Healthy Pessimism

After declining steadily for a week, livestock prices hit their lowest point in more than four months. The cave-in loosened the prop under retail prices. Most Eastern food chains promptly slashed as much as 19% off some pork prices, 35% off beef. Stores in Cleveland, Detroit, Chicago and points west followed suit, in some cases with even bigger slashes. Dun & Bradstreet's wholesale food price index dropped to its lowest point in 14 months.

The drop was partly due to seasonal shipments of cattle to market, though they were running lower than at the same time last year. When prices started down, some farmers stopped shipping, hoping that a shorter supply would raise prices. Nevertheless, except for hogs, prices stayed down. The Department of Agriculture, which mortally hates and fears a fall in farm income, predicted that the lower prices would not last. Many another expert thought differently. Mark W. Pickell, executive secretary of the Corn Belt Livestock Feeders Association, said that prices would be "lower in November and December," even lower next year. Whoever was right, consumers thought the effect was healthy.

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