In 1953, and again during the fall of 1956. Presently cows are in good condition. I think this is an instance where we used our money wisely and well and exercised good judgment.

Hogs is another illustration. About 2 years ago, as you know, we were in a very difficult situation on hogs. Again we were urged to do many, many things. We were urged to move in and put supports under the price of live hogs and make premium payments on lightweight hogs. There were many such proposals. We resisted all of these, and it took a lot of courage. I think it was well we did. We moved in with our purchase program under section 32 and bought again $101.3 million of pork and pork products. It was not sensational, but it was helpful. It helped stabilize the situation. With that help the farmers brought about the needed adjustments in supply, not through regulation or allotments, and presently the price of hogs is pushing $20 per 100 pounds.

The point I am making is we do use this authority when there is the opportunity to use it constructively. That is in the record.

We have resisted many urgings to move in and buy when, in our judgment, we would, instead of helping farmers, actually hurt them by generating still heavier supplies.

So my request of you is that you do not infer that we refrain from moving in under any and all circumstances. We do move in. We move in when the opportunity exists to be helpful and that we shall continue to do.

I am convinced if we had moved in with purchases under section 32 on every occasion we had been urged to do so we would have brought about a chaotic situation. We would have stimulated the production of far more pork and beef and eggs and turkeys and almost every conceivable product than the markets could ever have used. Instead of helping work toward a solution, we would have worked deeper into a problem.

Mr. MARSHALL. Dr. Paarlberg, do you feel that when the market was in the chaotic condition it was 2 years ago in the hog market, that purchasing lightweight hogs and taking the pressure off the market would have hurt the hog producer?

Mr. PAARLBERG. We did not think that it would have helped him as much as the program we adopted, and we were of the opinion that it would have been extremely difficult to administer and function properly in the interest of the farmers.

Mr. WHITTEN. When this petition went to the Secretary to step in and announce that he was going to buy pork so as to stabilize the market in the fall of 1955, prices had broken from about 20 cents a pound to 15 cents a pound. The Secretary's statement was that it had not fallen enough to justify action by the Department. It was then further reduced to about 12 cents and then the Department started in.

If I have understood the program in the 12 or more years that I have been on the committee, the strength of this program is brought into play by announcing early when you can see that the break is going to happen that you will buy.

Frequently in the past the break never did occur. The Government was out much less money and saved all that income to the farmers. So the whole heart of this thing is to anticipate, see and to move be

fore a break. Once you get a real break, there is not enough money in the Treasury to lift things back up. The surplus is the thing that causes the trouble. If the Government announces early that the surplus will be taken care of, the buyers can immediately know they are going to have to pay the price to get it, and the market strengthens. You can trace the record of this department and see case after case where that procedure has been followed.

May I say again, to my knowledge, this Department and your administration has never moved fast enough to prevent a break. It is only after the break occurs and the pressure builds up and it looks like you are forced into it that you move, and then it is too little, too late. That is just one man's opinion. I can cite you illustration after illustration in the record to substantiate what I have said.

Mr. MARSHALL. Often it is not a case of a chaotic condition because of the supply on the market, it is the lack of confidence in the trade. that it has in purchasing commodities under the market. Of course, I realize all of us will have honest differences of opinion. It is my opinion at the time of the 1955 trouble when the hog market was in a chaotic condition if you had raised the price on lightweight hogs I think that you would have strengthened the market and it would have cost the taxpayers of this country less.

FARMER'S SHARE OF MARKET BASKET

Now, you mention the market basket, and when you were talking about the farmers' share of this market basket, what commodities contributed to the fact that the farmer got more this year in his basket than last year?

Mr. WELLS. Most of it was livestock products.

Mr. MARSHALL. I may have misunderstood, but I understood when you were talking a moment ago that you gave some credit to the soil bank program for the fact that the farmer got more in his basket. How could that come about?

Mr. WELLS. I thought what I said was that agricultural production was somewhat less last year as the result of the Soil Bank Program than would otherwise have been the case. I do not think that it had much effect on the market basket because much of the soil bank acreage was in wheat and cotton which had a fixed support price.

Mr. MARSHALL. Which did not switch around very much as far as prices were concerned.

Mr. WELLS. Yes.

Mr. MARSHALL. And neither did the price of corn.

Mr. WELLS. The soil bank, in my opinoin, did not affect food prices

very much.

Mr. MARSHALL. I probably misunderstood. It was not a case of the soil bank giving the farmer a larger share of the market basket. Other things contributed, such as livestock.

Mr. WELLS. Livestock, yes.

ACCOMPLISHMENTS AND PRIOR APPROPRIATIONS

Mr. NATCHER. Mr. Secretary, in your general statement you make the point that one of the main functions of the Agricultural Marketing Service is to find new markets and to enlarge existing ones by

learning the current needs of both industrial and household consum

ers.

