The butter situation I think could be remedied if Congress could pass a law whereby when the housewife bought a quart of milk that that should state the content of butterfat therein.

The CHAIRMAN. A suggestion was made sometime ago that we might have less butter if the butterfat content of the milk that is sold, the raw milk that is sold, was increased.

Mr. HALL. Yes, sir.

The CHAIRMAN. Do you agree to that?

Mr. HALL. Yes, sir; I certainly do.

On the other hand, if you could stop the processors from taking the butterfat from the milk, adding coconut oil, dumping that butterfat on the market, you wouldn't have another solution.

I thank you, Senator, very much.

The CHAIRMAN. Thank you very much.

Have you any evidence of that being done? Of course, that would be against the law, you know, that operation.

Mr. HALL. Well, of course, they cannot call it milk, they call it something else, but that is being done, imported coconut oil.

The CHAIRMAN. They label it as such?

Mr. HALL. They cannot call it whole milk.

The CHAIRMAN. Thank you, sir.

All right. Mr. Osborne, will you step forward, please, sir, and give us your name in full and your occupation?

STATEMENT OF J. LEON OSBORNE, SANGER, TEX.

Mr. OSBORNE. I am J. Leon Osborne, dairyman and one partner of the Osborne Dairy Farm.

In the beginning, I wish to thank those concerned for this opportunity. The following statement is the sincere and truthful statement of facts, conditions, and opinions of the Osborne Dairy Farm, a bona fide and recorded partnership of J. L. Osborne, Sr., and J. Leon Osborne (father and son) located 6 miles east of Sanger, Tex., Denton County.

May I, at this point, state briefly that we favor rigid supports at not less than 90 percent of parity and production controls.

Senator, I will skip some of this in here with your permission.
The CHAIRMAN. Yes.

Mr. OSBORNE. You are interested if I have a plan?

The CHAIRMAN. Yes. I notice here you say 90 percent of parity and production controls. Are you relating them to dairy products? Mr. OSBORNE. I believe that on all commodities, sir.

The CHAIRMAN. How would you control production of milk and butter and cheese? How would you attain that end?

Mr. OSBORNE. I have that over here.

The CHAIRMAN. I see.

Proceed. That is one of the hardest nuts to crack. It is easy to do it where you have acreage controls.

Mr. OSBORNE. We think, sir, it is easy to do it this way.

The CHAIRMAN. All right; let us hear your method.

(The prepared statement of Mr. Osborne follows:)

In the beginning I wish to thank those concerned for this opportunity. The following statement is the sincere and truthful statement of facts, conditions, and opinions of the Osborne Dairy Farm, a bona fide and recorded partnership

of J. L. Osborne, Sr., and J. Leon Osborne (father and son) located 6 miles east of Sanger, Tex., Denton County.

May I, at this point, state briefly that we favor rigid supports at not less than 90 percent of parity and production controls.

We have, separately or together been in the business of operating a dairy farm, producing raw milk for more than 30 years.

We own 326 acres with dairy improvements and mostly cropland. We lease approximately 600 acres pastureland. We have 200 producing dairy cows and about 100 heifers. We own the most modern and efficient machinery and equipment possible, for both the dairy and the farm. To all this, to the best of our ability we apply our years of experience and wisdom, if any.

At the present, our operation cost and income are almost equal with little or no room left for normal or disaster losses. In both 1953 and 1954 our outgo exceeded our income to the extent that we used up our reserves and had to call upon our credit. We have had an investment in excess of $120,000 since 1953. Before showing depreciation and normal and/or disaster losses we received less than 2 percent interest above operational costs in 1953 or 1954.

Therefore, knowing by observation that the foregoing conditions are not peculiar to Osborne Dairy alone, but that it is comparable to a large majority of the dairy farms of the entire United States, I make the following observations and suggestions to those concerned :

I know that national economy has three major segments; namely, labor, industry, and agriculture. The three must be in balance if our economy shall be healthy and sound. By National, State, and local opinions and statistics, we observe and are told that both labor and industry are in excellent condition, of which, I am proud and glad. But, by the same measures, plus my own knowledge, agriculture is far below even a good condition. I believe that if present trend continues it will wreck our entire economy.

Labor and industry is protected, subsidized, or supported at a very high level; therefore, I believe it is neither unreasonable nor unfair to want agriculture protected at not less than 90 percent parity with controls on production based on supply and demand.

Take away protection from any one of the segments and you have creeping but sure paralysis.

