MICHIGAN FaRmr1 FARM NEWS Bureau l1Every Issue 011 he Issues" VOL. 54 NO.4 AP61L 1, 1975 MACMA annual held in .Grand Rapids M i chi g a nAg r i cui t u r a I General Manager Noel Stuck- Michigan Farm Bureau At Large Director Walter E. Frahm of Coo per a t i v e Mar k e tin g man noted in his management Frankenmuth has been named Association (MACMA), an MFB report that a major success in 1974 Michigan State University's 1975 affiliate company, has completed was the accreditation of four DairYman of the Year. one of its best years President marketing units under provisior.s Frahm, 12850Bradley Road, was Elton R. Smith said at MACMA's of the Michigan Agricultural awarded the honor during MSU's 14th Annual Meeting Feb. 21 in Marketing and Bargaining Act of Dairy Breeds and Awards lun- Grand Rapids. 1972cPA 344>' Asparagus, cabbage cheon at Kellogg Center Monday "W had t g' f I for kraut, potatoes for freezing and noon. The annual presentation is e a ne. am 0 near y tart cheeries were approved for part of MSU's Farmers' Week, seven. per cent lD. members ~nd bargaining under PA 344. March 17-21. experl~nced our. ~hlrd consecu!lve Although P A 344 h been und year WJth a posItIve net margm," . as. er ''This award is in recognition of Smith told the assembled mem- hre b~ processors With the Walter's successful dairy b rs Marketmg Board and MACMA operation, his leadership in e . currently involved in a suit filed by Michigan's dairy industry and Although no~new divisions were Michigan Canners and Freezers contribution to the dairy science added to the current 13, President Association and others MACMA department," says Dr. Charles Smith noted that MACMA is the attorney Jim White was positive of Lassiter, department chairman. largest marketing organization the outcome. Frahm has farmed continuously within the AFBF affiliated "There is no question in my mind since graduation from Arthur Hill American Agricultural Marketing that we will ultimately prevail in High School in 1945and a two-year Association and one of the major this issue," White told the MACMA MSU short course. marketing-bargaining groups in members in an address delivered Walter Frahm [right] At Large Director on MFB's Board, was He and his brotl)er, Ralph, the country. at the convention. awarded "Dairyman of the Year" honors during M.S.V.'s Farmers' jointly own a 500-acre dairy Week. operation that supports 60 animals ha ving a rolling herd average of Rewar program Two members 12,101 pounds of milk and 552 pounds of butterfat annually, a level maintained the past 13years. The herd has been on the Dairy to Ag board Herd Improvement Association (DHIA) test program since 1954. Frahm has been the Franken- muth School Board president many Two Michigan Farm Bureau Frank Smith, Jr., Carleton, years am has served as Deacon Members have been nominated by Monroe County, was appointed for and Elder of the Saginaw Warren Governor William G. Milliken to be a term expiring September 1, 1978. Avenue Presbyterian Church. members of the state's Smith, in partnership with his two He has been secretary-treasurer Agricultural Marketing and brothers, has approximately 900 of Saginaw County DHIA 10years. Bargaining Board. acres of vegetable and field crops. He was secretary of the Saginaw Renamed to the board was Mrs. They also ha ve three acres of Valley Guernsey Breeders' Clara McManus, Traverse City, owner aM operator of a 285 acre greenhouses for the production of Association and president and vegetables and flowering plants. secretary of Michigan Guernsey FOR INFORMATION LEADING farm, 150 acres of, which are in fruit. She serves on the bipartisan Smith is a former Monroe County Breeders' Association. President and MFB Board He has bee.n a member of Farm TO THE ARREST AND CONVICTION boa rd as a Democrat member and was first appointed to the board in Member. Currently he is president Bureau since 1948and has served of the Michigan Vegetable Council. as a director of the Michigan Farm OF PERSONS COMMlmNG 1973. Her reappointment is for a term expiring September 1, 1978. Bureau, Fann Bureau Services, Smith's appointment and Mc- Farm Bureau Insurance and the THEft ARSON OR VANDALISM She is a member of the Northwest Manus' reappointment are subject Michigan Agriculture Cooperative Michigan Farm Bureau. to State Senate confirmation. Marketing Association. 0\1 THIS PROPERTY Frahm am his wife, Sally, have REWARD OFFER EXPIRES DECEMBER 31, 1977 FaRm~ five children: Susan, Walter, Barbara, Charles and Thomas. Mrs. Jackson gets honor Michigan Woman's Farm Committee Chairman Claudine Jackson has Bureau been named a runnerup finalist in a Chevron Chemical Company Farm sponsored (,hemicals "Spokesman Vice Magazine of the Bureau Another Member Service from Year" contest. The annual event is conducted to Michigan Farm Bureau and honor those taking positive action in behalf of agriculture. This years Farm Bureau Insurance Gmup. Farm Bureau members participating in the new $200reward program contest drew a record number of will be posting the above sign on their property. To be eligible for the entries. program a member must: 1. Maintain a current Farm Bureau mem- Judging was based on three bership. 2. Purchase a "Kit" consisting of two 8 inch by 12 inch plastic factors: 1.) the number of events reward signs. two two-sided vehicle decals and two one-sided vehicle participated in by the entrant; decals. 3. Displa v shms and stickers in prominent places. 