NFO-219 (AV10722): US Farm Report: Higher Prices Through Grain Holding and Storage

hello everybody and welcome to us farm report today we're delighted to have as our special guest the national vice-president of the National Farmers organization mr. Erhard Pfingsten I must call him by the name most people call him by his associates and friends around the country and that's Fink I guess that's a good way to approach it as any right that's the one I like that thing yeah Fink doesn't like his first name and he doesn't like to be called mr. Pfingsten and so everybody settles for Fink for short bang this gentleman is one of the truly outstanding speakers in the agricultural field and in fact Fink in your work as national vice-president I presume you do a great deal of speaking all over the country yes I speak once you might say almost continuously to all kinds of groups to farm groups to conventions of other types and any place that I can let's say do some good for the American farmer I'm there and try to explain what the problem is and what needs to be done about it well I think that your background certainly qualifies you as do the backgrounds of most of the executives of NFO almost all NFO executives have farm background and that certainly is the case with you and in fact I understand that you have one of the really outstanding farms in the state of Iowa where is it Fink and how big is it it's at a little town by the name of Sergeant Bluff Iowa which is about six miles south of Sioux City Iowa what's on the level land down there and the Missouri River Valley yes and I think I have one of the finest pieces of land there is in the state of Iowa and when I started getting very active let's say in promoting the welfare of American agriculture I was farming at that time between fifteen and seventeen hundred acres of land I raised about five hundred head of hogs and have fed some cattle however because of the intensity of the activity that is needed in order to save the family farm I have cut my operation to about five hundred and fifty acres at the present time and still raise a 500 head of hogs I do not produce cattle anymore and of course needless to say I have one of the finest men working for me that any farmer could have anywhere and that of course turns me loose for a lot of activity Fink and I established quite some time ago the fact that we both went to college in Kansas right back to your school was St. John's at Winfield I went to the college of Emporia as well as the Emporia State Teachers College but college of Emporia and St. John's we determined we played athletics in the same conference right we used to take an awful beating every time but we kept it up you do a lot of traveling don't you I travel nationwide now in your travels and in your talking to people in spreading the NFO word I presume that much of what you say is predicated on the fact that a farm problem does exist oh yes it's a very very severe problem in getting worse you might say almost daily - I think we're at a point of where we're destroying all of rural America as well as the family farm and I think eventually destroy the economy of this nation if this problem is not immediately solved and this of course is the driving force of what makes us go why we have to put the NFO program into operation well then I was going to ask you to look into your crystal ball and predict the future of Agriculture but you just now did I think with your statement it's a rather bleak outlook Fink yes if something isn't done and if these problems are not to solve what are the answers to these problems well there's only one problem or one answer first of all you have to understand the problem the reason that we have the little farm prices that we do and the price is the only problem that there is out there in rural America the reason we don't have prices is because the rest of the economy specifically the buying interested by from the American farm and I'm talking about the people who finally get the production they have modernized they've modernized to the hilt as really every segment should they have let's say organized consolidated and merged to where today for all practical purposes our buyers are national in scope where they can bypass any area any market any individual and actually pick one against the other while the farmer is still going through the market in the same method that he did a hundred years ago our great-grandfather's and said and asked his buyer what it pleases them to pay him so the only thing that can ever solve this farm problem is to get the farmers into position to be businessmen in the market instead of being panhandlers sore beggars as they are now so they have to get into a position where they can establish their own price a price based on their cost of production rather than a price based on the whims of our buyers are on their convenience mm-hmm no another term for it is blocked bargaining by bargaining collective bargaining it's the only method in which the farmer can ever reach the point to where he can affect the buyers as they are affecting us now see that's a national setup our buyers are national as I said in scope well in order to counteract that the farmer is also going to happen to become effective national and you can't do it as an individual here sitting on a local farm it has to be done by farmers getting together into one organization bargaining together and selling together as one man so that they can meet this force that they have the law of supply and demand can't work with all of the power on one side and absolutely none on the other and this is exactly what we have so once the farmers get together block their production together mark it together bargain together I think at that point they'll be able to reach that but the reach a fair price so those are they yes those are the necessary steps and are absolutely necessary Fink in grain bargaining what is the first step well the first step necessary to be effective in grain bargaining is that the farmers must keep control of their grain at harvest time so that the buyers can not get a supply on hand that'll let them sit back and then wait for the farmers to dribble in mmm the