TABLE II.-Index of prices paid by Wisconsin farmers, for commodities bought, interest and taxes, 1910-54

Dairy farmers are liquidating their capital investments, lowering the standards of living of their families, and realizing very low returns per hour in producing milk for the 165 million people in this great country. They are the producers of the finest and most essential food for our people.

Action must be taken to alleviate this serious problem if the American dairy farmer is to continue to produce the very essential milk needed for an evergrowing American population.

This deplorable condition confronting dairymen in an era when employment, take-home pay of workers, and corporate earnings are at record highs must be corrected. Unless it is, the farm depression will move in to wreck the economy and high level of business activity and employment off the farms.

Specifically, Pure Milk Products Cooperative recommends that action be taken forthwith to provide for dairy farm prices at not less than 90 percent of parity. This is possible under existing legislation. Such action can be taken by the Secretary of Agriculture without the enactment of new legislation.

The Benson philosophy of reducing dairy support prices from 90 percent to 75 percent has not worked to:

(a) Reduce consumer prices and increase consumption of dairy products, or (b) Reduce production.

Milk processor margins are at the highest levels in history and consumer costs are near the peak, while dairy farm prices are at serious and near record low levels in terms of what they will buy.

Reduced dairy-farm prices has necessitated maintaining or increasing milk production to meet the ever-rising farm costs of production, taxes, and living. Again, Pure Milk Products Cooperative recommends that the Secretary of Agriculture act immediately to support dairy-farm prices at 90 percent of parity. We recommend to Congress that:

1. Parity on manufactured milk.-Congress act to define manufactured milk parity and parity equivalent for manufactured milk. Farmers are not benefited by receiving a higher percentage of parity when such increases are caused by changes in the method of calculation parity rather than by increases in the price received for milk for farmers.

The parity equivalent for manufactured milk is now determined by administrative ruling, rather than by congressional action. The Department of Agriculture has redefined parity equivalent for manufactured milk by a succession of decreasing percentages of parity for all milk. Consequently, farmers have been receiving higher percentages of parity for manufactured milk without either an increase in the number of dollars received or a decrease in prices paid for production items.

We would like to point out that present-day manufactured milk is probably equivalent in quality to the best milk available in the years when parity was established, and we see no reason for defining parity for manufactured milk by successive decreases in the percentage of parity for all milk as increasing amounts of milk are used in fluid outlets.

We believe that Congress should take immediate measures to provide a parity definition for manufactured milk that will have some meaning to farmers from the standpoint of returns.

2. School milk.-We commend Congress for its wisdom in authorizing $50 million for last year and $50 million for this year to finance the school-milk programs. This program has already proved successful, with thousands of schools and schoolchildren participating, and with substantial increases in milk consumption by schoolchildren during the last school year.

We believe that the success of the current program indicates that it is now time to expand this program to provide milk daily to all primary and secondary schools, at no charge to the children. We believe that such a program would serve a twofold purpose. In the immediate future, it would go far toward the elimination of the need for Government expenditures in a price-support program, since it would bring about substantial increases in the consumption. However, we do not believe that such a program should be considered as an emergency or surplus disposal program.

In the long run, we believe that the increased consumption of milk by children in our schools would be reflected in the improved health of our Nation.

Based on the 1950 census there should now be nearly 30 million children of elementary-school age, or from 5 to 14 years old. If each of those children were to consume a pint of milk daily in school, it would not only improve the health of the Nation, but it would also mean the consumption of about 5 billion pounds of milk per year in our schools. If such a program were expanded to include children of high-school age it might result in the consumption of nearly 7 billion pounds of milk per year in schools.

The nutritious character of milk is recognized without question, and we believe such a program would go far toward correcting some of the health defects that received so much publicity during World War II when large percentages of our eligible-aged servicemen were found malnourished.

There are unrefutable arguments, both economic and nutritional, justifying such a program. Wouldn't we be thoroughly justified in spending a few million dollars each year to better feed America's young people than giving hundreds of millions of dollars' worth of dairy products to other people of the world?

3. Surplus disposal.-We believe that the surplus dairy products held by the Commodity Credit Corporation can be put to excellent use as donations to schools, hospitals, the Armed Forces, and to needy families in the United States. We believe that complete disposal, other than a reasonable reserve for emergencies, should be made of all such products at the earliest possible date in order to eliminate their depressing influence on prices paid to farmers for milk. We think that every effort should be made to dispose of these stocks in a manner that will build future domestic markets and at the same time will supplement the nutritional needs of our needy people.

We recommend that Congress take action to increase the consumption of milk and dairy products by people of all ages. We believe that such objectives may be met in part by the use of a food-stamp plan, and we recommend that Congress

give serious consideration to the enactment of such a plan for the disposal to Americans of surplus food products held by the Government.

Large expenses are being incurred by the Government in giving surplus foods to foreign countries. Let's put a plan in effect to feed our undernourished Americans first.

4. Accelerated brucellosis program.—Brucellosis eradication is now recognized as an important step in the insurance of a safe and wholesome milk supply. Government appropriations for the payment of indemnities have become an indispensable part of such programs. The State of Wisconsin has contributed generous appropriations for such programs and has expanded them from county to county until it now appears that Wisconsin will become a Bangs-free State within the coming year. We urge Congress to continue adequate appropriations for indemnities and enact legislation to actively promote the elimination of brucellosis on a national basis at the earliest possible date.

