NFO-3 (AV10411): Midwest Farm Report

[music] Good afternoon and welcome to another edition of NFO Midwest farm report brought to you by members of the national farmers organization in this area with us on today's program is national NFO president Oren Lee Staley Mr. Staley I would like to have this opportunity to visit with you in your homes for a while this afternoon cause I think it's very important that we as farmers study the problems that were faced with today because we're living in a changing society we're living in a marketing under marketing conditions that are far different than they've ever been before so we in the NF Oh sincerely believed that if the American farmers really understood what we're trying to do the progress that we have made that almost every farmer would immediately become a member of our organization and not just become a member but would be a working member because of the problems that we face at the marketplace today are problems that we cannot meet as individuals we must realize that we're living in a different society today than we've ever lived in before we're living in an organized society every other segment of our economy is organized except the American farmers we're the only segment of the economy that produce a product and then go to the marketplace and say what will you give me we go there you might say with our hats in our hand after we put in months and maybe years of planning and work and investment involved and then after we have produced the most essential commodity in America we fail to put a price tag on our commodity or the commodities that we produce now this means that we must realize that times are different now than they used to be by that we mean that today farmers are selling to buyers that have concentrated buying and selling power very large value buyers and so in the past few weeks we in the NFO have done an extensive study into the forces that determine the prices that farmers are paid for their products we have done this through the work and the cooperation of our commodity departments in the NFO we have also worked and received the counsel of several independent agencies some of them services that are for the purpose of analyzing marketing conditions and the situations that develop in marketing that are not always tied directly into the agricultural in but are closely associated with those that buy our products and then of course as we begin to develop this study we begin to find many things that we had told the farmers about some of these things that are well recognized today in our economy the fact that the chain stores today are the large volume buyers in our economy is the fact that's well known and this is brought about a definite changing condition in the past few years at the marketplace for the American farmer now as we delved into the marketing of our products we did it because we wanted to be able to tell you with first-hand knowledge exactly some of the practices that are being followed today these practices that are being followed because in our changing economy you find that the large volume nationwide buyers in all segments of our economy become more prevalent in the nation's economy because of the services that the American people want to have rendered to them and for them and so the the studies that we were able to complete point out that in the markets we found for example in the Kansas City Market that they're the chain stores - chain stores mind you on Tuesday of every every week would let the processors know the prices that they were going to pay for beef carcasses and pork cuts for the next seven days on the following day on Wednesday there would be two more chains that would let the processors know the price they were going to be paying for the next seven days so this meant- that means really but the farmers that deliver livestock to this market find that they're really not delivering there to a competitive market but they're only delivering there for the processors to say this is the price we're going to pay you the price that reflects back to the price that they know they're going to get for the product that you sell them this is not only happening as far as livestock is concerned it's happening in the marketing of all of our products so this means that this large concentrated volume and buying selling power that has developed in the last thirty years has become so concentrated so large as far as the volume is concerned that they are able to say this is the price let's be a going to be paid for the product that you and I produce now this came about first after the war after World War Two as the large volume change stores buying power began to be felt throughout the nation today you do not see the private owned grocery store dotting the corner of Main Street in your small towns are the privately owned grocery stores that make up the buying centers that you used to have in your larger metropolitan areas but today you see large supermarkets with a nicely known chain name above those supermarkets and so it means this is volume buying that when this store buys it means that it's- they're buying not only for the people that live in this particular area where this store may be seen but they're buying maybe for another two three four or five hundred stores that cover a wide area that may cover a four 500-mile area or that may cover an area clear across the nation so this means that they are volume buyers and it means that they first were able to say to the meat processor submit a bid what you'll deliver pork-chops for example two weeks from today but that isn't what is happening today farmer friends that is a thing of the past that is a practice of the past today they are able to say not to say submit a bid or to say that they're going to pay a certain price today but they're saying this is the price it's going to be paid for the next seven days for example and this means that the processors that know the business of marketing that know what a load of steers will cut out for example or can easily reflect back to me as a producer the price that they are going to pay to me because they know the price that they're going to receive so this means that this is only good business and it's an accepted business practice today for example the chain stores in many cases bought Easter hands this year 60 days ahead of Easter this meant that they were able to buy on a low market it meant that they were able to fulfill their needs so that they normal Easter demand would not have any effect on the price and so this is reflected in the price of hogs for example and so this means that we're up against different problems and we've ever faced before we of course pushed for a chain store investigation to determine if these practices have been practices involving collusion but we're continuing to push for these investigations but even if these investigations should be successful in finding that there has been some collusion and there's evidence to point to this it still means that after the investigation is over there may be a few people that might go to the penitentiary there may be some cripple damages awarded some companies and some some people that have been dealing with them but those chain stores are still going to be there so what it means is that you will have because of the volume buying capacity of these large outlets a leader developing the industry is it has in other segments of our economy it means these large buyers are going to be there from now on they are not going to disappear they have never been there before but they have been in other segments of the economy so the American farmers are facing this concentrated economic force for the first time and they're feeling the blunt of this volume buying not because they're trying to take advantage of anyone it's just simply because the American farmers