SPECIAL SCHOOL MILK PROGRAM

Last year Congress in an effort to halt the downward slide of the dairy producers' income, and improve the health of the Nation's schoolchildren authorized the expenditures of up to $50 million of Commodity Credit Corporation funds for each of 2 years beginning September 1, 1954, and ending June 30, 1956, to increase the consumption of fluid whole milk among schoolchildren in nonprofit schools of high school grade and under.

The wisdom of this congressional action is highlighted by the degree of success the program reached this year in spite of a late start. Approximately 8 million children participated in the program and over 400 million additional one-half pints of milk were consumed by these children. This means that this new program was responsible not only for moving an additional 200 million pounds of milk as class I milk-the form for which producers receive the highest price-but for making this almost perfect food available to more children at more times during the school day. The National Milk Producers Federation supported the enabling legislation for this program and its member associations have cooperated with State and local school officials to help make it a success.

The Federation will continue to support this program and commends those members of Congress who have introduced bills in the current session which would increase the funds available for the program. We further believe that any effort to extend and expand this program and assure the dairy producers and the school officials of this country of its permanence deserves the support of the Congress. Thank you. The rest I will file for the record.

The CHAIRMAN. All of the exhibits that are attached to your statement will be placed in the record at this point in your remarks. Mr. NORTON. Yes, sir.

(The documents referred to are as follows:)

PARITY COMPUTATION FOR DAIRY PRODUCTS

USDA does not compute a parity price for milk used for manufacturing purposes only a parity price on all milk sold wholesale.

In lieu of a parity price for milk used for manufacturing purposes, USDA computes a parity price equivalent. Such parity price equivalent is computed as follows: The parity price for all milk sold wholesale multiplied by the ratio between the price of all milk sold wholesale and the price of milk used for manufacturing purposes.

Establishment of a parity price equivalent was made for the first time after the enactment of the Agricultural Act of 1949. USDA used the prices during the 30-month base period of July 1946-December 1948. Price of milk used for manufacturing purposes, $4.10 divided by price of all milk sold wholesale, $4.63=88.5 percent (see attached). $4.69 (parity price for all milk sold wholesale) X 88.5 percent=$4.15 (parity price equivalent).

Later a new ratio was calculated on the base period of 1946-53: Ratio, 84.1 percent.

In 1955 the ratio was calculated on the base period of 1946-54: Ratio, $3.7 percent.

USDA can and does keep the support price constant in terms of dollars and cents. It shows improvement to farmers by expressing its constant support price level as a percent of a lower and lower parity equivalent price for manufactured milk, which in turn is calculated from a ratio with a constantly reducing base.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Dairy Stabilization Act of 1955".

LEGISLATIVE FINDING

SEC. 2. Milk and dairy products are an important source of the Nation's total supply of food for domestic consumption and for export. They are marketed on nationwide markets, and substantial quantities thereof, in raw or processed form, move in interstate and foreign commerce. Recurring seasonal and periodic surpluses and shortages, impaired purchasing power and financial instability of milk producers, unnecessarily high prices to consumers for essential foods, disorderly marketing practices, economic strife, and congestion in storage, transportation, processing, and other handling facilities adversely affect farm credit, disorganize and disrupt the agricultural and general economy of the United States, impinge on the public welfare, impair the national security, and burden interstate and foreign commerce. The production and marketing of milk and dairy products is affected with a public interest, directly affects the welfare and security of the Nation, and is attended with substantial and far-reaching consequences to interstate and foreign commerce. All marketing of milk and dairy products is either in the current of interstate or foreign commerce or directly affects such commerce. That part which enters directly into the current of interstate or foreign commerce cannot be effectively regulated without regulating also that part which is marketed within the State of production. The intrastate production and marketing of milk and dairy products is in competition with the production and marketing of milk and dairy products for interstate and foreign commerce.

DECLARATION OF POLICY

SEC. 3. It is hereby declared to be the policy of the Congress (a) to provide an adequate, balanced, and orderly flow of milk and dairy products in interstate and foreign commerce; (b) to promote the effective merchandising of milk and dairy products in interstate and foreign commerce; (c) to develop an improved, orderly, and stabilized market for milk and dairy products which are marketed in interstate or foreign commerce, or so as to affect such commerce; (d) to protect the security and welfare of the Nation by maintaining adequate domestic production and supplies of milk and dairy products and by keeping the national agricultural resources permanently productive and reasonably adjusted to current demand; (e) to stablize the prices of milk and dairy products at levels which will assure adequate supplies of milk and dairy products and provide a fair return to the producers of milk and. butterfat commensurate with the cost of production, taking into consideration the investment and risk involved, and the labor of the producer and his family; (f) to protect the interest of consumers by maintaining a stabilized, continuous, and adequate supply of milk and dairy products at fair prices and by authorizing no action which has for its purpose the establishment or maintenance of prices to producers at levels above those specified in subsection (e); and (g) to provide a self-financing system of price and production stabilization for milk and dairy products based on a stabilization fee to be paid by those marketing milk, butterfat, or dairy products in interstate or foreign commerce, or so as to affect such

commerce.

