can be relied upon to take advantage of our higher price levels, but cannot be relied upon for regular quantities of the kind of beef our people want.

It will be a dark day for this Nation if consumers ever become dependent on foreign production for any appreciable quantity of their basic food supply, or if other countries are allowed to beat down the domestic cattle producers and feeders to the point where increased beef production may be discouraged or even economically impossible.

THE TRUTH ABOUT PROCESSED BEEF SUPPLIES AND PRICES, BY DON F. Magdanz, EXECUTIVE SECRETARY-TREASURER, NATIONAL LIVESTOCK FEEDERS ASSOCIATION This document is a sequel to that prepared by this Association on April 8, 1970, entitled, "The Truth About Beef Supplies and Beef Prices". Our statement of April 8 referred primarily to total beef supplies and over-all prices as well as the prospect for future production through 1975. This document is directed toward the production and availability of processing beef about which numerous inaccurate statements have been made recently both as to price and volume available.

OBVIOUS DISTORTION OF SUPPLY AND PRICE SITUATION

It is obvious that a determined effort is being made by the Meat Importers Council and by agents for foreign nations to distort the supply and price situation of processing beef in the U.S. In so doing, they are deliberately propagandizing the American consumer for the sole purpose of doing away with the modest import restrictions we now have. If these restrictions are relaxed, supplying nations could then load our market with frozen boneless beef and a relatively few local importers would benefit personally by handling a substantial increase in volume of product.

They obviously have no concern for our domestic beef industry and, while posing as great benefactors to American consumers, they have no concern for the future welfare of consumers. Should the domestic beef industry be crippled to the extent it cannot fulfill future requirements of this Nation as a result of expanded competition from foreign production, the beef supply would be in serious jeopardy since foreign nations could supply neither the quantity or quality of beef desired by the growing and affluent population in the U.S.

In September of 1969 the Meat Importers Council of America, Inc., circulated a booklet entitled, "The Case Against Restrictions on Meat Imports." The booklet is full of misleading statements, twisted analyses and inaccurate conclusions, designed to propagandize the consumers of the U.S. The introduction contains the argument that, "The U.S. needs to supplement a diminishing domestic production of manufacturing-grade meats." The facts and records show that since 1964 we have had an increasing amount of processing meat available to consumers both in absolute quantities and per capita supply.

Seizing upon a short-lived bulge in cattle prices during mid-1969, the booklet refers to, "The highest cattle prices in U.S. history." This rise in price which did occur was of short duration beginning in April and ending the second week in June. Prices then receded to levels that prevailed in the first three months of 1969. Even at the highest point, however, live cattle prices had not reached levels that prevailed in 1952, eighteen years before.

Be that as it may, we wonder what is so wrong about beef cattle prices reaching their highest point in history in 1969. Certainly cattle were not the only commodity that attained highest prices in history during that year, since everything else also set record prices as the general price level climbed. By 1969 we had record hourly wage rates, record disposable income, record prices for consumer services, record payments of Social Security benefits, record welfare payments and the highest figures for practically everything that can be mentioned. How can anyone justify picking out cattle prices and condemn them for reaching the highest level in history, particularly when it was not true.

At another point, the booklet states, "It (imported fresh-frozen beef) is definitely not comparable to or competitive with American meats of higher grade which are used as table beef and classified as 'Prime', 'Choice' and 'Good'. While not necessarily being comparable to the better grades of beef being produced in the U.S., foreign beef is directly competitive with domestic supply because a great deal of processing beef is derived from our better grade animals. Furthermore, not all fed animals are finished to the choice grade and some of them do not even reach good grade. Moreover. processed meat products in the retail counters, such as hamburger or frankfurters, are definitely competitive with

steak, ribs and roasts as consumers make their selection according to price as well as their particular needs and desires at the moment.

The argument that imports do not affect fed beef (and thus fed cattle prices) to any degree because such imported products are used primarily in the manufacture of processed products is ridiculous.

