Conversation 103-010

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That it is not, of course, covered when the cattle themselves go to the next farm.

While it's growing.

It's not covered while it's growing.

But the moment that it's slaughtered, then it's considered to be processed.

That's right.

At that point on, it seems complicated, even when I see your point.

Right.

You just have to say the meat is covered, period.

That all transactions of meat are covered except the first transaction when the farmer sells it.

Is that correct?

No, or not.

I think the proper way to say this is from slaughter on, it's covered.

And it's in his farm.

So for all practical purposes the

You have acted on the supply side with respect to the quote, not me, with respect to all food.

Everything has been done within the control framework that can be done in terms of controlling each process after the first sale, each linkage in that food marketing chain.

There are some minor things that could be done, such as changing the dollar and cents, changing the

pass-through rule to a dollar in sets, which would squeeze from the margins, which is not attractive alternative.

There's a possibility of a freeze at the raw agricultural level, which would cause all the problems of controlling or putting price ceilings on raw agricultural product.

One thing that has also affected food prices that I don't think people have talked about enough is the fact that the impact the wage price controls on the economy generally has affected the prices that people at each step of that food marketing lane pay.

For example, if you're controlling international harvester's profit margin, presumably tractor prices are less than they might otherwise be.

Secondly, the pay board in the last month has reduced the meat cutters, the automated meat cutters

From an 11% agreed upon wage settlement down to 7%.

Yesterday, the pay board reduced, say, 13,000 food chain employees down from 19% agreed settlement between management and labor down to 6.7%.

They took it.

It was just yesterday, but I haven't heard of this trying yet.

But that's a big cut from 19% agreed upon by management.

They haven't done anything.

It's really a stunning thing that management still agrees.

In any event, that's where we've arrived.

We've taken most of the steps that are available with respect to food prices.

there are some other areas as you know and we discussed the possibility of affecting the

Well, other actions like the medium for quota action, which have obvious problems and minimal effect in some instances.

But it remains essentially a supply and demand problem.

Food does.

And our control system is designed not to deal with supply and demand, with demand inflation, but really cause push inflation.

And that's what it's essentially impacting on.

Now, the other kinds of things that are possible ahead, I suppose you would like to comment on that.

Mr. President, in accordance with your instructions, we've been holding this very closely and working on a normal basis with the department's concern and would assume that everyone here would continue to treat it this way, but this was generally

an attempt to reduce the amount of governmental pressure on prices by changing governmental purchasing to the extent we couldn't use enough of our storage stocks so that we wouldn't be out on the market pushing prices up ourselves.

The normal practice with defense, Mr. President, is about a 30-day supply of these, and they have agreed that that will be drastically reduced as they use up their storage.

probably not run more than about a five to seven day supply, which is practically from the market directly to the vestibules.

They have previously instituted a change in menus.

I'm sorry.

Well, as I said, normally they keep about a 30-day supply of beef in storage, and we're going to reduce that drastically, use that up so that they'll come to purchases very soon.

About 30 days.

They'll reduce it down to about a six- to seven-day storage period.

Their reason for this is, as I understand it, a real crunch in prices in the next two months.

But in September and October, you expect to, I mean, I'm impressed by the supply.

Next in September and October, you expect it to come up.

So we need to do some things and face some of the pressure off and now it's good.

It is good.

That's why we're doing it.

So this is about two months.

Well, I can't question it.

We've got 11% more cattle than feedlots now than we had a year ago.

Absolutely.

Then they are changing menus for this reason.

This is in particular to closely help our changing menus.

We had a problem, as I recall, Don, the other day here in the Congress, that was very important.

It wasn't because it was in Korea.

Right.

It wasn't very good.

Everybody's delighted.

We're going to let our court eyes out there and sort of, you know, sort of, you know, take it home.

It's bad.

No, it's basically what it was.

It was a part-time business.

And even the secretary of agriculture over there, the secretary of math saying, buy less pork.

And the real thing, that was it.

Buy less pork.

That was a Freeman thing when I was there.

I mentioned it was not a career.

And so this is closely held, but it's the right thing to do.

