In other words, OPS says in this statement that when hog prices decline, they will consider lowering pork ceilings, and then when hog prices go up, they will raise pork price ceilings to allow packers to pay parity prices for live hogs. To those who know anything at all about livestock and meat, this is, of course, pure nonsense. We all know that the price at which packers can sell pork products determines what they are able to pay for live hogs and still remain in business. When ceiling prices on pork products are set at a level too low to permit packers to pay parity prices for live hogs, the price of live hogs cannot rise as long as these ceiling prices are in effect. Then how can OPS possibly raise pork ceilings if they are going to wait until the price of live hogs rises to parity first? OPS policy, as contained in this statement, appears to be to lower pork ceilings during periods of seasonally large marketings and resulting low pork prices, and then prevent hog prices from rising in seasons of short supplies. OPS has maintained pork ceiling prices in open defiance of Congress throughout this entire period.

The results of this policy already are evident. Hog production has become unattractive to farmers. There is no way of averaging out at a reasonable profit when hog prices are prevented from rising during the seasons of short supplies and when there is no limit to where prices may fall during seasons of large marketings.

In the Pig Crop Report released by the United States Department of Agriculture on December 20, 1951, it is estimated that the 1952 spring pig crop will be 9 percent smaller than in 1951. This estimate is substantiated by numerous hog salesmen on our livestock markets who report an abnormal number of bred sows and gilts now being sold for slaughter instead of being retained on farms to raise spring pigs. Many of these men believe that the decrease may be much greater than the 9-percent reduction forecast by the Department of Agriculture. This situation is further substantiated by reports from farmers who actually are reducing their hog operations this spring. The most common reason these farmers give is that hog production under OPS regulations is unprofitable. They can sell their corn and other feed to the Government or others and realize a greater net return than they can by raising hogs under these conditions.

We have shown that OPS regulations have slowed down meat production and reduced the amount of meat which consumers had every right to expect would be available. This is exactly the opposite of what OPS officials told the public-that price controls would increase production. The second point on which OPS misled consumers in order to get support for their price-control program was that price controls would bring lower meat prices.

Price controls on livestock and meat have not brought lower meat prices for consumers. Meat prices continued to go up month after month despite price ceilings. Retail meat prices have decreased only after increased meat production and lowered levels in recent months. Price controls have had no effect whatever in bringing about th's reduction in retail meat prices. Ceiling prices have remained the same as they were when meat prices reached their peak last fall, yet most meat prices now are substantially below these ceilings. This is conclusive proof that supply and demand, not price controls, have lowered meat prices. When we consider the disruption in meat production caused

by OPS regulations, and the additional fat and bone which consumers have been purchasing as a result of these regulations, we are certain that retail meat prices have averaged substantially higher during the past year than they would have averaged without price controls.

Chart No. 2 shows monthly retail beef prices for 1951 and 1952, and average prices received by farmers for cattle for the same period. The average retail price of round steak in 56 large cities as reported by the Bureau of Labor Statistics for January 1951, at the time of the price freeze was $1.06 per pound. In March 1952, after more than a year of price controls and a roll-back in live cattle prices, the average price of round steak in these same cities was $1.12 per pound, an increase of 6 cents per pound. During the same period, the retail price of rib roast increased by 3 cents per pound. Even the retail price of hamburger shows an increase of about 1 cent per pound. Currently all of these retail beef prices are below the levels reached under price controls last October and November, not because ceiling prices were lowered or because the regulations were more rigidly enforced, but because supply and demand forces have caused prices to come down.

During this same period, from January 1951 to March 1952, prices received by farmers for cattle increased by only 60 cents per hundred pounds or about one-half of 1 cent per pound. Cattle prices have been held down by price controls, while retail beef prices have been allowed to go up. The OPS price control program certainly has not reduced beef prices to consumers it it has widened the spread between farm prices and retail prices. The costs of processing and distributing meat have been increased but the higher retail prices have not been passed back to the livestock producer to encourage him to produce larger supplies of meat for the market.

Chart No. 3 shows monthly retail pork prices for 1951, as reported by the Bureau of Labor Statistics, and average prices received by farmers for hogs as reported by the Bureau of Agricultural Economics. In January 1951, before the price freeze, retail pork chop prices in 56 large cities averaged 75 cents per pound. In October of 1951, the retail price of port chops was 85 cents per pound, an increase of 10 cents per pound in retail cost to consumers. This increase occurred under price controls which OPS said would hold down meat prices. Yet during this same period from January to October last year, hog prices increased by only 30 cents per hundred pounds, or threetenths of a cent per pound. From October 1951 to March 1952, retail pork chop prices declined by 11 cents per pound, and were slightly lower than when prices were frozen in January 1951.

