NFO-24 (AV10432): Midwest Farm Report

[music] How do you do and welcome to the midwest farm before our special guest on this program today will be members of the NFO the National Farmers Organization we made a farmer you will meet some farm wires this program is brought to you and sponsored in the interest of agriculture small business and the welfare of the nation by the members of the national farmers organization how do you do my name is Coleman Scott it is my privilege to be the moderator again today on on this particular broadcast and I would like to have you meet my guests on this program first may I present to you Maynard Rafferty your home is where Coleman I live it near Grinnell Iowa which is about 50 miles east of Des Moines where our farm and what do you farm what type of farming do you do I have a dairy and grain farm for this grade a milk out there now may I present to you mrs. Faye Brim mrs. Brim where's your home we live about 80 miles south of Des Moines which county do you live in Decatur County in Decatur County south of Des Moines now on the end last week I introduced or either on one of these previous broadcasts I introduced you to Kenneth Johnson whom I told you was acting as probably the most exciting individualistic performance I'd ever seen here is a farmer and he and his wife have gone to the state capital in Des Moines and were working with legislators as lobbyists I'd like you to meet the other member of that team mrs. Kenneth Johnson mrs. Johnson where'd the you and your husband farm we farm near Callender which is in Webster County about 82 miles northwest of Des Moines I see and mrs. Leonard Felber mrs. Felber where is your home Ames and where do you and your husband partner what type of farming do you do we grain and livestock farm cattle and hogs and Ames is one geographically how far would you say the from Des Moines about 32 miles north of Des Moines where the Iowa State University is well now that we have established our guests I'd like to tell you a little bit about today's program it is probably one of the most challenging experiences that any interviewer can have when you talk with people who have established patterns and success themselves on a previous broadcast we talk with you about corporate farming I think we mentioned how beef traveled a corporate route through a rubber firm to a food chain now it a bit of my experience in the state of California to have visited this particular area in which this one story had been centered for miles and miles and miles and miles and miles we travel through the area owned by this one company it is a large company a company that has an asset of two million four hundred and fourteen thousand one hundred and twelve acres now if you ask yourself how big this is and will give you an idea if I told you that it was so large it would encompass between seven and eight counties of the state from which we are now talking to you what would it mean if we had various corporations like this all in farming it'll be like twelve to fourteen corporations owning the entire state of Iowa now if that causes you to re-examine your thinking and say well how big is it we go a little further with you this particular one firm that we were talking about it recently made a purchase of 8,000 head of cattle from a firm in a rubber company now the particular firm that we were talking about at forty-seven thousand head of cattle in the feed yards in one area alone give you an idea of how big it is it is so large that when I tell you that their major outlet is one of the largest food chain in the world and that they have recently bought it out have an outlet for their product you then become aware of the magnitude of the thing we'd like to discuss with you today before we get into it realizing the size and the scope of this one question remember we're going to ask you as farmers as businessmen as teachers as lawyers as bankers as other people interested in America to let us tell you this story and if you'd like to have additional information we'd love to send it to you and let us ask you is independent businessman if you are not farmers how are you as independent businessmen going to stay in business if the nation's economy consistently is being placed in the hand of fewer and fewer and fewer farmers today we're going to bring you a problem a problem about the 11 farm families that disappear and one local businessman goes out of business we'd like to talk with you about a thing called parity what it means and what it means to you we'd like to ask you how free enterprise can work if the condition of the declining American farmer continues where will rural America be this is obviously then everybody's responsibility we must all join our hands to be able to maintain free enterprise as we have all known it the American system of the American farm family now on these programs we have told you again and again and again that the great problem that the American farmer faces is first he produces a product over which he has no control as to its cost and second he has nothing to say about what he's going to get when he sells it you say this can't possibly be sold less than 20 minutes ago for the first time I talked with a man you are now going to see demonstrate these very facts his name is Maynard Rafferty is the gentleman that you met that I introduced you to first he showed me a formula that is so exciting I wanted him to show it to you Maynard show us this formula now Coleman this is a very simple formula which every business operates under whether they know it or not and it is units times price minus costs equals net income or profit now every business if it is to continue to be in business must show profit over a period of time otherwise it will go out of business we as farmers are in a business and we can control only one of the factors of this formula and this is the number of units practically every other business in this country can control two parts of this farming units and price both let me stop you if I major for moment you say we can only control the units you mean the production the unit of production bushels of corn numbers of heads of cattle that go to a market to chickens or whatever they may be right not you say them that the manufacturer can produce exactly what number