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4. At the present price level of wheat, can we expect to get back into the world market and compete with Canada and Australia ?
Please review these questions and if at all possible the committee make a study of the causes why farm income has declined. We want the committee to know that we here in North Carolina believe in the price-support principle provided supply is kept in line with demand.
The CHAIRMAN. Mr. Gillespie.
STATEMENT OF JOHN C. GILLESPIE, TAZEWELL, VA. Mr. GILLESPIE. John C. Gillespie, farmer, cattleman.
The CHAIRMAN, As I understand it, you are testifying in the place of Mr. Bishop. Mr. GILLESPIE. That is right. The CHAIRMAN. You may proceed. Mr. GILLESPIE. I am from southwestern Virginia in the fat-cattle business, which you know is recognized as a sick industry. I don't know that we have a cure-all for it. We do think we possibly have a right start in the direction to find some of the things which are wrong today. We are told and I think correctly, that 65 percent of our beef is being purchased by 3 chain stores today. That meat is being purchased at the beginning of each week at a certain price.
So much for beef grading Choice or Prime, so many carcasses for eastern division, North, South, West, so many grading Primé, so many Choice, so many Good, four divisions.
"Here is my price, you take it.” I am talking about Swift & Co. “I am going on over to Cudahy and going from there to Wilson, back to Armour.” All have the same price today. They are told, “We won't take your price today. We will change this and make the Prime so many Choice, make the Choice so many Goods. Carry it over in the cooler if you want to.” That isn't being done. They know they have purchasing power to buy at their own price. That same man sets his retail price every week. We are being squeezed to death by three buyers in the beef industry. We know we have somewhat of an oversupply of beef, not the oversupply that you gentlemen and everybody else here is led to believe. You have seen nowhere this year where anybody's coolers, any of the packing industry, has a carryover of beef. Sold out from week to week at an enormously low price while the retailer has an enormously high price.
I believe I heard you state your beef cost you the same thing. The CHAIRMAN. That is right. Mr. GILLESPIE. There were 21,000 cattle in Chicago yesterday at 1212 cents. You will buy your steak at the same thing again. There is where we are being squeezed to death.
The CHAIRMAN. What is the remedy? Mr. GILLESPIE. I am asking you gentlemen to investigate that purchasing.
The CHAIRMAN. You many enter into the field of antitrust laws; I don't know. Mr. GILLESPIE. That is correct.
The CHAIRMAN. You may suggest it. That is outside of the jurisdiction of this committee. As you know, we are agriculture, and that would come before the judiciary.
Mr. GILLESPIE. Wherever it is necessary to take it we would like to take it. We have no carryover of meats; we think it is purely a
squeeze play on cattlemen. The fact is we are pretty well convinced of it. We are asking for that investigation. You tell me you are not empowered with that authority. We must take it where it is necessary.
The CHAIRMAN. We could investigate but the committee that could bring action in order to remedy the situation, which to me sounds like violation of the antitrust lawsMr. GILLESPIE. We think it is, sir.
The CHAIRMAN. This would be the Judiciary and this committee will be glad to bring it to the attention of the Judiciary.
Mr. GILLESPIE. We have had a lot of newcomers in the cattle business since the war. People got rich; people went into the cattle business to make money. I am no newcomer in the business. I am the fourth generation on the same farm making three-quarters of a million pounds of finished beef a year. I have seen the depression; I have gone through it; we are not asking for Government handouts or dole today.
But we certainly are not agreeing to take money out of our pockets and pay subsidy and get nothing in return. Nothing we have is subsidized. I am not quarreling with the other man getting what he can get. We are getting nothing in return for what we are paying. We don't have anything carrying a subsidy in our area, which is the grass section of southwestern Virginia. At one time we exported those cattle to England. Later we had a big passenger-ship trade. Later we had hotel and restaurant trade. We pride ourselves and our hills, what they have done, and are doing and will do, but we are fast being pushed out.
The CHAIRMAN. I presume you know the history of cattle population? Mr. GILLESPIE. I do, sir.
