Mr. LONG. Yes. I am not taking the position necessarily of being critical about the method of procurement that a packer uses in his purchases, at least not to you people, but to me, when I go to buy, and when he has been feeding them himself, he makes no procurements. He draws them from a feedlot and does not commit himself anywhere, locally or at other points. He creates competition any time he buys, regardless of where he buys. This is the point I think was made some time ago, and as long as he is out in the country buying, he is creating competition. As long as he is procuring livestock, he is creating competition. I don't necessarily agree with some of the ways they do it; however, we are not suggesting that you or the legislature should limit this type of activity, unless it could be proven that it is being used and manipulated to increase his trade.

Mr. OLSON. In other words, we are trying to get at the ability of these packers to restrain the trade, or the ability to affect the market. This is what we are really trying to deal with, and it is a central issue, and we find ourselves discussing some of the areas that are not directly associated with this; but it is your opinion that this legislation is necessary and will correct the abuse that you feel is apparent in controlling the supply, and thereby directly affecting the market?

Mr. LONG. Yes. And there is one other point I think I did emphasize here, and that is the fact we are concerned about what he does to the market with this feeding. That is another thing.

The other thing that I am vitally concerned about is the economic impact that he has on the independent livestock feeder who has to compete, because of the fact that he has a subsidy type of feedlot and he can set up a feeding operation with margins so narrow through the use of other resources, and other advantages that the smaller independent feeder is going to have difficulty being able to compete with him, other things being equal. This is the other point I wanted to make, the market effect and the effect on the production itself, the feeding operation.

Mr. OLSON. That is all.

Mr. PURCELL. Mr. Bandstra.

Mr. BANDSTRA. Just to follow that through. It would be an unfair type of competition, if a packer-feeder is able, as you said on page 2 of your statement, to subsidize his feeding operation and depress the market. This would be totally unfair to the family-size farmer. It is not a fair type of competition.

Mr. LONG. This is what I am suggesting is happening with many of these feeding operations. And from what I get from my contacts with some of these packer-feeding operations, this is not a success in itself. Some of these packer-feeding operations are not a success in themselves.

Mr. BANDSTRA. They told you that they have lost money on their feeding operations?

Mr. LONG. They sure did in 1964, but these fellows are still around and the independent farmer is gone. This is a real good example. Mr. BANDSTRA. That would leave the only justification for it, the fact that they could affect the market downward and still survive. Mr. LONG. That's right.

Mr. BANDSTRA. Thank you very much.

Mr. PURCELL. Are there any other questions? Thank you very much, Mr. Long.

Mr. LONG. Thank you.

Mr. PURCELL. Before I call Mr. Ruser and ask him to take the stand, I want to present to all of you, who may not know him, not only an honest and genuinely fine man, but a very distinguished Member of Congress-Mr. Neal Smith.

This is your district here; isn't it?

Mr. SMITH. Yes.

Mr. PURCELL. He ought to be introducing me instead of me introducing him. In case there are any of you here outside of this district, I do want you to meet one of the real champions of the American farmer, in my judgment. And, in my judgment, one of the most competent Congressmen of the 435 that are in Washington. Mr. Smith is not only on the Appropriations Committee, he is on the Agricul tural Appropriations Subcommittee. I can certify to the fact that those of us on that Agriculture Committee go to Neal Smith for meaningful information, and no one can be more dedicated to his work, or more competent or more respected, than Mr. Smith. And, Mr. Smith, if you will stand up, in case there are any of you out here who are not from Iowa.

Mr. SMITH. Thank you. I just wish I had a tape of that.

Mr. PURCELL. At this time we will then call Mr. A. E. Ruser, if he is in the audience.

STATEMENT OF N. DALE RUSER, RUSER FEEDING CO., INC., RUSER VENICE FEEDLOTS, INC., OMAHA, NEBR.

Mr. RUSER. Mr. Chairman and members of the committee, I am Dale Ruser. My father, August Ruser, was to testify today. It seems he and my mother have their 73d and 70th birthdays, and they had made previous arrangements for him. So, if you will

Mr. PURCELL. Would you pull that microphone down?
Mr. RUSER. Can you hear me now, sir?

Mr. PURCELL. Fine.

