That gives a résumé of the activity in this project area as far as New York City is concerned. Mr. ADDABBO. Does the project serve just New York City or the entire State? Mr. SMITH. New York City, being the metropolitan area is a very major terminal market for food. The facilities will service New York City and the metropolitan area. They actually serve as a market for agricultural products from all over the country. But it is the vehicle through which food flows, or one of them, in supplying food to the consumer in the New York metropolitan area. Mr. ADDABBO. How do you actually determine what recommendations you will make as far as these facilities are concerned? Mr. SMITH. Sir, that is a job that our technicians undertake. In studying a particular market the staff determines the needs by examining the flow of products, cost of movement, and the relative efficiency in the many movements of the product to, within, and out of the market. They study possible locations, if relocations are involved. They have been engaged in this type of work a number of years and have acquired a considerable backlog of know-how in terms of what facilities are needed and required types of construction. After our engineers assess the magnitude of the facility that is needed they recommend the type, size, and location of facilities required to efficiently handle the volume of products for that particular area. Mr. ADDABBO. You mentioned three of the facilities being at Hunts Point. Where would the meat-handling facility be? Mr. SMITH. It is indicated that they will be located at the same place. It is not planned at this time that the facilities will include slaughtering operations. Mr. ADDABBо. All at Hunts Point? Mr. SMITH. Yes. In other words, indications are that a food center will evolve as a result of the research and planning work AMS has done. This is something which the New York City area, as you probably know, has needed very badly for a very long time. Mr. ADDABBO. Thank you, Mr. Chairman. Mr. WHITTEN. In that connection, all of these cities have been most anxious to have these surveys and plans prepared, have they not? Mr. SMITH. Yes. Mr. WHITTEN. And in actuality you have quite a number of others that would like for you to get around to them as soon as you can? Mr. SMITH. That's right. BENEFITS FROM MARKET FACILITY STUDIES Mr. WHITTEN. What is the purpose, what is the benefit of this? Once you do it, what does it mean in the way of savings or ease of marketing? Mr. SMITH. Mr. Chairman, as we see it, the benefits flow two ways. One, back to the producers or suppliers of the food that moves into a metropolitan area. And, two, to the consumers who ultimately buy and consume the food. Also, the operators in the market benefit from improved facilities, which make it possible to reduce their operating costs. Through the process of studying, planning, and constructing these facilities operating efficiency is increased, and costs are reduced in handling food through a metropolitan facility such as this. Mr. WHITTEN. What is the effect generally on the speed with which volume produce can move through such a market? Mr. SMITH. Through greater efficiency which is built into the facility, food in greater volume is handled at a lower cost and much more expeditiously and therefore reaches the consumer in better condition than through a less efficient facility. Mr. WHITTEN. What is the effect on business handled on a percentage where volume counted? How would the business come out? Would it improve the business of the handler over others since he could handle a larger amount in a shorter time? Mr. SMITH. As we see it, the challenge to the wholesaler, commission man, merchant, and broker and store that occupies such a facility, by this new type of construction and what he has available to handle food properly, is that he can perform a more effective service to his customers and therefore make moving food through that facility more attractive, with the end result that he preserves his position in the picture and actually augments his volume of business. Mr. WHITTEN. Having had this testimony each year, showing that the share of the consumer dollar left to the farmer has deteriorated from about 50 cents, not too many years ago, down to 38 cents. To put it another way, instead of 50 cents of the consumer dollar going to the people between the farmer and consumer, now approximately 62 cents goes. Anybody can readily see the value of doing anything that would reduce the cost between the farmer and the consumer. I doubt that there is any market in the country that handles the volume, or serves a channel through which vegetables and commodities move, as in New York City. So I think it might be worthwhile, since this is so important, for you to supply the committee with the report on how you went about it in New York in detail. Do you have a copy of the plans and specifications and recommendations? Mr. SMITH. There are a series of reports. Mr. WHITTEN. Could you make those available to the committee in view of Mr. Addabbo's interest in this type of thing? Mr. SMITH. Yes. Mr. WHITTEN. If this is the largest one it would, I am sure, indicate what the benefits are in other areas. Mr. LENNARTSON. I think conclusions are drawn in the report also as to approximate savings which may result from the new market. (The material requested follows:) SUMMARY OF MARKET FACILITY STUDIES IN NEW YORK CITY At the request of the mayor of New York City, the New York branch of the United Fresh Fruit & Vegetable Association, the