GENERAL DEFINITIONS

SEC. 4. For the purposes of this Act

(a) The terms "interstate commerce" and "foreign commerce" include the movement of milk and dairy products in commerce between any State or the District of Columbia and any place outside thereof, or within the District of Columbia, or between any Territory or possession which is included within the operation of this Act by the action of the Board and any place outside thereof, or within any such Territory or possession.

(b) The term "affect interstate or foreign commerce" means, among other things, to burden, obstruct, impede, or otherwise affect interstate or foreign commerce, the free and orderly flow thereof, or the production, storing, processing, marketing, or transportation of milk and dairy products for or in such commerce or after transportation therein.

(c) The term "United States" means the several States, the District of Columbia, and any Territory or possession of the United States which the Board determines should be included in the operation of this Act. The term "States" includes any State, the District of Columbia, and any Territory or possession

which the Board includes within the term "United States". The provisions of this Act shall apply to the United States as herein defined, except that the powers and authority of the Board may be exercised in other areas and in foreign countries in connection with the disposal of milk, butterfat, and dairy products.

(d) The term "Secretary" means the Secretary of Agriculture, "Department" means the Department of Agriculture, "Board" means the Federal Dairy Stabilization Board, and "Advisory Committee" means the Federal Dairy Advisory Committee.

(e) The term "person" means an individual, partnership, corporation, association, trust, estate, or any other business entity.

(f) The terms "milk", "butterfat", and "dairy products" mean milk and butterfat and the products of milk and butterfat, respectively, including any classification, type, or grade thereof; together with such combinations and byproducts thereof, and such products manufactured wholly or in part of both or either, as may be designated by the Board.

(g) The term "marketing year" means the twelve-month period beginning April 1 of each year.

(h) "Estimated supply" for any marketing year shall be (1) the estimated carryover at the beginning of such marketing year; plus (2) estimated production for market in the United States during such marketing year; plus (3) estimated imports into the United States, Hawaii, and Alaska during such marketing year, less the estimated surplus to be acquired by or charged to the Commodity Credit Corporation as a result of imports. Estimates for marketing years may be based on statistics or estimates for calendar years, or, in the discretion of the Board, calendar year estimates may be used in place of marketing year estimates.

(i) "Carryover" shall not include the estimated surplus milk or dairy products owned or controlled by or charged to the Commodity Credit Corporation, or to be acquired by or charged to it, under this Act before the beginning of the marketing year for which "carryover" is to be estimated.

(j) "Estimated demand" for any marketing year shall be (1) the estimated domestic consumption during such marketing year; plus (2) estimated exports during such marketing year; plus (3) an allowance for carryover. In determining estimated demand, estimated disposals of surplus milk or dairy products by Commodity Credit Corporation, or by the Board outside of the ordinary channels of domestic or foreign trade, shall be excluded.

(k) The "allowance for carryover" shall be determined by the Board. In making this determination, consideration shall be given to the need for maintaining an adequate, dependable, and continuous supply of milk and dairy products. The Board shall take into consideration any abnormal conditions present or likely to prevail, contingencies related to national security and world supplies, and trends in the production, marketing, and utilization of milk and dairy products.

(1) "Milk producer" means any person engaged in the production of milk or butterfat for market. A milk producer to be eligible to serve as a member of the Board, or to vote for nominees for appointment to the Board, must be engaged at least ten months a year in the selling of milk or butterfat on a commercial basis.

(m) "Commodity Credit Corporation" shall include the Commodity Credit Corporation as now hereafter constituted and any successor or other Federal agency authorized to perform similar services.

FEDERAL DAIRY STABILIZATION BOARD

SEC. 5. There is created within the Department of Agriculture as an agency and instrumentality of the United States a Federal Dairy Stabilization Board consisting of fifteen members to be appointed by the President from nominees selected by milk producers. Only persons who are milk producers, or who are officers or full-time employees of such dairy cooperative associations or marketing agencies of dairy cooperative associations as meet the requirements of the CapperVolstead Act (7 U. S. C., sec. 291-292), shall be appointed to or eligible to serve on the Board.

SEC. 6. In order to secure appropriate regional representation on the Board, the United States shall be divided into fifteen Federal dairy districts to be designated by the Secretary. In designating such districts, the Secretary shall give consideration to (1) complete geographical representation of the United States and (2) the importance of dairying in each district.