NFO- 209 (AV10711): US Farm Report:American Farms and Ranches

what is happening to American farms and ranches 2500 go on the block every week what are their chances for survival 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 receive 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 now presents a special guest Ken Stofferann director of nfo field staff Department and Leroy Kannas NFO field staff assistant here to do the questioning is W. W. Butch Swaim director of NFO public information Ken I know that you're over a large area of the United States now and have many many field man in the field why don't you test the program well thank you but I think number one I think our listening audience might be interested that the national farmers organization has had the most phenomenal growth in the last year and a half but I think it doesn't even compare it or anything historical precedent I think that we can say that we've grown faster than probably any other comparable organization or any kind of movement whatsoever in the same patterns we're in forty five of the nation's continental States now and by the end of this season we're going to be you know productive areas of all 48 continental states so I think this is testimony itself from what it was a year ago when we were in about 28 or 29 plus some membership in Alaska, Ken because right recently they signed up a former California farmer the Don farm in Alaska and I don't know whether you know or not but they took material back that he was going to start working in Alaska yes I understand that this happened here just about three or four weeks ago as I understand so we're having a a good season and organizing farmers and ranchers clear across the United States and I think they're all recognizing that collective bargaining agriculture the NFO way is the answer that's the main thing that they understand because we have inquiries from all over the nation I think probably our listening audience would be interested in the farm general March issue Central edition where in there it says farms 2,500 go on the block every week what are your chances for survival well your chances are multiplied many times when you belong to the national farmers organization because in that bargaining program was a better life for agriculture families and a better life in the bargain and we've had a lot of response from all over the nation as to the NFO's collective bargaining program it's not philosophy anymore we're actually doing it and putting it into practice bargaining on commodities and it all comes as a result of organization which has to come first because you don't solve your problems and then organize it has to come the other way first but why is it can--it more young we're not starting in farming well I think the answer butch lies and probably a graph that I have here where where we can show the investment in agriculture which right now in 1967 as of this figure here was two hundred sixty nine and a half billion dollars versus 1960 at two hundred and three point five and down here is really the answer where net farm income is shown from 1960 at less than twelve point five billion and on up and stabilizing here and following the investment a little bit when you get to 66 and then down again in 1967 where they show an investment of about fourteen point six billion dollars but that includes all of the government payments and also of many other things as far as charging off rental to farm dwellings to farmers and all of the foods that they eat out of their gardens and farms and whatnot Leeroy you have to start here while I go about all the empty farm homes in America you know I haven't have it here yet but I think this is self self-evident anybody driving through the community and view of the fact that in the last 15 years about just about 50% of the farmers have been forced off of the land due to low farm prices and increased investment in agriculture as to the last graph in the last 15 years time in the 1950 to '52 then farmers were receiving about fifteen percent return on their investment whereas in and they were borrowing money at that time for farm loans for about four percent whereas now a fourteen billion dollar return on a two hundred and sixty nine billion dollar investment only five and a half percent and farm operating money is costing seven so you can hardly expect young people to go into these farm homes when it's even a poor investment for the ones that are already in farming empty farms you get empty store buildings on Main Street right yeah it's uh it's a ratio it has been figured and computed that for every ten to twelve farmers that go off of the farm in a community one store or one business place has to close therefore you don't only have the influx of the the farmers into the metropolis of the city but also from your small towns in farming communities well another one you had there was empty schools and churches the whole thing it all goes together right yes it definitely does I know many of the areas they have adequate facilities to educate the children but no need due to the fact that there aren't any children in here so you run into school consolidation in order to maintain the curricular that the people want their children to have you know my home area I know it's president my home state of South Dakota they already had the design mapped out according to the exodus of the people in the rural community that by 1980 I believe it is or somewhere in that vicinity they intend to educate the high school pupils in 14 high schools for the state and as the school's goal so low the churches it was interesting to note that all about a month six weeks ago I attended a meeting the churches in the rural community are becoming concerned and they had computed some statistics through this area right here around Corning in southwest Iowa and come up with the fact that in the next 15 years 50% of their parish iners are going to be dead because of the high age that they run today other words this doesn't necessarily have to be true I mean this is what's predicted for us if we don't do something about you that the trend do you put an income out here in agriculture comparable to the rest of them where the man can get cost of production plus a reasonable profit with a reasonable return on