GENERAL FARM PROGRAM 909> 



Mr. HoLMAN. Well, at the plants — I think probably Mr. Lund 

 would verify this, or any plant man would — even in the plants thev 

 have separate places for handling different grades of milk. FoV 

 example, we have a grade A plant and a grade B plant, maybe, 

 under the same ownership, and the milk on inspection and the milk 

 that comes from the farms that have been particularly qualified for 

 grade A purposes will go to one plant, and the grade B milk or the 

 ungraded milk will go to another plant, as a general rule, throughout 

 this country. 



Mr. Granger. But I understand in processing and producing^ 

 grade A milk — ^in fact, all the milk that is produced is of a much 

 higher grade now than it used to be. 



Mr. Holm AN. Oh, yes. 



Mr. Granger. The whole industry is raised so far as producing 

 sanitary milk is concerned, whether it goes into manufacturing or 

 what-not? 



Mr. HoLMAN. That is very true. 



Mr. Hope. Mr. Holman, do I understand the position of your 

 organization to be you are opposed to price support by payments, 

 under any conditions? 



Mr. Holman. Yes. 



Mr. Hope. There are no circumstances under which you think the 

 program of payments, as suggested by Secretary Brannan or as 

 authorized by title II of the act of 1948, should be used? 



Mr. Holman. We went through some pretty sad experiences with 

 the payment plan during the war wherein, for example, under the 

 roll-back on butter which later had to be rolled up a little, we got to- 

 where the subsidy to the farmer on butter — which really was a con- 

 sumer subsidy — approximated 25 cents a pound; say around 23 cents 

 a pound. So that you had a condition there at the end of the war^ 

 as I recall — and Mr. Reed can correct me — where butter was whole- 

 saling for pretty close to 51 cents a pound. 



Then we went through decontrol. The consuming public had 

 been led to think butter was always going to be cheap, and, when the 

 decontrol order went into effect, there had to be a very painful recon- 

 struction of the whole dairy economy. Practically every dairy farmer 

 in the country was getting some kind of subsidy for some kind of 

 purpose, and we had an abnormal and unhealthy economic condition 

 which naturally rebounded to a somewhat unhealthy condition, too. 

 We think butter got up a little too high. You cannot always control 

 those things. But as the production of butter began to increase 

 again, butter prices began to sink down to considerably lower levels. 



I cannot imagine a single use for which milk fat is put that would 

 result in a satisfactory condition for dairy farmers by the use of the 

 subsidy method. Of course, we make a distinction between the 

 purchase for stabilization purposes and personal subsidies. 



Mr. Hope. I am making that same distinction. You believe, 

 though, do you, that you can carry out a satisfactory price-control 

 program through the stabilization of programs in the case of the 

 products, and through milk-marketing agreements in the fluid milk 

 areas? 



Mr. Holman. I think the most of our people are agreed that that 

 is correct. 