Also, the contention imports do not affect fed prices overlooks the very important fact that over one-half of the domestically produced processing meat comes from fed carcasses (See Table 2). This portion of beef available for processing has been steadily increasing, not only because larger numbers of cattle are being fed, but also because the grade standards were relaxed a few years ago requiring less finish for an animal to reach the Good, Choice and even Prime grades.

Beef is its own closest competitor regardless of the form in which it's marketed. Attempts are often made to draw a fine line between the factors which affect the fed market and the so-called cow or processing type market, and to treat these as two separate and distinct markets as far as price is concerned.

Such an analysis is not valid because there is a very definite and intertwined relationship among the various segments of the cattle and beef market. Any factor which affects one class of cattle or beef very definitely does not do so at the exclusion of the other classes. The above conclusion is logical in view of the very real competition between various cuts and/or products in the retail counter and the substitutability among classes of beef.

The unfair competition of foreign beef, however, does not stop with its infringement on the domestic cattle industry. It also competes unfairly in the market for other domestic meat animals and products such as hogs, pork, lamb, as well as domestic poultry and fish.

At another point the booklet argues. "It is largely the drying up of this domestic source of manufacturing meat and the soaring demand for convenience low cost meats which has made the importation of meat necessary." Again the record shows that the supply of manufacturing and processing meat in the U.S. is not drying up, but, as mentioned before. has actually increased. We could go on and on with refutation of statements contained in the booklet; however, that appears unnecessary. Let's examine the facts.

THE ACTUAL SUPPLY OF PROCESSING BEEF

Manufactured or processed beef from domestic production comes largely from two sources. First, there is the production of cow and bull beef, much of which is extremely lean because the animals slaughtered have been produced on grass and not in the feedlot. The other source is that portion of steers and heifers, both fed and non-fed, which is not sold as fresh beef cuts in the retail counter as table beef. Fresh beef cuts largely come from the loins, rounds, ribs and chucks. Much of the remaining parts of the carcass, including the plates, shanks, brisket and trimmings, wind up as ground fresh beef which may be sold as hamburger or is used in other processed products. Even part of the chuck may find its way into hamburger instead of being sold as chuck roasts, since prices of this particular cut are often comparable or close to prices received for hamburger.

Table I contains the figures to show the proceesing beef produced domestically from 1964 through 1969, which volume, when added to imported beef, gives the total supply of processing beef available to U.S. consumers.

TABLE 1,-COMMERCIAL DOMESTIC BEEF PRODUCTION-STEER AND HEIFER BEEF PRODUCTION-COW AND BULL BEEF PRODUCTION-DOMESTIC PROCESSING BEEF PRODUCTION-IMPORTS

1 Livestock and Meat Statistics, Statistical Reporting Service, U.S. Department of Agriculture, Statistical Bulletin No. 333. 2 Computed from total domestic beef production, steer and heifer slaughter, and cow and bull slaughter.

3 Computed from domestic production of steer and heifer beef using accepted fact that 26 percent of all steer and heifer beef is used in processing and manufacturing.

The information in Table I clearly shows the increasing volume of processing beef from steers and heifers in the domestic slaughter from 1964 through 1969. In addition, cow and bull beef have been increasing since 1967, although by 1969 had not quite reached the highest figure in 1965. The last column in the table adds the processing beef from steers and heifers, domestic cow and bull meat production, and the volume of imported beef (carcass weight equivalent) to show the total volume of processing beef that has been available to consumers in each of the six years. Note the steady increase from 8,519 million pounds in 1964 to 9,953 million pounds in 1969, an increase of 1,434 million pounds or 16.8%.

Table II below uses some of these same figures to show the per capita supply of beef in the United States as well as the per capita supply of processing beef, including that which is imported.

TABLE 11-PER CAPITA SUPPLY OF DOMESTIC BEEF AND IMPORTED BEEF-PER CAPITA SUPPLY OF

1 Livestock and Meat Statistics, Statistical Reporting Service, U.S. Department of Agriculture, Statistical Bulletin No. 333 2 National Food Situation, Economic Research Service, U.S. Department of Agriculture, February 1970, p. 15. * From table I.