of commodity he wishes to produce in order to protect his price that's right but the farmer is not now doing it we are unable to price our product therefore to maintain our profit or net income we have only one recourse we must crank out more and more units as you know the American farmers are the most efficient farmers in the world no question about this and we and they paid the penalty here in both and here right as I understand recently I saw the demonstration that showed that the farmer was actually paid on the ratio of the production of 10 units but he had to produce 14 to get the same amount of money today that he got paid only what was that 15 years ago I think 1950 that's correct then this becomes your formula of units times price minus the cost equals the net income yes well now you're back to NFO again this is what the national farmer organization has been saying for years that if the farmer were to bring to market those units at a price which made him a profit when he had removed his cost of operation he would then have a decent net income that allowed him to be a good purchaser himself is that is that the is that the point that you were making yes but this has many implications too let us for a moment consider the food industry the food processors and the chain stores they can control all three factors here they have a rather unique advantage in that they price their raw material which is farm products as well as their finished product they price it to and they control the number units well many of them actually work backwards they determine their net income that they must have and thus establish the price if they must have a 7% or 8% markup they then determine what this these two units will be and then determine the buying by it I noticed recently a commodity that only a few weeks ago was selling for I think 16 cents it is now 39 cents and it happens to be right in the middle of the season of production which is a strange thing isn't it I believe these people decided they wanted to make a profit while they're doing already decided to make one I can tell you this well now if you as a farmer were able to formula- to formulate a policy of operation and operate on this basis how would this change the way you now operate well a Coleman this this is NFO and in NFO we have what we call bargaining committees who have determined what a fair price for a farm commodity would be this price is based on cost of production which is the same as every other business must do and this we know that if we are to continue in business and be businessmen we have to do this in other words it's impossible for a grocer to sell eggs at 26 cents and [unclear] you to have a source of supply of eggs that he's gonna sell at 26 cents if it cost you twenty six cents to produce it he's obviously got to be able to add his price and his profit to be able to buy it but they they gotta learn obviously then the guy had to stay in the subsidy is the farmer yes that's true the American farmers are subsidizing the American economy and that American people buy their food cheaper now today than they have at any time in history and at any time in the history of the world the American people buy their their food cheaper than any other country at any time in the history of the world its strangest thing is we're going through a policy now destroying this source of production we are swiftly eliminating farmers through this cost price squeeze I recently read an article it was a very old article it was the 1958-59 article called the time-and-a-half farmer and it pointed out that in order for a farmer to work full time on his farm he had to go out and work exactly half of that amount of time somewhere else to make a living this was the strangest formula I had ever seen for success what about this thing now do you think that if it were possible for the farmer to control that is all the farmers let us say that all of the farmers together would it be able to say it takes this many head of cattle to constantly keep a good flow of red meat on the American table we know what it costs us to be able to produce them we know that if there's too much of it they just say to us well as a surplus and this is all we're going to pay you for your stuff today that if we were able to control this part of it allowing ourselves a fair profit minus our cost that having an increased net income the farmer would be able then to buy to increase his purchasing power thus creating the ability of the part of the city worker to buy more merchandise also because they could do buy more of his stuff well this would be a tremendous boon to the American economy if farmers could again take their rightful place and in the purchasing part of our whole total economy they ask you a question I was a farmer how big did you say your area where you are your farm is I have 240 acres all right now you know what it costs you to hone two hundred and forty acres you know what it costs you to operate them do you think that the average farmer today with the investment that it takes to own or to buy and pay for two hundred and forty acres has ever figured it out as a business and still refuse to join in the National Farmers Organization I don't think I think most farmers have never taken the trouble to actually figure out their cost of production now these figures are available through our state universities on statistical averages for the various states and and it can be figured out on an individual farm basis but I would say that very few farmers have ever actually done this we just are not that much of a businessmen as yet well is this because it has been too long a period since the farmer has been able to bring in his units and get a price for it is that what's caused this what brought this about I think this is a matter of habit we we have had our stuff priced by the buyer for for over the years and I think we're in such a habit that that it will take something very powerful to get us to break loose from this habit and change I don't know you brought forth probably one of the strongest points I think I've ever seen brought forth by a businessman who says that despite all of the things that he does unless he is able to find some new release from the type of marketing that he does and ultimately you're