1154 GENERAL FARM PROGRAM 



Secretary Brannan. First of all, I think it must be admitted that 

 there is some sympathetic relationship between the prices of meats. 

 If the price of any of those commodities would change materially it 

 would have an impact upon the price of the other commodities. 



Mr. Pace. How materially must the change be to have an impact? 



Secretary Brannan. I would like to go into the area of the specific 

 commodities. With respect to chickens, the sympathetic relationship 

 is rather mild. It is extremely mild. In the relationship between 

 hogs and lambs, again the sympathetic relationship is fairly mild. 



As we looked at the charts, there are a number of occasions in which 

 the prices of those two commodities moved in just exactly the opposite 

 directions, one going up and the other going down. People's tastes are 

 geared to some of those commodities and at seasonal times of the 

 year the demand is heavier on one than on the other. 



The hot season doesn't bring as big a demand for pork as the other 

 commodities. As you get into the area of beef, there is perhaps a 

 little more close relationship. On the other hand, there are some 

 experiences in which those prices have moved in the opposite direction. 



What I am trying to say is that there is some relationship but after 

 studying all the information and historical data we could get our 

 hands on, we do not feel that a drop of 20 percent in the price of hogs 

 would have a very serious impact upon the price of beef because we 

 are still considerably short of beef animals in this country in compari- 

 son with the genuine demand for them. 



While you must admit there is some sympathetic relationship, I do 

 not think it is so dangerous as to cause us to say that you should not 

 use production payments on hogs because of the weight of the impact 

 on beef animals. I would like to point out that beef is now selling at 

 about 150 percent of present parit}^. Beef is selling in the market 

 place at around $20 to $21 and the support level under the 90 percent 

 of parity would be $13. 



Mr. Pace. They are both above parity at the moment. 



Secretary Brannan. Yes. 



Mr. Pace. Are there any questions? 



Mr. CooLEY. Mr. Chairman. 



Mr. Pace. Mr. Cooley. 



Mr. Cooley. Mr. Secretary, under 4485 you would have the 

 payment-to-producers program plus the program you now have and 

 if it happened that the payment plan was more expensive than the 

 purchase plan you would be at liberty to change it. 



Secretary Brannan. That is right. 



Mr. Cooley. Do you feel that we should give you both powers 

 and if you found that the payments would work better you would 

 use them and if not you would certainly not be worse off because you 

 could come back to your purchase-and-storage program? As it is now, 

 you have no alternative and you have to go one way. 



Secretary Brannan. That is right. We would like to retain the 

 purchase authority also because on some occasions meat is out of 

 proportion, so to speak, and we could buy a little and stabilize the 

 market in those areas. That is particularly true in some of the south- 

 ern areas. 



Mr. Pace. In that connection, Mr. Secretary, you would have no 

 objection if the committee authorized two or three commodities or 

 all the commodities under the payment plan that are stipulated in the 