Mr. RUSER. Now as to our qualifications: My father started working at Omaha yards in 1911 in the traders division and became a partner in the firm in which he started in approximately 1930. He formed a new trading partnership with my brother and myself in 1947. For the past 15 years, until this year, 1966, he was president of the Omaha Livestock Traders Exchange, and for 2 years during this time he was president of the National Livestock Dealers Association. He started feeding cattle in 1929, and took us into the business in 1940. At the present the partnership operates two commercial feedlots with a total capacity of 17,000 head. We turn over a yearly turnover of approximately 35,000 to 40,000 head. Of this total approximately 40 percent are owned by the Rusers; approximately 30 percent are fed for various packers: and the balance of 30 percent are fed for ranchers and others associated with the livestock business. You will note that we feed only for those with an interest in some phase of the livestock industry.

THE LEGISLATION OF PACKER FEEDING

First, let me say that we are very happy and proud to be associated business that is as close to being a free enterprise as our fore

fathers visualized and planned for in this country, a business where a man's word is his bond, and we are adequately controlled by the Packers and Stockyards Act, as it now stands.

As we see it, the big question here is not the legislation of packer feeding, but the implications of legislation to a free enterprise. We are born in and prosper on competition, and if we now legislate on this competition against one phase of our business, it will be soon that we will legislate against other phases of our business. To us, this smacks of dictatorship and socialism, and not free enterprise.

As we all know, the trend is toward integration in the red meat industry. Right or wrong, it is here to stay and any attempt to control one phase can only lead to an attempt to control all phases and complete governmental control of the red meat industry. We do not want this to happen, and we are certain our associates in the industry do not want this to happen.

Being human, we know that there are times in the livestock industry that we wish we didn't have competition from one source or another— the poultry, swine, and mutton producers; the rancher; the commercial feedlots; the farmer-feeder; the packers; the chainstores; and even our neighbors, among others. Are we going to attempt to control this healthy competition on which we thrive? Definitely we should not.

We in the red meat industry must strive basically for two things: first, a healthy, competitive, free enterprise, where all phases can earn a livable income without subsidization: and, second, a very important one, a product that the consumer-all consumers-can afford to purchase-meat, the best eating in the world. And we have the feed grains, the know-how, and the industry to do this.

Percentagewise, the prices of red meats have not advanced as much as the prices of products of most other industries. How have we done this? By great strides forward in the operation of all phases of the industry, without the strings of unnecessary controls. Certainly, all of us have had to change some of our basic thinking and our operations and do some gambling to do this in these changing times. We are certain that we can continue to progress as an industry without any type of control on any or all phases of the industry.

In conclusion, just a word in defense of the packers, and this is as a part of the industry, not as ones who feed cattle for them, since we personally will continue to progress with or without their feeding business. Remember, they are a very integral part of our business, and if not the most important factor to the growth of the livestock industry, certainly near the top. They have spent millions on new plants, expansion, new methods, experimentation, and so forth, that have helped keep down the cost of production. The increase in feeding in the Southwest could not and would not have grown as it has without cooperation between packers and feeders. They spend more money in a week advertising the ranchers' and feeders' product than the ranchers and the feeders spend in a year. Theirs is not all a bed of roses as attested to by the failures and the diversification into the chemical and other fields in order to show a profit for themselves and their stockholders.

We are a great industry. Let us not enact legislation that will in any manner discriminate against any phase of our operations, the greatest example of free enterprise in the world.

We thank you for this opportunity to testify.

Mr. PURCELL. Mr. Ruser, do you feel that the consent decree that the remaining four packers entered into is a good legitimate law, or should that be done away with also?

Mr. RUSER. We feel-especially the 18 months we went throughthat it might have been a good idea if the packers could have retailed meat. It seemed to us, and maybe not rightfully so, but it seemed to us that the feeder, and even the packer, was taking the beating during these 18 months and the chains were receiving the benefits. It is hard to say. You make a law. You don't know how it is going to work 10 years from now. I know that if the packers could have competed with the chains, we would have probably bought meat cheaper across the counter-the housewife and the consumer. Whether the feeder would have received the benefit of this, it is hard to tell. It was a rough 18 months.

Mr. PURCELL. Now, is there any governmental enterprise connected with livestock that you think is worthy, or do you think they should just stop doing all of it?

