Additional data submitted to the subcommittee by-Continued Department of Agriculture Continued Domestic donations of U.S. Department of Agriculture surplus foods up 64 percent in first half of fiscal year. Estimated average cost of storage for 1 month based on inventory as of December 31, 1958 (table).... Estimated normal acreage and production of specified crops on Estimated July 1, 1959, carryover by classes, with comparisons Estimated supply and distribution, by classes, United States, Frequency distribution of all farms by size of allotment, 1958 Inspections for overseas exports, by classes and coastal areas, 2225 Midmonth cash prices in cents per bushel for various classes and Quantities of surplus foods donated for domestic and foreign use, Status of 1958 feed-wheat applications as of November 30, 1958. Wheat and flour: U.S. exports and country of destination, July- December 1957 and July-December 1958 (table). Wheat and rye, cash closing prices and support prices at terminal markets, specified months and days, 1958 and 1959 (table) _- Wheat, including flour (grain equivalent): Total exports and Government exports by programs, United States, 1948-57 Wheat supply and distribution, United States, 1953-58 and 1959 53 WHEAT SITUATION IN REVIEW TUESDAY, FEBRUARY 24, 1959 HOUSE OF REPRESENTATIVES, COMMODITY SUBCOMMITTEE ON WHEAT OF THE COMMITTEE ON AGRICULTURE, Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 1310, New House Office Building, Hon. Carl Albert (chairman of the subcommittee) presiding. Present: Representatives Albert, Jones, Breeding, Belcher, Smith (Kansas), and Latta. Also present: Representatives Poage, Johnson, McGovern, Stubblefield, Quie, and Mrs. May. John J. Heimburger, counsel; Hyde Murray, assistant clerk. Mr. ALBERT (presiding). The committee will please come to order. It is going to be my purpose in conducting these wheat hearings to take a page out of our vice chairman's book and start them at 10 o'clock promptly. I say that for the benefit of both members and witnesses. This is the first of two groups of committee hearings which we have scheduled on the subject of "Wheat." I believe that this subcommittee has about as difficult and important a job as any subcommittee of any committee of the House. The subject of wheat is very important not only to the economy of wheat farmers but to all the people of the United States. Wheat production is one of our basic industries. Wheat is one of our most important sources of food. Our hearings are also important to the taxpayer. Under the operation of the law as it now exists, the piling up of surpluses that we cannot dispose of in normal channels, or, at least, have not been able to dispose of in normal channels is costly and might in the long run be injurious to our entire farm program. We all feel that we should have supplies sufficient to tide us over any emergency but we are beginning to be subject to criticism and, probably, rightly so, from those who speak for taxpayers and from those who are not directly connected with the Wheat Belt of this country. So we have a job of trying to work out a program which will be, first, fair to the wheat farmers, and, secondly, to our citizenry as a whole. With these thoughts in mind we have scheduled this hearing today. These first 3 days of hearings have been planned for the purpose of presenting to the committee a detailed picture of the wheat situation. The discussions during these 3 days will be entirely on a technical basis. The Department of Agriculture spokesmen who will appear are specialists in their various areas and will appear as technicians, rather than a spokesman for the Secretary with respect to policy. We have agreed with the Secretary's Office, in order that the experts who are appearing during these 3 days may be entirely free to discuss the technical problems involved, that the committee will not ask them to express an opinion on any matter of Department policy with respect to proposed wheat legislation. In other words, this is a factfinding hearing. We are fortunate in being able to invite to appear before the committee some of the outstanding experts in the field of wheat production and use. There will be 15 or 16 Department witnesses heard during these 3 days. The general plan of the 3 days is to start with wheat production and move on through the problems of disposition and use, including the relationship to feed grains, and then discuss world trade and the export market. It is our plan to open the hearings today with a statement from J. A. (Judge) Satterfield and to follow his statement with a statement by Dr. Louis P. Reitz. Thereafter we will continue with a discussion of wheat production under existing provisions of law including such specific matters as the effect of the conservation reserve and Great Plains program, the 15-acre exemption, the feed wheat exemption, summer fallow, and similar matters. Tomorrow the subject will be the storage and movement of wheat with respect to production areas and areas of use, the various aspects of wheat consumption in the United States, and the competitive relationship between wheat and feed grains. On Thursday we will take up matters relating primarily to export and disposal programs including the production and export programs of other major wheat-producing countries, world trade in wheat, the place of the United States in the world commercial market, sales under title I of Public Law 480, the barter program, and similar matters. It is our plan to conduct this series of hearings in the form of panel discussions led by the Department witnesses. I appreciate the assistance of various people in the Department of Agriculture, particularly J. A. (Judge) Satterfield in helping to arrange the Department's presentation. I have asked that the principal spokesman for the Department witnesses with respect to each subject make such general statement as he deems suitable but that he feel free to have at the table with him all the Department witnesses who will be helpful in that particular part of the discussion. During the presentation of the principal statement, I will appreciate it if committee members will not interrupt the spokesmen except to clarify some statement which may not be entirely clear. There will be opportunity after the close of the presentation of each subject for full discussion. With that preliminary discussion I would like to ask Judge Satterfield if he will come forward and make an opening statement and act as moderator for the witnesses which the Department