Allowing an extra 300,000 tonnes of lean beef trimmings into the United States at a lower tariff has done almost nothing to cut ground beef prices at the grocery store, while cattle prices have fallen, according to an American Farm Bureau Federation (AFBF) analysis published on 23 September.

President Trump's August proclamation temporarily expanded the tariff-rate quota for lean beef trimmings by 300,000 metric tons, about 661 million pounds, from 1 September, and "encouraged" retailers to pass on a 25% discount without any commitment or enforcement. AFBF economists Bernt Nelson and Faith Parum tracked the daily price of 80% lean ground beef at 41 grocery stores in 22 states from 2 September.

The average fell from $7.29 a pound on 2 September to $7.13 on 23 September, a drop of 16 cents or about 2%. At 30 of the 41 stores the price was exactly what it had been on 2 September; seven ended lower, and only three reached the 25% discount. Prices rose in Des Moines and Davenport, Iowa, by 39% and 38%, in East Lansing, Michigan, by 25% and in Denver by 11%.

The economists say retail prices reflect costs along the whole chain, including processing, transport, labour and margins; according to USDA's Economic Research Service, ranchers receive 3.3 cents of each food dollar after their costs. The underlying problem is a shrinking herd: the US calf crop is expected at a record low of 32.5 million head, 3.8 million fewer than the 2018 peak, even as feedlot inventories stood at 11.16 million head in September.

Meanwhile cattle and feeder cattle futures have dropped sharply since the proclamation, and some ranchers report cash prices $300 to $400 a head below two months ago. AFBF President Zippy Duvall called on the president to roll back the plan. "To put it simply, the plan undercut a fragile recovery in the cattle industry while failing to benefit consumers," he said, urging long-term policies to help rebuild the US herd.

Photo: Rainer Zenz / Wikimedia Commons (CC BY-SA 3.0)

Source: American Farm Bureau Federation