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Washington, D. C. The subcommittee met pursuant to notice at a. m., in room 1310., New House Office Building, Hon. W. R. Poage (chairman of the subcommittee) presiding.

Present: Representatives Poage (presiding), Matthews, Hill, and Johnson.

Also present: Representatives Dixon and Fisher; Mabel C. Downey, clerk; Francis M. LeMay, staff consultant.

Mr. Poage (presiding). The committee will please come to order.

We will have some more of the witnesses today on this subject of wool.

I want to state that we do not intend to conclude the hearing today. There are others who will want to be heard and will have an opportunity to be heard at a little later date, but we do want to hear those who are here. I think Mr. Matthews followed the right course yesterday in hearing those from a distance first.

We have still listed here some from distant points. I think they should be heard first. I am going to change the order in which we are hearing the witnesses, to hear those from distant points first.

Mr. Dan Fulton from Montana, I wonder if you would like to be heard early in order that you might be able to get away.

Mr. FULTON. I should like to be heard now.
Mr. PoAGE. We will be glad to hear from you.



Mr. FULTON. Mr. Chairman and members of the committee, my name is Dan Fulton and my address is Ismay, Mont. I am a sheepman and president of the Montana Wool Growers Association, I also produce cattle and am the immediate past president of the Montana Stockgrowers Association.

The Montana Wool Growers Association includes in its dues paying membership over 90 percent of the sheep owners in our State. We are now producing approximately 15 million pounds of wool each year as compared to 25 or 30 million pounds in the early 1940's.

Montana, due to its climatic conditions, is naturally favorable to sheep production and there are thousands of acres now grazed by cattle, formerly grazed by sheep, which could once again be used for increased production of wool and lamb.


At one time, sheep raising in our State was strictly a range operation, but it is becoming more and more of a pasture operation, on both dry land and irrigated pastures. The production of lambs and wool on these pastures would tend to decrease production of some of the commodities which are now in surplus and are causing us so much trouble.

Since the incentive payment program was instituted, with payments being made to encourage production on a quality basis, the liquidation of sheep numbers in Montana has practically come to a standstill, and indications are that we can look for increases this coming year.

Reports to our State association office indicate that a great many ewe lambs were held over for breeding stock last fall. Many farmers, not previously in the sheep business, have purchased breeding ewes which will be used to set up new breeding flocks.

Prices paid for ewe lambs and breeding stock of all types, including rams, were higher last fall than at any time since the Korean war. Prices at the Montana ram sale held last fall were higher than in many years due to the increased demand for purebred rams for stocking purposes.

The average incentive payment per producer in Montana on the 1956 wool clip was $668.80. In many instances, this meant the difference between losing money or breaking even.

The impetus given to the industry by the Wool Act has not been confined to the actual amount of the payment, but it is also due to the secondary benefits derived from increased sheep prices, and the very important fact that the industry has been assured by the Congress of its interest in the welfare and stability of the industry.

We from Montana are convinced that the advertising program provided for in section 708 of the act has been of tremendous assistance to our producers.

It is my belief that the results from the advertising of lamb alone resulted in a stronger and steadier fat and feeder lamb market last fall. We are convinced that the real future in our markets lies in the hands of the consumers, whom we must keep informed as to the merits of our wool and lamb products.

Contracting of the 1958 lamb crop has already started and contracting of the 1958 wool clip should start soon. Because of these facts, we would like to urge the Congress to act as soon as possible on this measure.

The first Wool Act was limited to a 4-year period as a trial measure. We feel, however, that since it is the declared policy of the Congress to increase production of wool, that the act should stay in effect until the goal of an annual production of 300 million pounds of shorn wool per year is reached. Actually, a time limitation hurts the chances of increased production due to the very nature of the sheep business. After all, it takes 2 years from the time a ewe lamb is born before it can reproduce.

In closing, Mr. Chairman, I would like to thank our representatives, LeRoy Anderson and Lee Metcalf, for their support of our industry. Thank you.

I especially want to thank this committee for allowing us out-oftown people to appear at this time. Thank you.


Mr. Poage. We are very happy to have you with us, Mr. Fulton. We think you have been very helpful to the committee. It is good for those of you who know the industry, to take the trouble to get the facts to us. We appreciate it.

I think that you have touched on two interesting and important phases of the agricultural problems here. I think that your experience may be helpful to others.

In the first place as I understand you, you in the wool industry have found the direct-payment program to be a sound, practical, and effective approach?

Mr. FULTON. Yes, we have found that in the wool industry.
Mr. Poage. You want to continue it?
Mr. FULTON. What was that?

Mr. Poage. You want to continue it, you want to continue that program?

Mr. FULTON. Yes, sir.
Mr. PoAGE. It seems to me it has proven a success.

I, also, noted the promotion figures of the Wool Act, which you gave. Those promotion figures involve a checkoff, do they not?

Mr. FULTON. Yes, they involve an automatic withdrawal of the funds to pay for the program under section 708 of the act.

Mr. POAGE. And your experience has been that that has worked successfully and that it has been profitable and advantageous to the industry?

Mr. FULTON. Yes,

Mr. PoAGE. I think so, too. And I think that every segment of the livestock industry should have the privilege of using the same type of promotion that you are able to use under the existing act.

Mr. FULTON. Yes, sir; we do.

Mr. PoAGE. I am interested to see the reaction of a livestock man wbo has had some practical experience with this promotion program under the checkoff. I think that it enables you to increase the volume of your business and the profits you are making.

