Anyone who’s been to the store lately knows beef prices are high. Will an influx of foreign beef help bring down the cost of your hamburger?
Agriculture economist Brittney Goodrich, who teaches at the University of Illinois Urbana-Champaign, said it’s unlikely for a couple of reasons.
For one, President Trump’s proclamation from August doesn’t apply to all beef products – just lean beef trimmings, which are then combined with fattier domestic beef to make the ground beef you buy at the store.
“Because this is going to be combined into ground beef, there’s really not going to be a lot of pass-through to the consumer to see lower retail prices,” Goodrich said.
According to the proclamation, the Trump administration will waive out-of-quota tariffs on up to 300,000 metric tons of beef product for 90 days. The lean beef trimmings will be sold at 25 percent less than market value, according to the proclamation.
Another challenge is the time window: 90 days may not be long enough to take a chunk out of a decades-long problem. The U.S. cattle herd is its smallest since the 1960s, Goodrich said, due in large part to droughts out west.
The foreign beef announcement was criticized by the National Cattlemen’s Beef Association, an industry group representing cattle farmers.
“NCBA is disappointed by the President’s statement,” Colin Woodall, the group’s chief executive officer, said to NBC News. “While America’s cattle producers share the goal of keeping groceries affordable for consumers, flooding the market with government-subsidized, below-market beef is not the way to rebuild the American cattle herd.”
NBC Chicago asked the USDA which countries the beef will be imported from, and how much has been imported so far. We hadn’t heard back as of Monday night.
Fifth-generation cattle farmer Alan Adams knows the cattle industry is cyclical. It’s not unusual to see cattle prices drop at the end of the summer, he said, but the announcement from Trump weakened those prices further.
“I mean, I buy them and then I sell them. I have to pass the pain down to the people below me,” he said.
Adams said he feels for both ranchers and consumers.
“Well for us, the cattle that you see behind us we paid for them and brought them to the farm and we bid for them on an auction. And we make those bids based on what a future market might be when we sell them,” he told NBC Chicago’s Jenn Schanz while at his feed lot in Sandwich, about 60 miles southwest of Chicago.
And that market now, feels more shaky. While the Trump administration says the foreign beef will be sold at 25% below market value, it’s unclear right now which companies, if any, have agreed to that.
“Whether those processors can pass savings on or whether they will pass those savings on to consumers is unclear and the USDA certainly can’t dictate that,” Goodrich said.
Another factor: the processing time of turning cattle into the ground beef is longer than other forms of meat like chicken or pork.
“Producers have to make a decision. If they have a calf today, I could either sell that calf at historically high prices or I could retain that calf and try and increase my herd size, but then that’s not necessarily going to pay off until two years down the road,” Goodrich said.
Alan has about 1,000 cattle in his feed lot. He’s increased his mother cows on pasture from 50 to 60.
“We’re running that flat out, trying to make as much money as we can with the cow herd,” he said.
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