Nibbling at Food Prices

WHEN asked by a reporter what Americans could do to hold down meat prices. President Nixon replied: "Don't buy meat." Last week, in a somewhat more positive attack on the food price problem, the President took a couple of long overdue actions that were politically the least dangerous of several options open to him. Because he stopped short of putting controls on the prices that farmers charge, the chances are that his moves will not take much of a bite out of retail food costs.

Nixon put a form of controls on the wholesalers and retailers of fresh vegetables and fruit, eggs and seafood. These sellers--the famous middlemen--will be forbidden to raise prices on the fresh products just to increase their own profit margins; but they will be able to raise the tags if farmers and fishermen charge them more to get the goods. Because farmers are now doing just that as a result of seasonal factors, prices for these foods could well continue to rise.

As for meat, Nixon also removed the import quotas for the rest of this year. It is questionable whether that will make much of a difference in meat prices. On a per capita basis, imports last year accounted for only 11 Ibs. of the average 192 Ibs. of meat eaten by Americans. Imports have been low partly because of quotas and partly because of quality. While Americans savor the well-marbled steaks and tender roasts that come from grain-fed cattle, foreign ranchers generally raise grass-fed cattle, which produces leaner meat. In the U.S., imported beef is usually ground up into hamburgers and hot dogs.

Electionomics. The Australians, who are the prime exporters to the U.S., contend that they can step up shipments. But other major producers--in New Zealand, Ireland, Canada and Mexico--may not be able to meet an increased demand. With meat short the world over, producers have developed new markets in the Soviet Union, Japan and other countries.

Nixon might have tempted foreign ranchers to sell more to the U.S. if he had permanently lifted the protectionist, inflationary import quotas. That action, however, would have been bad electionomics because it would have endangered his farm vote. But if prices do not taper off soon, the President may have to swallow hard and put controls on the prices that farmers charge. Farmers would undoubtedly howl that the Government was trampling on free enterprise. Yet they seldom complain about all the controls and subsidies that prop up prices in agriculture, which is one of the most highly regulated and protected enterprises in the land.

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