U.S. price for beef up again

Press, 19 April 1979, Page 3

U.S. price for beef up again

NZPA Washington Prices for imported beef, New Zealand’s included, have risen another 5c per lb this week, nudging SUSI.SO per lb for the first time. In the face of strong consumer demand (in spite of record prices) and shortages of domestic beef for the hamburger trade, industry observers see little chance of a market shakeout.

Although some view the $1.50 per lb plateau as a psychological barrier that may cause a pause in the market’s upward surge, traders are bullish on the future outlook and consider high prices likely to continue for months. Brokers and traders are paying $1.45 to $1.48 a pound in the spot market this week, up from $1,43 to $1.44 at this time last week, according to a spokesman for the New Zealand Meat Board in New York. C.i.f. rates for forward contracts (delivery May/ June) have jumped in the same period from an average $1.37 to $1.41 and $1.42. Current high prices mean a bonanza for New Zealand and Australian producers, who together supply more than 70 per cent of imports. A year ago this week prices for imported boneless beef, used mainly in the hamburger and manufacturing trade, were 99c per lb c.i.f. As recently as December, 't-

1977, prices were languishing in the mid 60s range, as record American slaughtering rates depressed the market. The nation’s cattle numbers have shrunk dramatically in the last two or three years, but slaughtering rates have now tailed off as ranchers begin to rebuild their herds at the start of a new cattle cycle. Producers are culling fewer cows and heifers and the output of grass-fed beef (the type that imports compete with) is expected to be up to 40 per cent lower this spring and summer than a year ago, according to the, latest United States Department of Agriculture forecasts.

Lower production is aggravating already tight supplies and end users now are scrambling for available domestic and foreign beef. Manufacturers of fast food products—hamburgers, frankfurters, and other lines — are now facing the spring and summer season of peak demand, and this is putting additional pressures on suppliers. The c.i.f. price for imported beef was at $1.29 per lb on March 1 and has moved up steadily since then, apart from a brief 2c decline toward the end of April. The previous record of about $1.30 set in 1973 was breached in early April and each new rise sets a fresh record. New York city consumer

affairs officials have suggested beefless Wednesdays in response to the record prices, but such calls seem to have little support. The Department of Agriculture’s Deputy Secretary (Mr Jim Williams) said late last week that the Government should allow the market place to restore beef supplies and lower prices. “Any interference in the market, such as a repeat of actions to control beef; prices in 1973, will serve) only to discourage the re-; building of the nation’s cattle breeding herds and prolong today’s limited beef supplies and high prices,” he said.

Today’s situation was [directly traceable to “illadvised” price controls imposed on beef in 1973. “The surge of beef supplies when the price freeze ended broke the market, and low cattle prices over the next four years resulted in one of the largest herd selloffs in United States history and staggering financial losses which threatened the very structure of the cattle industry,” said Mr Williams. I He pledged that the Carter : Administration would not re;peat the mistake and impose [price controls.

Government economists; meanwhile say that imported; beef will account for about j 10 per cent of consumpton this year, compared with 9 per cent last year, and 7 per cent two years earlier.,