LIGHT WEIGHT TEST CCC COMPETITIVE BID PRICES AND TOTAL QUANTITY SOLD FOR EXPORT ON COMPETITIVE BID BASIS SINCE JULY 26,1955 WHEAT Mr. DANIELS. We had a problem when 150 million pounds of wool were turned over to the sales department to sell. We had quite a division of opinion in the trade as to the best way to move wool into the market. There was a strong indication that the best way to do it would have been on an auction basis. We felt very firmly that we could merchandise wool the same as we could merchandise the other commodities. We went more on a competitive bid basis. The wool market was demoralized and there was considerable anxiety as to what would happen when we moved in with our sales of wool. We limited out sales to 64 million pounds per month and purposely held to the high side of the market. This price curve [indicating] illustrates the price of three-eighths Blood staple wool. This [indicating] illustrates the sales we made of all the wools. You could not give the price of each one, because there are forty-some different grades of wool. By staying to the high side of the market we fed that type of wool into the market in an orderly fashion. We fed our overall supply of wool into the market in an orderly fashion. And we were able to get higher prices on an average than the going market. We were able to strengthen the wool market; not only our domestic wool market but the general wool market; the Australian wool market. Another important thing we were able to do was to insure and to get for the woolgrowers, who still had some 1955 clip unsold-we were able to strengthen the market and enable them to get higher prices for their wool. We are pursuing this type of policy so that we will not demoralize the market for the 1956 clip wool. That we feel is an important part of our sales program; to have our sales program work closely together with the price-support program. Mr. VURSELL. How much was sold? How many pounds were sold in this quantity? Mr. DANIELS. There were 614 million pounds a month sold, an accumulation of something over 252 million pounds over this period. Now we are slowing up a little on our sales during the slack period, on the sale of wool, so that we will not demoralize the market. Mr. VURSELL. I want to commend you on the approach of holding to the high side of the market, and particularly for protecting the market all the time you are feeding into it. I think it shows mighty good judgment and very fine results. Mr. DANIELS. We are doing that, and that is part of our overall sales program, because we are very firmly convinced that it is not necessary to demoralize markets in feeding these agricultural commodities back into the market. That has been a fear on the part of the trade. But by using good merchandising judgment and good merchandising principles you can stabilize markets and improve markets and liquidate the agricultural commodities at the same time. On wheat, with our light-test weight wheat, this [indicating] is the only wheat we are offering on a bid basis. We offered it periodically July 1955; September 9, September 19, March 13, March 20, and March 23, 1956. As that wheat shows up, we were able to feed that wheat into the market in an orderly fashion and stabilize prices at the same time. Mr. VURSELL. How much wheat? Mr. DANIELS. The sum total here is a little over 42 million bushels. I might say that as we grow and as we progress we are going to develop charts on each commodity so that we can study what we are doing and have a visual picture so we can improve our techniques as we go along. Mr. VURSELL. May I ask one question, Mr. Chairman? Mr. VURSELL. Do you feel from your continued experience, after having made your report to us last year, that you are having as good success, or better, as you anticipated in the beginning? In other words, are you encouraged with the progress you are making in helping to move these surplus products into the market? Mr. DANIELS. Oh, yes. Since I appeared before the committee on March 8 we have added two more commodities to the list we are offering on a competitive bid basis. One is rough rice and the other is tobacco. We are also liquidating more of our commodities all the time. Of course, we realize that there are more coming in. Mr. VURSELL. Surely. Mr. DANIELS. For example, on grain sorghums by moving the Government inventory during the feeding season it enabled us to take over less grain sorghums than we would have taken over otherwise. We moved our linseed oil aggressively, with the net result, we feel, that we will take over practically no flax this year. It will find its way into the market. We strengthen the market by liquidating these commodities. Mr. VURSELL. In other words, if you strengthen the market then the free-enterprise system works and you do not come to the Government and the Government is not troubled with so much surplus? Mr. DANIELS. That is exactly true. Mr. VURSELL. It appears to me you are doing a commendable job. That is all, Mr. Chairman. Mr. DANIELS. Thank you. Mr. HUGHES. Thank you, Mr. Chairman. Mr. MARSHALL. We want to thank you all for coming up and appearing before the committee, and the information you have given us. Mr. MCLAIN. It has been a fine opportunity, Mr. Chairman. We appreciate your courtesy, Mr. Marshall and gentlemen, and your patience. Mr. HUGHES. We appreciate the opportunity of coming before the committee. FRIDAY, MAY 4, 1956. SOIL CONSERVATION SERVICE WITNESSES ERVIN L. PETERSON, ASSISTANT SECRETARY OF AGRICULTURE G. E. KELLOGG, ASSISTANT ADMINISTRATOR, SOIL SURVEYS, SOIL W. R. VAN DERSAL, ASSISTANT ADMINISTRATOR, MANAGEMENT, SOIL CONSERVATION SERVICE C. B. BROWN, DIRECTOR, PLANNING DIVISION, SOIL CONSERVATION SERVICE C. H. DORNY, DIRECTOR, BUDGET AND FINANCE DIVISION, SOIL CONSERVATION SERVICE L. E. LYMAN, CHIEF, BUDGET BRANCH, SOIL CONSERVATION SERVICE W. T. MURPHY, CHIEF, DIVISION OF FLOOD PREVENTION AND RIVER BASIN PROGRAMS, FOREST SERVICE JOSEPH C. WHEELER, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE |