NFO-77 (AV10483) US Farm Report: Public Image of Agriculture with Ken Stofferahm, Bob Manke

welcome to another program of us farm report brought to you by the members of the national farmers organization in this listening area in the interest of agriculture rural business and the well-being of our nation we have as our special guests Bob Manke from Wisconsin and Ken Stofferahn from South Dakota both of these gentlemen are farmers who are members of the National Farmers Organization board of directors from their respective states recently this past week we've heard some statements both from high government officials the Secretary of Agriculture concerning the food situation and the prices of food mainly during this period I, from a, from Wisconsin state of Wisconsin have been noticing something happening very drastically in this state in one week in the Eau Claire paper we had 14 auctions listed in another area we had over nine hundred and eighty three mature dairy animals being sold in one week this has been very prevalent recently I would like to have Ken take and analyze this as what is the farmer's image where do we go what are the problems and how do we solve these at the present time with government involved in this situation thank you Bob today I would like to talk just a little bit concerning the public image that agriculture has had perhaps For several decades but perhaps this is more important today than ever before because I believe that in the past two recent weeks at least the statements concerning the image of agriculture has not been to the industry's benefit at all we've been led to believe as the American public at least that in the past few years that agriculture is pretty much been subsidized and that that the public is led to believe at least that the tax dollar that they spent has been used to pay the farmer for the in relation to these subsidies that paying the farmer for the production that he is produced and thereby bringing us into a period of decreased public image as far as agriculture is concerned this we believe to be a very devastating as far as an industry is concerned what we would like to do is perhaps correct some of the misinterpretations so that we can bring some of the facts to you and concerning the agriculture and its pricing structure the production factors and maybe bring some of the points to you so that you can better understand the condition that agriculture is in Bob mentioned some of the factors that were taking place as far as the production is concerned in the state of Wisconsin and some of the economic conditions as a result of it the listing of sales that we have seen here recently has gathered quite a little momentum an impetus to the point where at least that it seems to be running rampant that the sales are taking place the liquidation of herds not only are they perhaps selling out and being located into other herds but there are many going to slaughter I think we found ourselves this year more than any other time in a period of closer balance between the supply and the consumption of major commodities and agriculture than we've ever seen before to a large extent in the dairy industry at least that we found ourselves in a very critical shortage of dairy products to the point at least it looks to us like it's going to be very hard to catch up in the production cycle to produce enough to meet the consumption needs of the American public for years to come now this not only shows itself pretty much in the dairy industry but we found the same things taking place in the other major commodities we've been led to believe For several years that agriculture was producing surpluses in the line of livestock products grain products dairy products now we've found and we've taken an analysis of this for several years already but in taking the statistics from the US Department of Agriculture and using their own statistics livestock and meat situation the farm income situation all of the available statistics from several departments and we found that with the domestic production together with the imports that we've had and several these commodities that we have had a balance between the supply and the consumption of these products and yet at the same time we've been led to believe that the surpluses are the factor involved in the pricing mechanism that the farmers were not entitled to a fair price because of this over production we would like at least to bring you up to date a little bit more on the and the production as far as its ascitic statistics are concerned and exactly where we are as farmers in the production and pricing mechanism now as we've said before that we can take the US Department of Agriculture statistics and and bring it to the public to show that we have had a balance between these supply and the consumption of these products together with the imports will lead us to exactly in this balance but today we found at least that we've we come upon a period of critical shortage of these products and for the analysis perhaps on the supply demand mechanism that we hear so much about and this is responsible for a price structure I would like to have Bob Manke expound just a little bit more perhaps on this Bob one of the things that I'm going to be doing today in order to take and bring this out more clearly is use some of the other people's admissions and figures in arriving at our conclusions one of the statements that the president recently made that food is of important factor in the cost of living right now let's take and analyze this statement the American public is spending around 19 cents out of every spendable dollar for food this is the lowest price in the history of America or any other country that the consuming public can spend so little for so much food now how can this reflect in the rise of the cost of living I would like to take a report from one of the leading Commission firms from the Sioux Falls [unclear] taking the 1948 basic rates industry had prices went up 50% what would parity be on hogs hog parity would be $50 per hundredweight live weight corn would be $3.75 a bushel stocked cattle $65 per hundred weight this would be if we were equal to the rest of the economy does this sound like the prices we have now are inflationary? secondly how has the government handled this recent situation in order to take and actually handle the prices that we are operating under there is actually two lines of thought one of them that the government will control prices and secondly that it is the law of supply and demand again let's take and analyze this law of supply and demand in Thursday's March 31st 1966 in a drovers journal they said meat production drops 3% under a week ago 9 percent below 1965 last year our meat imports were just a little under the imports of our record year 1964 yet we're taking this amount of production bringing it in for to do only one thing decrease the prices to the American farmer when we are not even near parity prices