are letting them determine the price and it's only good business to buy the products that you are buying at the lowest possible price and then of course get as much as the traffic will stand so this means they're only following business practices that you and I would follow if we were in their place but the fact of the matter is that the American farmers must realize that this is a different economic force than we've ever faced before we can't think of our farming operation just as a farm with a fence around it we cannot think just about milking the cows or planting the corn or feeding the steers we must realize that we're living in an organized economy and that when these economic forces that have developed and that are going to continue to be here are as they're at the market place that we must go to that market place together to market our products with as much or greater strength than those that buy our products this is your job and it's my job as funders we in the NFO are proud of the fact that we have been pointing out to the American farmers the necessity of organizing to bargain collectively this means that we must group our production together to sell that production together to bargain together for the sale of that production now if we're going to do this we want to be certain but the structure of the organization which we're going to work together through is the type of a structure that we want in the NFO there's a few things that I do not believe are common knowledge you know of course when farmers start organizing that those forces that have been buying off of the farm are going to want to see you and I go to the marketplace and compete against each other they're not going to want to see us- to see us organized and put a price tag on our products so it means they're going to spread unfounded rumors and if you listen to them without coming and getting first-hand knowledge then you are being taken in by the fact that you have not examined for yourself what the NFO really stands for we in the NFO are all farmers only farmers and producers can be members of our organization and also we cannot go into business our organization has only one function to perform and that function is for the purpose of getting a price for our products a fair price for our products so then this means who has a control who has a final say does the president of the organization does a board of the directors no not in the NFO no contract that will bind you to market together can be put in effect by a decision made by the president of this organization or the Board of Directors only the members can do this and it takes a two-thirds vote approval of the members affected attending meetings of which they've been given a 10-day written notice giving date time place and purpose of the meeting ladies and gentlemen this means that the control of our organization the NFO is in the hands of the members and there it will and must stay because this structure cannot be changed only by it would take a two-thirds vote of approval of the members themselves and I know the members of our organization are going to keep the final control the final say, so it means that what we're doing is organizing bringing our production together for the purpose of selling our production together you know when we go to the marketplace as individual farmers as we do today one of us one day some more the next day this means that we're really competing against each other and we go there at the complete mercy of the buyers they are organized they're small in number they have the volume buying power to say now as they've never had before this is a price we're going to pay and unless the American farmers realize that this exists in our economy today that this is the economic force that they're up against unless we realize this then we're going to get less and less for the products that we have to sell and the cost price squeeze is going to get tighter and tighter just because we as American farmers have decided that we're going to continue to compete against each other rather than to go to the marketplace together and say this is our product this is the price we must have just as a man that sold me this suit of clothes he had a price tag on this suit I either paid the price or I left it we certainly produce commodities that are even more essential than clothes of course the commodities that we do produce eventually end up in clothes as we know but the commodities we produce - the most essential commodities in America and still we go to the marketplace and say what will you give me our industry is the most efficient industry in America, in the world it's been proven that we have more than double the rate of increased efficiency of industry in the last 10 years our industry is not made up of inefficient farmers the farmers that are in the industry today are businessmen but we're businessmen only on the producing end we must realize that there's more to our business now than just producing then how do we go about pricing our products we must take four basic steps first we must organize this means bringing our production together and when I say bringing our production together ladies and gentlemen I'm saying that we must work together in making the sale of our products this means sewing together as a volume group bringing the volume buyers to us because we then have the volume and we have an advantage now that we would have never had before because when volume buyers developed they must also buy from volume sellers and this gives us the opportunity to put a price tag on our products better than ever before so first we must organize this we must continue to do this is a most important step that we can take and is always the most important part of a bargaining program because your power at the marketplace is your production and your production has no power at the marketplace unless you have the production power of your neighbors behind you and all of our production together now this doesn't mean all of us have to sell together all of us do not have to belong of course to one organization to do this job but it does mean that if we're going to do the job enough of us have to get together so that we make up enough of the volume source the supply that the present volume buyers cannot fulfill our need to fulfill their needs from other sources and when we do this those that are not part of this volume selling force have scattered production here and there and certainly the volume buyers are not going to be very much interested in that scattered production so it means that as we bring our production together we establish our bargaining power and secondly after we have continued to organize our bargaining power then develops from the fact that we brought together enough of the total volume so the present volume buyers cannot fulfill their needs from other sources this means we must work on all the major commodities ladies and gentlemen any program designed to just do something about price on one commodity will have a short lived success suppose the dairyman would all get together in the next two or three weeks they would all join together or enough of them to affect the general price level how long do you think their success would last unless the other major commodities were brought up in relative balance how long do you think their success but even even resemble success unless the other major commodities came up in relative balance well I'll tell you what would happened there'd be more beef cattle men beef cow men that would be out milking those old beef cows and having black and blue shins than you ever imagined because this would be their opportunity to increase their income but if you bring up the cattle beef cattle price at the same time and relative balance then it means there's no more incentive to start milking those old beef