NFO-177 (AV10676): Acceptance of Collective Bargaining

welcome to us farm report a public information program brought to you in the interest of agriculture rural business and the well-being of our nation by members of the national farmers organization in this area and others interested in having American agriculture received cost of production plus a reasonable profit the American farmers and ranchers are building a brighter future for agriculture through the national farmers organization the organization that awoke America and represents the leadership of Agriculture u.s. farm report presents as a special guest Bill Lashmit bargaining coordinator for the national farmers organization and Gene Potter director of the NFO meat commodity department who is a graduate of the University of Illinois in agricultural economics here now for us farm report is Bill Lashmit Gene there are several things that I think that we need to discuss here for the benefit of the people number one I think the important thing is that collective bargaining is caught on certainly all over the country with most all farmers I would like to refer to the article or the survey that was run by farm journal in which they in their survey stated that 70% of all farmers thought that collective bargaining and holding actions were essential and we're all right something else that I thought that was real interesting in that particular survey is that 92% of the NFO members thought that holding actions were a must forty percent of the Farm Bureau members thought that it was a must and only 28 percent of the Farm Bureau members thought that it was wrong so certainly the idea of holding actions and collective bargaining is being more and more accepted by farmers in general I think there are several things that has brought this on one is of course the that farmers absolutely cannot continue to exist on the present play structure that we have prices are too low for what we produce what we have to sell compared to what they were 10 years ago and these things of course that we have to buy are so much higher than they were 10 years ago so this combination of things has has brought this about and certainly no one else is making the fight for the farmer are doing exactly what NFO is trying to do and this is working on a price as all farmers know that everything that farmers have to buy as I said well ago has gone up and our problem is price it's nothing else we can buy the things that we have to buy or that be gasoline feed implements from several sources or insurance there are several sources and the prices that we have to pay varies very little from one company to the other so our problem has to come back and be nothing more than the place that farmers receive for the products that they must sell so we just came into a holding action here and I'd like to take a few minutes if I could and explain to the people our structure that we established in going into this holding action because I think that very few people really understand the the scope of our organization and the network and the communication system that we have I think we have a communication system that is as good or better than anybody else in the country regardless of what particular group that it may be we are now organized in in 40 states and 41 states it is and in these 41 states we have the 41 states divided off into 37 marketing areas and I would like to draw this structure out here now keep in mind that a marketing area is made up of between 32 and 50 counties depends on the location in the area of the country and what you'd see in now in the Midwest in the heavy producing states of Iowa Illinois Minnesota Missouri Eastern Canton Nebraska and Kansas Indiana Kentucky Ohio Michigan Wisconsin these areas we have it down to in most cases our marketing areas contained in the neighborhood of 35 counties so we and when we divided these we divided these into seven areas and over each of these marketing areas we put what we call a marketing area cheap so I'm going to put him here this is our marketing area chief now keep in mind this is one marketing area there are thirty seven of these marketing area Chiefs in our NFO collective bargaining structure under the marketing area chief and I keep in mind they said there was an average of 35 colonies under this we have these marketing areas divided into seven equal geographic areas now of course the ideal situation would be if we had five counties in each zone these are called our zones but for the geographic areas that we have the marketing area divided into now each zone well ideally of course would be five counties but in some cases it might be four counties in some cases it might be six and these we call our zone coordinators there are seven of those in each of the marketing areas and this takes us down as I said there are four to six counties in each of these particular zones and bringing this on down into the counties we will say here that we have five over each of these counties or in each of these counties we have what we call our super County bargaining structure and in our carrot super County bargaining structure we have a bargaining supervisor over each of these counties and now I'm going to transfer this on down here and and show the actual County bargaining superstructure here we have a the bargaining supervisor he has also on the system under him the county is divided into geographic areas again we have asked that each county be divided into a minimum of four geographic areas depending on the membership and the size of the county but if a county and we'll take the example here that there we have will say five geographic areas in the county then in this over each of these areas we have what we call a bargaining coordinator a bc he's referred to there are five B C's in this particular setup that we have here now keep in mind I said there was a minimum of four there could