Soaring Meat

Nixon Administration officials always expected a "bulge" in some prices after the expiration of last year's freeze, but what has been happening at the supermarket meat counter looks more like an upheaval. Retail beef and lamb prices have reached 20-year highs; pork prices, which slipped 16.6% early last year, are again climbing toward record levels. Just since the start of 1972, a Manhattan housewife has had to pay 12.6% more for a pound of pork chops.

The high prices reflect a short supply of livestock. Faced with increased wage and feed costs over the past few years, farmers have trimmed the size of their herds and litters. Now that a bumper corn harvest has made feed cheaper again, cattlemen find it profitable to hold their steers in feed lots longer to wait for beef prices to go still higher. In January, beef production ran 3% behind demand and hog output lagged 17%. Substituting other foods is not the housewives' answer either. The USDA estimates that all retail food prices will rise 7% in 1972.

Need for Imports. Although Price Commission Chairman C. Jackson Grayson last week expressed concern that the jump in meat prices would hurt public confidence in Phase II controls, there is not much that he can do to stop it. Like other raw agricultural products, livestock is exempt from price control. Prices of processed meat theoretically are subject to control, but the commission has found it impractical to require packers to ask permission to raise prices every time the quotes on live animals rise.

Economically, the easiest way to bring meat prices down would be to import more inexpensive meat. Politically, though, that course is barred by two sets of quotas: mandatory quotas provided by a law passed in 1964, and "voluntary" quotas added in 1968 to avoid triggering the mandatory quotas. The voluntary quotas are reviewed yearly, and two years ago they were relaxed slightly in order to slow an earlier rise in meat prices. Agriculture Department officials conducting this year's review, however, make it clear that any further relaxation in this presidential election year will have to be decided on the "highest level"--meaning by Richard Nixon himself.

The need to woo the farm vote seems likely to keep the Administration from raising the voluntary quotas enough to make much difference. Speaking to the National Livestock Feeders Association in Omaha last week, Agriculture Secretary Earl Butz declared: "I say, isn't it about time that beef prices got up to levels of 20 years ago? After all, farmers' costs are 50% higher than 20 years ago."

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