It was a big deal for the cattle industry when President Jimmy Carter signed the countercyclical Meat Import Act in 1979. Prior to that, meat imports were based on a percentage of U.S. production, making a domestic oversupply situation even worse.
The quantity and quality of U.S. meat imports has been a contentious issue for more than half a century, never moreso than in recent weeks following President Donald Trump’s decision to allow up to 300,000 metric tons of primarily Brazilian and Argentine lean beef to enter without the additional out-of-quota tariff. The United States has had issues with both countries regarding their meat inspection programs.
The president said the foreign suppliers had committed to prices 25% below prevailing market levels. But there was no assurance the lower cost of the imported beef would be passed on to U.S. consumers.
Beef industry groups warned even a short-term increase in cheaper foreign beef imports would depress cattle prices and could undermine consumer confidence in beef, potentially derailing longer-term efforts to rebuild domestic cattle herds.
The U.S. cattle herd is the smallest in more than 50 years. Because of the countercyclical meat import law, beef imports were already at an all-time high. Although cattle prices have been strong and beef prices high, there had been no calls from consumer groups for the administration to do something. Rather, it’s been reported the call came from a Brazilian-based multinational beef packer.
In the weeks that followed, Trump announced other initiatives designed to appease producers and increase U.S. cattle numbers. But the import authorization, as of this writing, had not been rescinded.
There are a number of reasons why U.S. cattle producers haven’t increased their herds, despite strong prices. Perhaps the main reason is persistent drought, which now affects 80% of the U.S. beef cow herd in 26 states. Another is high input costs, which means cattle aren’t as profitable as it might seem.
Also, I think, cattle producers worry strong prices won’t last. Even though the fundamentals suggest there should be several profitable years ahead, there is always the fear someone in a position of authority will do something wrong-headed and screw it up.
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Al Gustin is a retired farm broadcaster, active rancher and a member of Mor-Gran-Sou Electric Cooperative.
