Update: Adds commentary
Reuters — U.S. President Donald Trump’s administration is quadrupling the tariff rate quota on Argentinian beef to 80,000 tonnes to reduce prices and protect American farmers, a White House official said on Thursday.
Why it matters: Canadian cattle ranchers are seeing record high prices through this year’s fall run, but lower U.S. prices would spread north.
The move lets Argentina ship more beef to the U.S. at a lower rate of duty at a time when U.S. beef prices have set records due to tight cattle supplies and strong consumer demand.
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The plan to import more beef from Argentina has angered U.S. ranchers, who largely supported Trump in his campaigns for president. They said the government should support domestic producers and that increased imports threaten their livelihoods.
“A deal of this magnitude with Argentina would undercut the very foundation of our cattle industry,” said Justin Tupper, a South Dakota cattle producer and president of the United States Cattlemen’s Association.
Agriculture Secretary Brooke Rollins on Fox Business Network’s “Mornings with Maria” said the administration was working to support both beef consumers and ranchers.
“There is frustration on both sides. And I was with the president yesterday and he is very, very frustrated because (of) everything he’s done to cut taxes, to bring down costs,” Rollins said.
The U.S. Department of Agriculture on Wednesday announced a plan to expand the domestic cattle herd and support American cattle ranchers, after Trump said he was working to lower the price of beef in the country.
Economists said the plan would probably not do much to lower prices quickly. U.S. cattle supplies have dropped to their lowest levels in decades after a drought burned up pasture lands used for grazing and hiked feeding costs, forcing ranchers to reduce the size of their herds.
BEEF HEADED FOR HAMBURGERS
Miguel Schiariti, president of Argentina’s Meat Industry Chamber CICCRA, told Reuters that meat exports to the U.S. consist of the country’s traditional beef cuts and meat used in the hamburger industry to lower fat levels.
“It’s good news for the industry,” Schiariti said. “Argentine beef is highly valued in the U.S. It has very good press. Argentina is rebuilding its distribution chain in the United States.”
However, U.S. analysts said increasing the amount of quota likely would not bring down beef prices for consumers much. The U.S. often imports lean beef from Argentina that is mixed with domestic supplies to make hamburger meat, they said.
Some of the beef could be served at restaurants or mixed into other food products, analysts said. This would help restaurant operators and food companies improve their margins but not necessarily lower prices for consumers, they said.
White House spokeswoman Anna Kelly said Trump had pledged to protect ranchers and deliver economic relief for everyday Americans.
The administration was accomplishing both by expanding beef imports from Argentina to lower consumer prices in the short term and rolling out new supports for ranchers, she said.
— Reporting by Jeff Mason, Susan Heavey, Leah Douglas, Tom Polansek and Maximilian Heath
