1248 GENERAL FARM PROGRAM 



We are in a very critical period. The fact that the Department 

 of Agriculture has had to come in unexpectedly to support butter 

 and to support powder was not iu the plan at all. It was because 

 emergencies had arisen. It indicates that this plan is long overdue. 

 I urge you very seriously, if this is going to be done at all on a trial 

 basis or any other basis, to please do so now, not next year. 



Mr. Pace. Mr. Parodneck, I have one question. It was indirectly 

 referred to by Mr. Andresen. You mentioned the fact that the 

 farmers were getting about 8 cents a quart and you were paying about 

 20K cents in New York, which makes a spread of 12}^ cents from the 

 dairy farm to the housewife. It has been frequently pointed out to 

 this committee — and I would be glad to have your comments — that 

 we have little assurance, with this payment going direct to the dairy- 

 man, that there would be any reduction in the price of milk to the 

 housewife when there is no machinery here in the contemplated plan 

 that would prevent a further spread between the dairyman and the 

 housewife. In other words, where you say the spread is now 12)^ 

 cents, what assurance does your housewife have that the spread will 

 not be increased to 14^ cents and she will still pay the same price for 

 the milk. 



Mr. Parodneck. I am glad you asked the question, Mr. Chairman. 

 There is a very good answer for that. It is true that the milk industry 

 is highly monopolized. In almost every market one or two or three 

 leading concerns have the market sewed up. They are the primary 

 distributors. But it is also true in most markets that there is still 

 some competitive element. This spread increases always under some 

 governmental direction. In the New York market I believe that huge 

 spread is the result of pricing formulas which are uneconomic. I do 

 not approve of them. They are pricing formulas under Federal order. 

 They are inspired by a high price and high profit policy. They have 

 reduced consumption. That is why that spread is so great. It has 

 been lower. If you take the figures at other times in the year, you 

 will find that that spread will be no more than 9 cents, or maybe 8 

 cents. At this time of the year it is very high because of a very large 

 available surplus and a high price for class-1 milk. 



Mr. Murray. The point there is that the price to the consumer 

 has not come down and the price to the farmer has. That just made 

 that spread ; did it not? 



Mr. Parodneck. No; the price to the consumer has come down, but 

 the price to the farmer has come down more. The price to the con- 

 sumer goes down with relation to the class-1 price only, and that has 

 gone down 2 cents where the price to the farmer has come down with 

 relation to the blend price. Since consumption has declined and 

 surplus has gone up, its decline has been 4 cents. 



Mr. Murray. Do you want to make Dan Tobin's milk drivers take 

 less money? Is that what you are proposing? There is one of the 

 big costs in between. Are you for lowering the wages of the people 

 who handle milk? 



Mr. Parodneck. I do not think that would do it, Mr. Murray. I 

 am trying to answer the chairman's question, if you will permit me for 

 just a moment. In each one of these markets there is a competitive 

 condition which can be encouraged by the Government. I will speak 

 for New York. My own organization is an antitrust instrument. We 

 are opposed to monopolistic practices, and we are in business to see 



