NCBA: Additional Beef Imports Won't Solve The Problem

The National Cattlemen's Beef Association is raising concerns about the Trump administration's reported plan to allow an additional 300,000 metric tons of tariff-free beef imports through the end of November. In a social media post, President Trump said the beef would sell at roughly 25% below market prices to help consumers, but NCBA said the proposal could create uncertainty for cattle producers without providing relief for consumers. NCBA's Executive Director of Government Affairs, Kent Bacus, said producers are still waiting for answers about how the plan would work and where additional imported beef would come from.

“As we wait for those details and try to find out exactly how this would be implemented, we know that they're looking to lift the over quota tariff for 90 days," Bacus noted. "For most of the countries that we bring in beef from, where we have these volume based quotas, the end quota tariff is about 4.4 cents per kilo. The over quota tariff is about 26.4%. So if you look at a lot of those countries in particular, their currencies are so weak that that 26.4% tariff is, quite frankly, they've been able to absorb a lot of that. But it was some kind of deterrent to keep them from just sending everything to the U.S. market. So by taking those safeguards off for 90 days, that's really going to send a lot of negative signals to the cattle markets, something we're very concerned about. And it's not really going to move the needle that much on beef prices.”

Importing Beef Won't Help Consumers

Bacus explained why the proposal wouldn’t realistically deliver lower prices at the grocery store.

"When you look at this, it's kind of vaguely worded with that announcement saying that it's going to be sold 25% below market value," said Bacus. "But there's really no rules or really no details as to how they would carry that out. That's truly unprecedented. And other than probably a handshake agreement, I don't know how you can actually get the importers to do that. And I also don't know how you would get the retailers to ultimately do that or whoever's going to move this product. That would take a full supply chain agreement to do that. And while I think that sounds good on paper, and it's definitely what they want to hear, I just don't know how realistic it is. And the volume that is coming in, if this is going to be limited to lean beef trimmings, then is that going to move the needle on ground beef prices? I don't know. So I think these are all important things that we need to look at.”

Bacus said beef demand remains strong despite higher prices.

"We still have very strong demand. And that's because beef is really that high quality protein that Americans want," he pointed out. "They want to eat healthy. They want to get the best bang for their buck. And we deliver such a great eating experience. There's a lot of other countries that benefit from the fact that American cattle producers have just done such a great job producing a superior product here and people want more of it. There are other proteins available. And if prices, if the market forces were really pushing back, then we would see that. We would see that reflected in the price. But consumers continue to pay that top dollar for that high quality protein.”

Imports continue to play an important role in the U.S. beef supply. Bacus explained what products are already coming into the country and how they fit into the market.

“You look at the first six months of this year, we've imported over $9 billion worth of beef into the U.S. market," Bacus said. "We've exported just over $4 billion. So you've got a tremendous trade deficit there. But on the import side, most of that stuff that's coming in is lean trimmings. And so that's going into ground beef. We have seen an increase in muscle cuts from Australia. So you've got steaks that are trying to compete there. Canada, Mexico, definitely sending a lot into the U.S. market. A lot of that is fresh beef that's coming in. But by large, Americans are buying U.S. beef. We are the dominant source here. It's still over 80 percent of the beef consumed in the United States is produced in the United States. So the stuff that is coming in is ground beef, or it's going to be made in producing ground beef. So that's not really a competition thing for us. The concern is that, though, if the government continues to try to intervene in the marketplace, then instead of market forces driving that and seeing that reflected in consumer prices, then you start getting the government and manipulating these things.”

Bacus said the United States should not be opening itself up for more beef imports. In fact, he says the administration's announcement caught many in the industry by surprise.

“We have regular meetings and regular contact with a lot of folks in government," Bacus said. "We work a lot with USDA. We work with the Trade Representatives Office, the Department of Commerce, folks at the White House. But honestly, this just kind of came out of left field. This is something, when specifically looking at imports, NCBA has been out there very strongly urging the administration to hold other countries accountable. We need to make sure that anyone that is trying to do business here, first of all, that they are not going to jeopardize the health and the safety of U.S. consumers or the U.S. cattle herd. And so, we really need to hold more people accountable.”

Bacus also encourages cattle producers to stay engaged through their state and national associations.

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