N.Z. beef goes well in San Francisco

Press, Volume CXVI, Issue 34128, 14 April 1976, Page 7

N.Z. beef goes well in San Francisco

(From

JOHN N. HUTCHISON)

SAN FRANCISCO. The curious economics of the international meat trade are reflected in San Francisco in a brisk market for New Zealand beef at the same time that American beef producers are getting the lowest prices in four years. New Zealand beef, selling in San Francisco at the dock for about SUS74c per lb a month ago, is now bringing 85c. At the same time, some supermarkets are selling hamburger (beef mince) as low as 59c per lb — 40 cents less than a year ago. Sirloin steak which sold a year ago for more than SUS 3 per 1b can now be bought for SUSI.B9. This state of affairs, called ••crazy” by some beef experts, is the result of some complicated interactions in the market. Cattlemen, faced with prohibitively high costs for feed, have been selling off their animals in large

numbers because the longer they keep them, the more money they lose. The beef population of the United States is down an estimated eight per cent below normal as a result. The drop in prices encourages the housewife to buy better cuts — the steaks and roasts instead of stewing and boiling beef. This drives the cheaper cuts into “manufacturing” beef, for hamburger sandwiches and canned products. But these cheaper cuts from American grain-fed animals are relatively rich in fat; so rich that lean. grass-fed beef from New Zealand,

Australia, and other exporting nations must be mixed with it to make it saleable.

The consequence is a rise in demand and price for New Zealand beef. New Zealand controlling beef exports so as not to over-run the American quotas (as happened last year), there is a virtual shortage of such beef now, the New Zealand price at a level being slightly out of range of many American buyers.

“As long as overshipping is controlled, the good prices for New Zealand beef should hold in the several months ahead,” said the buyer for one New Zealand firm in San Francisco. “We are about to enter the American vacation period, which is usually the strongest period for hamburger, the favourite sandwich meat for Americans eating out.” American cattlemen traditionally turn a deaf ear to the argument that the import of lean manufacturing beef is in fact often beneficial to the domestic market for their own cheaper cuts of grain-fed beef. It will be quite normal for them to put some of the blame for low prices on beef imports,

and to press for low’er quotas. However, their present impatience is directed towards high grain prices. Large sales of grain abroad, and poor weather in the corn and wheat country of the American MiddleWest, have been the main causes of the high prices for feed. Here in the West, an additional problem has been the shortage of pasture as a consequence of drought. The combined conditions are forcing some cattlemen to the wall. “One thing is clear,” said the executive of one killing works. “The consumer is getting a hell of a bargain.”