investment the young folks will be doing the farming the school will be filled up with children the older folks will retire and so the old folks trying to do the farming can we talk a little bit about your the increased net farm income the increasing income this is the thing that we must have in order to bring this about to keep the young folks out here in agriculture that's right butch and it's pointed out here on a graph what [unclear] it is computed what it would require to get farm prices at 100% parity under today's formulas and it would require an extra fifteen billion dollars in the gross farm income as compared to what is being received today which have been the gross farm income to a total of 57.8 billion well as you can see now that our figures were 42.8 billion last year which gave the agriculture a net cash income of only eight billion now that's not including government payments or any of the charges against rental or consumption of farm products but there's something interesting here and it is the costs of production amounted to thirty-eight four point eight billion and we subtract that from forty two point eight billion which give us then on the sale of agriculture production just eight billion dollars where the USDA pointed out fourteen point six but we think it's been padded just a little we don't have and figuring the investment this ain't billion dollars figures only three percent return on the investment from the sale of farm commodities gross farm income gross versus the net can you cover that one she forgets a little bit yes I think I probably did already bunch but in addition to that what we want to point out here is the effects of higher farm prices would have as far as the consumer is concerned now this is very interesting because people think that a corresponding rise would result to the consumer if you had an increase in farm income which is not true because right now the farmers share the consumer disposable income is only five percent and the consumer is paying now fifteen point five well thirty five percent increase in farm products only amounts to one point seven which is added on is fifteen point five is seventeen point two so the consumer will still have a break in this food prices I know that many times they've told us that if we get our price up the other Falls price will just go up and it'll go right on up I know Leroy you and I know this isn't true and you have a chart there about stabilizing the economy let's go into this thoroughly so that people will understand once and for all that it takes better farm prices to stabilize the rest of the economy it definitely does butch and it reflects right back to the last picture we were showing in consumer costs it I know a lot of people would think you were crazy perhaps if you said that the price of food goes up the farmers get a fair return for their production that they will have more money to spend for other things other than food but you actually do because of the employment that agriculture creates but I'd like to go to the position we're in now is unorganized farmers in a what will you give me market every time that labor or industry takes an increase in profits or wages farmers being in no position to offset this by pricing their products get squeezed tighter and tighter this actually creates a spiraling economy or inflation in simple words because a spiral is created when two ends don't meet if one works toward the center and the other toward the outside that you have a farther division and so what you have to do is establish agriculture in a pricing position so that as labor moves forward industry moves forward and agriculture so agriculture then too can price its product on an equal basis then everybody has the same size piece of pie so to say and if farmers receive the share that they're supposed to have a man that's working just throwing out a figure of speech now a man who's working 35 hours a week and taking home a hundred dollars and is spending seventeen and a half dollars for food we would require his services to work 40 hours a week therefore with the same wage scale he would take home 120 but it would cost him about 20 or 21 dollars for food which would still give him about 17 or 18 more dollars to spend for other things than food in other words you would have more full employment he could buy more food than he does now I'm still have money left right absolutely now a lot of people think perhaps that by pricing farm products that you would continue to go around and keep this wheel going around well anything that meets itself coming in the back door soon quits following it right so you'd level level off in other words the merry-go-round that we're on now would stop and settle down to a sound economy of earned income instead of a debt fueled economy that we have today absolutely now show us about the pricing structure here your opinion to what it takes to correct it well I think that's self-evident in this graph now we're not condemning any business here but as you see on this side a product that is manufactured is priced at the manufacture level and profit plus cost is moved on clear through to the consumer level and everybody derives their share or what is needed now on the off side in farm production you see a split arrow with part of it going up and part of it going down and this is actually where your problem comes into your economy this is their division which forces one end down and the other end up and this is why we're in the inflation- inflationary position that we are today it has actually come about in the last 20 to 30 years when small nucleus of people got into a position to price the products to the consumers through your retail chains they're buying cheap and selling deer and as long as we stay on organized they will be in this ratio an interesting item came over the UPI wire here about two weeks ago I believe was a four part of February three weeks ago and it was that economists were giving a report that you know supply and price situation the American consumer was going to pay about two and a half percent more for their cost of living this year for food and farmers in spite of the fact that they were going to produce more we're going to take less total dollars well that's right here at this breaking point in this arrow