University of Virginia Library

Phase IV Problems

Food Services Faces Beef Shortage

News Analysis

By TIM WHEELER

While much of the rest of the nation may be doing without
beef on their dinner tables in the summer weeks ahead,
members of the University community, for the most part, may
be spared this deprivation, though they may have to pay
dearly for what beef there is available.

That, at least, is Food Services Division Director Bernard C.
Fontana's evaluation of how President Nixon's Phase IV
controls on beef prices will affect the University. Mr. Fontana
admitted yesterday that Food Services was having difficulty
obtaining beef that it needs to feed its University customers.

In fact, Mr. Fontana said that his office was only able to
purchase 20 per cent last week of the beef that it was seeking.
The shortage in supply which prevented Food Services from
filling its purchase orders last week appears to be widespread,
too, and getting worse, according to national and state press
reports.

Nor is it likely the shortage will get any better before the
end of August. Mr. Fontana said it would be a "realistic view"
to expect that beef will be virtually unobtainable by then. The
beef shortage, he explained, results because "many of
the(meat) packing houses can't afford to buy at the prices
farmers are charging."

The President's Phase IV controls lifted the freeze on the
prices farmers could charge for meat, but at the same time
continued the freeze on prices packers could charge for
processed beef. Beef and other meats were already in short
supply before the announcement of Phase IV, thanks to the
freeze put on wages and prices by the President in June. In
response to the freeze, many farmers began holding back their
livestock until prices were allowed to rise. Some even resorted
to killing their animals rather than take them to market.

Phase IV removed this spectre, only to replace it with an
impossible situation where meat packers are caught in the
crunch between the rising price of livestock and the ceiling on
retail prices of processed beef.

In many instances, meat packers have been forced to stop
supplying beef, rather than take a loss on selling it at a lower
price than it can be bought from farmers. 'We were told just
that by one of our packers the other day," Mr. Fontana said.

Stockpiling Meat

"We're not exactly destitute," he said. "We've been
processing and freezing meat all summer." Food Services
regularly stockpiles supplies of meat, Mr. Fontana explained,
but this summer they have not processed as much as usual, due
to the beef shortage. With the present stockpiles, however,
Mr. Fontana estimated that Food-Services could continue to
offer meat (and beef) to its cafeteria and snake bar customers
through November. "We may not be able to serve steaks, "he
said, but the University certainly will not be without meat.

Some cutbacks are being made, though, in response to the
short supply of beef. "We are not faking any more catering
functions that call for beef," Mr. Fontana declared. Those
previously scheduled catering functions that have designated
their menus will be served beef as available.

Contracts Canceled

The problems encountered by the University are not
unique, either. Since the controls have been announced, the
Commonwealth of Virginia's supplier of poultry, Rockingham
Poultry Co., has canceled all its food supply contracts with
the state because the prices established by the contracts are no
longer applicable. As the state's supplier, and the largest
poultry supplier in the state, other schools and other state

institutions could be affected.

The problems will not end, either on Sept. 12, when the
freeze on beef prices is lifted. Mr. Fontana said that beef prices
could skyrocket after Sept. 12, as much as 60-75 per cent.
Added to the already soaring prices of pork and other meats
and foodstuffs, the food outlook appears very unstable and
confusing.

In an attempt to keep abreast of the rapidly changing and
highly unpredictable food price situation, Mr. Fontana said
that Food Services would soon begin adjusting food prices
weekly in the cafeterias and snack bars. Under the President's
guidelines, Food Services is permitted to pass along to the
consumer the direct increase in cost of the product, except for
the case of beef, which will remain frozen until Sept. 12.

Thus, as food prices, especially meat, fluctuate, Food
Services will every week adjust the prices at the serv ng
counter to reflect the price oscillations. For example, Mr.
fontana explained that if bacon went up another 20 cents per