commissioner of markets of New York City, the mayor's market advisory committee, the Market Men's Association of Lower Manhattan, and members of the various industries, studies of three major food markets have been completed in New York City. These studies were aimed at correcting the inefficiencies and unsanitary conditions and alleviating the congestion in three major wholesale food markets. In order adequately to determine and assess the losses that were occurring from poorly located, poorly designed, old, multistory buildings that lacked direct rail access, proper platforms, and which were unsanitary and presented fire hazards it was necessary to survey and study all the operations in these markets. Plans were then developed by our specialists that eliminated as many of the inadequacies and inefficiencies as possible. As a result of these studies, meetings and discussions have been held with representatives of the city, trade, and industry planning groups to explain and point out the advantages, disadvantages, costs, and benefits of the proposed improvements, and to persuade the interested groups to take the necessary action to bring them about. Three research reports present the findings of these studies. They recommended construction of improved facilities at proper locations that incorporated the most modern design features and which will permit the adaptation of the most modern materials handling equipment and techniques to food handling operations in the city. For example, it is estimated that construction of new facilities for handling fresh fruits and vegetables, meat and poultry, and butter, margarine, eggs, and cheese in New York City will save consumers, producers, and wholesalers over $25 million annually. The facilities planned could be built for $57.8 million and would provide space for over 450 wholesalers. The total estimated wholesale value of the products handled is over $1.1 billion annually. Thus, if the facilities are constructed and used as planned, the saving would amount to about 2.5 percent of the wholesale value or about $2 per person annually in the metropolitan area of New York City. Savings and benefits are comparable in other cities where studies have been made and improved facilities constructed. Additional information on these New York studies is contained in four reports entitled: "Improving Market Facilities in New York City for Wholesaling Fresh Fruits and Vegetables" (Marketing Bulletin No. 6). "New York City-Wholesale Fresh Fruit and Vegetable Markets" (Marketing Research Report. No. 389). "The 14th Street Wholesale Market for Meat and Poultry in New York City" (Marketing Research Report. No. 556). New York City-Wholesale Butter, Margarine, Egg, and Cheese Market Facilities" (Marketing Research Report. No. 561). Mr. WHITTEN. Will you proceed? Mr. SMITH. There are some other items, Mr. Chairman. 1963 MARKET NEWS INCREASES Mr. WHITTEN. We also provided increases for marketing news services in the Western States-Fargo, N. Dak., and Yuma, Ariz. Could you describe briefly what you have done at those particular points and how the news services are generally operating, including the leased wire? Mr. SMITH. These projects are underway, Mr. Chairman. For more detailed discussions of each of them I would like to call on Mr. Grange. Mr. WHITTEN. Mr. Grange, we will be glad to hear from you. Mr. GRANGE. Each of these projects is in the process of getting started. Yuma, Ariz., was started in December. Fargo, N. Dak., livestock market was opened the latter part of November, last fall. 1. In Illinois, a new State director of agriculture took office on March We had a request to hold up finalizing the plans until the new director could have an opportunity to participate in working out the arrangements. We have our cooperative agreement pending in Illinois now for his consideration and response to us. The first report from the Western area will be actually initiated this month. We have had contact meetings on making arrangements with our sources for information-the elevators, feed operators, and others, and discussions with various trade associations that are necessary. We will actually start issuing reports before the end of the month. The additional funds for the leased wire modernization were used to install commodity wires in the Eastern and Central part of the United States. Our traffic has grown to the point that the individual wires simply were not adequate to carry the load that we had. We are running into, as you know, many hours of delay on some circuits. These new circuits provided with the additional money went into operation shortly after the first of January, and I was told as recently as a couple of days ago that everything on the new circuits is really working better than we had anticipated. One thing that we really badn't thought too much about was the very favorable reaction we are getting from the west coast because this has resulted in our speeding up our transmission time going back to the west coast, giving them reports from important markets, such as New York City, such as we were just speaking of. We are always fighting time because of the time differential anyway. It has in some cases shortened our time by as much as 2 hours in getting the information from these eastern markets back to the west coast shipping points for their use. This is the way the leased wire funds were used. REPORTING HOG MARKETING Mr. WHITTEN. Last year's report includes the following statement: Attention should be given to the possible need