GENERAL FARM PROGRAM 627 



FARM PROGRAM POLICIES 



The 1947 annual meeting of the Oregon Wheat Growers League took action 

 approving the following policy statement developed by the Pacific Northwest 

 Farm Council. 



"We favor the continuance of the policy of maximum production geared to 

 economic use of the Nation's wheat lands. We favor such amendments to the 

 Agricultural Adjustment Act as will carry out these and the following basic objec- 

 tives. 



"1. Full parity for that part of the wheat crop used for human food under 

 some self-supporting plan. 



"2. The balance of the wheat to move into export, feed, and industrial markets 

 at competitive prices. 



"3. Use of production controls onl}^ when wheat stocks become larger than 

 permitted by an international wheat agreement." 



This committee recommends that the Oregon Wheat Growers League reaffirm 

 the action taken last year believing that the policies set forth in the above state- 

 ment are sound and practical, as the basis for a long-time wheat program. 



However, Public Law 897 was passed by the Eightieth Congress which, among 

 other things provides for a modernized parity formula, which under present condi- 

 tions would drastically reduce the wheat parity figure. It also provides that price 

 supports for wheat shall be on a flexible basis ranging from 60 to 90 percent of 

 parity depending upon the relationship of total supply to normal supply. This 

 relationship is usually, as at present, such as to set the wheat support price floor 

 at extremely low levels. 



Therefore we recommend, that the Oregon Wheat Growers League take steps 

 to have the existing law changed to provide for price supports on wheat at 90 

 percent of parity. Otherwise support prices based on the flexible 60 to 90 percent 

 parity could become effective in 1950 resulting in extremely low prices for wheat 

 at a time of high production costs. 



We favor the continuation of the wheat loan and purchase agreement programs, 

 but urge that official announcement of wheat loan rates be made as early as 

 possible. 



Statement of Don McKinnis, Chairman, Production and Marketing 

 Committee of Oregon Wheat Growers League 



My name is Don McKinnis. I am a wheat producer in L^nion County, Oreg., 

 and am chairman of the production and transportation committee of the Oregon 

 Wheat Growers League. 



Our producers fear that in determining a national policy for agriculture, Con- 

 gress may be unduly influenced by the propaganda appearing in financial and 

 trade journals and in the daily press relative to cost of food. The inference is 

 being made that the prices received by farmers are largely responsible for the high 

 cost of food to city consumers. I have read with considerable interest the excellent 

 report prepared by the Bureau of Agricultural Economics on farm-to-retail 

 margins for white flour and white bread, December 1948. We have attempted 

 to analyze this report and other information as it applies to the marketing of 

 wheat in Oregon. 



Let me give you a little background on the trends of the marketing costs of 

 processing wheat into flour and finally into bread. 



The marketing charges or costs of the processors have increased, but tend to 

 lag behind the increasing farm prices. The increases in marketing costs are due 

 chiefly to increased wage rates, increased transportation rates, and increases in 

 the marketing services demanded by the consumer. Wages and salaries make up 

 the major items of costs in processing and distributing a bushel of wheat into 

 loaves of bread. 



The profits of the businesses that process and market flour and bread have been 

 high, but are declining from their wartime peaks. These profits will probably 

 remain high until the expansion of production of the milling and baking industries 

 catches up with the expanding population. 



The question being asked by most people now is, "Why have farm prices 

 declined much faster than the retail prices of food to the consumer?" Let us 

 consider the case of the declining price of wheat, (about 30 percent since January 

 1948) while the cost of bread has stayed about the same or increased 0.7 percent. 

 One reason for this is that the wages and salaries which make up the major cost 

 of processing and distribution strongly resist being reduced until the general price 



