News

Economist says Trump administration’s rumored beef plan was unlikely to lower retail costs

An ag economist says the Trump administration’s recently floated plan aimed at lowering beef prices likely wouldn’t have moved the needle. Dr. David Anderson with Texas A&M University says, “I don’t think this would do very much to beef prices at all.” 

On Monday, the Wall Street Journal reported that President Trump planned to temporarily reduce Tariff Rate Quotas on beef exporting nations.  TRQs allow a specific quantity of a product to be imported at a lower tariff rate. Once that threshold is met, imports are subject to a higher tariff rate.   

He says the U.S. is already importing record amounts of beef, most of which is trim to be used for ground beef.  “We have to just kind of question just how much more of lean beef trimmings is the market really looking for,” he says.  “Even though we have record high prices, we’ve got the market signal already bringing in that beef.” 

He tells Brownfield, “If we’re looking for a cheaper steak, that’s not what we import and so, we wouldn’t have much effect there.” 

Anderson says the combination of strong demand, a cattle herd that isn’t expanding, ongoing drought conditions, and the continued suspension of live cattle imports from Mexico are pushing beef prices higher.  “The action that we try to take, that we try to lower prices, well, that’s really counterproductive because we need high prices to get producers to be profitable enough to be able to expand,” he says.  “And if we work to lower prices, we’re removing that signal to expand.” 

He says when herd expansion begins in earnest, it will likely push beef prices even higher because supplies will tighten further.  

The Trump administration received significant pushback from cattle producers and lawmakers in cattle country and has delayed plans to temporarily suspend tariffs.