ago, with movement delayed by late grass seasons in various sections of the country, even a 100 percent quota might not be sufficient to prevent stagnating the market while attempts were being made to secure permission from Washington to slaughter the cattle that were in excess of quota allocations.

EQUITABLE DISTIRBUTION OF MEAT

Another demand for the power to impose quotes has been based on the assumption that without them the meat supply cannot be equitably distributed throughout the country. Here again the assumption is that witn the quotas distribution was fair and equitable. It was not. Exhibit B shows the slaughter by market centers and areas in 1951 as percentages of the slaughter for 1950 (Department of Agriculture figures). I call your attention to the fact that from the beginning of price control in January the distribution of slaughter by regions has been most abnormal. It did not improve during the comparatively short period when quotes were in effect and has continued in some regions even to get more out of line as the diversions of cattle from normal channels increased. You will note that slaughter in Iowa and southern Minnesota, for instance, dropped from 85.8 percent compared with a year ago in May, to 42 percent in June and 60.6 percent in July-the two quota months-and immediately with the lifting of the quotas in August started to regain some of the lost ground. All the areas throughout the central part of the United States show somewhat similar decreases in July and August, while on the Pacific coast, in the Southeast, the South Central West and the Rocky Mountain regions there were substantial increases in percentages. In other words, right in the Corn Belt--the heart of the cattle-feeding operation of this country-there were more cattle fed but less beef available than in other sections of the country mentioned. This maldistribution was possible only because of the unworkable rules and regulations of OPS. It could not have been brought about in any other fashion. Let us hear no more about the efficiency of quotas in the distribution of beef throughout the country.

BEEF PRODUCTION FOR NEXT YEAR

We have the potentials for the production of a very large crop of beef for 1952. Cattle numbers are now regarded as being at an all-time high (official reports will not be available until January 1); the corn crop is now pretty well matured and it is one of the largest crops on record; other feed grains are likewise plentiful. We believe that, barring further "monkeying" with the machinery of beef production, we will have at least near record production next year. However, if Congress continues to threaten new legislation that will increase the hazard of feeding operations, already large, there can be no doubt about the effect it will have upon feeding operations for next year. Farmers have available to them the choice of selling their corn to the Government at the support price or running the risk of feeding it to livestock. They are willing to take the ordinary risks involved but fearful of legislative or executive action such as has occurred in the past few months when OPS with one blow announced that it was going to reduce cattle prices approximately 20 percent.

DIMINISHING CONTROLS

OPS announced on September 5 that certain slaughterers were to be exempted from ceiling prices during the remainder of September if they had been unable to obtain up to 50 percent of normal supply during the previous accounting period. This is an admission of the failure of OPS to succeed in enforcing the Price Control Act. It would not be remedied by restoration of the packer-slaughter quotas, as we have clearly shown in the foregoing.

We urge your committee to reject that portion of the pending legislation which would cancel the ban on slaughter quotas contained in the extension of the Defense Production Act of 1950.

EXHIBIT B.-Cattle slaughter by market centers and areas in 1951 as percentages

of 1950

Senator SCHOEPPEL. Mr. Chairman, I would like to offer at this stage of the record an article that appeared in the Christian Science Monitor that I think is most enlightening. It is entitled "The Stock Feeders' Case."

The CHAIRMAN. Without objection, the article will be put in the record.

(The article referred to follows:)

THE STOCK FEEDERS' CASE

To the Christian Science Monitor:

For a great many years I have been a subscriber to the Monitor and have always felt that it meant to be unbiased in its viewpoint. However, I really feel that you do not know all the facts regarding this cattle business. Since it is a very complex and specialized business, I am not surprised to find that very few outsiders do understand it.

We have a 260-acre extremely fertile Corn Belt farm. By following a 5-year rotation of (1) corn, (2) corn, (3) oats or barley with grass and legume seeding, (4) hay and pasture, (5) hay and pasture, we get 97 acres of corn which will produce 10,000 bushels this year, 48.5 acres of barley which will yield about 2,500 bushels, and 97 acres of a mixture of alfalfa, brome grass, and ladino clover. We will either sell or feed the barley and will put up 100 tons of hay, 300 tons of ensilage and get pasture for 50 head of cattle, 125 spring pigs, and 16 brood sows from the hay and pasture. All corn, hay, and ensilage are fed to cattle or hogs.

Gross income runs from about $31,000 to $45,000 with net income from $10,000 to $14,000. This leaves from $5,000 to $7,000 each for myself and my son-in-law who is the operator. This farm has been in the Illinois Farm Bureau farmmanagement service for 17 years and complete records are kept, analyzed, and compared with about 500 other farms in the State. We have always been above average for volume and efficiency of operation. Of course, our records for 1951

are not complete.

Of the 129 cattle we have bought and fed we still have 52 on feed but they will all be sold during August. If the August and October roll-backs had come on as scheduled, we would have had to wait until October to buy them low enough to come out and sell them under the roll-backs.

About September 15 we bought 70 head of choice quality light yearling steers direct from Colorado. These weighed 640 pounds and price laid down was $31.40 per hundredweight, or $14,000 for the lot.

