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about 35,000 lambs and 600 cattle each year. The lamb feeders would like to have lambs omitted from this bill, as they are a very perishable product. They are bought today and consumed within a week, they are not kept and they cannot keep them, they must be consumed right away. We have a good cash market for these lambs in every livestock market in the country and if this tax goes into effect, we are afraid that these lambs will back up and the public will not be able to purchase them. I believe that at the present time the packers are getting all the market will stand from the consumers for livestock.
Senator CAPPER. You would say the sheep-raising industry is on a profitable basis now? Mr. FARR. Absolutely not. Senator CAPPER. I understand you to say there is a good market?
Mr. FARR. We have a cash market every day but the prices are not remunerative. The sheep business is in bad shape both for the producer and the feeder.
Senator THOMAS. Tell the committee how lambs are sold. Mr. FARR. These lambs are consigned to a commission man on the open public market and the packer representative goes into the yards and buys them in open competition.
Senator THOMAS. They are sold by the pound, are they not? Mr. FARR. Yes, sir. Senator THOMAS. What does a marketable lamb weigh ordinarily? Mr. FARR. The lambs out of our feed lots average about 90 to 93 pounds.
Senator THOMAS. What does the farmer or producer get per pound for those lambs?
Mr. FARR. Last week I sold lambs in Chicago from $5.65 to $6 a hundred.
Senator THOMAS. That was in Chicago?
Senator THOMAS. If you bought those lambs in Colorado, what would you pay for them?
Mr. FARR. I bought all of them in Wyoming and Colorado last October and November and I paid from 3.75 to 4 cents a pound.
Senator THOMAS. Is that the cost of production, in your opinion? Mr. FARR. No; it is not.
Senator THOMAS. What should the producer receive per pound for lambs to make the cost of production in your opinion?
Mr. FARR. That depends on the wool price a great deal with it. I do not produce these lambs, I buy them from the range man and feed to consume our alfalfa hay and corn and sugar beet byproducts.
Senator THOMAS of Oklahoma. Estimating the land is worth so much and that the producer is entitled to a return upon that value, and estimating, second, the investment in the sheep themselves, and estimating, third, the cost of attention, what in your opinion should lambs bring to enable the producer to get the cost of production, that is, on the farm or on the range?
Mr. FARR. As I say, I am not a producer from that standpoint, I am a feeder, but I should say 7 cents a pound.
Senator Thomas of Oklahoma. Then the prices now paid to the producers is about one half in your opinion that they should receive to enable them to live and pay their debts and prosper?
Mr. Farr. Yes, sir.
The CHAIRMAN. May I ask the committee that the witness be allowed to make his statement and then after he has made it, he may answer such questions as the committee may see fit to ask?
Mr. Fark. We feel that if these prices are put back to parity prices at the present time that this meat is apt to back up and that we will find that the producer will be paying this tax instead of the consumer and we won't get any benefit from same. Owing to this keen competition in selling meats, especially fresh meat, which has to be sold practically immediately, it is pretty hard to pass a tax like this on to the consumer. At the present time there is no overproduction of livestock. Everything that is being produced is being consumed. Cold-storage holdings, I think, are the lightest on record at this time. Lamb production is decreasing; we have reached the top of our cycle and are going down. The lamb crop of 1932 was about 8 percent smaller than the year before. This is due to weather conditions in the West and on account of the aged ewes and economic conditions, the bankers having forced them to liquidate their ewe lambs.
The other day Mr. Peck said that they could regulate the receipts of livestock. I have been in the feeding business for 25 years and I find it is impossible to regulate receipts. The weather enters into it a great deal, storms and blockaded highways and railroads, and you will have days of bare markets and days of glut markets. With the present radio hook-up over the country, the market is quoted every day at noon. If it is a little higher today, a lot of men think their neighbor hasn't heard it and they will try to get to town tomorrow. With the excellent railroad service that they are giving now, it is pretty hard to regulate supplies. For instance, I am a thousand miles from Chicago. I used to load lambs on Tuesday for the following Monday. Today I can load them on Saturday and sell them in Chicago on Monday. They don't stop at the feed yards adjacent to the markets like they used to.
