The Pay Off

By adding $15 million to the $560 million annual meat subsidy, the Government hopes to increase the supply of beef and pork. This week Economic Stabilizer William H. Davis explained how: P:Higher prices ($7 million more) will be paid to packers of Army beef, and all packers who operated profitably in peace time and can prove a loss from their cur rent packing operations will receive a special subsidy. In addition, 25-c- a 100 lbs.

will be paid to packers when cattle sell at top prices. Purpose of these payments: to shore up the sagging earnings of packers crushed between high prices for cattle and low ceilings on meat products.

P: To encourage feed-lot operators to resume full operations and feed their cattle to heavier weights, the Office of Price Administration will cancel its plan to lower ceiling prices for choice cattle.

P: A study will be made of pork prices; any increases deemed necessary to encourage farmers to raise more hogs will be made retroactive to April 1.

One booby trap which Davis knew he might expect was a move by some packers to use the new subsidies to bid cattle prices still higher. But Davis was ready for such shenanigans. He sternly warned that if cattle ceilings were pushed through the roof, OPA would prepare a plan to allocate cattle to packers on a quota basis.

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