As I see it, a rigid support program has not resulted in better prices to the producer but have resulted in more profit to the processor. If the desire is to support the processor, it should not be called a farm program.

As we are concerned as producers the only way we can see a future is to have butter go into stomachs and not into storehouses. Since the support price on butterfat has dropped from 90 percent of parity, the trend has been decidedly more butter consumed.

The Government has bought less butter, owns less butter, and the other people are eating more butter.

When people are using it we have a market, when they are not using it we go down a dead-end street.

This indicated to me that rigid price support creates a problem for us rather than being any part of a solution.

The CHAIRMAN. Do you sell grade A milk?

Mr. PARKS. Yes.

The CHAIRMAN. Do you have a market?
Mr. PARKS. Denver milkshed.

The CHAIRMAN. You are not in trouble.
Mr. PARKS. No.

The CHAIRMAN. Do you have a plan for those who are in trouble? Mr. PARKS. Today we had it brought out this 90 percent parity, when we cut to 75 percent, that it hadn't done us good. It has. It took the market off. Parity is on butterfat and not milk. I would like to get it over that by doing that we have sold a lot more butter and consumption increased.

Senator THYE. Did I understand you correctly that the parity is on butterfat and not on milk?

Mr. PARKS. That was my understanding that that was part of it. Senator THYE. How do they arrive at parity? Don't they take the manufactured plus the prices received for fluid milk?

Mr. PARKS. That is right.

Senator THYE. And then compile all those figures and arrive at parity by the total amount paid geographically across the Nation. Mr. PARKS. That is right. I can't say what I mean. But the thing was that since we dropped down the butter price, the people are eating butter.

Senator THYE. You see the only reason we interrupt once in a while is to make certain we understand what you mean. But on the dairy matter, may I ask you at this point if you have raised the price in the past year to the producer?

Mr. PARKS. No, we have never lowered it any to speak of.

Senator THYE. In other words, you answered me in one way and I asked the question the other way. I asked you did you raise the price to the producer, and you say you haven't lowered it.

Mr. PARKS. Yes. I see what you mean.

Senator THYE. You see the point. What I am getting at is in the past 18 months you had a reduction in supports from 90 to 75 percent, and when that reduction was put into effect did it affect your producer's price?

Mr. PARKS. It raised it some.

Senator THYE. I beg your pardon.
Mr. PARKS. Yes.

Senator THYE. How much a hundred?

Mr. PARKS. We are on a butterfat base there.

Senator THYE. I grant you that but you raised it. Let me be more specific. Maybe we can get it straight. When did you raise the price to the farmer? Are you a producer?

Mr. PARKS. Yes.

Senator THYE. When did you get a price increase in your milk? Mr. PARKS. We got a price raise in January.

Senator THYE. What year?

Mr. PARKS. This year.

Senator THYE. You mean last January?
Mr. PARKS. Last January.

Senator THYE. You got a price raise?

Mr. PARKS. Not much, I think about 2 cents a pound butterfat. held about there. We are running $1.32.

Senator THYE. What took effect prior to that time in that calendar year?

Mr. PARKS. In the city of Denver we have had the increase in population.

Senator THYE. Now, going back, the price supports were reduced April 1, 1954. What happened at that time to you as a producer? Did your price stay at the same level?

Mr. PARKS. Yes; pretty much so. Two or three cents a pound. Senator THYE. You made the statement to us it improved the dairy situation and I am trying to ascertain just what was involved because if there has been an improvement in your area then you are better off than they are in some other areas and I want to be sure just what is responsible for it, whether it is your good management or something else.

Mr. PARKS. It is our milk producers association where we put up the base plan.

Senator THYE. Is that an assumption on your part?

FROM THE FLOOR. Mr. Chairman, I think Senator Thye is distorting the man's statement.

Senator THYE. As far as I am concerned I am only trying to make certain whether the information given us is personal assumptions or if it is actual information based on the facts.

Mr. PARKS. I am trying to give it to you.