2.) the variety of media, and Contact your County Secretary Mrs. Clara McManus and Frank Smith .Jr. 3.) the message or program. President's column Washington Legislative Supply report ••• page 7 on 5372, S373••• page 2 Seminar••• page 6 PAGE 2 MICHIGAN FARM NEWS APRIL 1, 1975 5372, 5373 Let's get it straight I was pleased to see nearly 500 fanners turn out for the prices. Secondly, the additional four percent sales tax ttUlt Senate Taxation Committee Hearing on Senate Bills 372 and farmers would be required to pay could not be passed on as 373.These are the bills that if passed would subject farmers fanners, unlike industry or merchants, are not able to to considerable increased taxes by removing most of the increase the prices they receive in order to pass on such present sales tax exemptions on farm production inputs. increased costs to the consumer. It then, in effect, becomes This means that all machinery, equipment, bailer twines, an additional tax on the fann family income. sprays, chemicals and numerous other supplies that are My prepared testimony gave an actual example of a fann now nontaxable would become taxable. family that had a net family income last year of $10,000. In my testimony prepared for the hearing, I pointed out Had these bills been in effect their costs would have gone up that the exe~ptions left would be minor as they would only $729.00which translates into more than seven percent of apply to seeds, feeds and fertilizer. As a matter of fact, their family income! In looking at other examples, I find many farmers do not plant seeds, they plant trees, bushes, that this could range from over three percent to ten percent ;eedlings, vines, plants, etc. which apparently would be or more depending on the type of agriculture and the in- taxed. In addition, we were absolutely amazed to note that dividual situation. I also find that according to the most the bills as they now read, in my opinion, would make recent issue of Economic Indicators, a US publication breeding livestock and livestock or poultry, or horticulture prepared by the Council of Economic Advisors, that the 1975 products purchased for futu~e growth taxable. Bob Smith, adjusted parity ratio has skidded to 70. This is the per- our Legisla tive Counsel, discussed this briefly with the centage ratio of index prices .received by farmers to the Treasury Department and they were unable to give a index of prices paid. Impossible as it may seem, this is the definite interpretation. This means that the livestock in- lowest it has been since 1933!42years ago! dustry could be especially hard hit. I want to personally thank all the Farm Bureau members I was also interested in watching the conduct of the who took time to come to Lansing on March 24 and appear hearing. As it turned out, not many farmers had an op- at the hearing, and also to thank the thousands of Fann portunity to speak after coming to Lansing at their own Bureau members who have written to their state senator time and expense as some legislators took up part of the and to Senator Bowman, Chairman of the Senate Taxation time. However, I was pleased that such a large number Committee. I also was pleased to see how well Fann turned" out for this hearing, plus the fact that some farmers Bureau's "telephone grid" worked when it was put into close to Lansing went to the effort to bring in several pieces effect three weeks previous to the hearing. We know that of farm machinery and placed signs on them to indicate most senators received many letters from Farm Bureau what the sales tax would amount to, in addition to the high members. However, there are indications that in a few price that machinery now costs. Some of the farmers told counties, county legislative committees, and minutemen me that passers-by were amazed at the size of the equip- did not follow through as far as possible. Let's make sure ment now used on Michigan farms and its prices. tha t our communication system works in the future because Sena tor Bowman and his committee obviously "got the this is a continuing effort. message" as to how farmers feel on this unreasonable Let's not be lulled into .complacency by being told that "effort to tax production, machinery and supplies. Senator such legislation as 8372 and S373 are "only vehicle bills," MICHIGAN Bowman tried to placate the crowd by telling them several . and "not to worry" as they are only trying to "clarify" times that Senate bills 372 and 373were onlv "vehicle bills" present statutes. These bills were introduced for one pur- FARM NEWS and that they were only needed to "tighten up" and pose and only one purpose and that is to impose the sales "clarify" some of the sales tax laws. The fanners did not tax on nearly everything that fanners buy to produce food buy that as the bills are very clear as to their meaning. in order to pick up an estimated $15 million in state taxes. They simply mean large increases in the cost of agriculture Admittedly, Michigan has the best sales tax exemption in The Michigan FARM NEWS is published monthly. on the first day. by production. Fanners would become caught in a" double tax the nation. Farm Bureau fought the original battle way the Michigan Fann Bureau Infonnation whammy." First if the bills pass and reimpose sales taxes back in the 1930's. We have fought several times through the Division. Editorial and general offices at on industry that make the supplies that we buy, those taxes years to keep it. It is obvious we must fight again--NOW! 7373 West Saginaw Highway. Lansing. Michigan 48904. Post Office Box 960. would obviously oass on to the fanners in the form of higher Telephone. Lansing 485-8121. Extension 228. Publication office. 109 N. Lafayette I DONNA St., Greenville, Michigan. Subscription I =. price. 65 cents per year. ~~en!tio~o~llie~a: Established January 13. 