cows tomorrow morning than there was yesterday so this is the next important step then after you have brought together enough for the total production so the present volume buyers cannot fulfill their needs from other sources then you find out what type of an organization you've built you know you either have built at this point a collective begging group or a collective bargaining group if you go to the marketplace together and say what will you give me all you've done is formed another marketing agency and all you're doing is begging collectively but if you're going to bargain together it means that you must put a price tag on your products and it means that when you put a price tag on your products you must be willing to back up your bargaining power because when you go into the processor and you say this is a price we must have you put a price tag on your products and this is what everyone else in the economy does today with the products that they have to sell or the services that they render to you this simply means that if you're going to put a price tag on your products you have to be willing to use the same tools that they use and that one tool the one tool that gives you the real strength is a holding action the man that sold me this suit of clothes put a price tag on it he initiated a holding action I either paid the price or I left the suit this is nothing new it's something everyone else uses every minute every second they have their business establishment open for you to be able to use as a customer so this means that you must at intervals use the holding action to show to the processors that you have brought together enough of the production and that they're either going to have to deal with you or their competitors will be getting their volume source of supply because you're going to be sewing together if you approve by the two-thirds vote and this is important because every decision made affecting you as far as marketing and prices concern must be approved by the two-thirds vote other members affected attending meetings of which they've been given a 10-day written notice giving date time place and purpose of the meeting to me this simply means that you'll never get the in fo members to approve a contract with the processor unless they know the marketing conditions expected of it were they're supposed to deliver and the price that they're going to get now a holding action then must be used at intervals sometimes we hear opposition say a holding action won't work I wondered just how silly they can really get because they are released that the American people are going to quit eating in essence because they're saying in essence that you as farmers cannot have the most essential or do not produce the most essential commodity in America now this simply means that this is nonsense what they're really saying is that you're not going to do it they're usually very careful very cagey when you question them can't farmers do it they agree they can but they're trying to say you won't now this is the decision you yourself as an individual farmer must make up your mind about are you going to do it or are you just going to the marketplace and continue to be punished with the present prices we're receiving then the most important point of the NFO collective bargaining program the point that- the point that is most misunderstood because it is the ultimate goal of the NFO contracts with processors contracts with processors that will not only stabilize our prices but will also meet the marketing problems of our industry it means that you must be able to do something that is comparable with what industry has been doing they have an inventory automobiles for example manufactured maybe 90 days ahead but they let on the market what they can get a price for it we as farmers of course cannot do anything like this as individuals and we can only do it as a group if we understand the basic fundamental steps that must be taken through a contract with processors that contract must not only stipulate the price we're going to have the price that we must have for our products before they sell it must also set up a surplus disposal program incentives to sell hogs and cattle at lighter weights for example to reduce the tonnage there has never been a time when we could have not even caused people to be hungry if we still had so chosen by just an incentive to sell at lighter weights little loan just balance out these supply with what was available there as far as the man was concerned as far as grain is concerned we must be able to store take from the normal market channels but at the end of the year be able to meet our problems at that time by diverting from the normal market channels that production that has not been used on dairy for example in a percentage on dairy [unclear] heifer cares of top-quality could break the cattle cycle just as bred heifers and in sunny for bred heifers and the beef cattle industry could break the cattle cycle these steps have been carefully considered we in the NFO now have the experience we're organized but almost every county from the Pennsylvania line to the western areas of Kansas and Nebraska from the Canadian border into Kentucky and Oklahoma we have a large staff people that are all farmers every one of them but people that have had technical education but are still farmers and these are the only people that we're going to use in our organization because we do have enough initiative we have the intelligence to do this job because we've done such a great job of producing means we also have the ability to sell that production the question is now just how much punishment are the American farmers going to take that is your decision to make are you're going to continue to go to the marketplace and be punished I cannot understand a dairyman that just continues to sell the milk at the price he's getting I cannot understand a beef cattle man or a hog producer or a grain man that continues to take the prices they're getting and then just not do anything about it it seems to me that they would say before we sell another product we are going to do something about this problem and when you come down to it how can you you cannot do it as individuals you have to do it together now in the NFO leaders in your county come around to visit with you about the NFO don't left your partisan stands on other issues whatever they might be affect your judgment this is your business those people that want to see you come to the marketplace as individuals play on those old prejudice they don't ask us what farm organization we belong to or what political party we support or what church we go to when we go to the marketplace they treat us all the same when the NFO leaders come around into your county remember they're all out there as county leaders donating their time they're coming to try to convince you that we should all work together don't make them come to you let's start going to them those of you that are non-members and say to them we want to know more about NFO and get the facts from the people that are involved you must wonder sometimes why your neighbors work so hard in the NFO why the NFO members are so proud that they're working together in our organization it's because they as businessmen realized that now is the time to meet our problems it's no longer a decision that we can make as individuals let's do this job together let's join together now it's just a matter of how much punishment we want to take are you going to continue to go to the marketplace and say what will you give me where are you going to join together those that say they're going to wait and see are really just saying we're going to wait and see if our neighbors gets the job done farmers in other areas get the job done this is not the attitude of businessmen with an issue do it together now [music]