Therefore, let agriculture have a program that will hold our income high enough to pay off our mortgages and permit us to buy the things that industry and labor want us to buy and use up, in order that they may continue to have excellent conditions; a program in which the producer has his responsibilities; a program which will not carry even a remote possibility of Government bankruptcy; and a program that will permit and assure agricultural families their proper place in our national economy picture of tomorrow, that of being on par with the other two segments.

With all this in mind, I make the following recommendations as it pertains to dairying :

That the self-help program, attached hereto in pamphlet form, as proposed by National Milk Producers Federation be put into effect by Congress as soon as possible, with the following amendments and additions:

1. Add: That production be controlled by a quota system based on supply and demand:

(a) Such quotas to be revised from year to year according to the demand and surplus carryover.

(b) Such quotas to be transferable in order to let new producers in.

(c) Other methods of letting new producers in, based on market area and seasonal demands.

2. Amend: Section 5 of proposed bill so that the board of directors shall not have as its members more than 3 of the 15 directors who are connected either directly or indirectly with a private concern or corporation which may process and/or handle fluid milk or milk products.

3. Add: By authority and in compliance to section 3-subsections (a) and (b) of proposed bill-that all milk or milk products moving in interstate commerce and at retail shall bear a label upon the container stating the minimum amount of butterfat contained therein. The purpose of such is to give the consumer complete knowledge of what he is buying and help to eliminate unfair competition; thereby encouraging greater consumption.

The foregoing is the statement of facts, beliefs, and opinions, and suggestions as pertains to dairying in our national agriculture picture, as I see it.

Again, I wish to express my sincere thanks for this opportunity to be heard. 64440-56-pt. 427

Mr. OSBORNE. Over on page 2 I would like to make this statement, to take away a statement made just prior to this, that labor and industry are both protected at very high levels and supported. And we realize that to take away the protection from any one of the segments, you have creeping, but sure paralysis. Therefore, let agriculture have a program that will hold our income high enough to pay off our mortgages, and to permit us to buy the things that industry and labor want us to buy and use up in order that they may continue to have excellent conditions.

A program in which the producer has his responsibilities, a program which will not carry even the remote possibility of Government bankruptcy, a program that will permit and assure agricultural families a proper place in our national economy picture of tomorrow, that of being on a par with the other two segments.

With all of this in mind, I make the following recommendations as it pertains to dairying.

In the previous testimony here of Mr. Nelson, I too endorse the self-help program in the proposed bill that is now before the Congress, with these additions and amendments.

One, add the production controls by a quota system based on supply and demand. And under that, such quotas to be revised year to year, according to demand and surplus carryover. Such quotas to be transferable in order to let new producers in. And other methods of letting new producers in, based on market area and seasonal demands. The CHAIRMAN. Before you get to that, what would you do with the surplus that a farmer produces?

Mr. OSBORNE. What would I do with that surplus?

The CHAIRMAN. Would you make him dump it?

Mr. OSBORNE. No, sir; that surplus would be bought on the twoprice program as now exercised.

The CHAIRMAN. Go ahead.

Mr. OSBORNE. You asked on the quota system-what plan on production that would be. Your control would be the quota system, which is now operating in practically all of the areas, in all of the market areas. We call it a base plan.

The CHAIRMAN. I understand, you have a base now. You have a quota.

Mr. OSBORNE. Yes, sir.

The CHAIRMAN. If the farmer produces over and above his quota, what would he do with that excess?

Mr. OSBORNE. That price would be set with this 15-man board that you are acquainted with. That price of that commodity would be set at such a level that you can move into the world market with it without being penalized.

The CHAIRMAN. That is self-help?

Mr. OSBORNE. That is self-help.

The CHAIRMAN. We tried to discuss that a while ago.

Mr. OSBORNE. As I understand, it is designed to be self-supporting,

by the dairymen themselves being assessed.

The CHAIRMAN. I do not see how it can be self-supporting, when the Treasury puts up $500 million. The entire program up to now has cost only $700 million.

Mr. OSBORNE. As I understood the bill that was merely a loan to begin operating on.

The CHAIRMAN. That is a loan without any security, to an organization. We just turn it into your lap, $500 million, and you handle it from then on out. If you lose it, the Government loses it.

Mr. OSBORNE. The only time that we would have to take it, that we would have to use it, would be to buy the surplus milk that was used over our quotas, because of supply and demand.

The CHAIRMAN. All the Government did to sustain that loss before was to sell what it took over. That caused this loss. They sold that at a loss. That is all that the Government did.

Mr. OSBORNE. Your second price would be your world market price. You could move on to the world market with it.

