Ranching Realities Meet Political Priorities
Article by Ivy Jean Reynolds
In mid-October, the Administration announced a new trade deal with four countries in Latin America (Argentina, Ecuador, Guatemala and El Salvador). Part of the deal includes the elimination the 10 percent tariff on Argentinian beef imports, and quadruples the amount of beef imports (an increase from 20,000 metric tons of beef to 80,000 tons). A 25 percent tariff would be triggered once imports reach 80,000 tons (as Congressionally mandated). The deal has not been officially signed, leaving implementation timelines uncertain.
The Administration’s trade moves are clashing with rancher priorities. With the U.S. cattle inventory at an all-time low and skyrocketing beef prices, cattle producers should have been poised to benefit from a strong market. However, actions taken by the Administration in an effort to lower costs for consumers may put undue burden on producers. New Mexico produces about 696 million pounds of beef annually, valued at roughly $1.12 billion, one of the largest markets in the country. Prices have soared as a result of persistent drought, high feed and input costs, and limited herd expansion, shrinking the cattle supply. There are also ongoing discussions about market consolidation contributing to rising prices within the meatpacking industry as four firms (Tyson Foods, JBS USA, Cargill and National Beef Packing Company) control over 80% of U.S. beef processing. It is important to note that Tyson Foods and Cargill settled a class action lawsuit for $87.5 million that claimed the processors were fixing prices.
Bipartisan discontent over the deal continues. The current strategy has drawn criticism from American cattle producers and policy makers who argue that the Administration’s approach will hurt the U.S. cattle industry. On October 29, 14 House Republicans sent a letter to Secretary Rollins and U.S. Trade Representative Jamieson Greer about their concerns with the Administration’s strategy to lower beef prices via increasing imports from Argentina, pointing to a consistent trade imbalance (Argentina only buys $2 million in U.S. beef, while exporting $200 million in beef to the U.S.). Members who signed include: Reps. Jason Smith (R-MO-08), Adrian Smith (R-NE-03), Greg Steube (R-FL-17), Beth Van Duyne (R-TX-24), Mike Carey (R-OH-15), Michelle Fischbach (R-MN-07), Bruce Westerman (R-AR-04), Rudy Yakym (R-IN-02), Scott Franklin (R-FL-18), Max Miller (R-OH-07), David Kustoff (R-TN-08), Frank Lucas (R-OK-03), Gregory Murphy (R-NC-03), and Aaron Bean (RFL- 04).
On November 3, three members of the New Mexico delegation, including Reps. Teresa Leger Fernández (D-NM-03), Melanie Stansbury (D-NM-01), and Gabe Vasquez (D-NM-02), also sent a letter to Secretary Rollins and Ambassador Greer regarding the same issue, pointing to industry consolidation in the meatpacking industry.
The deal has sparked outrage among key industry voices. On October 21, the U.S. Cattlemen’s Association’s sent a letter to the White House raising alarm that the strategy to expand Argentine beef imports is not an America first solution. Similar concern was raised in a letter from the Texas and Southwestern Cattle Raisers Association (TSCRA). Additionally, John Boyd Jr., the founder of the National Black Farmers Association, has also voiced concern about the Administration’s actions, particularly their impact on soybean farmers and cattle ranchers.