NFO-13 (AV10422): Midwest Farm Report: Panel onFarm Report

[music] welcome to another program of the NFO midwest farm report brought to you by the farmers in your listening area today's program we have Mr. Erhard Pfingsten the national NFO vice president Mr. Lloyd Fairbanks the national organizational director for NFO and Ken Stofferahn the National Board of Directors members from South Dakota probably the most misunderstood part of the NFO and the NFO program is the holding action some people have been led to believe that the holding action is the NFO program actually it's a very minor part of the program the program is to sell our production on contract at prices based on our cost of production and then produce for that contract but in order to exercise the bargaining power that power that lies in our farm production you have to have a tool that gives you bargaining power and this is where the holding action comes in you have to have a way to cut off that production the same method that's used by every business in the United States you can tuck bargaining power till you're blue in the face if you can't cut that production off you don't have any bargaining power so this is where the holding action comes in now even when it's understood to that extent there's still people who believe that it's there's something unusual about it actually it's no different than what every businessman up and down every Main Street in America does every day so let's compare the NFO holding action to the way the American businessman conducts his business first of all we establish a price on our production a price based on the cost after we've established that price we offer the production to every processor in the United States any processor that's willing to pay that price and contract for it gets the production it's that simple now if they refuse to pay us as farmers a fair price we have no choice we'll have to cut the production off we use the holding action but even in the holding action just as soon as any processor is willing to pay that price and contract for it he gets it now does the American businessman conduct his business he sets a price from the production that he handles a price based on his cost after he's established the cost he adds to that cost the margin of profit that he has to have to stay in business then he sets his price and after he set a price you as a customer had better believe you are either going to pay that price or you don't get the product does exactly the same thing that we proposed to do in a with the NFO on American farm products in other words the holding action is the tool that gives us the bargaining power to activate or to enforce contracts to bring about the signing of those contracts with the processor I have with me today Lloyd Fairbanks our organizational director on my left and Ken Stofferahn national director from South Dakota anything that you have to add to that Lloyd yes 'Pfing' I've had a more or less a unique situation that I've been able to watch each and every one of the whole in actions that we've had throughout the NFO collective bargaining period those of the test action the all-out action and our last action and I've got stage time the progress that we've made in our organization toward getting this bargaining power and implementing the deciding to master contracts that Fink was talking about I have seen that way had short actions to begin with as we started out in a relatively short our small area in Kansas Missouri Iowa and Nebraska then we moved on out into larger area as we organize and each time our members realized more and more that they had to keep the production on the farm in order to make their power felt until the all-out action there is where we really begin to make progress because there is where we started signing master contracts into the organization and from there we have signed hundreds of master contracts in all commodities and in each holding action that we have now we always make games because the fact that when we sign these master contracts that is something that cannot be taken away from those master contracts are good from the time that they are signed until they are activated and a year after that so this is what we have gained as well as the experience that our members are gaining and having to conduct themselves in a holding action and how to hold that production on the farm that we can sign sufficient master contracts that they can be activated so we can get cost to production plus a reasonable profit Ken what do you have to say about this thank you Lloyd first of all I want to comment on the holding action itself the tool and the instrument by which we become successful in demonstrating bargaining power but before this I would like to go back and cover first of all perhaps four basic steps in successful bargaining number one of course you have to recognize the vast supply area and of course take into consideration the major commodities and of course looking at it from the scope of the entire nation the next step then of course is that you have to organize the in these areas of supply and in there in other words talk to the farmers about the program get them into the program and then considering this area of supply the next step then would be is to bring your production together in such a fashion that to make your bargaining power felt so that those who buy it from us in the raw material form cannot fulfill their needs from other sources now here of course is where the holding action comes in of course the fourth and step that I mentioned would be to stabilize your price at a fair and equitable level through signed contracts with our processors now let's talk about the holding action just a little bit we mentioned that it is the tool or the instrument by which we become successful in implementing our contracts or to force the processors to sign or bring them to the bargaining table so that they know that you have the production behind them - that you have the production behind you but first of all I think the holding action gives the farmers in the entire nation the opportunity to cooperate and together to make their bargaining power felt' if we first realize that this is their first opportunity that they