Mr. FREEMAN. Perhaps not as gloomy as some of our low-protein wheat; but it is, nonetheless, a gloomy picture.

Senator CURTIS. Who do we sell this to?

Mr. FREEMAN. Oh, we sell it to Italy; we sell it to practically all countries around the world.

There is no one real big taker of it, as such. It is a type of product that is very specialized, and you can get it only in a very few places, but our business goes up when the other countries have a crop failure, and it is strictly competition in other years.

Senator CURTIS. What has the export price been?

Mr. FREEMAN. We have had to subsidize it, pay an export payment, very substantial, and I do not recall the figure right off, as compared to other classes of wheat.

Senator HOLLAND. Please furnish that for the record.

That is important.

Mr. FREEMAN. All right. We will give you some history on the export payments on Durum wheat.

(The information is as follows:)

The export payment rate for durum wheat during the marketing year just ended averaged 23 cents per bushel on the Pacific Coast and 9 cents for the Atlantic and Great Lakes ports.

The payment rates announced July 23, for wheat to be exported from the Pacific Coast after August 1, are 28 cents for durum as compared with 12 cents for hard red winter, 13 percent protein.

Senator HOLLAND. The price for Durum wheat is higher; is it not, than that for other average wheat?

Mr. FREEMAN. Yes, sir; very much higher.

Senator MILLER. Could I ask a couple of questions, Mr. Chairman? Senator HOLLAND. Yes, Senator Miller.

Senator MILLER. How much of a deficiency in the California area is there in this Durum wheat production so that they have to go to other areas to purchase?

Mr. FREEMAN. Well, that I do not know. I do not believe we have statistics in the Department to say.

Senator MILLER. Well, we have been talking about the fact that they have to go elsewhere to make up the deficiency in the west coast

area.

Mr. FREEMAN. Well, from little I know of the area, sir, I would assume that certainly because of the transportation cost they do not ship Durum wheat from the traditional area into the west coast market. What I would say is that, through economic reasoning, what would probably happen is that products would be shipped in, products manufactured, closer to or somewhere between the traditional area and California. Certainly, we have no reports of any shortage of Durum products.

Senator MILLER. Well, then, for example, they might ship Durum wheat down from South Dakota to Omaha, and there they have a macaroni factory and they make it into macaroni, and then ship the macaroni out to the west coast.

Mr. FREEMAN. Well, I think that is what is happening; yes, sir. Senator MILLER. It is not a case of shipping Durum wheat in bulk. Mr. FREEMAN. No, sir. I think the economic situation would indicate that it would be more feasible to ship products.

Senator MILLER. But you do not have any idea how much that would amount to?

Mr. FREEMAN. No, sir; I do not.

Senator MILLER. Now, in your testimony on page 3 at the top, you say: "Domestic consumption is estimated at 32 million bushels," and then you point out that exports during 1968-69 amounted to 47 million, and that totals 79 million bushels. Then, you say down here at the bottom of the page that the total supply of Durum in the Nation is substantially more than enough to satisfy our domestic and export requirements, which would seem to me to indicate that the supply, the carryover supply, should be at least 70 million bushels and maybe greater. But you say up here that it is estimated that the

Mr. FREEMAN. Carryover

Senator MILLER. Durum wheat stocks in all positions in April 1969, totals 67.5 million bushels. That is less than 79.

Mr. FREEMAN. Yes, but we always have an additional crop coming on, and it is hazardous, as it is, to grow this Durum crop, but we have never had a year when we did not have a substantial production, enough when added to the carryover, of a level we are talking about, to more than meet our requirement.

Senator HOLLAND. I note from the statistics already inserted in the record that out of the total of 97,697 acres in Durum wheat in the Nation, only 455,000 out of the 97,697,000 bushels of Durum wheat produced in the Nation, or less than a half a million, were produced in California, which is considerably less than one-half of 1 percent of the production.

Mr. FREEMAN. Yes, sir.

Senator HOLLAND. Now, what is proposed by this bill, with reference to the increase of the Tulelake production?

Mr. FREEMAN. It would just about double the acreage and, I assume, the production that is in California now.

Senator HOLLAND. The acreage is shown for 1968 at 7,000 acres. What would the total be under this bill?

