NASHVILLE, TENN. (RFD-TV) — President Donald Trump recently announced his plan to increase beef imports from Argentina in an effort to lower consumer beef prices. However, analysts say the details of the proposed deal remain unclear, but the impact on U.S. cattle producers would likely be limited.
Greg McBride, a commodity broker with Allendale, explains why.
“We’ve heard Argentina talk about it; we’ve heard President Trump talk about it, but we haven’t heard exactly what the details are as far as the type of beef that we will be importing,” McBride said. “Now, Argentina is one of the top six producers of beef in the world. They do export a good amount, but they also use quite a bit. So, there is some beef available to us. They’ve only sent us about 100 million pounds of beef last year. So, we’d have to see them increase that quite a bit to make a big difference.”
The U.S. Department of Agriculture (USDA) also released a 13-page plan last week to expand the U.S. cattle herd and lower beef prices. That plan did not mention imports from Argentina. However, current tariffs on Brazil have created a beef import gap for the U.S., McBride said, adding that at least some of the additional beef from Argentina will fill that gap.
“We do have tariffs going on with Brazil, and we are a buyer of Brazilian beef quite a bit,” McBride said. “It goes in with the trim and grind to make some of the ground beef and stuff like that. So, you have to think that some of what we’d be buying from Argentina would fill that gap, and then how much on top of that would we then be able to buy that would kind of help to kind of refill the freezers and bring some of these Prices down.”
Despite those uncertainties, domestic cattle markets are already experiencing rapid price swings, according to Zach Tindall of Producers Livestock, who explains why these movements do not always translate into cheaper meat for consumers.
“The comments here [in] the last week have been that cattle feeders need to realize that the inventory that they have is too high-priced for the consumer,” Tindall said. “Well, if we lower the price of a calf, is that going to make your meat at the grocery store any cheaper? My say is, no. It’s not that simple. But it doesn’t matter if you’re a hedge fund and you’re watching this thing, and the President of the United States says, ‘Hey, beef’s too high, we’re going to get it to come down.’ I mean, past history, what he says usually gets done. And I think that’s a lot with a lot of what’s going on.”
The idea of buying more beef from Argentina does not sit well with much of farm country. Rep. Dusty Johnson (R-SD) says that right now, many ranchers are just confused. He, too, would like to see the specifics of the beef import trade proposal with Argentina.
“They don’t really know whether or not they should be making the investment and buying more grassland, more pastureland, and buying more cattle,” Rep. Johnson said. “I don’t think this is good long-term for the American beef supply, and so I — of course, I want to see the specifics — but I do have concerns. I mean, what we really need is more American beef, not more Argentine beef, in the American marketplace.”
Cattle group leaders like Ben Weinheimer, president and CEO of the Texas Cattle Feeders Association (TCFA), say politics can always muddy the waters.
“The messaging around it can be much more substantial than the actual numbers, the surrounding metrics,” Weinheimer said. “Yet, I think it’s one where we’ve been a little bit cautious and made sure we haven’t overreacted to those comments. We really want to continue to stand by the Trump administration and Secretary Rollins. They’ve done a lot of great things for agriculture, and we expect to see that from them going forward, and even though some of their policy decisions may have some short-term implications, we’ll continue to be hopeful and supportive of them.”
With all the recent movement in the cattle market, many producers are keeping risk protection top of mind.
Jake Charleston with Specialty Risk Insurance joined us on Tuesday’s Market Day Report with an insurance industry update. In his interview with RFD-TV News, Charleston discussed cattle producers’ perspective on market movement over the last week and conversations he has had with producers about the purpose of Livestock Risk Protection (LRP) insurance.
