NFO-96 (AV10502): US Farm Report: Food Facts from USDA

welcome to us farm report brought to you in the interest of agriculture rural business and the well-being of our nation by members of the national farmers organization in this listening area we're glad to have this opportunity to present to you some of the leaders from our nation's capitol today our special guests as we have United States Senator Walter F Mondale from the state of Minnesota Assistant Secretary of Agriculture George Marin and Oren Lee Staley president of the National Farmers Organization now here is mr. Staley the members of the NFO in this area are proud to present as a public service from Washington DC some of the people that are really in the limelight as far as the present issues are concerned concerning both agricultural farm prices and also the price of food to the consumer today the main topic for discussion in many households is the price of food and the the cost of the food commodities that the families and the communities throughout the nation eat there's a probably more misunderstanding as to really whether food prices are comparable to price increases in other segments of the economy throughout the past few years also from a farmer standpoint there is more misunderstanding as to just what the farmer is receiving in the way of price for the products that he produces after all food just doesn't happen to be in a store it has to be produced there's a lot of investment behind it and there's a lot of work many many hours people in the cities many times do not understand this today we have two gentlemen with us here in Washington DC that are really authorities on the subject because they're right in the middle of decisions that are being made on various policies that they're determined many of the future policies in this nation today we have here with us and it's a great pleasure to have both of these gentlemen senator Mondale United States senators from Minnesota senator Monday of course in the agricultural state of Minnesota is one that has taken a very active part in agricultural policy and working on behalf of farmers we have Assistant Secretary of Agriculture George Marin George identify yourself there we'll be talking of course and George is as assistant secretary of agriculture is the director of the consumer and marketing division so George is one that makes the studies his department makes the studies their branch of the Department of Agriculture really on the consumers cost as far as food is concerned and also what the farmer receives out of it and so I'm not going to take any time we're going to start off with with questions here today I think first we'll say senator Mondale as a senator from an agricultural State what do you feel about the farm income picture and what do you feel about the price of food well Orin Lee I think the biggest problem in dealing with farm prices and consumers crisis is to see the elementary fact that there are two different things the price that the farmer receives is only a small proportion of the price that the consumer pays in the marketplace not a third and I think this confusion has never been more serious than it is right now we have recently seen a an order by the Department of Agriculture to buy milk at four dollars a hundredweight to put the raised floor the farmer is not getting rich off of this increase the parity returned to the dairy farmer while it's improved is still less than than it should be I think today the average dairy farmer in Minnesota gets about 60 cents an hour for his efforts and very little return on his investment indeed as you know we're losing dairy farmers every day because of it the price increase on 1/4 milk to the consumer by anyone's fair figures should not be more than one cent a quart yet we see many reports of two and three cents a quart being charged to the consumer and I'm afraid many times the consumer is left with the impression that the farmer is putting all this in his pocket there is a sharp difference between farm prices and consumer prices the same with bread there's been a slight improvement we're- in the price of wheat to the farmer but at the very most this should not reflect more than the half a cent maybe slightly more than in a in a loaf of bread a pound loaf of bread and yet we see reports of two and three cents there once again the requirement being blamed for the whole increase when only a small proportion is going to him so I would say the main point that I think is so important and I think this is where all of us who believe in in fair prices for the American family farmers we must pound home the point that the farmers still below parity he's still receiving substantially less than his city brethren and that what he receives for his farm products is only a small proportion of what the consumer pays George I know this is right down your line because this is what you do in the department I know you have a lot of figures that taken a large staff of people to compile and keep record of why don't you comment on however you want to do it because this is known on the field why don't I show you some of the figures along the very line that the Senators been talking and if you have questions or comments or the senator has 'em what the Senators covered almost everything I think it needs to be said but we do have on these charts some summary pictures of what has occurred and the first thing there hasn't been any massive inflation in the United States economy and there's no real danger of serious inflation there hasn't really been any sudden inflation it's up about three and a half percent for retail food prices in the last year which is too much but it's nothing to get hysterical or panic striken about there's been a little increase at the farm level here for a long time but you're really interesting thing is this for 15 long years that's the way retail food prices have been going up for 15 long years farm prices have been like this and there is a disparity I think personally I probably probably shouldn't say this as an officer the administration but as a person and an economist I think that certain foods at the farm level have been priced too low I think animal products particularly milk maybe hogs maybe beef and really if the American people want to continue to eat as cheaply as they have been eating and they've been eating cheaply in real terms by far the cheapest in this world and as well as they eat and they eat better than anybody else in this world there are going