Trump signals openness to beef processing rule changes

Comments follow conservative radio host Glenn Beck's criticism of federal rules for processing plants

Butcher prepares order of ground beef Nate Abeyta, owner and founder of Deep Cuts butcher shop in Dallas, prepares an order of ground beef. (Tony Gutierrez/Associated Press)

Key Takeaways:Toggle View of Key Takeaways

  • President Donald Trump said Aug. 26 that he is open to reducing beef-processing regulations after conservative radio host Glenn Beck raised concerns about packer rules.
  • The comments come as beef prices remain elevated, with ground beef averaging more than $7 per pound in July amid a severe cattle shortage.
  • The Justice Department's antitrust probe into meatpackers continues as the administration weighs measures to lower prices and increase competition.

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President Donald Trump suggested he was open to changing federal regulations on beef processing, as the administration continues to target high meat prices as a priority ahead of the midterm election.

Trump, when pressed by conservative radio host Glenn Beck on Aug. 26, said less regulation “could be a very good call for ranchers or farmers — no, for the country.” 

The president did not provide any details into what regulatory changes he might consider.

The comments come as the president has been trying to tamp down skyrocketing beef prices, including by boosting foreign imports and launching an antitrust probe into meatpackers — moves that have, at one point or another, sparked backlash from different parts of the beef supply chain.



Beck, in his radio show, told the president that “we can’t butcher with all of the federal regulations,” adding that he was a rancher himself. The consolidation of U.S. beefpacking has long raised concerns of outsize influence over the prices that ranchers receive. Recent rises in beef costs have renewed that scrutiny.

Ground beef cost an average $7.116 a pound in July, up about 9% from last year and 47% from five years ago, according to the U.S. Bureau of Labor Statistics. The U.S. faces a severe cattle shortage, with higher production costs and dry pastures making it more difficult for ranchers to raise animals. 

“Break the back of those processing plants. There’s people that want to build processing plants everywhere. The regulations are killing us,” Beck added.

“So you’re saying with less regulation, you think that the ranchers and farmers would do a very good job of processing the beef?” Trump asked Beck, saying he had been “hearing about this problem for 20 years.”

“This is a very big thing you just told me, though, because you just gave me a very good idea,” he said.

The Justice Department already has an ongoing antitrust probe into the meatpacking industry. About 85% of the U.S.’s cattle are purchased by just four companies, according to the Department of Agriculture. 

The U.S.’s Tyson Foods and Cargill Inc., as well as Brazilian-owned JBS NV and National Beef Packing Co., dominate the market. The USDA is also trying to encourage competition and earlier this summer committed as much as $500 million in payments to help midsize beef processors weather elevated cattle prices.

Tyson ranks No. 8 on the Transport Topics Top 100 list of the largest private carriers in North America, and JBS USA Holdings No. 81. Tyson ranks No. 1 among the top agriculture and food processing carriers, JBS No. 11 and Cargill No. 26.

But while consolidation in the industry has created long-standing concerns for ranchers, meatpackers are also struggling as cattle become scarcer and pricier. Companies such as Tyson and JBS have closed a number of processing plants, as their beef segments continue to operate at losses.

Ranchers and farm-state Republicans, while supporting additional scrutiny into the meatpacking industry, have also protested other efforts from the Trump administration to boost foreign imports. The president most recently said he would allow 300,000 tons of beef shipments over the next 90 days to be imported at a lower, in-quota tariff rate. That move could benefit meatpackers and lower consumer prices in the near term, but risks undercutting the profitability that ranchers require in order to rebuild their herds.

Agriculture Secretary Brooke Rollins said on CBS News that the president felt “very convicted” that the “short temporary fix” was important as consumers are paying more for ground beef.

The rebuild of the domestic cattle herd — which is ongoing but sluggish amid ongoing drought conditions and market uncertainty — will be required to stabilize beef prices longer term. The U.S. still produces the majority of the beef it consumes, even as imports are seen expanding to a record 19% share of total U.S. supply.

Written by Catherine Lucey, Jennifer A. Dlouhy and Ilena Peng

 

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