We think it would be better to try this out on wheat or cotton or something that is not perishable. Livestock is very, very perishable and after it has been down east in the cooler for a few days, it has got to sell or it will start to smell. The lamb crop, calf crop, and pig crop are already on the way. You couldn't curtail production of these products for at least a year and longer in the case of cattle and lambs. I believe the bill is uneconomic, unsound, and unfair, as nature has so much to do with animal and plant production that it is practically impossible to regulate it. The best law to regulate all of these crops in my opinion is supply and demand. The farmers in our country want and must have lower taxes. They are doing everything they can at home to cut those taxes. The school districts are being cut down just as low as they can and our counties are doing a good job and the State also is working on it. We trust that Washington will continue, as you started out this past two weeks, on an economic program or an economy program.
We get lots of Government reports from the Bureau of Agricultural Economics that in my opinion are helpful to the consumer more so than they are to the producer. I refer to estimates and predictions. Some of those reports have caused us a lot of trouble in the past. I think we should get the Government out of business instead of going into business, and this is certainly going into business to try and regulate the number of lambs and hogs and cattle and the number of acres of wheat. It would take a vast army of employees and will increase expenses, and I can't see where it will help the producer, as the producer pays practically all taxes anyway. I think that is all, Mr. Chairman.
Senator KENDRICK. Mr. Farr, may I ask what is your information as to whether the sheep and lambs west of the Missouri are increasing or decreasing in number?
Mr. FARR. Practically all of the decrease has come west of the Missouri River in the West, the biggest decrease in sheep that has come in the past has come in the last few years, owing to economic conditions. The range man couldn't hold his ewe lambs, he had to sell them to pay the bank. Sheep have been very cheap and old ewes would hardly pay the freight. Therefore, they have been breeding these old ewes and they are getting older every year. With a hard winter they are going to be very few sheep in the West.
Senator KENDRICK. In your opinion can increased prices be relied upon to take care of any increase or decrease in production?
Mr. Farr. As I said awhile ago, the sheep cycle reached its peak about a year ago. Texas switched large from cattle to sheep, and I don't believe that a big advance would materially increase production of sheep for some little time.
Senator KENDRICK. I have observed the actions and methods of my neighbors in the sheep business and it is my opinion that they are now curtailing their production as fast as they can.
Mr. FARR. Yes, they are.
Senator KENDRICK. A few years ago, as I have stated to the committee, every flock master in the West was saving his ewe lambs to breed. They are not doing that now, are they?
Mr. FARR. No; they haven't been for the last three years.
The CHAIRMAN. Mr. Farr, may I ask you this question: Under normal conditions, were you satisfied with the marketing processes established?
Mr. FARR. Under normal conditions, yes; we think we have a good market for livestock. Of course the price is not satisfactory today, and hasn't been.
The CHAIRMAN. I am talking about normal conditions, when there was purchasing power enough amongst the people at large to consume their needs, your marketing conditions were satisfactory?
Mr. FARR. Absolutely
Senator NORRIS. Have your people, feeders like yourself, enjoyed any privileges of borrowing money through the intermediate credit bank or other Government agencies?
Mr. Farr. I don't know of a feeder in Colorado or Nebraska that has borrowed money through any Government institution.
Senator NORRIS. You wouldn't favor that, would you?
Mr. FARR. Well, I have never tried to myself, I have been financed through local and Denver banks.
Senator NORRIS. Do you know whether those banks got any assistance from the Finance Corporation in the way of loans?
Mr. Farr. Not for the feeders, I think everything has been handled locally and rediscounted through the Federal reserve bank. The Reconstruction Finance Corporation has loaned a lot of money to the range men in the West.
Senator NORRIS. Has that been a good thing or bad thing?
Senator NORRIS. That was a time the Government went into business that you didn't object to, was it?
Mr. Farr. Well, personally, I didn't borrow from them, personally, I think the Government
Senator NORRIS (interposing). Well, do you think they ought to loan to these other fellows?
Mr. FARR. Well, it has done a lot of good in the West.
Senator NORRIS. That was an instance where the Government went into business and it did some good? Mr. FARR. Yes, sir.
