Cattle Markets React to Proposed Tariff Changes; Consumer Beef Prices Expected to Remain Steady in the Short Term

By Ryan McGeeney

While recent headlines suggesting changes in U.S. tariffs on South American beef imports are raising eyebrows and nudging markets, the fundamentals of supply and demand will remain intact for beef producers in Arkansas and elsewhere for the foreseeable future, cattle market experts said Monday.

On Oct. 16, U.S. President Donald J. Trump suggested a plan to lower beef prices for American consumers was in the works. The proposal involves expanding the tariff rate quota on Argentinian beef from 20,000 metric tons to 80,000 metric tons, said James Mitchell, extension economist for the University of Arkansas System Division of Agriculture.

He said that while this would quadruple the amount of Argentinian beef entering the U.S. market, it would still be a minuscule portion of the overall U.S. beef market. A September report from the U.S. Department of Agriculture forecast U.S. beef imports at 5.4 billion pounds — just over 18 percent of total U.S. beef consumption.

However, Mitchell said, discussion of raising the Argentinian beef tariff quota is only one of several factors making cattle producers nervous.

“There are also talks of easing feeder cattle import restrictions on Mexico, which were put in place because of the New World Screwworm in Mexico,” Mitchell said. “Yesterday, news broke about discussions of easing tariffs on Brazil. Brazil has been a high market for U.S. beef imports the last few years as well.