rest of their production so that they don't have to bid and partially to understand this you have to understand that in well worth virtually all production farm production we have a very static situation where the same farmer sells to the same elevator who sells to the same broker who sells to the same grain company who to the same processor and so forth so this has to be broken up if you're going to make the grain market competitive and only one way to do it and that's to keep enough at harvest time so that they have to bid to get it and then of course by changing patterns but taking it out of one area in the other creating a vacuum that you make them bid for grain and this brings the general price up well thank do you carry on this kind of practice in your own farming operation in Iowa I sure do I wouldn't think of selling one bushel of grain at harvest time and I've got myself set up of course so that I can hold all of mine I'd say that I probably have close to 80,000 bushel in storage right now on my farm Mrs. Pfingsten has become somewhat accustomed to Fink's long speaking tours she's made her yard a real showplace on the farm Fink and his Foreman managed to stay busy storing and drying corn last year's crop was a good one and Fink periodically inspects his storage facilities for leaks or moisture new storage facilities have been readied and this year's crops are already in the process of being dried well in Grain bargaining what is the first step they must keep it within their power so that they can bargain for and then you bring enough of a block together you can do several things you see you can create the vacuum that I'm talking about by upsetting the static conditioning marketing that you have if an area and pretty much over the United States and especially in the main grain producing areas it is divided off by areas among the big companies they don't have to bid because they have probably the only get to all of the production out of any given area and as long as there's nothing nothing upset there there's no reason to bid but if you pull a million several million bushel out of that area they are going to be short and they're going to have to bid for it they're going to have to get it from sources that they haven't been getting it from before and there's only one way they can induce farmers to get to do it to sell to them to change their pattern and that is by offering them more money so you've placed competition back in the area by upsetting us the static pattern that they had before this works in all production we've talked earlier about some of the prob that agriculture is suffering today what do you feel are the real critical farm issues Fink well of course price is it and then of course the issue then becomes of how do you get that price government programs enter into this to a great extent and in the past farmers have relied very much on the government to support their prices to hold up the prices which then finally amounts to that the support prices though at least the law will let them pay and this has pretty much determined our price in the past our prices have always been until the NFO got into the picture have followed this support price that's been about it well I think we have a real critical time ahead of us right now because the programs are under fire the farm program that we have now is to expire at the end of 1970 and so in the meantime either we have to get a new one or we go back to what it would be real chaos and I think the most critical thing that we have to guard against right now is the proposals that have been made by the farm Bureau and I think that that proposal is probably the most devastating blow that the American farmer ever got if this program goes into effect their program provides first of all on the support prices that it'd be 85 percent of the previous three years average 85 percent support now remembering that the support prices to a great extent set the price this would mean that the first year that that program was be in effect we would have a fifteen percent drop in support prices it would mean that each year after that we took an additional cut of five percent and this would figure out that in a five year period that their program has been proposed for that we would drop to in the sixty cents a bushel for corn to give you just one example and of course I'd say we're very close to the cost of production figure at the present time so we can't afford to take a 15% cut now or an additional 5% each year after that in addition to that they proposed cutting out the government payments while the government payments at the present time constitute 7% of the gross income of the American farmer and 24% of the net income so that one section of their program in itself would comfortable would take away 24% of the program then they have a land retirement program a whole farm retirement program supposedly voluntary well in the first place the their program calls for taking a million acres a year our 10 million pardon me 10 million acres a year out of production well at the present time this year 1969 there are 57 million acres out of production so if we drop that the allotments and so forth and then went back went to that program that would mean that the very first year as compared to this year we would have forty-seven million acres more in production well this again would cause a glutton would make the farm put the farmer in still more hopeless situation now the emphasis is is on that this is voluntary first of all I can't see why the real cry is there for the voluntary part of it because all of our programs are involuntary any man that doesn't want to participate he doesn't have to so he's free to do as he pleases now and still in a position to take advantage of the Advanta of their increased prices that the programs do offer but this will be gone now the man who is not participating in a farm program he's going to lose very severely by this because he cannot increase his acreage or his output and he's going to get lower prices so there's only one way for him and that is to go downward now in additional to that the voluntary part is not voluntary for many of the people who are going