to be some modest price increases at the farm level if we want to maintain the kind of a life we've had in this country it's justified in terms of parity or equality of income among people in this nation and in the national interest of the consumers themselves my personal feeling is that there should be somewhat higher farm prices if you've any questions on that one no no I think I think that on this point George when you say maybe getting down there just to the word disparity maybe just a little explanation of there is another chart on that it's very easy to show it there has been some improvement in farm incomes in the last five years and I'm very very happy to be able to say it but it's still a long way this is the average disposable income this black line here a people who don't work on farms and that's the average disposable income per capita for the people who do work on farms now they're both rising but this one is far higher and it's always been higher and on a very simple basis the difference between this and this is the difference in what people earn who work on farms this little one who work off farms this big one for the same kind of work in the same kind of capital this is a fact and I'd like to see it stop being effect it's because of this disparity as you might call it in the farmers returned that some of us joined with Senator McGovern to oppose any action by federal government agencies to reduce sub parity farm prices because we just don't think it's fair to press down the prices that farmers are receiving today when there's so much below that which everyone else receives for their effort in their investment I'm proud to say that our the the McGovern resolution which we worked on which was reported unanimously out of the committee passed the Senate without a single dissenting vote and we're glad to have your support for that and I think it showed that the mood of the of the Senate whether they represented an entirely urban state or rural state was that farm prices are too low even though we're encouraged by the price improvement they're still too low and governmental agencies should not try to discourage the improved return to our farmers I'm glad to say that since this resolution has passed that the Defense Department has started purchasing pork again that we're starting to buy butter for school lunch programs that some of the importation of cheese and particularly the low sugar fat dairy products from Canada has been reduced and the export controls and hives have been relaxed all of which I think has shown that the government has thought this issue over again and has decided that that the policy of the federal government ought to be to achieve parity prices for our farmers and that in fact there's a very little relationship between achieving that level and high prices to the consumers because of what had talked about earlier now I would like to say just a minute I'd like to say for five years the Department of which I'm a member has been working as hard as it can day and night along with the farmers of this country just exactly for that in now we've got substantial improvement in five years real good improvement but we're still a long way from where we want to go we're shooting for three years to get parity income and if things go right for the first time in history we got a chance to do it but I would say that for the sense of this resolution senator everybody in the Department of Agriculture and I think especially Mr. Freeman we're wicked and we're with you with our whole heart well certainly we've been with you senator on this as you well know are our leaders calling and letters coming in it helped a great deal help because we did not want to see a government policy established there would be a long range policy once that was established that's right to use government pressure of any type to keep farm prices below equity in other words an equal- equal level of income I think that as a farmer I know what's happening in the world the average age of farmers is about 50- -eight years leads now this tells a story the people can no longer take for granted that a quarter milk or a half a gallon of milk is going to be in a supermarket in the New York City or that there's going to be a sirloin steak there just because they want it it's going to be there only if it's produced on the farm and it's going to be produced only on the farm George as you were saying there if there is a sufficient income for the farmers to well just plain words to economically be able to stay on the farm aren't we seeing this in dairy farm prices we hope that we hope that that we will see some more improvement in this field but in Minnesota I think we're losing about seven dairy farmers a day right we hope that that's moderating some would the improved prices to the dairy farmers but the return is so low that many many farmers have just told me that they don't intend to live that kind of life for that kind of return they'd love to farm but they they just can't do it as a charitable enterprise they've got to get a decent return well farmers might stayed on the farm many of them because as a way of life my kids are going to stay there if it's only sound from an economic stance and they're -they- and otherwise the economics nation know whether the neighbors kids have gone off to town and get a good wage with no investment and see the the children that do stay there what kind of income they have the standard of living but I think that the thing that we have to keep emphasizing to everybody is that farmers do not want anything unjust they're not asking for something above the rest of the economy they only want to get up in balance but I think that we don't need to talk about just the farmers here today because well being many many people a good percentage the audience will be consumers and I say one more word on those farmers right I'd like to make very clear what the policy of the administration and Mr. Freeman and those of us in the department are we really believe that in times like this with large defense commitments which nobody no responsible American thinks we can cut much and a tight economy the responsible people should not kick prices up needlessly there should be no exploitation no profiteering on this tension of this world but by the same token and just every bit as emphatically where we need and deserve a farm price increase to get the supplies that the people of this nation not just the farmers but the people of this nation needs