Trouble on the Range

That American folk hero, the big Western cattleman, has become more of a business executive than a broncobuster. Often a college graduate, he herds his cattle from a helicopter, feeds and breeds them with the aid of computers, waters them from electrically warmed troughs and sometimes fattens them on beer. But while he pampers his animals, the cattleman himself is having a tough time. Last week the Chicago price of prime beef on the hoof fell to 22-c- per lb., the lowest since 1946, and cattlemen discarded their usual suspicion of Government programs long enough to cry for federal aid. Washington responded quickly. The State Department signed agreements with Australia and New Zealand to limit their exports of meat to the U.S.

Competition from Celebrities. Imports of Australian beef have doubled in the past two years, and U.S. prices dropped 25% in 1963. More than 10% of the 97 Ibs. of beef eaten by the average American last year was imported, and most of it came from the sprawling ranges of Australia and New Zealand, which produce a chewy but inexpensive grade of meat. The new trade agreements will hold this year's imports to the 1962-63 level and permit small increases later--but this did not satisfy U.S. cattlemen. In Omaha, the National Livestock Feeders Association announced that it was "disturbed, disgusted, dumfounded." Cattlemen's groups want even stiffer import quotas and think that the 3% tariff on red meat is much too low.

But the real problem is back home on the range, where too many people are raising too much cattle. Last year, as cattlemen held their cows off the market in hopes of higher prices, the U.S. herd expanded by 6% to 106 million head worth $13.5 billion. Swift, Armour and other packers are feeding much of their own cattle in direct competition with the independent cattlemen; so are such supermarket chains as Food Fair and National Tea.

Show business folk with high incomes, oil operators, companies, and even churches have moved into the cattle business to exploit its tax advantages.

Cattle is considered an asset that can be depreciated over a relatively short period; the expenses of raising herds are fully deductible, and long-term profits are taxed as capital gains at a top of 25% . Among the part-time beef barons are Jack Benny, Greer Garson, Gene Autry, Dinah Shore, Stewart Granger, Hunt Oil Co. and the Mormon Church.

Help for Housewives. Since meat is the biggest single item in the U.S. food bill (about 25-c- out of every dollar), one beneficiary of the current situation is the U.S. housewife. Retail beef prices slipped 2% to an average 81-c- per Ib. last year, and the dip is expected to continue for a while. But Government experts also reckon that the cattlemen's troubles are only temporary. The beef business historically runs in cycles; when prices hold low, cattlemen sooner or later have to thin their herds, marginal operators drop out--and prices begin to recover. Besides, as the Agriculture Department made a point of noting last week, Lyndon Johnson, as a cattle raiser himself, is very much interested in seeing that ranchers get the right treatment.

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