Mr. RUSER. Would you repeat that, sir?

Mr. PURCELL. Is there any worthwhile activity that the Federal Government involves itself in regarding livestock or farming that you think is worthwhile, or do you just want to stop it all?

Mr. RUSER. No, sir. We do have good agencies. The stockyards division, I think, does a wonderful job of legislating. They keep us all on, shall we say, on the straight and narrow. We operate an industry that is a little different than most. There are very few contracts. We buy cattle, bid on cattle and that is basically our bond.

Mr. PURCELL. What does the packers and stockyards division do that you have anything to do with?

Mr. RUSER. They have, for example, at the Omaha yards-and I have been there for the last 25 years have watched as far as collusion on the part of the stockyards. I know the regulations they have as far as the sale barns over the country.

Mr. PURCELL. Then the activity of the packers and stockyards is not smacking of dictatorship and socialism, and is not against free enterprise? The Government is all right?

Mr. RUSER. It is a-in other words-it is the policing organization in our operation.

Mr. PURCELL. How about the Post Office? Is that all right, I suppose?

Mr. RUSER. Yes, sir.

Mr. PURCELL. How about the effort that is made by the Department of Agriculture in the market news service? Is that service a worthwhile service?

Mr. RUSER. That is very good, and we make full use of that in our operation.

Mr. PURCELL. They do a pretty good job?

Mr. RUSER. A very good job.

Mr. PURCELL. So that is not smacking of dictatorship and socialism and is not against free enterprise?

Mr. RUSER. No, sir. It is not pointing the finger or discriminating against any segment of our industry. It is helping us.

Mr. PURCELL. So then I suppose it could be argued either way, but chances are the preponderance of the evidence would indicate having

had some kind of a government system the agricultural program has maybe made feed to the feeder a little bit cheaper? We could argue that. Now has this program also been a socialized program and smacking of dictatorship, too?

Mr. RUSER. Our personal opinion, and this is personally, we could do without some of the legislation as far as grains, and some of the agricultural products.

Mr. PURCELL. So we are sort of smacking of one or the other of these?

Mr. RUSER. We believe in free enterprise. This is what we think a person should be able to do-what he wishes to do, under our free enterprise system, with legitimate controls, as we have the Packers and Stockyards Act, and I know there are two sides to the question, whether we should have subsidies or not. I personally feel that we can get along without some of the subsidization that we have. Mr. PURCELL. For instance, the feed grain program?

Mr. RUSER. Yes, I believe so.

Mr. PURCELL. The wheat program?

Mr. RUSER. I believe so.

Mr. PURCELL. How about these ranchers who lease this Government land for about 10 cents a section, or something like, 10 cents an acre? Is that a subsidy or is that good free enterprise?

Mr. RUSER. I happen to be on the school board and there is, I believe in Nebraska, where they are selling some of the school grounds, rather than leasing, as they have, on bids. Again there are two sides to the question. I do not know enough personally about that to answer that question. It is on bids, I know, and sometime somebody bids too high and there are other times when they bid too low. I personally am not qualified to answer that part.

Mr. PURCELL. How about government regulating beef imports? Is that socialism or free enterprise?

Mr. RUSER. I believe this came up, because during the 18 months the imports had increased. The people evidently felt that this was one of the causes-not the only cause, but one of the causes-that our beef market was so depressed. And we think it is only one of of the causes. It got over, I believe, over 10 percent. We know we need foreign trade with a balance. I believe they came up with a fairly good program on the legislation of imports.

Mr. PURCELL. During all of that time several of us were on several study groups and did the best we could to be looking after the investments of the American rancher and beef producers, and I have made every hearing, every committee or every study group that they have ever had on the study of beef imports. I have never at one time heard anyone saying anything about any of the cattle coming out of Canada or Mexico. The best that I could figure out is that it was because some of our folks had some money in Canada and in Mexico, and it is not interfering if it is our money. It is just them "foreigners." These Canadian cattle are coming in and the Mexican cattle are coming in and there are about 300 and 400-300,000 and 500,000 head a year coming in from Mexico, and I think about that many from Canada. Now is that interfering with our system? It may be that sometime in the future there will have to be a limit on the number, as far as the Mexican and Canadian cattle is concerned.