tions. The chief known foreign potash deposits are in Russia and in Russian-zone Germany.

SITUATION IN 1949-50

Present information suggests that during 1949-50, supplies of nitrogen for agriculture use could easily reach about 1,070,000 tons, perhaps more, but considerably above 1948-49; phosphate supplies for the coming year could exceed 2,200,000 tons, as a minimum; again an increase over 1948-49; and potash supplies in prospect should reach 1,150,000 tons and could materially exceed that figure if any substantial imports develop. Even at the indicated figure, the supply would be a good deal better than last year's.

Compared with increasing needs for the three plant foods, the deficit in supplies of nitrogen for 1949-50 should be substantially reduced through increased private domestic production and through the larger quantities made available from the production of Army plants; production of processed phosphate will probably meet the demand in most areas, although there may be need for greater supplies of concentrated phosphate than present capacity can provide. Domestic production of potash is expected to increase, which should reduce the deficit between supply and demand.

(Chart accompanying Mr. Porter's statement is on opposite page.) Mr. PORTER. Mr. Chairman, we also have copies of the Fertilizer Situation Report for 1948-49, which are available if you desire them.

Mr. ABERNETHY. Mr. Porter, I would like to ask you one question and I would like to suggest, if I may, that you be back here tomorrow. There might be some other questions. Will you be available tomorrow?

Mr. PORTER. Yes; I will be available tomorrow.

Mr. ABERNETHY. On page 9 of your statement you say:

Present information suggests that during 1949-50, supplies of nitrogen for agriculture use could easily reach about 1,070,000 tons.

That is rather encouraging. That is considerably above that which is available now. How many tons will that be above the 1948-49 supply?

Mr. PORTER. Roughly, 120,000.

Mr. ABERNETHY. So that is an expected increase of about 12 percent. Mr. PORTER. Yes.

Mr. ABERNETHY. What is the basis for your opinion?

Mr. PORTER. The basis for that opinion is a very thorough-going analysis of production capacity which has been added, voluntary reports which we have received as to new capacity coming in and will likely be available by next July, some more possible shifts in production, an increase in operations at some plants, together with the possibility of some additional tonnage from Army production over and above that of this past year.

Mr. ABERNETHY. I wanted to know if you anticipated in that estimate a transfer of tonnage from the Army.

Mr. PORTER. We have reflected that. There is something along that line in this 1,070,000-ton estimate, which could go up or down somewhat. We have introduced a quantity which might be available from Army production.

Mr. ABERNETHY. We thank you very much, Mr. Porter, for your statement. I hope you will be available tomorrow.

Mr. PORTER. I will, sir.

Mr. ABERNETHY. Are there any questions?

Mr. COTTON. I have one question that I would like to ask, but if he will be here tomorrow I will wait until then.

Mr. ABERNETHY. You may ask your question now, if you wish. Mr. COTTON. I merely wanted to inquire, Mr. Porter, on one point. I gather from your statement that the Department does not feel there is any necessity for Government allocation of fertilizer with the present situation appearing to be improving; is that right?

00

PHOSPHORIC ACID

39

'40

PERIOD

POTASH

NITROGEN

*

* *

Mr. PORTER. We have, in a way, a policy question. I think I can answer in this manner. It is not our general thinking that there should be any rationing or distribution control, with the improvement that seems to be in the picture. The necessity for any action of that type seems to be disappearing and I do not think, speaking of the general attitude of the Department, that we would be inclinded to recommend or go along with a proposal for allocation of nitrogen for fertilizer.

Mr. COTTON. Do you anticipate that next year and year after there will be less need for fertilizer to be shipped abroad?

Mr. PORTER. With the prospective increase in production in Europe the need for shipments from the United States to that area for even next year will be considerably less. As to the Far East, that is, Japan and Korea, there will still be a requirement. I think we can assume that-and this question should perhaps be more specifically answered by the ECA and the Army rather than the Department of Agriculture as those requirements decrease it is very probable that there will be more available for the United States.

Mr. COTTON. I saw recently a newspaper report that Japan was back at practically the level of prewar production. Do you know anything about that?

Mr. PORTER. I have had opportunity to read the same report. May I suggest, if you wish to explore that a little further, that you make that inquiry of the reports of the Army, who are directly concerned? Mr. COTTON. Does the Army have representatives here?

Mr. ABERNETHY. Yes.

Mr. COTTON. Just one other matter. Is there any form of allocation of fertilizer now in practice in the Government?

Mr. PORTER. There is the international allocation system through the IEFC. Internally, there is none except for the distribution of the 10 percent of ammonia which comes from Army production and which is distributed through the authority given to the Deaprtment of Commerce. There are no other governmental controls or allocations over the production of ammonia in private plants.

Mr. COTTON. That 10 percent is referred to in the so-called Morse amendment?

Mr. PORTER. That is right.

Mr. COTTON. Does the Department of Agriculture participate in any way in determining how the 10 percent should be distributed? Mr. PORTER. The act itself set up certain criteria as to preference plants and charged the Department of Commerce with making the distribution. When the question came up as to the disposition to be made of some tonnage of ammonia from Army production over and above the quantity needed to meet the minimum requirement of the preference group, the Department of Agriculture did suggest to the Department of Commerce that that surplus or excess be channeled back to producers of nitrogen who are called upon to supply the 30,500 tons of nitrogen in the commercial export program for this year. Mr. COTTON. Did you speak of any particular producers?