Senator THYE. In the course of the past 18 months you

said you

are better off. I want to know, has your price been raised to the producer? You say about 2 cents a pound butterfat?

Mr. PARKS. Yes.

Senator THYE. And that was effective January 1955.

Mr. PARKS. Yes.

Senator THYE. The other question is: Did the price of milk either go up or down to the consumer?

Mr. PARKS. It held steady.

Senator THYE. It held steady?

Mr. PARKS. Yes.

Senator THYE. Did you increase the amount of dairy produce in the milkshed? Was your overall total production on the increase? Mr. PARKS. It has increased some.

Senator THYE. It has increased regardless of whether you got a lower support or not, it has increased?

Mr. PARKS. That is right, in volume.

Senator THYE. In volume?

Mr. PARKS. Yes.

Senator THYE. Do you know whether you are manufacturing more butter and powdered milk now than you did 18 months or a year ago? Mr. PARKS. It is less than 18 months ago because Denver has grown so it has taken that surplus.

Senator THYE. In other words, you are not manufacturing as much butter.

Mr. PARKS. No; due to the increase in population, I think, of the city of Denver.

Senator THYE. It isn't a question, therefore, of economics of the dairy industry, nationwide. It is applicable only to your city of Denver because of the constant growth of population.

Mr. PARKS. That is right.

Senator THYE. In areas where they had to rely on butter, powdered milk, and cheese sales, many of those producers suffered from 60 to 75 cents a hundred price drop when the support was reduced from 90 to 75 percent. That was the reason I asked you these questions because we have to get the facts in here or otherwise your statement referring to your local situation might be confusing from a nationwide standpoint and might encourage some expansion in dairying that could be disastrous not only to you as a dairyman but to the industry as a whole. That was the reason I asked the questions.

I want to say to you back there that I was not trying to heckle the witness. It does us no good unless we get facts into the record and that was the only reason I asked the questions. It happens that Mr. Parks' local situation differs from that of other areas. I could take you into areas in northern Wisconsin, Michigan, Illinois, and Minnesota, where we are dependent entirely upon manufacturing, such as butter, powdered milk, and cheese, as an outlet, and there, of course, we do not have either a milk control order nor do we have the benefit of fluid milk sales. There we took a drop of anywhere from 40 cents to as much as $1 a hundred on our milk. Therefore, what I wanted to establish is that Mr. Parks' statements did not necessarily reflect the true national picture.

Mr. PARKS. I want to make another statement then that I am not in favor of the rigid price supports. I would rather have the flexible price supports.

The CHAIRMAN. Thank you.

Mrs. Hanson.

STATEMENT OF MRS. STANLEY HANSON, CLAY CENTER, KANS.

Mrs. HANSON. I thought most of the problem would have to be solved by the farmer. Or a lot of it, and the fact that we would have to sell abroad and I think if we do we are going to have to cut the price, and I would say that possibly lower than this 105 percent of parity that the law says, the Secretary cannot offer it in world markets lower than that.

We are going to have to make it cheaper if we are going to compete with a lot of these substitutes. I think the Chinese are making a substitute for bread out of a substance they distil from the sea that they call algae, and that is a very cheap substance. If there is any opposition

from other segments of the economy to Secretary Benson's efforts to dispose of these surpluses, it ought to be brought out in the open and I think I read something about Senator Eastland's actions in securing agricultural attachés to the Embassies in foreign countries again if I am not mistaken. Then Mr. Johnson brought out the point that possibly the farmers themselves could do something about this marketing.

Had the Farmers Union and Farm Bureau taken steps along that line and even Mr. Anderson's wheat improvement association, and there is going to have to be adjustments made by several other segments of the economy and in this respect I would like to say that I think that Congress should reduce spending and balance the budget, reduce farm subsidy and eventually reduce taxes which I think Senator Byrd of Virginia has recommended, and it would help the farmer in the long run.

Congress should implement President Eisenhower's request for revisions in tariff and transportation regulations and I think that Congress has put some study into cutting the military, at least I think Secretary Wilson is trying to bring about something there.

