This is a transcription of this speech made for the convenience of readers and researchers. A copy of the text of this speech exists in the Senate Speech file of the John F. Kennedy Pre-Presidential Papers here at the John F. Kennedy Library.
A New Dairy Program for Wisconsin and the Nation
The decline in farm income is like a dark cloud on the horizon. Our experience in the twenties and thirties has made it abundantly clear that, if the farmer suffers sooner or later everyone suffers. That is why the decline in farm income -- to its lowest level in 18 years - is more than a regional problem. It is a national threat.
Dairymen in 1960 are more fortunate than most farmers -- their surpluses have been reduced to the vanishing point -- supply and demand are better balanced -- and there is hope that they may enjoy a higher income in the months ahead.
But it would be a mistake to assume that their problems have been solved. Last week the President sent to Congress a farm program that would appear to guarantee cheap feed prices -- but only at the ultimate expense of the dairy farmer. With cheaper feed the precarious balance between dairy production and consumption would be destroyed. Cattle, hogs, feed grains and milk prices would all drop -- for there is a close inter-relation between them. Milk prices cannot be isolated from livestock and feed-grain prices. Nor can wheat be permitted to freely compete with corn without affecting almost every farm product.
In this state what happens to dairy farmers is of primary concern to everyone. Wisconsin has twice as much milk as any other state. Falling dairy prices on the farm immediately affect every urban community in the state. Wisconsin cannot sit by and watch this major industry fall apart. It is time for a new program -- a program, in my opinion, which must have at least four major objectives:
First, dairy producers’ income should not be permitted to fall below current levels. Although prices all around us -- in every item we buy -- are constantly rising, the return for family labor on Wisconsin dairy farms is actually lower today than in the pre-war years 1937 to 1941. Annual income today on these farms averages about $3000. This $3000 -- less than $60 a week -- represents 3500 hours of work and an average $35,000 investment in the farm and its equipment.
And now even this modest income is jeopardized.
Last year the average price of manufacturing milk was $3.22 a hundredweight. That is a fair price. That is a reasonable price. Certainly it does not bring the farmer an exorbitant return. But the support level is only $3.06 a hundredweight; and Secretary Benson has continued the support at that level for the next marketing year. Senator Proxmire has introduced legislation -- which I have co-sponsored -- to raise the support level to $3.22, last year’s average price. Only in this way can we keep dairy farm income at its present level. The farmers cannot afford, under pressure from the new feed grain program, to find new dairy production prices back to $3.06. They cannot afford it -- and neither can the rest of the country.
Second, the federal dairy program should be managed by the dairymen themselves. The key to income is the control of production. Preventing waste, avoiding surpluses and adjusting supply to demand are essential in any industry -- especially farming. Dairy farming is no exception.
But it cannot be done by quotas and limitations imposed by Mr. Benson’s unsympathetic bureaucrats. The producers themselves should develop and manage the program. They have the experience. They know the problem. They can do the job.
And they can do it without simply relying upon low prices to drive enough farmers out of business. That is cruel and ruthless. The dairymen themselves can adopt much more reasoned methods to gear supply to demand.
Actually demand for dairy products has been relatively inflexible. But it should increase at a steady rate of about 2 percent a year as our population grows. It should increase even more as more new markets are found and as more hungry mouths are fed. But it must not increase faster -- and by their own self-help stabilization program, our dairymen can keep that production at the proper level.
Third, we need greater research into the production, processing and marketing of milk.
The research achievements of the past few years have been noteworthy -- in the future they can be spectacular.
In the past 20 years milk production per cow has increased 35 percent. This has brought abundant milk -- our most important food -- within the reach of all Americans. Fifty years ago it took 25 minutes of labor by the average worker in American industry to earn one quart of milk. Thirty years ago it took 15 minutes. Today it takes less than 7 minutes.
But new research can make production even more efficient. It can open the way to new products. It can benefit both the farmer and the consumer. For example, work is underway to develop dairy cows that will produce milk with a lower fat content that retains high quality for calorie conscious housewives -- to develop superior breeding animals for both dairy cattle and poultry -- to cut down brucellosis and other diseases -- to develop a more stable usable whole-milk (not skim milk) powder -- and many, many other new and potentially revolutionary advances. Research is the key to the dairyman’s future. But research takes time and effort and money. And the time to start must be now.
Fourth and finally, we must strengthen our dairy cooperatives. Cooperatives can help the dairy farmer escape some of the currently harsh cost-price squeeze. In the course of the past 10 years the dairy farmer, along with every one else, has been forced to pay higher and higher prices - - for his clothes and car and machinery and doctor bills and all the rest. But the prices received by farmers for dairy products during that period have dropped 8 percent.
This squeeze has pinched almost every farmer in Wisconsin. But the unfortunate facts are that at the same time our consumers have been paying 14 percent more for their dairy products. The dairy farmer needs a 23 percent increase, without any increase to the consumer, just to receive the same share of that consumer’s dollar as he did 10 years ago. That is why a dairy farmer cooperative - - sharing and reducing the costs of handling, processing, transportation and distribution - - can help him increase his proportion of that consumer dollar.
This principle of cooperative action by farmers is not new. But it must be expanded, not cut back. It must be encouraged, not penalized. The current efforts to impose a cumbersome and discriminatory tax on cooperatives must be defeated. As I pointed out in a letter to the Secretary of the Treasury when the tax was first proposed last year, his plan to tax some cooperatives is both inequitable and discriminatory. It offends our basic tax objectives by taxing those coops least able to pay. So far as I know it is the only instance in which the Federal Government has attempted to dictate the rate of interest and the maturity of private business obligations.
Maintaining income, production adjustments controlled by the farmers themselves, increasing research and encouraging cooperatives -- these are the four basic principles on which any new dairy program must be based. And these are the four principles for which Wisconsin voters -- dairymen and consumers alike -- can speak in the April Primary and in the November election.