feed mixers for any quantities by utilizing them in making animal feed.

Are you having difficulty in selling powder skim milk?

Mr. YORK. Skim milk powder is flowing much faster into the market place than it has.

Senator AIKEN. That is, the price of skim powder is about 25 percent higher than it was before the price of butter was reduced? Mr. YORK. Yes.

Senator AIKEN. The Commodity Credit Corporation, which a year ago last spring owned 600 million pounds of powder, now has somewhere around 20 million pounds on hand which they could sell tomorrow, we will say, if they wanted to sell it at a price.

I would like to point out that at the time that skim powder was sold for feed, soy meal was selling for $115 a ton. It was fortunate we had half a billion pounds of skim powder to sell at that time. Soy meal is now selling, I believe, around $47 a ton.

I come to the last point, to establish a support level for milk and dairy products at 100 percent of parity. The program has to be put on a national scale. Could you tell us what parity for milk is at the present time?

Mr. YORK. We recited that.

Senator AIKEN. So that we know.

Mr. YORK. You mean right here in the New York milkshed? Senator AIKEN. Parity is established on a national basis, too. Mr. YORK. That is true. Our figures show that the parity is 76 percent, I believe.

Senator AIKEN. I mean in dollars and cents—what is the parity price for a hundred pounds of milk?

Mr. YORK. I do not have that figure exactly available.

Senator AIKEN. Would you be surprised if you found it was $4.61 ? I think I can speak from memory that it is $4.61 for 4-percent milk. Mr. YORK. No; I am not surprised.

Senator AIKEN. That would mean possibly four and a quarter, or $4.30-I do not know what your butterfat differential is-512 cents, is it not?

Mr. YORK. About 52 to 6 cents, about that, in the New York milkshed.

Senator AIKEN. It is a question in my mind whether it would be to the advantage of the New York dairymen to put too strenuous a fight for $4.25 milk. I do not believe many of them could keep in business unless they had a more hopeful, long-range view than that. The parity for United States milk, which is 3.95 percent butterfat is $4.61, according to the figures just submitted to me.

Mr. YORK. I understand that, but I do not get the point of your question.

Senator AIKEN. As of October 15. You want a support price for milk at 100 percent. What I am trying to find out is, are you asking for $4.25 milk?

Mr. YORK. We want 100-percent support price on butter and cheese. Senator AIKEN. If you get 100-percent support price for all milk, that would be 100 percent for the milk products.

Mr. YORK. No.

Senator AIKEN. The price for the milk on the farm--if you got it, you would not be so particular as to whether it went to butter or cheese or was sold to the fluid market afterward, would you?

Mr. YORK. The question, though, is that the amount of milk that goes to butter and cheese is not returning 100 percent of parity. Senator AIKEN. That is true. It does not. Right now I do not know what you are getting for milk. The blend price covers what goes into butter and cheese.

Mr. YORK. That is true.

Senator AIKEN. What did you get in October?

Mr. YORK. What we get for butter and cheese today is in the vicinity of $2.87, less 14 cents.

Senator AIKEN. It is the blend price, I would assume, that interests the farmer which is the price he gets for all milk. What was the October price for milk?

Mr. YORK. The October blend was $4.15, I think.

Senator AIKEN. With no premiums paid?

Mr. YORK. That were premiums paid, in certain sections of the milkshed. Even some people engaged in the handling of milk for manufacturing purposes paid premiums.

Senator AIKEN. What I am trying to point out is that if the New York milk producers' objective is 100 percent of parity on a national basis, he has his sights pretty low. I think they are very low. I would not be surprised if there were a good many dairymen in New York that could not continue in the years ahead to exist at that level. Mr. YORK. That, of course, is true, but that is not the objective of our program.

Senator AIKEN. That is what I have to point out once in a while, when I hear people in our dairy sheds say that they wished they had 90 percent supports. What they are saying is that they wish they had $4 milk.