Because has anybody visited one of these mess halls recently?

You ever seen one?

It's terrific.

I mean, it's out there and it's wonderful.

Kids get, they get the best with their hands, you know.

but they load it in there and it's wasted in enormous amounts.

That's another thing they're going after is trying to control the supply and the changing menus and the following, when using up of the storage, they'll start moving into substitute purchases and this is all expected to run for about two months and it's all, as I said, done orally.

The same program was present with somewhat less results because they've been doing it earlier with the Veterans Administration purchases and with the other departmental purchases and agriculture.

We're getting very good cooperation from all of them.

But they're still providing excellent balance.

Oh, yes.

Yes, indeed.

No, there's no problem with that.

Moving into addition, that would be total management.

Yes.

No, the diets are completely balanced.

They just will include a substantial lessening of beef and other high-priced foods, primarily beef for about a two-month period.

And as a matter of fact, the fence was doing some of it anyway because it was necessary for them because of the price of beef to start shifting some of their purchases.

So they've done that just to get...

more on all of the dollars.

But we'll have a complete report for you on the first page that's more important than a subsequent report.

We wanted to follow up on these moves with some work with and on the various organizations that play a part in this.

And Ron, you have a sort of a seminar schedule of that, correct?

That's right.

And we have a business organization

I would respectfully suggest, again, this is a question, rather than talking about grocery stores and retailers, I mean, it's chain stores.

Chain stores.

I mean, chain stores is a bad word.

Grocery stores is a good word.

I don't know.

The thought was

When we talk about jaw-boning, we think about jaw-boning in the context of a government that does not have wage price controls.

And I think the press still thinks of it that way, and many of us do.

It's a very different thing.

It's a very different thing to be meeting with people involved in this process when you have wage price controls in existence, I think, than it is to be jaw-boning, so to speak, when you don't have anything you can do after you've jaw-boned.

So the thought was that possibly some meetings with individuals at each level or each stage of the entire food process in the coming two weeks would be useful.

And you asked who's going to be doing the meeting.

The groups that would be met with would include each group from the producer right through the retail level of the food marketing chain.

That would include food chains.

That's what I'm talking about.

Right.

The people who would be doing it, we kind of had the feeling that it might be best if the individual department head who had jurisdiction over that particular group not be the one to do it alone.

And it just seems like that kind of puts him in a spot where he's got five or six other relationships and linkages that need not be upset necessarily.

And if he were to be involved, it probably should be with George or with me or with her or with someone.

The two of you should be in each deal.

You should be in all of them.

George can be in those if he has some pretty time for it.

Is that correct?

Well, I think we're going to try and just use the dickens on him.

I noticed his name was on the list, but I also noticed he was kind of worried about it.

But there are the businesses themselves that the wholesalers retail on, there are the producers, there are the associations for these organizations, there are the labor groups, and then there's the final group which we've discussed, and that's the possibility of actually in meeting with, for example, our agricultural attaches and the major meat supplying countries and encouraging them to encourage imports from those countries.

because of the question as to what the effect of simply removing the voluntary quotas will have with the quotas of stimulus behind it.

And those are essentially the layout of means that we were considering having and we'd be happy to discuss them.

Tell me about the imports in just a moment.

I did a little checking on that.

And you can't import margin here because of all the policies.

That's a great issue.

Oh, well, Brett and I said, no, it's not.

See, we don't import from England.

We do import from Ireland.

But the Irish imports have dropped to virtually zero in this country now.

That's the European market.

It's a better market.

But let me ask you about the Polish hand.

Do you mind?

There's no request.

There's no other place for a Polish hand.

Did you ever drive a car in Los Angeles in the old days?

Yeah, you know what I mean?

You know the purpose of that, of course, is to say, well, it's the food fly.

Well, okay, I really don't know, but this is not the purpose.

This is not the purpose.

I believe you, but I'm not sure.

I'm not sure you believe me.

Well, let's get to the point.

Really, really, I see the point.

Take Argentine beef.

We do import canned Argentine corned beef, mostly it's cooked.

Australia is a free country and New Zealand is a free country.

