Beef prices have hovered around record highs for over a year. The problem has been so persistent that in August, President Donald Trump announced a plan to try to lower them with an executive order to void certain tariffs on up to 300,000 metric tons of imported beef.
The executive order claimed that the beef would cost 25% less than the market price. But it also irked American ranchers, who feared the policy might hurt prices in the cattle market.
Farm Action, an agricultural think tank and advocacy group, has been tracking this executive order. Sarah Carden, the group’s senior director of research and policy, spoke the Texas Standard about its results so far.
This transcript has been edited lightly for clarity:
Texas Standard: Well, just a quick refresher for folks on the specifics of this policy. The Trump administration is voiding a tariff on up to 300,000 metric tons of beef from Argentina, which officials say could be sold at a discount of up to 25%. Could you start by telling us how much of this beef has been imported so far?
Sarah Carden: Yes, absolutely. What the EO allows is for up to 100,000 metric tons of additional lean beef imports to come in every 30 days, so for four or three months. Every 30 days that ticker resets.
What we have seen so far is they are actually not utilizing the full quota. For the first 30 days they imported just shy of 38% of the quota. Then in the next 60 days, we saw about another 30% of the next 100,000 trench come through.
So they actually can’t at this point import the full 300,000 metric tons because it resets every 30 days. But I anticipate they’ll hit somewhere closer to one-third to half of that at the completion.
So we’re not getting the influx of beef, at least not quite as to what was anticipated. What about the cost savings? Can we tell if this meat is saving shoppers money?
Unfortunately, we have not seen the savings that we were promised. We have consumer pricing data that we’re checking every 30 days or so. And after the first 30-day update, we saw overall less than a 2% savings.
And what’s more is, parts of the country even saw certain increases, so it does not seem to be particularly effective at bringing prices down.
Now, I recall that when this policy was first announced, American ranchers were pretty upset. Many said this move would cut how much money they could sell cattle for. Have we seen that happen?
So unfortunately, they were right about that. We’ve seen the market really drop precipitously for ranchers. In particular, looking at the markets that are competing directly against these lean beef imports, those prices have dropped pretty substantially over the last 60 days or so. We’re estimating that ranchers are losing around $320 per head of cattle that they’re bringing through in the cull market.
And meanwhile, one reason that beef prices are so high is that American beef cattle herd as a whole, it’s extremely small at the moment. There’s just a low supply of animals to turn into beef, as I understand it.
So could these imports play a role in keeping ranchers from regrowing their herds?
So that was our biggest concern with this policy. Even before this announcement, we had sent over some recommendations as to how to address high beef prices, because we all feel it.
But the way to do that is by supporting and building a more robust cattle sector, not by knocking the legs out from under it. And unfortunately, you know, It’s a multi-year cycle. You have got to send signals to ranchers that the market is stable, that it is steady, that they should make investments to grow their herd.
Because when markets are high, there’s a lot of pressure to liquidate. And when they’re volatile, in particular when you feel like they’re high right now and they’re gonna go down, there’s lot less incentive and a lot less security for ranchers to make the types of investments it takes to grow their herds.
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So what are you going to be watching as you continue to track the effects of this policy through the end of the year?
Well, the other thing that we’re keeping an eye on is the price that packers are paying for beef. There’s intermediaries. There’s these packers that are buying the beef and then selling it to retail, and then retailers selling it to consumers.
Unfortunately, both those stops in the supply chain, the packers and the retail industry, are both extremely consolidated. There’s not a lot of competition left in those sectors. That really creates a major barrier from securing those savings and making sure that those savings reach consumers.
So our preliminary examination of the data is also showing what we were concerned about, which is that this meat is entering the supply chain to packers at a lower price. Somewhere along that supply chain, those savings are not being passed along to the consumer.
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