Livestock economist James Mitchell at the University of Arkansas says President Trump’s expanded beef import plan hasn’t provided noticeable price relief for consumers and has pressured cattle prices.
“All of this mattered a lot to producers, regardless of how much of that beef was imported,” he says.
In August, President Trump announced a plan to allow an additional 300,000 metric tons of lean beef trimmings into the U.S. over 90 days without higher out-of-quota tariffs to lower ground beef prices at the grocery store.
Mitchell says retail beef prices have remained largely unchanged, as about 38 percent of the first month’s 100,000-metric-ton import quota was filled in September.
“It was well below the 100,000 metric tons allowed. That leaves close to 63,000 metric tons not filled of that quota,” he says.
He says the imports have impacted cull-cow prices, which could continue to pressure the bottom line for some producers.
“If you look at enterprise budgets, really at any state, cull cows are from year-to-year, 15 to 30 percent of cow-calf revenue.”
Mitchell says producers should continue to watch for any policy announcements or revisions that could create more market uncertainty. The 90-day expanded beef import plan is expected to end November 30.
EDITOR’S TAKE:
Ok, sometimes we all try things that don’t work out as planned. That appears to be the case here. Consumer prices haven’t reacted as expected largely because only about one-third of the expected imports were realized in the first month. In addition, even that small amount of imported beef sent the wrong signal to beef producers. When will the beef herd expand and help bring prices down for consumers? It’s anyone’s guess, but hopefully sooner than later.
Although some beef producers are suggesting that higher input costs have trimmed their margins, rest assured many or most of them are having a very good year from an income perspective. That implies they will be looking for ways to lower their tax burden by reinvesting a good deal of that money in items necessary to keep operating at peak efficiency. Items like new trucks! Items they can write off in the year purchased using the 100% write off provisions of section 179 of the U.S. tax code. Use this information to sell more trucks. And, as always, make sure you have the latest inventory posted on AgTruckTrader.com, the place where farmers shop for CAD members and their next truck.
