TO AMEND THE PACKERS AND STOCKYARDS ACT, 1921

THURSDAY MARCH 15, 1934

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D.C.

The committee met at 10 a.m., pursuant to adjournment, Senator George W. Norris presiding.

Senator NORRIS. The committee will come to order.

The next witness I have here on the list is Mr. Stebbins.

Please give your name, address and occupation to the stenographer.

STATEMENT OF GLENN T. STEBBINS, SECRETARY, UNITED STATES LIVE STOCK ASSOCIATION, KANSAS CITY, MO.

Mr. STEBBINS. Mr. Chairman, if the committee please, I have submitted to the reporter a bound copy of these photostat copies of these charts which I have here. If possible, I would like to jjust lay these charts on the table for the committee, for the committee to look at and then pick them up, please.

(The bound copy of photostats referred to is attached to the original of this record.)

Each one of these charts is different, and I thought you might pass them around.

My name is Glenn T. Stebbins and I am executive secretary of the United States Live Stock Association, which, as our president, Mr. Hildebrand, stated yesterday, represents a membership located in 25 States in the United States.

A study of the relationship between large receipts of hogs coming into the packing houses direct from concentration points and private stockyards, and daily fluctuations of hog prices on public markets in the year 1933, reveals the damaging effect of direct holdings on the value of hogs.

After tabulating the daily receipts of directs, and comparing the daily totals with market fluctuations on those days, it is disclosed that

In the main the largest supplies of direct receipts reach the packing houses on Monday and on either Thursday or Friday. These heavy receipts of "directs" on Monday enable their owners to stay off of the public market on the day of the week when the supplies of farmers' hogs on the competitive markets usually are largest. Thus we find from the tabulation that the public hog markets in the year 1933 were lower on 29 Mondays out of 52 weeks ranging anywhere from 10 to 30 cents lower.

79

On January 9, 1933, Chicago and Kansas City combined had 44,000 direct hogs against only 50,000 farmers' hogs on sale. And, of course, the market was lower. This does not take into account the multiplied thousands of directs at other markets in the hands of miscellaneous packers, nor moving into or out of concentration points. On the Mondays suffering the greatest breaks in prices the supplies in packers' hands at Chicago and Kansas City were reported by the Bureau of Agricultural Economics as follows, together with supplies of farmers' hogs on those markets:

On 19 Mondays in 1933 the public market was more than 10 cents. lower, and on all these Mondays direct hogs at Kansas City outnumbered farmers' hogs on sale.

Thus it is shown that the heavy receipts of hogs direct into the packing houses on Monday morning supply much if not all of the demand for hogs from those packers having them, resulting in lower prices. These lowered prices usually prevail for several days, and about Thursday or Friday another large supply moves into the packer's hands to keep prices down.

With heavy direct receipts on at least 2 days a week the packers were able through the year 1933 to keep prices under control. Thus, the American pig crop has sold below cost of production, and until this vicious circle of directs, bearing the market every day of the week through 2 days of paralyzing receipts, is stopped, there can be little hope that producers of hogs will profit by their industry.

Direct buying of hogs in the United States prior to 1920 was of comparatively small volume and perhaps without measurable effect. Since that time, however, it has developed to a point where it deeply reflects on the welfare of the livestock industry and in order to tell the story of its development during the subsequent years, the following graphs were submitted.

The first graph is a simple picture of the population of the United States and portrays the increase in our numbers during the last decade showing an average increase of one million seven hundred thousand. per year. In contemplating this picturized statement it must be kept in mind that people must eat to live, and that meat is, or it should be, a major item in the American diet.

On the second graph we see in graphic style our yearly pork production. Since the story at this time is mainly concerned with hogs, this graph is submitted as evidence that the production of hogs during the period covered (1920-33, inclusive) has remained fairly constant, moving through about three cycles of moderate variation, reaching a low point in 1926.

1920

1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931

1932 1933

Dept of Agr.

Figures Express number of head. Hoq Population on farms

48.34

It will be perceived from this third graph that per capita consumtion of pork has more or less followed production, the number of pounds consumed per person having varied accordingly. While the figure for 1933 displays an increase of about 10 pounds per person over 1921, the amount shown in any one of the years covered is short of actual consumption, being based on federally inspected slaughter only. Thus any result based on these figures will be conservatively low.

Here on graph no. 4, we develop the annual increase in consumption of pork which must necessarily accrue by reason of the increase in population as shown on graph no. 1. It reveals that even by using the conservative figures set out in graph no. 3, the accruing increase in consumption has offset the decrease in exports.

I hand you graph no. 5 which depicts the premium spread which hogs commanded as compared to beef cattle prior to about the middle of 1927. It will be noted that hogs again edged above been cattle in the latter part of 1929, and the early part of 1930. At which time the total number of hogs received direct throughout the country, for some reason, failed to increase in the latter part of 1929, and began only a slight upward trend again in the early part of 1930, as will be shown later on a graph no. 9. Moreover, as displayed in graph nos. 6 and 7, which I shall hand you in a moment, it will be noted that the number of hogs received direct at Chicago and Kansas City, failed to increase during this particular period.

Furthermore previous to 1923, which is the first year shown on this graph, direct buying of hogs was of little consequence, and the and the premium spread above beef cattle has existed to a greater or lesser degree