The bulk of our people, of course, come, one, from Australia, and two, from New Zealand, from America, from Africa, from all over the world.

I understand that's a good idea.

We have the Australians, I've indicated, that they will, as contractors, work on that, you know.

Yeah, King Ranch is a big area, by the way.

By the American capital.

Yeah.

The second point is in regards to New Zealand.

But if they got it in and it was reasonable price, would they eat it?

No, but I mean, if you put enough spice in it, you can't tell what it tastes like.

There is a tariff imposed.

I think it's three or four cents.

I'm not sure about that.

It's a modest tariff.

Can we lift that?

This is not an effective tariff.

I think three or four cents a pound of land, I think a lot of it.

But Mr. President, in this case, I might think for some time we should import more New Zealand land because seasonally, in this case, when I was planting the seasonal crop, we've got land for half a year, we tried to grow it all year.

Six months is a good time.

There's no lamb.

I have assisted one of our sheep producers for years.

They should encourage New Zealand lamb imports.

So you've got encounters year-round because their season is just opposite our season.

So leg of lamb and shoulder of lamb.

Shoulder of lamb is a little harder to carve.

Leg of lamb and shoulder of lamb are quite old.

Very, very strange.

It's a very good buy for us.

The trouble is, though, to get the lamb, you've got to take the whole carton.

Those are the only areas that remain are the import quotas and the tariff.

That's all of what we have on the supply side.

because of the supply side .

We were fearful about the reaction of the cattle producers on this .

I had no problem .

I had some 45,000 people in the audience.

That's quite a good reception.

Tuesday, I had the National Farm Broadcasters Group in Florida.

Yesterday, I spoke to Cliff Hanson's group in Wyoming, the Wyoming stockholders, right in the heart of the capital.

They got, they got five cows for the man and the woman, and this is my own company.

And when he introduced me, he took the occasion to say that I'm the guy that got the, that got the bill through for the import quotas on the feed.

And I don't understand why the president took action to aggregate that kind of stuff.

And he was on there just introducing me.

He was obviously trying to embarrass me.

He took 15 minutes.

It came my turn.

I had about 1,500 people.

I said, Senator McGee just asked, well, how do you want to be introduced?

I told him, you introduce me.

I'll make the speech.

And I said, but he didn't get the point.

I said, all right, let's just get that right.

And he said, no problem, right there.

The problem is I was here first, the cattlemen are making about 20% and they're doing real well.

And what I mean, a good second point is that they realize that

And I think that's terribly relieved at the moment.

In fact, well, we took the poll off.

That ain't gonna affect their profits much for the moment.

They're concerned about the long haul.

They think of the fact that enormous pressures might develop to impose price control at their level.

Isn't this true?

I think that's what they're relieved about.

I think that's their proof.

I see no problem.

Well, why don't we take you out for me and close the prices a better way?

He might have a fighting second.

Okay, thank you, folks.

We'll be contentioning the British president will have some slight favorable thought from that, and that it makes

the British market a little less attractive for some of these meat shipments that have been going there.

And now we may have some divergent shipments to the US market.

Because in other words, like the British, the pound not being worth the stooge, it doesn't mean as much to the Australian people as it does to the rest of Australia.

As long as they have a fixed price contract at some point.

But it's a, any time they can.

Excuse me.

Well, there was just this last point you asked, Mr. President, about how this ought to be discussed.

And it seems to me that the most honest and factual and direct way is the way that George Shultz handled it after you made your announcement on Monday that you agreed to the White House press conference.

I'm paraphrasing what he said, that the goal is to see that there's an adequate supply of good food at reasonable prices.

And that supply, weeding the supply part of it in, I think, points out the difficulty of imposing price ceilings, which could lower the price but affect supply.

And I think that packaging those together is valuable.

The problem with it is that it points out

that there still are some things remaining that the federal government's doing, in some cases the Congress, in some cases the executive branch, that tend to historically reduce supply by either through tariff or import and prevent a full flow into the country.

The way George said it, and the way I say it, and the way I think is the best way to say it, tends to lead to that kind of question coming up next.

What about these things that tend to be protectionist?

