APPENDIX G-3.-Exports of dry whole milk of selected countries of origin to areas of destination, 1948-52

1 Files, Foreign Agriculture Service, U. S. Department of Agriculture.
Trade of Canada-Exports, vol. II, 1951, Dominion Bureau of Statistics for 1949, 1950, and 1951.
Trade of Canada-Exports, vol. 9, No. 12, December 1952, Dominion Bureau of Statistics.
4 Commonwealth Bureau of Census and Statistics.

New Zealand Statistical Report on Trade and Shipping, New Zealand Customs Department.

APPENDIX G-4.-Dried milk: Production, net trade and consumption, principal countries, prewar average, 1949 and 1950, preliminary

Condensed and evaporated milk (whole and skim): Production, net trade and consumption, principal countries, prewar average, 1949 and 1950,

Production

preliminary

Apparent consumption

1

APPENDIX G-5.-Average hourly wage rate of selected countries 1

1 United Nations, Monthly Bulletin of Statistics, vol. VII, No. 2, February 1953, p. 110.

2 The First Natior al Bank of Chicago, Foreign Exchange Quotations, May 1952. Calculated.

4 June 1952.

Average April, May, and June 1952.

Mr. REMALEY. In the interest of conserving the valuable time of the committee I should like to highlight a few of the salient features of our position which are developed more fully in the statement. Included as tables in that statement are details of our production, domestic sales, imports and exports, and it is from these data that we have come to the conclusion that so long as the Government is purchasing or storing dry-milk products, these are evidences that there is a surplus of these products and imports of such products under these conditions should be completely restricted.

The products under consideration:

(1) Dry whole milk is fluid whole milk from which the water only has been removed;

(2) Dry buttermilk solids is the milk resulting from the churning of butter, from which the water has been removed; and

(3) Nonfat dry milk solids is separated milk from which the water has been removed;

These products can be used wherever their fluid equivalent is required. Additionally they have special uses of their own. Our four largest domestic markets are bakery products, dairy products, meat products, and the small retail package.

1. Effect of imports in the dry-milk industry and the dairy economy: I would like to consider first the effect which imports have had on the dry milk industry during the period 1950-52 when imports of dry whole milk and dry buttermilk solids were completely unrestricted. During this period dry whole milk imports increased from 24,500 pounds to 37 million pounds and dry buttermilk solids imports. increased from 539,000 pounds to 12,500,000 pounds. Also during this period the domestic production of dry whole milk dropped 32,500,000 pounds in 1952 from 1951. The importation of these quantities of dry whole milk and dry buttermilk solids had the same effect on our economy as the importation of 38,200,000 pounds of nonfat dry-milk solids and 13 million pounds of butter. Similarly the loss of 32,500,000 pounds of dry whole milk production meant the probable production of 23 million pounds of nonfat dry-milk solids and 10,700,000 pounds of butter, instead of the dry whole milk. In a period of surplus, such as we experienced in 1952 and are still experiencing in 1953, these imports plus loss in production of dry whole milk represented a total of 61 million pounds of nonfat dry milk solids and 23,700,000 pounds of butter which probably was bought by the Government under the support program.

2. Competitive prices: Prices of imported dry-milk products made them particularly attractive to the American manufacturer of food products. He could use these products more cheaply than butter and nonfat dry-milk solids when bought at the existing support prices of 65.75 cents per pound for butter and 15.6 cents-average 16 cents spray, 14 cents roller-for nonfat dry-milk solids. Under the present support program 100 pounds of milk testing 3.9 percent butterfat and 8.95 percent milk solids not fat can be recombined from butter and nonfat dry-milk solids for $4.48. The same 100 pounds of milk when combined from domestically produced dry whole milk at 40.46 cents per pound-average price June 1952-cost $5.44. Imported dry whole milk selling at 15.5 cents cost $3.10 per 100 pounds. You can readily see that there is a great difference between the cost of a hundred pounds of milk from the imported products as opposed to the domestic products when bought at the actual support prices.

Any American food manufacturer needing fat and nonfat solids would obviously buy the imported product. The American dairy manufacturer was then forced to process his own milk into products for support which he could then sell to the Government in 1952 for an equivalent $4.62 and 1953 for $4.48.

Differentials in prices can probably best be illustrated by a comparison of the prevailing support prices in Canada and the United States. Canadian support prices today are 8 cents for roller and 11 cents for spray. United States support prices are 14 cents for roller and 16 cents for spray. Even at a 50 percent ad valorem tariff, it would be to the advantage of the American manufacturer to import Canadian roller nonfat dry-milk solids. Relaxation of import restrictious can only mean increased imports and would require increased purchases by the Government under the support program.

3. Potential imports: What are potential dry-milk imports if import restrictions are relaxed? The major foreign producers and exporters of dry-milk products are Canada, Sweden, Denmark, New Zealand, Netherlands, and Australia. During 1951, which is the latest year for which we have complete data, these nations produced 145,500,000 pounds of nofat dry-milk solids and 179,500,000 pounds of dry whole or approximately a total of 325 million pounds of dry-milk products. In 1950 consumption of these products amounted to only 152 million pounds-excluding New Zealand for which there is no data-or approximately 50 percent of their production. This means that about 50 percent of the production of these countries is for export. It is obvious that these exports will tend toward the highest price market, which is the United States.

4. Export market potentials: Our exports of dry-milk products do not conflict with our stand on import restrictions. Except for exports which have been financed through the Commodity Credit Corporation or other Government agencies, our exports are almost entirely to markets which are historically United States markets such the LatinAmerican countries, Japan, and the Philippines. Over 90 percent of our commercial exports of dry milk are to Central and South America. One nation alone, Venezuela, in 1952 bought 32,500,000 pounds out of a total export of 42,500,000 pounds. It should be pointed out, however, that due to competition from other exporting nations, our exports of dry whole milk in 1952 were off 17 million pounds from 195!.