The CHAIRMAN. It is my judgment from evidence gathered on this trip, too many doctors, too many lawyers, and too many other people that had no business in the cattle business got into it. Mr. GILLESPIE. Yes.
The CHAIRMAN. The cattle population in the last 5 years instead of increasing at the rate of 134 to 2 million head per year, averaged 412 million. That is the cause of the trouble, I think.
Mr. GILLESPIE. Your meat-eating public has increased almost the same amount.
In other words, your purchasing power. That is the reason your coolers have had no carryover. It is the reason these meats will all sell; they are selling at a tremendously high price but they should be purchased the same way.
The CHAIRMAX. Is your recommendation only to look into the antitrust?
Mr. GILLESPIE. Yes, sir.
Mr. GILLESPIE. Only one. I think taking lands out of production plus subsidies or any other thing of the kind is certainly a turn in the wrong direction. In our country if we take anything out of production we don't make enough now to fatten these cattle. We have to buy grain and we take lands out of production it will be the same as you not maminn vann front an honlu lavan
The CHAIRMAN. When you say land out of production, you mean grazing land?
Mr. GILLESPIE. Yes. I just don't know where that would fit in our picture.
The CHAIRMAN. Have you any views to express as to taking cultivated acres out of production ?
Mr. GILLESPIE. We can't cultivate that much. We can't make enough grain for our cattle. We are in the hills.
The CHAIRMAN. Would you favor this order to reduce the huge amount of surpluses we have on hand, a curtailment of the cultivated acres ? Mr. GILLESPIE. No, sir.
The CHAIRMAN. That is because you are in the cattle business. Mr. GILLESPIE. That is right, I am fighting my own case. I realize that.
The CHAIRMAN. I realize that is the situation, but if you were a wheat or rice or cotton farmer, you might think differently.
Mr. GILLESPIE. I am not quarreling with them. I am here for myself. Thank you.
The CHAIRMAN. Thank you. (Mr. Gillespie's prepared statement is as follows:) Gentlemen, I didn't come down here as a critic, either to criticize what has been done or what is being done but simply to state my own views as an average farmer of today.
Gentlemen, today is late, but not too late to try to work out some formula by which the farmer and cattleman can live. I am primarily interested in cattle, in beef grading good and choice, made on grass.
We are told and I think correctly that 65 percent of our beef is being purchased by three chainstores. Bids are placed with all major packers every week at a low figure-take it or leave it proposition. They also retail that meat at a fantastic price.
My own experience Example: We were forced to sell a steer recently because of an injury to a leg. In no way affecting quality of beef. In trying to dispose of said beef we were told by three chainstores that their meat purchases had been made for following week. Finally settling and selling to Piggly Wiggly in desperation for 20 cents per pound for front quarters and 30 cents for hind quarters. Steer would have graded choice.
One of my associates wanting some of this particular beef, especially after being told by me what I had sold it for, and knowing quality of meat, goes to store for price of cuts. He was asked 98 cents per pound for round steaks and $1.05 per pound for sirloins. Being told that is our price this week. I ask you who sets this price for chainstores?
No notice of coolers being full of carryover meats-squeeze play on the cattleman.
Investigate, I am not a newcomer to the cattle business but the fourth generation. Have lived through the depression and not asking for a Government handout or dole but certainly not agreeing to take money out of my pocket to pay the other fellow subsidies and get nothing. So if we pay one subsidies let's pay all subsidies or cut it all off. I don't believe subsidies is the answer.
The $1 an hour minimum wage recently passed by you gentlemen I believe was done a little too hastily without enough thought. It helps no one, not even the man it was intended to help-only caused everything to rise in price. It really hurt the farmer and cattleman. We can't compete. Farm machinery and everything he has to buy increased while the price of his products decreased. I ask you please, if that was the intent?
We do not expect a miracle but we know that given enough thought by the committee in cooperation with the farmer and cattleman of sound judgment and advice, this can be worked out whereby the two of them can expect and receive a fair return on their investment.
Gentlemen, it is hard to realize the seriousness of any situation unless you are directly affected by it. When your heart and soul and 30 years work plus what earnings you might have had are needlessly going down the river then you can realize it.