have ever had in the history of agriculture of working together toward this goal this I think is very very important that no other organization has ever offered them this type of opportunity that they could all act together in pricing their production another thing about the holding action I would like to comment on and that is that I've heard in several instances have people say that it will not and cannot work the strange thing is that I believe that it must be the issue among farmers themselves the people that have told the farmers that it cannot and will not work in most instances if not all are the very same people who if we do a little bit of checking we find that it is the same type of instrument that has worked very successfully for them about all I have right now turn it back to Erhard Pfingsten well as you said can every business in the United States or for that matter every businessman has used this principle very successfully now it is really the only method that hasn't been tried for American agriculture we as farmers have been going to a market letting our customers set the price and say what will you give me and then wonder why we don't get a fair price now if our businessmen on Main Street were to do that same thing I'll guarantee you your automobile dealer your tractor dealer grocery-man don't make any difference who it is they'd go broke if they were to sell their production on that system so it is really a system that we're proposing here the very tried system the successful system of every business in the United States so what makes anyone think what's worked for everyone else wouldn't work for the farmer it has to it just can't get around it but the big battle at the present time is not really whether or not it'll work it's a battle of minds out here in the country we on the one hand trying to point out to the farmers that everyone else is doing business just exactly that way setting their price refusing to sell when they don't get that price and we're organizing the farmers to do the same thing so the battle comes in between us and the groups that want to keep the farmers in the position that they're in in that helpless what'll you give me position they're trying to convince the farmers that they don't have any power and actually there is no group on earth that has the power that the American farmer has because we have the food we have it first and there isn't anyone gonna do anything with it until we let Lou sell it and it is for this reason that the opposition to the fair prices where farmers are trying to convince the farmers that they don't have a chance to solve their own problem through mutual cooperation a bulletin that I usually carry don't have it with me a consumers bulletin from the United States Department of Agriculture and by the way it is last December's issue raises the question how much food is there in the United States that is above the farm in warehouses coolers and so forth and they answer the question that if the American consumer were willing to cut his calorie intake to 2,000 calories the food supply would last 16 days we're eating just about 3,000 calories a day in other words if the consumer were to go on as he is eating today the food supply would last 10 days so I'll tell you there's the power that the farmers have to get their price it's unlimited if they'll just get together to do it and that's the only method in which they're going to be able to get a fair price is through their own efforts through their cooperation with each other establishing their prices and then through selling together bargaining together and holding together if need be they'll get those contracts that stabilize the prices guaranteeing them cost of production plus the profit that they rightly deserve and must have if they're going to continue to operate 'Pfing' there's something I'd like to bring out here too there's many misconcepts about our holding action first is a lot of people think that our holding action is our whole program and this certainly isn't true our holding action is only used to implement signing the master contracts so we can have the stability of price and marketing conditions and then there's another thing too that I'd like to bring out here and that is that there a lot of people called it whip holding well this is certainly erroneous because withholding is illegal and holding actions is legal holding action is as think pointed out to you nothing different than just why as the gross woman down here or the automobile dealer or anyone that has services or commodities to sell is doing today they're holding them for a price and we have the legal right to do this under the Capper-Volstead Act and so this is one thing I'd like to clear up there's the fact that there isn't the withholding but a holding action what we're doing in other words the difference is withholding usually indicates that it is a boycott which it isn't at all we hold for a price and a contract and the farmers production of course is the power that's going to see to it that we get it depending on how the farmer uses that power as I pointed out that's all the power there is in the battle if they get the production they're in business if they don't get it they're out of business a packing plant out here there's nothing but a pile of junk without cattle and hogs they have to have them if they're going to stay in business and make a profit likewise a milk plant not worth it well I shouldn't say it that way I guess the way I started- is with absolutely nothing without that farmers milk it's useless it has no other purpose than processing that milk so they can't get along without the farm production and needless to say the people can't get along without the food so the farmers have all of the power now this is what every farmer has to understand that there is no neutral ground in this battle because the farm production represents that power one way or the other that power of the farmers production is either going to be behind his fellow farmers who are organizing to get themselves and him a fair price or the power that production is going to be placed on the side of the processors who don't want to pay a fair price so there is no neutral ground the farmer out here whoever