NASHVILLE, TENN. (RFD NEWS) — The White House has been trying to address rising consumer prices in recent weeks, including increasing the amount of certain lean beef trimmings that can enter the United States under a lower tariff rate.
One market broker warns the timing is key ahead of the midterm elections. Tim Strunk says beef prices, like other consumer goods, have been affected by inflation in recent years.
“Let’s be honest. Beef prices are just like anything else, right? The inflation over the last several years has impacted the price of literally anything and everything we do in our lives. And I think you have an administration that is trying to look ahead to these midterm elections. And you know, I don’t want to get political because that’s not my job, but it’s what’s happening that they’re looking ahead to these elections and trying to make the general public think that they’re looking out for their best interest in trying to get prices down. But let’s look at fuel prices. Let’s look at, you know, these ongoing conflicts that we’re involved in and how that impacts things.”
And speaking of fuel prices, diesel prices have also remained elevated.
The latest U.S. Energy Information Administration data shows the national average for on-highway diesel at $5.60 per gallon for the week ending August 31.
President Donald Trump has said additional beef imports are intended to help lower prices for consumers. The White House’s latest action temporarily increases the in-quota quantity for lean beef trimmings by 300,000 metric tons, with the additional volume scheduled to enter the market in three 100,000-metric-ton tranches over 90 days.
An economist at the University of Missouri says imported lean beef is already selling for about 25 percent less than comparable U.S. beef.
Domestic 90 percent lean beef trim is selling for about $460 per hundredweight, compared with about $361 for imported lean trim. That imported lean beef is used by packers to mix with fattier domestic beef to make ground beef.
Researchers say the bigger concern is how quickly additional imports could enter the market. A sharp increase over 90 days could give cattle producers less time to adjust.
Despite the added imports, the U.S. remains a major global beef supplier.
The U.S. Meat Export Federation says some regions are seeing significant growth. July U.S. beef exports were steady in volume compared with a year earlier, while export value increased 6 percent to nearly $797 million.
USMEF President and CEO Dan Halstrom says global demand remains resilient.
“We were even on volume over a year ago, but we were up 6 percent, just about $800 million of beef exports globally, which continues to be pretty resilient demand on the beef side, and on a per-head basis, that’s over $420 per head attributable to exports, which is a significant increase from prior year. So, if you look at the global landscape, we have several areas of the world performing well. Mexico, one of the largest months year to date, you look at Taiwan up 38 percent on value, Japan up significantly, Caribbean up significantly, and even Central America continues to perform well.”
USMEF data shows July beef exports to Taiwan were up 38 percent in value, while shipments to Mexico also increased. Japan remained a major market, with July export value up 9 percent from a year earlier.
Halstrom says beef exports to China are down on the year, but he remains hopeful for progress later this month.