1923. Second Class Postage paid at Greenville. Michigan. EDITORIAL: . Editor: Associate Editor: Jim Phillips; Donna Wilber; · Land and Open Space Preservation ~~~l~ ~= plete information. ~O~~i~ The news m ed a Contributing Editor: Cindy Sage: Staff Act CPA116) is getting nearer. The County Farm Bureaus Photographer: OFFI('ERS: Marcia Ditchie. .Michigan Fann Bureau; President. Elton R. Smith. Caledonia. R- I House-Senate Joint Rules Com- mittee held a hearing on March 11 throughout the state are holding numerous public meetings in order 1; Vice President. Dean Pridgeon. Montgomery. R-I: Administrative For the past several weeks, I and farmers were at the very and approved the rules and to inform as many landowners as Director. Robert Branden. Lansing; ha ve listened to condemnation of bottom of the "blame" list with regulations necessary for the possible of the details of the Act. Treasurer aDd Chief Financial Officer. the plblic press by Fann Bureau only 3.1%. If the public press had ~lax D. Dean; Secretary. William S. administration of the law. There Farm Bureau uses a slide Wilkinsor.. people. This concerns me. Until a not done an admirable job of telling are still two steps to be completed presentation along with other l>IRECTORS: District I, Arthur short time ago, I was a member of the story of agriculture to the before applications will be informational material. Ba iley. Schoolcraft; District 2. Dean the 111blic press - am proud to be a Pridgeon. Montgcmery. R-l; District 3. general public, farmers would not available to landowners. Economists at MSU will soon Andrew Jackson. Howell. R-I; District 4. part of this vital industry. Now, I be enjoying the good image they do The regulations must be for- publish a study of the effect that Elton R. Smith. Caledmia. R-l; District am equally proud to be a part of the today. warded to the Governor by March PA 116 can have on agriculture 5. William ~ike. Owosso. R-3; District 6. Jack Laurie. Cass City. R-3; District 7. Michigan Farm Bureau. Yet more press contacts, by far, 27, after which they are forwarded through cutting property taxes. Kenneth Bull. Bailey. R-l; District 8. Although my position has are made in the fonn of complaints to the Secretary of State and then Eight different farms were used Larry DeVuyst. Ithaca. R-4; District "9-: changed - one thing has not. I am than appreciation. When the become fully in effect 15days later. to create a composite picture. The Donald Nugent. Frankfcrt, R-l; District still a journalist. The basic dif- 10. Richard Wieland, Ellsworth. R-l; publicity is good, we tend to sit This process will be completed results were that if the Act had District 11. Franklin Schwiderson. ference is that now the Fann back am take it for granted. When about the 12th of April. Application been in effect for the past ten Dafter. Bureau policy .book is my guide it's not, we make charges of bias forms are at the printers and will years, the overall property tax DIRECTORS AT LARGE: Walter Fratun. Frankenmuth; James L. Sayre. instead of just my own personal and misinformation. be sent out to townships, county relief would have ~een 47.percent. Belleville; Gerald E1enbaum. Owen- convictions. Thankfully, the two Before any of us make such am city offices. The greatest relief dunng that dale. closely parallel. charges, we'd better take a look at Application fonns will also be period would have been for beef WOMEN OF FARM BUREAU: Mrs. Richard Wieland. Ellsworth, R-l. Journalists have a common our own objectivity. Something we available in county Farm Bureau fanners with ~ percent tax .relief FARM BUREAU YOUNG FARM- trait; they are crusaders at heart. disagree with is not necessarily offices am perhap; other places arxl cash ~ram farmers WIth 70 t:RS: Gary Nye. Hillsdale. They truly believe they can change misinformation. And bias? We all such as extension offices and other percent relief. POSTMASTER: In usirw form 3579, things for the better - and the have that. businesses. About 1600 fanners Dairy and fruit would have been mail to: Michigan Farm News. 7373 history of our great country shows According to Webster, bias is "a ha ve already p1t their names on a aboot 50 perc~nt. In pro~ecting the West Saginaw Highway. Lansing, that they can. It's called the mental leaning or inclination; Mictjgan 48904. request list. Forms will be sent expected tax mcreases m ~e next "power of the press." partiality, prejudice." What kind directly to them. The May issue of several years, the study estimates S«ond class p05tal~ .There are few journalists who of organization would we be if we the Michigan Fann News will that the tax relief would be at least paid at awse this power. Most aim for (;~mviU~. l\lIcbipn did not have that? Your Michigan contain sample copies of the at>- 56 percent by 1984. objective rep produce for the government in- Udall bill and the Jackson bill, urban development and other be collected. would also be made under HR 4296. centive rather than market in- some similarities do exist. pressures. HR 1793 and related bills are The bill would raise loan rates centives. Under this condition, Both bills would provide federal Existing federal estate tax awaiting consideration by the above the level set in the current large stockpiles of grain would funds in the form of grants to states exemptions were set in 1942 and House Ways and Means Com- fann program. The loan levels develop and be transferred into for land use planning. Both bills are badly out of date. For example, mittee. Michigan Congressmen would rise from' the current $1.37 government hands. Such stockpiles would establish an office within the inflation and the decline in pur- Guy VanderJagt and Richard per bu. for wheat to $~.05 per bu. would return agriculture to a Department of Interior to ad- chasing power of the dollar would VanderVeen (D-Grand Rapids) for corn and feed graIns. A loan period of depressed domestic minister provisions of the land use require that the current $60,000 a re members of this committee. rate on soybeans would be prices return fanners to being programs. Neither bill at this time exemption be raised to $180,000just Fann Bureau is in strong support established to re~lect t.he historical dependent upon the government would withhold funds for other to reflect the 1975 value of the of this legislation. average relatIOnshIP. to corn for a substantial portion of. their programs, such as highways and support levels durmg the income and lead to production airports, to force states to develop preceding three years and would controls. a land use plan. The bills would, Livestock equipment More ago research needed firm acquired "Only farmers produce food" its Farm Bureau Services, through interests Cooperatives, in Universal Inc. announces equipment, so we are certain the move is a good one. "Universal