The Trump administration has released a flurry of announcements in recent weeks with actions intended to lower beef prices and boost domestic cattle herds. President Donald Trump and his Republican Party are facing considerable political headwinds less than two months from midterm elections, and the moves appear to be aimed at lowering food costs without alienating a symbolic portion of the base—ranchers.
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In practice, experts say it’s too early to tell if this will work.
This wave began with an announcement on Aug. 21 from Trump, who said that the U.S. would allow 300,000 tons of ground beef imports at a lower tariff rate. In return, these products would be sold at a 25 percent lower market price.
The news drew backlash from ranchers and Republicans in Congress, even as Agriculture Secretary Brooke Rollins defended the decision.
With midterms approaching, the president is caught between lowering persistently high beef prices for consumers and addressing issues ranchers have raised for years, like a lack of transparency in beef labeling and competition in the marketplace.
Experts say the recent executive action is a good signal, but unlikely to directly resolve these issues. Instead they are hoping it spurs more movement from Congress.
Kayla Lowery coaxes cattle out of a trailer at the Montana Livestock Auction in Ramsay, Montana, Sept. 9. (Photo credit: Holly Pickett for the Washington Post via Getty Images)
The U.S. Cattle Herd Is Likely to Stay Low
On top of lowering beef prices, the Trump administration said its import policy will incentivize ranchers to rebuild their cattle herds amid a 75-year low nationwide. But industry experts said that’s unlikely, and that the imports are more likely to undercut domestic beef prices.
Operating expenses for ranchers have significantly increased over the last several years, including feed, veterinary expenses, and more. Simultaneously, the cattle industry has remained vulnerable to major price swings in what a rancher gets per head of cattle.
The domestic industry was dealt a significant blow after a drought in late 2020 led many to cull their herds. While there have since been periods of ranchers receiving higher prices, they have largely helped ranchers dig out from challenges in the marketplace rather than allowing them to expand their operations.
Overall, the cattle industry is facing ‘extremely imbalanced’ supply and demand, meaning what traditionally worked to bring beef prices down is not effective today.
In the current period of higher prices, some ranchers have also decided to capitalize on the moment and sell their livestock, rather than rebuilding their herds. The number of cattle operations in the U.S. has decreased by about 17 percent between 2017 and 2022, according to the USDA.
The declining herd has coincided with cattle imports rising and domestic beef prices reaching “record highs,” Bill Bullard, CEO of independent ranchers group R-CALF, told Civil Eats. Without more certainty for the future of beef markets, ranchers are less likely to invest in rebuilding herds now, he said.
Overall, the cattle industry is facing “extremely imbalanced” supply and demand, he said, meaning what traditionally worked to bring beef prices down is not effective today. This is partially due to consolidation within the meatpacking sector, an issue ranchers and the administration have both raised.
Beef Industry Consolidation Remains a Top Concern
The imports are also unlikely to truly lower beef prices for consumers, Bullard said, because of the imbalance between supply, demand, and the levels of consolidation throughout the beef supply chain.
Currently, the “Big Four” meatpacking processors—Tyson Foods, Cargill, JBS, and National Beef —control about 85 percent of the beef market. There’s also heavy consolidation within the retail sector, where retail beef prices have increased despite lower wholesale beef costs.
“There’s been a little bit of give and play between the big retail and big packers on who gets the most cut, but what is clear is that consumers and farmers continue to lose in that equation,” said Sarah Carden, senior director of research and policy at the nonpartisan watchdog group Farm Action.
Even though cheaper beef will be imported, Carden said, it must take multiple steps through highly consolidated industries before it reaches the consumer. The deal doesn’t guarantee that the packers and retailers will pass along the cheaper price, with few levels of competition to keep prices low.
President Donald Trump looks on before signing executive orders related to beef processing and cattle ranchers on Sept. 4. (Photo credit: Kent Nishimura, AFP via Getty Images)
New Energy Enters Beef Policy
Facing rancher backlash from the import news, the Trump administration has since announced a series of actions aimed at addressing the cattle herd decline and anti-competitiveness in the supply chain.
The USDA has announced a Ranchers First Initiative, aimed at rebuilding the cattle herd. This plan includes new risk-management tools to encourage heifer retention, greater disaster assistance for ranchers, and efforts to boost regional beef-processing capacity.
The administration also expanded a Department of Justice investigation into beef prices by requesting information from top retailers.
Most notably, on Sept. 4, Trump signed two executive orders aimed at challenges in the ranching industry. Trump said these would help ranchers process and sell their own meat directly to consumers.
The majority of cattle producers don’t have the means to finish and process their own product. It requires more space, logistics, storage, and electricity.
His order directs the USDA to increase state participation in the State Meat and Poultry Inspection Program, Cooperative Interstate Shipment Program, and Talmadge-Aiken Cooperative Inspection Program. Under the order, the USDA must also develop technical assistance and training programs for smaller meat processors.
Bullard from R-CALF said it may increase competition and allow some producers to avoid the big four monopolies. But there’s also skepticism about how effective the executive order will be.
The majority of cattle producers don’t have the means to finish and process their own product. It requires more space, logistics, storage, and electricity to incorporate processing, and many producers don’t see that as a viable option on a large scale.
Rob Levitt, an executive chef and butcher based in Chicago who works with a network of local ranchers, said most of the farms he works with don’t have the capacity to process, package, and sell their own product. It can be expensive for farms to invest in and install the necessary infrastructure, he said, and he doesn’t see these policies having a widespread benefit.
