Dairymen today are more fortunate than most farmers. Their surpluses have been reduced to the vanishing point - and supply and demand are better balanced.
But there is reason to be concerned about the months ahead. Milk production was down last year. But now cheaper feed means higher milk production for next year. Corn prices, already at a 15-year low, are sinking further. Wheat is being subjected to pressures to join in the competition with feed grains - driving prices still lower. And already the proportion of heifers to cows is the highest on record, indicating still higher production next year. I can find no basis for complacency in the projections of milk and dairy prices in the months ahead.
If we are to prevent disintegration of the price structure - if we are to avoid disastrous over-production of milk - we must adopt a dairy program now to avoid these consequences. Basic to that program must be machinery run by the farmers themselves to keep supply and demand in balance. Our economy cannot afford the recurring fear that our abundance will produce hardship.
When the steel companies found - two years ago - that the economy could only absorb half their capacity, they reduced production. Instead of lowering prices, they raised them. When automobile manufacturers learn that the demand for cars is low, they schedule less production. The machine tool industry, for similar reasons, intentionally keeps a large unused capacity.
These lessons can be applied to the dairy industry. But it will take group action. The Government cannot legislate a balance between supply and demand. But it can - and should - make possible the organization of dairymen to achieve this balance.
The bill pending in the Wisconsin Legislature to give farmers and their marketing organizations the power to overcome merchandising and selling handicaps by organizing together is helpful. But an effective program needs Federal action.
As the University of Wisconsin committee appointed by Governor Nelson pointed out, an improvement in dairy prices and income requires the development of "some positive and effective mechanism...to gear the growth of production of milk to the growth of demand. This is a national problem which must be dealt with on a national basis." I fully subscribe to that view.
The aim should be to establish national production goals at present levels, so that no farmer would suffer any reduction in output. Each individual dairy farmer would receive a quota based on his history in the dairy business.
It is a relatively simple matter to do this. As you know, the history on more than half the dairymen in the United States is already a matter of record under our Federal milk orders. This can easily be extended to all dairy farmers.
Such a system has these major advantages:
It would reduce the need for costly Government price support operations. Although price supports might still be necessary until supplies are brought into balance, they could be discarded thereafter - or merely kept on a standby basis.
The dairy farmer would be able to assume responsibility for the management of the dairy program. No other group is so well qualified to undertake this responsibility. Most dairy farmers already participate in the management of cooperatives with large-scaled operations involving millions of dollars.
It would give farmers a fair share of the national income. In 1952, the average dairy farmer in Wisconsin received 56 percent as much for his labor as his urban cousin who worked in the city. Today it is only a little more than half that figure.
I should like to emphasize that this is the ideal time to undertake this program. Supply and demand are now in rough balance. But our wheat and corn surpluses hang over the dairy industry like the sword of Damocles. Relatively little adjustment would be necessary at the present time. But if we delay - if we persist in the present course - the damage may be irreparable - to the farmer - to the urban worker - and to the Nation.
A sound Dairy Self-Help program will not be easy to achieve - nor will it solve all of our problems. But it represents a fundamental goal in 1960 - for every farmer, consumer and public official concerned about one of our nation's most vital industries - the dairy industry - and the stable, adequate, safe supply of its most important product: milk.
Source: Papers of John F. Kennedy. Pre-Presidential Papers. Senate Files, Box 907, "'A Plan of Action for the Dairy Industry,' Shawano, Wisconsin, 11 March 1960." John F. Kennedy Presidential Library.