Senator LUCAS. Well, maybe so. If I thought the margarine crowd were in that kind of business, they would not get any consideration from me. And if you have any proof on that, I would certainly like to have it, because that is a pretty tough statement: To say that they are just going to steal your butter market by selling margarine for butter. Mr. LYTLE. We feel, Senator, that when you go into a restaurant and order butter, and you are given something else and Senator LUCAS. That is not what I am talking about. I am talking about the industry itself. Mr. LYTLE. I am talking about the product being offered to con sumers. Senator LUCAS. I do not think that that is what you say here: To repeal the tax and not provide some safeguarding regulations would allow the oleo interests to move into the thousands of public eating places. You are still talking about the oleo interests. They could still offer the product as butter, you say, and therefore steal the hard-won markets from the butter industry. In other words, you are talking about the oleo industry stealing markets from the butter industry. Mr. LYTLE. I believe our national federation has prepared a pamphlet listing quite a number of such cases. Senator THYE. Mr. Chairman? The CHAIRMAN. Senator Thye. Senator THYE. Mr. Chairman, I am not a member of this committee and I always feel that I am trespassing at any time that I make any reference or any comments. But in all fairness to the testimony by Mr. Lytle, I think that the entire paragraph should be read. And it would read like this: To repeal the tax and not provide some safeguarding regulations would allow the oleo interests to move into the thousands of public eating places. That left me to understand that it was his statement that he was not charging the processor, but he was charging the fact that the product would go into the many public eating places. I say that in fairness to Mr. Lytle. Senator LUCAS. I certainly am not trying to challenge the gentleman from North Carolina. I am merely trying to get his interpretation of his statement. Mr. LYTLE. I see what you mean. My interpretation is exactly as the gentleman has stated: To the effect that without some sort of regulation nationally, that sort of thing would take place. Senator LUCAS. I think I can agree with you on that; that there would be certain violations, or substitutions, if we did not have something technical with which to work. That is what we have been trying to get from the witnesses, so that we could intelligently work on an amendment in committee on that, and so that we could work on that very thing. Senator GEORGE. Has the State of North Carolina adopted any regulatory measures to protect the public? Mr. LYTLE. Yes, sir; we have excluded the sale of the yellow oleomargarine in public eating places entirely. Senator GEORGE. Excluded it? Mr. LYTLE. Yes, sir. It can be sold in packages clearly labeled but not be sold in public eating places. Senator GEORGE. It cannot be served in public eating places? Senator GEORGE. It has to be sold in the white? Mr. LYTLE. Yes, sir. Senator GEORGE. Have they adopted any similar legislation against nylons? Mr. LYTLE. No, sir; there apparently is not any deception as between rayon and nylon.'" Senator GEORGE. Or cotton and rayon? Mr. LYTLE. Apparently there is no deception as regard the con sumers. Senator GEORGE. They are taking a large part of the market? Mr. LYTLE. Apparently they are but they are taking it on their own merit and rayon and cotton are making it plain that their product is not nylon. Senator GEORGE. Do not the oleo people make it plain that it is oleo and not butter? Mr. LYTLE. No, sir. Senator GEORGE. Did you hear the testimony of the Under Secretary of the Treasury that the Treasury saw no reason for continuance of the tax as a regulatory matter now that we have a Food and Drug Act and now that we have other regulatory measures that can handle the situation? Mr. LYTLE. No, sir; I did not hear that testimony, sir. Senator GEORGE. All right, sir. The CHAIRMAN. Thank you, sir. Mr. Rich L. Duncan, secretary-manager of the Falls Cities Cooperative Milk Producers' Association. STATEMENT OF RICH L. DUNCAN, SECRETARY-MANAGER OF FALLS CITIES COOPERATIVE MILK PRODUCERS' ASSOCIATION, LOUISVILLE, KY. The CHAIRMAN. Proceed, Mr. Duncan. Mr. DUNCAN. My name is Rich L. Duncan, and I am secretarymanager of the Falls Cities Cooperative Milk Producers' Association at Louisville, Ky. The Falls Cities Cooperative Milk Producers' Association is an organization of 1,600 dairy farmers of Kentucky and Indiana producing high quality, rigidly inspected milk, principally for bottle trade in the three Falls Cities' markets. We do an annual business of approximately $9,000,000. We do not make any butter, and the buyers of our milk produce a relatively small amount with the exception of the flush months of April, May, and June. Since our inception in 1931, we have been influenced by and dependent on the price of Chicago 92 score butter in our price-setting determinations and formulas. We received as little as 65 cents per hundred for our excess milk in June 1932, and our record high price was in December 1947, when we received $5.78 per hundred for all the milk which we produced. Ninety-two score butter was 16 cents per pound in June 1932, when we received the 65-cent price, and was 86 cents 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 year 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 I have sold off my own farm to the stockyard cows which have brought as high as $260 just for beef. COWS. 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 our 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 none. 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. Senator GEORGE. No questions. The CHAIRMAN. Mr. Glen M. Householder? STATEMENT OF GLEN M. HOUSEHOLDER, DIRECTOR OF EXTENSION SERVICE, THE HOLSTEIN-FRIESIAN ASSOCIATION OF AMERICA, ON BEHALF OF THE PUREBRED CATTLE ASSOCIATION, BRATTLEBORO, VT. The CHAIRMAN. You may proceed, Mr. Householder. 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 |