I understand this is a companion bill to one introduced by Chairman Johnson of House Dairy Subcommittee. I am president of Iowa Creameries Association and their director on National Milk Producers Federation Board and I feel that the dairymen of Iowa and the Nation will be very much in favor of H.R. 12394. I attended a board meeting of the National Milk Producers Federation in Washington, D.C., last week and this group unanimously approved S. 2917, a Senate bill for higher dairy suports, raising manufactured milk to $3.25 per hundredweight and butterfat to 59.6 cents per pound. Sincerely yours, ELKADER, IOWA. Mr. JOHNSON. Are there any questions? (No response.) Mr. JOHNSON. If not, we thank you. Mr. WOLF. Thank you. ADOLPH ELVERS. Mr. JOHNSON. The next witness on our list is Mr. E. M. Norton, Secretary of the National Milk Producers Federation. Is Mr. Norton here, or someone representing him? Mr. HEALY. I am. Mr. JOHNSON. You may proceed. STATEMENT OF PATRICK B. HEALY, ASSISTANT SECRETARY, NATIONAL MILK PRODUCERS FEDERATION; ACCOMPANIED BY N. J. POST, DIRECTOR, DIVISION OF SPECIAL SERVICES, WASHINGTON, D.C. Mr. HEALY. Mr. Chairman and members of the committee, my name is Patrick B. Healy. I am the assistant secretary of the National Milk Producers Federation with offices at 1731 I Street NW., Washington, D.C. With your permission I would like to file the statement for the record and comment on some of the pertinent points which are raised in it. Mr. JOHNSON. There being no objection, you may do so and the statement will be made a part of the record at this point. (The prepared statement of Patrick B. Healy, assistant secretary, National Milk Producers Federation, follows:) STATEMENT OF PATRICK B. HEALY, ASSISTANT SECRETARY, NATIONAL MILK PRODUCERS FEDERATION Mr. Chairman, members of the committee, my name is Patrick B. Healy. I am the assistant secretary of the National Milk Producers Federation with offices at 1731 I Street NW., Washington, D.C. Dairy cooperatives with farmer membership in 48 States make up the federation. We appreciate having the opportunity to appear before you today to discuss an increase in the dollars and cents support level for manufacturing milk and butterfat. With your permission, I should like to submit as part of our presentation the attached charts which support our argument that the dollars and cents support level for manufacturing milk and butterfat should be increased from the present level of $3.06 per hundredweight for manufacturing milk, and 56.6 cents per pound for butterfat to a minimum of $3.22 per hundredweight for manufacturing milk, and 59.6 cents per pound for butterfat. The charts we are presenting today show, in summary, the following to be the situation facing dairy farmers: (1) The price-support level for manufacturing milk has a direct effect on the price paid for all milk. (2) Dairy farmers continue to be victims of a severe cost-price squeeze, which has been going on for a number of years. The benefits of new and refined technological methods which might have been expected to improve their net income position have been lost to them. Lower prices for milk have in effect transferred the benefits of technological gains to consumers or to labor employed in the marketing of milk and dairy products. (3) Lower milk prices to dairy farmers have not resulted in a reduction in the annual production of milk, nor in the retail price of milk. (4) Lower support prices for milk to farmers have not been reflected in lower retail levels. (5) Total Government purchases of dairy products since 1952 have represented but a small percentage of our overall annual production. The market for milk last year sustained an average price of $3.22 per hundredweight for manufacturing milk-the price support level was $3.06 per hundredweight. While this level of $3.22 per hundredweight for manufacturing milk is not adequate to relieve the pressure on dairy farmers, it is certainly better than a return to the price support level of $3.06 per hundredweight. Bearing in mind that the dollars and cents support level announced by the Government sets the floor for the market price of milk, and also bearing in mind that if milk production should increase this year as present indicators show it might, then, the $3.22 level which the market sustained last year would, if it became the price support level, continue to be the market price level for this year. If production does not increase, then the market price should rise above the $3.22 level which would bring about some improvement in the income position of dairy farmers. If milk production should increase this year over last year by an amount in excess of that needed to meet demands of increased population, and the dollars and cents support level for manufacturing milk be $3.22 per hundredweight, there would be an increased cost for the dairy price support program this year over last year. If the Commodity Credit Corporation were to purchase the same amount of dairy products at the $3.22 support level for manufacturing milk as it did last year, the additional cost would amount to $3.5 million. However, the income position of dairy farmers would improve by $180 million. We recognize that increased costs for these programs are important considerations. We believe, however, that the accomplishments from a higher support level more than justify the increased costs. On this question of cost of programs designed to assist domestic agriculture, I am reminded of a recent experience where we opposed a request made of the Tariff Commission by the U.S. Department of Agriculture to increase the import quotas on Edam cheese and Gouda cheese by 4.6 million pounds or 100 percent over the existing quota, and on Italian-type cheeses by 2.3 million pounds or 25 percent over the existing quota. The Tariff Commission recommended the increase to the White House and the White House approved. This means that CCC will again be used to provide a market for foreign produced cheese the domestic cheese displaced in the consumer's market basket by the imported choose will wind up in Government storage and be chalked up as a cost to the support program. We estimate that these increased imports of cheese will cost CCC an additional $2.3 million annually in procurement if domestic cheese is displaced by the imported item. We respectfully suggest that a possible additional expenditure of $3.5 million spent to improve dairy farmers' economic position has considerably greater merit than to spend an additional $2.3 million to guarantee foreign producers a market in the United States for foreign-produced cheese. NATIONAL MILK PRODUCERS FEDERATION, MAY 1960 Relationship of Basic Formula Prices in 11 Fluid Milk Markets with Manufacturing Milk Prices and the Price Support Level (Calculated on basis of 3.5 percent butterfat) A J J A J J A J 1954 1955 1956 1957 Average of basic formula prices used for computing Class 1 prices in Chicago, St. Louis, Omaha, Average prices paid by plants manufacturing butter-powder, American cheese, and evaporated milk, as published in "Agricultural Prices," USDA Announced support level for manufacturing milk, USDA J |