I say we do not have an oversupply of beef but a market controlled by the few. There gentlemen, this is where you come in as our duly elected representatives of the people.
STATEMENT OF A. C. LAWRENCE, CHAIRMAN, AGRICULTURAL
POLICY COMMITTEE, NORTH CAROLINA STATE GRANGE, APEX, N. C.
Mr. LAWRENCE. I am A. C. Lawrence, a farmer living in western Wood County. I raise tobacco, corn, some wheat and a few livestock and hogs and a few other small general practice crops.
The CHAIRMAN. Proceed. Mr. LAWRENCE. I also serve in the official capacity as chairman of the agricultural policy committee for the North Carolina State Grange. I am not any speechmaker such as the Grange representative who preceded me.
The CHAIRMAN. We don't want speechmakers. We want you to talk to us as a dirt farmer. Mr. LAWRENCE. That is what I will do. The CHAIRMAN. You may proceed in that light. Mr. LAWRENCE. In reference to some questions that were given to Mr. Caldwell as our representative as to whether or not he was representing the feeling, the sentiments, and recommendations of the North Carolina State Grange or his own, I, speaking for the agricultural policy committee who had a part in developing the policy under which the Grange now operates and who have just recently come out of the policymaking meeting of the grange, I will say that the things which he gave us here this morning do constitute a part of the agricultural policy committee of the State grange at this time. .
Those solutions and recommendations for your consideration which we offered, all of them were in our recent policy and in his statements to our organization which was approved unanimously by the group.
Now I have a statement here of the policies of the grange, I am not going to give them because he has already covered them. He did have one thing which he did not cover
Recognizing the importance of the continuation of the family-sized farm in our American way of life, we recommend the promotion of all necessary measures to insure its continuance.
The CHAIRMAN. What are those measures? What would you suggest? You know a statement like that doesn't do too much good unless you expand it by telling us what those measures are. Would credit be one of them? Mr. LAWRENCE. Yes, sir.
The CHAIRMAN. Better credit. Mr. LAWRENCE. We think that credit should be made available at as reasonable rate as possible. That should certainly be true in the case of young people trying to get started in the farming business.
The CHAIRMAN. Would you make that credit available only in the event that the local banks or local lending agencies can't help?
Mr. LAWRENCE. Yes, sir; I think the local lending agencies should be given the first chance.
The CHAIRMAN. If they can't or won't-
The CHAIRMAN. How can we get those reasonable rates? How can we force it? You tell me.
Mr. LAWRENCE. I am not in the credit business. That is out of my line. I am just a farmer.
The CHAIRMAN. All we can do is suggest. We don't want to pass any law to force any banker in North Carolina to charge 2 or 4 or 6 percent. That is their business.
Mr. LAWRENCE. We do think credit, a careful screen of individual cases should be made before credit is extended.
The CHAIRMAN. How many acres are you planting now, cultivating?
Mr. LAWRENCE. No, sir. A part of the land is utilized for pasture, noncrop pasture, but most of my pasture is improved.
The CHAIRMAN. Of these 56 acres, how many do you have in cotton? Mr. LAWRENCE. None.
The CHAIRMAN. How many in tobacco ?
The CHAIRMAN. That is used on the farm?
The CHAIRMAN. Have you ever planted cotton?
The CHAIRMAN. Why aren't you doing it today?
The CHAIRMAN. You therefore lost your acreage. The reason I was trying to find out if you were planting diverted acres to other crops—that is a problem we will have to try to solve. Have you any other suggestion ?
Mr. LAWRENCE. I noticed in your opening statement you suggested that the main idea of your committee was to try to keep all farm people on the farm; was that it? . fo. . . ,
The CHAIRMAN. Yes. Mr. LAWRENCE. I say that you have a problem the way we increase on the farm and also you have a problem to supplement the income that the farm people demand if they stay.
The CHAIRMAN. It is a problem, but we will try to solve it if it is possible.
Mr. LAWRENCE. That is good politics but we should not try to fool folks.
The CHAIRMAN. It is not politics, it is to save America. You put the farmer on his feet and give him the same right to earn a living as labor, and the country will prosper.