Costs are as follows: The other costs include veterinary fees, electricity for lighting and for water heaters, hired man, his living quarters and all the extras, new feeding equipment and repairs on old, feeding floors, building repairs, and depreciation and insurance on cattle, buildings, and equipment:

On a steady market these cattle are selling as prime grade at $37 per hundredweight and will average about $400 per head or $14,000 for the lot, leaving a loss of $1,500. These cattle have been sold since the first roll-back. A second rollback August 1 would have resulted in heavy additional loss on the 33 head we still have which were not ready to go before August. If sold before they were finished, which could have been in July, the price would have been much lower and so would have resulted in more loss. So a loss on these was unavoidable unless we had sold them in April or early May as feeding cattle at about $35. In that case, much of our feed would have been wasted. We knew the roll-back was coming but we cannot just sell all our equipment and feed and change a rotation which has been planned 5 years ahead.

Forty head of good grade feeding steers bought about October 15, 1950, and sold in April 1951, averaged 750 pounds and cost us laid down $8,400. They were fed as follows with all the feed except the protein supplement being produced on the farm:

These 40 cattle sold for $35 per hundredweight and brought $14,680 or $6,280 more than the cost, leaving a profit of $424. Please note that these cattle were sold ahead of the roll-back and brought $7.50 per hundredweight more than they cost. Yet the margin of profit was small. If they had been sold after a 10percent roll-back you can see they would have sold at a loss.

About June 15 we bought 19 head of choice, heavy feeders in Chicago for $6,490. Per-hundredweight cost was $33.95 laid down. Feed costs for these cattle are:

On the present market we estimate that those cattle will sell for about $1,600 more than they cost, or a net profit of $400.

You will probably wonder why we feed cattle when profit margins are so uncertain and small. The answer is that we can maintain our land at a high level of productivity by this system and market a large amount of grain and largely unmarketable rough feed through livestock. With the same rotation without livestock we would have to sell a great deal of hay and all of our grain. Fertility would soon run down and so would yields. In addition to the animal fertilizer

produced we buy a great deal of supplemental commercial fertilizers. The farm now produces at least 75 percent more feed for livestock than it did when I started operating here in 1911. That is where our real profit lies and not in the margins we make on feeding. Any old cattle feeder will testify to the truth of this statement.

Do you see very much inducement in the cattle-feeding business for speculative capital to become interested in? I can see where a speculator might be interested in the business of producing cattle on the range and I suppose some are. Neither do I see where our profits are so large that we should be cut another 9 percent. There are two classes of cattlemen-range-cattle producers and those of us who buy range cattle and finish them for market. We feeders produce a very large proportion of the total tonnage of beef which goes to the consumer's table. We not only contribute tonnage but we also raise the quality and palatability of the product. Moreover, losses are sometimes heavy and profits are seldom large. To break even we have to have a considerable gain in price as well as in weight and finish.

I have an investment of at least $110,000, besides a considerable investment which my son-in-law has in his operating equipment. It takes a lot of labor to carry on this business. Labor cost has doubled in the last 5 years on the farm. We have to have an operating capital of from fifty to sixty thousand every year and we do not get it out until the end of the year and in many cases much longer than that. We run the risk of bad weather conditons, death losses, and governmental whims and economic conditions.

If economic conditions cause us to lose, we farmers have never blamed anyone but ourselves for using bad judgment. This roll-back is different. It just isn't fair play because the Government has never supported cattle prices in a time of depressed prices. We admit that we have been receiving a very large gross income, but it is the costs that are giving us the squeeze.

According to a recent economic bulletin from the United States Department of Agriculture, one-third of the farmer's gross income went for expenses a few years ago and now three-fourths to four-fifths goes for expenses. At the same time that the Government is cutting us down, it is allowing price increases all around the circuit in industry, which are resulting in increases in everything we buy.

You probably know that there is a limit under the Control Act on what the packer can pay the feeder, but no limit on what the feeder must pay when he goes on the range to buy cattle. If we are to sell on a controlled market it seems no more than fair that we should be enabled to buy on a controlled market. This doesn't mean that I favor controls. But if we are to have them, have them all the way down. AN ILLINOIS STOCK FEEDER.

The CHAIRMAN. Mr. Montague.

STATEMENT OF JOE G. MONTAGUE, ATTORNEY, TEXAS AND SOUTHWESTERN CATTLE RAISERS' ASSOCIATION

The CHAIRMAN. Without objection, Mr. Montague's full statement. will be placed in the record. You may proceed.

Mr. MONTAGUE. Mr. Chairman, my statement you say will be printed in the record. I won't then read it at this time.

The CHAIRMAN. If you wish to read it, go ahead.

Mr. MONTAGUE. I don't think that I will read it.

The CHAIRMAN. I am just making sure the whole thing is in the record, but you can high light it or whatever you wish.

Mr. MONTAGUE. Yes, sir.

I would like to state at the beginning that it was our primary intention to have the president of our association and several members of the board of directors make this appearance for the Texas and Southwestern Cattle Raisers' Association.

The CHAIRMAN. If you want any statements from them filed in the record, if you will get it to us by Friday we will insert them.