AGRICULTURE: Galloping Prices

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At the Chicago stockyards last week Iowa Cattle Feeder Joe Dingman sold a twelve-ton load of 20 prime-fed Aberdeen Angus steers for $9,492.60. The price was a near-record 39¢ per lb., highest since 1952 and far more than the 27¢ per lb. that prime beef brought a year ago. Other beef prices climbed as much as 1½¢ per lb. last week, and the average-grade steer brought about 28¢ v. 21.7 the same week in 1957. This was good news for beef raisers, glum news for beefeaters. Each 1½ boost will bring almost a 2¢ rise in the price of dressed beef. Although packers, processors and retailers will absorb much of the increase, some of it will fall on the consumer. Rising beef prices are one of the reasons that the consumer price index, up .2% in February, will probably continue to go up.

Prices were up not only because of the big consumer demand but because livestock producers were sending fewer cattle to market. Shipments of beef cattle to the nation's dozen major stockyards last week ran 13% below last year. Output was low because the long drought in the Southwest had helped cut cattle population by almost 3,000,000 head since January 1956.

Rather than sell their cattle, livestock-men are now busily building up their herds. At long last, they had excellent conditions for it. Good grazing land was plentiful. Parts of the Southwest had three times as much rain this crop year as last. Soil was moist for six feet down in some areas, and once-dry water holes were brimful again. Furthermore, standard-grade feed corn was selling in Chicago for an average $1.15 per bu. v. $1.31 a year ago, and cattlemen were fattening their herds at bargain prices.

Many cattlemen figure that prices have yet to reach their peak, will continue to nudge up through 1958 at least. In Kansas City cattle brokers last week were ordering calves for fall delivery and fattening for as much as 33¢ per lb. v. 25¢ last fall. Cattlemen eventually will have bigger and beefier herds to sell, and prices will then start to soften. But the price-pushing demand for beef will probably continue to outpace supply for a long while. The Agriculture Department figures that beef production will not rise much until the 19605. Reason: it takes about three years before the gleam in the bull's eye is turned into steak on the table.