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per pound in December 1947, when we received the price of $5.78. Our producer milk price curve has followed the curve of butter prices very closely.
We, as do 29 other large milk markets, operate under a Federal milk marketing order of the Production and Marketing Administration of the United States Department of Agriculture. In 23 of these marketing orders, a butter plus skim milk powder formula determines the milk producers' pay price as one of the basic price alternates. In our market, when the butter price moves 1 cent up or 1 cent down, our producer prices move 5 cents up or 5 cents down when our butter powder formula is used.
It is undisputable that the butter market acts as a "gold standard" to the dairy industry in the fluid or bottle milk markets, as well as in the manufacturing milk markets.
Several months ago oleomargarine production passed butter production. The more oleo becomes like butter, the greater its consumption will be, and as the demand for butter slackens, our milk prices in fluid milk markets will drop approximately 5 cents per hundred for every 1 cent drop in the butter price. Our labor expenses and feed bills will not go down in proportion.
In Louisville, Ky., some of our principal hotels and clubs serve oleomargarine and insist that it is butter. Truth has no label on the table.
If no line of demarcation exists between oleo and butter, and oleo wears more of the mask of a butter substitute, creeping consternation will develop in America's largest agricultural industry and dairy farmers will lose confidence in the future outlook for dairy production, and America's patriotic dairy farmers will not reach the production goals recommended for home and foreign needs. Today, we have 10 percent fewer cows in our American pastures than in 1945, according to the United States Department of Agriculture.
Total milk-cow numbers of American farms on January 1 this year were 25,165,000 head. This figure is 3.6 percent less than January 1, 1947. The calf and heifer crop for replacements is running low. Six and one-half million dairy cows were led to the shambles last
and only 5.6 million heifers came into milk production to take their places in the milking line.
During 1947 beef cattle prices to farmers were 50 percent above parity and hogs were 46 percent above parity. In comparison, milk prices were 17 percent above parity and butterfat 20 percent above parity. It looks as though the grass is greener on the other side of the fence and this is why dairy farmers have let their production slip. Milk production was down 6 percent in January of this year comparable to January 1947.
The CHAIRMAN. Would the high price of meat induce the sale of a lot of dairy cattle?
Mr. DUNCAN. Yes, sir, I think particularly in a lot of marginal. cows. I have sold off my own farm to the stockyard cows which have brought as high as $260 just for beef.
Consider these facts in the light of our responsibilities. In 1947 the country experienced the highest birth rate on record with 3,700,000 babies coming into the world. The pre-war average was 2,200,000. Marriages in 1947 were 500,000 more than the average before the war.
Babies are dependent on our fluid and evaporated milk. Coupled with an unusual civilian demand, which is running 5 percent in our Falls Cities markets over the previous year, the European relief program calls for evaporated milk, cheese, and milk powder for export.
Are these facts convincing to you that the dairy farmer should be discouraged at such a time and oleomargarine should be exalted?
Twenty-two States of the Union will not permit without regulations colored oleo sales, even if the Federal 10 cents tax is deleted. We, who sell our products in the remaining 26 States, will be handicapped with colored oleo on the shelves of our groceries and an inequality will exist between States. Our fluid milk markets, dealing in bottle milk, will have new problems.
Let down the bars of oleo and immediately you make the enlightening suggestion that other substitutes of such products as ice cream and cheese may wear the mask of the genuine products.
In hectic days of strikes and more strikes, which our Nation is currently passing through, how many milk strikes have you read
about in America's largest agricultural industry? I know of non Falls Cities market, between March 1, 1931, and April 1, 1940, we participated in nine strikes.
April 1, 1940, marked the day we received our Federal milk marketing order, which, indeed, set up an orderly program of milk marketing. We have not participated in any strike since that date. During this period we have enjoyed stability and market harmony with our butter price formulas. We did not dream of this in the thirties. Shall one branch of our American system upset the orderly procedure which another section has set up? As man to man, shall we, like children, bump over with our rumps the blocks which we have carefully set up with our hands?
In conclusion, I want to say that I am a dairy farmer, milking 60 cows in Kentucky. If you let the bars down, I know that market reaction will cause at least a 4-cent drop in the butter market, which, in turn, will reduce my milk price 20 cents per hundred.