Note that since 1964 per capita supply of all beef has risen from 99.8 pounds to 110.6 pounds. At the same time, the per capita supply of processing beef has gone up a like percentage from 44.3 pounds to 49 pounds. The contention there is a gap in the supply of processing beef in the United States is an absolute myth and cannot be supported or substantiated.

PROCESS BEEF DEMAND IS "CREATED"

It has sometimes been stated that the principal reason for substantial increases in meat imports in the United States is the increased demand in this country for processed products. It must be realized that this so-called demand is a "created demand" and a large tonnage which has moved from foreign nations is prompted as the result of offering a vast array of processed products to consumers, rather than any specific "call" from consumers for this type of product.

Instead, foreign nations desiring to export beef products have poured them into the United States and, along with the importers of these products, are now trying to convince United States consumers that they need more processed meat. They are also encouraging consumers to insist on the relaxation or elimination of import restraints.

SHORTAGE DOES NOT EXIST

If there is or has been a serious shortage of processing beef in the United States, why has not the retail price of hamburger, for instance, changed much more than prices of table cuts such as sirloin steak or beef ribs. According to Bureau of Labor Statistics the average price of hamburger in the United States during 1968 was 56.1¢ per pound. In August, 1969, when hamburger reached its peak price, the average was 65.6¢ per pound, an increase of 9.5¢ or 16.9%.

The average price of sirloin steak in 1968 was 119.5¢ per pound. During the highest months in 1969, which happened to be July, the average price of sirloin steak in the United States was 141.9¢, an increase of 22.4¢ per pound or 18.8%. If there was such a shortage of processing beef, as has been alleged, why is it that hamburger did not rise much more in price on the average than the example of sirloin steak that has been used.

By February, 1970, the average price of sirloin steak in the United States did come down to 130.9¢ which was 11.4¢ per pound over the average in 1968 or 9.5% higher. The average price of hamburger did hold fairly steady at 65.3¢ per pound

or 9.2¢ per pound over 1968, which was 16.4%. It's true that the price of hamburger did not decline as much as certain fresh table cuts, but neither did the price increase as much during the temporary price bulge in 1969.

If there is any validity to the allegation made by proponents for increased imports, why has not the price of hamburger gone up materially to reflect this contended shortage of processing meat? The truth of the matter is the shortage does not exist.

So far we've demonstrated there is no shortage in the normal sources of the supply of processing beef. There is still another source of beef available for sale as hamburger which tends to provide a ceiling on the price of hamburger. We refer to chucks from both steers and heifers.

For quite a number of years, the price of chuck roasts at retail has closely paralleled the retail price of hamburger at figures from 4c to 10c above. Furthermore, most of the time domestic boneless chuck is sold in the wholesale market for less than domestic boneless bull beef and at times is sold for less than imported boneless bull beef.

For example, on August 4, 1969, domestic boneless bull sold at $63.75 per cwt; imported bull beef was $62.50 and domestic boneiess chuck was $62.75. On November 3, domestic bull beef was $60.00, imported bull beef was $58.00, and boneless chuck $57.50.

Continuing with examples, on February 2, 1970, domestic bull beef was $65.50, imported bull beef was $61.75, and boneless chuck was $63.50. On April 16, domestic bull beef sold at $68.00; imported bull beef brought $63.75, and domestic boneless chuck sold at $67.00.

CONSUMER DECEPTION

The National Livestock Feeders Association contends that those who are insidiously attempting to bring about relaxation of import restrictions and open the door for increased volume of foreign beef, are perpetrating a hoax on consumers of the United States, and are using it as a device to bring pressure on the Administration. This is a highly organized and carefully planned maneuver that should be stopped cold by complete exposure of the facts.

Table III (See Page 8) containing the record of frozen beef in cold storage at the end of each month since January 1968 vividly exposes the deliberate attempt to falsify the supply situation.

In 1970 foreign nations have been shipping us products (covered by the 1964 Meat Import Law) at the unprecedented annual rate of 1.3 billion pounds. This annual rate contains an estimated volume for March, 1970, of about 100 million pounds.