Mr. FREEMAN. They are asking to bring the total in the area up to 12,000 acres. They have allotments now for about 6,000.

Senator HOLLAND. And you think it would bring up the total production still less than 1 percent of the total nationally?

Mr. FREEMAN. If they took all of the increased allotment granted them; yes, sir.

Senator MILLER. Could I ask a further question, Mr. Chairman? Senator HOLLAND. Yes.

Senator MILLER. Then, because of what you have said in response to my earlier questions, it appears what could happen if this bill is approved would be that the manufacture of macaroni might be shifted from Omaha to California?

Mr. FREEMAN. Yes, sir.

Senator MILLER. In other words, what they are interested in is the finished product, and they are getting it from maybe Omaha, Kansas City, or some place like that now, but, if they go into this program of doubling their acreage and they need spaghetti or macaroni, they will make it out there?

Mr. FREEMAN. I would assume that; yes, sir. That is what I assume would happen.

Senator MILLER. I wonder if this underlies some of the thinking behind the bill?

Mr. FREEMAN. It could well be.

Senator MILLER. Rather than just a deficiency in the wheat production itself, we might be getting into a manufacturing problem here. Senator HOLLAND. I should think that the 455,000 bushels now produced out there would not support any heavy industry of macaroni and other similar products.

Senator MILLER. I do not know, Mr. Chairman, anything about the quantities used in the manufacture or what the macaroni or spaghetti trade looks like, but I wish we could get that clarified somehow.

Senator HOLLAND. If the total use of macaroni, domestically, was 32 million bushels last year, and only 455,000 was produced in California, there could not have been very heavy processing on the Pacific coast at all.

Mr. FREEMAN. I understand that they process all that they produce out there for food products, and then switch over into the manufacture of other products, because they do not have enough Durum wheat locally. But we do not have any consumption statistics by States or by areas on these types of products. I suppose we could reconstruct from our records how much Durum was milled at certain mills.

It would be a rather painstaking process to go back through, because of the processing certificate requirements under the present law. But we could go back, I suppose, through individual records, however, as I say, we do not compile this, and we would have to go back and do it manually from what they had reported to us and our certificates that they had paid us on processing of wheat into food.

Senator MILLER. Well, let me make it clear that I do not have any spaghetti or macaroni factories that I know of in Iowa, but I do think that there are some in Senator Curtis' State, and I think there are some in Kansas City, and that is why I wanted to see if we could get some kind of a picture of that.

Do we have any people available who can give us a picture of the macaroni and spaghetti production, whether this could underlie part of the purposes of the bill?

Mr. FREEMAN. Well, I certainly think that an increased Durum production in this area would shift the manufacture of Durum flour out to this area, and unless there is something in it that I do not see, I do not see how it would increase the total consumption of Durum wheat products and it certainly would cause some translocation of Durum milling.

Senator MILLER. Are you saying that they cannot now economically, let us say in South Dakota and North Dakota, process it into flour and then ship the flour ont to the west coast?

Mr. FREEMAN. Well, the flour would have a lot of the same-it would have some advantage over shipping Durum wheat as such, but still the most advantageous product to ship would be the finally manufactured product.

Senator CURTIS. Now, do they mill Durum wheat in the same mills. that they mill other wheat?

Mr. FREEMAN. Yes, sir.

32-296-69- 3

Senator CURTIS. It does not follow, for instance, that the macaroni companies, whether they are Skinner of Omaha or elsewhere, do not mill their own wheat, do they?

Mr. FREEMAN. No, sir.

Senator HOLLAND. Apparently, the difference between the Department and the Wheat Association in the traditional producing area is solely on the basis of whether this added production in California would be of any consequence or whether it would be inconsequential from the standpoint of the national picture.

Mr. FREEMAN. Mr. Chairman, I would

Senator HOLLAND. And apparently the Durum Wheat Association of North Dakota and the sister State there thought the production would be inconsequential, and the Department's attitude is that you feel it would be consequential, that it would have substantial effect on the whole picture.

