Beef prices in America are at record highs. Since February of 2020, the cost of both ground beef and steak has risen by more than 50% – leaving many Americans worried about the affordability of a basic food staple. As a result, the President himself told cattle ranchers last month to “get their prices down.”
To be fair, part of the problem is structural. Recent drought has saddled ranchers with higher feed costs that discourage them from raising new cattle and instead encourage them to liquidate their herds. Rebuilding takes time. But when prices are high, there’s also an incentive to keep thinning. As one Nebraska rancher put it, “We can make just as much money with fewer cattle, better genetics, than we can with having a s—load of cows running around.” This reality has reduced America’s cattle herd to its lowest level since Harry Truman’s presidency and prompted President Trump to take action by increasing imports, particularly from Argentina, of low cost, quality ground beef.
Predictably, domestic ranchers have responded with a wave of opposition, driven by the hope that restricting supply will keep domestic prices – and short-term profits – high. But that approach risks long-term harm to the very ranchers pushing it.
There are effectively three markets for beef: choice and prime cuts for domestic consumers, high-value exports to Asia, and ground beef. The first two are dominated by American producers, who hold a natural advantage. Given the choice between an American or Brazilian steak, consumers will pick American beef every time. The same is true in Japan, Korea, and other export destinations, where U.S. producers have built premium brands over decades.
The ground beef market, however, functions differently. Most American cattle tend to produce rich, high-fat cuts prized for steaks, which must be blended with lean beef to make the ground beef products that fill grocery store shelves. That lean component, however, often comes from imported beef from Argentina, Brazil, and other South American suppliers. And without those imports, domestic processors would face an imbalance of too much fat trim and too little lean beef that would force them to divert valuable trimmings into the low-value tallow market at a loss.
By allowing low-cost, high-quality ground beef to enter from South America, President Trump is helping to restore balance across all three markets. He is also protecting both U.S. cattlemen’s margins and consumers’ pocketbooks by targeting two Brazilian meat packing companies – JBS and Marfrig Global (which owns National Beef) – that have attempted to unsuccessfully curry favor with the Administration while exploiting American markets and crushing competition.
Ranchers’ refusal to accept these economic realities are shortsighted. Artificially inflating domestic prices might feel like a win today, but it risks shrinking demand and driving foreign buyers elsewhere tomorrow. If U.S. beef remains overpriced, trading partners like Japan and Korea can easily shift to premium imports from Australia or New Zealand – undoing years of effort to establish U.S. brands abroad. And once those markets are lost, they’re exceedingly difficult to win back.
It’s somewhat understandable that ranchers are wary. But the administration’s current plan to boost imports by reallocating import quotas doesn’t expand total low-tariff imports – it merely shifts them among countries. Both Australia and New Zealand have underfilled their quotas in recent years, and their large entitlements give them room to ship higher-value steak cuts that compete directly with U.S. ranchers. That’s the real threat they should fear.
The smarter move is to direct those quotas to low-cost suppliers such as Argentina, Paraguay, and Brazil – nations that specialize in lean beef used for ground products rather than premium cuts. Simultaneously, Secretary Rollins and the USDA should require Argentina – where has there has been a particular focus in boosting beef imports – to adopt a First Come, First Served rule to expedite exports and ensure beef arrives quickly. Under this system, export quotas are filled in the order that shipments physically arrive rather than through pre-allocated licenses or delays, creating a faster, market-driven process that rewards efficiency and speed.
The best way forward is to take pragmatic steps that can deliver relief to consumers while keeping America’s ranchers globally competitive. In the end, resisting imports may feel like protecting the herd – but in a global market, it’s just fencing in the future.
Todd Tiahrt is a former member of Congress who represented Wichita and South Central Kansas.
Read Full Article »