And we've got to know that's what we're doing.

We're talking about it.

That's what we've been doing since.

One of the things that we need to work with is encouraging imports from other countries.

This is a question that they raised right away.

If we increase our exports to the United States this year, say from Australia,

will that good performance be reflected in whatever quotas may be set next year?

And so they're looking for some sort of assurance that if they perform well and help us, then we will reflect that back again.

It should also indicate, because I think the, I think the demand, sorry, the demand for

are just moving up in their expectations of their eligible filler expectations in Japanese.

They're what they were 200 years ago.

They just eat rice anymore.

I think what's the difference here is that you might be sent on a test.

Right now we're eating 116 pounds of beef per person, twice what we did 20 years ago.

Twice what we did 20 years, yes.

But looking ahead, our people forget that by 1980, just eight years hence, we'll be eating 130 pounds of beef per person.

When you put the increase in population, that makes 25% more beef by 1980.

We'll be in this American market than we have now.

Well, that's the problem.

The easy increase is gone.

You can't put many more cows in the market.

Can I ask one other thing?

Is there any way, I suppose you could explore this, is there any way we could be of assistance to the Argentine in terms of a lung disease?

Do you want to spend a lot of money as a test and slaughter program to get rid of it?

Well, in some parts of the world, children have chosen to live with them.

Syria has chosen to live with them, for example.

Sweden doesn't have it.

Have you ever, would you mind just exploring?

Oh, certainly.

Well, now, we've come to Mexico.

Mexico is a free area.

They had an outlet down there some of the time.

We spent a bit of our own money down there to send out a mix.

We're looking to the long haul.

I don't mean to sign all this right now.

I want you to explore it a little bit.

I said in the letter that your situation was pretty bad.

It was an artery that was going down there.

He was going to bring in a lot of people.

He just caught him.

Well, we'll have to just like him when he comes down there.

He caught him.

I just heard that you couldn't bring him in.

Yeah, well, they're not checking.

We have one or two proposals that have come in prior to the Ex-Im Bank, for some reason, that can in fact represent projects and do something about how the mass police and several of the left-wing people are working on that, too.

And anybody who sees Argentina, and for that kind of parts of Brazil, I mean, you don't even worry about the Western Hemisphere or the world's peace in like how many years could come, if you get it in there, because they have enormous, beautiful, declining,

Just a question.

We've got extensive potential here in our southern states.

We've expanded regionally.

We are growing rapidly.

Whoever thought Florida was going to be one of the capital states, which it is today.

I was in Mississippi, might be in there.

In Irving, Massachusetts.

He's got a slogan down there, a million more mama cows by 74.

He says a million more by 74 mama cows.

And I said, you better have some papa cows around, too.

Mr. President, I think that brings you up to date on the different things that have been done and plans that we have to try to follow through on this with various organizations.

and also I mean, with regard to what we do in the future, I think that the, as you all know, the public relations is what is really important.

When I say really important, what is really important is the rights and that of our people.

But what people think about it is something they haven't noticed in practice well.

I don't know that the change in the court system and also the action taken yesterday is not going to have a very large impact on the actions being taken through the departments of the Department of Defense and the other government departments.

It's not very great.

All these actions together may have some effect.

That's a legal thing.

On the other hand, we have to realize that the numbers that are going to come out the next month are negative as far as the administration is concerned.

We can't.

You're probably worried about it.

We can't.

and say, let it be legal.

But what we must do, on the other hand, we must indicate that we have taken some action, that we do care, and that the action that we have taken, and the fact that we do care, will have a mitigating effect on the problem as time goes on.

People have this thing, one, that this administration cares, the second, that it's activists, and third,

that there are better times ahead.

Now, one very, very sensitive point is this.

You'll all be asking, I'm sure, about what about controls?

What about a freeze?

I think it's very important for everybody to ask that question.

I think the way to answer it is to say, now, we have taken certain actions up to this point.

We are very honest in agreeing that because of this shortage that we have, those actions are not going to be that, that there is not going to be some increase.

to continue to increase over the next couple of months or so.

