Grade-A Crisis

Headed straight for the U.S. housewife's doorstep and Economic Stabilizer James F. Byrnes's lap this week is a milk crisis of Grade-A quality.

Bad enough was the housewife's normal milk problem: how to get a bottle of good milk cheap despite a hocus-pocus of trade names, grades and delivery methods. Much worse is the problem now threatening: how to get milk at all.

First is the question of supplying civilians, the military, Lend-Lease. Back in 1930 the U.S. produced 100 billion pounds of milk and milk products. The figure is jumping to 120 billion pounds this year, maybe to 122 billions next year.

But 1943 needs may reach 140-145 billions, of which civilians may get only 102 billion and the military and Lend-Lease the rest. Workers have more money to spend for milk, want also to piece out coffee shortages with milk, meat shortages with milk products. So rationing is in the works for early 1943, with the least essential uses cut hardest: ice cream, whipping cream, fancy cheese.

But rationing is an ex post facto job, and one of Jimmy Byrnes's problems is to cure causes of limited production: Farmers are skimping on expensive protein feeds that a cow needs for top yields. Machinery is rationed or nonexistent. Farm wages are too high for many an operator to pay. Laborers are abandoning the seven-day-week grind of cow-tending for easier, better-paid city work. Thus big & little farmers are selling herds: the culls for slaughter, the good cows mostly to neighbors; heifers--next year's cows--are being sold for beef at fantastic prices. Results: fewer cows were milked in October than any other time since 1933; production per cow this autumn fell 1% from last fall; farmers are squeezed in a mesh of prices, wages, labor shortages.

Squeeze All Around. Some big milk distributors--notably in New York and Duluth-Superior--were squeezed too when OPA froze fluid milk and cream prices last May at abnormally low March levels. Under the price law, OPA could not then freeze butter prices, which jumped upward and tried to drag milk prices along. But for the distributors, the Government provided subsidies of $1 million a month --temporary hush money until OPA and the Agriculture Department could decide on the least evil of three: 1) raise milk a cent a quart; 2) lower the average price to farmers; 3) continue paying subsidies.

Nobody likes the subsidies, but more might come. Farmers feel the money is going to the wrong group, the distributors. The distributors want free prices. But OPA sweats at the thought of raising fluid milk prices and upsetting the cost-of-living index. The Department of Agriculture looks appalled when talk veers to reducing the wholesale prices of fluid milk. Finding a way out is Economizer Byrnes's task.

Realistic Cure. Unhappy also are the two agencies over a realistic solution to the subsidy-price foolishness--a solution that many a housewife advocated months past: to cut falderals by which the few monopolistic dairy companies had maintained prices. Experts say savings of 50% could come from 1) eliminating duplications of milk collecting and distributing systems; 2) forbidding trucks to start on delivery routes without full loads; 3) zoning deliveries; 4) encouraging milk sales in grocery stores.

But standing in the way of such economies is OPA's and Agriculture's unwillingness to offend anybody, to upset the arbitrary restrictions and shibboleths of distributors and union drivers--like those forbidding a driver to solicit customers who had not been his before a specified date, and requiring unions to enforce a particular retail price.

Experienced marketing specialists advocate permanent ceilings on manufactured milk products, carefully calculated so as to forestall any tendency of dairymen to cut production and shift to other kinds of farming. After that, the experts say, a rebuilding of milk prices can be undertaken.

Farmers want other solutions: 1) firm Government control so milk cows and heifers cannot be sold for beef; 2) control of farm labor; 3) a feed price ceiling, with a floor for at least a year after the war to allow readjustments on farms; 4) higher prices for dairymen themselves, maybe direct subsidies and bonuses (like Canada's) to encourage production; 5) assurance of getting essential machines and equipment.

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