5. Dairy promotion.-Pure Milk Products Cooperative has long supported the work of the American Dairy Association, the Chicago Milk Foundation, and the Milwaukee and National Dairy Council in their efforts to promote the sale and consumption of more dairy products. We do not believe, however, that advertising and promotion can cure all the problems confronting the dairy farmer. Government and health regulations, more efficient processing, and better methods of marketing and distribution are of great importance in improving the welfare of the farmer. We therefore urge that Congress enact bill S. 788, offered by our own Senator Wiley, to establish a dairy research laboratory in order to expand and coordinate all of the dairy research of the country.

6. Federal order expansion to establish minimum prices.-We believe in the principles embodied in the Agricultural Marketing Agreement Act of 1937, and the Federal milk orders, and oppose any amendments which would make the above-mentioned program less effective. We believe, however, that the time has come when areas covered by milk orders should be enlarged and consolidated on the basis of economic and geographic conisderations. Likewise, we believe that the principles and application of milk orders should be extended into the field of manufactured dairy products to assure minimum prices for milk going into the various uses.

7. Maintenance of import quotas.-Pure Milk Products Cooperative believes in the expansion of America's foreign trade. We also believe that all treaties must be negotiated for the mutual benefit of buyer and seller. The importation of dairy products should in no way impair present Government support programs or dairy-production patterns. We, therefore, urge Congress to maintain strict import quotas on all dairy products as long as the Nation's dairymen are producing milk and butterfat in excess of domestic consumption.

8. Cheese price supports.-We believe that it is the Government's function in its support program to maintain a balanced purchase price ratio between cheese and the butter-powder combination. Cheese is not only Wisconsin's and America's most distinctive dairy product. It is also a major market for both the fat and nonfat portions of milk. We greatly oppose any Government program or policy which is discriminatory or harmful in any way toward cheese or its production.

Enormous increases in per capita consumption of cheese have taken place in the past few years whereas butter consumption is much lower. Cheese production must be encouraged.

9. Price supports.-Pure Milk Products Cooperative stands for effective price supports that will afford dairymen 100 percent of parity. We adhere to the principle of self-help, but until such can become a reality we must place our reliance for price stabilization by the Government. We are not satisfied with the present support program. Under it dairy farmers have not received 90 percent of parity. Their net return has been declining under it. It supports operators and processors instead of farmers. Pure Milk Products Cooperative insists that dairy farmers be the recipients of the intended benefits. The dairy farmer has $95 out of every $100 of the capital that is invested in the dairy business. We believe that at least 90 percent of parity should be assured to him to protect his investment in the capital facilities necessary to produce an adequate supply of this most essential food-milk.

10. Production controls.-Pure Milk Products Cooperative stands ready to accept production controls if necessary to obtain 100 percent of parity. However, we insist that such controls be applied across the board to all butterfat and milk in the market place, and to all dairymen whether they be large or small producers. We ask that the Government retain an adequate reserve of dairy prod

ucts with which to meet all foreseeable contingencies after such controls are imposed, and that these reserves be used by the Government only in times of emergency.

11. Grade labeling.—Pure Milk Products Cooperative strongly recommends enactment of legislation by Congress that would require consumer grade labeling of all butter and cheese, with the date of such grading shown on the consumer package. Grade labeling protects consumers and encourages the production and consumption of quality butter and cheese. The Federal Government should institute this requirement on all butter and cheese moving in interstate com

merce.

CONCLUSIONS

The sale of milk and cream, and of meat animals from dairy herds makes dairying the largest single segment of the Nation's agricultural economy. Dairy farmers carry some 95 percent of the total capital investment of the entire dairy industry in contrast to only about 5 percent for processing and distribution agencies. With this heavy investment by the farmers themselves, it becomes exceedingly important that we maintain the economy of the dairy industry at a level sufficiently healthy to protect those investments.

Mr. ECKLES. All right, sir.

The CHAIRMAN. Thank you.

Mr. ECKLES. My name is William C. Eckles. I am manager of Pure Milk Products Cooperative, a cooperative of some 18,000 dairy farmers in the bargaining and service field in Wisconsin.

We did not appear before your committee yesterday or the day before because we were tied up with our annual convention of those dairy farmers in Fond du Lac, Wis.

We want to bring before the committee some of the problems that we have.

Pure Milk Products Cooperative is the largest farm bargaining and service cooperative of its kind in the country. It has in the neighborhood of 18,000 members. They sell both grade A and grade B or manufactured milk to 160 or 170 plants in Wisconsin and edges of Minnesota and Illinois.

The marketings of those members last year amounted to 10 percent of the milk in the State of Wisconsin or roughly 12 percent of the total milk in the United States.

This material shows some of the relationship between prices received by farmers and the prices for milk, the prices paid by farmers and the prices for milk.

It shows in the last couple of years in chart 1 the situation is getting itself back in about the same position we were in in the mid and late thirties.

Farm costs are rising substantially, and milk prices have been on the downgrade since 1952 or so, and the costs of producing milk and the items that farmers buy are putting a squeeze on dairy farmers. You folks, of course, are familiar with that situation.

At our convention yesterday we passed several resolutions and have discussed these matters in local meetings throughout the State, 72 locals of Pure Milk Products Cooperative in the past few months, and we want to make some specific recommendatitons to you that are set forth in this brief.

I will run through them hurriedly and talk with you a little about them. You may have some questions. We think that the methods of computing parity for manufactured milk should be revised so that the dollar values that farmers receive are in line with the prices that they pay for commodities that they buy. We think it should be specifically set out in the form of legislation.