President Donald Trump’s plan to cut record beef prices by importing more meat from Argentina is running into heated opposition from U.S. ranchers who are enjoying some rare profitable years and skepticism from experts who say the president’s move probably wouldn’t lead to cheaper prices at grocery stores.
The National Cattlemen’s Beef Association along with the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America and other farming groups — who are normally some of the president’s biggest supporters — all criticized Trump’s idea because of what it could do to American ranchers and feedlot operators. And agricultural economists say Argentine beef accounts for such a small slice of beef imports — only about 2% — that even doubling that wouldn’t change prices much.
South Dakota rancher Brett Kenzy said he wants American consumers to determine whether beef is too expensive, not the government. And so far there is little sign that consumers are substituting chicken or other proteins for beef on their shopping lists even though the average price of a pound of ground beef hit its highest point ever at $6.32 in the latest report before the government shutdown began.
“I love ‘Make America Great Again’ rhetoric. I love ‘America First’ rhetoric,” he said. “But to me this feels a lot like the failed policies of the past — the free trade sourcing cheap global goods.”
Several factors have sent beef prices soaring, starting with continued strong demand combined with the smallest U.S. herd size since 1961. In part, that small herd is due to years of drought and low cattle prices.
Beef imports also are down overall because of the 50% tariffs that Trump imposed on Brazil, a big beef exporter, and limits on Mexico, where the country is fighting a flesh-eating pest.
Kansas State University agricultural economist Glynn Tonsor said Argentina can’t produce enough beef to offset those other losses of imports.
Through July, the United States has imported 72.5 million pounds of Argentine beef while producing more than 15 billion pounds of beef. Much of what is imported is lean beef trimmings that meatpackers mix with fattier beef produced in the United States to produce the varieties of ground beef that domestic consumers want, so any change in imports would affect primarily hamburger. Steak prices that were averaging $12.22 per pound probably wouldn’t change much.
Idea creates uncertainty among US ranchers
Even if increased imports from Argentina won’t reduce prices, the idea creates uncertainty for ranchers, making them less likely to invest in raising more cattle.
“We’re always going to have uncertainty in the world. But the more uncertain something is, the less likely most are to put money on the line,” Tonsor said.
Argentine livestock producers like Augusto Wallace are excited about the prospect of selling more beef to America because he said “whenever an additional buyer comes, it’s beneficial for everyone, right? For all the producers.”
But economists caution that exporting too much beef could backfire for Argentina because that would drive up prices for consumers there.
American ranchers say the idea of boosting imports from Argentina runs counter to the stated purpose of Trump’s tariffs to encourage more domestic production and help American ranchers compete.
“It’s a contradiction of what we believed his new course of action was. We thought he was on the right track,” said the president of R-CALF, Bill Bullard, who hoped Trump’s policies would discourage imports and encourage ranchers to expand their herds.
Texas A&M livestock economist David Anderson said “ranchers are finally getting prices that are going to make up for some really bad years in the past with the drought, low prices and high costs. We finally get some good prices. And we start talking about government policy to bring down prices.”
Bryant Kagay, part owner of Kagay Farms in Amity, Missouri, said he thinks the plan would hurt ranchers. Cattle prices that had been averaging around $3,000 for a 1,250-pound animal slipped more than $100 immediately after Trump mentioned the idea of intervening in beef prices last week, though they have recovered a bit since then.
Ranchers hope Trump changes his mind
Although Kagay voted for Trump in the last election, he worries the trade war is hurting farmers and ranchers by driving up costs and costing them major markets like China.
“I continue to see things that I don’t really think are in the best interest of our country and the average citizen,” Kagay said. “I guess I hope he starts to see that and quits worrying about punishing opponents and winning whatever battle he’s involved in, and then tries to do what’s best for everybody.”
Ranchers are hopeful Trump will reconsider this plan. Agriculture Secretary Brooke Rollins said Tuesday on CNBC that the administration remains committed to helping ranchers prosper while trying to reduce consumer prices. She promised more details soon about the Argentina plan and a larger effort to reinvigorate U.S. beef production by opening up more land and opening new processing plants while securing trade deals for new markets. The administration wants ranchers to raise more cattle and produce more beef.
“The bigger supply — even aligned with a bigger demand — is going to allow those prices to come down, but also to have a vital industry for these ranchers to be able to survive, which is what we’ve got to do,” Rollins said.
Sen. John Hoeven, a North Dakota Republican, said Tuesday that after talking to Trump and others in the administration, he expected to see more details about the policy.
“It’s very important that we support our cattle ranchers,” Hoeven said.
Rancher Cory Eich, who lives near Epiphany, South Dakota, said he doesn’t consider the Argentina idea a serious threat in the long term and doubts ranchers will make changes to their operation in light of the news.
“Nobody’s happy about it, let’s put it that way,” Eich said. “Personal opinion, I thought it was kind of a ruse when he mentioned it. I mean, it’s coming from Trump, so take everything there with a grain of salt.”
Funk reported from Omaha, Nebraska. Associated Press videographer Cristian Kovadloff contributed from Coronel Brandsen, Argentina.
—Josh Funk and Sarah Raza, Associated Press