In so doing, an attempt is being made to show that this high rate of imports has little or no effect on our domestic market. There is more to the situation than meets the eye.

1 Cold Storage Reports, Statistical Reporting Service, U.S. Department of Agriculture, Feb. 1, 1969, through Apr. 1, 1970.

Column 4 of Table III shows the increased volume of frozen beef in cold storage as of the end of each month compared to the same month a year earlier. Note that

on January 31, 1970, frozen beef in cold storage was 90.680 million pounds above January 31, 1969. February, 1970, was 121.321 million pounds above a year earlier, and March was 101.356 million pounds higher. Cold storage holdings of frozen beef in the last nine months of 1969 were only modestly above a year earlier with the exception of October which was 70.113 million pounds above 1968.

If there is such a terrific demand for processed beef, why is this much greater volume of frozen beef being held? We submit that frozen beef is being deliberately held out of market channels after it has been recorded as imported, in an attempt to force prices of manufactured products to go up, thus providing more ammunition to use in an effort to repeal the 1964 Act or prevail for the suspension of qutoas once they might be put into effect.

In the opinion of this Association, those who are attempting to hoodwink the consumers of our Nation need to be told bluntly that it is not going to work. Not only are they advancing arguments that do not hold water, there is evidence of a deliberate attempt to force a situation on American consumers that is contrary to actual circumstances. To be equitable to American consumers and the domestic cattle industry, the facts must prevail.

APRIL 8, 1970.

THE TRUTH ABOUT BEEF SUPPLIES AND BEEF PRICES BY DON F. MAGDANZ, EXECUTIVE SECRETARY-TREASURER, NATIONAL LIVESTOCK FEEDERS ASSOCIATION With all of the clamor being heard again about beef prices and what appears to be the beginning of another wholesale public attack upon the cost of the Nation's most important food item, it would seem the time has come to state a few hard, cold facts and set the record straight.

As suppliers of the fed animals from which consumers enjoy Choice beef, as well as Good and Prime, it is disgusting that whenever the cattle feeders and cattle growers realize or approach receiving prices for fed animals that allow them a decent return for effort, investment and risks incurred, some persons feel called upon to scream at the top of their lungs about the price of beef.

Sometimes this hue-and-cry comes from individual consumers or small groups of consumers. At other times, it comes from over-zealous writers who apparently are trying to "whip something up".

Through United States citizens registered as foreign lobbyists, foreign nations are trying desperately to create alarm in order to get a bigger piece of the U.S. market for their clients at the expense of American citizens and taxpayers engaged in the domestic cattle industry. U.S. importers are also in on the act. Some manufacturers, who would like to expand markets for their products in the nations who want to ship us more beef, are fanning the fire.

Always the fingers are pointed at high beef prices with apparent disregard for the facts in the case.

Are beef prices high compared to other consumer items, services, wages, taxes, disposable incomes, etc.? The answer must be an emphatic, NO! And there isn't any justification for all of the alegations poured forth from a variety of sources.

BEEF IS STILL A BARGAIN

The evils of inflation have brought about price and cost increases of practically every item we might name. In the past 10 years-since 1960-many of these increases have been substantial. But the price of fed cattle, wholesale beef, and even retail beef, have not nearly kept pace with the rest of the economy.

All that cattle feeders and growers want is a fair shake. They're not getting it and, except for occasional brief periods, haven't realized a return for nearly 20 years commensurate with inflated costs and prices.

Even in mid-year 1969, when cattle prices and wholesale beef did move upward temporarily, the average price of fed steers, Choice grade, at the peak time was slightly less than in 1952-18 years ago. Prices were, for two weeks in June, 1969, about 30 percent above the average in 1960. In less than 4 months, Choice steers were back down to only 10 percent above 1960. Wholesale beef prices declined similarly. Retail beef prices also came down, though not as much. But this is the fourth month of 1970. What is the situation now? It's simply this.

At today's prices, beef is still the best bargain in the food stores. The same was true last summer and fall even though prices were higher than now.