James Mitchell Says Trump’s Beef Import Quota Has Yet to Lower Ground Beef Prices

In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with Dr. James Mitchell, Extension Livestock Market Economist at the University of Arkansas, about the Trump administration’s plan to import 300,000 metric tons of lean beef over three months in an effort to lower ground beef prices for consumers. With the first month of the September-November import program complete, Mitchell explains how much of the available quota was used and why consumers have yet to see a noticeable price decline.

The administration’s plan allows 300,000 metric tons of beef to enter the country over September, October and November without out-of-quota tariffs. The program is divided into three monthly allotments of 100,000 metric tons.

Mitchell said data from the U.S. Commodity Status Report showed that imports fell well short of the first month’s allowance. “Of those 100,000 metric tons, there was basically only 37,000 metric tons that were actually filled,” Mitchell said. “So well below the allowable quantity for the first month of September.”

That left a substantial portion of the September allotment unused. Mitchell said the available data suggest the unused amount does not carry over into the following month.

In the report released for the first week of October, Mitchell noted that the quota, identified as the “affordable beef quota,” reset to zero percent filled for the new month, with the maximum allowable quantity again listed at 100,000 metric tons. “I take that as implying that the quantity that was unused in September is not carried over into October,” Mitchell said. “But from what I can tell, based off of this report, it resets in October, so it’s not one of those you can carry it over.” However, Mitchell cautioned that this interpretation is based on the information currently available.

Brazil, Nicaragua and Paraguay are the three primary countries supplying beef that qualifies under the new import arrangement, according to Mitchell. Brazil is the largest of the three in this category.

With the proclamation announced at the end of August, Mitchell said the timing may have affected how quickly companies could arrange additional imports. “Maybe some of this was timing in terms of companies making arrangements to actually import this beef,” Mitchell said. “And so October, November will be more telling.”

The next two months of data should provide a clearer picture of whether importers use more of the available quota as the program continues.

One of the administration’s stated goals was to ease ground beef prices for consumers. So far, Mitchell said available data have not shown a noticeable impact. “None so far,” Mitchell said when asked whether there was evidence of lower consumer prices.

He explained that researchers tracking prices at individual grocery stores have reported no change. Data from the Bureau of Labor Statistics also have not shown a noticeable decline in beef prices attributable to the program.

Mitchell said an important factor is that the imported beef is not necessarily ready to be sold directly to consumers as ground beef. “We’re not importing ground beef that is ready for consumption,” Mitchell said. “This beef still has to be processed further and turned into ground beef, so there’s further processing that has to go on with this.”

That additional processing brings costs that must be considered when evaluating whether increased imports will translate into lower retail prices. “There’s costs associated with doing that, and so we just haven’t seen any noticeable impact in terms of lower consumer prices for beef,” Mitchell said.

As the program moves through October and November, additional import data and consumer price trends will help determine whether the expanded access to imported lean beef has the intended effect on the ground beef market.

The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR above for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.

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