secondly let's take and look what happened recently we had an import quota put on beef pie which took and cut the price of beef animals around $3 per animal this was put on evidently for one reason to take and control the price of shoes and only 20 cents of each rawhide according to testimony would go into a price of shoes that should have a great effect but we're entering into this period if the law of supply and demand is operating how can these prices be pushed downward evidently there are other influences in the market then law of supply and demand we have some other statements here that the breakdown of this pig crop report revealed that we should market between 9 percent less and for 9% less and 4% less than a year earlier through the end of June this is a report from the commodity outlook if this is true how can the pork prices be pushed downward remember we have been told for years that we are operating under the law of supply and demand to me it is up to every farmer to try to figure out who is controlling these prices who is running his pocketbook and when this is found out then we can take and enter in to a method of solving these problems Ken how does this actually take how does it affect the country it affects it in very many ways Bob and I'd like to point out a couple of these first of all you probably have three main segments of the total economy which would be of course agriculture labor and industry now several analysts economists and I'm not going to argue too much with what their philosophy is main thing I want to do is to point out that perhaps a little more of an analytic view on their part perhaps would point out the importance of agriculture and just where it stands in relation to everything else very many times that you will talk to these people the analysts the economists and they will pretty much tell you that agriculture is not the tail that wags the dog because they compared it to the gross national product of perhaps nearing 700 billion dollars and the gross farm income of around 40 billion dollars now to the casual observer this doesn't seem like it's very important in the total overall economy at all especially if you will take a good look at this you will be nearing the problem that is involved because out of the 40 billion dollar gross farm income there's only around it true net farm income of around 7 billion dollars it stated there on 13 but a lot of this is charged off as rent the food that we eat and so on so it's a true net income of perhaps around a 3 percent return now a 3 percent return is reflected in the fact that agriculture's total assets totaling somewhere in the neighborhood of about two hundred and forty to fifty billion dollars now I'm sure that all of these analysts economists that if they would take a good look and both sides of the ledger that you have a two hundred and fifty billion dollar industry in agriculture and compare this against the gross farm income at forty billion a true farm net income of around seven billion dollars and compare this with the gross national product of seven hundred billion dollars you can see that agriculture is the biggest single industry that we have in these United States it's a very important one from the standpoint of consumption from production and entering into the economic cycle of the segments of our economy i'm not professing to be an economist of any kind but merely using arithmetic is a basic science to point out the importance of agriculture as an industry I'm not going to bother you with several figures but generally we would like to pervade this type of picture to you so that you can gain a little more insight into the problems that are facing the American farmer today and for that matter the total nation now from the standpoint of consumption we find that this big industry is the largest single consumer steel of rubber and of petroleum products now my question to the American public if they think they're paying too much for food and I'd really don't think they are and they're not thinking this really but my question to them is how can we keep this big consumer as a single industry of these goods and services steel rubber and petroleum products in a position to buy or be the biggest consumer of them if we're not willing to pay a fair price to agriculture in the form of raw materials cattle hogs grains and dairy products now I think in what Bob is mentioned before this is very important to bring out also and that is for a long time already that we in as the current disparity ratio has been so great that we must take a look at the increase in wages and earnings perhaps in the last 15 years compared to what it has been in agriculture as far as the farmer is concerned now this has been a very great disparity or a very dislocation great dislocation now we've seen at least that the mechanism or at least the pricing mechanism and the price that the consumer is going to pay for the food items let's take this for an example that as far as the great distribution outlets are concerned the retail firms but I think that these people are smart enough for merchandisers at least and I'm sure that I wouldn't be any different if I were in their position but they're charging a price that the market will bear and this is only good business but this is what they're doing now you'll find that the differential between what the farmer receives and what the consumer pays for these food items is very very great so use this again reflects that the market is a market in which the consumer is charged a price that the market will bear and not necessarily reflecting too much a consideration of the cost of what the hogs and cattle are on the hook and other products as well but you can see the disparity in the in this circle supposedly that we're trying to get into with getting the farm prices up a little bit higher many people will tell you that its profitable to raise hogs or produce hogs that perhaps the eighteen dollar level well this of course is arbitrary but from the economic standpoint or using arithmetic is a basic science in computing the importance of agriculture to keep the nation in itself on an earning basis perhaps would be the biggest control of inflation that we ever had if we were to raise farm prices and balance with wages and other capital costs but if we were to analyze this and we would find that the the great disparity ratio that has been in existence for fourteen or fifteen years already that it's pretty hard to gain status into this circle and to keep prices and balance with wages and capital cost because the very minute that you'll see any rise in farm costs as far as livestock is concerned these days reflects itself in that those retail and distribution centers or outlets are going to up the price that much higher to perhaps give agriculture a little bit more a little bit worse image than what we've had before and consequently makes it very difficult to pervade a this image to the consumer that agriculture is not