White House to Temporarily Suspend Beef Import Tariffs to Ease Record-High Domestic Prices

The White House is fine-tuning an executive order aimed at reducing domestic beef prices by temporarily cutting beef import tariffs through suspension of the annual tariff-rate quota. U.S. at lower tariff rates once import limits are reached.

The policy move comes ahead of the midterm elections. It follows a Wall Street Journal report that detailed the Trump administration's plan. U.S. cattle herds are at record lows. U.S. cattle herd has fallen to a 75-year low, according to the Wall Street Journal.

The latest USDA national average supermarket beef prices reached near $7 per pound. Direct-to-consumer ground beef prices have risen dramatically, with some operations selling ground beef for $18/lb. Tim Elkins of Elkins Cattle Company in Texas stated: "Tariff-rate quota is a penalty threshold that gets removed.

Cattle prices are at record highs while ranchers are already subsidizing costs due to consumer resistance, resulting in lower profit margins. The main brunt of the tariff suspension will be felt by cow-calf operators and stocker operations. The Big 4 packers are Tyson, JBS, Cargill, and National Beef.

Tim Elkins stated that the policy benefits the Big 4 packers who have a monopoly while putting American ranchers and farmers in the backseat. Most imported beef impact will be seen in trimmings of the cow often used to make ground beef and hamburgers. Tim Elkins stated it is highly unlikely that higher end steak prices will come down due to lower quality of imported beef.

The price of the calf at auction is currently at its highest. The entire cattle-raising part of the country is in a drought. The price of hay, fertilizer, diesel fuel, and other inputs are at their highest.