be as many as eight depending on the size of the county and the membership in the County bargaining coordinator now under the bargaining coordinator we have it broken down still farther right on down to the most minute part of the county into the member the bargaining coordinator has under him then for each eight members are each eight members in the county he has what he has called here a County Marketing Coordinator County Marketing Coordinator so let's say that this man here he has eight of these here under the bargaining coordinator and then this Barney this marketing coordinator is responsible for eight members and this is how the structure is laid out from the marketing area clear down to the each individual member in the county Gene I see that you're pointing at me here and that's a good thing that you are because I'm a little bit wrong here and what I am calling this now I'm coming I'm going to come back up here and make this correction that's a good thing that you were sitting there watching and being awake more awake than I was and I want to run through this whole thing again real quick we've got the marketing area chief we have the zone coordinators the seven of them for each of the counties in the zone five is an ideal situation I said we had between four and six then we have our county structure coming on down where we have our County bargaining supervisor and his assistant and then I call these by mistake bargaining coordinators and I should have called them section foremen actually these are section foremen and after we come from the section foreman we come on down and of course the next step being then the bargaining coordinators and the bargaining coordinators comes right on down to each member in the county so this is our structure and I think it's a very good structure it gives this communication system all the way from here in other words let me explain how fast it really is we can make a tape here at the Nashville office right here in this very room at 10 o'clock in the morning and by 4:00 o'clock in the evening it can be what was on that or from meeting that evening in the counties the tape can be played in every County over this whole area the whole 1500 counties in the 41 state area now if I get this erased and I would like to go on to the next step that we are talking about are we are going to be talking about and I think the next step that we need to go into gene or the neck thing that we need to talk about is what everybody else was predicting and and as far as numbers who are concerned and I would like to to talk about hogs and cattle both at this point you know and I'm going back to last November when the processors and and the government and everybody else for predicting that the hog numbers we're going to hold fairly constant up to these possibly the second week of December and then the numbers would start tailing off and there would be less slaughter then for the latter part of December January February and March but we saw this as something totally different than what the government now keep in mind that we go back and use this structure right here in determining the exact numbers of head of livestock or anything else if there is out here in the country and bar none this is the best communication system and the best system for gathering information there is then I want to start out here and and just throw a little projection on the board here if I can now and coming out of December what the government was more or less projecting was that the numbers would possibly tail off a little bit here we'd have a straight tailing off and then in March we need to pick up a little bit a very little and then we would have another tailing off now this is what the more the less the government predictions were showing now when we got ours we saw something totally different we saw this thing and keep in mind that this first line here is what the government was saying was going to happen and here's what our members with the communication system and bringing this in that we saw was going to happen we saw this thing coming off something like this into about the second week it's a slight incline all the way up to the second week and then we saw this thing starting to move up like this a much sharper increase than and much earlier than what the government and coming on up tapering off here and then the second week of April then we saw this thing starting to tail off and getting close to what they were saying out here possibly by August so this is what we saw now in the and I'm going back to when we call the holding action which was right here at this particular period and into your Iowa at that time we had an 1850 market now we forecast something in the neighborhood of a 15 percent increase this was a very erratic increase we we saw this coming over what the government was projecting that's this 15 percent here more and I know that I talked to myself to several processors and I know that you were into some with me in which they kept saying well watch this market gonna do what's this market gonna do and I know that my standard answer to those people was well it's gonna depend what the market does is what NFO does so what I'm saying here is what we did is that we maintain that at this peak hogs would have gone to someplace between 12 and 13 dollars what we did is that we level this thing off we took hogs off of the market to this point here right here well maybe a little further about the second week of April now what we are in the process or what we were in the process of doing is taking this 15 percent increase off that we had here and spreading it out into the valley that was coming here and still maintaining the market and this is of course what we've been doing up to this point now today I think here in Iowa that you'll see roughly in 18-75 market and we have moved one heck of a lot of hogs during this period of time and