Thanksgiving turkey, fixings will cost a lot more in 1981, say experts
Enjoy next week's Thanksgiving dinner, folks. When you sit down to the Thanksgiving table again in 1981, the turkey and fixings could cost you 15 percent more.
That's the bad news.
Now for the good news: Those higher prices will help ensure that farmers are able to steadily expand US food output for the growing world market.
Top government and private planners from the US and abroad, meeting here in Washington, agreed that world food prices are headed up sharply. They also agree that, although this price spiral will be particularly felt by American consumers in 1981, it is inevitable and even ultimately beneficial in terms of the food supply.
With Moscow, Peking, Tokyo, and Mexico City lengthening the lines of customers for farm products from the United States; the experts warn that one certain effect will be a 10 to 15 percent rise in the prices Americans pay for their food in 1981. The steepest hikes will be seen at meat counters over the next four months.
Diplomats, economists, industry representatives, and ordinary farmers in Washington for the annual "Outlook" conference of the US Department of Agriculture (USDA) concluded that the US can react in two ways:
* Impose price controls and export embargoes in an attempt to brake inflation.
* Or accept higher food prices while mounting a determined effort to increase agricultural productivity.
J. Dawson Ahalt, chairman of the USDA's World Food and Agricultural Outlook and Situation Board, leaves no doubt about where he stands. His advice is: "Consumers who can afford to stock up and have some storage space would do well to buy their meat now."
In one of the battery of research papers presented to the USDA conference, Mr. Ahalt spelled out clearly that rapid food price rises are inevitable. He pointed out that such increases were held to 9 percent in 1980 only because of the large grain stocks built up in previous good years. He then gave a grim forecast:
"With stocks generally depleted, the danger looms that disappointing harvests worldwide again next year would lead to widely fluctuating prices and perhaps serious food shortages in some areas of the world. The fact that we face such a prospect just two years after accumulating our largest global stocks of grain in over a decade underscores the continued fragility of the world food situation -- that the balance between too much and too little food can tilt easily and rapidly, from one direction to the other."
The basic threat, Ahalt told the Monitor, comes from the fact that "the world is consuming grain faster than it is producing grain." The fact that the US bears the main load of keeping up with world consumption, he said, explains international interest in US farm policies.
In a separate interview, Howard Hjort, the USDA's director of economics, policy analysis, and budget, warned that "the world is in a near-precarious situation. . . . One must have concern about our ability to satisfy the world's food requirements."
Mr. Hjort cited a wide range of statistics to show that over the past 30 years US farmers have stepped in to supply rising world food demand. He indicated that the US retains a unique capacity to meet this demand, which is driven up constantly by rising population and the growing demand for better diets.
According to his forecasts, Hjort told the USDA conference, "by 1985, the world outside the United States would be dependent on the US for 15 percent of its agricultural supplies, compared with 2 percent in the early 1950s and 11 percent in the late 1970s."
Hjort estimates that the combination of rising foreign demand for US farm products and domestic demand (boosted by gasohol production), "would suggest that demand for US farm products could grow as much as 2.8 to 3.0 percent per year and fluctuate as much as 10 to 15 percent from year to year in the early part of the decade."
He is confident the US farm sector can expand output by 3 percent yearly. But he warns this will involve heavy environmental and economic costs, since US agriculture operates near capacity already and must develop more intensive methods and till more marginal land.
Hjort, Ahalt, and their colleagues agree that the only answer -- if US farmers are to satisfy both domestic and overseas food requirements -- is higher food prices.
Otherwise, there will not be sufficient profit to spur on the new investment needed to modernize and expand the vast but already strained American agricultural machine. This new private investment, says Hjort, must be firmly underpinned by government policies which support new systems for transporting and marketing US farm products in the most efficient way to satisfy American customers in all parts of the world.
Yet Hjort and his colleagues admit that this scenario for expansion falls apart unless some way is found to convince US consumers that, in the long term, everyone benefits from higher food prices as these increases feed back into the agricultural machine to boost its productivity and its ability to meet world food needs. Until this message gets across, apparently, it will be difficult for Congress and the administration to stick to policies which, though they feed the world and significantly build US export income, cost votes at home.
Carol Tucker Foreman, the controversial consumer activist appointed by Carter as the USDA's assistant secretary for food and consumer services, joined others in predicting that "real prices for food will continue to rise dramatically for the rest of this century." Speaking at the Outlook conference, she called for policies to protect the poor. She said that while most Americans have a bargain in paying only 16 percent of their disposable income for food, "25 million Americans living in poverty . . . spend about 40 percent of their income for food." These people, she said, must be protected against the expected food price increases.
Richarld Lyng, now heading the Reagan transition team at the Department of Agriculture, responded by thanking the Mrs. Foreman for her policy recommendations and pledging that there will be no letup in the battle against hunger at home or abroad.