TRENDS IN SHORN-WOOL PRODUCTION

With regard to the progress being made toward increased production of wool in accord with the intent of the act, sheep numbers and wool production continue at low levels. The net decline in wool production in the last few years has been primarily due to reductions in sheep numbers in Texas and several of the Western States where severe drought conditions prevailed.

Shorn-wool production in 1957 was greater than a year earlier in 23 of the 35 native sheep States and in Arizona and South Dakota of the 13 western sheep States.

About 70 percent of our total production, of course, is in the 13 Western States where range conditions and cattle prices influence sheep numbers. Furthermore, due to the nature of the enterprise, year-toyear increases in wool production can be expected to be only gradual even under most favorable conditions.

ADVERTISING AND SALES PROMOTION UNDER SECTION 708

Section 708 of the National Wool Act of 1954 provides a method for growers to organize and conduct advertising and sales-promotion programs for the industry's products and the financing of such programs by deductions from their payments. It thus permits growers to use their own money in efforts to increase the demand for and the returns from lamb and wool in the free market and thereby reduce the amount of payments from the Government to accomplish the objectives of the act.

Soon after passage of the act, growers and grower groups organized the American Sheep Producers Council to conduct advertising and sales-promotion programs for lamb and wool.

Growers, in a referendum held in 1955, approved deductions of not to exceed 1 cent a pound from incentive payments on shorn wool and not to exceed 5 cents per hundredweight from the payments on unshorn lambs for financing the advertising and sales-promotion programs. Intensive programs of advertising and sales promotion for both lamb and wool are underway.

So far the Secretary has approved the deductions from the payments for each of the 3 marketing years, 1955, 1956, and 1957. These deductions will be sufficient to finance the promotion and marketdevelopment activities of the council for 3 years and provide a reserve sufficient to carry the program for a fourth year.

Upon extension of the National Wool Act, it is planned that the Secretary will hold another referendum to determine the continued willingness of growers to use a portion of their payments to conduct advertising and sales promotion of their products.

RESEARCH AND OTHER ACTIONS TO AID INDUSTRY

The Department has been giving increased attention to programs which will help the industry improve its production and marketing efficiency and thereby lessen the need for price assistance. Research and other action programs dealing with disease control, improvement of production and marketing practices, conservation measures to increase the carrying capacity of both public and private grazing

lands and greater efficiency in processing and adapting the industry's products to consumer preferences all are contributing to the achievement of our objective.

EXTENSION OF NATIONAL WOOL ACT RECOMMENDED

The 1958 marketing year beginning April 1 will be the fourth and last year for incentive payments under the existing legislation. The National Wool Act of 1954 limits such support to marketings during the period April 1, 1955, through March 31, 1959.

Your committee placed a termination date in the bill it reported to the House. The committee stated that this was not to be construed as meaning that they felt the wool program should be of a temporary character.

They said that, on the contrary, they hoped and believed that the program would provide a relatively permanent solution to our wool problems but since the program is new and different from any tried before, it would be well to review its operation and effect after a time and make such improvements and changes as experience might indicate.

We believe that the incentive payment program under the National Wool Act is proving to be a sound solution to the special problem of wool. As I mentioned, in the case of wool we are on a net import basis. The program is providing the needed price assistance to our domestic woolgrowers:

(a) Without adversely affecting foreign trade;

(b) Without adversely affecting the competitive position of wool with imported wool and other fibers; and

(c) Without having the Government in the wool merchandising business.

The program is restoring initiative and confidence in the industry. The tariff designed to protect the industry is also providing the financial assistance needed to meet increasing costs and competition from foreign imports. Reports coming to us indicate increased interest is being shown in sheep production as forage and range conditions permit.

Due to the longtime nature of the enterprise, it is obvious that a continuing program is essential to retain the gains already made and give growers the confidence needed for them to proceed with their plans for increasing wool production. Early extension of the act is therefore recommended by the Department of Agriculture.

Mr. Chairman, here is the set of charts and tables on the wool situation and the incentive payment program which I mentioned. With your permission, I should like to have them placed in the record.

We thank you very sincerely for your patience in listening to our views on the special situation with respect to wool and extension of the National Wool Act of 1954.

Mr. MATTHEWs. Thank you. Permission has already been granted to insert the charts in the record.

(The charts referred to are as follows:)

Exhibit

A. Stock sheep and lambs on farms January 1.

B. United States-duty-paid imports of wool by specific countries of origin.
C. Foreign value of wool imported into the United States and import duties.
D. Prices paid by farmers.

E. Pasture feed conditions, October 1, 1956.

F. Prices for wool at Boston and Sydney, Australia.

G. CCC holdings of wool accumulated from 1952 to 1954, price-support loan program.

H. Average price received in the open market by growers and incentive payments for shorn wool.

I. Number of stock sheep in the United States; domestic production, imports and consumption of wool; wool prices and payments under the National Wool Act of 1954; and 70 percent of duties collected on wool and wool manufactures.

J. Number of goats clipped; production and consumption of mohair, and farm price of mohair in the United States.

K. Number of farms and ranches reporting sheep and shearing sheep in 1949 and 1954.

L. Production of shorn wool, by States.

M. Estimated mill consumption of wool, cotton, rayon, acetate, other manmade fibers and silk, United States, 1938 to date.

N. Price per pound of wool and other textile fibers, 1938 to date.

O. Duties collected on wool and wool manufactures imported into the United States.

P. Projections of payments under wool payment program and duty collections available for payments through the 1958 marketing year with incentive price at 62 cents for the 1958 marketing year.

Q. Wool payments through October 31, 1957, for the 1955 marketing year.
R. Wool payments through November 30, 1957, for the 1956 marketing year.
S. How wool payments are figured.

The decline in sheep numbers from 1942 to 1950 was the most drastic in history. Our wool production has varied with sheep numbers. Over 70 percent of our shorn wool is produced in the 13 western range States, including Texas and South Dakota. Sheep numbers in those States have declined about 50 percent since 1942, and in the rest of the country 39 percent.

The net decline in the last few years has been primarily due to reductions in sheep numbers in Texas and several of the Western States where severe drought conditions prevailed. Shorn-wool production in 1957 was greater than a year earlier in 23 of the 35 native sheep States and in Arizona and South Dakota of the 13 western sheep States. (Exhibit A.)