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Trump to Sign Orders Aimed at Lowering Beef Prices
The U.S. Cattle Herd Has Shrunk to a 75-Year Low, Sending Consumer Prices to Record Highs
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President Donald Trump will sign two executive orders May 11 to try to lower beef prices, according to a White House official, the latest effort by the administration to counter high consumer prices ahead of November midterms.
The orders aim to address short-term supply issues in the U.S. beef market by expanding imports and by supporting a rebuild of the country’s domestic cattle herd, according to the official, who requested anonymity to discuss the measures before they are made public.
While the official did not provide further details on the orders, the Wall Street Journal earlier reported the administration is planning to temporarily reduce tariffs on beef imports as soon as May11.
The move would suspend the annual tariff-rate quota, which applies a higher rate after a certain level of beef imports are reached, on all beef-exporting nations, according to the report, which cited people familiar with the matter. It would enable more of the product to enter the U.S. at low rates.
The Trump administration also plans to direct the Small Business Administration to increase loans for U.S. ranchers, while reducing some laws surrounding protections for endangered wolves and ear tag requirements, the Journal reported. The U.S. Department of Agriculture last fall also announced a plan meant to loosen regulations, including on grazing access, to boost supplies.
The U.S. cattle herd has shrunk to a 75-year low, sending consumer prices to record highs while also tightening margins for meat processors. The cost of beef has been one of the key drivers of food inflation, making it a political flashpoint for the Trump administration ahead of November’s congressional elections.
The outcome will hinge on voters’ views on the president’s handling of the economy, with polls showing the public worried about high costs for groceries, utilities, housing and other items which are squeezing pocketbooks.
READ MORE: DOJ Confirms Antitrust Probe of Beef Processors
The U.S. is already poised to import a record amount of beef this year, according to USDA. Those supplies in the first quarter of the year have come largely from Brazil, Australia and Canada, according to USDA data. Brazil, the world’s top beef exporter, in particular is poised to ship more to the U.S. as its usual buyer, China, has imposed quotas. Trump had already increased Argentina’s quota for beef shipments.
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The largest 3PLs in North America continued to face volatile business conditions last year, from compressed margins to tariff-driven supply chain upheaval. Read more
The president has blamed meatpackers, particularly foreign-owned firms, for the increase in prices, and the Justice Department is currently investigating the industry for antitrust behavior, even as processors have been losing money in the current market.
Shares of Brazilian meatpacker Minerva SA jumped nearly 4.4% on the Journal report earlier May, and U.S. shares of JBS NV briefly erased losses before resuming declines. Arkansas-based Tyson Foods Inc., the U.S.’s largest meatpacker, fell as much as 4.7%.
Tyson ranks No. 9 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 1 among agriculture/food processing carriers. JBS ranks No. 86 on the TT Private 100 and No. 12 on the agriculture/food list.
