Housewives' Beef

Inflation, which has smashed wage guidelines, sent interest rates to record levels and jacked up a host of indexes, has claimed another victim. Because the farm price index has reached a 17-year high, the retail price of food, which is what irritates people most about inflation, will continue upward. Last week the Agriculture Department reported that prices received by farmers rose 4% during the month ending May 15, and were 8% higher than a year ago. The meat index rose 9% during the month. Prices received by farmers for vegetables jumped 25%, while the dairy product index exceeded that of the corresponding month a year earlier for the 18th consecutive time. Just about everything was higher than last year: pork, chicken, eggs, milk.

The most significant rise of all was for beef. Compared with a year ago, prices in April were up 8% for hamburger, 9% for sirloin and 10% for round steak. Some alarmed butchers predict that sirloin may hit $2 a Ib. this summer.

Traditionally, high prices reflect a short supply of cattle. This year the mechanism of the market has been snarled by increasing affluence. With disposable income up 6% from last year, Americans are indulging in their longstanding love of beef. In the first quarter of this year, 6% more steers have been marketed than in the equivalent period of 1968, yet consumer demand for red meat is rising even faster. At current rates, Americans this year will eat an average of 110 Ibs. of beef each, compared with 62 Ibs. in 1952.

High prices should encourage farmers to increase their herds substantially. At the same time, consumers are likely to begin substituting cheaper meats for beef. The result should be a fall in prices --eventually.

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