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Tariffs indirect impact on livestock profitability

A livestock economist says an increase in tariffs on one protein indirectly impacts the profitability of others.

Texas A&M’s David Anderson uses pork as an example.  “We’re less competitive in export markets – so we sell less pork,” he says.  “But we’ve already produced the pork.  So it stays here and those items get into the domestic market.”

He tells Brownfield more pork in the domestic market lowers its price at the meat case – giving consumers a less expensive option.  “As consumers – we buy a little more pork,” he says.  “Which means we didn’t buy beef or chicken.  Those prices then come down because our actions as consumers – we buy more of the cheaper one.”

And he says, that trickles down through the supply chain.  “Through lower beef prices and lower fed cattle prices and lower calf prices,” he says.  “Because those cattle feeders are the ones who are eventually going to demand our calves and then retailers are eventually going to demand that beef.”

US agricultural goods have been targets of the recent trade rifts with China, Canada, Mexico, and the EU.

AUDIO: David Anderson, livestock economist TAMU