Dive Brief:
- President Donald Trump said Friday he would temporarily relieve tariffs for some ground beef imports in a bid to lower consumer prices that continue to hover near record highs.
- The U.S. will allow up to 300,000 metric tons of ground beef to be imported with no out-of-quota tariff for the next 90 days, Trump said in a social media post. The president said he has “a commitment that this beef will be sold at 25 percent below current market prices.”
- Trump said the move would relieve prices for consumers while allowing U.S. ranchers to rebuild domestic supply. The president did not provide more details on the deal, including which countries are taking part in the agreement.
Dive Insight:
U.S. beef production has plummeted as a severe cattle shortage prompts higher reliance on imports. The pace of U.S. cattle processing in July was estimated to be the lowest level since monthly records began in 1970, according to the U.S. Department of Agriculture.
Drought conditions in 2023 decimated cattle supply, and ranchers have since remained hesitant to rebuild beef herds. Many have instead focused on adding dairy cows as demand for whey protein soars, with dairy cow inventories rising 2.1% this year compared to just 0.2% for beef supply.
As production remains constrained, the U.S. is importing record amounts of beef. Imports in the second quarter reached a record 1.6 billion pounds, with Australia making up the largest portion of the increased supply.
The supply crunch has also significantly raised the cost of beef for consumers and processors, who have moved to close plants or restructure operations as they report a drag on profits. Tyson Foods, which recently closed two beef plants in a move resulting in layoffs of more than 2,500 workers, said prices are unlikely to recover until 2027 at the earliest.
Ground beef prices have surged more than 25% since 2024, with consumer prices reaching $6.88 per pound in July. Prices for all uncooked beef steaks reached $13 a pound in July, a new record.
Lowering beef prices is a higher priority for the Trump administration ahead of the November midterm elections as consumer inflation becomes a political flashpoint. The administration also will lift a more than yearlong ban on cattle imports from Mexico that was enacted to contain the spread of a deadly livestock parasite as part of a plan to lower prices.