Mr. Fulton. There is no question at all that the setting up of this program has provided finances for sound effective promotion of our products.

The program of promotion that we have is so new. It is to a certain extent, experimental, so that we hesitate yet to make definite statements on that. However, such indications that we can get to date convince us that it is very worth while, that it is going to help our industry. And to the extent that the promotion program is successful in maintaining demand, increasing prices, it makes it easier, less costly financially, to carry out the rest of the program.

That is one of the reasons we are so anxious to continue that portion of the act. We think that without that portion of the act the rest of the act might get too expensive to maintain. So we are, especially, anxious to maintain that 708 section.

Mr. Poage. You are aware of the fact that there are other seg. ments of the livestock industry which cannot provide for a promotion program with a voluntary checkoff?

Mr. FULTON. Yes.

Mr. Poage. And you are aware of the further fact that you are the only segment of the livestock industry that can do it because of the provisions of the Market and Stockyards Act of 1920 which prohibits certain checkoffs, which actually prevents the development of a promotion program for beef, or for pork, or any other type of promotion program for sheep other than what is provided in this bill?

Mr. Fulton. I am testifying for the sheepmen, so I could not admit that. (Laughter.]

I am very familiar with it. I am the immediate past president of the Montana Stock Growers Association which is primarily cattlemen. So in that capacity I became very familiar with what you are talking about.

Mr. Poage. You have seen it work just as I have described it?
Mr. FULTON. Yes.

Mr. Poage. That outside of the livestock field anybody can promote their products any way they see fit?

Mr. Fulton. That is my understanding.

Mr. Poage. It seems to me grossly unfair to shackle the hands of the livestock producers.

Mr. FULTON. Yes.

Mr. Dixon. I appreciate, Mr. Fulton, what you have said about this promotion part of the program. Also, what our chairman has said.

I wish we had made it that way last year.

I was rather surprised to learn the individual payment in Montana amounted only to $668, where I thought your operations were usually quite large, that the incentive payments only amounted to $668. That indicates, does it not, that this measure goes directly to the assistance of small operators, does it not?

Mr. FULTON. Yes, that is very true.

Mr. Dixon. That at least in one measure would help the small people all along the line.

Mr. FULTON. I think that is true.

Mr. Dixon. You do not have any idea what the maximum payments to any one man were, do you?

Mr. Fulton. I do not have the figure on that.
Mr. Dixon. Thank you,

. Mr. Chairman, that is all.

Mr. Poage. We are very much obliged to you. We appreciate your coming before us.

Mr. Fulton. Thank you.

Mr. PoAGE. I see Congressman Anderson from Montana here. We have just been hearing from your constituent, Mr. Fulton. We Wonder if

you like to make a statement right now, Mr. Anderson.



Mr. ANDERSON. Thank you for your courtesy in permitting my representative to speak to you and for this chance to talk to you for Montana, which is traditionally one of the major sheep raising States in the Union. We are interested very much in the extension of the National Wool Act because it is one piece of farm legislation which has worked out extremely well.

On behalf of both my colleague from the First District of Montana, Congressman Lee Metcalf, and myself, I want to endorse the statement which was just made to you by Mr. Dan Fulton, who is my

constituent, incidentally, and president of the Montana Wool Growers Association, so that he is, also, my president because I am a sheep grower and a member of that organization.

As you can well understand, the extension of the National Wool Act was the most important matter under discussion at the recent State convention of the wool growers in Miles City. The group there adopted the position which has been explained to you by Mr. Fulton in regard to extending the act and the time limit. Our growers felt that an expiration date tends to create uncertainty in the sheep industry which requires periods of longer than 4 years for proper development and stability. Therefore, Congressman Metcalf and I endorse the amendment in this connection which Congressman Fisher proposed to you yesterday.

We, also, support Mr. Fisher's amendment to strike the word "specífic" from the language of the act since that word limits the availability of funds.

My colleague, Mr. Metcalf and I are both authors of bills now pending before your committee, to extend the act. And so, Congressman Metcalf and I endorse these two proposals and ask that this committee consider them at the time of consideration of the bill.

It would be most beneficial to the wool growers of my State if this committee could act on this matter as expeditiously as possible, in order to assure continued stability to the sheep growing and wool raising industry.

I thank you, gentlemen.

Mr. MATTHEWS (presiding). We want to thank you very much for that fine testimony. I wonder if there any questions that you would like to ask?

Mr. HILL. If you would permit me, I thought Montana was the largest sheep growing area rather than Texas. Would you explain that to me so that I will have it straight? Yesterday I think we were told that Texas was.

Mr. ANDERSON. I won't get into an argument with Mr. Fisher on that. Texas is not only a larger State geographically than Montana but they do produce more sheep than any other State in the Union. Montana is not quite second even.

Mr. Hill. You are second?

Mr. ANDERSON. No, we are not. There are a group of 3 or 4 States including your own State of Colorado, Mr. Hill, which are almost identical, and our neighboring State of Idaho. Our three States produced approximately the same, and we kind of run a race for second.

Mr. Hill. It is your feeling that so far as you are aware they are all unanimous, in your area, for the extension of this legislation; is that your opinion?

Mr. ANDERSON. I haven't heard a word of objection to the extension of the Wool Act. I think all of the growers feel that is one act that has worked without any cause for criticism.

Mr. Hill. Thank you. Mr. MATTHEWS. Are there any other questions? Mr. Dixon. You also favor the checkoff? Mr. ANDERSON. I do. I do feel that if the growers themselves are willing-it would have to be up to their choice—if the growers them

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