getting paid in accordance with what we have to buy or with the earnings of Labor and Industry so this again I would like to have you think about and that is that farm prices are not what they should be today and as Bob has already told you that if we were really getting a price which would reflect the simple considerations not only of cost of producing it plus a reasonable profit but including the factor that if we were getting a price in relation to the increase in wages and other things in the past 15 or 20 years perhaps that hogs would be selling on the hoof at around 50 dollars a hundred, corn at about 3$.75 and cattle at about $65 per hundred now bear in mind that this is not what we're asking for sorry for the NFO program program of collective bargaining under the National Farmers Organization we're not asking for these prices at all we're asking for the simple consideration of cost of producing it plus a reasonable profit and gain status into this pricing mechanism which would keep us in balance with other segments of the economy and I don't believe that we're asking for anything too much at all but from the standpoint of figuring these considerations and from the standpoint of being an able and unwilling consumer of these other products if we have the income with which to do it I believe it's going to justify itself several times over in the earned basis or the earned income that this country needs to have to be the great leader that it is and stable government that we do have so Bob I would like to throw this back to you for some perhaps some comments that you might have on this at this time one of the things that we have here again also from this article I'm going to leave the name of the chain store out it starts out the chain store operating about a thousand stores reported it lost money on every pound of poultry sold in 1963 and '64 losses of three and three ten cents a pound in '64 and four and four tenths and sixty three were incurred as lost leaders however other meat prices were increased to offset the poultry loss and show a profit why should beef pork and lamb subsidize the poultry trade this is important because the poultry industry at this point is well over the 95 percent integrated at that integrated stage so this is why the pressure more pressure is being used in order to take and force the livestock prices down this is something that we cannot long endure because we have to take and analyze what is going to happen to the farmers if they take and try to operate under this type of an economic situation I would like to read from a Sunday magazine than in the newspaper magazine and I imagine most of you people had gotten it but here I am going to read this in its entirety because I feel at this point it is very important this is what our president has to say it starts out poverty on farm according to President Johnson there is no worse place to be poor in America than back home on the farm with mechanization of farm methods an ever increasing number of farms are able to feed the country farmers on economic small farms are becoming impoverished there are approximately 20 million Americans directly involved in agriculture but nearly 1/2 of the people classified as poor by the standards of social security administration live on farms not only are they poor but they receive less medical help and their children less education than any other trapped in a pocket of poverty they are cut off from the national prosperity they have little chance to improve their life at a rate of eight hundred and sixteen thousand a year the youngest and the cleverest of them are leaving the farm joining the migration to the cities it is just a question of time before only a few corporations on most of the productive farms in America this is not NFO talking this is other people telling us what will happen if we are as farmers are not interested enough to take care of our own problems let's take and look and see what happens this surplus figure is always being used as a weapon to take and depress farm prices since the year 1948 we have not produced as much meat in this country as we have consumed in both '64 and '65 we had to import well over a billion pounds in order to take and meet the needs of the country what have we done with farmers in the mean time we have taken and from the end of the war when we had seven million family farms we have taken and gutted it to around three and two tenths million farmers well over 50% this to me is important because it is going to take people to produce this food and the average age of the farmer according to certain statistics are either 56 to 58 years old how are you going to get old people to increase food production this is a problem that is going to face all of America farmers and consumers this is going to take serious thought of all people one of the other things that happens and this is bringing out the point that Ken touched on this ratio of one to seven per are the one to seven ratio on foreign dollars and the gross national income this is a line that followed it from 27 to 42 and every farm gross farm dollar is increased seven times this is important because agriculture during the past 15 to 16 years has been raped out of enough money that it is well putting us in a financial strain nationwide this money that the farmers are not receiving for their food this new wealth that is produced in the country that is not being paid for equally to the rest of the economy is only forcing the American government both federal state and municipal private industry and regular consumers to take and increase their debt at the most rapid rate in the history of America I have never known any business any government any corporation that could take and be prosperous through borrowing and using borrowed money in place of earned money this is a situation that we are facing we have only one thing that we can do in this talk today we brought out that the law of supply and demand is not working that it seems that the government is not interested in getting us a fair price we have one alternative and this is as farmers to take and organize and do it ourselves the historic records of the United States government proved conclusively that farm prices must be in balanced with wages and interest costs in order to have a sound and fully operating national economy and relativy full employment for our nation's people government records also prove that each dollar of gross farm income generates $7 of national income under payment to agriculture for the past several years has caused our economy to operate on excessive credit and is a real danger to our nation's economy how much longer can we afford to under pay our nation's farmers when it's costing our nation's $7 for each dollar of underpayment to our American farmers the members of the national farmers organization are calling on the rest of American farmers to join with them in an all-out effort to solve this great nation's problem join now