Washington - Although cattle prices are on the rebound, the government announced Tuesday that it will buy another $20 million in beef to help producers.
The buy, which is over and above what the Agriculture Department would normally purchase, will help ranchers “who have been operating at or below break-even levels for most of this year,” Vice President Al Gore said at a conference on agriculture issues. The meat is used in federal food assistance programs. The purchase is not expected to affect consumer prices.
Gore also said that the government needs to improve income protections for farmers. The Agriculture Department is negotiating with the White House on some proposals to make the federally subsidized crop insurance system more attractive to producers. The final recommendations will be included in President Clinton's 2000 budget, said Keith Collins, USDA's chief economist.
Congress this year rejected the administration's proposal to raise commodity price supports as Republicans argued that the action could disrupt markets. Lawmakers instead provided farmers with $6 billion in direct payments to compensate for low prices and weather-related losses.
Cattle are currently selling for 62 cents a pound, up three cents since this summer, and the Agriculture Department expects the price to top 70 cents early in 1999 because of tighter supplies. Many producers in drought-stricken areas of the country slaughtered their heifers this year because they didn't have enough feed, said USDA economist Ron Gustafson.
The number of cattle nationwide is down about 4 percent since 1996, when prices last reached 70 cents.
Prices should “stay fairly strong for the next couple of years,” Gustafson said.
The government's latest beef purchase is one of a series that USDA has made over the past year to boost cattle prices. During the budget year that ended Sept. 30, the department bought 146 million pounds at a cost of $158.9 million. USDA would normally purchase about $130 million to $140 million a year.
Meat Industry Insights News Service
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Phone: 631-757-4010
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