in other words the farmer was going to produce more for less the consumer was going to buy a little more and he was going to pay more for each item right very true so if we don't put a stop to this we're all going out of business together absolutely over end Department another point I would like to comment on in here is people assuming that you can't get a price for farm products because of surplus well one instrument in here is that every step on an arrow that is moving upward any supply they have is carried as inventory well when you start from the retail food outlet and they start pricing it downward toward the farmer at that point the processing industry or the hog buyer or the farmer if he has one percent more at that point they considered a surplus so actually the changing of the pricing system turns surplus to unit taury right don't you have another chart there that shows that a little bit better yes I do the grain bans yours it breaks it down and it makes it appear as though there isn't as much as what a lot of people are led to believe now on this item here you'll note that the top figures the soybeans in supply a hundred and sixty million bushel as of September 1 right prior to the harvest of the 1968 crop the wheat in supply July 1 just prior to the wheat harvest of 537 million bushel and the corn supply of October 1 just prior to the 1960 year 68 harvest was 1 billion 150 million bushel well this looks is a tremendous amount if you're not in a position to price it or handle it and therefore it's considered surplus now to take another look at it if farmers start pricing their products and turn that arrow around and you change it to inventory and at that point serving normal disappearance you have about a two-month supply of beans and about a four and a half month supply of wheat and about a three month supply of corn now this may seem like a quite a little to some people if they were trying to do away with in a few days time but figuring crop conditions and all this nature it's actually a moderate reserve then another token if you start pricing livestock and some of the imports get shut off and we have to produce that in this country it wouldn't take long to move through this grain supply and this is actually the only form of holding a surplus in the United States is in these grain bans surplus or inventory right and they're just such little difference between a surplus in inventory that's putting a price tag on it now talking about asking to produce some of the meat I'd like to point out that America hadn't produced enough red meat to feed their own people since prior to 1950 in 1968 we bought 19 percent of all the red meat in the world that was for sale the United States I did now if we were to produce that meat most certainly your inventory a grain wouldn't last very long supposing a war would come along and the beet supply would be cut off it has been the past we need all this green immediately to produce that meat to feed our own people and and under normal conditions not creating not figuring any any movement so far as a war of this nature if the only reason that imports are coming into the country today is because there is a demand for them the farmers put themselves in a position to price their product at that point anything that is imported over and above what is needed it has a price depressing effect to the consumer so at that point the the imports into this country will be governed by the retail outlet so as to not interfere with their ability to price it to the consumer in other words what they do bring in then will be used to break the farmers price right it won't be possible now we're shipping out the grain breaking the grain price shipping back in the meet and breaking the meat price and the farmer suffers both ways now Ken let's get into the price for foreign trade a little bit here oh Butch this has been an area that I think is opened up an avenue a tremendous interest for listening audience we've always been told of course that we had to compete in world markets well I want to point out some world markets here area gives a breakdown of a bushel of wheat produced in South Dakota the producer in South Dakota receives a dollar 27 cents for it and the local dealer gets 5 cents for it and 6 cents is transportation to a warehouse 11 cents is transportation to the foreign country and 38 cents is transportation to the Gulf port now if you add all this up and then consider the price of wheat in a foreign market or the country or the city of Rotterdam one of the common market countries over their domestic price level for wheat is approximately three dollars and 42 cents a bushel versus the dollar twenty seven cents here in the United States now the difference between the transportation costs and what it costs the producer or the what the producer receives here is subtracted from their domestic price support level over there so that leaves a dollar and fifty five cents approximately in tariffs or import duties charged by that foreign country before they will let this bushel of wheat get into their economy price up there we wouldn't have to pay that term is there there wouldn't be any need for as high a tariff even under their variable levy system there wouldn't be a need for as high a tariff as what is now being presently charged and I think that the answer lies in increasing the domestic price level here on our bushel of wheat to compare more with the three dollar and forty two cent price of the foreign markets have can this is exactly what Common Market has been telling us for the last five or six years now they've sent official representative mister Corning Iowa to meet with the national farmers organization because they're vitally interested in what we're trying to do to raise the prices they pointed out that they would be better off if we raised our prices the farmers themselves and the government over there would be better off because they wouldn't have to subsidize their farmers as much in fact what they would like to do to raise the price structure of agriculture clear around the world they pointed out that many of the regions didn't have the money to pay it anyway and they proposed just like we proposed to do to put on the market what we can they can consume at a price and then give it to the rest