to change the reporting base for pork products from Chicago to a point farther west in view of changes in marketing of hogs and movement of hog numbers. What attention have you given to that committee statement? Mr. SMITH. Mr. Chairman, we went into the problem rather fully and reviewed the changes that are taking place and that have taken place as far as livestock marketing is concerned. Our conclusion, in brief and I will have Mr. Grange elaborate on this-is that Chicago still remains a very important market for hogs. To meet the needs of changing reporting from that point to some point farther west can be better served by including coverage on some of the midwest markets. Mr. WHITTEN. After you reached that conclusion, what did you do about it? Mr. SMITH. Well, we didn't have the basis of further coverage. Mr. WHITTEN. This report says, "change," it doesn't say "add to” or give us three or four more reporting points. The directive said "study the change from' and 'to."'" It would be to leave one place and go to another. That would be my understanding. Gentlemen, we didn't direct you to move out of Chicago to another place, but Í repeat the language. "Attention should be given to the possible need to change the reporting base for pork products from' and 'to.'" I don't see how you could misunderstand that. There is a changing volume at Chicago compared with the past, percentagewise. I don't know that you should or should not. But I don't believe that you could carry out the instructions of that report without making a study and having the figures before you. Was that done, and, if so, what was your finding? Mr. GRANGE. Mr. Chairman, yes, we did review the data on the volume that is being handled at these different markets. Mr. WHITTEN. Could we have that information in the record at this point? Mr. GRANGE. We can supply the figures. We summarized them briefly in the letter which we sent to the committee back in December, I believe it was. As we point out in that letter, Mr. Chairman, we have no basis for saying that the market reporting work on hogs in Chicago should be terminated. Mr. WHITTEN. May I say for the record myself that our including it in the report does not make a determination. It just asks you to go into the matter and give attention to whether or not it should be changed. So you might proceed. Mr. GRANGE. We address ourselves particularly to the wording of "change from Chicago to" a more western point. The Department of Agriculture does not select, determine, and designate a reporting base or trading base for hogs or any other commodity. This is determined by the industry concerned. Mr. WHITTEN. You determine whether you are going to put your people there to do the work and send it out over wires, don't you? Mr. GRANGE. That is right, Mr. Chairman. We would report the market. In the case of Chicago it is still one of the more important markets. It is No. 2 to Omaha of the markets which we are reporting in the same way as we are Chicago. There is a very heavy volume of pork being traded in the midwestern markets west of Chicago. St. Louis, Kansas City, and other markets up and down the Missouri River that we are not now covering. In our judgment we would not be justified in closing Chicago and shifting our report to one or more of these other markets. Mr. WHITTEN. I think that is sufficient. You might provide for the record the additional information which you supplied to me as chairman. As you can realize, that letter which came to us is not now a matter of record. (The letter requested follows:) Hon. JAMIE L. WHITTEN, U.S. DEPARTMENT OF AGRICULTURE, Chairman, Subcommittee on Agricultural Appropriations, DEAR CONGRESSMAN WHITTEN: The following statement is contained on page 16 of the House committee report on the Agriculture appropriation bill for 1963: "*** attention should be given to the possible need to change the reporting base for pork products from Chicago to a point farther west in view of changes in marketing of hogs and movement of hog population." All meat reporting was discontinued while price controls were in effect during World War II. Shortly after the war meat reporting was reinstated at New York, San Francisco, and Chicago. Since 1947 additional points have been reinstated or added. Currently, meat reports are being issued from New York, Chicago, Philadelphia, Omaha, Denver, Los Angeles, San Francisco, Portland, and Spokane. While it is true that the movement of hog population during the last 15 years has resulted in an increased proportion of hogs in the Corn Belt, redistribution within the area has been inconsequential. According to the Department's report, "Annual Livestock and Poultry Inventory," hogs and pigs on farms in the United States numbered 57 million head on January 1, 1947, and 55 million on iJanuary 1, 1962. The Corn Belt States accounted for 69 percent of the total in 1947 and 73 percent in 1962. Distribution within the Corn Belt was 60 percent 'n the western section (Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas) and 40 percent in the eastern section (Ohio, Indiana, Illinois, Michigan, and Wisconsin) in both 1947 and 1962. The entire Corn Belt is now served by Omaha and Chicago reports. Hogs slaughtered in federally inspected plants in the Omaha area totaled 4.2 million and in the Chicago area totaled 2 million head in 1961. Prices at Chicago continue to be used widely by the industry as a basis for trading despite the fact that equally comprehensive quotations are furnished for Omaha. This is probably |