to be affected presumably the older people the people who want to leave farming and away are going to put that land into that million acres a year that's being taken out so it may be voluntary for him but it is not voluntary for that young tenant who is now farming the land who can't buy his own farm it is not voluntary for that farmer who uh who uh rents some adjoining land that makes up part of his program now or part of his operation so if he were to lose let's say half of the land that he's farming now he's set up with a line of equipment that cannot be supported on that reduced acreage so I'd say it is it's a very severe blow and I think we had better watch this because the average age of farmers now is 57 years old we have to have these young people coming into the farming if we're going to continue to produce this food in addition to it we're losing the know-how out there in agriculture the income now is only 3% on the investment and how can a young farmers start by borrowing money from six to ten percent and receive only three percent return and at the same time donate his work so I'd say agriculture is facing a very severe test at this time and I'd say we'll face destruction if the Farm Bureau program goes into effect Pfingsten's comments concerning low profit margins for farmers brought to mind a recent interview with a young NFO farmer kent remington with his brother operates a 2,000 acre farm near St. Anthony Idaho Kent is a representative of the National Farmers Organization not salaried or paid by them but he represents this fine organization as potato marketing coordinator for the northwestern states can it's pleasure to welcome you to u.s. farm report Thank you Bill it's good to be here Kent what kind of an investment the you and your brother have in this operation in Idaho Bill Jerry and I have around a million dollar investment invested in land machinery buildings and our packing shed well now what kind of a return the last few years have you realized on that million dollar investment in the last three years we have had less than 1% about 1% net that's fairly ridiculous isn't it we feel so do you think of any other business in the whole world investing a million dollars and getting that kind of a return that wouldn't be hollering about it no avail and that's what concerned us so much because we aren't alone in this millions of farmers clear across the United States are in this same for document and people don't understand that the people in the cities don't understand our problems here and some of them see these little farmers out in a little old house that their grandfather's was born and raised in and they say well the farmers are different they're a second-class citizen and that's the way they expect to live and enjoy living but really we don't St. Anthony Idaho is a town of what size can't say nine he's about 5,500 people right up against the layin right in the valley of the Rocky Mountains on the upper Snake River Valley well that's pretty country yes we think so now in this 2,000 acres that you and your brother operate how many acres are devoted to potato of growing this year we have about 650 acres did vary from year to year according to our rotation and what other kind of farming do you do there we raise feed drain and wheat a little hay very little hay we have a cattle feeding operation mm-hmm how many cattle do you run there Kent well that too varies from oh up to 250 head down we carry around 100 head in the summertime but in the wintertime when we have cold potatoes and not great potatoes to feed to our cattle here we feed them to our cattle and when we have them while we boost our herds up according to how many potatoes we have there your family as I understand it has lived in the St. Anthony area for a long long time yes my father and mother was practically raised their father was born there my wife and her family was was all born and raised within a ten-mile radius of St. Anthony you graduated from St. Anthony high school and went on to a Business College in Salt Lake for a couple of years are you applying what you learned in Business College to your farming operation well that's hard to tell I'm glad my wife went to business college too I think that gives us the answer she handles that part of it for you huh yes your you have children do you know yes yeah two daughters one 15, one 13 well now the potato industry admits does it not that there has been a price rise of around $1 per hundredweight yes bill last year we and Idaho wanted to do something in potatoes for NFO you know you always want to flex your muscles and test your strength and you never know what you can do to try something and so we tried to do a little bargaining in potatoes and we went out and was successful in getting a contract from a fresh packer and and that contract was for a little bit more than the market price and when we got that contract we put the word out to the farmers and the farmers whether they would remember non-member why they wasn't gonna take less than that present so the opposition has a way of fighting which is quite effective but to make that price look bad they would raise it go out and buy a small lot of potatoes and raised at a dime or fifteen cents above that price and like that make that price look bad to the farmer but so what we did is when they raid to the dimer fifteen cents we're eight to the dimer fifteen cents and we just kept raising that market up and when the industry was saying that we was short of potatoes is a reason the market was raising what they didn't realize that up in Red River Valley those people were still selling their potatoes for a dollar 100 because NFO wasn't working him there and our price got up so high that our processors even went up in Red River Valley bought the potatoes for a daughter a hundred and could ship them down to Idaho to process and cheaper than they could buy him right in Idaho so it wasn't that there was a shortage of potatoes because it wasn't in the industry we kept telling them that we was affecting this market and they said well a good test is in February historically the market always slumps in February and what happened they said if we would