to work outside of them. You should not accept the thesis of the old established organizations because these people would work through them if that were going to be their position. Senator ALLEN. You think this is a ground swell movement? Mr. LEVIN. Yes, I was asked to come here by ranchers who are actually cattle people and I think it is; yes. Senator ALLEN. What about present beef prices? Are they sufficient to cover production costs and a small amount of profit with present prices? Mr. LEVIN. No; if you will look at the statement that I gave you, I got it in too late to get it in the index, it is the first example before you get to the index, the documentation of the cost. To produce a feeder calf, you would have to have 70 cents a pound just to give me in my area what it actually cost me to produce that. A 400-pound calf would have to bring me $280 just so that I recover my costs. Even today, last fall, 400-pound calves at 48 cents was above average. I don't know what that figure ought to be, but it is under $200. We are way short of meeting our costs even under the approved cycle they are talking about. Senator ALLEN. Well, cattlemen never have recovered from the price ceilings slapped on beef during the Nixon administration. Mr. LEVIN. It is the action or inaction of Government and the action of monopolies that is causing our problems. I would like to respond a little bit to your statement about the way we fund this. I agree. I thought I had some obligation to say something about funding. I don't think it was too good an example. In the Wall Street Journal of March 3, 1978, it says that the House Ways and Means Committee voted to provide airlines with $3.5 billion over the next few years to install quieter engines on our airplanes. That is coming out of our tax funds. Senator ALLEN. They did not suggest a tax. Mr. LEVIN. They do suggest some kind of tax, that they tax air travelers. Senator ALLEN. Not the general taxpayer? Mr. LEVIN. No, but then you mentioned that it needs to come out of the tax revenues. On March 2, you have the people here that the chairman invited to make a computer study of the effects of the parity price in the marketplace and the parity price on what I am suggesting. He did not ask the group to put it in their study, but they did it on their own. I would like to call attention to some of the differences because I think it is pertinent to the testimony. You have that in your records. That was Mr. Chen who testified on March 2, 1978. They put in the effects of parity price in the marketplace and target prices at 100 percent of parity with deficiency payments. They used two examples. How does it affect gross national product by 1979? Through the market price, you have a negative gross national product of 0.86 percent. To do what I am suggesting, you have a positive gross national product gain of 2.16 percent. How does it affect disposable personal income? Under the market system-minus 0.37 percent. Senator ALLEN. I believe I have used more than my time. Mr. LEVIN. Those are just some examples. I thought it was interesting. It looks like we get more for our money the way I am suggesting. Senator MELCHER. Thank you very much, Mr. Levin, for your testimony and your excellent presentation of charts and graphs. Mr. LEVIN. I appreciate being here. I appreciate the opportunity to testify. Senator MELCHER. Mr. T. A. Cunningham, president of the Independent Cattlemen's Association of Texas. STATEMENT OF T. A. CUNNINGHAM, PRESIDENT OF THE INDEPENDENT CATTLEMEN'S ASSOCIATION OF TEXAS, AUSTIN, TEX., ACCOMPANIED BY CASH CUNNINGHAM Senator MELCHER. Mr. Cunningham, I have your decale here and I am going to present it to my wife and let her put it above the stove in a prominant place. Mr. CUNNINGHAM. There are over 30,000 up across the United States. We hope to have 100,000 in the store fronts in the next 60 days. If we cannot do it one way, we will do it another. Senator MELCHER. We will put one up in the Senate restaurant. Senator ALLEN. What is the time requirement for each witness? Senator MELCHER. Ten minutes. Senator ALLEN. Then it might be advisable to ask our witnesses to paraphrase their statements to stay within their time. Senator MELCHER. Could you summarize your statement? Mr. CUNNINGHAM. If you will, I have a short summary. I do not want to bore you. We have been before you a number of times and you pretty well know the stand of the Cattlemen's Association.