There is no question but that the farmer is in a price squeeze; just about everything he buys is produced by organized labor whose wages have been increased about every 6 months for the past 6 years. The minimum wage now by law is $1 per hour. Steel, which goes into farm machinery, has been going up steadily over a period of years. On our own farm our school taxes in 1955 were six times as much as they were in 1948. No one objects to bigger and better schools but they cost money and a lot of it. Roofing, cement, nails, wire, and lumber which farmers have to buy a lot of are all up 10 to 20 percent. A tractor which cost $2,000 in 1948 now sells for $2,500. În 1948 it took 40,000 pounds of milk to pay for it. Today at 1955 prices it takes over 70,000 pounds and this is only one illustration. An example like this applied to school taxes would be: in 1943 it took 2,000 pounds of milk to pay my school taxes, but in 1955 it took over 18,000 pounds or 9 times as much.

The CHAIRMAN. That is something that we cannot control, unfortunately. That is really a State matter.

Mr. KELSEY. That is right; but I am just reading this for the example.

I have a record of the amount of milk I have produced every day since March 1, 1920; also the butterfat test and the prices received. Let me call to your attention the prices actually received by me since 1948. They are not Market Administrator figures nor are they adjusted to any butterfat differential.

With milk prices going steadily down and costs going rapidly up how long can the farmers take it? There should be a remedy. For one thing our class 3 milk is priced too low. The wholesale prices of cheese, butter, and dried milk would seem to warrant a higher class III price. A Federal order covering all of the New York City marketing area would also be a help. Elimination of premiums paid to nearby producers would be another help. This applied to the blend price would probably not be very much but their milk is no better nor any easier to get to market than those farther from the market.

Price supports in my estimation only create bigger surpluses and I do not see how they can be carried out without rigid controls and that I am sure would not be satisfactory to the industry. If I were to have Government help I would rather have an out-and-out subsidy—something like we had in 1944. I believe a better plan would be a base price for 3 or 4 fall months and a surplus price paid for all milk over the base regardless of the month in which it was produced. There is a plentiful supply of labor, yet no one asks them to work for a surplus price. If they did, labor would just strike until they got a raise. Farmers cannot go on strike with a perishable product but we take less and less because we have a surplus. Is there a good reason why dairymen cannot have the cost of production plus a fair profit?

The CHAIRMAN. Thank you, sir.

Senator HOLLAND. Let me see if I understand this witness. In general you think that a revision of the Federal marketing agreement structure is the most needed thing, is that it?

Mr. KELSEY. Well, perhaps not a complete revision, but I believe if we were set up to have a base price in this milkshed for, say, 3 or 4 fall months and be paid a class 1 price for the base, the farmers automatically would cut some of the production when they realized they were taking the low price for over the base.

Senator HOLLAND. Then you agree with the several witnesses today who have said that it is not new legislation that is required but a revision of the marketing agreement structure?

Mr. KELSEY. Well, not completely new legislation, but some changes.

Senator HOLLAND. You are not for price supports?

Mr. KELSEY. No, I am not for price supports.

The CHAIRMAN. Thank you.

Mr. KELSEY. Thank you.

(Mr. Kelsey's prepared statement is as follows:)

Tri-State Milk Producers Cooperative, Inc., is an independent cooperative, incorporated in the States of New York, Pennsylvania, and Vermont.

We recommend that there should be some method adopted whereby the dairy farmers in the States of New York, Pennsylvania, and Vermont and other milkproducing States should be given cost of production plus a reasonable profit for their milk, the most natural food known to man. There are cost figures available from the agricultural colleges which could be used as a base for the cost of production.

Realizing that if the farmers received a lucrative price it would be an incentive for overproduction, therefore we recommend some method of regulating the volume of milk produced be it base or surplus or quotas or some other method which would be more acceptable to the majority of the producers. We believe if this were the case, there would be no need for subsidies or price supports or burdens on the Secretary of Agriculture for purchases of surplus commodities brought about by overproduction. This in itself could be a major factor in reducing taxes which are so burdensome to the entire population.

We further wish to state that in the present financial squeeze, we find our agricultural population in a minority position as far as purchasing power compared with other segments of the Nation and we realize that this condition cannot long exist without some drastic repercussion that would effect the entire economy of our country.