we have proven that although you might have a big swell coming in numbers and you might have a big tapering off or a a belly coming into this thing so to speak but if you are selling if you can hold off here and sell here and still maintain the market I think that we have proven that this is one way that the market can be stabilized this is what we have accomplished certainly with the structure that we have in the economic situation that we have in agriculture today we felt that farmers could not go through this and still maintain or have as many farmers left today to out here in the agriculture as we've got if this thing would have gone ahead and happened so this can this can be accomplished on gene I like to ask you a question here I've been doing all the talking up to this point we've been into this holding action just what have we accomplished this point in your opinion well I think bill of course one of the things that has been done you've been talking about here but by no means is that the total objective of this organization to just try to affect supply over slaughter over the short run to improve the general price level that certainly has to be part of it but we saw a situation prior to this and bill know that you were aware but we have been marketing and developed in an elaborate marketing structure out here over a period of the last four years moving a tremendous volume of production and we're making some gains as far as the industry was concerned but there was some hesitancy on the part of many people in the processing industry to be progressive enough to make steps forward that we felt that there were going to be a tremendous amount of farmers pushed off in the farm before the job could be accomplished so as far as leveling out the supply of course that was one objective I think the most important objective was that of signing contracts with processors to stabilize the market price in the future and we've said many times at the beginning the holding action of course that there have been contracts signed we've announced the saying of contracts at various times and we're still signing contracts in fact yesterday we got two contracts in that were mailed in just yesterday so there is an effect from this standpoint but I think one thing many people do not realize that a contract that is signed with the remember the industry with a processor although today right at this minute we don't have enough of those contracts to activate and stabilize the market we do have a great number of them and those are just like money in the bank because those contracts are good they can be activated tomorrow or they can be activated six months from now they're good until enough of them are piled up until we can activate them and stabilize the price in the future so in the meantime then it's a matter of using this block of production that has been grouped together the members working together and not going in and saying I have 50 head of hogs to sell what will you give me for them but going in as a block and I would like to use an example of that if there are four farmers each with a hundred head of hogs and there's a processor that kills 400 head of hogs when I as farmer number one and you're number two and there's two other farmers sitting over here bill when a processor X wants to buy 400 head of hogs once he buys my hundred he needs your hundred and the other two farmers are great deal less and then when he buys yours he needs the two left a little bit less yet and by the time he's bought that third farmers hogs he does need the fourth man very bad at all yet when all four of these farmers go in and say we have four hundred head of hogs and move them together in a block their bargaining power is terrifically increased and that bargaining power is what we're using to stabilize the market now and move off the production that would have been here several months ago well this is certainly right a correct gene or what you're saying here and it's it's been very important it is very important that that we continue and we get more contract signed and certainly we have a large number of contract signed now and also a thing that I was talking about while ago this has been very important is to level out this production to maintain a stable price but let me ask you this question why then would should farmers join NFO to market this way well I think that's a funny question for you to ask I'm sure you've answered it many times yourself bill but I know it is one that that enters a lot of people's minds because we're aware of the fact that any farmer in a heavy a livestock producing area has no problem selling his production there's plenty of people who want to buy it so the question then comes why join an organization make the effort to do something different than you have in the past why exert this effort well it costs something to market farmers have paid that cost before in low prices and erratic price levels we paid the cost for marketing the way we did in 1955 with $10 hogs we paid it again in 1959 with cheap hogs we paid it in 1963 with prime cattle and I had Chicago at $18 a hundredweight we've paid our cost to market before and we took it off in the price the NFO was asking its members to pay that cost of marketing and effort to get a higher price to stabilize the supply to block that production together to sell it as a group so that Packers can't use one farmer against another but they go to the market as one block and having some bargaining power not going to there and saying what will you give me for what few head I have as an individual okay fine Gene there's one of other thing that I wanted to ask you and that was we had a group of people in here today and they had to seem to have a problem from an area not too far from the office here but would you- would you explain this and why this particular problem developed well Bill it it was a problem