* We are the largest nonaffiliated cattle association in the United States. We are 312 years old. We are not one of the stagnant organizations. We are a new one. We have appeared before you. You pretty well know our stand. We have been around for 312 or 4 years now. We have been here real often. I want to thank you for taking the time to hear us. The time for decisionmaking concerning agricultural legislative reforms is long overdue because agriculture as a whole is bankrupt.. In our opinion, it is ridiculous for the finest agriculture in the world to reach this condition. The Independent Cattlemen's Association has testified for 3 years: that if one segment of agriculture is depressed all segments will soon follow. Now that all agriculture is bankrupt, we are risking the economic security of the entire country. We are aware that you do not have the jurisdiction to change the 1964 Meat Import Act which sets import quotas. However, we feel compelled to talk to you on the matter because it is important to: the States that each of you represent. Even though we are asking for limitations of beef imports, we're not saying that we don't believe in world trade. We realize that the countries of the world must cooperate with each other. *See p. 238 for the prepared statement of Mr. Cunningham. We don't think that American agriculture producers can continue to operate under the restrictions imposed by minimum wage, social security, insurance, the Occupational Safety and Health Administration and the Environmental Protection Agency, just to name a few. How can American producers be expected to compete with countries such as Mexico that pays its laborers $2.50 a day and has unrestricted use of pesticides and other chemicals? Only a river separates us, and the Mexican producer is in direct competition with the domestic producer. Do you think it is fair and honest for those Mexican products to be mingled with our own, making it impossible for the American housewife to know whether she is buying a carefully inspected and regulated product or one which has been raised in Mexico?" That is the reason our association has given such strong support to legislation which would require inspection and labeling of foreign products so that people will know what they are buying. Legislation which would require inspection and labeling is pending before this committee now. I am not trying to imply that minimum wage, social security and insurance are wrong. I'm just saying that the domestic producer would not be expected to operate under all these laws and still have to compete with the foreign markets. The cost of these inspections and regulations is tremendous to us and then our Government allows these uninspected and unregulated products to be commingled with ours. We're selling very few good cuts of beef to these foreign countries. The biggest thing that we sell to them are hide, tallow, lard, and other byproducts, which they need very badly. America is the only country that buys what we don't need: Beef. If everyone believed in fair world trade, there wouldn't be any reason for the United States to receive more than 50 percent of all the imported red meat from all exporting nations. Not only are beef imports an unfair competition for the American livestock producer, taxation is also pulling the agriculture producer into a mire. The average agriculture producer in Texas pays 50.4 percent of his net income on ad valorem taxes. Other businesses in our States paid 4.2 percent in 1975. Since he's not making a profit anyway, this represents an even greater burden. Another one of our major problems is that our own State Department seems not to be aware of the magnitude of our distress, a deputy assistant in the State Department testified before the Senate Finance Committee on February 27, that imports aren't hurting the domestic cattle industry. He could not be more wrong. We were appalled by his lack of knowledge. According to the Census Bureau, Mexico shipped 594,020 live cattle into the United States in December 1977, alone. These are practically all feeder cattle. The total number of cattle imported from Mexico in 1977 was 1,025,250. From Canada, the total was 528,806 giving a grand total of live cattle from both countries as 1,544,056 head. Now, if you don't think a half a million feeder calves dumped in Texas in 30 days won't bust your market, you are kidding yourself. If a market is running level, if you dump 5 percent on it, it will break that market. Counting all meats coming in, we have never received less than 12 percent. So that means there is no way we can survive at all. Now that we have killed off our cattle and gotten down to about the same amount we are importing, we are getting the market back. What our organization wants, we want a bill stabilizing the cattle industry if we are going to regulate the cattle industry with imports. We know we have to have imports, but we want them to be stabilized. We wanted to make some sense. The more we produce, the less can come in. And the less we produce, the more can come in. We have such a bill-that of Senator Bellmon, Senator Bentsen, yours and maybe several that will come in that bill do this. Highpriced cattle will hurt us just as bad as too cheap cattle. It will tear us up. What I had rather do is answer any questions that you all have because we know what imports will do to us. Of course, we understand with the imports coming in, we start liquidating herds and that added more fuel to