will broaden its base purchase of the Agri-products in the manufacture of livestock "In the face of a growing "The problem we now face is not programs, maintains Wittwer. division of Starcraft, a subsidiary equipment, which will in turn allow potential crisis between population only to increase absolute levels of "There is still room for tremen- of the Bangor Punta Corporation. us to be of even greater service to and food supplies, our greatest food, feed and fiber; but to do it dous improvements in the resource and hop'e is man's with the most efficient use of nutritional value, yield and other Universal Cooperatives is a our fanner-customers." major supplier of goods to Farm The purchase involves all real scientific creativity," says Dr. resources, especially those that important factors in many crops. A estate, equipment, inventories, Sylvan H. Wittwer, director of the are nonrenewable," says Wittwer. special effort should be directed Bureau Services and Farmers Michigan State University's These include land, water, energy, toward improving the proteins of Petroleum reta iloutlets, and is co- and the trade names "Star" and' owned by 38 other regional Fann "Star Tank" and the registered Agricultural Experiment Station. fertilizer and chemicals. cereal grains (rice, wheat, corn, trademark "Hog-Tite." "We may already be on Energy and food problems could sorghum, barley, oats, and Supply Cooperatives. Included in the acquisition are borrowed time," he says. "Under be partially solv~ by increasing triticale>. This would be the "Sta reraft has been accepted as three plants located in Goshen, present technology, we are the photo-synthetic efficiency of quickest possible solution to an industry leader," said Donald Indiana; Red Oak, Iowa, and reaching upper limits in the plants. Solar energy is free, non- protein deficiency. R. Armstrong, Executive Vice Fernwood, Mississippi. number of people one farmer can polluting and' available in essen- "Improved water management President for Farm Bureau Ser- The new operation will be known feed - in food yield per ton of tially unlimited amounts. is also a necessity. Innovations in vices and Farmers Petroleum, as the Star Agri-Products Division fertilizer used, and the number of Food crops, even under good drip or trickle irrigation are a step "and they are particularly of Universal Cooperatives, and will people 100 acres can support." conditions, capture only about one in the correct direction. By putting proficient in the field of livestock be headquartered in Goshen. Wittwer feels, however, that percent of the sunlight that the water only where the plants scientific and technical innovation, illuminates . their leaves. need it, water requirements can be coupled with changes in human ·'Potential for improvement is reduced as much as 80 percent." behavior, can avert the disaster of great and results could come Wittwer sums up the need for a food and population crisis. Since quickly with only ~ fraction of the new agricultural technologies, little can be done to immediately money currently being invested in "We can get along without reduce population growth -- short other forms of energy research," luxuries, but we can't survive of famine, pestilence or war -- he Wittwer says. "It is a travesty that without food, nor can the world. favors a rapid shift of national so few resources are being directed Only farmers produce food. With research priorities. toward bioconversion of solar the help of science we can keep it Q: I attended my Board of Review meeting to protest my property "To prevent potential food crises energy. that way." tax assessment and I am not satisfied. How do I appeal? [This there is real urgency for beginning "We need to review changing question was received by telephone to Farm Bureau Center.] a massive agricultural research weather patterns. and how they A: You have taken the first correct step in your effort to adjust program, perhaps like the affect the production of crops and your assessment which you believe to be too high. A taxpayer must Manhattan Project that developed other renewable resources," says first appeal to the local board of review and if he is not satisfied with the atomic bomb during World War II," says Wittwer. Wittwer. "Weather is the major determining factor in crop April 19, the action taken there, he has the right to appeal to the Michigan Tax Tribunal, 868 Southland Avenue, Lansing, Michigan 48922. Such an However, there has been some productivity. This was witnessed in appeal may be by letter and postmarked no later than the first fuzzy thinking on the part of 1974 when a wet, late spring, federal research administrators advisors and over the past coupled with a summer drought and an early, killing frost in the 1775 Monday in May [May 5]. Your letter should mention that you have appeared and protested before your local board of review and ~ive the date. You will receive from the Tribunal forms and instructIons decade. Coupled with current fall, completely changed the on which to iooicate the full basis of your appeal. The taxpayer also emphasis on stretching available predictions of" politicians and has another opportunity to appeal to the Tribunal, and that is within petroleum supplies, this means economists. Poten~als for creating UBy the rude bridge that 30 days after he receives his tax bill. that U.S. research priorities are all better weather 10 agricultural arched the flood, Residences, agricultural property and others are permitted to muddled up, Wittwer maintains. areas should get more .attention. Their flag to April's appeal to the "Small Claims Division." There are no fees. The On the other hand, the The test tube genetics of science breeze unfurled: property owner can appear (or himself, or be represented by population/food problem is m~re fiction are now a reality i~ the someone if he chooses. The appeal will be held by a member of the complex than just producmg plant w?rl~. Thr~ugh tIssue Tax Tribunal. The dicision is final. The property owner, however, greater