actually saying you're walking on the verge of bankruptcy is that right no matter how successful he is he ultimately is walking on the brink of bankruptcy I I think that the the figures will show that the average American farmer today is getting one of two things he's getting paid for his labor or he is getting a return on his capital investment he is not getting both and know no other business can afford to operate this way I was talking with a lady today briefly I figured out that the investment that she and her husband had were better than a half a million dollars and without a single doubt the only way that they're able to stay in business is to be able to do five people's work now there are very few men few businessmen who run a business and expect to have to do five people's work to be able to make the living of one but that's essentially what is pointing to Maynard I think you brought for some good points I hope you'll have an opportunity to come back on this one mrs. Brim mrs. Faye Brim i introduced you to early earlier mrs. bream you are a farmer's wife is this right that's right how long have you are let us say not in say in years have you been on the farm a great many years or is this a new experience to you or what is it no we've been farming most of our married life close to 30 about 30 years then during this period you've obviously seen many many changes in your own system of buying and selling the merchandise that is the buying the things that you buy and selling the things that are produced on your farm right sure have well let's take let's go back to this thing a minute ago ago we were talking just before we came on the air about the the periods that exist approximately 1950 in relation to the 1965 when the farmers income was largely almost equal to that of the factory worker how is this affected your ability to buy today well I think we buy about half as much as we did back then even then even though you produce approximately 40 percent more merchandise on your farm your purchasing power is approximately 50 percent of what it was- that's right- well I don't know if I were sitting out there at this moment as a farmer bear in mind now and I had the very same problem in my house I believe I'd wanted to get a lot more information and let me ask you if as farmers you want this information may we invite you to contact your nearest National Farmers Organization chapter regardless of where you live if this problem is your problem we'd like to discuss it with you we'd like to show you how the only way in the world it is possible for the American farmer to bail himself out of this particular position is through the unified strength of every farmer in America don't forget it's your country and the country you save may very well be your own I talked recently on one of these broadcasts to a man who said that he and his wife were acting as lobbyists in the state legislature when it met in Des Moines Iowa now probably there was no experience that could be more challenging to a farmer than to sit down and be able to talk about the laws which have played such a large part in the problem which agriculture faces today because many of those problems many of the laws were written were actually written without full knowledge of the problem itself I introduced you earlier to mrs. Kennedy Johnson I now want you to meet her both as a farm wife and also as a lobbyist mr. Johnson tell me something first time are the kids standing up under this thing of you being gone so much of the how not too well they kind of like to have your home they're lonesome they look forward to weekend with all the bad weather we've been having we're going to have to have school on Saturdays so they say they only have one fun day now but grandmother will be happy when the legislature is over I can assure you what exciting things have happened to you in this legislature oh so many things recently since we have become more acquainted many of the Senators and Representatives have brought bills to my husband to be investigated so to speak you can't understand a bill just to look at it it refers to section so-and-so over the Code of Iowa and these all have to be looked up in the library and he sits down with them and spends hours doing this to see just exactly what the bill means and then he takes it back to the senator or representative with his recommendation as to whether or not they should vote him or how they should vote in the bill have you found them most anxious to receive this assistance really from the farmer himself I certainly have we haven't asked them if we could do this they have brought bills to us well I think that's stimulating is conveyed let me ask you something now as a farmer's wife do you see any great future for your children on the farm today with the position that the farmer is placing himself unless either legislation can be written to find some way to cause the farmer to change his way of marketing or unless the marketing programming has changed by the farmer himself to make his purchasing power better if marketing isn't changed I see no future on the farm for our children and if it isn't changed even with all the ground before him I hope our children don't farm I can't think of anything else I would like to hear less than to hear from a successful farmer's wife that she hopes her children don't farm unless things change I said unless things changed well she made the first step she and her husband are members of the National Farmers Organization but she and her husband left their homes to come in and talk with legislators about the problems that face the farmer the next step appears to be up to most of the farmers but there is a step ahead of him for a long time now there has been a move to be able to reduce the number of farm families now whether this affects you or not remains to be seen mrs. Felber showed me a magazine a moment ago in which there was probably the most exciting story I've seen mrs. Felber what is this story the US News World Report of March 22 1965 to eliminate 2 and 1/4 million farmers all right what did you find in that article that struck you so strongly well farmers that are going to be left evidently will be this small inefficient farmer the farmer that farms part-time and works part-time in other words the real