Likewise, all dairy farmers will be penalized in an economic upset. Is all the “bla bla" of a $6,000,000 propaganda campaign on oleo going to stampede the emotions of sane and sound thinkers and allow economic civil war to break out anew between groups in our Nation? Is the cause of 26 oleo manufacturers worth that much?
The CHAIRMAN. Thank you very much, Mr. Duncan.
STATEMENT OF GLEN M. HOUSEHOLDER, DIRECTOR OF EXTENSION
SERVICE, THE HOLSTEIN-FRIESIAN ASSOCIATION OF AMERICA,
Mr. HOUSEHOLDER. Mr. Chairman and gentlemen, I am Glen M. Householder and I am director of extension service for the HolsteinFriesian Association of America. My home is at Brattleboro, Vt.
The Holstein-Friesian Association of America is the official herdbook association organized for the purpose of recording pedigrees of
purebred Holstein-Friesian cattle in the United States. However, my statement to your committee is on behalf of the Purebred Dairy Cattle Association, headquarters of which are at Port Chester, N. Y.
Membership in the Purebred Dairy Cattle Association comprises the five major dairy breed registry associations of America: The Ayrshire Breeders' Association, American Guernsey Cattle Club, Brown Swiss Cattle Breeders' Association of America, American Jersey Cattle Club, and the Holstein-Friesian Association of America.
The long-range purpose of this all-breed association is to improve the producing ability of the dairy cattle of this country. The five member breed associations represent 227,500 owners of registered dairy cattle in the United States.
I am instructed to inform your committee that the Purebred Dairy Cattle Association is unalterably opposed to any change in the present statutes regulating the sale of oleomargarine. As breeders of the seed stock from which will spring a more efficient national dairy herd, we are naturally gravely concerned over the policy which the United States Senate will adopt, regarding legalization of the last step necessary to permit a cheap, synthetic, conglomerate imitation to masquerade as natural dairy butter by usurping the yellow color with which the Almighty endowed milk fat.
More milk, at a lower cost of production, is the ideal that has motivated these 227,500 breeders of registered dairy cattle during the past century to work the way they have. Their contribution has been second to none in advancing the American standard of living and nutrition.
Now, when the possibility of making an even greater contribution to the common good looms' bright and positive, a greedy combination numbering less than 30 manufacturers of oleomargarine demands legalization of privileges which amount to the surrender of a trademark associated with butter through the generations-a trade-mark originated by nature long before anyone had ever heard of “copyright.”
Increasing application of the laws of heredity for breeding more efficient dairy cattle, and developing profitable and stable dairy farming, is the soundest basis for building permanent fertility into our soil. It gives a stamina to our population never attained anywhere in the world on a cereal diet. Only a sound dairy industry can move forward through such research.
While America's national dairy herd has never averaged 200 pounds of butterfat per cow annually, the registered dairy herd of this country, under strict supervision of testing by breed associations and State colleges, has maintained a per-cow production ranging from two to two and one-fourth times the national average in butterfat.
Since 1939, when artificial dairy cattle breeding associations first got under way in the United States, the breeders of purebred registered dairy seed stock have been able to increase their service to the small dairy units until, in 1947, 1,585,000 dairy cows were artificially bred in 39 States to registered dairy bulls, most of which had proven their ability to increase production.
A single registered dairy bull, with very favorable proof as a production sire, has sired in excess of 15,000 calves through artificial insemination. Greater strides toward the improvement of efficiency in milk production have been made in this country during the past 10 years than during any similar period in world history. It is un
believable to the breeders of registered dairy cattle in the United States that their Government would desire to blight this progress by jeopardizing the availability of milk and its products through legalizing a ruthless and destructive competition by imitation butter.
What American dairying needs is wider distribution of the inheritance which has made this superior production possible. This goal will not be achieved if the Congress of the United States deliberately invites competition from the "coconut cow” through legalizing the imitation of butter by a product which, through the years, has consistently refused to identify itself by selecting a distinctive trademark—either color, shape, or package.
Dairy farmers sense the impending disaster which will most surely visit the industry should Congress be high-pressured into granting the Oleo Trust the unfair advantage they seek. This is illustrated by the fact that the national dairy herd, cows of milking age, has declined 1,605,000 animals between January 1945 and the first day of 1948.
In the first 4 months of 1948, the slaughter of milking-age dairy cows was unprecedented in the history of our country. The failure of dairymen to raise heifers for replacement purposes has been equally alarming.
