AGRICULTURE: Pork Price Drops

Into the nation’s twelve main livestock centers last week trampled a horde of hogs that was 40% greater than in the same week last year. As a result, prices in Chicago flopped to $14.35 per 100 lbs., their lowest level since 1945. It meant trouble not only for farmers, but also for the Republican Party. Corn-belt voters loudly demanded that Agriculture Secretary Benson come to the rescue with a Government buying program.

Minnesota’s Republican Senator Edward J. Thye, among other public officials, backed them up. He asked for a quick, short Government pork-buying program while the fall hog run is at its height. Said a Benson aide: “The Department of Agriculture is watching the hog market closely, and has already developed machinery for making purchases, should they be deemed necessary. Buying could get under way on short notice.” The purchases would amount to something like 170 million lbs., only 1½% of the year’s total expected output. But it is big enough to raise prices if compressed into a quick buying spree (Benson’s statisticians figure that if the Department buys 6% of a commodity during a given marketing period, it will raise prices about 10%).

Ezra Benson hesitated to give the order. Pork’s troubles go too deep to be cured easily by price props. U.S. consumers are losing their taste for pork because 1) they are cutting down on fatty foods, and 2) they followed the advice of the Agriculture Department to eat more beef (which was a propaganda maneuver to raise beef prices) back in 1953. From the 1933-35 period to 1954, U.S. per-capita beef consumption jumped by some 24 lbs., to an estimated 79; pork consumption edged up by less than 6 lbs., to 67.

Benson also had the tricky corn-hog ratio to consider. This ratio determines, in effect, whether a farmer can make more money by selling his corn or by feeding it to his hogs (it takes about 9 bu. of shelled corn to put 100 lbs. on a hog). When the price of corn is low in relation to that of hogs, it is more profitable to turn the corn into pork; that was the case through most of 1954, with the result that the 1954 fall pig crop was 16% bigger than in 1953, and the 1955 spring pig crop was 9% bigger than in 1954. To swell the hog population still further, free corn prices on the market have been considerably lower than the Government support price. A farmer eligible for corn support could thus sell his own crop to the Government at $1.58 a bu., buy corn on the market that was ineligible for support at around $1.20 to feed his pigs.

Because of the prospect for more big pig crops, it looked as if Secretary Benson might be pressured by Congressmen into buying up pork. The program would be applied mainly at the processing level—a limited purchasing agreement aimed at cured shoulders, hams and bacon which the Agriculture Department could quickly dispose of through school lunch programs, hospitals and other charitable organizations.