The U.S. Department of Agriculture announced a new set of economic action plans to support American ranchers dealing with historically low levels of cattle stock. The issue is driving up grocery store prices, but a food economist told Straight Arrow it’s merely a “Band-Aid” on the growing problems plaguing the industry.
The initiatives focused on economic headwinds ranchers have faced this year in rebuilding their cattle herd due to disease spread and drought. Much of the plan locks in slaughter rates for ranchers and pays out a differential if they exceed the value of retaining the cow for breeding. USDA Secretary Brooke Rollins wrote on X that one of the plans included prioritizing domestic ranchers in federal spending.
“American beef is the best in the world, and Americans can have full confidence in its safety and quality,” she wrote Monday.
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The purchasing would mean people at federal prisons, hospitals and related institutions would be supplied with American-raised beef as a priority over foreign-raised beef. The plan permits coordination with other federal agencies, including the Department of Defense, Veterans Affairs and others for food supply.
William Masters, economics professor at Tufts University and co-author of Food Economics, told Straight Arrow that the initiatives will have “almost no impact” on beef prices. He added that the measures Rollins announced don’t exactly solve the problems ranchers face in cattle inventory.
“The measures that were announced are really cosmetic, performative actions. It’s theater and not real change,” he said.
Nationally, there’s a historically low monthly rate of fed-cattle slaughter at 25 billion pounds, according to the USDA’s Aug. 18 situation outlook report. Fed cattle are used to produce beef seen in the grocery store. The next report is set to be released on Sept. 17. The report stated the rates are the lowest since tracking started in 1970. Next year’s beef production forecast is flat.
With high property values dissuading the next generation of farmers from the industry, the Bureau of Labor Statistics projects agricultural workers to decline 2% by 2035. The uncertainty around tariffs, high energy costs and access to labor adds extra strain on ranchers and farmers with established properties, also driving up beef prices.
“When those things are curtailed, you have higher costs throughout the system,” he said.
Beefing up products
President Donald Trump signed an executive order on Friday that allowed 300,000 metric tons of beef to be imported into the U.S. duty-free starting Tuesday, adding that the imports must be sold 25% below market rate for lean beef trimmings. The exclusion is effective until the quota is reached or Nov. 30, whichever is earlier.
The American Farm Bureau Federation, an advocacy organization for the agricultural industry, said in an Aug. 26 report that the order doesn’t benefit American farmers and ranchers. Instead, it directly overlaps the fall selling period ranchers have for spring-born calves. It comes at a time when ranchers are trying to increase cattle herds.
“The beef cow herd sits at its lowest level in over 50 years, not because ranchers lack incentive to rebuild, but because drought and record production costs have made expansion a financial risk,” according to the bureau.
According to the USDA Agricultural Marketing Service’s Monday report, lean beef trimmings are priced at $0.93 to $1.58 per pound. The report covered 4 million pounds of fresh lean trimmings delivered within 21 days.
The department also said in its Aug. 18 situation report that Brazil, Australia and Canada were the nation’s leading importers of beef so far this year. Together, they make up 58% of imports.
A Wall Street Journal investigation revealed that the import plan happened only because the Brazilian owner of JBS, the world’s largest meat packer, lobbied Trump to ease beef tariffs for the South American country. Masters said that Rollins’ announcement was a way for the administration to respond to criticism of Trump’s plan.
“But the tariffs, higher energy costs, and the lack of access to workers is something that is such a profound burden, that there’s really no way to lessen that,” he said. “There’s no way, there’s no Band-Aid.”
Prime rib, prime prices
One thing ranchers, grocers and restaurants can agree on is that beef is considered a luxury commodity compared to poultry and pork, Masters said. A major part of that, he said, is the lack of innovation in beef production.
“If you came from the 19th century, and looked at animals today in the livestock sector, you would absolutely recognize every element of how we raise beef,” he said. “You would be astonished to see how we raise poultry and to some degree, pork.”
He said disease control in the 1800s, along with lower feed costs from crop breeding for corn and soybeans, helped the U.S. become one of the top countries with disease-free livestock. A screwworm outbreak in Mexico is threatening that stance after the Trump administration announced it will reopen the international cattle processing port in Arizona. There are about 50 confirmed cases in the U.S., and more than 38,000 in Mexico.
According to the National Cattlemen’s Beef Association, the parasite outbreak was concentrated in Texas near the U.S.-Mexico border and in southeastern parts of New Mexico. The illness feasts on open wounds and orifices and burrows into the animal. It was previously eradicated in the 1960s, but has since returned.
“If the Administration wants to help cattle producers, it should focus on reducing legitimate regulatory burdens, lowering fuel and fertilizer prices, protecting the U.S. cattle herd from foreign animal disease, and expanding opportunities for mid-size and regional cattle processors,” the association said in a statement.
However, Masters said that these problems affecting the beef industry have been tricky to address for years. Ranchers have faced continued resource constraints from climate change and diseases, making it an industry that only wealthy ranchers and farmers could sustain.
“The basic point is this has always been a very difficult way to earn a living in which those who have been able to survive through the ups and downs are now much more wealthy than the average American,” he said.
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