Los Banos Rotary Club History
Speaker Says OPS Meat Control Is Wrong Answer

Declaring that the setting of price controls on any given commodity does not restrain the demand for goods and services, E. W. Stephens, western director of the American Meat Institute, San Francisco, told members of the Rotary Club Tuesday that the age-old law of supply and the age-old law of supply and demand, and not an OPS ruling, actually and finally determines the price of meat or any other commodity.

Pointing to the meat industry as an example, Stephens said in the first nine weeks of OPS meat price ceilings more than a quarter billion pounds less beef were moved into consumption through distribution channels than during the same period a year earlier. As a result the expected per capita consumption of all meat during the present year may be two pounds, perhaps as much as four pounds, less than the 148 pound per capita figure previously predicted.

Explaining a few of the meat industry's problems, Stephens emphatically denied the charge that beef producers have conspired to profiteer. The rise in the price of beef over the last decade, he said, can be attributed to the tremendously increased consumer purchasing power of the people. Mrs. American housewife is the lady who actually and finally determines the price of beef, and of most every other commodity on the American market. Meat purchases have always accounted for a steady 5 to 6 per cent of the consumer's budget, so the average consumer has continued to pay 5 or 6 per cent of his income for meat, but since the supply of meat is limited, he has done so by paying higher prices.

Increased cost of livestock, of feed, of land, have all increased cost of production, Stephens pointed out. Higher labor prices, overhead and general expenses have increased costs for the packer and the retailer, and the final cost to the consumer is but the natural outcome.

Returning again to the basic principal of price control, Stephens emphasized that establishment of direct price-wage controls does not reduce or restrain the demand for goods and services. If demand is not restrained the direct price-wage controls will not work while they are in force and it will be difficult ever to remove them without a great surge of inflation, such as we had in 1946 when controls were removed after years of deficits and monetary expansion.
Briefly commenting on the importance of the beef industry to California, Stephens said that last year California was second in the United States in number of beef slaughtered and first in number of lambs slaughtered. In addition to home grown livestock, the state imported large numbers of beef, sheep and hogs.

August 24, 1951

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