The Trump Administration is taking another stab at importing beef, and local farm groups say the move threatens to dampen a bright spot in the agriculture economy.
President Donald Trump wrote in a social media post that he'd made a deal to import upward 300,000 tons of ground beef with no out-of-quota-tariff for the next 90 days. The idea is to bring down beef prices for consumers.
"We have a commitment that this beef will be sold at 25 percent below current market prices," the president wrote.
High prices for beef at the grocery store comes down to supply and demand.
The national cattle herd is the smallest it's been since the 1950s because of hard droughts. Despite a tight beef supply, consumer demand is strong leading to high beef and cattle prices.
David Anderson, Texas A&M Agrilife Extension livestock and food product marking specialist, said people are looking for a quick fix, but there isn't one.
"It's really difficult to come up with a policy option that makes a meaningful change here when our real culprit in large part is out of our control, and that's the weather," Anderson said. "That's this drought."
Oklahoma farm groups – Oklahoma Farm Bureau, American Farmers and Ranchers/ Oklahoma Farmers' Union and the Oklahoma Cattlemen's Association – criticized Trump's move. They say it's a short-sighted step done at the wrong time for producers.
Recently, cattle prices have bolstered Oklahoma agriculture's economy during a time of uncertainty. Agriculture organizations say importing more beef discourages ranchers from rebuilding the herd and injects unpredictability into an already volatile market.
In a statement from American Farmers and Ranchers President Scott Blubaugh said bringing in more beef makes the nation more dependent on foreign meat.
"We cannot and should not be reliant on foreign nations for our food supply. Will somebody please tell the president this is not "America First?" Blubaugh said in the statement.
In response to the move to increase imported beef, Gov. Kevin Stitt signed an executive order to make the Oklahoma Beef Industry Advisory Council yesterday.
Beef import deal lacks key details
If Trump's idea comes to full fruition, Anderson said, it would bring in a lot of beef in a short timeframe. But details are sparse in the social media post.
He said the deal might not mean more beef on the market, and products would come in tariff-free.
The U.S. already imports beef from other major players, including Brazil, Canada, Mexico, Australia and New Zealand. If the deal means importing additional meat, Anderson said, he has questions about capacity.
"What country actually has the supplies to be able to sell us that much beef in the next 90 days, on top of what they were already selling us?" Anderson said. "That's a pretty short list."
This comes as severe drought looms in places where a lot of cattle are raised. Fall weaning season is near and producers continue to see high input costs.
Despite its lack of details, the announcement played into cattle prices, according to James Mitchell, University of Arkansas extension livestock economist. He said the October feeder cattle contract is trading at $318 per hundredweight, down from $335-$340 for August.
"It's really hard to kind of disentangle this by itself," Mitchell said. "But I think timing and looking at the reaction as a whole, you could say that this has just had a negative impact in general, and markets have been trading lower over the last couple of weeks leading up to it as well."
To rebuild cattle inventories, he said the U.S. needs profits for producers, good pasture for cattle and patience while herds grow. Currently, he said, there are just profits.
At best the announcement could delay or limit the pace of rebuilding the U.S. cow herd, Mitchell said. At worst, the uncertainty could create longer-lasting damage to rebuilding efforts.
This is not the first time the Trump administration has mentioned a plan to import more beef. Last year, the administration said it was looking to bring in more Argentinian beef – an idea Oklahoma farm groups also criticized.
Cortney Cowley, Federal Reserve Bank of Kansas City senior economist, said she doesn't know if this latest move would make a huge difference at the grocery store. She said 300,000 tons is about 2% of the total domestic consumer consumption projected for this year.
"Retailers who actually set the prices still are aware that demand is really strong," Cowley said. "Also, beef is one component of meat, which is one small component of consumer prices, even food prices. And we've still been seeing what's been driving this kind of food at home inflation or food at the grocery store inflation, is still processed foods."
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