The amount of money required today to purchase a farm and equipment is prohibitive to a new beginner and is also having a serious effect on our older farm operator. Young men who should be our farmers of tomorrow are leaving the farms for industry. It is very evident that the returns on investment and hours of labor do not meet the approval of our younger people. In our experience in calling on the individual, we find that men who have operated farms nearly all of their lives are seriously contemplating retiring from farm operation for their sons have no interest to carry on under the same condition that their fathers have.

Is it any wonder that the young man who should be our farmer of tomorrow seeks employment in industry where he can work an 8-hour day, a 40-hour week, vacation with pay and much more leisure time for himself.

The increase in taxes that farmers have to pay necessitates some relief immediately and that can only come with increased prices. Otherwise, we may find that instead of carrying surplus we may be in the minus column for enough fluid milk to supply our market.

As far as we can see into the future there will be an increase in taxation to maintain our present highways and schools and build new ones to take care of the added population which is bound to occur. This is another reason for strongly urging the Senate of the United States to pass legislation to give us cost of production plus a fair profit.

The cost of producing milk in the northeast is somewhat greater than in some other parts of the country due to our long cold winters which demand a longer barn feeding season and a higher cost of production. The consumer is getting the purest bottle of milk today produced any place in the world and in the very near future another health safeguard is going to be put into

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practice and we mean the new brucellosis program. The consumer under today's wage scale works less time to pay for a quart of milk than ever before. Labor is advocating a 30-hour week for a 40-hour pay. Labor now has a minimum wage scale of $1 an hour where the farmer is taking less pay per hour along with 14 to 16 hours a day, 7 days a week. Again, we wish to reiterate the importance of cost of production plus a fair profit is not unfair or unjust for the man who has a farm of average investment running into the thousands of dollars.

One man's milk is as good as another and no premium should be paid to any producer regardless of location with modern transportation and facilities as they are today. We recognize that in the past there was a necessity for a premium for the close-by producers to keep up a uniform production due wholly or in part to poor transportation and facilities in getting milk to the marketing area in some months of the year.

Huge surplus piled up in Government warehouses have a tendency to depress prices, also to replace sales of current production, such as the school lunch program. Further advertising of larger consumption of milk and milk products, including our Armed Forces at home and overseas would stimulate the market.

In conclusion we stress the importance of—

1. Cost of production plus a profit.

2. Elimination of butter and oleo being displayed in the same showcase. 3. No subsidies or price support as this tends to over production.

4. Higher prices for class III.

Let us be ever mindful of Thomas Jefferson's statement, "That Government that governs least governs best."

The CHAIRMAN. Our next witness is Mr. Zelnick. Give your full name for the record and your occupation.

STATEMENT OF JOSEPH ZELNICK, FREEHOLD-LAKEWOOD-FARMINGDALE COOPERATIVE OF FARMINGDALE, FREEHOLD, N. J.

Mr. ZELNICK. My name is Joseph Zelnick. I am a commercial poultry farmer of Freehold, N. J. I have been sent here, gentlemen, by the Freehold-Lakewood-Farmingdale Cooperative of Farmingdale, N. J., a cooperative comprised of about 400 egg farmers. Unfortunately, being unfamiliar with the procedures of senatorial hearings, I did not come with a previously prepared text, although I do have my main points written down, so I will beg your indulgence while I make a few remarks.

The CHAIRMAN. Proceed, sir.

Mr. ZELNICK. I will try not to be repetitious. I wish that I could come here and say that the picture in the poultry industry was a bright one, but it is not. Certainly not in the area from which I come. The past 2 years have been very critical for the poultry farmer, the egg farmer mainly, that is, in our area.

Our egg-feed ratio, that is, the income from eggs, has not been sufficient to pay for feed, let alone for other costs, such as maintaining our buildings, feeding our families, and keeping up our farms in general.

Our debts have been mounting. Our buildings have been deteriorating. And, in fact, the problem has been such that it has been disrupted.

The poultry industry in our area is essentially a family unit. In most cases it is operated by the farmer, his wife, and in some cases his children and an occasional hired help.

The situation is such that for the past period most of us have had to look for part-time, and in some cases full-time work off the farm

in order to be able to survive, in order to be able to put food on the table.

Just as an example, I have four neighbors, on either side of me, one right next to me, and the other is about a quarter or a half mile away. In each case one member of the family has to work outside to maintain the farm or else they would not be able to stay on the farm. The same is true in my own case.

