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It is a matter of record that I have been a consistent advocate of a uniform class 1 price the year round, with proper adjustment up or down as economic conditions warrant. I spearheaded a drive for better milk in 1947 and 1948. And that was based on uniform class 1 prices.
Class 1 price for milk creates a uniform price of production pattern and this pattern of production in turn determines the price paid to milk producers. This was demonstrated in the cycle of years of 1943 to 1948 when nearly uniform prices of class 1 milk prevailed and became the highest ever received by dairymen.
Consumption of milk also remained at the highest level ever recorded during the same period.
The weakness in our present milk formula is the utter disregard for the production patterns so necessary to channel milk into quality surplus products that will make well, store well, and bring the highest consumer prices.
The present milk formula takes money out of the flush months' receipts and adds it to the fall receipts. This inducement created a large unseasonable flow and winter surplus that about ruined the dairy industry. It encouraged too many milk producers with good pastures to turn to fall and winter production, thereby creating the tremendous oversupply at the wrong time of the year.
If a producer with good pasture can get as much for class 1 milk in June as he can in November, naturally he will produce the bulk of his milk on grass, but by this method the winter producer has a healthy market and receives a good price, as was demonstrated by the November 1948 blended return of $5.55 for 3.5 milk in the 200 to 210 mile zone.
The summer milk producer will also receive a good price at a lower cost of production. The cow freshening on grass is still a good producer in November and proves to be a real money maker.
In 1947 production was 104 percent over the November production in the metropolitan area.
In 1954 June production was only 58 percent of November 1954 production in the same area.
That proves that the formula has disrupted our orderly procedures as we had them previous to 1947 and 1948.
It did not take too much brain and ingenuity on the part of any dairy leader to know if we take money out and add it onto the other we will disrupt something. That is perhaps what they wanted to do, because we had something very orderly in 1947 and 1948.
On the other hand, 1948---just listen to this—when our costs of production were lower, the first 6 months the producers of blended returned $5.03 for 3.5 milk; in 1954 the first 6 months netted producers a blended return of $3.73 for 3.5 milk, or $1.30 less, even though our costs of production went up a lot.
The bulk of the surplus milk should be produced on grass. From this quality surplus products can be made that bring the highest return to the producer. At present too much of the cheese is made when cows are in the barn. This quality of cheese has a tendency to glut the market and reacts unfavorably on good grass cheese prices.
Farmer owned and operated milk cooperatives in the metropolitan · area have the finest equipped cheese-manufacturing plants in the in
dustry, their product is the finest in America. There will never be enough good New York grass Cheddar cheese to supply the market.
For many years the dairy leaders worked together diligently and brought the milk industry out of chaos to the peak of success in 1948 when the milk producers average $5.08 for 3.5 milk in the 200 to 210 mile zone. We inched along. We took what we got, prepared for something more, and by that inching along we have been able to build our own. It was secure. We can do the same thing again.
There was nothing so wrong with the Federal-State order that a hearing or two could not amend it to the satisfaction of all concerned.
Then suddenly, under the clamor for something more permanent, the unworkable formula was thrust upon the unsuspecting milk producer. On February 1, gentlemen, I was there. That was in 1948. Secretary Brannan told a tremendous crowd at Syracuse that if the class 1 price formula would not work it would be taken out. It is a matter of record.
I went personally before the Secretary and begged and pleaded that it not be put in. I delayed it. I am sure, gentlemen, because the formula was not put in August 1950, but the pressure was so great upon the Secretary that he had to approve it. Now it is a dismal failure. Let us recongize it.
In August 1950, the formula began to operate. For over 5 years it dissipated the honest labor of men, women, and children on the farms of our great metropolitan areas. For over 5 years the bulk producer lost over 1 cent per pound of all of the milk he produced. This staggering loss amounts to millions and millions of dollars. It really dealt the agriculture a staggering blow.
Senators, why does this formula continue when it is already proven to be 5 years of failure? I will tell you why.
The CHAIRMAN. May I interrupt? Mr. PISECK. I am just abut finished.
The CHAIRMAN. There are nine more witnesses to be heard and we have only a very few minutes.