has sent up here today. The Chair notes that one of our committee members, Mrs. May, is in the audience. We ask her to come forward and we should like to have any other members of the committee or Members of Congress who desire to come forward to do so. Will you take over, Mr. Satterfield, and direct the presentation this morning? STATEMENT OF J. A. SATTERFIELD, COMMODITY STABILIZATION SERVICE, ACCOMPANIED BY JAMES B. DYESS, COMMODITY STABILIZATION SERVICE, AND DR. LOUIS P. REITZ, AGRICULTURAL RESEARCH SERVICE Mr. SATTERFIELD. Mr. Chairman, on my left is Mr. James B. Dyess of the Grain Division. He is our wheat program specialist. And on my right is Dr. Louis P. Reitz who will present to you his views on the upward trend in wheat yields during recent years. I would like to open these discussions by making a statement concerning our supply situation on wheat and the problems that have led us into the situation we are faced with today. Total wheat supplies for the 1958-59 marketing year are currently estimated at 2,353 million bushels which is about 12 percent above the previous peak reached 2 years ago. This is enough wheat to supply all of our domestic requirements and exports for more than 2 years. In fact, if we did not harvest an acre of wheat this year we could still have as much as 300 million bushels more than we need from current supplies to carry us through until the 1960 crop is harvested. There are several factors contributing to this huge oversupply of wheat. Among these, of course, would be weather. But it is not our purpose to discuss the impact of either good or bad growing conditions on the production of wheat. Our purpose is to examine some of the program factors inherent under the provisions of law which have contributed to these excessive supplies of wheat. These factors may be cited as follows: 1. The requirement of law to maintain the national acreage allotment of wheat at not less than 55 million acres even though increased yields of wheat have outmoded this as a minimum allotment. 2. Expansion in the production of wheat by farmers growing 15 acres or less. By law these producers are excepted from marketing quotas. 3. Excessive production by large wheat farmers in their noncompliance with allotments. 4. Expansion of wheat production in the noncommercial wheat States. The Agricultural Adjustment Act of 1938, as amended, provides that The national acreage allotment for any crop of wheat shall be that acreage which the Secretary determines will, on the basis of the national average yield for wheat, produce an amount thereof adequate, together with the estimated carryover at the beginning of the marketing year for such crop and imports, to make available a supply for such marketing year equal to the normal year's domestic consumption and exports plus 30 percent thereof. The national acreage allotment for wheat for any year shall be not less than 55 million acres. This formula for computing the national acreage allotment for wheat has never been given a chance to work. On the surface it would appear that during the years prior to World War II this would have been a good formula for wheat. Advancements in the use of modern techniques of farming since the late thirties have now resulted in the production of wheat at a new plateau for yields. With no further advance in these achievements, our production of wheat in the immediate years ahead on 55 million acres may be expected to exceed outlets now known to be available for wheat produced in this country. The act of 1938 was passed after all fall-seeded wheat for harvest in 1938 was planted and too late to have much effect on the seeding of spring wheat for harvest in that year. Even then this act provided a minimum allotment for the 1938 crop of 62.5 million acres. The actual acreage of wheat in the year 1938 was not materially affected by the program. With an allotment of 62.5 million acres, farmers actually seeded 78,981,000 acres of wheat. In June 1938, when the national allotment of wheat for the 1939 crop was being considered, Congress amended section 333 of the act to provide as a temporary measure that the 1939 allotment should not be less than 55 million acres. Then, in July 1939, the Congress by a joint resolution approved this minimum national allotment provision for wheat as a permanent measure for any crop of wheat. It has remained in effect to this date. A national acreage allotment of 55 million acres of wheat did not seem unreasonable at the time it was being considered by the Congress. At that time the average yield of wheat under normal weather conditions was about 12.7 bushels per acre on a planted basis. In other words, 55 million acres of wheat with yields as could be anticipated in 1938 or 1939 would have produced about 700 million bushels. This together with carryover supplies prevalent at that time would have provided about a normal supply of wheat. Greatly increased yields since then are largely responsible for recent bumper crops reflecting the technological revolution in agriculture. The average yield for the 14-year period 1919 to 1932 was 12.7 bushels per planted acre. Weather conditions during this period could be considered as about normal from year to year. For the period 1941 to 1950, inclusive, these yields increased to an average of 15.8 bushels of planted acres. They advanced to an average of 17.8 bushels per acre for the period 1952 to 1958. These greatly increased yields are a measure of efficiency of which farm producers can be justly proud. But under past agricultural programs they have resulted in very burdensome surpluses, bringing great marketing, storage, and Government operational problems. Compliance with allotments is now on a harvested acreage basis. The Agricultural Act of 1954 further amended the Agricultural Adjustment Act of 1938 by providing that producers of wheat overplanting their allotments could plow down, pasture off, harvest green for hay, or otherwise destroy the excess acreage over and above the allotment. This had the effect of placing compliance with acreage allotments and marketing quotas for wheat on a harvested acreage basis. An examination of recent yields of wheat on a harvested basis indicates that we may now expect an average yield of about 22 bushels per harvested acre. It is evident under present yield conditions that a 55-million-acre allotment may on the average produce annually about 1,200 million bushels of wheat or about 200 million bushels more than our anticipated requirements for domestic use and export. |