By David Dayen and Zachary Groz
On the day that the Trump administration announced the importation of 300,000 metric tons of ground beef without tariffs in an attempt to reduce current sky-high retail prices, the U.S. Department of Agriculture (USDA) released its monthly Cattle on Feed Report, which showed growth in the amount of cattle on feedlots but at much lower percentages than estimated. Placements were also historically tight, at the lowest level for July in 30 years.
What this means in layman’s terms is that ranchers should have been able to earn higher prices for heads of cattle, since supply was at a premium, for the first time in a while. After decades of falling profitability, over half of cattle ranches have shuttered in the U.S.
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But the good news in that report was swamped by the beef import announcement. Instead of cattle price markets going up, they tanked briefly, continuing a trend that began a few months back. Cattle prices have fallen 20 percent from their peak in June.
The primary beneficiaries of volatile cattle prices are the Big Four meatpackers, which control approximately 85 percent of the beef market. Consolidation at the meatpacker and retailer level means that lower cattle prices are not reflected at supermarkets, where shoppers are paying some of the highest beef prices in U.S. history. Combined with reporting about a personal intervention by meatpacking kingpin Joesley Batista at the White House the day before the beef import announcement, ranchers had the suspicion that they were seeing cattle prices manipulated and being sold out by their own government.
“Could somebody ask [USDA] how the government crashing the cattle market with cheap imports is beneficial or helpful to rebuilding the herd?” one rancher asked on social media.
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