Red-Meat Price Policy in Egypt

The background of the study explained that the price inflation of red meat is partially due to demand pull phenomena. However, the question is does it also work according to a cost push mode1/4 the answer, from the analysis followed in the text is yes, it is also a cost push problem, particularly at the feedlot level. The analysis showed that the cost of producing fed beef animals in late 1980 and early 1981 was 1.34 L.E. per kg. liveweight, assuming a 20 percent margin. This was clsoe to the market price of 1.35 to 1.40 L.E. in April, 1981. The price fixed by the government in September, 1980. which was 1.05 L.E. per Kg. liveweight of fed calves, 1.97 L.E. per kg carcass and between 2.3 to 2.5 L.E. per Kg. meat. the trader would get positive margin of 11.4/ if the fixed prices for both the fed live calf and the carcass were valid. However, he has to supply his carcass to the butcher at not less than L.E. 2.32 per kg. because the actual market price of a fed calf is L.E. 1.34 per kg. Therefore, the butcher would have to supply the lean meat of the carcass at not less than L.E. 3.2 per kg. instead of L.E. 2.38 per Kg. as a fixed price. These imputed prices of meat allow 10/ and 15/ margin for the trader and the butcher respectively