Senator HOLLAND. I want to ask one more question. I notice the primary statement made by Mr. Benham, your predecessor, speaking as president of the Dairymen's League Cooperative Association, relative to fluid milk was this, and I quote:

Machinery is presently available to the United States Department of Agriculture to bring our prices to dairy farmers for fluid milk without in any way getting into the support question. The machinery we are referring to is the operation of the marketing orders under the Agricultural Marketing Agreement Act of 1937.

Do you agree with that statement?

Mr. YORK. There are some limitations there are some areas within, for example, the present Federal New York order that could be done which would result in improvement in the fluid prices in the New York order. However, that does not mean that the present New York order of class 1 or fluid price is unduly low. Last year, for example, as I recollect, the New York class 1 price was higher than the class 1 prices in both Boston and Philadelphia markets after adjustment was made for the location and butterfat.

Senator HOLLAND. My understanding of this statement which I have quoted is to the effect that no new legislation is required in that particular field, that the machinery is presently available, that the

question is one of readjustment of the New York milkshed marketing agreement as to fluid milk prices, is that your understanding? Mr. YORK. As I said with you, that is true. There are some areas within the New York order, without changing the Marketing Agreement Act, that could result in improving the New York class 1 price. However, I would like to qualify that in saying that the New York class 1 price has not been unduly low and the question lies, in our judgment, largely in the value of milk being used for manufacturing purposes under the New York order.

Senator HOLLAND. Then there seems to be, as I would interpret your statement and that of Mr. Benham, a rather great difference between his point of view, speaking for the Dairymen's League Cooperative Association, which he says represents 24,000 dairy farmers in the States of New York, New Jersey, Pennsylvania, Vermont, Massachusetts, and Connecticut, and your position for your organization, which you say has a membership of 10,000 dairy farmers in New York, Pennsylvania, and Vermont. Why the difference in the approach? Mr. YORK. Well, Senator Holland, we are strictly a bargaining type of cooperative. We do not own processing plants or country receiving plants. Our ambition is to use every method we can to improve the level of prices of farmers selling milk in the market place. I am not trying to say that is not necessarily the ambition of the other organization that you were referring to, but we have found that one of the problems within the New York order is the level of the manufactured milk price, being low as it is. For example, the New York class 3 price, manufactured price, has been this fall as much as 30 cents below the manufactured price in the adjoining Boston market. Because this manufactured price is so low under the New York order, it has had the tendency of sucking into this market, into the New York market, additional surpluses. We have had plants that have never been in the New York pool that are engaged strictly in manufacturing milk, but because of the low class 3 price, the pooling provisions, these plants have come into the New York pool, so handlers could purchase their supplies cheaper.

We think the class 3 price is too low. There has been a difference of opinion on this between our organization and the Dairymen's League at hearings in the past, a very drastic difference. More recently, I would say that the Case committee recommendations, of which Dr. Everett Case of Colgate University was chairman, came out with seven specific recommendations for improving the New York order. The seventh one, of course, was for a separate Federal order for northern New Jersey.

One of those recommendations of the Case committee was to increase the class 3 price. We think the class 3 price is important. We think it is too low.

Senator HOLLAND. You understand it is quite confusing to Members of Congress, many of whom are from other States, to find two apparently representative organizations in this same area taking different positions on this question. It does not help us to decide upon a unified program, to find that rather real controversy between your two organizations.

Mr. YORK. I certainly appreciate that very much. I might say that the place that we have left for bargaining prices for milk to

producers today is in the hearing room. And at these meetings like you have here today.

It is too bad there is a difference of opinion on these matters, but we think that the New York class 3 price certainly should not be lower than, for example, the prices paid to producers at the midwestern condensery prices. They are below. They have been below. In 1948 they were above. We think that is a very important problem within the present New York Federal order that should be remedied. The CHAIRMAN. Thank you, Mr. York.

Mr. YORK. Thank you.

The CHAIRMAN. We will next hear from Dr. Shaul.

