President Donald Trump made a statement this week referencing the possibility of the U.S. importing Argentinian beef as a way to “bring beef prices down.” This would harm U.S. producers and interfere with the free market.
KLA is working alongside NCBA to ensure the administration understands the industry’s opposition to government intervention in the marketplace and the lack of any consumer-facing benefit stemming from it.
Government intervention will have the opposite effect of the administration’s desire to grow the beef herd. Faced with the possibility of artificial government suppression of beef prices, ranchers will decide to liquidate rather than retain heifers, further shrinking an already record-small cattle herd.
It also is being made clear the economic damage caused to producers when the market reacts to broad statements from the administration about beef prices. The Trump administration needs to let markets work. Vague statements about lowering beef prices only add volatility to cattle markets, creating significant price risks for cattle producers
Beef prices reflect strong consumer demand for the high-quality, nutritious steaks, roasts and ground beef provided by U.S. producers. They also reflect the higher input costs faced by ranchers and cattle feeders, as well as the reduced herd numbers due to the recent multi-year drought in cattle country. When factoring in the nutritional benefits of beef, consumers get significant value from their beef purchases.
KLA is actively engaged on this issue and will update members with more information as it is received.