822 GENERAL FARM PROGRAM 



Several additional points are worth emphasizing in the time al- 

 lotted to me. I want to endorse fully Secratary Brannan's proposal 

 for compensatory payments, when needed, in order for the livestock 

 producer to attain income parity. 



It is not necessary, I am sure, to dwell at length before this commit- 

 tee on the fact that price supports for livestock cannot successfully 

 be implemented by the same methods as apply to storable grains. 

 Meat is perishable and/or semiperishable, and the problem of storage 

 could not be met when supports are most needed. If price supports 

 are to be made effective for livestock, practical measures must be de- 

 vised for underpinning the supports. Otherwise, they will collapse. 

 Recall in tliis connection the experience with the heavy 1943-44 

 hog marketing. Because of a large corn crop, farmers increased hog 

 breeding at that time. There were ''floors" as well as "ceilings" for 

 hogs. But with the heavy hog marketing which developed, compli- 

 cated by labor shortages at the major packing plants — a condition I 

 have reason to believe the big companies did not wish to avoid — ^the 

 operation of supply and demand caused hog prices to fall thi'ough the 

 floor. Therefore, numerous hog producers took a severe beating on 

 prices, in spite of the so-called price support guaranty. 



Significantly, the packers did not pass on to consumers anything 

 like the full benefit of lower prices on hogs. This provides further 

 evidence that the marketing margin does not automatically adjust 

 itself to conform with changes in raw material prices. 



Very recent experience in respect to hog prices, when compared 

 with wholesale prices on pork, provide further evidence on the threat 

 arising out of the margin situation. In the weekly Livestock and 

 Market News for April 26, 1949, issued by the Production and Market- 

 ing Administration in Cliicago, we find data which is extremely 

 iUuminatmg. 



This authoritative Department of .A.griculture source states that 

 barrows and gUts in Chicago on .August 21, 1948, averaged $29.90 per 

 hundred pounds, whereas on .A.pril 23 of this year they averaged 

 $18.22. This is a steep drop of 40 percent. But for the same period 

 we find that the wholesale (packer) price on pork loins weighing 8 to 

 12 pounds sold up to $72 a hundred on August 21, 1948, compared 

 with up to $51 on .A.pril 23 of this year, a drop of 29 percent. Again 

 pork loins weighing 12 to 16 pounds went down from $65 to $50 a 

 hundred for this period, a change of 23 percent. And, most significant, 

 for the same period pork loins weighing from 16 to 20 pounds, popu- 

 larly known as the ''poor man's pork," went down from $55 a hundred 

 to $45. This was a drop of only 18 percent. 



These figures afford further demonstration of the failure of the 

 marketing margin on meat to adjust itself in conformity with changes 

 in livestock prices. Observe that this failure is most glaring for those 

 low-income consumers who are always under the greatest pressure 

 to curtail their meat purchases to a scale below minimum family 

 nutritional requhements. Again, I urge that this situation relating 

 to margins be studied with the greatest care and that steps be devised 

 to safeguard against the real dangers that are involved. 



I wish now to comment briefly concerning the price support method 

 for livestock proposed by Secretary Brannan as an alternative to 

 storage under loans and/or Government purchase. I am aware that 

 efforts have been made to damn compensatory payments as a form 



