912 GENERAL FARM PROGRAM 



the manufacture of products? If you had all the various types of 

 distributors in the agreement would that help? 



Mr. KopiTZKE. That would be wonderful. 



Mr. Hope. You think that is beyond any hope? 



Mr. KopiTZKE. Perhaps not. 



Mr. HoLMAN. May I make this comment? It is not generally 

 understood but it is a fact that in the fluid milksheds of the country 

 that are under the Federal order, the use of the parity system for com- 

 puting prices has gone out of existence. There are other methods 

 that are used which have taken the place of the parity computation. 

 It is more like the price relationship of bottled milk to manufactured 

 milk. 



Mr. Hope. Like you have in the Boston milk area? 



Mr. HoLMAN. Yes. Of course, that is an extreme example of the 

 new social philosophy going into effect there. I am thinking more of 

 places like Chicago and the Twin Cities, Cincinnati, and St. Louis, 

 where, to a great extent, the price of fluid milk is determined by the 

 price of evaporated milk with a differential for sanitation and a 

 differential above the price of evaporated milk. 



Mr. Gordon. In answer to Mr. Hope's question, unless you had a 

 marketing agreement on a scale so vast that I cannot visualize it 

 working, you will attempt to have it within a branch of the industry. 

 If the price is too low, you will find that you have no raw material; 

 if it is too high, you price yourself out of the consumer's market. 

 I think that it would be utterly impracticable. 



Mr. Hope. You think that as far as the milk that goes into the 

 manufactured products is concerned, you could have a price-support 

 program based upon the stabilization of prices by Government buying, 

 do you? 



Mr. Gordon. I think with reference to the relationship, the 

 Department of Agriculture has done a pretty good job with that 

 88/2 percent. It is based upon a historical reason. 



Insofar as I can say offhand, it seems to me, considering the differ- 

 ence in the cost of production and processing, it would be fairly well 

 in line. 



I think there is no question about it; you could buy the products 

 of milk. You could buy the products of milk such as manufactured 

 products, and it would stabilize the market. 



Mr. Hope. Without excessive loss on the part of the Government? 



Mr. Gordon. IVlr. Hope, that depends upon the year. The 

 Government today, if you mean this year, is buying butter and 

 nonfat milk powder. I am entirely in agreement with the Assistant 

 Director of the Dairy Branch, who stated in St. Paul just recently 

 that he was qviite confident that he would not lose a penny on the 

 butter; he would perhaps make some money on it. I understand 

 from the same authority that 90 percent of all the nonfat powder 

 bought to date has already been allocated. 



The Chairman. Mr. Holman, if I understand your statement, you 

 are suggesting that the method of calculating parity be changed so 

 as to take into consideration farm-lal^or costs, and farther that con- 

 sideration be given to the subsidy program which was used during 

 the war period. 



Mr. HoLMAN. I suggested that the inclusion of farm labor be put 

 into the index, but express the views of the majority of our people 



