The price of hamburger was down by as much as 20 cents a pound in many Washington area supermarkets yesterday -- part of a short, but sweet, wave of lower beef prices.
Wholesale prices for beef dropped about two weeks ago as middlemen's demand for beef declined. The middlemen -- feedlot operators and packers -- have been buying fewer cattle, and curbing their costs of doing business, in the face of rising credit costs and inflation. Those price drops now are showing up in the supermarket.
In the live cattle market in Omaha, beef prices dipped 15 percent at one point last week. The decline was even more dramatic in some regional markets, such as the Fauquier Livestock Exchange in Northern Virginia. Manager John Heyl said that feeder cattle sold at the Fauquier market last week cost 20 percent less on average than three weeks ago.
Over the past two days, however, the price in Fauquier and other markets has begun to edge back up. That means that today's lower store prices for beef will resume their upward march soon, perhaps by the end of the month, as market conditions return to normal.
This is a short-term reduction," said Ron Gustafson, an agricultural economist with the U.S. Department of Agriculture.
He said that the store price for a pound of beef averaged $2.26 during 1979, based on a USDA survey of all cuts, including hamburger, steaks and roasts. That compares with a price of $2.35 for the first two months of this year.
That average, which is based on a national price sampling, may drop six cents a pound before the cattle market returns to normal and prices begin increasing again. By the end of this year, Gustafson predicted that retail beef prices will climb 8 percent over 1979. That works out to a 1980 average of $2.44 a pound.
Actual retail prices will vary, according to the region, the store and the cut of meat.
Those predictions do not take into account the impact of a government order last week to halt the sale of more than 70,000 cattle known to have been implanted with the banned growth simulant DES, which causes cancer in laboratory animals.
Gustafson said yesterday that USDA does not know yet what effect that order ultimately will have on the meat supply -- or on meat prices.
The forecast for other meats, including pork and poultry, is good for consumers in the short term but not as good in the long term, government officials said.
Large supplies are expected to hold down prices for the rest of the year. "The nagging concern is that producers will look at prices, think it is a long-term trend and get out of the "business" said one government economist. He said that kind of thinking could lead to a reduction in future hog production and higher prices for consumers.
Pork prices have been falling steadily for months, according to USDA retail price surveys. The average for 1979 was $1.44. So far this year, the price has decreased even more -- to $1.35 a pound in January and $1.33 in February.
Some consumers who had grown accustomed to rising beef prices did not notice that the trend had reversed.
"It's gone down?" said Susan McInerney, an Arlington mother of two who buys ground beef to make hamburgers for her children.
She paid $1.69 a pound for the last ground beef she purchased at Safeway, she said. Now that the price has fallen to $1.49, she said, "I probably will stock up my freezer."
The 130 Safeway supermarkets in the Washington metropolitan area have ground beef on special this week. In addition, the stores have reduced prices for T-bone and sirloin steaks by 10 cents a pound.
"The new prices [on steak] took effect this week," said Ernest L. Moore, a Safeway representative. He said the lower prices are based on lower wholesale costs.
Besides hamburger, the reductions include T-bone, $3.99 a pound compared with $4.09 last week; sirloin bone-in, $2.99 a pound compared with $3.09, and round steak, $2.99, compared with $2.79.
Spokesmen for Giant, Grand Union and A&P said their stores also are pricing beef to reflect at the wholesale level changes. However, none of them were able to provide any any examples immediately.