Mr. FREEMAN. Mr. Chairman, our objection to the bill is not so much—we admit that the production is relatively small, with this exception-what we object to is the beginning of a series of exceptions. This is a production adjustment program, and I am sure, if these people can make a good cause for want of this product in their area, there are innumerable other areas. I do not suppose you could talk to a wheat farmer who said that he had enough allotment or enough certificate payments now. We do not have any class of wheat differences in our program now, as far as the allotment goes. The present legislation gives the authority to the Secretary to increase the allotments for classes of wheat if there is an impending short supply, but no authority to do this on special area basis.

Senator HOLLAND. I noted the statement in the latter part of your proposal to the effect that there were various other requests for exemptions or for special treatment from other parts of the wheat producing areas of the Nation. Are they of consequence in the whole picture?

Mr. FREEMAN. Well, we have not had any from any organized group, as such, but each time we meet with farmers or talk with farmersfor instance, people close to ports will say that because of the increased importance of exports in wheat that they should be given increased allotments because we are closer to the export, and in a year like we are facing now with a shortage of high protein wheat we will cer tainly hear from some producer saying that "because of the shortage of this wheat, and we traditionally raise it, we should be given an increased allotment."

Senator HOLLAND. Referring to your statement on page 4, which I quote:

Although the bushel amount of additional certificates involved under this bill would be relatively small, there are a number of other wheat producing areas in the Nation where farmers have indicated a need for additional wheat allotments to assure a more economic operation. If all of these requests were approved, the bushel amount of certificates involved would be substantial.

Can you file for the record a list of those other areas where you anticipate trouble when you start making this additional exception in the Tulelake area for Durum wheat?

Mr. FREEMAN. We will, and, as I say, we have never had organized organizations of wheat producers ask for this. It has been normally

when we meet with farmers, talk with farmers, when they come in to see you, and we have hearings and appeals everyday from somebody that wants more allotment and feels that the State committee or the county committee has not dealt fairly with them and have given him an uneconomic-sized allotment, or else because of higher percentages of his wheat is used domestically than for another class of wheat, he should have an increase in his marketing certificates.

Senator HOLLAND. My question was whether you would file for the record a list of those various areas where you anticipate such trouble. Mr. FREEMAN. We would make a statement about it for the record. Senator HOLLAND. Please do so.

Mr. FREEMAN. All right.

(The statement is as follows:)

Requests for additional wheat allotment acreage have been filed with the Department during the past two years for the following counties:

Glacier, Toole, Lewis and Clark and Blaine Counties, Montana; Emmons County, North Dakota; and Norton County, Kansas. These requests were submitted to the ASCS Washington office. Many other requests for additional wheat acreage allotments are received by county and State ASC offices but were not granted at that level without reference to the Washington office.

In addition, requests have been received periodically in earlier years from various areas throughout the Nation because of this need for additional wheat allotment on farms to insure a more economic operation.

Senator HOLLAND. Senator Talmadge?

Senator TALMADGE. Mr. Freeman, as I understand your proposition, your testimony, people at Tulelake now can plant all of the Durum wheat they see fit, sell it on the market as they see fit without benefit of any certificates; is that correct?

Mr. FREEMAN. That is correct.

Senator TALMADGE. Well, what is the reason then that they want this additional allotment?

Is it because they would get certificates that would give them additional price support?

Mr. FREEMAN. That is right, Senator.

Senator TALMADGE. You stated also, I believe or did you that there was a shortage of this Durum wheat on the west coast?

Mr. FREEMAN. Yes, sir, there is a shortage in that particular area. Senator TALMADGE. They sell everything that they grow in the area now?

Mr. FREEMAN. To the best of my knowledge, yes, sir; that is right. Senator TALMADGE. At what price?

Mr. FREEMAN. We have records that indicate they receive-I think the season average for Durum wheat out there last year was about $1.69, or some such price as that.

Senator TALMADGE, $1.69?

Mr. FREEMAN. Per bushel.

Senator TALMADGE. In addition to that, what did they get in the way of a certificate, anything?

Mr. FREEMAN. Yes, sir.

Senator TALMADGE. I believe that law has expired now and there is no certificate for Durum in California?

Mr. FREEMAN. Yes, sir; there are certificates.
Senator TALMADGE. All right.

They get $1.69 plus-What is the certificate?