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Show 'Price Premium' Battle Grows in Importance War Food Administration Faces Increasingly Increas-ingly Difficult Problem of Getting 'Bashful' Beef Cattle to Market. By BAUKHAGE Nf-tvs Analyst and Commentator. WNU Service, Union Trust Building, Washington, D. C. The fight over subsidies pardon me, I shouldn't use that word subsidies, sub-sidies, the New Deal doesn't like it the fight over "price premiums" on farm products is once more the chief concern of the administration and the members of congress who do not see eye to eye on this painful question. ques-tion. The smoke of the battle over the veto of the subsidy ban included in the Commodity Credit corporation bill has settled, and since then there was another veto (the tax bill) that didn't fare so well. But the Farm Bloc members are not so overopti-mlstlc overopti-mlstlc as to believe that the President Presi-dent and congress are still far enough apart on the subsidy question that another veto could not be sustained. In the senate, the cooler heads of the opposition know this and are not willing to go through the same futile process again. In the house, It is a different matter mat-ter although this is not likely to change the final picture. House Leader Joe Martin, while conceding no jot or tittle to the administration that he can withhold, has made it plain that price control is neces- sary, and he isn't going to allow too much delay on the part of those who want an anti-subsidy rider attached at-tached to the OPA bill. He has other plans of his own. War Food administration officials are quoted as admitting that the case of the bashful beeves is one of their greatest problems. Concretely, Concrete-ly, they have the job of enticing two or three million head of beef cattle off the ranges and into the butcher shops during early spring and summer. sum-mer. And the only thing that they know of to make the cattle move is the good "old reliable" that makes the mare go cash money. Since the administration is sitting on the ' ceilings and refusing to allow prices to the consumer to go up, Uncle Sam will probably have to make up the difference again, if congress will let him, in the form of a "price premium" pre-mium" to the stockmen. The Banker's Stake And the government is wondering about something else besides a few meatless Mondays or Tuesdays or Wednesdays. It is worried about the banker who has a stake in steaks, as well as the cattleman and beefeater. beef-eater. Cattle on the ranges have increased in-creased beyond the feed on the ranges. 1 The average livestock population of America in the years 1922 to 1942 was 69 million head. Roughly let's say half -of this was dairy cattle. Now the estimate is 82 million head and the ratio of eating cows to milking milk-ing cows has increased alarmingly in the last few years. And the beeves are now home on the range because there isn't a price incentive to lure them to slaughter. The government feared this; feared first the famine and then the flood. It now looks as if the famine was coming and the flood is not far behind. be-hind. And this is where the banker comes knocking at the door. He remembers re-members other gluts when the drouth, for instance, sent all the cattle cat-tle to market at once, ruining the industry, making the banker's notes justo much wallpaper. But how, the simple citizen asks, can there be a price drop when the government has placed a floor under un-der prices as well as a ceiling over them? Well, see what happened to our friend, the hog. The farmer brought his pigs to market. The government gov-ernment fixed the price which the packers were bound to pay. But so many pigs arrived that the packer couldn't pack them and the law didn't say he had to buy what he couldn't use. So the farmer, rather than pick up his pigs and carry them home again, sold them off at disgracefully low prices to the smart boys. Finally the smart boys got the floor price, the butcher got his ceiling price which the consumers with full pocketbooks and empty stomachs were glad to pay. All the farmer got was mad. Thif happened why? The government govern-ment says simply because some farmers, seeing as how there was going to be such a good market for hogs, exceeded their quotas got too hoggish (one district in Iowa, I was told, increased its pig crop by 53 per cent, when the figure the government govern-ment had set was 15 per cent). More about that later. And so the War Food administration administra-tion is afraid the same thing might happen to the cattle market. And the banker is afraid. It would be bad enough if we ran into a glut like the hog-jam but, as one WFA livestock live-stock expert put it, "we shudder to think what might happen if an early drouth developed. There would be a great stampede to move cattle to market. Transportation and processing process-ing facilities might not be able to handle the movement. The result might be the loss of thousands and thousands of head of cattle." R. M. Evans, member of the Federal Fed-eral Reserve board for agriculture, who is a former agricultural adjustment adjust-ment administrator, is urging the bankers in the cattle industry to do their share in coaxing Ferdinand off the range. About 'Elastic' Prices Of course, the cattlemen have been among the most violent critics of the price control administration and their representatives have maintained main-tained a steady battle here in Washington Wash-ington in an effort to remove the ceiling ceil-ing prices from beef (or, as they say, make the prices elastic) so that prices would rise and fall in accordance accord-ance with the seasonal demand. The cattlemen's viewpoint as presented pre-sented by Joe G. Montague of the Texas and Southwestern Cattle Raisers Rais-ers association, boils down his plaint to a simple statement. "Cattle -just provide the frames to hang beef on. The Lord knows we've produced the frames but somebody fell down on the job of hanging the beef on 'em." Mr. Montague told me the other day that the weights have gone down faster than even he expected although al-though he predicted the glut, and the promised famine ever since the fixed price was made last October. They have gone off 27 to 28 pounds a head and he expects this will continue con-tinue until July when grass feeding begins again. "I'm trying to get the cattle off the ranches but I can't do it. The feed lots are- not taking them because be-cause there isn't any feed. I could sell thousands of pounds of feed today to-day if I could get my hands on it. The government reports show that there's a lot of feed somewhere but we can't find it." Hoarded Corn There is plenty of feed in the shape of corn in the country but the farm- ers with their government-assured prices on hogs are hoarding it they are transforming it into pork. The government "asked for this" when it put a premium on hog-raising, as we have explained. But many farmers, farm-ers, poultry and dairy farmers and others outside the corn belt need feed. Not only farmers but industrialists who need corn for their chemicals, are complaining. The army and navy who need their products have echoed their pleas. So the government is smack up against the problem of prying this feed (corn) loose from the farmers who are keeping it to feed to their hogs. The only way they can shake the kernels loose is to increase the price of corn. The only way they can do that without breaking through price ceilings is to subsidize corn in other words, buy it at a price which will make it more profitable to the farmer to sell it than to feed it to his hogs. Montague's argument is that because be-cause the cattle business is seasonal you have to have flexibility in price. If the price is nailed down, the cattleman cat-tleman will sell his grass-fed cattle cat-tle in September, instead of holding out for higher prices in the spring, and save going through the anguish of zero weather. Of course, under price control, the theory is that the flexibility is provided by the subsidy sub-sidy excuse me again by the government gov-ernment offering a price premium which gives the cattleman enough for a fair profit but doesn't increase the price to the consumer and start inflation. But the cattlemen don't want sub-price premiums. They want prices to rise and fall in the good old-fashioned way. And that is where the issues in the fight over the proposed amendment to the OPA bill are neatly joined. |