quantities of food and culture, It IS paislble to take Here once the embattled has the choice to appeal to the entire Tribunal. In this case, there fiber. "We must be concerned with characteristics from drastically farmers stood, are some fees involved based on the size of the valuation. One ad- the resource input required, and different crops and combine them vantage of the Tribunal is that while the property owner must justify the costs of these resources," says in new plant species. The technique And fired the shot heard round the his appeal to the Tribunal, the tax assessing officials must also Wittwer. circumvents sexual reproduction, justify their action and the decision is made by an impartial person The dramatic increases in the thus avoiding long established world." or the entire Tribunal. cost of energy and energy related incompatibilities between species So far it appears that the Tribunal is working very well and that the inputs (fertilizers and chemicals) aM genera ... Emerson huge backlog of appeals transferred to them from the Tax Com- have drastically changed the More emphasIs IS needed on mission is steadily being reduced. picture. traditional plant breeding ,, PAGE 6 MICHIGAN FARM NEWS APRIL 1, 1975 "Washington here we are "legislative leaders" spend intense four days in Capital For four days last month Michigan's Congressional delegation in Washington knew that fanners in the State are concerned, interested and aware of critical issues facing the nation in general and agriculture in particular. March 16-13 saw 54 Michigan Fann Bureau members, cho;en by their Counties as "Lel!islative Leaders." usilU! much shoe leather and contributing greatly to the prosperity of Washington, D. C.'s taxi fleet, in a determined effort to meet with and explain to their Congressmen key issues important to farmers. It was all a result of MFB's 15th annual Washington Legislative Seminar sponsored by Fann Bureau Women. The Seminar's purpo;e each year is to make possible contact between MFB members and their elected Congressmen, so that Farm Bureau policies and current issues before Congress can be discussed on a personal basis. Once in Washington take-off points for Congressional contacts were the Democratic and Republican breakfasts. Woman's Committee Chairman Doris Wieland and husband Dick with Congressman Ruppe [R. At the breakfasts Congressmen were seated with Farm 11th District] at the Republican breakfast. Bureau members from their districts and conversation quickly turned from the French toast to pending legislation. The new fann bill and $80 billion budget deficits wer:e popular topics of discussion around the breakfast tables. It was immediately after the breakfasts that the "Legislative Leaders" proved their mettle as they quickly nailed down appointments with their representatives before the solons had a chance to leave the room. There was no doubt that the Counties choose determined and aggressive "Legisla tive Leaders". The dedication of the "leaders" was evident in other ways. Several, discovering that extra Congressional office visits could be squeezed in if the excellent bus tour of the city was skipped, quickly decided to do just that-miss the tour and make the office visits. A group of dairymen headed for AFBF's Washington I office paithaste after learning a special meeting on countervailing duties was being arranged for them. It was a quick few days in the nation's capital but fruitful for a group of aware fanners and fann wives who should be bringing back to the Counties some sharp insight into what is going on in Washington. Hopefully, a few lasting impressions were left in some Congressional offices. by Jim Phillips, Editor Edward Hebeler, Saginaw County, shared a few thougbts with Representative Traxler [D. 8tb District] at the Democratic breakfast. Time-out for a laugh with the Secretary. Reporter Ron Cordray. Bootb Newspapers, took notes as Director Bill Spike, Owosso, explained the issues during Tbursdays news conference at the National Press Club. Photos by Marcia Ditchie APRil 1, 1975 MICHIGAN FARM NEV\lS PAGE 7 Michigan Marketing Outlook LIVESTOCK feeders, and declines in the corn economics in the livestock in- volume. The processor market was ('ORN market, have triggered a sharp dustry. Indications are that or- limited this year; much fruit was A recent release of com planting CATTLE increase in the price of forty-prond derly marketing of the remaining not large enough to shift to fresh intentions was 97% of a year ago. The recent cattle and calves on feeder pigs. As of this writing, 1974 crop should return the best market. Horticulturally this is not Traders consider this to be bullish; feed report, reported cattle and forty-poUI¥l pigs are being priced financial results. a major problem. It just needs to however, intentions to plant calves on feed, March 1, for from $40 to $42, with demand. be recognized, again, by each soybeans is 6% more than a year slaughter in the seven major ~trong. grower for its danger. Fruit ago. The weather, plus a new states, down 41 % from a year ago. APPLES-PEACHES- growers know the steps necessary report on the export situation. are Febroary placements of cattle Hill Byrum, Marketing Specialist PEARS - PLUMS to overcome the problem of un- key factors com growers need to and calves on feed were down 29% Market ()evelopment Division A historic marketing lesson was dersizing. watch during the next sixty days in from a year ago. again demonstrated this year. Dave Wolfe. Marketing Specialist making selling decisions. At the same time, weekly When t he marketing situation Market Development Division slaughter numbers continue to run HONEY becomes difficult, the most WHEAT 60to 80thousand head greater than The honey market is sharply desirable fruit moves best. In Increased wheat acreage, plus a a year ago. down from one month ago. Grower almost all fruit marketing, the ()AIHY substantial carry-over, are There seems to be a bullish tone prices for white honey - ~; light moderate-sized fruit moves best. It