then this department will support it fully and my hunch is that on animal products you've mentioned dairy but your life dairy is shrinking faster than ever before I think the other animal products must have higher income at the farm level not just for the benefit of the farmer senator but for the benefit of the American people who want to have meat and animal fries to eat and for the farmers they know that the grain farmer in order to produce the green has got to have you also have the consuming public I didn't want us to get misunderstood here because of consuming public they don't consume the grain they consume the end product now I think that the one thing that amazes me is we get into these studies here that I know that you as the facts on that amazes me that maybe they could buy an automobile for $800 less a few years ago maybe you buy a package of cigarettes a three centerfire three cents a pack less a few years ago and they're proportional increase in price has gone up much more rapid than the price of food but it seems as though all the emphasis the suddenly gets placed on the price of food when we're only spending about one-fifth of our disposable investing less than that 18.2% right 18.2% well that's what they're having this party he was ready for that this is right so George why don't you here give us an analysis of what the farm prices are what the price increase has been the farmers the small amount that has resulted the far inadequate as we all know and then what the price of the consumer so that they can get a real picture here to understand why food is really a bargain well suppose I start off by saying as you said senator there's only a little over a third of what people spend for foods now that's a big industry now it's over ninety billion dollars at retail just for food alone just a little over a third of it goes to farmer the rest of it and I'm not saying it's improper goes to processing distribution and the massive supply industries that support them here's one item which is very sensitive with my wife and your wife and everybody else's is bread you look back in 1950 you paid fourteen cents per pound low two and a half cents of that was a farm value of wheat okay you look in 1966 it's weaker the wheat component of a loaf of bread is up seven tenths of one cent that's all the price here is twenty two cents so here what you've gotten is a rise of eight cents at retail in a loaf of bread and you've had seven tenths of one cent increase in the price of wheat I'm not accusing anybody of profiteering or exploiting but it's a cold fact that the increase in price of the price of bread is not in any measure at all due to the price increase a farmer got for his wheat well isn't it also true that during that interval between 1950 and today there were in which the price of wheat actually went down yes to the farmer and the price of bread went up to the consumer the other day we when we were fighting on this hide export problem they told us that the reason we wanted to have put the export controls on hides was to keep shoe prices even well the first thing we knew is that hides went down to the farmer and shoe prices went up to the consumer right so I think that's another indication of yeah of the fact and this is difficult to understand that there's so little relationship between what the farmer receives and what the consumer pays is entirely correct and a lot of the noise that's occurred about this matter has been absolutely baseless you can say honestly accurately that the recent increases in retail prices which have not been astronomical to start with are not in any real measure due to the increases in farm prices look at this one now if I may this is just from last year or this year of 1966 to last year 65 the price at retail in New York of a loaf of bread went up three cents the price of bread of wheat and a loaf of bread went up a half cent which is a mighty modest increase at the farm level the increase was six times higher than the increase of the wheat that went into it and again this is not any accusation but this is a cold fact which I think the public of the United States ought to Norma it's true on milk if I can show you the last one here two milk prices have gone up and as you know senator your States the biggest milk state in the Union there have been more that's a funny thing later with California there have been more cows killed out there have been more farmers leaving at a higher rate and for 16 consecutive months the production of milk in this country has gone downhill this is the first time in history if this continues then the American people really may find out what food shortage is for the first time in their life if it continues very much longer supplies are gonna be short enough but you will see some real high prices and this is what I think the people of the United States ought to be thinking of you can't turn around milk production in six months or a year or two years but again here prices did go up we in the department did raise a support price for milk and we did it to assure an adequate supply of milk for the people of this country as well as a decent income for the producers which incidentally is required in order to get a decent supply one cent up at the farm level two to three cents up that's a retail level so you had about a 250% increase higher increase at the retail level in New York City in most other cities and then you did here I will tell you here this 1 cent is not merely justified in terms of equity but to keep the volume of production that the kids of this country needs there wasn't any option we did what was right and I'm rather happy and proud we did it you talk about the value of milk to our school children we sat through this testimony on the special school milk program on the school lunch program which includes and you were in on that I recall rather vividly and we appreciate your leadership and that's this field I think you were impressed as I certainly was by the testimony and reports from dietitians from persons in charge of programs around the country which feed over 18 million school lunches 19 million school lunches this man's a statistician no [unclear] the millions of children who daily receive this school milk there is no question but the investment this made nation is made in feeding its children at schools has been one of the most magnificent examples of an enlightened program we've ever seen the health of our country has been remarkably improved we got about 19 