and I'm sure as far as these members and farmers are concerned it's a real problem but we have sitting in one area it's hard to understand what happens but from this standpoint and when you put the whole area together it's not too hard to see what happens at all there is a major killer involved who today is paying a higher price well this killer was offered the block of production out of that particular area in all that was asked was a decent market value for it he was not willing to take it from the membership as a block and so it was sold to another killer at the price the original killer had been asked but the original killer who was a major packer then although he didn't take the block of production he's going out today and trying to buy from individuals at a higher price then he turned down for the whole block this seems rather foolish because here you say well he's paying more than what he would have had to pay and that's true but he's using that extra price there 25 50 cents a hundred in some cases particular instance to try to break up that block it again as an example of the fact the industry is afraid of this block of production they're afraid of farmers working together and they use a price to an individual can trying to convince him that he shouldn't be a part of the overall block that he should break off an individual and then the next step of the story is if he does break that block up which we've seen it happening in several years ago this happened in particular case and he was successful in breaking the block up and then the market went right back down in the area but if the membership sticks together all and this man will eventually quit doing this when he sees that he's not gonna be able to break that block of production up okay gene do you see this over a big area happening today or just just spotty or what well it certainly is spotty in fact in the majority of the heavy livestock producing area there isn't this type of problem at all you find this type of problem when there are a limited number of buyers and these buyers one of which is a one of the large major killers so it is a spotty situation this is not the only place that there is but it's a very small percentage of the total area okay okay I think everything that you have said here is is very true and as we continue to analyze and look at the problems that agriculture has today certainly from the economic situation and we have been in contact with the with the banks and the local business people we certainly know that the credit situation as far as agriculture is concerned is is getting tighter and tighter and it comes right back to one thing I think as far as I'm concerned and this is that farmers must get together it's either get together organize together bargain together and sell together or we're certainly gonna have less number of farmers now the the whole economic structure is for same concern is based on one thing and this is doing away with with more farmers this is what they have in mind they also have in mind of stabilizing the market but stabilizing at a much lower bigger than what farmers must have to produce the livestock or the grain or whatever it might be until they get it in fewer fewer people's hands and once that it isn't cured fewer people's hands then I will guarantee you that there will be something done as far as raising the price to the consumer so this is a serious situation that we're in Gene what advice could you give any of these non-members out here as far as joining the organization what should they do bill I think is one thing many people have the idea well I don't know for sure what I should do so I won't do anything and then I won't have an effect one way or the other farmers are going to make the choice whether they act or whether they don't act there's one of three things that are going to happen the farmers are either going to fill this void in some type of collective bargaining organization or the government will do this through a socialized or nationalized agriculture whatever you want to call it has been done in many of the Western European countries and this is an answer to the problem if you considered as such it would put agriculture on a sound basis but I don't think myself or any of the rest of the farmers or the majority of the farmers at least want to be dictated to by the government so it's a matter of their making a choice it's a matter of which one they're going to do they either act or they don't act if they don't act you're going to give government intervention or you're going to get corporate agriculture vertical integration either one of them he is not popular with farmers and I know that most of them don't want it so this leaves only one choice that we feel is feasible at all and this is farmers working together to improve their position so even if American member or a man who hasn't joined the organization it's just waiting he in fact has made a decision he has decided to either let government take over agriculture or to be pushed out and let corporate agriculture come in well I would agree with that 100% Gene and I think it that with all boils down the old slogan that we have always had that farmers must organize they must do this job themselves they must bargain together and sell together to end this whole problem in agriculture u.s. farm report has presented as a special guest Bill Lashmit bargaining coordinator for the National Farmers Organization and gene Potter director of the NFO meat commodity department members of the National Farmers Organization invite you to tune in again next week at the same time for more facts on agriculture and rural America which is a gear wheel in our economy that produces the majority of our nation's new wealth the farm income pattern sets the nation's prosperity and the national farmers organization represents new thinking in a new generation of agricultural producers