Mr. POAGE. Thank you very much. We appreciate your being here, Mr. Ferguson. Mr. Johnson has two witnesses we will try to call before noon. Mr. JOHNSON. I wish to introduce Mr. Post, from the National Milk Producers Federation. Mr. POAGE. Very fine. We will hear from you, Mr. Post. STATEMENT OF N. J. POST, DIRECTOR, DIVISION OF SPECIAL SERVICES, NATIONAL MILK PRODUCERS FEDERATION Mr. PosT. Mr. Chairman, members of the committee, we appreciate having this opportunity to discuss with this committee H. R. 3984, a bill introduced by Representative Johnson, designed to expand the soil-bank program to include pastureland; and those bills, H. R. 2771 and H. R. 5857, introduced by Representative Albert; and H. R. 2860, introduced by Representative Dixon. The National Milk Producers Federation is a national farm organization. The federation represents over 500,000 dairy farm families and some 800 dairy cooperatives owned and controlled by these dairy farmers. The dairy cooperatives in the federation have farmer membership in 47 of the 48 States. Many of the cooperative associations represented by the federation are manufacturing associations engaged in the processing and marketing of milk in the form of manufactured products. The record of this committee membership has amply demonstrated its interest in and support of legislative measures designed to improve the economic position of dairy farmers. The committee should know that the federation's membership appreciates this. Milk, butterfat, and cull cows and calves from dairy farms account for nearly 20 percent of the Nation's gross farm income making dairying the largest single segment of our national agricultural economy. Our product is produced in practically every county in the United States. The dairy industry is unique. Our crop-milk-must be harvested twice each day and marketed every day. Because of this, prices paid dairy farmers for milk and butterfat-unless they are stabilizedare subject to frequent and wide fluctuations. When a small surplus develops in the industry, prices tumble. When a small shortage develops, consumer prices for dairy products skyrocket. Such violent fluctuations in price benefit neither the farmer nor the consumer. The term "price-cost squeeze," frequently mentioned, is not merely a label on the situation facing us today, it is a concise description of a set of economic facts. In analyzing the present situation facing dairy producers and recognizing the wide gap between the dairy farmer level of prosperity and the overall national level of prosperity, we find that the source of our problem is the 4 percent of our total annual milk production that is not at this time being taken up through the commercial channels of trade. This 4 percent of our total annual production is the amount of milk in the form of butter, cheese, and nonfat dried milk that the Commodity Credit Corporation has bought for each of the past several years. This 4 percent has set our prices. Those prices are too low and have been too low. The current price-support level for manufacturing milk and butterfat ($3.25 per hundredweight for manufacturing milk; 58.6 cents per pound of butterfat) is far below parity. These dollars and cents support levels compare with $3.74 for manufacturing milk and 67.3 cents per pound for butterfat in 1953. In spite of the substantial progress made by dairy producers toward improving the efficiency of dairy farming, evidenced by such developments as bulk tanks, pipeline milking, and herd improvement, hourly earnings of dairy farmers are far below minimum wage rates prescribed by law for labor. For example, published statistics from the United States Department of Agriculture show that in eastern and western Wisconsin the hourly returns to dairy farmers are 30 and 35 cents, respectively. In the central northeast, the highest of the test areas, hourly returns are only 81 cents. The expansion of the soil-bank program to include pastureland is in line with the policy of Congress and the purposes of the program **to protect and increase farm income." The application of congressional policy underlying the program to dairy production would make a substantial contribution toward bringing much-needed stability to the production side of our industry. If pastureland were included in the soil-bank program five significant developments could occur: (1, A betterment of dairy farmer income; (2) A reduction in the production levels for milk; (3) An improvement in soil fertility thereby providing insurance to the Nation that production capacity would always be available when needed; (4) The absence of dairy products in CCC inventories would bring genuine stability to our industry; and (5) It would be less costly to the Government to make soil-bank payments rather than purchase dairy products, together with the fact that such payments go into the farmer's pocket and not for warehousing and transportation. In further support of the recommendation we stress and reiterate the fact that the surplus milk production that creates our problems amounts to about 4 percent of our total annual production. This small percentage is an unstabilizing