Retail prices of sliced bacon declined by over 6 cents per pound from October 1951 to March 1952 and retail prices of hams declined by over 4 cents per pound. Ceiling prices on pork products have not been lowered during this period, and most pork products are selling below ceiling levels. The reason for the decrease in pork prices was production, not price controls. Large hog marketings have resulted in temporarily plentiful supplies of pork. The index of all pork prices, at retail, as reported by the Bureau of Labor Statistics in March 1952, was 5 percent below the index for January 1951.

Hog prices, on the other hand, declined by 16 percent during this period, widening the margin between retail pork prices and farm prices for hogs.

Under the provisions of the Defense Production Act, hog producers understood that they would be able to get parity prices for hogs. With this assurance, they went ahead with their production plans only to find that OPS has changed the rules laid down by Congress. OPS says hogs can be sold at parity only during the periods of short supply, and they did not allow producers to receive parity even during the period of small hog marketings in the spring and summer of 1951. This has lowered the average price received for hogs during the past year to the point where farmers would have been much better. off financially to sell their grain and go out of the hog business.

As a consequence, we have been getting not only large runs of butcher hogs on the markets, but in addition large numbers of sows and gilts which would have been retained on farms to raise pigs in 1952.

There is a great difference between the production of hogs and the production of cattle. Hogs mature quickly, and they must be sold when they reach market weight, which is when they are about 6 months old. They must be fed chiefly on grain, with little opportunity to cheapen feed costs by the use of roughage.

Cattle, on the other hand, can be brought to market weight and finish in about a year, or they can be used to consume more roughage and not reach market until they are 2, 3, or 4, years old. Therefore, while price controls have only slowed up beef production, they have caused farmers to liquidate hogs.

Retail prices of lamb increased by 1 percent under price controls from January 1951 to March 1952, as shown by the index of retail lamb prices prepared by the Bureau of Labor Statistics. Prices of live lambs received by producers decreased by 15 percent during the same period that retail prices were rising by 1 percent. Again, consumers were paying more for the same product, while lamb producers and feeders were receiving less.

The fact that OPS retail ceiling prices on meats are higher than prices paid before controls has been concealed from consumers. At the start of the price control program, OPS officials said that the posting of retail price ceilings in each store was necessary in order for the housewife to determine whether she was being properly charged. Yet retail meat ceilings never have been posted in stores and the cosnumer has no way of knowing how the price charged compares with the ceiling.

Ceiling Price Regulation No. 25, Ceiling Prices of Beef Items Sold at Retail, was issued on April 30, 1951, and became effective May 14, 1951. The Statement of Considerations accompanying this regulation contains the following statement:

Dollar-and-cent ceiling prices by grade and cut provide the simplest and most effective type of price control. Since retailers will be required to post the prices established by the regulation, the housewife will have a simple and easily recognizable list of prices available to her in order to determine whether she is being properly charged for her purchases.

Section 7 of this same regulation, CPR No. 25, contains the following statement:

Not later than twenty days after the effective date of this regulation, you must post at your store your "Official OPS List of Retail Beef Prices." You may use an exact copy of the OPS list if the printing is as legible and at least as large. Put it at or near the place where your meat sales are made and where your cus

tomers can easily see and read it. 20 feet of meat counter space. for posting or copying from your These lists of retail beef ceiling prices should have been posted in every retail meat store by June 4, 1951, but the effective date then was changed to June 18. On June 13, OPS again changed the effective date to June 25. Then on June 21, OPS postponed the effective date to August 1. A revision of CPR No. 25 was issued on September 21, 1951. Section 7 of the revised regulation headed "Posting Ceiling Prices" consists of the following:

You must have at least one list posted for each You may get your official copies of the price list District Office.

This section will be added by amendment.

The OPS press release issued with this revised regulation contains the following statements relating to posting of ceiling prices:

It is no longer necessary to list the ceiling price on the tray or compartment. However, the posting of official OPS ceiling prices in retail markets at places where they may be readily seen by consumers will be required.