I want to agree, if it doesn't work, we're just not gonna speculate about that.

The moment that you speculate about a possible freeze, it will drive up the price.

And there must be no speculation that we won't go, or that we will.

I think we should simply say, I think we should say that the president had talked to the members of the House Department, the council, said that he considered that the item of highest priority, of the very highest priority on any item, that the council would consider at this time, the food crisis.

Because it is.

It's the highest priority.

Because it's the highest priority in the minds of people.

They're not worried about interest, or cars, or a lot of other things.

Of course, they ought to be worried about, too.

But food prices, because the husband, every day, he's got to go there.

And so, she sees those prices up, and the old man wonders why he doesn't pay her.

and so forth.

But whatever the case may be, since that is one that is a very sensitive point, we must indicate that we consider it the highest priority.

And that there is a concerted program in which all responsive, or all

all of those agencies of government that can have any effect on the problem have been enlisted, whether it's a small effect or a large one.

It's very important throughout all this to follow also the line that I had made, that let's don't make the farmer the scapegoat for the higher prices.

We can have it both ways, and the farmer should be making scapegoats.

It isn't the farmer who's kicking up these prices, it's the fact that there's a big demand.

And as soon as the farmer uses a decent family composition, it will be very well in the home then.

As a result of that, people are going to grow wild cows and hogs and so forth, and there might be a lot later the price will be down on the production.

So that's about the way it works.

And I want to suggest, and you were talking about the shortage of mates here.

I prefer not to use that term.

As a matter of fact, our people this year are reading more books per person than ever before, as to this career, I'll say it short.

And I think something that I've talked a lot of times about is the tremendous explosion in demand.

And I tie that to the fact that we're really achieving a record new high, record-level digital employment every month for some months.

and the fact that we're putting out food stamps to 11 million people and feeding two more people.

And frankly, Mr. President, I said this is in line with the President's directive that we don't want any American to go to bed hungry and that we have a quadruple the number of people getting food stamps.

We doubled the number of people getting food stamps.

We've increased by 80 times in our honey growing and food distribution.

And this goes at the lower level of the income spectrum, where the income elapses because food is high.

A large share of it goes to food.

And I say, and the administration is delighted these people have purchasing power.

And let's recognize that this is the place they want to come.

In other words, there isn't so much to show them.

There's no show them the fact that

because it's basically the demand, and the demand is there because people can afford it.

Because this administration has had that goal in its workings.

In other words, you fight hunger, you drive up price.

And then what I'm gonna do is I couple with that.

Talking to Kevin, I couple with that.

I'm delighted that the demand is great, and Kevin should be delighted that the demand is great, and we're gonna build our numbers up to them.

In the meantime, we need action.

the connection of the supply, and I do the best we can to make this explode at any time.

But now, on that connection, George, I think it's important that when you and Don meet, we can change the way we do it.

Build a proper publicity.

Now, I think the change, I mean, who's got a Democrat on that?

I mean, most people do.

It's very, very important.

But on the other hand, it is not responsible for changing leaders, changed our representatives and so forth, to

when they see the possibility of a shortage of supply over the next two or three months, to inform the public they're gonna jack up prices.

That's what they're gonna do.

Now we are doing everything we can on the governmental side to hold costs down all around the country.

And we believe that change and responsibility to hold the line here.

having in mind the fact that the actions that they're taking, while they will not effectively be illegal, have some benefit.

And actually, their pricing policies have been like this.

They're not made on a monthly basis.

Their pricing policies, they're only six months.

They're not made on a monthly basis.

The same thing goes for finance.

for them to go rushing out, and frankly, the creators of public mind, enormous crisis and enormous attention to this thing, is not particularly helpful.

And I think we should hit them very hard with this, because what they're asking for by doing that, and what they're gonna get, is something they don't want.

That's direct control.

as they can be told by the private.

So I think that the change, yeah, the reason you talk about the change is that they are the lead horses in the whole business.

They can show responsibility.

We can't tell them to sell at a loss.

We can't tell them is their prices, is their cost so up that they cannot reflect that in prices.

But we can say that now the whole country is watching food prices.

