On the day that the Trump administration announced the importation of 300,000 metric tons of ground beef without tariffs in an attempt to reduce current sky-high retail prices, the U.S. Department of Agriculture (USDA) released its monthly Cattle on Feed Report, which showed growth in the amount of cattle on feedlots but at much lower percentages than estimated. Placements were also historically tight, at the lowest level for July in 30 years.
What this means in layman’s terms is that ranchers should have been able to earn higher prices for heads of cattle, since supply was at a premium, for the first time in a while. After decades of falling profitability, over half of cattle ranches have shuttered in the U.S.
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But the good news in that report was swamped by the beef import announcement. Instead of cattle price markets going up, they tanked briefly, continuing a trend that began a few months back. Cattle prices have fallen 20 percent from their peak in June.
The primary beneficiaries of volatile cattle prices are the Big Four meatpackers, which control approximately 85 percent of the beef market. Consolidation at the meatpacker and retailer level means that lower cattle prices are not reflected at supermarkets, where shoppers are paying some of the highest beef prices in U.S. history. Combined with reporting about a personal intervention by meatpacking kingpin Joesley Batista at the White House the day before the beef import announcement, ranchers had the suspicion that they were seeing cattle prices manipulated and being sold out by their own government.
“Could somebody ask [USDA] how the government crashing the cattle market with cheap imports is beneficial or helpful to rebuilding the herd?” one rancher asked on social media.
The primary beneficiaries of volatile cattle prices are the Big Four meatpackers, which control approximately 85 percent of the beef market.
As longtime rancher Mike Callicrate told the Organized Money podcast last month, tanking cattle futures, even if temporary, had short-term and long-term effects. In the short term, it induces panic: Ranchers sell their herds and leave the business, providing meatpackers with cheaper product to process. In the long term, if ranchers stop investing in cattle because cheap imports undercut them, supply will remain low, processing plants will continue to close, the nation will rely more on imports from the Big Four meatpackers, and consolidation and higher prices will perpetuate.
Cattle ranchers are part of a loyal rural constituency for Trump, and the strong pushback unnerved the administration. So the administration released two executive orders designed to placate rancher fury. “We’re coming up on midterms, he opened up the export deal, it pissed everybody off, so now he’s like, well I’m gonna throw you a bone,” said Oregon rancher Curtis Thomas.
Yet every initiative in those executive orders is either weaker than advertised, undermined by prior administration actions, or at cross-purposes with the impact of low cattle prices, according to ranchers and farm advocates.
As Dustin Kittle, a rancher and agricultural attorney from Tennessee, pointed out, the orders mandate seven reports, one website, one new coordinator position for ranchers and small meat processors, and a handful of technical assistance and training programs. What they don’t do is anything to benefit the last remnants of a dying industry.
“Can you understand the frustration of America’s farmers and ranchers when they are used as a propaganda piece,” Kittle wrote, “to make it appear to the public like their concerns are being heard?”
FOR EXAMPLE, THE FIRST EXECUTIVE ORDER foregrounds stronger enforcement of fair competition laws in agriculture. In particular, it directs USDA Secretary Brooke Rollins to investigate violations of the Packers and Stockyards Act, a century-old law covering discrimination and unfair conduct by the middlemen meatpackers, who purchase cattle and process beef for retailers.
But just two months ago, Trump’s USDA canceled three new Packers and Stockyards Act regulations instituted by the Biden administration to increase protections for livestock producers and guard against retaliatory meatpacker practices. Those rules could have made it easier to investigate and enforce misconduct.
Primary enforcement of the Packers and Stockyards Act now goes through the Agricultural Marketing Service (AMS), an obscure agency whose primary mission is to promote the sale of U.S. food products internationally and that works hand in hand with meatpackers on those initiatives. In fact, it was the first Trump administration that disbanded the Grain Inspection, Packers and Stockyards Administration (GIPSA), which had primary enforcement responsibilities, and pushed them into the AMS. That was paired with a withdrawal of stronger Packers and Stockyards Act rules, put in place by the Obama administration.
At the time, even conservative Sen. Chuck Grassley (R-IA) was forced to admit that Trump’s USDA was “pandering to big corporations.”
