Dl2—Lancaster Farming, Saturday, October 24,1981
Lou Moore says
Agriculture is so interesting
because each day brings some
unexpected event. The summer of
1981 has been no exception with the
sharp drop in grain exports, the
impact of high interest rates, the
failure of beef prices to recover,
the prospects of a near-record corn
crop, and now the shock of the
Australian horse-meat incident.
Australian Horse
Meat Incident
Meat imports to date in 1981 have
totaled about 300 million pounds, or
about 7 percent of total U.S. sup
plies. Most of the U.S. imports are
boneless lean meat; a small
volume of hamburger and patties
is also unported. Australia usually
supplies more than half of the lean
meat imported into the U.S.
In August, meat from a
moderate-size Australian packer
was impounded m San Diego for
being trained with horse meat. All
meat exported from Australia is
required to be certified by the
Australian government that it
meets federal inspection.
The U.S. certifies these plants
once a year but expects Australian
inspectors to provide constant
inspection. Obviously the system
had broken down. Australian
authorities say their own in
spection indicates that a third kmd
of meat is in some of those ship
ments—kangaroo.
Royal Charolais
sweeps Indiana
State Fair
INDIANAPOLIS, Ind. -
Seventy-five entries from five
states completed in the Indiana
State Fair Charolais Show held
here.
Judge Jim Gillooly of
Washington, Ind. selected animals
owned by Royal Charolais, Co.,
Youngwood Pa., as grand
champion bull and grand cham
pion female. RCC Vindicator 3262
was given the nod as grand
champion and junior champion
bull and RCC Royal Temptress
3377 was chosen grand champion
About one-half million pounds of
meat has been imported by USDA
inspectors as being unfit for
human consumption. The following
steps will be used by the USDA to
prevent a repeat of this type
problem— ail Australian meat now
m the U.S. will be tested to
determine its species; all meat
leaving Australia must be tested
for specjesjdentification and kept
under security until it reaches the
U. 5..; all countries shipping
boneless meat to the U.S. will be
notified to begin a species
determimation program; and all
meat will beiurther checked when
it reaches the U.S.
The confusion of the impounding
of this meat has aided the domestic
market for boneless beef. Until this
development domestic boneless
beef was priced about 10 percent
below a year ago.
No Boom in Beef
The baseball strike proved that
players and owners are poor
judges of consumer behavior. They
thought the fans couldn’t do
without baseball. But the fans have
stayed away m droves. Note how
the TV cameras try to avoid
showing the empty seats in the
stands.
The fans (consumers) haven’t
been rushing out to buy beef,
either. The percent of disposable
income spent by consumers for
female. Royal Charolais Co. also
won reserve champion bull honors
on RCC Mr. Excalibur 3123.
Royal Charolais Co. also won
calf champion and junior and
senior female championships.
Derby Farms, Crestwobd, Ky.,
won reserve champion and reserve
senior champion female on DF
Silver Liberty.
Royal Charolais Co. captured the
group awards with their pair of
bulls, pair of calves, get of sire,
group of five head, and they also
won the Premier Breeder Award.
it’s “a season of surprises"
beet during the secona quarter ot
1981 was around 2.05. This is the
lowest percentage of income that
.U.S. consumers have ever
to the purchase of beef.
In the mid 1970’5, consumers were
spending from 2.5 to 2.7 percent ot
their disposable incomes for beef.
Purchases of beef are likely to be
on the weak side for the remainder
of the year. It isn’t that consumers
don’t like beef—it is just too ex
pensive for consumers m an
economic squeeze! Beef costs from
about 88 to 90 cents per pound more
than pork and about $1.50 to $1.55
per pound more than chicken.
Even so, the price of beef at the
farm level has been at unprofitable
levels for more than 2 years. Beef
producers are not likely to see
profits this fall, butJ9B2 should see
profits return to the industry. Pork
production should fall from 5 to 7
percent in 1982, but beef production
will increase only slightly.
The economy should show im
provement by then, thereby in
r \ Y
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717-626-1164
creasing consumer beef pur
chases. The prospects of a bumper
com crop should bring down the
breakeven price for cattle feeders,
bringing them back U>
profitability. If high interest rates,
continue, it will bit the cattle
business particularly hard.
Too Many Feeder Cattle?
In recent weeks, replacement
stocker beef cows in. many
markets have actually sold for less
than those going to slaughter. This
is- an indication that expansion of
cow herds is likely to slow even
more from the reduced level at
mid-year, when there were about 2
percent more cows than a year
ago.
With lightweight feeder animals
selling at about $l5 per hundred
below the price of a year ago, the
market is telling cow-calf
producers that too many feeder
cattle are being produced right
now. If feed prospects continue to
improve through October, it is
likely that feedlot operators will
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regain some enthusiasm for cattle
feeding. They may bid up the price
of feeders as they attempt to fill
lots with animals so as to take
advantage of large volumes of low
priced feed.
The tax bill passed in early
August will provide tax cuts to
consumers of 5 percent beginning
October 1, 1981, 10 percent ef
fective July 1, 1982, and 10 percent
on July l’ 1983. The 5 percent tax
cut could accelerate the annual
growth rate in fiscal 1982 and
bolster consumers disposable
incomes. However, consumers’
allocation of the additional income
between savings and consumption,
and even between competing
durable and non-durable items,
raises uncertainty about the im
pact on meat prices.
it is almost a foregone con
clusion that any strength in
livestock prices will have to come
from an increase in meat pur
chases by consumers.
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