of the world if they have to or work out some method whereby and but raise their standard of living by raising the prices on the farm commodities they do produce well there's definitely a movement going on over there now to break down that kind of a protection system that they have in there and of course the farmers in Europe certainly don't want to see that heaven and but rather would see that the big supplier or the world market supply of most agriculture commodities for export have a similar type system and the only way you can do it is through effective organization any longer because the Department of Agriculture unfortunately hasn't paid too good attention to farmers and protecting farmers price ways as far as world markets are concerned well this gets us into farm organization why don't you comment on this this subject guess for a moment well this is interesting too because actually there is absolutely no competition between NFO and the other major farm organizations for example how does NFO fit in with the other farm organizations such as the Farm Bureau at the Farmers Union or the National Grange well these organizations perform services for their members through legislative legislation and also service cooperatives they have insurance programs they're servicing their members through cooperatives and this is needed now the farmers need this service but there has hasn't been up until any fool came along there hasn't been any organization or wasn't any organization to perform the service of bargaining for the purpose of getting a price for the production grown on farms before it left the farm and NFO was born strictly out of this need and so there is no competition between farm organizations structurally wise and we don't ask the members of other organizations to desert those organizations but to only join NFO for the purpose of getting a price for that production before it leaves the farm and bargain for it before it does leave their gate and so it fits in very well with the other farm organizations and we have a lot of cross membership with all the other general farm organizations I've often said that I don't believe the producers of America are going to leave their bargaining power to the government who's had since the 30s to get farmers a price and haven't yet neither do I believe they're going to leave it to other farm organs nearly 40 years to make use of the capper-volstead Act before the NFO came along so it's a case of joining together bargain together now Leroy let's talk a little bit about collective bargaining well I thought I got a picture here that we've designed in very simple terms and I'm sure the people are accustomed to it you go into your supply and demand factors and the amount that is due needed for a needed for getting a price up here you see a farmer overhauling his tractor let's assume that while he is doing this he twists off and all of a sudden establishes a demand for four head bolts he comes into town and he has two local dealers and they have two pricing systems one here has three in a been at $1 each another one has three over here in a package they're grouped together and he will sell the three for five dollars the sensible way to get the supply that he needs what he has the demand for is to buy the three for five dollars and get the remaining one from the unorganized at one dollar each therefore the farmers who have put their production together into the package for selling it are the ones that are establishing the price on that item and within the organization the membership agreement of the NFO the entire governing structure of it is operated by the members and all of the terms of packaging conditions of selling and pricing is in the at the option of the producer members the bargaining power is going get a price for their product and then they're going to buy the remaining supply from somebody else right this is uh this is a way it would appear at the time how about the supply contracts there and I'll just touch on them briefly which and that is where the one thing one a bear in mind is this not is not our original- ultimate goal of course this is master contracts that will reflect the cost of production plus a reasonable profit but at the present time we are in supply contracts now marketing livestock green dairy production just about all items of farm production and generally the members are deriving a better price this is not the goal of the NFO and you might compare to a football game and that is it steps toward the original goal but we're going into Huddle's and designing each play and moving forward with these supply contracts one individual from the deep south explained it quite humorously these supply contracts are definitely not all that we want in the NFO but it sure beats going to the marketplace and saying what will you give me absolutely speaking of football games there's another one here football teams it brings it out real well I think the football team is there and the organized farmer is out in front the processors the government everybody else is out to take over agriculture and the captain that snap says loose ball down below it says who's going to control farming this is the real battle folks who's going to control farming will it be the organized farmers the NFO farmers it most certainly will be Ken there's no question about it but what block bargaining and block selling through the NFO is going to get the job done legislation will not be successful congressman O'Konski who has been trying to pass legislation for farmers for nearly 30 years says the farmers United or perish collective bargaining is the key to the farmer success the American farms and ranches can survive through the NFO collective bargaining program which is being recognized as the number one collective bargaining group for American agriculture u.s. farm report has presented a special guest Ken Stofferann director of NFO field staff Department and Leroy Kannas NFO field staff assistant doing the questioning was W. W. Butch Swain director of NFO public information 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 such the nation's true prosperity level and the national farmers organization represents new thinking and a new generation of agricultural producers a brighter day for American agriculture