farmer will disappear yeah it also states here that northeast part of the country will lose 150,000 farmers that'll be 65% and every approximately 11 farmers disappearing from a farm means that one businessman disappears in the South 1 million 180,000 farmers or 79% Midwest 860,000 farmers are 65% and the West 210,000 farmers or 66% well my friends I don't know whether you happen to be in this group of those that are slated for removal to someplace else I don't even know where you're going to be sent but apparently you're going to be sent away from the farm now one of the big questions that has been asked repeatedly is what has happened to the farm income now this was an article that I came across tonight just before this before we came to broadcast it was handed to me it says there's a new way of saying parity for the wheat farmer this was injected into farm talk when Representative Purcell is a Democrat from Texas and chairman of the house agricultural Subcommittee on wheat introduced a bill to make the farmer have a return of domestic food fleet of $2 and a half with an escalator provision they tried to change to the average hourly wages of manufacturers workers now he went on to say that city people don't understand parody but they do understand escalator clauses because they've got them in labor contracts but he went on to say that the marketing spread on bread has increased 80% in the last 20 years but that if farmers that an equal share of the increase they would now be getting $4 for a bushel of wheat but the question was how much would this increase the cost of a loaf of bread and the answer is about a set alone now we were discussing this bit of parody before we came to the air Maynard Rafferty and Maynard is the one you met a moment ago with his formula of the net income structure here units times price minus cost equal net income Maynard give us about a 92nd rundown on this meaning of poverty parity would you as a farmer what is how would you describe it apparently is defined as the index of prices received that's farm prices to the index of prices paid in other words it's it's this old cost price squeezed thing index of prices farmers received to the prices farmers have to pay I have here copy of the Iowa farm science magazine Iowa State University at Ames on the back page of the February 65 issue as the parity prices and in 1934 parity prices were 75 percent they have been higher than that every year since but they have gone down practically every year in recent years and now we are back down to 75 percent of parity for 1964 which is the same as we were thirty years ago in 1934 so essentially the farmers basic income is figured on the 1934 price structure today we have progressed backwards thirty years now to 1934 in the cost price squeezed for the American farmer well if you think that strange let me point something else out to you during the period that we've been talking about the farmers share of the retail food cost of the typical Market Basket and food products fell from 51 percent in 1947 to 37 percent in 1964 now the consumer food prices rose from 51 and three tenths percent to ninety five and six tenths percent and then up to a hundred and six and two-tenths percent while the farmers share that was constantly dropping now the question is who took the pressure on the prices and what caused the food prices to go up nobody wants to deny anybody a profit nobody wants to say that the distributor's or the processors or anybody else that took part in the handling of the raw farm product and delivered it to the food market and he wasn't entitled to a product at a nobody wants to take his profit away from him but somebody has taken the profit away from the farmer and it doesn't make sense to constantly make the farmer the goat of everybody else's subsidy now does it if you were a farmer we'd like to talk to you about it we think there may be a place in the National Farmers Organization where you can find the answers that you need heaven knows we hope so because too many people are dependent on you as a farmer we've said again and again and again the farm you save may be your own this is more than just a slogan this is a basic positive fact an international farmers organization we have done much to bring you this information and the help that you need to understand it because to combine the unified marketing we will then be able to present to the general public the best way to be able to buy the product that the American farmer produces it will also be able then to produce for the farmer himself and his family a just returned from the honest sweat and the labor that he has produced not alone for the work that he's done but for the investment that he's made and to pass on to his children something much better than a sloppy heredity which we have already wasted in a bankruptcy my friends there is a place for you there is a need for you may I thank you for your time your friends and neighbors who have shared and bringing this program to you would like to express their appreciation for the opportunity to discuss it further with you my name is Coleman Scott and on behalf of our guest today and all of the members of the National Farmers Organization may I say thank you and goodbye [music] Rural America's future and our national economy is everybody's business because of the nature of our economy when agriculture is sick this disease-- your friends and neighbors who have shared and bringing this program to you would like to express their appreciation for the opportunity to discuss it further with you my name is Coleman Scott and on behalf of our guests today and all of the members of the national farmers organization may I say thank you and goodbye [music] Rural America's future and our national economy everybody's business because of the nature of our economy when agriculture is sick this disease spreads into all other segments of economic life nobody is immune a special invitation is extended to farmers merchants bankers to everybody to write NFO in care of the station to [unclear] express your opinion this program has been presented in the interests of Agriculture small business and the welfare of the nation by the members of the National Farmers Organization tune in next week for the Midwest farm report [music]