1168 GENERAL FARM PROGRAM 



Is it your considered judgment that in the event the production 

 payment plan is used on hogs, it would not have a material effect on 

 the marketing of other meat products; is that your considered 

 judgment? 



Secretary Brannan. Mr. Chairman, I think I would be willing to 

 state it just about that way. I would like to amplify it by stating 

 this, that unless there was a very drastic immediate drop in the price 

 of hogs, we would not expect any appreciable sympathetic reflection 

 upon the price of beef animals. 



I also would like to say this, that while there might be some sym- 

 pathetic eft'ect on it which we would not contemplate, at least which 

 the livestock growers would not contemplate, with too much pleas- 

 ure, nevertheless a choice has to be made here between some 

 type of operation which is palatable to all the people and a type of 

 opei'ation which we have before us which, in my opinion, will be most 

 unpalatable to people. And you have a selection between alterna- 

 tives, neither one of which is wholly attractive. 



Mr. Andresen. Would it not depend entirely on how low the price 

 support might be as to whether or not consumption would be increased 

 to such an extent that, by causing a shift in the diet of people, if they 

 buy more pork, they will buy less beef? Is not that right — and that 

 depends on the price of pork? 



Secretary Brannan. No, sir; I do not think that follows necessarily. 

 They might buy less of a lot of other commodities. The things which 

 will control the price of any one of those commodities is the amount 

 of oft'erings in the market place at any particular time. Surely there 

 will be a sympathetic relationship between the two commodities, but 

 there are other factors which are equally controlling and, in my opin- 

 ion, much more controlling. They would be the volume of marketings 

 at any particular time, on the one hand, and the demand, pressure, 

 or activity of the demand, on the other hand. 



Mr. Andresen. You are expecting a large marketing in the fall, in 

 October, which is going to bring the price of hogs down below the 

 support price. That is why this legislation is being considered here. 



Secretary Brannan. Yes. Let us assume, also, at the same time 

 there was a very light marketing of beef cattle — and I am not pre- 

 dicting any such thing at all — the light marketing of beef cattle might 

 very well offset any adverse sympathetic influence that the price of 

 pork would otherwise have had on beef. In short, it is not a simple 

 problem where you can just take two factors and set them in juxta- 

 position and say if you move one an inch, the other one reflects a 

 comparable move of an inch or a quarter of an inch. There are 

 many, many factors all the way across the board that will bear on 

 the price movement of any commodity at any time. 



Mr. Pace. The other question takes you into the field of specula- 

 tion, surely; but, drawing upon your experience, would the announce- 

 ment of a production payment plan on hogs or any other commodity 

 have any psychological effect upon producers and buyers? I mean 

 to say would there be any feeling that "Well, we get the dift'erence; 

 so what does it matter?" Would it have any effect in restraining 

 smart bargaining, you might say, in trying to get the best price? 



That statement has been made, and I want the benefit of your 

 experience. 