force in our industry. Dairy farmers are well aware of the depressing effect this surplus in Government inventories has on market prices. At the same time they are faced with a real situation of meeting their financial obligations. Under present conditions with low milk prices and increasing costs, these obligations can only be met by maintaining or raising the level of gross income. We believe that substantial participation by dairy producers in the soil-bank program would bring us much closer to that point at which milk availability and commercial demand would be in balance. We would at the same time be maintaining our productive resources in a condition in which they would be ready and available when needed to meet increased demands occasioned by population growth or other causes. The extension of the conservation reserve program of the Soil Bank Act to include grazing lands and provide for the reduction of livestock numbers as authorized in H. R. 5857, as well as the proposal in H. R. 2860 to establish a grazing lands conservation and improvement program, is the type of legislation which, if made applicable to dairying, would attack the dairy-farm problem at its source. We have been developing a proposal along similar lines for dairy farmers which would expand the soil-bank program by encouraging the slaughter of dairy-type heifer calves and/or dairy-type heifers or COWS. The proposal would reduce the total number of milk cows to a level predetermined by the Department of Agriculture as the number needed to produce adequate supplies of milk and dairy products, taking into account the efficiency per cow that would be steadily increasing. This would be accomplished by paying a premium to producers for the marketing for slaughter of dairy-type heifer calves. The amount paid would be set by the Secretary of Agriculture at a level which would induce the increased marketing desired. It is contemplated, for example, that the goal for the first year might be 12 million additional heifer calves. The goal for each year would be separately determined. The cost of increasing the number of dairy-type heifer calves slaughtered under this program would be much less than the cost of buying the surplus milk they will produce if the problem is not attacked at the source. The cost of the program would be limited to $75 million per year. Once the cow numbers are adjusted to demand, the cost should decrease to a very low level. The cost of purchasing surplus milk should begin to decline sharply in about 2 years and would soon be practically eliminated. The program contemplated in this proposal would accomplish several things: First, it would bring about an immediate increase in the income to dairy farmers. Second, it would raise the level of efficiency of our milk herds. Third, it would attack the problem of surplus at the source. Further justification for the expenditure of Government funds for this proposed program is the fact that with milk production continuing to reach record levels, the Commodity Credit Corporation will be purchasing considerable quaitities of dairy products under the price-support program with a resulting substantial outlay of Government funds. It is likely under the proposal that within 3 years or less, milk production in this country could be at a level where CCC purchases of dairy products would be unnecessary. If the increased slaughter rate contemplated in the proposal were reached, milk production at a maximum of 3 years hence would be stabilized at present levels and the increased need occasioned by population growth would wipe out the present almost 5 billion pound surplus. We thank the committee for giving so freely of its time and attention. Mr. POAGE. Thank you. Are there questions? Mr. JOHNSON. In listening to your statement, and with the bill we worked out together in mind, that I introduced, have you in studying the Albert bill come to the conclusion that it could be worked outthat is, the Albertidea could be worked out, so that it would apply to the dairy industry as well as the beef industry? Mr. POST. The idea of reducing cattle numbers; yes, sir. Mr. JOHNSON. That is the idea that was brought out in the Albert legislation? Mr. POST. That is right. Mr. JOHNSON. You probably heard the testimony of Mr. Ferguson. As the Albert legislation is drawn at the present time it would not apply to the dairy industry? Mr. PosT. Mr. Johnson, the language in Mr. Albert's bill does not, I agree, specifically point out dairy. Mr. JOHNSON. Most of your surplus dairy animals would be classified as canners and cutters. Mr. PosT. The bill you are referring to there is the bill that we have not had an opportunity to review, Mr. Johnson. Mr. JOHNSON. I see. Mr. ALBERT. That is an entirely different thing. Mr. POST. Yes. The ideas, the objectives in H. R. 5857 that Mr. Albert proposes are certainly in line with the proposal as coming from our organization as I described in here. Mr. ALBERT. Mr. Ferguson was testifying as to H. R. 5856. That did not relate to the soil bank at all, but to the support program. Mr. PosT. Yes. Mr. ALBERT. That is a different matter. Mr. ALBERT. I