I wonder if at this point in the record, to save time, you would file a short statement as to the accomplishments of the department during the fiscal year 1957. In addition to that, with your permission, Mr. Chairman, I would like to have a short chart inserted at this point showing the appropriations for the Agricultural Marketing Service beginning with the year 1950 and extending through the year 1958. Mr. PAARLBERG. We will be glad to do that.

Mr. WELLS. The Agricultural Marketing Service was not organized until November of 1953. I am not sure how far back, Mr. Natcher, we have the figures of the comparable earlier agencies. Do I make myself clear?

Mr. NATCHER. Let us begin with the fiscal year 1953.

Mr. WELLS. Yes. We may have to go back 1 year to get a comparable base.

(The information requested on appropriations is as follows:) Annual appropriations, 1953 through 1958, for Agricultural Marketing Service

NOTE.-Amounts are adjusted for comparability with appropriation structure in 1959 budget estimates.

(The statement requested on accomplishments is as follows:)

EXPANSION OF MARKETS-CURRENT ACTIVITIES OF THE AGRICULTURAL MARKETING SERVICE DIRECTED TOWARD EXPANSION OF MARKETS AND INCREASED CONSUMPTION OF AGRICULTURAL COMMODITIES

The programs of the Agricultural Marketing Service are directed primarily at facilitating the effective and efficient marketing of agricultural commodities within the United States. Some programs are also directed toward problems of moving commodities into foreign outlets.

Several types of activities carried out by the Agricultural Marketing Service contribute to the expansion of markets and increased consumption of agricultural commodities. Significant progress and several specific accomplishments in this area were recorded during the past fiscal year.

As a background to current activities and accomplishments, a brief discussion of changes in consumption and use patterns during the past two decades is pertinent.

CHANGING CONSUMPTION PATTERNS

Significant shifts have occurred in the kinds of foods consumed in the domestic market during the past 20 years. There are now more protective nutrients in the food we eat more proteins, more minerals, and more of some vitamins. This has resulted mainly from increased consumption per person of dairy products (except butter), and of meat, poultry, and eggs. Total consumption of fruits and and vegetables, per person, has not changed greatly, though consumption in processed form has increased while that in fresh form has declined. Use of visible fats and oils, per person, also has remained relatively stable but per capita consumption of cereal products and potatoes has declined. The major shifts in consumption have been toward more palatable, nutritious, and expensive foods, which require greater farm-resource use in their production. Without these shifts agricultural surpluses in the United States would be greater than they are.

Under conditions of rising incomes one would expect that additional increments would go to satisfy wants other than food, with the result that the proportion of income spent for food would decline. But the contrary has happened. In 1939 consumer expenditures for food accounted for 22 percent of disposable income; in 1957 food expenditures were 25 percent of income. Part of this rise reflects the more expensive foods that people are eating; part of it reflects more services. Despite the many conveniences and services added to farm products for the benefit of consumers, the farmer's share of the food dollar, at 40 percent, is as high today as it was in 1939. This would indicate that increased costs resulting from greater processing, packaging, and other servicing of food products have been offset by increased efficiencies in the marketing system.

In the industrial-use field, agriculture is faced with serious competition from "synthetic" raw materials, particularly in traditional markets for natural fibers and fats and oils. Synthetic fibers the rayons, nylons, Orlon, and others have become important competitive factors in marketing cotton and wool. Fats and oils are being largely displaced in the detergent field by petroleum derivatives, and are feeling the impact of synthetic resin latexes in the paint, varnish, enamel, and other protective-coatings field.

Use of agricultural products has been influenced considerably by activities of the Agricultural Marketing Service-through research, direct measures to in-. crease food consumption, and supporting marketing services. The following statement discusses highlights of work recently completed or currently in progress under each of these headings.

I. RESEARCH

Research to aid in the expansion of markets for farm products employs people of several skills; economists, statisticians, marketing specialists, psychologists, biological scientists, and engineers. The work ranges widely. It includes household and industrial consumer surveys; product testing in the market place; determination of market potentials, distribution patterns, and market availability; evaluation of promotional activities; determination of factors affecting public distribution programs; discovery of better methods of maintaining quality; and current and long-term projections of demand for agricultural products.

Industrial markets. Except in apparel and household furnishings, cotton has lost a number of industrial outlets, and its use has been diminished in others. Canvas awnings are giving away to other materials; tire cord is now virtually all synthetic; insulated wire and cable show diminishing uses for cotton; seat padding in passenger cars is increasingly of foam rubber. Similarly, wool as upholstery material in automobiles is almost a thing of the past. These are but a few examples of the inroads synthetic raw materials are making on natural fibers.

The Department has studied several of the industrial-use markets for cotton and wool. During the past year a comprehensive report on use of fabrics and fibers in the passenger-car industry was issued. These studies have the support of cotton and wool producer groups including the National Cotton Council and the Wool Bureau.

