The first person I have on this is Mr. Henry Stafford of Bethel, Vt. I understand that you represent, aside from yourself, others in your statement.

How many are there in your group?

Mr. STAFFORD. There will be 8.

The CHAIRMAN. Please give the names of the people who are on the list whom you represent and talk for?

STATEMENT OF HENRY STAFFORD, CHAIRMAN, DAIRY COOPERATIVE MARKETING COMMITTEE, BETHEL, VT.

Mr. STAFFORD. Mr. Chairman. My name is Henry Stafford of Bethel, Vt. I am a dairy farmer with 30 milking cows; a director of the Bethel Cooperative Creamery; and have been a supervisor of the White River Soil Conservation District for the past 12 years.

At a meeting of the Dairy Cooperatives of New England, held early in September, a committee was named to prepare testimony for presentation before your committee.

As chairman of that committee, I would like to present eight farmers who will cover certain phases of the dairy industry here in New England. These men are operating farmers and are well qualified from experience to know the problems of producing and marketing of milk. They represent cooperatives with producer members of 9,000-threefourths of all those shipping to the Boston milkshed. Their subjects are interrelated, so that many questions you have in mind early in the meeting may be answered in later testimony.

1. Earl N. Gray, Morrisville, Vt., a dairyman and president of United Farmers of New England, Inc.-Federal Milk Order No. 4. 2. J. Leo Edson, Plainfield, Vt., a dairyman and president of New England Milk Producers Association, Inc.-milk promotion program. 3. Park Newton, Georgia, Vt., a dairyman, a member of the Vermont Dairy Industry Commission, a director of the Cooperative Credit and an agricultural stabilization program committeeman-Federal milk programs.

4. Mr. L. E. Griggs, Morrisville, Vt., a dairyman and president of Northern Farms, Inc.-Honest labeling of foods which may be substitutes for dairy products.

5. Harold Smith, Cuttingsville, Vt., a dairyman and president of Bellows Falls Cooperative-Dairy research.

6. Marvin Clark, Williston, Vt., a dairyman and president of Richmond Cooperative Creamery-Disease control program.

7. Donald L. Smith, orchardist, and the executive secretary of the Vermont Cooperative Council-The cooperatives' role in agriculture. 8. Harry Varney, Jr., Shelburne, Vt., dairyman-Price supports; Government controls and general Federal agricultural policies.

The CHAIRMAN. I misunderstood the clerk of the committee. I thought that you represented all of them, that you would do the talking for all of them. Do I understand that each one is to talk on the subjects that you have just mentioned?

Mr. STAFFORD. That is right.

The CHAIRMAN. I believe that this committee is fairly well acquainted with what the problem is. What we are seeking is a solution of it. That is what we are trying to do. That is what we are looking for.

Mr. STAFFORD. That is right.

The CHAIRMAN. If all of these witnesses testify, I hope that they do confine their testimony to that which we can do in order to alleviate the conditions that they say exist, and to suggest ways and means of doing that. That is what I am hopeful will be done. Do you understand?

Mr. STAFFORD. Yes.

The CHAIRMAN. The statement that one represented all I misunderstood. That is what I understood the clerk to say with whom you spoke a while ago. It turns out that all of the witnesses want to be heard on these various subjects.

I can point out that a fw of the subjects probably have to do with the conditions and the problems here.

Mr. STAFFORD. That is right.

The CHAIRMAN. Please, in as few words as possible, state what the problem is, if it is anything peculiar to the dairy industry here, and then give the solution to it.

Mr. STAFFORD. I believe you will find in the testimony that they will hit the highlights.

The CHAIRMAN. Thank you.

Give your name in full for the record, please, and your occupation. STATEMENT OF EARL N. GRAY, PRESIDENT, UNITED FARMERS OF NEW ENGLAND, INC., MORRISVILLE, VT.

Mr. GRAY. Mr. Chairman, members of the committee, my name is Earl N. Gray. I am a dairy farmer living in Morrisville, Vt. This morning I delivered 1147 pounds of grade A milk to the creamery. I am also president of United Farmers of New England, Inc., an operating cooperative with approximately 2,100 members located in Maine, New Hampshire, and Vermont, who distribute their products in the Greater Boston, Mass., market.

Vermont is an important dairy State. According to the latest figures, we have 457,000 dairy cattle as compared to only 383,000 people. Seventy percent of the milk sold to the 2,200,000 people in Greater Boston comes from Vermont. We are convinced that Federal Milk Order No. 4 is an absolute essential if we are to maintain sound dairy markets here in New England. This order has operated successfully for the past 20 years and has proven to be fair to both consumer and producer.

Back in 1933 before this order was established the dairymen here in New England were faced with ruin. During the period February through May of 1933, the farmers in this area averaged to receive only $1.16, with one company paying as low as 70 cents per hundredweight. I am well acquainted with the conditions this created, both on my own farm and among my neighbors. It is a catastrophe that we hope to avoid in the future. There are a little over 12,000 dairy farmers producing milk for the Boston market. If they are to supply the changing demands of their customers 365 days a year and allow for necessary changes in production from season to season, reserve supplies of milk must be maintained. Our Federal order simply guarantees that the milk sold for fluid use and the reserve supplies are divided fairly among us. Our distributors pay for milk according to the purpose for which they use it. We farmers receive a uni

form price whether our milk is actually shipped in fluid form or manufactured as part of the reserve supply.

It is impractical and practically impossible to operate any fluid milk market without adequate reserve supplies. Month-to-month and day-to-day variations in New England milk supply and demand make necessary this backlog. The great majority of milk supply not sold in fluid form covering this reserve is subject to Federal Order No. 4 in the Greater Boston Market. The Boston milkshed, in effect, carries the principal burden of reserve supply for the entire New England area.

There are 5 Federal orders in the 6-State New England area, of which the order in Greater Boston is the largest and accounts for better than 75 percent of the milk under Federal order. The Boston order furthermore generally establishes the basic pattern of milk prices throughout the New England area. The other Federal orders

in New England are Worcester, Springfield, Fall River, and Merrimac Valley, all in Massachusetts.

There are two important reasons for the maintenance of a reserve supply in New England. In our principal producing area, the Greater Boston milkshed, milk deliveries during June, our peak production season, will average about 160 percent of deliveries during November, the low point of the year. A large part of this difference is due to the excellent pastures available in our area and the notoriously rugged New England winters.

There is also a market variation in the day-to-day demand for milk. In our own organization, the normal pattern of sales will range from a high of 17 percent of the weekly total on Friday to a low of only 8 percent on Sunday. This variation is caused by a number of important factors beyond our control. The modern supermarket, an important factor in fluid-milk sales, makes over 80 percent of its sales during the 3 days, Thursday, Friday, and Saturday, with the peak on Friday. These stores are closed on Sunday. Public schools purchase milk only 5 days each week. Our restaurants in the downtown area do not operate on Sunday and those located in the business section and from the rise in population or from the school-lunch and school-milk programs.

The farmers of New England recognize that new customers gained by our advertising and sales promotional programs must be kept through the maintenance of a top-quality product. In essence, any differential in fluid-milk prices in our New England Federal order markets represents the necessary incentive to encourage our dairy farmers to take the needed pains to produce the high quality fluid milk we must have to maintain this increased sales volume.

I have with me copies of a more complete statement covering the position of our New England dairy cooperatives with respect to Federal milk-marketing orders. I will be happy to present them to the committee for future study, rather than taking up any more of your time on this busy day.

The CHAIRMAN. If I am to understand your statement, you do not want us to do anything that you are satisfied with the law as it existsam I right?

Mr. GRAY. It is much better than we ever had.

The CHAIRMAN. No complaint, as I understand it?

Mr. GRAY. Some of us will find fault with our wives, but by and large we are satisfied.

The CHAIRMAN. Are these orders you mentioned virtually the same in 5 or 6 areas?

Mr. GRAY. Approximately; yes, sir.

The CHAIRMAN. Who in this area is opposed to those is it those who distribute?

Mr. GRAY. I expect the Massachusetts farmers, but I would not know.

The CHAIRMAN. You would not know?

Mr. GRAY. I would not know; no.

Senator HOLLAND. I would like to ask some questions. It has been stated to us by some dairy farmers coming from States which do not have readily accessible to them large milksheds that one of the things they want Congress to do is to require the amendment of the existing Federal marketing agreements and orders, so as to give ready access to all markets to milk produced anywhere in our country that is of good sanitary quality. Do I correctly understand your testimony to be that you do not want to have the Federal marketing agreement legislation amended in that regard?

Mr. GRAY. You are right. That is right.

Senator HOLLAND. You feel that the Federal marketing agreements and orders which allow for the supplying of milksheds in great milk consuming areas by the producing dairymen who are nearby and who can enter into a comprehensive agreement with the Government are useful and should remain as is?

Mr. GRAY. That is right.

Senator HOLLAND. You mentioned the school-lunch program. Do you approve that program or disapprove?

Mr. GRAY. We approve it.

Senator HOLLAND. Have you sensed any disturbance of your normal distribution channels in your area that has come from the schoollunch program?