want to commend you upon your statement, Mr. Post. You have brought out some very effective arguments to show why dairy cattle should be included in the soil-bank program, I think. Mr. Post, I take it you have read the report of the Department of Agriculture on my bill, H. R. 2771? Mr. PosT. Sir, we just this morning late received a copy of it. Mr. Johnson supplied us with a copy of it. Point No. 1 would not apply to the dairy industry at all. Two, the livestock carrying capacities of some so-called range grazing lands would apply. Mr. ALBERT. What I am trying to get at is, do you think these would present any insurmountable problems, as to the numbers of cattle and the different types of land and that sort of thing? Mr. POST. We certainly would not anticipate any insurmountable problems, Mr. Albert. Mr. ALBERT. Thank you very much. Mr. POAGE. I gather from your statement that you believe that if we would cull our dairy herds that we would strongly reduce the surplus-milk problem? Mr. POST. Yes, sir. Mr. POAGE. That if we had a program to encourage the reduction that we would cull out our dairy herds and thereby we would reduce our production and by that you would bring it in balance with demand and that you would then have a much stabler market? Mr. PosT. Yes, sir. Mr. POAGE. Probably we would have to have a continuing program. We cannot do that this year and then stop it. It has to be done every year, at least, to be effective. Mr. POST. I think that is very true, Mr. Poage. Mr. POAGE. If we could get a little Government help on it, we probably would do it? Mr. POST. We certainly think so. Mr. POAGE. Thank you very much. Mr. POST. Thank you very much. (The following statement was submitted to the subcommittee by Daniel A. Poole, of the Wildlife Management Institute :) STATEMENT OF DANIEL A. POOLE, OF THE WILDLIFE MANAGEMENT INSTITUTE Mr. Chairman, I am Daniel A. Poole, editor of the Outdoor News Bulletin, a conservation news service issued by the Wildlife Management Institute. The institute is one of the older national membership organizations dedicated to the improved management of natural resources in the public interest. Its program dates back to 1911. As a preface to this brief statement, Mr. Chairman, we wish to make it clear that the conservationists favor the enactment of legislation for which farmers and ranchers have demonstrated a need and which, in the judgement of the Congress, will be in the national interest. The institute is appearing today merely to ascertain the scope of the proposals under consideration. Our questions pertain to a matter in which many Americans, during the past several years, have demonstrated a keen and sincere interest. The conservationists would like to know whether or not the enactment of H. R. 2771, H. R. 5857, and similar bills would allow the holders of grazing permits on national forests and public-domain lands to apply for benefits under the soil-bank program for grazing reductions on Federal lands. This question is of fundamental importance. If these bills apply to Federal grazing lands, their effect would be to reverse the long-established and highly successful grazing policy of the United States Forest Service. That is, such legislation would, in effect, fix the grazing allotments of present holders of permits on national forests by law, thereby overthrowing the long-recognized and widely accepted administrative policy that recognizes grazing on national forests as a privilege, as distinguished from an actual legal right. Range forage on the national forests is a public resource, and its use, like that of timber, minerals, water, wildlife, and other national forest values, is subject to the existing and highly commendable policy of multiple use for the greatest benefits to all the people. The ability of the Forest Service to administer and manage the lands trusted to its care rests in that agency's discretionary authority to regulate the numbers of permittees and of livestock, and to similarly control other forms of forest usage. Unsuccessful efforts in the past, and most recently in the 83d Congress, with legislation sponsored by a few leaders in the livestock industry sought to divest the Forest Service of its discretionery authority to administer the lands on the basis of capability and to entrench grazing as a right, rather than a privilege. Hearings were held by House and Senate committees and the thousands of words of testimony, coincident with the absence of affirmative action on the part of the Congress, manifested the widespread desire to maintain national forest grazing as a privilege-not a right-so that the forests could continue to be administered and managed in the public interest. For this reason, Mr. Chairman, conservationists urge the committee to consider the insertion in H. R. 2771, H. R. 5857, and similar bills of whatever wording may be necessary to make it clear that these bills apply solely to grazing on private lands. Mr. POAGE. Is there anybody else who wants to be heard on these bills that are before us? Is there anybody else that wants to be heard on the soil bank grazing land bills or on the support plan? |