Since America became a great industrial Nation, the best minds associated with the marketing of milk and its products have labored to level out seasonal production. They strove thus to avoid the devastating effects of handling one-third of the annual milk production of this Nation during a brief period in the spring. Because the profit margin on milk has consistently been so narrow, full advantage of maximum production on flush grass has been the dairyman's only salvation.
Golden butter has literally become the "Fort Knox” for the storage of this flush seasonal production, to be held until required during the low-milk production months of November, December, and January. Should legalized bootlegging of yellow-colored oleomargarine be invited by repeal of Federal control over this product, the total available facilities for handling fluid milk in this country will not permit the processing of all milk made on flush grass. This problem is particularly pertinent to New England where I live, and New York, which lack manufacturing facilities to handle grass milk except as butter.
Soil conservation, depending as it does largely on increased growth of
grass and leguminous hay crops, will be dealt a staggering blow in the fringe areas where the dairy industry is only today
gaining a longsought foothold as the soils-building program takes effect.
In excess of $30,000,000 worth of farm-made butter was sold from these New England and New York State subsistence farms during 1947. Seven million, three hundred and five thousand dollars of this dairy income went to mountainside farmers in the North Atlantic States where the oleomargarine interests have argued that no market other than that for fluid milk should be considered.
Should these marginal farmers, who are striving to rebuild land worn out by row-crop farming, and in no case equipped or located to benefit by a fluid milk market, be denied the ordinary degree of protection afforded other products in competitive marketing, no seriousminded person could hope that they will continue to find a profitable market for this vitally important grocery-bill income source. No other income is as reliable. No other income comes into their homes every week, year-in and year-out.
Since the dawn of history, every major war has been won by armies and civilian populations which possessed the most adequate food resources. Victorious America has never come to grips with a power backed by the agricultural resources possessed by Russia.
The purebred dairy cattle breeders of America ask each member of this committee to ponder soberly that statement. Is this the opportune time to enact legislation destined to stymie progress in a segment of America's agriculture which is admittedly producing nature's most nearly perfect nourishment for mankind ?
The Oleomargarine Trust is demanding that Congress level the last barrier which prevents 100 percent imitation of natural dairy butter by oleo made from deodorized oils, synthetic vitamins, benzoate of soda, and artificial butter flavor, and packaged in historically established butter cartons. Should Congress yield, it is the considered judgment of the breeders of registered dairy cattle that an era of oleomargarine bootlegging, at wholesale level, will be touched off, the magnitude and scope of which will make the Volstead days seem mild and harmless by comparison.
With the powerful arm of the Federal Internal Revenue Department legislated out of the picture, and with the Pure Food and Drug Administration able to handle only cases of deception and fraud involving interstate shipment, there will be a monetary incentive to sell colored oleo at the price of, and in the guise of, dairy butter. The logical conclusion is that Nation-wide substitution of yellow oleo for dairy butter at butter prices will follow.
In summary, then, we urge you to consider the reasons why this oleo legislation, already so far advanced, must not become the law of our land.
First of all, consider the great value to every man, woman, and child of our Nation today of the progress made in a stable dairy world. Consider the blow to further progress which would be struck by repeal legislation doing drastic harm to the delicate balanced economy which has made possible our progress of the past.
Secondly, consider the effects on our all-important milk supply if the present seasonal balancing factor, manufacture of butter, is jeopardized. Remember while you think of this, that there is no substitute under the sun for fluid milk, for which butter is the balance wheel. Seasonal fluctuations, inevitable without a butter market, will mean long periods when milk will not be present on many tables.
Thirdly, think of our soils-national resources never to be replaced once lost. Recall what cash cropping has done to soils in our marginal farming areas.
And lastly, remember that the best way to fight crime, fraud, dishonesty, and profiteering is never to let it begin. You have seen what temptations lie ahead. Don't let it happen. Don't set off this wave of temptation. Once such temptation is loosed, policing will be far more costly than prevention of fraud in its present harmless state. As a representative of 227,500 independent dairy farmers, I
say to you that legalizing the use of butter's yellow trade-mark by a synthetic, imitation product will have as devastating an effect on the morale of the American dairymen as did the dropping of the first atomic bomb on the morale of people of the Japanese Empire.
The CHAIRMAN. Senator George?