Government Tries To Offset Slump In Beef Price

School lunch programs will be beefed up under a government plan to buy $50 million in red meat to ease the sting of falling cattle prices paid to ranchers and feedlot operators.

The beef purchase is one of a number of steps announced by the White House Tuesday after President Clinton met with Republican and Democratic senators to promise his support for the industry.

The U.S. Department of Agriculture will begin to buy beef for the 1996-1997 school year at once rather than waiting until later in the year. And the White House said the department will consider additional purchases if warranted by market conditions.

Cattle and calf sales are the largest single-commodity source of farm income, with sales of $35 billion to $40 billion a year.

“We have to act quickly; we can’t fool around,” Clinton said as the meeting began.

The president also ordered easing of grazing restrictions on idled environmentally sensitive lands and promised to use “all the tools at his disposal,” including existing short- and medium-term credit guarantees, to promote the export of American beef.

“I doubt very much that the purchases under the school lunch program itself will cause a major turnaround on the market,” Agriculture Secretary Dan Glickman told reporters. “I think it is a good psychological boost out there in the market.”

Grain shortages have raised feed costs while dry weather in the Great Plains threatens range and pasture land. A heavy slaughter of excess animals has created a red-meat glut that is holding down prices.

Reports of “mad cow disease” in Britain and possible harm to humans are an unknown factor.

Without relief, producers could sell off large numbers of animals, causing a short-term dip in consumer prices but longer-term increases when shortages occur.

The price of fattened cattle fell to the upper $50s per hundred pounds in April, compared with $62 and $63 in March and $77 in 1993.

Slaughter cows at the Stockland Livestock Exchange in Spokane brought 28-33 cents per pound this week, compared with 50 cents per pound in 1994, said President Jim Seabeck. Calves weighing 500 pounds fetched 52-60 cents, compared with 80-90 cents two years ago.

“Feedlots are probably losing $100 to $200 a head,” Seabeck said.

, DataTimes