STATEMENT OF KENNETH A. SHAUL, PRESIDENT, SCHOHARIE COUNTY COOPERATIVE DAIRIES, INC., COBLESKILL, N. Y., AND PRESIDENT, MUTUAL FEDERATION OF INDEPENDENT COOPERATIVES, INC.

Mr. SHAUL. Mr. Chairman and gentlemen of the committee, my name is Kenneth A. Shaul, of Cobleskill, N. Y. I am now and have been a dairy farmer in the New York milkshed for more than 40 years.

The CHAIRMAN. You have heard a good deal of the testimony up to now on this dairy question. I wonder if you have anything new to add. Would you mind filing your statement and giving us the highlights, giving us from it anything that may be in addition to that which has already been stated?

Mr. SHAUL. With your permission, I would rather read it. I think it is somewhat different.

The CHAIRMAN. Proceed.

Mr. SHAUL. At the present time I am president of the Schoharie County Cooperative Dairies, Inc., of Cobleskill, N. Y., and president of the Mutual Federation of Independent Cooperatives, Inc., of Syracuse, N. Y.

The issues before this hearing have to do with the level and mechanics of price supports and production controls for the so-called basic and perishable commodities, including milk and milk products. Price depressing surpluses of cotton, tobacco, wheat, feed grains, and milk have accumulated in this country because of the

(a) Pressure for increased production during World War II and the Korean War.

(b) Improved methods of production applied by farmers.

(c) The price support and related programs of our National Gov

ernment.

(d) Failure of production control methods applied to date to really reduce production to market demands.

(e) For some commodities, lower prices to producers because of the increased supply has not resulted in lower prices to consumers and increased demand.

(f) Lower support levels and lower prices for milk in the New York milkshed have contributed to an increased supply rather than reduced supply of milk.

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(g) The loss, risk, and uncertainty facing farmers who consider moving into nonfarm employment.

Solution of the problems facing all our farmers are of tremendous importance to dairymen in the New York milkshed.

For example, it is my belief that the present flexible price support and production control programs will take a long time, if successful at all, to reduce surplus commodity supplies to a reasonable level with demand. Likewise, a return to a high rigid support level with the kind of production controls we have had would not reduce surplus commodity supplies to a reasonable level with demand. Either program would be most disastrous to our welfare as dairymen in this section.

A free market for cotton, wheat and feed grains with its lower prices would soon result in rapid increases of supplies and lower prices for livestock and livestock products, including milk.

At this time our analysis of the proposed land-rental plan indicates that this program:

(a) Will distribute Federal tax money to producers of the basic crops involved in direct ratio to the production on each farm.

(b) Will not reduce production of the basic commodities and probably not of nonbasic commodities.

It is not and cannot be a production control program. It could be a threat to the dairyman if crop production on the rented land moves into milk and if the program proves difficult to administer. Dairymen of the northeast would receive very little land-rental money as they produce few acres of basic crops.

Because of our increase in population and the help of the Federal Government, the dairy industry is cutting down on its surplus supplies of recent years.

We could make further progress in solving our supply and price problems if national agricultural policy is improved so that dairy farmers receive:

(a) Adequate protection against support levels on wheat and feed grains at rates higher than on milk and milk products.

(b) Adequate protection against extensive transfer of land, labor and capital on midwestern and southern farms from the production of cotton, wheat, feed grains and livestock to milk production.

(c) Increased authority to control producer and milk plant participation in federally regulated milk markets.

(d) Increased appropriations to the Dairy Branch of the Agricultural Marketing Service so that more adequately and timely aid can be given to our Federal milk market order program.

(e) Amendment of the provisions of the Agricultural Agreement Act of 1937 and the rules of procedure promulgated thereunder, pertaining to milk orders so that the procedure for the amendment of milk orders, of which there are now 63 in the United States and increasing monthly, may be made more readily and consequently more timely, than under the present procedure.

The CHAIRMAN. Mr. Shaul, have you any suggestions to make to change the law in relation to milk-order programs that we have?

Mr. SHAUL. Well, the one suggestion is that under milk-order procedure for amendment could be acted upon more quickly. That would seem preferable.