Again, I am sure that this, too, was based upon facts and figures that were supplied to him by you or your Department. Could you define for us the situation in which you found the dairy industry when you took over, so far as supplies on hand, price support levels, domestic consumption, et cetera, and the situation as it exists now. Also, what you have done, if anything, to implement the President's request? (The material requested is as follows:) When this administration took office in 1961, the dairy price support program was being carried out under the same basic legislative authority in existence today-the Agricultural Act of 1949, as amended. The act requires that milk and butterfat be supported at such level from 75 to 90 percent of parity as is necessary to assure an adequate supply. Early in 1961 the dairy price support level was at 80 percent of parity. The national average price for manufacturing milk was being supported at $3.22 per hundredweight and butterfat in farm-separated cream was supported at 59.6 cents per pound. In March 1961, the Department increased the support prices for the 196162 marketing year to $3.40 per hundredweight for manufacturing milk and 60.4 cents per pound for butterfat. These prices were 85 percent of the parity equivalent price for manufacturing milk and 82 percent of parity for butterfat. It was necessary, under the law, to reduce dairy price support to 75 percent of parity beginning April 1, 1962. Dairy price supports have remained at the legal minimum of 75 percent of parity in the 1963-64 marketing year and will continue at that level in 1964–65. The President, in his 1963 farm message, recommended a voluntary dairy program. The administration recommends a voluntary dairy program combining two proposals. The first proposal would authorize shifting from the present "blend" pricing system in Federal milk marketing orders to a baseexcess pricing plan-that is, a plan whereby each producer would receive a "base" or pro rata share of the sales of milk in the market for the highervalued fluid uses with the remainder of his marketings, or "excess," being priced at the lower rate applicable to milk going into manufacturing uses. The purpose is to enable a producer to reduce his total marketings without losing any part of his share of the fluid market. The second proposal would authorize payments to producers who voluntarily restrict their output of milk. Shown below are tables containing data on stocks, production, utilization, prices, purchases, and expenditures under the dairy price support and related programs. Commodity Credit Corporation purchases, utilization, and uncommitted stocks, Apr. 1, 1962-Jan. 31, 1963, compared with Apr. 1, 1963–Jan. 31, 1964 Apr. 1, 1963-Jan. 31, 1964. The decrease in purchases of nonfat dry milk was largely due to increased exports from commercial sources under the payment-in-kind program. Such exports totaled 206.7 million pounds in the first 10 months of the present marketing year compared with 9.6 million pounds a year earlier. Milkfat and nonfat solids contents of CCC and section 32 purchases of dairy products, compared with total milkfat and nonfat solids contents of farm marketings of milk and cream (delivery basis) 1 Estimated from nearest calendar year marketings on the basis of the ratios of milk 2 Assumes milk fat content of marketings average the same as those for total milk pro- 3 Estimated on the basis of milk fat percentages used and the following formula: Percent of nonfat solids in milk equals 7.01 plus 0.434 of the milk fat percentage. This formula is given in estimating the solids-nonfat content of milk, Marketing Research Report No. 65, AMS, May 1954. Assumes that butterfat in farm-skimmed cream averages 28 percent and that nonfat solids content of the cream averages 23 percent of the butterfat content. Excludes milk fat and nonfat solids in butter and cheese purchased in March 1954 and 7 In addition, payment-in-kind certificates were issued for the export of 23, 200,000 8 Partly forecast. CCC and section 32 purchases of dairy products by program years, since Apr. 1, 1951 1 Purchase contracts in large containers plus scheduled deliveries in small containers in each period. 2 Excludes 5,200,000 pounds of butter and 86,700,000 pounds of cheese purchased in March and contracted for resale back to the sellers in April. • Deliveries. Partly forecast. The decrease from 1962-63 is mainly accounted for by increased exports directly from commercial stocks under the payment-in-kind program. Such exports are estimated at 240,000,000 pounds in 1963-64 compared with 24,200,000 pounds in 1962-63. Net Government expenditures on dairy price support and related programs by fiscal years, beginning July 1, 1951 1 CCC purchase and other costs (processing, repackaging, transportation, storage, and handling), less proceeds from sales (including sales to sec. 32). CCC reimbursements to military agencies, Veterans' Administration and other participants. Support levels and prices of manufacturing milk and butterfat under the milk and butterfat price-support program, beginning Apr. 1, 1951 1 Except as noted the figures listed are the actual percentages of the parity or parity equivalent prices published near the end of March before the beginning of the marketing year. In some cases the announced percentages, based on forward estimates of parity, were slightly different. For 1951 through 1961-62 the average prices indicated are for manufacturing milk (the 3-product series). Beginning in 1962-63 the average price indicated is for manufacturing-grade milk. Price increased effective Apr. 18, 1956. Price effective Apr. 1-Sept. 16, 1960. Price effective Sept. 17, 1960-Mar. 9, 1961. 711-month average of adjusted prices. Secretary FREEMAN. The permanent legislation, which is on the books, has been there for a long time and calls for at least 75 percent of parity supports on dairy commodities based on the manufactured milk price, which is about $3.14. This is the minimum level and continues. During the last year, and the figures can be put in the record, the amount of carryover in butter, in cheese, and dry milk, has been substantially reduced. It has been reduced because, first, production was down about 1 percent, primarily in my judgment, because of a very heavy drought year. Second, because of both commercial and concessional sales, we sold 90 million pounds of butter, for example, mainly to Western Europe, because of the drought conditions over there, which was quite unusual, and moved over 170 million more pounds of butter products under Public Law 480. So our stocks have been significantly lessened, but the problem of overproduction in dairy, in my judgment, continues. |