Senator NORRIS. You wouldn't oppose the Government going into business wherever they could do some good ?
Mr. FARR. Well, these are unusual times at the present time, yon understand.
The CHAIRMAN. The tariff is a sort of instance of the Governmeut in business, isn't it?
Senator NORRIS. One of the reasons you are opposed to this bill was because it put the Government in business, you stated?
Mr. FARR. Well, this bill—it is pretty hard to visualize what they will do with it. If they dictate to you how many sows you can breed or how many lambs you can raise, it will take a vast army of employees
Senator NORRIS (interposing). You wouldn't object if they would loan you some money? The Government has been loaning money to the banks and railroads. Was that a good thing or a bad thing?
Mr. FARR. Time will tell, Senator. It has been a good thing up to date, in my opinion.
Senator NORRIS. From what you said, you were opposed to the Government going into business. I wanted to see what kind of business you objected to and what kind of Government business you favored.
Senator FRAZIER. Mr. Farr, you seem to indicate by your statement that under this bill the so-called parity price would be lower than it is at the present time?
Mr. FARR. Oh, no; it would be higher, about $2 and something.
Mr. FARR. Because I am afraid that the consuming power of the public can't stand that traffic now. If you put the tax on, they will have to buy lambs for less than they are paying us now or if the market consumes so many lambs at $2 a hundred now, we might have some left over we couldn't sell.
Senator THOMAS of Oklahoma. If lambs get down to half the price they are now, the public would eat more of them; is that correct?
Mr. FARR. They would eat more if they were available, but they won't be available. All meat produced is being consumed even at these low prices. If you raise the price from $2 to $4 a hundred, I don't believe they could consume it at this advance in price.
Senator THOMAS of Oklahoma. If the administration would devise some plan to increase the buying power of the masses, in other words, put these unemployed people to work and enable the merchants and factories and other institutions to open and commence doing business, that would help some, wouldn't it? Mr. FARR. Certainly.
Senator KENDRICK. Mr. Farr, as a feeder and an extensive shipper to the market, I understood you to say that the most favorable feature of our present market is cash at some price? Mr. FARR. Yes, sir.
Senator KENDRICK. And you are apprehensive that this product, that must be moved and moved without delay, may be affected by congestion in the market, is that your idea? Mr. FARR. Yes, sir.
Senator KENDRICK. Well, have you thought about the suggestion that since the Government assumes to place a certain addition or tax on the amount the packer pays it might intervene to the extent of fixing the price that he shall pay? Do you believe it would be necessary for the Government to do that, if they proceed on this basis?
Mr. Farr. I don't believe the Government can fix the price that the consumer will pay. If it gets too high and they can't afford it, they will quit eating lamb and eat something else.
Senator KENDRICK. The Senator from Oklahoma spoke of the wisdom of decreasing the price or the possibility of decreasing the price. It is my opinion, and I have heard it stated in discussions outside, that the packers would be compelled to pay a correspondingly lower price for the commodity in order to meet this additional increase imposed by the Government. It occurs to me that there is a very strong probability that to offset that danger the Government will have to say to the packer what he shall pay. Do you think there is a possibility of that?
Mr. FARR. Well, there might be.
Senator KENDRICK. For instance, if the packer pays you 4 cents or 5 cents for your lambs and an additional 2 or 3 cents is added to that and such additional amount is prohibitive when it comes to selling the product, isn't it possible that he will have to reduce the price accordingly so as to move the product to the consumer?
Mr. FARR. That is what I say. If he has to pay this tax, he will probably take it off of us and we won't get as much as we are now. .
Senator NORRIS. Where do you ship mostly from, Greeley?
Senator NORRIS. How does that compare with the value of the lambs that you ship?
Mr. Farr. It is a little over 10 percent of the value of the lambs. If you were to put this tax on lambs or cattle, if you put a tax on hogs, that would benefit the corn land, but I don't know what land you would benefit with a tax on cattle or sheep.
The CHAIRMAN. If there are no further questions by the committee, Senator Kendrick has another witness here that we will have for 10 minutes. Much obliged to you, Mr. Farr.
Mrs. Donnelly, of Kansas City: