Meat Bites Back

With prices up, cattlemen may begin to replenish their herds

In a fit of lunar lunacy, the cow that jumped over the moon has gone into orbit. During this year's first three months, average prices for beef cuts are up 9%, to $2.23 per lb., and are expected to climb a further 25% by year's end. Because high prices at meat counters are such an immediate indicator of inflation's bite, consumers are clamoring for Washington to do something to bring them down.

Yet Agriculture Department officials argue persuasively that methods that have been used before -price controls, consumer boycotts and increased import quotas-would only hurt now. Reason: today's higher prices are the best way to encourage cattle producers to replenish the herds that they have depleted over the past four years, when beef prices were low.

The current import quota of 1.5 billion Ibs. annually, or 5.5% of the total beef consumed in the U.S., is about as high as it can go. Because of beef shortages elsewhere in an increasingly affluent and meat-eating world, only Australia and New Zealand can increase their import allotments. Those two could be lifted by 50 million Ibs., to a total barely enough to meet one one-thousandth of U.S. beef needs. Local consumer boycotts, like New York City's "Beefless Wednesday" campaign, signal cattlemen that demand for beef is dropping and that further herd cutbacks are in order.

The White House has completely ruled out a beef price freeze. Little wonder. It was President Nixon's desperation move to clamp controls on beef prices in 1973 that caused much of today's shortages and high prices. Though cattle producers' prices were frozen, their overhead costs continued to rise. Many could not afford to feed their animals and had to sell off large numbers just to stay solvent. As more beef came onto the market, prices briefly fell. But the size of the nation's herds also plummeted from 132 million cattle in 1975 to the present 110 million -and prices rebounded with a vengeance.

Only in the past few months have they risen high enough for producers to consider seriously holding more cattle back from the market for breeding. Says Lauren Carlson, president of the National Cattlemen's Association: "We are at the critical point right now. Every cattleman is going to be making decisions in the coming weeks that will affect prices for a long time." The decision should be made easier because futures prices for cattle have jumped 50% in the past year and reached new records-a sign that prices will go higher in the months ahead. Thus it would pay the cattleman to breed his herds instead of selling them now.

Once a cattleman chooses to keep rather than sell his heifers, the long, three-year breeding cycle begins. A heifer born this spring cannot be bred for another 15 months. This is followed by a nine-month gestation period. Since most producers like to breed their cows twice before sending them to market, this spring's newborn calf will not be ready for slaughter until early 1982. Only then are prices likely to ease. Says Alfred Kahn, the White House inflation adviser: "While ranchers are rebuilding their herds, prices will probably stay well above 1978 levels for the next two or three years." In the meantime, what can carnivorous consumers do to keep food bills down?

Agriculture Department experts advise buying more pork and poultry. Supplies of both are expected to be up 20% over last year, so their prices should drop accordingly. In short, let them eat pork.

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