Senator CHILES. Thank you very much. Senator Bellmon, do you have any questions? Senator BELLMON. Only one. You don't have a line on the charts showing what the cost of producing a dozen eggs or a pound of poultry. How much is a farmer losing today? Mr. CONNER. Well, it is 10.2 cents per dozen above the price they are receiving. I have that in my prepared remarks. I believe it is 10.2 cents per dozen more than they are receiving for a dozen of eggs, so they are losing around 10 cents a dozen. Senator BELLMON. How about broiler prices? What is the cost of producing broilers today? You show the farm price. I cannot see it there. It is down below. Mr. CONNER. Well, it is down to about 14 cents farm price, and that would be slightly below cost of production. I don't know just what the cost of production is at the moment, but it is slightly below the cost of production. You see the downward trend which is reflected in the retail price also. The margin usually stays in all of these charts, and you see the margin usually stays about the same. Senator BELLMON. If I read your charts right, the farmer gets about 14 cents for the broiler and the person who sells the broiler pays, say. 14 cents, and then it is-I cannot see that. Mr. CONNER. Well, the retail price now is about 42 cents. These are national averages. Florida would be lower on the eggs, for instance, it would be considerably lower than the national average as far as the farm sales are concerned and Mr. Land will testify for the Florida industry in that respect. Senator BELLMON. The charts show that the farmers get 14 cents for growing the broiler and the processor and the retailer gets 28 cents for selling. Mr. CONNER. Yes, sir. Senator BELLMON. So he gets two-thirds of the cost of the frying chicken as made up from pricing and retailing? Mr. CONNER. Well, of course, the American broiler producer is the most efficient and I am sure he is not happy with the price. He is almost producing himself out of business giving us a bargain. You will remember that West Germany had a tariff on U.S. poultry that exceeded our cost of production. That is how ridiculous the world situation was in order to try to protect their poultrymen in West Germany, they were having to put an import duty that exceeded our cost of production. We met with President Kennedy at that time and asked him to take this up with him, and he got, I think, a relief on it, but that shows how far we are out front of the rest of the world, and this is reflected in the consumer interest. There is no doubt about that in the retail marketplace. Senator CHILES. Thank you very much. We appreciate so much your coming. Our next witness will be Dr. E. T. York, who is the provost of the Institute of Food and Agricultural Sciences at the University of Florida. We are going to ask because of our time constraints that witnesses do hold their formal testimony to 10 minutes. We will accept any statements that they have into the record, but we want a chance to try to hear from everyone and to also get an opportunity to ask some questions where we have an opportunity. Dr. York, we appreciate so much your being here. STATEMENT OF DR. E. T. YORK, PROVOST, INSTITUTE OF FOOD AND AGRICULTURAL SCIENCES, UNIVERSITY OF FLORIDA, GAINESVILLE, FLA. Mr. YORK. Thank you, Senator Chiles, Senator Bellmon. I am here mainly to listen today. I am delighted to have one of my colleagues. Dr. Kenneth Terfertiller, who is the chairman of our agricultural economics department to discuss briefly some of the economics of food prices and perhaps give a little insight into why and how food prices have changed. Senator Bellmon, Dr. Terfertiller is a native of Oklahoma, a graduate of Oklahoma State. We are delighted to have him with us here in Florida. He is doing a great job as head of our food and resource economics department. Senator CHILES. Good morning, Dr. Terfertiller. We are delighted to have you here. STATEMENT OF DR. KENNETH TERFERTILLER, DIRECTOR, DEPARTMENT OF AGRICULTURAL ECONOMICS, UNIVERSITY OF FLORIDA, GAINESVILLE, FLA. Mr. TERFERTILLER. Senator Chiles, Senator Bellmon, I appreciate this opportunity to come and be a part of this hearing today. I do have a copy of all of the things I say here in writing. I think the spotlight as we know today is really literally on food prices here and around the country, and I would like to talk mainly on that. I have been asked all about the economics of the food prices, itself, and even though, as Commissioner Conner said, it is pretty hard to look at this entirely economically, because there seems to be some political parts in it, too, I will try to limit my remarks to more the economic analysis of it. I will not be getting into all of the commodity areas. This will fall later as Commissioner Conner testified. I would like to talk just about a broad economic trend and areas that affects this and before I get into an outline of the economic statements I make I would like to say that I also appreciate the people on low incomes particularly. I have a wife and children and my mother is on a fixed income and I particularly appreciate her problems of low-income people, particularly in fixed income people of the food prices. I also appreciate, Senator Bellmon, the other side of it, the small farmer to get from one year to the next. I say that in the background as you get in the economics seems impersonal. I have this feeling. and I will try to keep that out of it and try to keep also some of the statements that might appear on the political side and let someone elso worry about this. Just in summary, the things I would like to cover are essentially three prices and this is why food prices have gone up, was the relative position of food prices as compared to other things and again, even though we are concerned about them being too high, I think you have to look about how they compare to something else. |