Mr. PORTER. We merely indicated that it should go back to those producers in a ratio of the contribution of each producer to the export program.

Mr. COTTON. I assume, Mr. Chairman, there will be someone here from the Department of Commerce.

Mr. ABERNETHY. Yes.

Mr. COTTON. That is all.

Mr. ABERNETHY. Thank you very much, Mr. Porter.

STATEMENT OF LLOYD C. HALVORSON, ECONOMIST, THE NATIONAL

GRANGE

Mr. HALVORSON. I am Lloyd Halvorson, economist for the National Grange. First I want to express the appreciation of the National Grange to this committee for holding these hearings. Our members raise a number of questions regarding the fertilizer situation and particularly in regard to how much fertilizer will be available and the reasons why their needs are not yet met.

These hearings tend to provide answers to these questions. Also we believe that by making the farmer's demands and needs known to industry, industry will be stimulated to meet the needs. If there are abuses, we believe that these hearings will bring public opinion to bear and this has a corrective influence.

I would like to say in connection with the printing of the hearings and the committee report that the sooner they are available, the more useful they will be. From time to time we receive letters from our Grange members containing observations, questions, complaints, or ideas on the fertilizer situation. For what they might contribute to this hearing, I will discuss them in what follows.

The fertilizer shortage at least for some of the materials is not yet solved. We still get letters asking the help of our national office in securing more nitrogen fertilizer, or complaining about the shortage. Last spring and early summer we had letters from some of our members concerning black market in nitrogen. In this connection I want to read a letter which we received last June from one of our members in South Carolina. [Reading:]

I have received almost daily for several weeks telegrams from various members of the South Carolina delegation to Congress telling me of cargoes of nitrate soda at Charleston, S. C., Savannah, Ga., and Wilmington, N. C.

For some reason with 75,000 tons arriving within a period of a few weeks very little got into farmers' hands. I have reports that the State tax stamps have been sold for South Carolina's share from the fertilizer inspection and analysis department, Clemson College, Clemson, S. C. I also have reports that soda is available at from $85 to $100 per ton from some of the fertilizer dealers, while others have little or no soda. From $60 to $62.50 is the right price.

As a whole it is too late for this crop season even though it were available right now. However, I certainly would like to know if there is any way I could have the soda arriving since March 1 traced to delivery.

It burns me up to think that some of us worked so hard to get nitrogen and then have it apparently go direct into the black market or be stacked back in some warehouse. I would certainly like to have proof as to delivery and if it is as the reports coming to me have the matter made public. It would be a direct service to agriculture.

It seems to me that it would be a service to farmers if machinery could be set up ready to make an investigation into black marketeering should it again appear to exist.

Last December some producers of anhydrous ammonia raised their price from $70 a ton to $85. This gave cause for concern that nitrogen fertilizer prices would be raised to the farmer. It was felt that the increase in the price of anhydrous ammonia was unjustified because the price, until about a year ago, was $59 a ton. Many of the Govern

ment nitrogen plants had been purchased as war surplus for much less than they are worth today. It has always been said that some of these Army plants are producing nitrogen for around $35 or $40 a ton. We would like to ask that the cost of producing a ton of anhydrous ammonia in Army war plants be obtained in detail and published in the committee report and hearings.

Our members have also complained that they cannot buy fertilizer in the form they desire it, that they have to buy mixed goods to get nitrogen. In many cases this situation results in a waste of fertilizer elements. We would like to see the facts published as to the percentage of nitrogen that is now going into mixed fertilizers as against prewar and to find out if industry could not make more fertilizer material available in the straight form if that is the form in which it is most needed.

It will soon be 4 years since the war ended and our members have all this time been looking forward to the day when the nitrogen fertilizer produced in the Army plants will be used to supply domestic needs. We hope these hearings will show that the recovery in foreign countries has been so great that more nitrogen will this year and next year be available for domestic needs. If recovery is not being made in the foreign countries, our members would like to know why.

Last year Public Law 793 appears to have been effective in making more nitrogen fertilizer available in some of the critical areas. Public law 793 is in regard to allocating products.

Mr. ABERNETHY. Very fortunately, you have one of these plants down in South Carolina where this farmer you were speaking of resides. There is where one of the sulfate plants is located; is it not? Mr. HALVERSON. We have had one letter indicating that this law is still needed to make enough nitrogen available in the Pacific Northwest.

There are a few matters which do not relate to the present fertilizer shortage which I would like to comment on. It has been alleged that double or triple superphosphate is the cheapest form of phosphate fertilizer for farmers in most sections of the country and yet it is mostly ordinary superphosphate that is available and used. Others allege that ordinary superphosphate is the cheapest form of phosphate fertilizer. We urge that research be done to answer this question and that the facts be brought out in the hearings or the committee report.

Research into the need for mineral elements other than N. P. & K. seems to be quite inadequate and we urge more research on this problem. Very few States are equipped to test the soil of farmers for deficiencies in the so-called minor plant-food elements though they are very important to good crops and health of livestock and people. Research on soil-testing methods for these minor plant-food elements needs to be done and the States encouraged to expand their soil-testing laboratories so as to be able to tell farmers what elements may be lacking in their soil.

Mr. ABERNETHY. You have brought up one matter which I am glad you have mentioned. It is the reference to tie-in sales. I don't think the fertilizer industry can be held entirely accountable for that situation. It may be that some responsibility lies with them. In any industry, no matter how ethically they may endeavor to operate, there