Mr. PISECK. I will do it within 1 minute. The CHAIRMAN. All right. Keep to your text. Mr. PISECK. The metropolitan New York milk market needs no self-help plan, no basic surplus, no production-control schemes so flagrantly presented today, and which would not only penalize the producer and confuse the administration.
The five markets within easy reach of all producers can absorb every drop of milk produced in the metropolitan market.
What is needed most is a workable Federal-State milk order that will revamp our milk production to a pattern very similar to 1947 and 1948 at the earliest possible moment. Not a pound of butter or cheese made in this surplus metropolitan area needs be sold to the Federal Government. We have the markets. We have the population, enough to readily consume every pound of milk or milk products produced in the area. It is high time that we used our brains and ingenuity to bring this about.
I thank you.
Senator HOLLAND. I want to ask one question. I want to see if I understand the situation. This is what you are saying, that when you and others appeared before Secretary Brannan that he took the advice
of the economists rather than that of the practical dairy leaders. Is that it?
Mr. PISECK. That is right.
Mr. PISECK. We want that leadership back into the hands of the producers, so that we can go back where we were.
Senator HOLLAND. You want the leadership returned to you and other dairy leaders, and the economists put in the back room; is that it?
Mr. PISECK. That is right.
The CHAIRMAN. We will next hear from Mr. Barton. Give us your name in full, please, for the record.
STATEMENT OF WILLIAM BARTON, FREEHOLD, N. J. Mr. BARTON. Mr. Chairman and gentlemen, my name is William Barton, a potato grower.
The CHAIRMAN. We desire to hear all of the witnesses, may I state, but because of weather conditions our pilot has just sent word that unless we can leave from here around 3:30 we may not be able to land in Washington. Of course, I would like to stay in Utica, but I need to go back to Washington tonight, if possible. So please do not repeat. Just give us new matter.
Mr. BARTON. First, I want to thank the committee for the opportunity to speak before this committee.
I am a potato grower in Monmouth County, N. J.
Potato growers at the present time are not making a substantial living. We have not made ends meet in the past 3 years, 1955 being one of the worst seasons we have experienced.
We sold potatoes for $1 and less per hundred pounds graded and packed f. o. b. at the farm. Yet potatoes within 15 miles from my farm were costing the consumer 5 and 6 cents per pound. I would like to know why there is such a markup in price. Gentlemen, it does not sound reasonable, when the farmer himself is selling them at a loss. Why should we have to do so!
Therefore, in my opinion, I would like to ask the committee to set up a program whereby we as farmers will receive a reasonable price for our product.
I feel that the potato growers of not only New Jersey, but of all of the States, need some means of Government control, basing my statement on the fact that the Government reports from Washington tell us that there is an oversupply in the country. Therefore, I would like to state my own opinion that the Government should control the production, not by acreage but by bushels or hundredweight marketed.
I feel this would eliminate the mistakes made in the previous program which was based on acreage allotments instead of bushels or hundredweight. This program should apply only to growers who have been producing potatoes for the last 3 years. I say this because I know that in the previous program people planted potatoes because there was a Government support.
I would like to add to that, gentlemen.
My friends from Long Island made the statement this morning about the mercantile exchange in New York.
I think that is dong more harm than anything else there is in the country right now. I for one, as a grower, would like to see that thrown out.
The CHAIRMAN. Thank you, sir.
I wish to place in the record at this point a telegram from your Senator, Herbert H. Lehman, who says that he cannot be here because of previous engagements in New York. He wishes me to give his best wishes to all of the witnesses scheduled to testify and to all of those assembled at the hearings in Utica, as well as the other Senators. The entire telegram will be put in the record at this point.
(The telegram of Hon. Herbert H. Lehman of the State of New York is as follows:
DEAR ALLEN: I keenly regret my inability to be in Utica today but urgent Senate committee business keeps me in New York. However, I am happy to welcome you and your committee to New York State to conduct hearing which I know will be useful in finding the difficult solution to our difficult farm problems. I would like your permission and that of your committee to file a statement of my views on this matter to be included in the record of your Utica hearings. Unless advised otherwise I shall send this to you in the Senate Office Building. I feel as much concerned over our farm problem as over any other problem we face today. The drop in farm income which is especially severe for New York State farmers represents a startling blight upon our economy. Whatever legislative formulas are devised they must be aimed at promptly raising the level of farm income and the return of the individual farmer so that they may share in our national prosperity. We dare not neglect our farmers nor let them continue to be the forgotten folk of our current economic life. I shall, as I said, submit my detailed views to you. In the meantime please convey to the other members of your committee and committee staff members my heartfelt greetings. I was pleased to be able to work closely with members of your staff in arranging for these hearings. Give my best wishes, of course, to all the witnesses scheduled to testify and to all those assembled at your hearings in Utica. Warmest personal regards to you.
The CHAIRMAN. We will next hear from Mr. Evans. Can you summarize the matter in your statement in a few words?
STATEMENT OF HAROLD J. EVANS, SECRETARY-TREASURER, NEW
YORK COOPERATIVE SEED POTATO ASSOCIATION, INC., GEORGETOWN, N. Y.
Mr. Evans. Mr. Chairman and gentlemen, my name is Harold J. Evans, and I am secretary-treasurer of the New York Cooperative Seed Potato Association, Inc.
I will be very brief. Omitting all preliminaries, I would like to say we believe, basically, one of the big troubles with the potato industry also is a bigger supply of potatoes than the market requires at the present time. This suggested program tends to regulate the supply of potatoes to market requirements to avoid waste of crops, a fair price to the consumer, and a living wage to the potato grower.
The suggested program, we think, is a plan that might reduce the amount of potatoes produced and, also, I would like to say that we would like the idea of using what we have.
The United States Department of Agriculture puts out yearly what they call acreage guides. These are broken down to the State level. The acreage guide is supposed to be the amount of potatoes in any State or area that it can produce and market profitably.
As far as potatoes are concerned, the guides are not broken down from the State levels. Growers have no idea what their share of that allotment might be.
We also have in the setup in this country an ASC organization in every State and county. The committeemen on these committees may not necessarily be potato men. Therefore, we recommend that a potato committee in each State and county be set up to work with these ASC committees. And then take the acreage guides, break them down to a county- and farm-level basis.
If the acreage is reduced by this committee to the farm we feel there would be a fair distribution.
Of course, when we are talking acreage we also have in mind if it is based entirely on the acreage we may get too many potatoes. The committee should take that into consideration.
In determining the farm allotment in that way we recommend that the 1952, 1953, and 1954 acreages be used as a base, because last year, 1955, several sections used released acreages from other crops and increased potato plantings.
The CHAIRMAN. Is that not what caused the trouble?
Mr. EVANS. One of the biggest causes of the potato market being that way
is due to the fact that California released acres from cotton and put them into potatoes, something like 38,000 acres, which flooded the markets, reduced the price, and we have not recovered from it.
The CHAIRMAN. Maine has done the same thing.
Mr. Evans. Maine has a lot of potatoes. They exceeded their allotment, but under the present program of utilizing for diversion in starch, et cetera, I do not think that there will be too many potatoes there. The figures indicate too many, but actually we do not believe there will be.
We also think that under this acreage allotment program every grower should have his allotment, his base allotment, but that he should not necessarily have to plant to the full extent if he did not want to, because in a system of rotation of crops sometimes you have 5 or 10 acres, more or less, and by reporting that to the county committee and getting released from that or putting in a request for a few more acres that somebody else releases, we would have a uniform supply, we think.
In back of this whole thing we would like to see enough potatoes supplied, but we do not want to see too many.
We would also like to see a provision for new potato growers who want to come in. This program, so far, is based more or less on a voluntary basis. We have a good many potato growers. In fact, by and large the potato industry is not in favor of rigid controls, at least that is true in this State. If, however, it seems to be necessary to have such mandatory acreage allotments and marketing quotas, we would recommend something like Senate bill 3049, with which you are familiar. We think that covers the situation very well. That does imply a whole lot of regulation and supervision and extra work, and we thought that might be accomplished in more or less a voluntary manner.
We believe that all this released acreage from other crops, and potatoes, too, should not be planted to any crop that is unsupported. Ît has caused a lot of damage to the potato industry. The released acreage, planted to other crops, would do the same thing.