Mr. GRAY. It is hard to answer that question yes or no. We have an educational program. We have increased fluid sales all of the time. That has, of course, a bearing.

Senator HOLLAND. You think the fact that you have increased the fluid-milk sales all of the time indicates that either there is no disturbance of your distribution system that has been occasioned by the school-lunch program or that if there has been any disturbance it has been exceeded by the increase in the business in other fields? Mr. GRAY. That is right.

Senator HOLLAND. Thank you.

The CHAIRMAN. Senator Aiken, any questions?

Senator AIKEN. No questions.

The CHAIRMAN. I note that you have another paper. Do you desire that to be incorporated in the record?

Mr. GRAY. Yes. This is much more complete.

The CHAIRMAN. That will be done.

(The prepared statement of Mr. Gray is as follows:)

Dairy farming in New England is largely devoted to the production of fluid milk for sale in its original form. A brief study of the area on a State by State basis does much to clarify the picture.

In the State of Maine, dairying is not the major agricultural activity. Seventy percent of the milk production is utilized within the various cities and towns of the State; the other 30 percent comes almost entirely into the Greater Boston market.

New Hampshire, after utilizing the supply needed within the State, exports about 45 percent of its milk-production mostly to Greater Boston and Massachusetts secondary markets. New Hampshire milk shipped to Greater Boston represents about 5 percent of the market total. This comes from plants in the Connecticut River Valley. Substantial portions of this supply are actually produced in Vermant, which is just across the river from these plants.

Massachusetts is a deficit area from the standpoint of milk supply.. While small quantities of Massachusetts milk do come into the Greater Boston market, most is utilized in the so-called secondary marketing areas; notably-Worcester, Springfield, Lowell, and Lawrence, where Vermont milk also supplements the local supply. The balance is used in the various other cities and towns of the Commonwealth.

Both Rhode Island and Connecticut are deficit areas making up their shortage largely from Vermont and New York State.

The real backlog of milk supply in New England is in the State of Vermont. This State has 457,000 dairy cattle versus 383,000 people according to the latest counts available. Vermont milk accounts for 70 percent of the Greater Boston milk supply as well as supplementing supplies in local areas as indicated above. It is impractical and practically impossible to operate any fluid milk market without adequate reserve supplies. Month-to-month and day-to-day variations in New England milk supply and demand make necessary this backlog. The great majority of milk supply not sold in fluid form covering this reserve is subject to Federal Order No. 4 in the Greater Boston market. The Boston milkshed, in effect, carried the principal burden of reserve supply for the entire New England area.

There are 5 Federal orders in the 6-State New England area, of which the order in Greater Boston is the largest and accounts for better than 75 percent of the milk under Federal order. The Boston order furthermore generally establishes the basic pattern of milk prices throughout the New England area. The other Federal orders in New England are Worcester, Springfield, Fall River, and Merrimac Valley, all in Massachusetts.

There are two important reasons for the maintenance of a reserve supply in New England. In our principal producing area, the Greater Boston milkshed, milk deliveries during June, our peak production season, will average about 160 percent of deliveries during November, the low point of the year. A large part of this difference is due to the excellent pastures available in our area and the notoriously rugged New England winters. In our

There is also a market variation in the day-to-day demand for milk. own organization, the normal pattern of sales will range from a high of 17 percent of the weekly total on Friday to a low of only 8 percent on Sunday. This variation is caused by a number of important factors beyond our control. The modern supermarket, an important factor in fluid milk sales, makes over 80 percent of its sales during the 3 days, Thursday, Friday, and Saturday, with the peak on Friday. These stores are closed on Sunday. Public schools purchase milk only 5 days each week. Our restaurants in the downtown area do not operate on Sunday and those located in the business and financial districts are virtually closed on Saturday as well.

Our most important New England market of Greater Boston is located on the Atlantic Ocean which is a strong influence in our weather pattern. A prolonged heat wave led to a record bulge in fluid milk sales in July and August; on the other hand, a sudden east wind can drop our temperature as much as 30° within a few hours. The impact on sales is tremendous. Again in our own company, we have experienced sales rising and falling as much as 20 percent from a normal pattern due to these sudden changes in our local weather condition.

During the calendar year 1954, the 6 New England States produced 3.7 percent of the United States total. As of July 1, 1954, our population in this same area represented 6.1 percent of the total United States figure. We are, there fore a deficit area as far as total dairy product consumption is concerned. The New England position wtih respect to the United States total milk production as well as its status in the substantial increase in milk production during the years 1952 and 1954 are best illustrated by the following table. This table