A larger US tariff-rate quota for lean beef trimmings has done little so far to lower ground beef prices in grocery stores, according to an analysis by American Farm Bureau Federation economists Bernt Nelson and Faith Parum.

In late August a presidential proclamation temporarily raised the quota by 300,000 metric tons, about 661 million pounds, and beef under the lower tariff began arriving on 1 September. The proclamation urged retailers to cut beef prices by 25% but did not require it or set up any enforcement.

The economists tracked daily prices of 80% lean ground beef at 41 chain and independent stores in 22 states from 2 September. The average fell from $7.29 a pound to $7.13 on 23 September, a drop of 16 cents or about 2%, and stayed between $7.13 and $7.38 throughout.

Store prices ranged from $4.99 to $10.49 a pound. Thirty stores ended the period where they began, seven cut prices but only three reached the 25% reduction, and four raised them, including stores in Des Moines and Davenport, Iowa, East Lansing, Michigan, and Denver.

Nelson and Parum noted that a lower tariff on imported beef does not automatically reach the shelf, because retail prices also reflect cattle, processing, transport, labour and retail margins.

They said the result points to the underlying problem of tight domestic cattle supplies, with the US calf crop projected at a record-low 32.5 million head, and that rebuilding the herd matters for long-term supply and price stability.

Photo: Gajda-13 at Danish Wikipedia / Wikimedia Commons (CC BY-SA 3.0)

Source: Farms.com