OPS is now preparing these price posters and as soon as they are distributed among retailers, the regulation will be amended to set a definite date for their mandatory posting. This is expected soon.

This statement was made back in September 1951. Now, a full year has passed since OPS stressed the importance of posting retail ceiling prices for beef so the housewife would know if she was being overcharged. Yet these lists still have not been issued. Is it possible that the OPS staff has been working diligently on this project, which they once considered so essential, for almost a year and have been unable to prepare lists so consumers would know if they are being overcharged for beef? Or was this delay due first because retail prices were not reduced as promised, and now because consumers would find out that supply and demand have resulted in prices below OPS ceilings? We are inclined to believe, in view of the tremendous number of regulations, speeches, and press releases prepared by OPS, that the failure to provide these lists of retail beef prices has not been due to inability of the OPS staff to find time to prepare this material. OPS has not really tried to reduce retail meat prices except in a few isolated cases. Instead, they have allowed prices to increase to consumers, for the most part, as supply and demand generated upward pressure on retail prices. As a result, no serious pressures have been exerted against ceilings which would necessitate meat rationing and which would have stimulated even more serious black markets. Very serious harm has been done to the entire economy, however, by the huge increase in distribution costs as a result of price and other controls. Increased distribution costs resulting from interference with normal trade practices, as well as the extra expense of supplying information to OPS and in attempting to comply with the regulations, has caused meat packers to be able to pay less for live animals. This entire additional expense has been assessed against the livestock producer, as it is assessed against the raw-material producer in any industry where the consumer sets the price of the product at retail.

And the consumer does set the price of meat. The amount of money consumers are able and willing to pay for the available supply of meat sets the retail price of meat. In a free market, this is the price posted at the meat market, and actually paid by consumers. In a controlled market, it includes the short weights, the lower grades of product, additional fat and bone, and the money under the counter.

In a free market, this money flows back to the livestock producer and tells him what consumers want most and what he should produce. Under price controls, increased retail prices for meat go to pay the additional distribution costs of the legitimate meat packers and retailers, and to contribute to the fortunes amassed by the unscrupulous operators.

Slaughter quotas, which were in effect for 4 months of 1951, are a good example of this interference with normal trade practices which have added to distribution costs and have resulted in lower prices to livestock producers.

When the Defense Production Act was extended in 1951, the authority for establishing livestock-slaughter quotas was eliminated by Congress, OPS and others immediately asked that Congress restore this power, arguing that livestock-slaughter quotas were necessary in order to keep meat moving in normal channels. This same argument is being used now to persuade Congress to restore this authority to OPS. The theory of slaughter quotas, as stated by OPS, is that each slaughterer will be allowed to slaughter his normal percentage of the total livestock marketed, and thus prevent distortion of the meat-distribution pattern. Since the year 1950 was taken by OPS as a base for establishing quotas, and if these arguments used by OPS are true, then in each month when we had quotas, each slaughterer would have slaughtered the same proportion of total animals marketed as he did in the corresponding month of 1950.

With a record number of cattle on farms and ranches, it was natural and reasonable to expect that cattle slaughter in 1951 would be larger than in 1950.

Cattle slaughter was larger in January 1951 than in January 1950. Beginning in February, the first month after the price "freeze," and continuing through September, cattle slaughter each month was substantially below that for comparable months a year earlier, despite near-record supplies of cattle on farms and ranches. Only in the months of October 1951 and February 1952 has cattle slaughter been greater than for the corresponding months a year earlier. This decrease in cattle slaughter has not been a coincidence. It has been a direct result of price controls on cattle and beef. It is exactly what leaders in the livestock and meat industry predicted would happen under price controls-production would be decreased.

Cattle-slaughter quotas were in effect during the period from April through July 1951. During these 4 months, cattle slaughter was smaller in relation to the previous year than in any other period during 1951. It is clearly evident that slaughter quotas did nothing to maintain the level of cattle slaughter which had been decreased as a result of price controls. While we have accumulated a record number of cattle on farms and ranches, the production process has been slowed up, and consumers have been getting less beef instead of more beef. Cattle feeders cannot push cattle for the quick but expensive gains on full grain feed. They must hold their feed costs down by using more pasture, hay, and other rough feeds to full advantage, and this means more time is needed to get cattle ready for market. While these cattle eventually will come to market and be slaughtered for beef, under this system of feeding to which cattlemen have been forced by price controls, less beef is produced per