he is is either going to help his fellow farmers solve the problem and get a fair price or he's going to help the processors keep the farmers in the miserable shape that they're in one way or the other now each farmer's production actually counts twice if they'll take it away from the side of the processor it weakens that much there when placed over on the other side on the farmers side it helps that much more over there to solve this farm problem and there isn't anyone else going to solve it with- but the farmer himself and the farmers themselves are going to have to decide and they're going to have to decide now whether they want a price or whether they want to keep on like a bunch of dummies going to the market asking the processors what it pleases them to pay them had an interesting point there and that is first of all let's consider the point to how much power there really is in food itself how much bargaining power there is we oftentimes look at business and how successful they've been at pricing their production now whether it be cars tractors any form of industrial goods and services and no problem at all and pricing this and yet very definitely they use the same method as we're proposing through a holding action now I talked about a commodity or something that has bargaining power within it I can think of none other that has any greater amount of bargaining power than does food because this is something that people need three times a day and cannot absolutely cannot get along without it this is something I think we as farmers ought to really realize and that is that the amount of power that lies within the production that we have on the amount of bargaining power if we simply realize one of these days that we will just ask for a price and all cooperate and join and support the effort then certainly when we asked for it in this manner we're certainly going to get it another point now since we've covered that and that is that oftentimes we get the question that a holding action as far as farmers and agriculture are concerned will not work because you're defeating your purpose when you go into one of these they say that the production that you have livestock it's going to have to be marketed somewhere sometime and they'll just sit back and wait for it and you're defeating yourselves by increasing the tonnage on the hook a very very interesting thing happened the other day at the Research Committee of the National Farmers Organization and the figures will be released soon but I want to bring you up to date on just exactly what we found out the method we used was this they took the number of head of cattle that would be marketed through the entire year and took it on a 365 day average and even went so far as to allow for a two and a half pound they gained now we took a situation whereby if you would hold the entire amount of cattle marketed in a 30 day period from the market absolutely nothing went to market it was found out through mathematical calculation that you would not even gain two days slaughter in this 30-day period now what offsets this is the fact that during this time we know that not all of it is held of course now what offsets this is that there are a lot of cattle that are marketed perhaps seven to eight hundred pounds which is about twenty in some cases thirty percent lighter than the average so and our conclusion was that you do not gain tonnage during a holding action at all but you actually decrease it by the amount that is marketed at lighter weight now then to or might comment on this the situation just a year ago Erhard if you remember it when prices on cattle were so low I think it was in December of or from January of 64 on through May or June now remember now that there was no a holding action conducted by the National Farmers Organization during this period yet prices were so low that each individual farmer clinging to the hope that something would happen that the price would go higher had his own little individual holding action now we proved by statistics also that here is where you really gain the tonnage because there's absolutely no incentive to market any lighter weight cattle so comparing the two there's some amazing results and that is that when we have a holding action conducted by the National Farmers Organization this is a period when you actually decrease the tag yes I've worked on those figures too and have compared quite often not so much the recent figures as I compared 1962 to 1963 1962 we had relatively fair prices not all the way what they should have been but they were definitely much better than they've been for the last several years and in that year 1962 we did have a holding action there was a good one and the figures for that year indicate that the total or the carcass weight the average carcass weight was considerably lighter in 1962 than they were in 1963 as you pointed out when we didn't have any holding action and I figured it out at one time it figured that every farmer held on the average at least 30 days now probably all of them didn't but those for those that didn't hold a little longer seeing whether maybe they couldn't gain the quarter or 50 cents I don't know what they were waiting for go broke on that just as fast as you can on the other price but nevertheless they hope to get just a little break and we're hoping that it to come next month or so in held that way so it a breach doubt that all farmers held all cattle at least 30 days that was what it would average out so I think it does prove your point very definitely that it doesn't increase the tonnage that it actually decreases them when we have in have a holding action it seems that there's those people out there who would rather cut off their nose to spite their face then cooperate with their fellow farmers they'll ship in at lighter weights to build the tonnage or to build the numbers and therefore decrease the tummies it actually goes in I think another thing it ought to be brought out in connection with the holding action we do often when we've tried it tried to win in a holding action didn't make it didn't realize the full goals that were after that was more or less looked at as a defeat I'd like to point out that an apple just has to win once