If the Price of Beef Rises and Remains at the Higher Level Than Over Time the Suppl of Beef
High Beefiness PRICES EXPECTED TO REMAIN
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December 4, 1985
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BEEF prices accept turned upward beyond the state, counter to the direction of food prices in full general nationwide, as reported on Nov. 23.
Shoppers at supermarkets in Kansas City, Mo., are paying about $2.29 a pound for round steak. Consumers might well remember that figure, co-ordinate to one market place expert, for they may not see it again for a long time.
Beef prices take risen after a tightening of supplies, foreshadowing weather that could last as long every bit three years, according to Tommy Beall, market inquiry manager for Cattle Fax, a division of the National Cattlemen'southward Association.
''Without some unforeseen alter, that is going to be a long-term trend,'' Mr. Beall said. ''A smaller beef supply and smaller full meat supplies look pretty well assured over the adjacent three years. And I think the price tendency ahead of us is going to be higher without whatsoever question.''
That is counter to the direction food prices in general are taking nationwide. Food prices have continued to rise in recent years merely less than inflation, and this has meant setbacks for American farmers.
The trend in beef prices that Mr. Beall sees is the result of many forces, he said, principal amid them five years of depressed weather condition in the cattle manufacture and a consequent reduction in cattle herds.
John Navlicek, the Agronomics Department's principal cattle market specialist, said beefiness supplies were likely to remain lower and prices higher over the next few years than they have been in the recent past. Merely in light of increases he expects in supplies of broiler chickens and perchance of pork, he questioned whether the ascension in beef prices could continue much across present levels.
For consumers, the first show of modify came in October, when a monthly survey by the National Cattlemen'south Association showed that a national average of prices on five cuts of beefiness had risen slightly, from $2.29 to $2.31. That 2-cent increase was the outset since Feb, but information technology was followed in November by a sharper increase to $2.43.
Meanwhile, cattle prices, which sank to their lowest signal of the twelvemonth in July and remained around 50 cents a pound in late September, began ascension sharply as fewer cattle reached the land's slaughterhouses. Mr. Beall explained that the cattle industry equally a whole had been losing money more than often than not over the last 5 years. In response, cattlemen have been reducing their herds.
After reaching a tape of 132 meg head in 1975, a dramatic liquidation of herds in 1976 brought significantly higher rates of slaughter and a tape beef consumption of 94.4 pounds per capita. That beef was sold at distress prices. Americans who bought information technology take never eaten so much beefiness before or since, but cattlemen suffered severe losses.
Cattlemen continued the liquidation until 1978, rebuilt until 1982, when herds totaled 115.four one thousand thousand caput, and then started liquidating once more.
To reduce herds, cattlemen slaughter old breeder cows and retain fewer heifers, young females. The process tends to increase supplies temporarily, every bit information technology has this yr. Even while herds are being reduced, total beefiness supplies for 1985 are expected to reach 78.6 pounds per capita - ii pounds more than than in 1980, when herds were beingness expanded.
Simply the phase for a downturn in supplies has been set. Only 7.6 meg caput of cattle are now beingness fattened in feed lots for slaughter in the seven principal producing states, according to a report by the Agriculture Section. That is viii percent below the level of a year agone.
Both Mr. Beall and Mr. Navlicek expect the total number of cattle nationwide to drop beneath 106 million by year'southward terminate; neither expects cattlemen to start rebuilding their herds before 1988.
Cattle herds are being reduced even while record supplies of livestock-feed grains are on hand and prices are low. ''They say cheap corn means inexpensive cattle,'' Mr. Beall said. ''Simply that'due south an former myth. A lot of times the reverse is true.''
Bankers' reluctance to finance farmers, he said, plays a function in this. ''Yous accept to take an incentive to feed that corn to cattle,'' he said. ''Yous tin can feed information technology, sell information technology or shop it. The bankers see that feeding it may be the riskiest option of all.''
Mr. Navlicek expects beef product to be down five to vii percentage in 1986 and, with pork down in the first half and upwardly in the second, total reddish meat production to be down iii to 5 percent. Simply he said he expected an increase in broiler production to leave an overall decline in full meat supplies of 1 to 3 percent.
Source: https://www.nytimes.com/1985/12/04/garden/high-beef-prices-expected-to-remain.html
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