Meat prices will follow heat wave's temperatures -- up

Beef and poultry are expected to lead a fresh surge in food prices brought on by heat in the US farm belt. Because of the severe heat, many cattle herds are not putting on the weight they normally would and millions of chickens have died, according to Jack Roney of the US Department of Agriculture's World Food and Agricultural Outlook and Situation Board.

Yet Beef prices, which began to moderate this spring, could continue their downward trend over the short run because some cattlemen are selling their herds earlier than they otherwise might for lack of grazing vegetation, according to the National Cattlemen's Association in Denver.

The new consumer price index (CPI) figures say beef, veal, and pork prices actually declined by .5 percent from May to June, while fresh vegetables were up 2 percent and poultry increased .8 percent. Fresh vegetables increased 1.9 percent from May to June.

Taking the effects of heat, drought, and the new CPI figures into account, the US agricultural outlook board now forecasts that food prices overall will rise from 8 to 9 percent this calendar year, compared to 10.1 percent last year. This new prediction amounts to a ruling out, close observers say that US food prices this year will register on the low end of the scale that was forecast by the Agriculture Department last December. That forecast was for a rise of from 7 to 11 percent, depending mostly on weather conditions.

How the revised 8 to 9 percent forecast will hold up will depend on what the weather does from here on in, says Mr. Roney. Thus, if the weather becomes milder, as it has to some extent already, overall food prices would probably not go above this level.

But even with milder weather, Mr. Roney and others are quick to point out, beef and poultry prices have already been boosted by the heat wave -- although the ripple effect may not have reached US supermarkets yet. This price rise is at least partly softened by an abundant stock of corn and soybeans. Corn stocks now stand at 1.7 million bushels, highest since the mid-1970s. But new prolonged heat could evaporate these stocks substantially before too long.

And sometime this fall, Bruce Rattner, the New York City consumer affairs commissioner, says that poultry prices will be soaring because millions of chickens and at least 50,000 breeding hens have perished because of the heat.

Until recently, poultry has been a bargain compared to other meats.In New York City, the average wholesale price of chicken went up more than 10 cents to 57 cents a pound during the past month. While poultry is up less than a percentage point in the CPI, it will probably be up a great deal more in coming months. But the time it takes for new chickens to mature is a great deal less than what it takes for cattle to be ready for market -- months compared to years. So, bargain poultry prices might be on the rebound this winter after the cost of beef just begins to soar.

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