The Showdown

In the midst of a blizzard, trains and trucks rolled up to Chicago's stockyards last week, disgorging huge numbers of hogs and cattle. As the squealing, lowing animals were crowded into the cold and muddy pens, prices tumbled. Sales of steers were heavier than in any comparable week in ten years. Had the big break in meat prices finally come?

It had for pork, which has long been selling under its retail ceilings. One big Midwest food chain cut prices on pork chops 10-c- a Ib. to 73-c-, planned another 10-c- cut this week. Elsewhere, housewives were loading up on the biggest pork bargains in months as a near-record pig crop (66,000 last week) came to market.

Black Markets. But beef was another matter. Beef prices are still at their retail ceilings; supplies of many good cuts are short and, in some places, prime beef is simply unavailable. Despite the huge shipments of beef to market, big meat packers cannot buy their normal quotas of animals under OPS controls.

Even after last week's price break, steer prices in Chicago stayed above OPS ceilings. Normally heavy buyers rode around the cattle pens, casting covetous eyes at prize steers (see cut) but buying few. The only way packers can legally buy steers is by averaging down the high prices with cheaper animals such as cows. Cows now account for 50% of the packers' kill, v. 25% in normal times. Even so, slaughtering has been running some 20% below last year, because there are not enough cheap animals to balance the high-priced steers. Result: the big packers are operating at such a low level that they have been losing money on beef for the first time in years. In effect, the packers obeying OPS are underwriting meat controls while black marketeers are making big profits.

The chiselers are not scared. They remember that even during the war, fines were low and jail terms unusual. Despite the loud war whoops from OPS last month, its big enforcement campaign has been disappointing. There are too many artful dodges. In front of an OPS inspector recently, a Chicago butcher demonstrated one by cutting up two identical carcasses. Cuts from one complied with OPS regulations; cuts from the other did not, and even the OPS man could not tell how the cheating had been done.

Under OPS's complicated cutting regulations, cheating is made easy. The rib and the short plate of a steer, for example, are contiguous parts of the animal. But under OPS ceilings, prime rib wholesales for more than double the price of short plate. Thus, butchers who want to cheat merely cut the rib big, the plate small. Another dodge: meat packers are allowed a certain shrinkage in cooling their meat, but it is a simple matter to claim more shrinkage than actually occurs. It is just as simple to rejuggle the books to bring purchase prices down with little risk of being caught. For with retail prices skyhigh, black marketeers can buy their beef above OPS ceilings, sell it at legal prices and still show a profit.

Bulging Feed Lots. Ever since beef controls first went on, meatmen have demanded they be lifted. Most admit that if they are, prices will go up. But after a temporary flurry, they think heavier supplies will bring prices down.

Actually, the showdown is at hand. In the corn belt's feed lots is a record number of cattle that must come to market sooner or later. If they move soon, prices will drop, beef will be plentiful, and Mike Di Salle will win his battle for continued controls. But if this does not happen, and the beef-control program is working as badly and as unfairly by midwinter as it is now, then even impartial observers think that meat controls must be abandoned.

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