The key to dairying in Michigan, causing a bearish affect on the to the meat trade as of this writing. amber - 38t; and copper melter - is better flavored and is adaptable at the present time and in the near wheat market. If we get a normal There appears to be a decline in the under~. While the 1974 U.S. into more varied marketing future, appears to be producers .com crop planted, and good har- number of choice cattle available production was reduced 15 to 19%, directions. While we can blame the knowing their cost of production. vest conditions for wheat, the trend for slaughter; consequently, we the world output" remained about weather, the processing com- Specifically, producers ought to of the wheat market will be down. can anticipate choice butcher equal to the 1973 crop. The higher panies, the fresh packers, and the consider culling any cow which is cattle advancing to the high 30's in U.S. prices attracted 30 million salesmen that handle our fruit, it is not paying her way. Granted, the NAVY BEANS the next thirty days. pOunds of foreign honey into the the producer that can do the most cull cow market is still weak; but, OJrrent grower price for navy The feeder cattle market has U.S. to affect the selling of the fruit. inefficient cows are not adding beans is $10.50 cwt. also advanced in recent weeks. Dave Wolfe, Marketing Specialist Just two examples: Michigan anything to net income. Planting intentions, as of this This is due to moderate increases Market Development Division a pples generally ran small this Consumption of fluid milk is an writing, were 92% of a year ago in in the butcher cattle market plus year; 30,000 bushel of Mic.higan important factor in the milk check. Michigan. Competing states are stocker operations competing for cling peaches went on the ground With current uncertain economic indicating even greater cutbacks. grass cattle. SOYBEANS because they were too small to sell. conditions, fluid milk consumption Minnesota is expected to cut back I expect 500 to 700 pound, strictly At "Soybean Day" held in APPLES. Many growers have would not be expected to rise ap- as much as 31 % from a year ago. choice cattle, to co~t up to $32 Adrian on March 12, Dr. Robert aimed at the bagging trade preciably. The only favorable We could see an even greater delivered during the next thirty Wisner, Extension Specialist in producing a smaller fruit in larger factor in dairying, at the present cutback in navy beans in Michigan days. Grains - Iowa State University, felt volume. This year the weather time, appears to be the relatively because of increased interest in the market had over-reacted in the as they happen to be combined in were lower there would be no efficiency argument in favor income producers (wheat, corn, cotton, soybeans, cattle one man, the family farm operator, the concept is to split up of the big farm. and hogs) are not in general grpwn under contract. the factors of production and recombine them in optimum Undoubtedly advancing technology will gradually in- However measured, family farms are vastly in the form. There is nothing really new about this; businessmen crease the size at which the efficiency of production is majority and they produce the great bulk of our farm have been doing it for a long time. But its application to maximized. There may be spectacular breakthroughs for products. The units that are either large-scale, or factory- agriculture, on a wide scale, is new. The economic ef- this or that commodity. But so long as numerous operating type, or corporate in legal form, or integrated in their ficiency latent in this organizational change is, in certain decisions are necessary and these are strongly conditioned structure are relatively few in number and produce the cases, very great indeed. Managerial ability can be by such variables as weather and soil conditions, there are minority of our food, feed and fiber. They are generally recruited, trained, and given responsibility not just for a major obstacles to the development of super-large farms. highly specialized, concentrated in relatively few com- small unit but for a large one. Capital can be brought in 3. Market opportunities--Large scale units are likely -'to modities, and found chiefly in few regions. from the outside, not in conventially sized chunks but in develop when there is a market opportunity to be exploited. Now again the question: Is the large-scale farm the aggregations suited to the capability of the new managerial For example, the development of frozen concentrated forerunner of tHings to come? Or is it Unique? The answer concept. Farms can be consolidated or operated as orange juice provided an opportunity to market a quality to this question must be a judgment; and the following associated units, making maximum use of new mechanical product, at uniform standards, the year around, at comments are of that nature. equipment and new managerial techniques. Production can relatively low cost. Small-scale individual farmers, It would appear U'u the five circumstances listed as be scheduled as to quantity, grade and time. Markets can production-oriented and with limited awareness of the being conducive to I, ge-scale farm production are not be organized. developed and managed. Labor can be hired opportunity for new marketing institutions, simply could generally prevalent throughout agriculture. We may get and given certain well-specified tasks to perform, as in not meet that market opportunity. So large-scale operations more large-scale units, but this trend will most likely be factory labor. Organizational form can be corporate, developed and expanded. selective, gradual, and never total. cooperative, partnership, or sole proprietorship. 4. Repetitive operations-Modem technology has made it The large-scale agribusiness unit faces several obstacles possible to routinize some farm operations, much as with that the family farm avoids; Here, let's make a clarifying point. The major factors 1. Union labor: Large-scale units are vulnerable to which distinguish the new forms we see emerging in the assembly line in industry. Broiler production, sugar cane, and some parts of the vegetable-processing industry unionization of their labor supply. California grapes and agriculture from the older traditional forms are these: lettuce illustrate this problem. 