The government's doing everything on its side to expect you to cooperate and to show restraint so that some action that none of us want to have today has not become imperative.

Is that about it?

Is that a good line to take, sir?

I think you all laid it out, but I also think it's very important to say, and you and Don will say it, that I think this is a suggestion that was made that I should see.

I thought that was, that's a great understanding.

And also, after all, it's very hard.

It's not exactly what we want to agree to see.

I have a comment on what we want to agree to, and Don will say it.

And I find that the thing is, I think you can say, though, that this has been discussed a great one.

All of you can say this when you talk to your very own son.

We've discussed it in capital.

We went through this.

The president's totally behind what you're doing.

You know, you're doing, you know, I mean, you take a lot of advice, as a matter of fact.

So that it doesn't just appear, well, here's the Secretary of the Treasury calling me in because he's a jack of all trades.

I think the identification of the President with his support, although I don't want to get out and start talking about this one, because you've got to say the big part for a little later.

You think so, don't you?

Yes, sir.

Is that what we all agree to?

I think there's another thing about what you said to these chain people.

It's very proportionate.

I think the pay board came out with this decision.

Because last time you called them into trouble, and then they drove all of us back.

Now we can say this is a circle, and that you and I together may be cut down, held down.

You've got to hold us on to that.

The amalgamated meat cutters, you're in president, you know.

really quack this all the time.

And, well, basically, the computer should find this out, and George Meany will be cracking a song and saying, if I were he, I'd do exactly the same thing.

You can't cut them from 19% to 5% and have them change arrogantly.

They're shooting from the hill, anticipating the rising.

Well, we're gonna have to raise prices.

And they can take a little, they can frankly take a little bit of a, a little bit of a cost of

voted in line here.

Everybody else voted in development.

Let them do it.

Well, I took on the development of New Henderson and the press briefing yesterday here in the White House.

It went down to the union.

The union?

The union.

Well, I know.

Yeah.

But having taken them all.

Now, let me say that it's very important that the Chamber be taken on, too.

And that the amount that may be put on there.

And I think the majority of you would.

I don't know if that's what you think, but that's exactly what we said here today.

George, you know, I raised this point, and I hope that I fully understand the attitude of a union leader.

He said, look, if you cut us from 19 to 5, then you're going to let the business guys get away, and of course you're going to make some cash.

In the last 20 years, the price has gone up about a dollar and a hundred above.

The price has gone up.

only about a dollar and above where they were 20 years ago.

Not immediately, they were about 20 years ago.

You get this typical thing.

But I think statistically, we can point out that they're roughly where they were 20 years ago.

In the meantime, we've now made big matters of triple.

Yeah.

Well, we appreciate all of your work here.

We'll follow through since there are various areas that you're in.

But I've seen .

She only goes out when she can smile.

Her goes out and frowns.

No, but you'll prepare it the way you want.

I think this idea is intriguing.

You've got to be very careful not to be polyamory and not to say, well, gee, well, there's not going to be a clue in this.

But it is important in this situation.

to say, let's well understand that Americans are eating better.

That is one of the reasons that the market is higher.

This food stamp thing, I didn't realize that that had such an impact.

I had neighbors in this administration.

We wanted to use the person's work.

That's the trouble with being a doctor.

I thought I always said the President's mandate that we're not going to have any marriage for a bed hungry.

And we've got 13 million people getting assistance here.

We've got to go to the Senate for approval to get everything back.

Why are you very happy?

He wasn't here.

Very good answer.

I think we probably ought to go on with the agenda items and try and wrap it up.

Dr. Stein and Jamie can begin them, and I think that you and I are required to make a critical decision on the outside.

Turn it over.

I've just lost a little of our memory.

It's like that.

Well, I think you and I have been asked to leave for a few minutes.

So I would think we should shut over to Curt and let the procedure agenda .

The basic issue here is that we reclassified the health services industry in the first part of May.

in terms of putting a care truck in the health industry for the first time.

The health industry has been operating on separate rules by reclassifying them, re-changing those rules.

In order for things to happen subsequent to the reclassification in terms of the number of firms that are...