US ranchers whiplashed by Trump’s beef policies

The American rancher, one of Donald Trump’s most steadfast voting blocs, has had a whiplash-inducing month.

Ranchers have found themselves caught between the president’s desires to appease both them and the American consumer in the wake of high beef prices, starting with Trump’s quip on October 19 that the US would increase beef imports from Argentina and the ensuing rancher backlash following the announcement of an investigation into the hyperconsolidated US meatpacking industry and the removal of tariffs on Brazilian beef.

The lowest herd size for beef cattle since the 1950s has led to higher cattle prices for US ranchers. Other factors that limit supply include the Mexican border’s closure due to concerns about screwworms and high tariffs on imported beef.

Cattle prices paid to ranchers are distinct from those for consumer beef, which were $6.32 for a pound (453 grams) of ground beef in September, an 11 percent increase from $ 5.67 per pound in September 2024. Due to the government shutdown, the Bureau of Labor Statistics did not release economic data, including the consumer price index for the month before.

Trump’s plan to import more Argentinian beef was met with opposition from his typically devoted ranchers, who they perceived as a threat to their recent economic successes.

They would be acting in a manner that they have for the past 20 years, which is Terrible! Trump stated in an October post on his Truth Social platform, “It would be nice if they understood that.”

Corbitt Wall, a commercial cattle manager and market analyst, is clear that he “totally supports Trump and everything he does,” but he also saw hubris and a misunderstanding of the president’s cattle industry.

He told Al Jazeera, “There was not a person in the cattle business on any level who was not insulted by that post.”

Since Trump’s announcement on October 21st, Wall has religiously followed prices across the cattle trade, from ranch to slaughterhouse, and has witnessed a decline in the futures market for cattle by more than 15%.

Futures prices affect cattle ranchers’ future sales prices, which will also affect future sales prices. Wall said he hopes Trump leaves the cattle market alone for the sake of ranchers.

He doesn’t understand the impact a statement can have on our business because he doesn’t live in this place, he said, and he does in fact do in this cattle world.

Years of challenging weather

Rancher in Oregon David Packham claimed that many ranchers are still struggling despite years of declining cattle prices.

Years of drought across the nation caused some ranchers to sell their cattle, raising feed costs for everyone. Additionally, tractor-to-pick-up truck prices have increased, especially as a result of the COVID-19 pandemic, and are expected to increase even further as a result of Trump’s tariffs.

Packham said he has sold cattle at a loss frequently and doesn’t want consumers to believe that ranchers are raising livestock for the price.

Because I couldn’t afford $100, 000 for a new tractor, Packham said, “I’m looking at a 40-year-old tractor that I use on a daily basis just to keep putting it off replacing it, making repairs, even though it’s difficult to find parts for now, just to keep it limping along.” We have all this loss carryover, so when I say we’re not really making a lot of money, it’s because of it.

Up until Trump’s first term, Packham was a registered Republican. Ranchers who criticize Trump, he said, are in a minority in the community because of the president’s comments about Argentina and the subsequent chaos in the cattle industry.

“I’m noticing more and more of them [ranchers] who have been cautiously neutral and who are now kind of like me and who just say, “You know what?” No. This is bulls***. He’s a train wreck, Packham claimed.

The “Perennial issue”

However, Trump’s announcement on November 7 that the big four US meatpackers, Tyson, JBS, Cargill, and National Beef, will be subject to a Department of Justice investigation for “potential collusion, price fixing, and price manipulation,” is something that action ranchers can support.

Because the four companies, which own more than 80% of the market, have historically had little negotiating leverage on ranchers looking to sell cattle.

However, the first Trump administration’s investigation into meatpacker price fixing was initiated in 2020 as a result of a gulf caused by falling cattle prices and rising consumer beef prices. Under President Joe Biden’s administration, the investigation continued, but it never came to an end. Just before Trump announced the antitrust investigation in November, the investigation was quietly closed with no findings, according to Bloomberg News.

The administration’s announcement regarding the antitrust investigation is “entirely for political consumption,” according to James MacDonald, a research professor in agricultural and resource economics at the University of Maryland.

You can gain some political ground by attacking the packers, according to MacDonald, because it is a recurring problem that “p***es off ranchers.”

Packham said that because of the squeeze caused by the tight cattle market, packers are operating with slimmer margins and not from an absolute position of power.

More than 3, 000 people were employed at Tyson’s Nebraska beef-processing plant as of Friday. The decision, according to MacDonald, was “shock” because it showed how severe the US beef shortage is. Years of drought, which wiped out grazing lands and slowed herd rebuilding, contributed to the current low cattle inventory in the US. Years of work go into improving the cattle supply chain.

It’s a fundamental and kind of a fact, according to MacDonald, and it won’t change for a while.

MacDonald also doubts that Argentina’s increased imports will help to lessen this shortage or lower prices because the country primarily exports lower-grade, lean beef to the US, which accounts for only 2% of imports. He anticipated that while the import market will be impacted by the reintroduction of largely lean Brazilian beef, overall beef supply will be impacted less by it.

McDonald also cited heifer retention figures, which indicate how many female cattle ranchers hold back to produce future herds, which are still low.

These figures were likely taken into account when Tyson made the decision to shut down its plant in Nebraska, and McDonald asserted that the industry doesn’t anticipate a rebound in herd numbers either.

Tyson claims that he doesn’t believe cattle supplies will soon rebound, according to MacDonald.

Trump’s recent policies’ actual mechanisms may not temporarily alter consumers’ bottom lines or alter the cattle market, but Wall is more concerned about the effects of the news cycle, claiming ranchers are “live and die” by the cattle markets. Despite Wall’s shaken faith, he still believes that ranchers will support Trump in spite of the election results.

There is no way for people to choose that option, according to Wall, when you consider what the other side has to offer. They will stick with him in the long run, they say.

Source: Aljazeera