As was mentioned before and I will not go into detail—there are the foreclosures, and the failures in the past 2 years in our area have been numerous.

I would like to make one brief remark on the family farm setup as I see it as an individual. I feel that the family farm setup as such is one of the bases, one of the solid bases, of our whole economy. I know that in the poultry industry we increased production during the war to keep up with demand. We expanded. We also kept up with all sorts of technological advancements. We have maintained progress on an equal basis almost, you might say, with other types of industry. I think this is a credit to us, because we have done this without necessarily increasing the size of the operation. We have done this. We have maintained our individual family enterprise. But the situation now is becoming such that we cannot continue much longer.

Yes, there have been fair prices for the past few months. But in the period of 1954, from the beginning of that year, it has been so disastrous that there will have to be for a long time high prices for us to make up the losses we incurred.

I am a relatively small producer, possibly between 3,500 and 4,000 birds. I have within the last year went into a debt of over $6,000. That was ending of March of last year. The debt kept mounting after March of this year and I am not sure what it is now. I am afraid to have the accountant come around and check the books.

The important thing, gentlemen, is that we need help. I am not here as an expert, but I can offer a few suggestions.

I would like to say that I see the help that the poultry farmer needs to maintain his operation in two classifications. One is immediate help. And the other is the long-range point of view.

I speak mainly here for the egg farmer, the one who derives his income solely from eggs. There are thousands of them in our area. Just as an aside, I would like to say just to show you the picture briefly as it exists in our area, we have a cooperative store that is connected with the feed co-op part of it, that sells equipment to the farmers.

During the late forties and early fifties that store gradually rose until it did a volume of almost $200,000 yearly in business. In the fiscal period ending as of September 1955, the volume of our co-op store was $60,000. That was not because we dropped our inventory. That was not because we lost our membership. Our membership is still the same as it was before, but it was because the poultry farmers did not have the money to buy the equipment and to keep up the buildings. In fact, the newspaper in our area, the press reported that in our whole area the volume of retail business has dropped about $50 million from the year before, which is a tremen

dous drop for a small area such as we represent. And that is attributable mainly to the plight of the poultry farmers.

Our picture therefore is not a bright one, but a desperate one. We need immediate help. That can be done, I feel, in a few ways. First of all, as was said before, the release of grains to us. This would give us cheaper feed and a more favorable egg-feed ratio. Also, I think that the marketing agencies of the Government could find outlets for our so-called surpluses.

By the way, we are told we have a surplus, and at the same time I read in magazines and newspapers that in a few years from now there will be additional people at the table; that the present expansion of the agricultural industry will not be able to keep up with that increased demand.

I would like to say I think it would be of benefit to see our farmers maintain their farms so that they can keep up with the demand that will be there in the future. We cannot do it now.

A school-lunch program would be a very good outlet for us and it would certainly help affect our price. Other consumer outlets could be found.

I think one thing that would help us immediately would be a mortgage moratorium, because we are faced with a serious crisis now. We have to replace our flocks in order to be able to stay on our farms. We do not have the money to buy new chicks, to feed and raise them. By the same token, if we keep the old birds, we are told, and we know, that old birds are not profitable. So we are caught in between the devil and the deep blue sea. We have to find a way at least to replace enough birds to take care of the normal mortality that takes place on the farms.

And a mortgage moratorium would relieve us of certain payments, at least we would be able to siphon off some money towards that direction.

As to the long-range help, well, I think it was stated before by one of the representatives from our area that we would like equality under the law.

We feel in the past few years the poultry and egg industry has expanded to where it is one of the important segments of the agricultural industry as a whole. We are not opposing the dairy or grain or any other farmer. They are entitled to make a living and to make a living off their farms. We want the same rights that any other farmer has. We want the right to make a living from our farms. We need stability in our industry. Our prices are governed by speculative engagements on the market. There are many times when the prices drop 5 cents or more from 1 market day to the next. In my case a drop of 5 cents, a small farmer as I am, represents a loss of about $60 on 1 shipment. It is really more than I can take, but when that price starts to go back up it takes a few weeks to rise again those 4 or 5 cents. That is very important to us.

We feel at least many of the members of my organization, the organization which I represent—that the Brannan plan is a very satisfactory plan. True, Senator, it would take money to administer it. It would take money to put it into operation, but it takes money now to put other plans into operation. It takes a lot of money, for instance, to help the shipping industry of our country, which is not