million kids in 70,000 schools in every state in the Union but most people also don't know that we have 7 million needy families at the peak of the winter that we help about a million and a half people on food stamp we actually give milk to more than 19 billion because the special milk program bumps it up to about 25 million and then in the years when we've had a little dairy surplus of which we have zero now we did help with foreign feeding on right now it's a good program like this gets us to a point that if I may bring this up Oren Lee because I feel so strong about this next Tuesday we go back into session on the food for freedom program and we talk about farmers in terms of what they mean in their local community we talk about them in terms of what they've done in terms of feeding the American people at a lower percentage of income than any other farm families we talk about the product of the American farmer and the nutritional level that we've established in our children but the truth of it is that the American farmer is one of the few people who stands between world hunger and a world that we can somehow patch together and get back on its feet there was a time when there were many surplus producing areas in the world no longer North America that's Canada and the United States and Oceania Australia New Zealand all that are left the other countries that used to be surplus producing are now deficit in other words if they don't get food from the outside they're gonna starve and this that this food deficit is in the- just growing fantastically it's estimated that 10,000 people died daily that millions are suffering suffering from malnutrition and the big issue in this Congress and I'm surprised it hasn't had more discussion the big issue in this Congress is whether or not that we've removed our surpluses we really believe in helping the world from and preventing world starvation the only way we're gonna do that is if we have family farmers who are getting a decent return for their efforts no I'd like to tell you what Secretary Freeman thinks what I think and what the executive branch thinks yes we've got about 20 years ahead of us where if we primarily North America to a lesser extent Oceania don't continue to provide the kind of help we've given before which I agree has made the American farmer the most potent instrument of foreign policy that this nation has and the greatest contributor to peace and stability in this world of any part of the United States if we don't do it there'll be hunger but secondly I think we've got to take the most remarkable most impossibly efficient at times character the American farmer and see if we can get people in these other countries to let's reduce it so we got two things we've got their help with production we've gotta find some way that the efficiency of the American farmer which has increased about three times faster than any other part of this economy and see if you can get it used in these poor countries we see two jobs ahead of us Senator George I'm glad to hear you say this because I agree wholeheartedly senator Mondale here that the family-type farm is the only farm structure that has ever worked yet anywhere in this way no other farm structure as they've been efficient in the producing of agricultural products we've never used our agricultural production many times in the past and foreign affairs as we could have used it as correct with the with the supply that we did have it seems to me that the consuming public has to realize that here in America we as farmers have to have an opportunity to get equal profit level because the profit motive is the only thing that brings about an efficient industry and continued production but it seems to me that the American people cannot expect George to have continued profits in industry or the working people cannot continue to be have full employment or a weight scale that they have now and to have the American farmers far below the rest of the country you're seeing it milk now and the trouble in milk again is that if it goes too far then you just don't repair the damage in six months one year two years this can be costly to the American public if farmers don't get enough of an income to maintain the supplies that American consumers are accustomed to it and I think we have several developments here today you as high governmental officials here expressing not only the sentiment but the understanding of these problems is a vital importance farmers are having a better understanding of the problems they realize more about the problems involved in the economy and together we can meet many of these problems senator do you have any final words here well I think what we're really dealing with here Oren Lee on the problem of farm prices and consumer prices is a it's a lack of public understanding or an inadequate understanding of the reality these figures I think tell the truth right secondly I believe that we need to gain more public understanding of that magnificent contribution that our family farmers made to our society to our economy and to world peace and I think that the American people understanding that will stand behind our joint objective in getting a full and fair return for the American farmer and we're all gonna be better off here this is the basis of democracy it's correct and it's always worked that way George do you have a final word yes 7%of the workforce of this countries now on farms that 7% has produced so well and largely because it's produced so well this is the richest nation that the world has ever seen in addition to that that 7% has done a superb job in giving a chance for decency and dignity to a great many hungry people elsewhere and they've contributed immensely to the stability the safety of this nation and the people of the United States what to be grateful to them George those are fine final words we've had the opportunity to visit with you here as a public service brought to the people by NFO members US farm report has been brought to you as a public service in the interest of agriculture rural business and the well-being of our nation we wish to thank our special guests on today's program the United States Senator Walter F Mondale of Minnesota Assistant Secretary of Agriculture George Marin and NFO president Oren least Aileen members of the National Farmers Organization invite you to tune in again next week for more facts on agriculture the economic gearwheel in our economy that produces the majority of our nation's new wealth