GENERAL FARM PROGRAM 901 



of milk used in making butter, cheese, and other manufactured milk 

 products. 



It should be emphasized at the start that no single milk parity 

 program will suffice to safeguard the interests of the producer whose 

 milk is used for manufacturing purposes. A single parity program 

 necessarily must deal in national averages and use of those averages 

 has the effect of leaving manufactm-ing milk mthout adequate pro- 

 tection. 



By way of example, I call attention to the February 15, 1949, data 

 which were typical of a situation which has long existed. 



On that date, the parity price of milk was given as $3.92 per hun- 

 dredweight by the Bureau of Agricultural Economics. On the basis 

 of 90 percent of parity as the support price, any producer whose milk 

 was selling for less than $3.23 per hundredweight would be aided by 

 the Government. Actually, the price of manufacturing milk on that 

 date throughout most of the large manufacturing milk areas of the 

 Midwest ranged from about $2.85 to $3.10 per hundredweight, but 

 no support aids were forthcoming. 



Whj^? Because on February 15 the average market price of milk 

 was $4.33 per hundi-edweight according to the Bureau of Agricultural 

 Economics. 



Mr. Andeesen. That was 3.9 percent butterfat milk? 



Mr. Gordon. That was 3.9 percent butterfat milk; that is right, Mr. 

 Andresen. 



Thus, according to BAE's calculations, the market value of milk 

 was 41 cents above parity and $1.10 above the support price, and 

 parity became inoperative as far as the producer of manufacturing- 

 milk was concerned, because of the high national average. 



The high market average in relation to the price of manufacturing 

 milk was and is due to higher prices of bottled milk, of course. In- 

 variably prices in the metiopolitan milksheds are higher by a con- 

 siderable margin than they are in the manufacturing areas, and those 

 of us who speak for the producers of manufacturing milk have no 

 quarrel with this situation as long as it does not react adversely upon 

 the incomes of our producers. We know that the milkshed producer 

 has costs which are usually higher than those of the manufacturing 

 areas, such costs pertaining mostly to sanitation and inspection re- 

 quirements, and to costs which are the natural concomitants of prox- 

 imity to market. If the suggestion embodied in this substitute pro- 

 posal for H. R. 2200 is adopted, it will, we think, adjust the situation 

 satisfactorily, providing it is changed to provide application of the 

 proposal to the period starting January 1, 1950. 



We feel that it is essential that a parity milk price and a parity 

 manufacturing milk price be made mandatory, because it is most im- 

 portant that the dauy industry be provided with safeguards vv^hich 

 transcend the authority and opinion of any nonelective officer of the 

 Government, however sincere may be his good will for that industry. 

 In his proposed plan for a farm support piogram, for example. Secre- 

 tary of Agriculture Brannan has edified the industry with his apparent 

 appreciation of the nutritional and economic importance of milk and 

 dairy products, and yet in his appearance before the House Commit- 

 tee on Agriculture on April 25 last he made these statements with refer- 

 ence to milk supports: 



L'nder the proposed program with regard to milk and its products, we would con- 

 tinue full use of present marketing agreements and orders, extend those programs- 



