Beef Marketing

Issues and Concerns Gao ID: CED-78-153 September 26, 1978

Beef is important to consumers' diets as a primary source of protein. About 25 percent of the consumer food budget is spent on meat, and beef accounts for about 60 percent of this amount. Recent rises in beef prices have, therefore, had a strong impact on the public.

In the first half of 1978, beef prices rose to record levels. The main reason for the recent price rise appears to be the regular 10-year cattle cycle which has resulted in a decreased cattle inventory. Other factors also affect the final retail price of beef and the entire beef marketing system. There are serious concerns over the increasing concentration and market control within the beef marketing system and the government's ability to deal with this concentration. Industry officials believe that prices quoted by the "Yellow Sheet," a publication based on market information, are subject to manipulation. Producers and feeders have also charged that they have little control over prices set by packers and retailers. Groups within the beef industry, the federal government, and the consumer movement are concerned about the role of the government in ensuring beef supply safety and quality. Several innovations that are being considered may enhance the ability of one industry segment to control the market, and other innovative practices would affect traditional ways of determining yield and quality. The cattle industry has criticized the practice of importing beef because it depresses prices, but consumers have been the beneficiaries. Although cattlemen have blamed the cattle futures market for price fluctuations, the market is widely used and supporters claim it minimizes price risks and stabilizes the market. Inconsistent state transportation regulations are also a source of concern to beef producers.

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