1. Large scale instead of small operations. are of this type. Monoculture, or one-crop farming, seems especially suited to this technique. Large-scale agricultural 2. Low returns on capital: As witnessed by their per- 2. The breakup of the old combination of land, labor, formance, farm people accept a relatively low rate of capital and management as these were found in a single firms tend to develop where repetitive operations are adopted. return on capital invested in land though, of course, they individual and their optimum recombination, with are unha ppy a bout these low returns. The prestige of land management in the key role. Other kinds of farming, especially diversified operations, are less adaptable to central direction. Activities are less ownership and the assurance of continued farm operation 3. The gradual elimination of the old distinctions between production, marketing, processing and distribution. repetitive and situations are more individual, so that given by such ownership are powerful forces, causing Note that corporation farming is not listed among the decentralized decision-making is necessary. Livestock operating farmers, often, to hold their land at prices that major factors which distinguish the new from the old. As farms and the dairy business seem to be of this type. cannot be met by corporate-type operators which must pay has been said, the new organizational form can be anyone of 5. Favorable attitude toward large-scale operations-- going interest rates for their capital. . several types. Whether one favors or opposes corporate Large scale units occur where and when such units are 3. High fixed charges: Large-scale farms have very high farming is not really the issue. Only about one percent of socially and politically acceptable as well as economically fixed costs, of which hired labor is perhaps the greatest. In our commercial farms are incorporated, and more than 90 attractive. a bad year these costs eat them up. The family farmer, who percent of these are family corporations, set up primarily Perhap; one reason the large-scale units are common in supplies his own labor, meets a bad year by paying himself to facilitate the passage of the farm from one generation to California is the fact that California's agriculture had its a lower return and taking in his belt a notch or two. He is another. The new managerial concept, not the legal form, is origins in the large-scale Spanish hacienda system. And one ready to go the following year, while the large-scale farm the heart of the matter. reason that large-scale units are accepted in the South is the may ha ve gone under. Having defined what is meant by a large-scale farm long historical dominance of the large-scale plantation 4. Adverse public attitudes: Hostility toward large-scale operation, let's also indicate what is meant by the family system. Intergration and large-scale operation have not integrated farming units is widespread among farm farm. A farm on which the majority of the labor and the caught on well in the Middle West. This is, in part, perhaps, organizations, the Congress, and local units of government management decisions are made by the operator and his due to the fact that the Midwest was the birthplace of the in many parts of the country. Thus many obstacles are put family is a family farm. It might be a small unit with a low Free Soil movement; it was homesteaded in family units in the way of large-scale integrated units. income or it might be a large one with a gross income of and the family farming tradition is a matter of deep The family farm is a durable and resilient institution. It commitment. has SUrvIVedwar, depression and natural disaster. Up to $100,000 or more. this point, with the exception of the broiler industry and a When' using the phrase "large-scale units," let's recall The poultry industry pioneered the large-scale type of that the relevant criteria are that the decision-making few other sectors, it has survived a technological organization. Poultry-men scrapped traditional ideas. They function has been to some extent differentiated from the revolution. It has strong ideological support, supplies transformed small scale production into a specialized mass other factors of production, that the operation is large by through the political system. production system geared to the needs of retailers for high conventional standards, and. that the procurement, There is nothing inexorable about the trend toward large- volume, uniform quality, relatively even-priced products. production and marketing processes have been merged at scale agriculture. Legal tools are available to check the They turned away from products that pleased the producer least in part. trend; prohibitions of one sort or another. to products that pleased the consumer. They experimented How much of our agriculture is in units thus defined? It is With a representative government, the people can have with contract production, marketing techniques, and hard to determine because the terms are vague and the any kind of agriculture they want. We are a pluralistic managerial concepts. They hit on a combination that criteria are various. Several measures are offered: you can country socially, politically and economically. The fact reduced costs, relatively, by about one-fourth in a 15 year take your pick. that there has been some in the (llrectlo(l 01 large-scale period. During this same span of time they almost trebled 1. Labor input --USDA says that only 5% of the farms in units does not mean that this trend must be extended until it the per capita consumption of chicken. the United States are larger-than family farms. The main embraces all of agriculture. Nor does it mean that large- Many