all the odds are in our favor now comparing it for instance to our nation I'll guarantee that George Washington didn't win the war for independence in his first battle in fact I never could even figure out how he kept going long enough till he did win won but he did win that last one and that has sticken to this day almost 200 years later we didn't win the war against the Japs in our first battle either we lost our shirts at Pearl Harbor and we didn't do so hot at Manila we were driven out of there too but a very great man when he left there said I shall return he did and the next time we cleaned them out we made it stick and it's still sticking today so I'd say all of the odds are in favor of the National Farmers Organization the processors are going to have to win every single battle from now on in order to keep us from winning our program and getting the fair prices for agriculture through collective bargaining where we have to win just once once we break through the show's over that's it so I do think that the American farmer is going to have to successfully fight one holding action but I believe that once the tape established their power go all the way through win those contracts I think it will have been established and above all in the minds of the farmers themselves to make them realize that they do have the power that they can set their price and that they themselves can and must solve the agricultural problems 'Pfing' there's one thing you've said here a little bit ago nobody can also touched on it and that was the light weights this is something that we saw a lot of during the last action in fact the reports coming in the office we found that the bulk of the hogs in the later period of the last 43 day holding action were coming in around a hundred and eighty pounds some of them even as light as a hundred and sixty pounds we also had cattle that were coming in that were half fat and grass cattle in sets and we're quite sure that many of those also were slaughtered for tonnage but to show you some of the irregularities that go on during the hold in action we found livestock moving from the West to the central part of the country and from the east to the central part and then the south and the north and this is certainly not normal in other words worth the strength of the NFO was they were trying to move it into that area in order to break down our holding action and certainly we are organized strong over this central area and now out over 23 States whereas it needs to hold this production right here in a given few states now we can hold over these other states and that production that they can bring in from the lesser producing states is not a damaging factor to our holding action I think there's one thing that I heard you say one time I'm not in connection with the holding action that I think probably would be of interest and that was the amount of meat perhaps in storage and by the percent that you cut the supply of any one day how this would cut into the adventure or the meat storage and what the effectiveness this would have would you care comments yeah I think this is a point that the farmers need to understand because they seem to think that they have to cut the whole supply off in order to have a successful holding action they actually don't now in our last holding action there was about a 7 day supply not quite a 7 day supply on hand when we went into that holding action and during that period that we were holding the processors had to have a full supply just to stay even I mean what would normally be a normal supply for that period they had to have all of it just to stay even anything below that they had to cut into the reserves and we were pretty successfully holding or keeping away from the market 20 to 30% of the production throughout that period so for each single day you see that we cut into that supply by 20% or cut their receipts for that day by 20% that much we reduced the amount that there was left in reserve or in storage now you have to understand to begin with that I think the processing industry or the packing industry at any rate as a terrific job to do just to supply the markets or the needs of the people across the United States with no more than a seven-day supply on hand keep in mind that even the department stores keep a hundred and twenty days or a hundred thirty, forty days supply of such items of shirts socks handkerchiefs underwear on and now when you realize that that they do that and they must do it because they think they need it just look at the gun that the packer is under when he has to supply the nation with no more than a seven-day supply in reserve there's a terrific problem in distribution so each time each day that we cut that supply by another twenty percent of one day's receipt we were eating deeper and deeper into that to where we had him at a point where that they couldn't operate or where we would they would have to run out of meat couldn't be any other way they couldn't supply the nation anymore now commenting on what Lloyd said about moving the production into other areas I saw in one area hogs coming in from Salt Lake City Utah coming into Iowa now Salt Lake or Utah doesn't as far as I can see produce enough hogs to supply just the city of Salt Lake City by itself so imagine them bringing hogs across those mountains in the state of Iowa where we had 23% I think it shows the desperation of it but I think what we have to do now sum up here that there is no way of winning this battle until the farmer skipped together until they use the bargaining power that they have and that bargaining power lies in their production that they have to cooperate with each other in order to get the fair prices and that once the farmers are determined to do that there is absolutely nothing that can stop them so I'd say it's high time for the farmer out there to quit listening to the people that have been making a fortune off of them all these years selling them down the river getting nothing for their production and just making a profit off of them you better listen to your friends [music] the members of the NFO are calling on the rest of this nation's farmers to join with them and support their efforts to solve our farm problem [music]