I think you know that there is legislation introduced designed to curtail or to place a limit on the extent to which such a practice can be carried out. So it is a matter that another committee of Congress will no doubt consider either before this session is over, or sometime in the near future. CHAINSTORE MERCHANDISING Mr. HULL. Chainstore merchandising of livestock products is another aspect that interests and concerns me. As Chairman Whitten noted at one point during the hearings last year, we have seen a change in terminology by chainstores; what used to be a rib steak might now be called a chuck steak, or vice versa. Could you enumerate for us some of your larger problems in this area of chainstore merchandising, false or deceptive advertising, et cetera ? Mr. LANGEN. Yes, I certainly can. Let me say this: We just had one such case called to my attention yesterday in which some figures were brought to us indicating that a certain chainstore or merchandising concern was selling certain cuts at abnormally low prices to certain customers. That whole matter is under study now. I asked that this be very carefully reviewed in order that we might further use it in connection with other complaints that I am sure will be coming. In fact, we had a case that was settled much to our satisfaction in court not too long ago, in which a major freezer-locker meat merchandiser was among other things substituting front quarters for hind quarters and in that way misrepresenting the product they were selling to the consumer. The court held in our favor in that instance and I am sure that will prove to be a case that will be helpful in approaching the other problems as they are called to our attention, too. TRANSFER TO DEPARTMENT OF ECONOMIC AFFAIRS Mr. HULL. I note that your administration would be transferred to the Department of Economic Affairs under the President's proposed Government reorganization. Do you apprehend this somehow will improve the operation of the agency? Mr. LANGEN. As I understand it, the reorganization which has been proposed, does not envision any change in the operation of the respective agencies. They will be maintained on very much the same basis, The object of the reorganization on the part of the President has been one of realining and streamlining the operations of the entire Executive branch of the Government for greater efficiency. Let me add that while those recommendations have been made, they are not included in this budget or our budget request in any way, shape, form or manner. It still follows that in order for those to become reality it will take congressional action. At this point we are simply sitting by waiting to see what kind of response Congress is going to give the proposal. As far as the Packers and Stockyards Administration is concerned, and if the reorganization were to be carried out as designed, I do not see that it would change our activity, our objective, our purpose, or our accomplishment at all. I think possibly the working of our agency relative to the operations of the entire Government would probably be better. Mr. HULL. My best to you. You are a good man. Mr. LANGEN. Thank you, you are kind. Mr. WHITTEN. Mr. Evans. Mr. EVANS. I repeat what the gentleman said before. It was a pleasure to serve with you for the 2 years I did. Mr. LANGEN. Thank you. MARKET CHANNELS AND PRICING METHODS Mr. EVANS. I was most interested in the statement in your justification book and the explanatory notes in volume 3, as well as your statement regarding the extent to which you reviewed the significant changes in market channels and pricing methods. I have always felt that the fellow who raises the product in this country for the past 40, 50, 60 years, has been at a great disadvantage when he meets the fellow who buys his product. What, if any, changes do you see on the way that might strengthen the producer's hand, and might make him be able to demand a better price for his product than in the past? Do you note any changes in this regard? Mr. LANGEN. Yes; I think we note several changes in this regard. It is in one of the elements that we will quite thoroughly explore during our conference with the advisory committees. The increase in the number of auctions brings new problems. However, if those auctions perform as they were intended to perform, you can not get a much more truly competitive situation. Buyers who want cattle will have no choice but to bid in competition with each other. This becomes of some concern to us because of the very rapid movement into auctions. Most of them function very well. There are also some that I understand have some problems. For instance, we find some auctions that seem to have as an objective trying to see how many cattle can be moved through in an hour. The minute that happens, you lose a significant part of the competition. The objective of an auction should be to see how much money can be got for each animal. It was called to my attention that there are auctions that have so many cattle backlogged that they often times may start selling at 9 and 10 in the morning and continue until midnight and often times into the next morning. You can imagine what happens after midnight. A lot of the buyers have left. Their competition is missing. This is not good business. These are some of the things at which we are going to have to take a look. We feel that our charge is to provide to the producer that he is going to have an equitable, solvent place in which he will have competitive opportunity to move his product at the best price possible. ADVANCE CONTRACT BUYING Mr. EVANS. What is the story in regard to contract buying in advance, where a large packer or a chain store might make an agreement with a feeder or the farmers in advance for a certain number of head or pounds and certain grades, that they