Such groups are interested also in apparel and household markets, which have held their own much better than other markets, partly as a result of the active promotional efforts of the interested industry groups.

Also published in the past year were studies of teen-agers' attitudes toward cotton and other fibers, women's attitudes toward wool and other fibers in specific apparel uses, and preliminary findings of studies of men's fiber preferences in selected clothing items and of homemakers' appraisals of fibers in items of household furnishings. These "market profile" data are of inestimable value to the merchandising and promoting groups in supplying facts and in permitting them to plan their programs for maximum effectiveness.

A report on an economic evaluation of color in domestic wool calls attention to a nongrade factor which is of importance to wool growers because of the discounts color engenders in the market; possible ways of minimizing the color factor are pointed out.

New and expanded outlets for fats and oils are being explored to offset losses in the soap industry and in the drying-oil industry. Nearing completing is a study of the use of fats in animal feeds, a growing outlet. Also under way are studies of the potentials for expanding use of fats and oils in the plasticizer indus try, and in the manufacture of synthetic lubricants, lubricant additives, and hydraulic fluids. These studies are being carried out in close cooperation with the Utilization Research Agency of the Department to provide them, as well as

private manufacturers, with information on directions that physical-science research may profitably follow.

New and improved food products. During the past year research was initiated to determine the possibilities for expanding the market for cottage cheese through product improvement and industry promotional efforts. It is estimated, for example, that if consumption per person in the South could be brought up to the national average, requirements for fluid milk would be increased by 1.5 billion pounds annually. Further improvement in consumption is possible in other geographic areas also.

Similar research was undertaken to determine the potentials for expanding sales of cultured sour cream, another of the fluid milk byproducts. The test findings in a midwestern city indicate that consumption of this product can be increased a third or more if quality is properly controlled and the product is actively promoted.

Poultry meat consumption increased from 17 pounds per person in 1939 to 31 pounds in 1957. Most of the increase was associated with the rise of the specialized broiler industry. But the increase in per capita consumption of broiler-fryers in recent years has been at low prices. A study conducted in 1956-57 revealed that while household use of broiler-fryers was almost universal, the frequency of use was affected by lack of knowledge or interest in different ways of preparation. About one user in three served only in fried form, neglecting the possibilities of baking or roasting, broiling, barbecuing, or preparation in other ways. Variety in meals is of concern to homemakers. Proper educational and promotional efforts can be employed to overcome this difficulty and stimulate further increases in consumption of poultry meat at equitable prices to producers.

Sav

High acceptability of dehydro frozen peas was found in restaurant use. ings in packaging, transportation, and storage amount to about 2 cents per pound, over $1 million annually if adopted only by a third of institutional users. If, in addition, this becomes a retail item, total savings might run as high as $5 million annually.

Potato flakes, a new convenience form of dehydrated mashed potatoes developed by Utilization Research, were tested by market researchers during the past year and were found to have high initial acceptance and a good repeat-purchase pattern. Several processing plants, in Maine, New York, Idaho, and California, are now producing potato flakes for local distribution. If the product attains national distribution, as seems imminent, it could well arrest the downtrend in potato consumption per person. Since 1940 consumption of potatoes has declined about 1.25 pounds per person per year. The test result in a representative northeastern, middle-sized, urban market indicated a potential sales of potato flakes equivalent to 2.1 pounds of raw potatoes per person per year, without apparent displacement of other potato products. This would require an additional supply of about 6 million bushels of potatoes a year if the full potential were realized. Food merchandising programs.—Many agricultural producer groups are organized to engage in an aggressive program of merchandising their products through advertising, dealer-service, publicity, and in other ways. Such groups include the American Dairy Association, National Broiler Council, Poultry and Egg National Board, National Peanut Council, American Sheep Producers Council, Red Cherry Institute, National and State Potato Councils. Florida Citrus Commission, Sunkist Growers, Washington-Oregon-California Pear Bureau, and many others.

Such groups are frequently in contact with the Department with requests to aid them in determining where their markets are strong and where weak, what types of promotion would be most effective for their products, and what are the habits and attitudes of consumers with respect to theirs and competing products. In response to such requests the Department during the past year completed research on lamb availability and merchandising in retail stores; domestic distribution pattern for rice; the effects of a one-city promotional campaign for lamb; homemakers' use of the opinions about peanuts and tree nuts; homemakers' appraisals of citrus products, avocadoes, dates, and raisins; and consumers' use of and opinions about poultry.

It is difficult to place a dollar value on this type of research assistance. However, if the research is effective in increasing the efficiency of producer merchandising efforts by only 5 to 10 percent, it is worth half to a million dollars for the products enumerated in the last year alone.

Food distribution programs research.-The effectiveness of the Department's national school lunch program and special milk program undoubtedly can be