The CHAIRMAN. The difference would be a loss by whom?

Mr. OSBORNE. There would not be any difference. It would be a loss by the producers themselves.

The CHAIRMAN. You mean the surplus?

Mr. OSBORNE. The surplus that I produce would be low enough. The CHAIRMAN. You would get something for it, would you not? Mr. OSBORNE. He would get something for it. He would get what he could sell it for, what the Stabilization Board could sell it for, say, in Mexico. If they could sell that milk at $200 a hundred, then I would receive that.

The CHAIRMAN. What would the $500 million be used for-why have it?

Mr. OSBORNE. Your first year operating, as I understand it. The CHAIRMAN. You mean to buy the milk or to do what? Mr. OSBORNE. They would have to get the money from the producers, as I understand it, on an assessment to begin operations. The CHAIRMAN. I thought that was self-supporting, that it was self-help?

Mr. OSBORNE. It would be a self-help, as I understand. Maybe I do not understand it. That is the impression I have.

The CHAIRMAN. I am trying to understand it myself. I think that you have your program misnamed. It is misleading, when you say it is self-help. When you ask the Government to put up $500 million, which is half a billion, it may be a good investment. Still and all, let us not call it self-help.

Mr. OSBORNE. Well, we will call it something else then.

The CHAIRMAN. All right. Proceed.

Mr. OSBORNE. No. 2 of that same proposed bill, amends section 5 of the proposed bill, so that the board of directors shall not have as. its members more than 3 of the 15 directors who are connected either directly or indirectly with the private concern or corporation which may process and/or handle fluid or milk products.

The reason for that is simply that those men are interested in themselves more than they are in the man on the farm producing it. No. 3, is a repetition of the previous witness' statement. Believing all milk labeled, that is, all milk and milk products moving into interstate commerce, and retail, should bear a label on the container, setting forth the minimum amount of butterfat contained therein. The purpose is to give the consumer complete knowledge of what he is buying and to help to eliminate unfair competition, thereby encouraging greater consumption.

Again, I wish to express my thanks for this opportunity, sir.

The CHAIRMAN. You are very welcome. I have been glad to have you.

Mr. Spalding, give your name in full for the record.

STATEMENT OF TOM SPALDING, PONDER, TEX.

Mr. SPALDING. Mr. Chairman, my name is Tom Spalding. My home is in Ponder, Tex. I am a diversified farmer. I raise cotton, corn, maize, oats and wheat, and sheep and cattle.

I have a pretty large problem overall, I think.

I think it has been pretty well covered here today. I do not want to go into it too far. I would just like to go on record as saying that I would like to have at least 90 percent of parity, and possibly 100 percent.

The CHAIRMAN. All right, thank you.

Mr. Peeler?

STATEMENT OF R. G. PEELER, HEREFORD, TEX.

Mr. PEELER. Mr. Chairman, I am from Hereford, Tex., which is located approximately 50 miles southwest of Amarillo, Tex.

To begin with I wish to say that it is a pleasure for me to have this opportunity to discuss our farm problems at grassroot level with such a distinguished group as we have here today and I assure you that the farmers all over the United States are watching with interest these meetings which you are conducting.

I am from Deaf Smith County, Tex., which is located approximately 50 miles southwest of Amarillo, and is located in one of the northern counties of the High Plains Underground Water District. At the present time there are approximately 24,000 water wells in this shallow-water area. I do not represent any interest other than that of farming and a large part of my livelihood is from my farm.

I have no interest in any elevator or grain business. Our part of the country is considered a new farming section of the Nation. Not too many years ago our country was cow country. However, we grew from cow to the wheat country and from the wheat to grainsorghum country.

Grain sorghum is a native crop, so to speak, for this part of the United States. Although not considered as a major crop, nationally, grain sorghums are the basic crop for farmers in our area as indicated by the fact that the Texas 1954 production was approximately 117 million bushels, or 7,799,000 acres, whereas the 1954 production of wheat amounted to only 21,540.000 bushels.

The CHAIRMAN. I would like to put in the record here, while you are talking about sorghum-I raised the question earlier as to what States produced it-these figures I have here are figures for Missouri, South Dakota, Nebraska, Kansas, North Carolina, South Carolina, Alabama, Arkansas, Louisiana, Oklahoma, Texas, Colorado, New Mexico, Arizona, and California. These show the amount of sorghum they raised. The production average from 1944 to 1953 was 134 million bushels plus. And the production for 1954 was 204 million bushels plus. And the average indicated for 1955 is 228 million

bushels.