milk consumption is declining, and surplus problems are becoming acute, without the added pressure of oceans of milk seeking an alternative outlet to replace lost butter sales. With milk cow numbers now the lowest since 1931, the long-run effect of the generally lowered relative butterfat price level would be to cause a reduction of about 2,000,000 cows in the national dairy herd. The hog and beef cattle industries would be seriously affected by such a decrease in milk cow numbers. First, because of the liquidation of an important part of the dairy herd in the form of beef; second, because in the long run many dairy producers would shift from the production of milk to the production of beef and hogs. Removal of regulations would not materially improve the cottonseed oil and soybean oil markets. Increased utilization of cottonseed and soybean oil in oleomargarine will only be accompanied by increased importations of cheap foreign vegetable oils, at no significant gain to domestic producers. Dairy products are subject to price-support. Reduction in dairy products prices caused by the removal of restrictions on oleomargarine would merely increase the Government purchases of butter under price-support programs. Due to reduction in dairy herds, the decline in demand of dairy farmers for cottonseed meal and soybean meal for feeding would reduce the income of cotton and soybean producers. It is probable this would more than offset any gain, very small at the best, to be derived from increased utilization of cottonseed and soybean oil in oleomargarine. Finally, the persons who would profit by the removal of regulations on the manufacture and sale of oleomargarine boil down to about 24 large firms, one of which is a gigantic foreign corporation-Lever Bros. and Unilever, Ltd.-the largest of its kind in the world. I am advised that of these 24 concerns, five manufacture more than 60 percent of the entire product. Compare the gains to be won by these corporations with the losses of the millions of cotton, soybean, and dairy producers, and the millions dependent on the dairy business. for trade, income, and jobs. If Congress yields to the oleo plea of "Let 'em sell fluid milk," it will be fomenting a dairy depression. Already dairy farmers are hard hit by price declines and market dislocations. A new body blow aimed at the very heart of the dairy price structure is all that is needed to turn the present dairy recession into a true depression. I might add to that that when the Geneva trade agreement is allowed to go into effect with regard to the importation of dairy products you may have the situation where, with these lowered duties ranging down to as low as 25 percent of the rates in effect in the act of 1930, you may find a situation where oleo presses down the dairy prices on the one hand and the tariff rates allow a great in-rush of dairy products on the other hand. So our farmers will have little or no method of escape from the calamity which is bound to come about when these two great economic forces are allowed to operate freely. It will be a repetition to a great extent of the competititve struggle between vegetable shortening and lard. Lard has actually been a sick industry ever since the late twenties due to the great increase in volume of the vegetable oil production. 89343-49- 6 On the other hand, the enactment of the Gillette-Wiley substitute will: Provide protection to dairy farmers consistent with the desires of the people of the various States. Absolutely safeguard State rights, permitting any State to regulate the sale of yellow oleo or not, as it pleases. Provide an effective protection against fraud, for the consumer, but at the same time allow a free choice between purchase of uncolored oleo and butter as a table spread. Provide protection for the dairy farmers against "butterlegging," which is a threat to a fundamental and vital form of agriculture returning more than eight times as much cash income a year to the Nations's farmers as oleo provides. For the above reasons we respectfully ask this committee to report the Gillette-Wiley substitute to H. R. 2023. Mr. Chairman, with your permission, I would like to demonstrate what I think is the truth of a statement I made earlier in the session. Chart I (p. 77): Briefly, here is a comparison of the present national income from butter and oleomargarine. Here is the oleomargarine, and there is the butter, which shows you the problem. In the case of oleomargarine it comes to $98,500,000. In the case of butter it comes to $834,000,000. Chart II (p. 78): A question was asked, I believe, by Senator Millikin, as to whether the total table spread has increased or declined over the years. First let me show you what oleomargarine has done to butter over the years. In 1938 the average per capita consumption of butter was 16.4 pounds per person. In that year it was 2.9 pounds of oleo per person. By 1943 the per capita consumption of butter had declined to 11.7 pounds, whereas oleomargarine had increased to 3.9 pounds. By 1948, butter had decreased to 10.2 pounds, oleomargarine had increased to 6.1 pounds. Table 2, which is filed as a part of the appendix to my testimony shows that in 1924 the total per capita consumption of butter and oleomargarine was 19.9 pounds. That rose to 20.3 pounds in 1927, and then it declined down to about 19 pounds. In 1935 it got as high as 20 pounds, and then from that point on, it has steadily declined to where the total consumption today is 16.3 pounds, or considerably less than the normal consumption of table fats over the former period. As to what accounts for that I can't say. It may be the ladies and even the men are getting a little afraid of their waistlines, but certainly the total consumption of table fats is not as great as it was. I don't believe that is made up for by the salad oils and dressings which are the third great utilization of vegetable oils. Chart III (p. 79): I have maintained for many years before this committee, going clear back even earlier than 1930, back into the twenties, and that was without regard particularly to oleomargarine, either, that there is not enough cottonseed oil produced in this country to meet the edible demands. So when you increase your utilization of cottonseed oil in any particular commodity, you have to decrease its utilization in some other commodities. This standpipe chart shows the amount of cottonseed oil that was used in the shortening of the year 1935. I believe that was about 65 percent of all of the ingredients of shortening. |