hold that market in February they would admit that we was the major factor in pricing potatoes and we didn't only hold it but we pushed it up during February and the market never did fall until our farmers bargainers and this is the the thing our people was bargaining wasn't professional bargainers out of a college or out of the eastern anything they was farmers right off the farm and eventually they had to go back on the farm and plow their crops and plow their the ground and get ready to plant the crops and the market the day that our boys went back on the farm fell and he went right on down for the rest of the season excuse me all right no I just it was interesting one of the fresh Packers we toward the end of the season we went in and wanted to sell him a lot of spuds and he said I'll buy a hundred thousand sacks right now if you will stay in bargaining and Lyle says well I candy says I've got to go to the farm you've got to get to work and he says well then I'm not interested because if you guys quit bargaining I know this market will draw yeah what about the new crop sign-ins are are really going good aren't they we feel real good bill last year we asked the farmers to sign in apportion their crop they wanted an fo to bargain far and it worked fine but you know we got to selling contracts the fast that sometimes it was almost buying our total amount of supplies and we would have to sign more in before we could go right into the contract this year the farmers instead of signing five or ten thousand sacks or fifteen thousand sacks or signing their entire production in right now for NFO to bargain with under these no penalty sales again is it this way over most of the state of Idaho throughout the state of Idaho it is and in Colorado or in I'm sorry in Oregon those farmers are doing a wonderful job with signing them in too what made you interested in NFO to begin with you're a member now of what a little less than two years standing what attracted you to NFO Kent well bill I think that the milk holding action back in 57 was the thing that brought me to NFO at the time that these farmers are dumping milk and the cameras was showing this milk flowing down the bar pits and and they was the farmers and their wives and their overalls out there dumping their milk on the ground I I thought at the time it was foolish but I couldn't get this out of my mind that there was a group of people that wasn't saying why don't somebody do something for me they was out there trying to do something for themselves and then they're trying to do something that will affect the their market themselves and they're not asking that age-old question why don't somebody do something for me and that's all I've ever wanted to do is to have the opportunity to do something for myself and I don't believe that the government should support us I'm a taxpayer and and I should support the government and I don't think that the government should have to dig into their tax money and pay me diversion prices and pay me not to produce and such as that I only want an opportunity to be able to do it myself and here was a national organization that had that one thought in mind is to get the farmer a net and be able to do it himself and and that's what brought an air drew me to NFO international organization we're trying to tear down state lines just as in the States we're trying to tear down county lines and and to be able to do this it seemed like every state feels like they have their own individual problems and they should work them out themselves and so if a state comes up with a problem in the potato business alone then they if the state can't correct it why they'll ask me to go and and work with them now I don't claim to be the brilliant man and can can figure all these problems out but I go there we call a meeting of the people who have the problem we talk about it get all the problems down we can then if we can't come up with the answer among us then we can call on national and and we call in into the national farmers organization and they have all of the brains clear across the nation then somewhere the answer to those problems are and so made mainly that's what I do and I promote NFO at every opportunity that I can but mainly I keep the northwestern stage coordinated with the national organization in the potato the Farm Bureau is in my opinion not at all a farm organization it's an insurance company it's one of the biggest businesses there is in the United States and Mr. Schumann when he goes into Washington testify he says he represents so many families he did quit saying farm families because I clipped him on that a few years ago and I pointed out that he claimed two hundred two hundred thousand farm families in the state of Illinois but the state of Illinois said they had only a hundred and twenty thousand farmers so he does not represent the farmers and I'm out there in the country every day among farm people and night after night and day after day these members of Farm Bureau tell me that they do not approve of their policies that they're in there as members only because they feel that they get cheaper insurance which I also don't believe I think our state laws see to it that when you're selling for less that you're also giving less or when you're charging more that you have to deliver so I'd say their insurance customers he doesn't represent that many farmers he represents that many insurance policies and so I'd say that anytime that a man takes an insurance policy or does business with him in some of their other operations and he becomes a member of that mr. Schumann says in Washington that that man is for what he is proposing and I don't think that's right at all no he doesn't represent never did for years they have represented farmers I can see that one of your problems Fink is that you just aren't enthusiastic enough about NFO well give me a little time maybe I can get worked up about it's been a real pleasure this has been most interesting and thank you so much for being our guest today thanks for having me my pleasure today ladies and gentlemen our guest has been Erhard Pfingsten national vice president of the National Farmers Organization [music]