Steep food rises forecast in U.S.

Press, 27 November 1980, Page 8

Steep food rises forecast in U.S.

NZPA-Reuter Washington; Housewives will have to pay a lot more for food and the United States may be forced to hold back agricultural exports if the world’s weather is as bad next year as it was in 1980, a United States Government economist has said.

Howard Hjort, the United States Agriculture Department’s chief economist, also told a press briefing that global reserves of animal feed grains would be running short by harvest time next year. “There will be no reserves for feedgrains when the harvest starts for next year’s crops, but supplies of foodgrains will be slightly better,” Mr Hjort said. Officials predicted tight world grain supplies' Jfter a severe summer heatwave damaged American corn (maize), cotton, and soyabean crops, a recent drought harmed the Australian wheat crop and the. harvest in the Soviet Union fell dramatically because of wet weather.. Asked what the impact would be for consumers if bad weather again hit world crops, Mr , Hjort .replied: “There will be a sharp increase in . prices and possible restraints oh U.S. agricultural exports.” • :'’-.■ He also predicted , . that grain prices would rise even more than current, forecasts if President-elect Ronald Reagan carried out his cam-

paign promise to lift the partial grain embargo against the Soviet Union, imposed by the Carter Administration after the Kremlin’s intervention in Afghanistan.

“If the embargo were lifted, it would not be a major factor, but it would cause domestic prices to be slightly higher,” he said. Mr Hjort repeated the Government’s estimate that United States food prices would rise between 10 and 15 per cent in 1981, depending mainly on the weather. Meat was expected to show the biggest increase, going up by between 15 and 20 per cent. Mr Hjort said that the Agriculture Secretary (Mr Bob Bergland) was recommending that the United States allow unlimited meat imports next year. A White House decision on this is expected within a few days. Rising mortgage interest rates and higher house prices kept inflation in the United States running at a annual rate of 12.6 per cent in October, the Government has said. In , an accompanying report, the Labour Department said the after-tax, in-flation-adjusted earnings of a typical American city dweller- with a- wife and two children declined 0.6 per cent in October after a 0.1 per cent decline in September.