people saw in this movement a threat of traditional criterion used in this measure is the amount of hired labor. agriculture and attacked with great vigor. Others say a These larger-than-family farms employ more hired labor Continued on page 11 useful approach applicable to other farm commodities, and applauded. Is the organizational technique adopted by the boiler industry unique, different, a special case, an aberration, incapable of bein~ extended throughout agriculture? Or is the boiler industry a prototype, a forerunner, an indicator of what all of agnculture will be like some time in the future? To answer these questions it is necessary to identify those conditions which appear to be conducive to the development of a large-scale agricultural system, and then attempt to T()VIC judge how general these conditions are. 1. Unexploited knowledge--Large-scale units develop when there is a significant body of unexploited scientific by KEN WILES knowledge. For example, 25 years ago there was an Manager Member Relations enormous gap between the nutritional. genetic, and sanitary knowledge in the poultry industry and prevailing pr 'ctices in that industry. Large units with able ~ nagement could quickly put into operation the better APRIL 1, 1975 MICHIGAN FARM NEWS PAGE 11 Continued from page 10 Committee Discussion Topic Report Sheet scale farming units should be abolished. There is no good on future The Discussion Topic and Report sheet for the discussion topic on reason to prevent us from having a farming system that is partly large-scale and partly family farms. Those who topics meets the opposite page is furnished for use of community group members who may wish to review it prior to their group meetings. If used by a believe in market competition should also believe in the .appropriateness of competing institutional forms. The Discussion Topic Committee Community Group, in lieu of report sheet furnished the Discussion For most US agriculture, the family farm can continue met in Farm Bureau Center in Leader, please torwara answers WIth mmutes to Information and to be the major organizational form: If it is permItted the March to select discussion topics Public Relations Division, Michigan Farm Bureau, P.O. Box 960, flexibility that will allow the efficient use of modern I to be used by Community Farm Lansing, Michigan 48904on or before May 1, 1975. technology am management; if it is provided with good Bureau Groups for the next six research, education and credit; if it makes wise use of the months. COMMUNITY FARM BUREAU principles of cooperation; if it continues to enjoy the good The committee, with Elmer Discussion Exercise & Report Sheet will of the public. Gowell as chairman, spent a full April, 1975 All these things are possible if we decide we want it that day reviewing topics recom- way. mended by community groups Community Farm Bureau ~-County from throughout the state. Narrowing down a list of over 150 Indicate the number of people taking part in this discussion. Topic Summary suggested topics the committee selected the following topics: 1. Grading and weighing of TOPIC: FAMILY FARMS The discussion in February of'Estate Taxes brought to the at- 1. In your lude;ment are the family farms going to survive? grain. Yes No Undecided tention of many that adequate estate planning is essential for a farm 2. Solar use in farming. operation if it is to be passed on to the heirs. Many Community Farm 2. Is there a trend toward larger family farms in your area-~ 3. Cost breakdown vs. farm cost. Yes No Undecided Bureau Groups used this opportunity to invite resource people to 4. Future of family farms. attend their meeting. A summary of the responses received follows: 3. In your judgment, has the tendency to specialize in one or two 5. Solid waste problems. crops, rather than general farming, been a significant factor in 1: The number of individuals in a community group with a current 6. Problems of city people. causing an increase in the size of family farms? will drawn up by a competent attorney varied from zero to fifteen. Members of the committee, Y~s No Undecided 2. The number of families in a group who have had professional appointed by President Smith and 4. Do you feel that there is a tendency to view large-size farming estate planning assistance varied from zero to ten. the districts they represent are: operations as not being in the best interest of the general public? 3. The highest numbe~ of partnerships represented in anyone Clark Lipscomb, Climax, Yes No Undecided group was six. 5. Conclusions :-- --- District 1; Allen Carpenter, 4. Of those reporting, 38% of the partnership agreements were not in writing. Reading, District 2; Mrs. Richard 5. Fifty-six percent felt that in case of untimely death of the major Kamprath, Ida, District 3; Mike farm operator, adequate provision had been made to take care of the Bowman, Alto, District 4. estate taxes and other current expenses so the farm could remain in Also Mrs. Richard Traver, the family and continue operation. Williamston, District 5; Mrs. 6. Some of the conclusions reached by the groups were: Estate Bruce Leipprandt Pigeon, District planning is good, if only for "peace of mind"; not enough families 6; Elmer Gowell, Rothbury, have adequate wills; individual choices have to be made; seek ad- District 7; Robert Fulton, Oakley, vice in making wills; inheritance tax laws need to be updated; in this District 8; Mrs. William Wagner, day and age it is hard to know when adequate provisions have been Kingsly, District 9; Mrs. Bryce made. Shantz, Mio, District 10; James Campbell, Pickford, District 11. FARM BUREAU MARKET PLACE SPECIAL RATE TO FARM BUREAU MEMBERS: One free 25 word ad per month per membership, additional words, 10 cents each. Figures such as 12 or $12.50 count as one word NON- MEMBER advertisers: 15 cents per word one edition, two or more editions, 10 cents per word ..Copy deadline: 13th of Month. Mail classified ads to: Michigan Farm News, P. O. 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