Education in the long run is going to contribute. I don't know if you gentlemen can do anything other than lead in that field, but it is very important that our high schools start teaching economics. I understood Brookings Institution made a survey and 99 percent of the high school students received no instruction in economics. You know what that means in an agricultural community where a great many students don't go to college.

The CHAIRMAN. That is really a State matter.

Mrs. HANSON. I mean I think all along the line the problem of agriculture is as much a problem of the State and Federal Government and I think I should say the colleges should encourage a back-to-thefarm movement as they have encouraged students to go into engineering and other lines.

A lot of this is education which I think the State could probably help in. An adjustment is going to have to be made in any future welfare or labor legislation, which ought to be geared to the needs of the farmers. I realize you gentlemen don't have anything to do with that, but you have a vote, legislation ought to be geared to keeping more old people on the job inasmuch as our life span is increasing and older people are increasing and raising levels of technical skills.

I think Secretary Mitchell had something along that line. Just training people to work, not insist on benefits-and the farmers do pay taxes for welfare purposes.

Farmers never should have been put in the social security program. You can't pass that tax on. Help has to come from industry, which is a private matter.

With the training in economics a great number of farmers might be interested in investing in industry and it will have to come in the development of less expensive and radically different farm equipment or in research into new uses for farm products.

I think Mellon Research Institute has done research in the use of corn. I am not so sure that wasn't in connection with the Department of Agriculture.

I think that is all.

Senator SCHOEPPEL. I want to make clear what was said about this 105 percent of parity. Restrictions on sale of storable commodities under the agricultural adjustment act of 1949 is 105 percent of the current support price plus a reasonable carrying charge. Now the restrictions on sale of the setaside commodities under the Agricultural Act of 1954 is 105 percent of parity, but it applies only to the commodities in the setaside. I wanted that in the record.

The CHAIRMAN. Mr. Neel.

STATEMENT OF AILIFF NEEL, WINDOM, KANS.

Mr. NEEL. Members of the Senate Agriculture Committee and Senator Carlson, everything that I have to say on the wheat program has been very well covered today by Mr. Patterson, so I will put that with the clerk.

I would have this to say on the surplus wheat that is stored in commodity credit. I think that wheat should be sold back to the farmer for feed because I don't know what else you will do with it. He knows he cannot sell it to the other countries. We will have to feed it.

On the dairy, I farm wheat and run a dairy. I just have one statement to make on the dairy: that an investigation should be made into the processing and retailing of dairy products to see why there is such a spread between what the farmer receives and the customer pays. Thank you.

Senator THYE. Do you sell your milk on a fluid milk market?
Mr. NEEL. Yes, sir.

Senator THYE. What is your city?

Mr. NEEL. McPherson.

Senator THYE. All of your milk is sold in the form of quarts of milk?

Mr. NEEL. All used as fluid milk.

Senator THYE. Did you reduce your price or did you suffer a

loss when the supports were lowered?

Mr. NEEL. It went over 15 percent.

Senator THYE. Fifteen percent is how much on that market?

Mr. NEEL. At that time we were getting $5 a hundred.

Senator THYE. $5 a hundred and it went off 15 percent?

Mr. NEEL. Yes.

Senator THYE. Was it reduced to the consumer?

Mr. NEEL. At that time it was reduced about 1 cent a quart but within 2 or 3 months it was back up to the previous figure.

Senator THYE. Did they change the price on your fluid milk?

Mr. NEEL. No.

Senator THYE. Thank you.

(Mr. Neel's prepared statement follows:)

WHEAT PROGRAM

1. The new wheat program should control bushels not acres. That way there would be a control on the amount of wheat in storage.

2. Guarantee the farmer 100 percent parity on all wheat used for domestic consumption.

3. Let the wheat farmer plant excess wheat for feed, seed and to have his own carryover in case of drouth years.

4. Continue soil conservation program so that we may maintain the soil fertility for the future years.