This history casts a shadow on the idea that the USDA will engage in anything approaching robust enforcement. Indeed, the only concrete demand in the executive order is a report within 60 days detailing any current enforcement activity. “It’s just another big rug pull,” said Mike Callicrate, head of Colorado-based Ranch Foods Direct. “This idea that we have to study something that’s been studied to death already is crazy … I think he’s going to delay it, get past the election, see where things are at, and nothing will happen.”
Separately, the Justice Department did seek information from the nation’s largest grocers about high beef prices. But the Antitrust Division, which issued the request, has been devastated by staff losses and may not be able to do much enforcement even if they found something.
One source cited a broader souring in attitude toward farmers and ranchers from the first Trump administration to the second, largely because of severe staff reductions caused in part by the Department of Government Efficiency. Ranchers report that USDA officials are hard to reach relative to the first term, when Trump used New Deal–era programs to hand out money to farmers as a counter to the impacts of tariffs. Just this week, four unions representing USDA staff sued the agency to block a reorganization plan they say would further kneecap operations.
ANOTHER ITEM IN THE TRUMP ADMINISTRATION’S first executive order enables ranchers to cut and sell their own meat. But the idea that individual ranchers will be able to compete with meatpacking giants for access at consolidated retailers like Walmart is fanciful. While boutique producers may be able to eke out more sales of specialty products, the initiative, a version of a congressional bill called the PRIME Act, is not in any way a salve for high beef prices or the depression economics of the cattle rancher industry.
The USDA recently instituted the “Ranchers First Initiative” to provide grants to rebuild cattle herds. While this aims in the right direction if you want lower retail prices, the import announcement has hobbled the idea of rebuilding herds. Ranchers won’t stay in an industry that cannot generate a profit, and futures markets are so volatile from the whipsaw of announcements that ranchers cannot hedge their purchases against future prices.
The second executive order starts off with a 90-day policy review, coincidentally the same amount of time that the 300,000 metric tons of beef (which represents about 10 percent of projected U.S. beef consumption in the import time period) will be allowed into the country duty-free. The processed mystery meat is apparently coming from Brazil and Argentina, both of which have seen their exports rejected by the European Union and China, respectively, because of alleged contamination and threats to food safety.
“You’re telling me that you can butcher that animal in … Brazil, Argentina, stick it on a boat, bring it all the way up to the United States, and still be competitive against what I can do it for here. It puts pressure on us, and in the meantime, our input costs are still going up,” said Thomas, the rancher from Oregon.
The second order asks regulators to consider delisting gray wolves, which attack cattle herds in some parts of the country, from the endangered species list. Gray wolves are generally found in Alaska, the Pacific Northwest, and the Upper Midwest; several states with large cattle populations, like Texas and Nebraska, have limited gray wolf populations. So the impact on herds is questionable.
Meanwhile, a bigger threat to cattle herds, the invasive New World screwworm, is not materializing, according to formal USDA reports, though experts have questioned the numbers as “very strange.” Much of the current surveillance is being done with cameras that would be unlikely to see cattle with open wounds.
Another policy option in the executive order, adding country-of-origin labeling (COOL) so consumers can see where their meat comes from, has been highly sought by ranchers. But the order just sets up a 90-day process to review current authorities that might allow executive action on COOL, as well as an economic impact. There is no guarantee that any regulations would be changed; there is some language in the order saying that the White House will merely issue a legislative recommendation.
“Until Congress puts it in statute, it is a review and a press conference,” said one rancher on Twitter.
Because mandatory COOL was tossed out by the World Trade Organization in the 2010s, the beef coming in from Brazil and Argentina is not subject to these labeling restrictions, and can be combined with domestic beef without consumers’ knowledge. The 90-day review of COOL options in the Trump executive order means that Brazilian and Argentinean beef will not be affected.
Overall, the response from the Trump administration to rancher anger is notable mostly in its thinness. This gives Democrats an opportunity if they choose to take it. Thirteen Democratic senators introduced legislation to break up the big meatpackers earlier this year, though they have said little about it since.
