until the late crop comes in.
The CHAIRMAN. Can you come down to brass tacks? Tell us what you would do about it. That is what we would like to know.
Mr. Love. In these acreas, they have probably a history by now. I think some storage would help to a certain extent to alleviate this marketing. Instead of being marketed in 6 weeks, they could be carried over a 6-months period. I have storage for 100,000 sacks of potatoes. I have remained out of the early deal.
The history of that thing is that the people dislike to store potatoes, because there is more shrink on them. They grow the potatoes this year and do not get the money until next year. It is a long-time deal. They want money to pay the pickers. It is quite expensive. It is $50 an acre on Idaho. They pick enough—they sell enough to pay their pickers. And then after they get them in storage we will see a lull in the deal, and then the market has a tendency to strengthen. It has in the past.
I think the potato acreage is entirely too high, but I think our crosscompliance, if it had been held on and kept these districts from enlarging in their acreage, it would have been very good for us.
The CHAIRMAN. We are familiar with that. We thank you very much.
We have six more witnesses who have asked to be heard. We have added them. I will be very glad to hear from them, if they have something new. I will call on them. Try to help us out by sticking to the point and trying to give us something that you have not heard here today. If you do, we will get along quickly. If you can limit your testimony to new matter, anything to solve the problem, we will be glad to hear from you.
The first is Mr. Trentham. There was a banker who testified here this morning, Mr. McFarland.
What is the name of the gentleman you said that you would like for us to hear?
Mr. McFARLAND. Mr. Trentham.
STATEMENT OF B. C. TRENTHAM, QUAY COUNTY, N. MEX.
Mr. TRENTHAM. My name is B. C. Trentham of Quay County, X. Mex. Our problem is a little different from those you have heard today. Ours is broomcorn.
New Mexico being one of the major broomcorn producing States in the Nation, and Quay County is one of the major broomcorn producing counties of the State, the economic status of the farmers is of vital importance to the economy of the county, State, and Nation.
There is an estimated 20,000 acres of broomcorn grown annually in Quay County. This represents the total cash income for an estimated one-tenth of all families in Quay County. The weather condition, such as rainfall, wind, and so forth, are such that oftentimes broomcorn is the only crop a farmer can grow.
The table below gives some information regarding broomcorn. These figures are estimates from the USDA and county agent's office in Quay County.
Tons Total consumption in the United States.
45, 000 Total production in the United States.
30, 000 Total import to the United States.
15, 000 Production in Quay County (estimate)--
2, 500 With the above information in mind, the Quay County broomcorn growers are asking for an import duty of $50 per ton to be placed on all foreign broomcorn shipped into the United States.
The CHAIRMAN. Is your recommendation or remedy to put a tariff Mr. TRENTHAM. Yes, sir.
The CHAIRMAN. You see, this committee does not have jurisdiction over that at all. I will be glad to present your statement to the proper committee.
Another thing, any law or bill on the subject must originate in the House of Representatives. We cannot in the Senate put in a law. So my suggestion to you is that you might get hold of your Congressman and have him put in a bill in the House and let it go through the regular channels. As I say, in the Senate we cannot handle it until it comes from the House. We can hear evidence, but it would not be effective, because we cannot do anything about it.
Mr. TRENTHAM. This bill has been produced before and died somewhere along the line. It has never reached you.
The CHAIRMAN. You know why it has died, do you not?
The CHAIRMAN. The present administration as well as the past-we will not make any differences—does not like to impose too many tariff barriers. They want trade to be more or less free between nations.