More Furor over Food Costs

Just as everyone had feared, last week's inflation figures were a stunner, and the most appalling thing about them was the high cost of eating. Not only does April's .9% rise in consumer prices mean that the economy is once again in double-digit inflation--11.4% on an annual basis --but food prices are climbing more than twice as fast, 23.8%. The rise is turning the nation's supermarket shoppers into an army of walking wounded and making grossly naive the Administration's January prediction that food prices would go up by only 4% to 6% this year. Instead of acting as a brake on inflation, as policymakers had expected, food is one of the principal fuels.

The most visible trouble is being caused by beef prices. Climbing steadily for months, they leaped during April by 6.6%, recalling the spiral that led to a housewives' boycott of meat products five years ago. Beef is rising because cattlemen are not sending their animals to slaughter. During 1975, 1976 and 1977, slumping meat prices encouraged ranchers to cut the size of their herds, lest they become stuck with steers that could only be sold at a loss come market time. By this year, the nation's cattle stock had dropped to a seven-year low of 116 million head, and the scarcity began to force prices up.

Ranchers are now expected once again to begin building up their herds. Yet by using cows for breeding instead of sending them to market, they will unavoidably cause the shortages to intensify and prices to rise still more. Agriculture Department officials estimate that the climb will not begin to slow down until autumn at best, and it will be the early 1980s before herds are back up to satisfactory size.

Short of coming up with cows that breed as fast as battery hens, there is little that the Government can do to ease the fluctuations of the ten-year beef production cycle. One stopgap measure that President Carter is now considering would be to relax import restrictions on foreign beef in order to increase supplies at meat counters. Since there is presently no world surplus of beef anyhow, lifting restrictions would probably bring in no more than 250 million Ibs. of beef on top of the 1.3 billion Ibs. that the nation already imports from Australia, New Zealand, Canada and ten other countries. That would trim perhaps only a nickel a pound off the price of beef by year's end. Even so, Agriculture Secretary Bob Bergland is fearful that an abrupt lifting of controls could have a disastrous psychological impact on ranchers, who would see prices begin to level off and would stop expanding their herds.

Last winter's foul weather is certainly part of the reason for the double-digit helping of food inflation.

Heavy rains in California savaged the vegetable crop and were largely responsible for April's heady 30% rise in the price of lettuce. Fresh fruits are also expected to climb by 15% to 16% during the year. Pork production was expected to grow by 13% this year, but cold weather made the animals more susceptible to disease, and growth projections have now been scaled back to from 2% to 3%.

Another villain is the Government itself. In the past two years, aid to farmers has quadrupled to an estimated $7.9 billion, much of it for price-propping mechanisms and subsidies. Carter's budget for next year now proposes to cut the amount to $4.2 billion. Farmers complain that they need all the federal largesse they can get because rising costs are making it hard for them to turn a profit. In that sense, they are suffering in the same way as other Americans, who also must figure out how to make ends meet as inflation devours their purchasing power. In fact, the prices received by farmers are up 11% from last year's low levels.

Whatever the plight of the farmers, the real victims are the consumers. Complains New Yorker Henrietta Wise: "Every time I walk into a grocery store, I'm terrified. It's more than the prices, it's the whole concept of food. It's the basic substance of life." Some shoppers have become de facto vegetarians because of the sky-high price of meat, but vegetables are no bargain either. Marsha Avrushin of Oak Park, Mich., has taken to prowling supermarkets for off-brand items. Says she: "When I was a kid, a candy bar was a real treat. What makes my kids' mouths water now is a salad. Fruits and vegetables have become a luxury." Though shoppers everywhere are becoming much more discriminating in what they buy, many arrive at the check-out counter with glazed, catatonic expressions on their faces. Says San Francisco Housewife Vera Trinkaus: "What bothers me the most is that the prices on items jump not just a few pennies but 20-c- or more at a time. I can't figure it out. There haven't been any new labor contracts signed recently. Where is the money going?"

Price rises for a few food items should soon begin to slow down--at least somewhat. The wholesale price of fruits and vegetables dropped 1.6% during May, and that should result in better prices for consumers by midsummer. That hardly means the problem is on the way to being solved. After revising its wishful-thinking January guesstimate, the Administration now forecasts a total 1978 food price rise of 8% to 10%, and with a bit of bad weather between now and year's end, even that figure may turn out to be too optimistic.

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