will take so much and pay so much. Is this a trend, or is it not? Mr. LANGEN. There is no question but that this is something that prevails in many, many instances. I am not in the position to say at his point the extent to which it may be growing. However, it is becom ing a more and important part in the whole movement of livestock, there is no question about that. There is a great deal more of direct buying, as we refer to it, which means that it goes directly either to the packer or the chain store, as you say. VERTICAL INTEGRATION Mr. EVANS. How about the area of integration, particularly as it relates to livestock. Has there been a greater tendency toward this? You mentioned there is relative success and failure involved, but is there a growing movement in this direction? Mr. LANGEN. I think there is a growing movement, but certainly not to the degree that exists in the broiler industry. The matter of supplying feed, for instance, for a feed lot and the financing necessary to it is a growing practice. This has been encouraged by the high interest rates and the difficulties involved in getting financing with which to buy feed and other necessary supplies. UNIFORM BRANDING LAW Mr. EVANS. I have one more question, Mr. Langen. Some ranchers and farmers in my State suggested at the beginning of this year that I look into the possibility of proposing a uniform branding law. Our State of Colorado has a law. Kansas has no branding law; the theory being that title to the cattle can be followed more carefully and the problems of rustling can be diminished. Does this question of title to cattle and bills of sale and rustling come under your administration at all? Mr. LANGEN. Yes, to the extent that they can be identified. Many times this is a very perplexing problem. I see some merit to what you say in the matter of branding. One of the instances in which you will find this problem is in the movement of cattle by truck into the stockyard or into an auction. This trucker may well pick up cattle from several different places. If they are not branded what they usually do is they slip a brand tag on them at the time they load them. How easy it is to change that because all it takes is a pair of scissors. Then there arises a question at the time when they arrive at the auction or the stockyard as to whether or not there may have been some brand change. There might also be some doubt as to the actual owner of three or four steers or a couple of cows within a whole truckload. Mr. EVANS. This is what happens. This is what the complaint is in Colorado. While we have branding laws in Colorado, the difficulty is that people come in and rustle cattle and take them across the border into Kansas where they do not have branding laws and the auction houses or sales rings have no requirements for registration. When our ranchers go to Kansas where they think the cattle were taken to see if they can find them, as far as the records are concerned there is no record with regard to brand and therefore great difficulty in trying to find out whether the rustled cattle were sold in the Kansas auctions. Mr. LANGEN. There is no doubt that this is a problem. You do find many instances where you have a cattle trucker who not only trucks cattle to market, but who may also buy cattle. Often the trucker has bought half the load and is hauling the rest for somebody else. You can well see the temptation that is there. Consequently, having those animals well marked is important. Mr. EVANS. I inquired from the National Cattlemen's Association if they wished to express interest in such a law and they said no, they prefer to go the route of standard State laws. They expressed their interest in approaching it in that fashion rather than Federal law. Mr. LANGEN. There have been various things used in stockyards. and auctions for purpose of marking animals other than the clipping of a brand or identity on them. Various crayons have been used to mark animals with a color. Greases or paints have also been used. This is so they are not going to be able to shift from one to the other too readily. Mr. EVANS. Does this kind of offense come under your jurisdiction at all? Mr. LANGEN. If the complaint is raised, and there has been an injustice done to a producer, yes. You can tie it to the auction, the dealer, the commission firm or whatever the case may be. Mr. EVANS. Thank you, Mr. Chairman. Mr. WHITTEN. Mr. Michel. Mr. MICHEL. Mr. Chairman, first I want to say, Odin, it is good to see you around this table. The only regret is that it is on that side rather than this side. Having served so many years on this side of the table, I think it has ably fitted you for knowing the kind of testimony we like to hear on this side of the table. I think it is quite obvious that your testimony here today is one of the most interesting we have had on this budget item in the years that I have been on the committee, and in such a relatively short period of time you seem to have gotten yourself engrossed in the job. MAJOR LIVESTOCK MARKETS In Peoria we are hoping to take up some of the slack from the closing of the yards in Chicago. As a matter of fact, we doubled the capacity of the yards in Peoria to take on a good part of the cattle business. Several years ago we got into the hog business to a greater extent, so now Peoria is one of the bigger hog markets in the country, is it not? Mr. LANGEN. Yes, sir. The hog market in Chicago closed some time ago and all of its hog business has moved into other markets. Peoria got a big share of it, beyond all doubt. Mr. MICHEL. I wonder if you would place in the record at this point the 10 largest markets, and the volume in head and in dollar sales, if that is available for the 10 largest markets for cattle, hogs, and sheep. Mr. LANGEN. I surely will. (The information follows:) |