2—Lancaster Farming, Saturday. April 14. 1973
Congress Abandons
(Continued from Page 1)
because Phase II ended, but as the result
of a very tight supply and demand
situation.
In Chicago, American Meat Institute
president Harold DeGraff said Wednesday
that a rollback of food prices would
produce one of the worst meat shortages in
the history of the United States.
For the entire livestock and meat in
dustry, where over 55 million cattle and 40
million hogs are in the production pipeline
getting ready for market, the immediate
aggregate cost of the rollback would ex
ceed $1.25 billion, DeGraff said.
The loss to the meat packing and
processing industry alone would be in
excess of $l5O million, representing meat
and meat products in the pipeline between
packer and retailer.
“There would be some limited, short
term benefits for consumers in that
livestock marketings would temporarily
increase as the result of forced liquidation
of livestock herds. But for the longer
pull, the ability£f the industry to provide
meat in future months and years would
be seriously curtailed," DeGraff said.
“Prices for livestock and wholesale meat
prices on April 4 were both about 14
percent higher than on Jan.lo, the end of
Phase 11. A rollback of this degree would
force feeders of livestock into a loss
position; would cause growers to abandon
their plans to expand meat production, and
would result in the shutdown of many
packing and processing plants.
“Meat supplies m the consumer market
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would hit the skids, resulting, I believe, in
the most serious meat shortage ever, with
a, return to meat rationing and black
markets," he said.
The only real solution to the problem of
meat prices, DeGraff said, is more meat,
not more controls.
“We have a prospect of more red meat
this year than ever before. Larger supplies
are on the way and will arrive on schedule
provided the marketing processes are not
disrupted by unworkable controls," he
said.
"Until we can get larger meat supplies
next fall, consumers are going to have to
use more restraint and learn to get along
with about the same amount of meat they
had last year.
“Ceiling prices and controls will bring
more problems for consumers but will not
bring them any more meat," DeGraff
noted.
DeGraff said that it was particularly
important that whatever extension of
controls is enacted by the Congress, they
must be designed to encourage increased
supplies of livestock.
“There are more than two million far
mers and ranchers producing livestock
throughout the United States. To en-
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courage these hard-working people to
produce more livestock, we must assure
them that they will have a reasonable
chance to make a profit. Any other course
would be disastrous," he said.
Current high meat prices are simply a
reflection of increased demand and record
consumer incomes.
“People are making more money than
ever before, and as they earn more, they
spend more, on meat as well as everything
else.
“The biggest problem is inflation -■ the
steady erosion of our purchasing power,
and a main cause is deficit government
spending, a problem that has yet to be
solved," he said.