the fire. We just had too much meat. They said the reason we got into this jam is that we are overproduced. If we are overproduced, it is silly for us to increase our imports. When these cattle come in from Mexico, they weigh 300 to 450 pounds. They are fed out to 800- or 900-pound animals. Then they count against us as American-produced beef. Why does Mexico completely control the imports that we have no say over whatsoever? For instance, this is not cattle, but cattle works the same way, part of my family farms. I was born in Selma, Ala., your country, Senator Allen. My son-in-law farms. We run the cattle. What happens down there we are on this side of the river. We cannot use insecticides to kill the bugs. Our insecticides are so weakened that we can barely grow a vegetable anymore. Maybe this is right. However, across the river, they can use anything they want to at $2.50 for labor. And they come in mixed. It is commingled. If these insecticides are wrong, why are we letting them come into our country and why are we commingling? If it is wrong for us, why do we not inspect it? What we would really like to see is a bill that would stabilize the situation. Since imports are going to regulate our cattle industry, we do not want any more subsidy or controls. We do not want any more interference. If Congress is going to regulate our market, regulate it to where it would be more of a rubbered effect and not a boom to bust. The only thing that happens in boom to bust, the consumer and producer gets ripped off. Both people. If you get it stabilized, the producer can make it and so can the consumer and so can the wholesaler and retailer. We would like for it to be inspected the same as ours and have it labeled all the way to the housewife so she knows what she buvs. Senator MELCHER. Mr. Cunningham I have no disagreement with you. I still have a bill that would require pretty stringent inspection of imported meat. I think we should. At one time it passed the Senate and I almost got it passed in the House of Representatives. It was a bill that said we were going to monitor all the foodstuffs that come in to make sure, by residue sampling, that the chemicals that we ban here are not being imported in the tomatoes and lettuce and meat that we import from abroad. It makes so much sense that we are going to pursue that. Maybe this year we will pass it. Mr. CUNNINGHAM. I sure hope you will. Senator MELCHER. It makes a lot of sense for consumers. On the labeling, we have the opportunity to pass a labeling bill this year. We do have an opportunity this year to pass revisions to the 1964 Meat Import Quota Act, and I think we are going to do it. I very much like your comments on the inverse ratio. If we have a lot of beef here, cut down on what beef we allow into this country. When we have a shortage of beef, if that day comes again-I do not know if it will-but if it does, the exporting countries are not hurt much because the price of beef will be higher. The key part is to adjust our imports to suit ourselves. Mr. CUNNINGHAM. Certainly. Senator MELCHER. We do not really need beef imports. We are overly generous giving any quotas to anybody to send beef to this country. Mr. CUNNINGHAM. I think so, too. [Applause.] Senator MELCHER. I am with you on all of these points. I think you have presented excellent testimony and made an excellent witness as you always do. I am very happy to have you here. Senator Allen. Senator ALLEN. Thank you, Senator Melcher. I agree with everything you said. Today, we would certainly be derelict in the Congress if we do not respond to amending the 1964 Import Act. I think the request you made certainly shows that you are still the independent-minded person that you have always been. Mr. CUNNINGHAM. We certainly are. Senator ALLEN. It would appear we are imposing a hardship on you rather than helping you under the present system. Mr. CUNNINGHAM. It is just backward. Senator ALLEN. Yes, it is. It must be changed. I feel that this committee will be well nigh unanimous in favor of giving you relief. Mr. CUNNINGHAM. We appeared 2 years ago. Senator ALLEN. Yes, I remember. Mr. CUNNINGHAM. And with all the research. This is what we have been dedicated to all the way through. Someone asked me back home if I had moved up to Washington. I said, "No, I stayed up there half the time and we did not get the bill passed. Now I will stay there all the time until we do.” We will be with you until you do pass it. Senator ALLEN. Thank you. Thank you, Senator Melcher. Senator MELCHER. Thank you, Mr. Cunningham. Our next witness is Joyce Robinson, Montana Cattlemen's Association, Choteau, Mont. We welcome you to the committee, Joyce. We are eager to hear from you. STATEMENT OF JOYCE ROBINSON, MONTANA CATTLEMEN'S ASSOCIATION, CHOTEAU, MONT. Mrs. ROBINSON. Chairman Melcher is from Montana and we are exceedingly proud of him. I want everyone to know that. Senator Allen, I am delighted to see you. 29-974-78- -3 |