Beef prices in America are at record highs. Since February of 2020, the cost of both ground beef and steak has risen by more than 50% – leaving many Americans worried about the affordability of a basic food staple. As a result, the President himself told cattle ranchers last month to “get their prices down.”
To be fair, part of the problem is structural. Recent drought has saddled ranchers with higher feed costs that discourage them from raising new cattle and instead encourage them to liquidate their herds. Rebuilding takes time. But when prices are high, there’s also an incentive to keep thinning. As one Nebraska rancher put it, “We can make just as much money with fewer cattle, better genetics, than we can with having a s—load of cows running around.” This reality has reduced America’s cattle herd to its lowest level since Harry Truman’s presidency and prompted President Trump to take action by increasing imports, particularly from Argentina, of low cost, quality ground beef.
Predictably, domestic ranchers have responded with a wave of opposition, driven by the hope that restricting supply will keep domestic prices – and short-term profits – high. But that approach risks long-term harm to the very ranchers pushing it.
There are effectively three markets for beef: choice and prime cuts for domestic consumers, high-value exports to Asia, and ground beef. The first two are dominated by American producers, who hold a natural advantage. Given the choice between an American or Brazilian steak, consumers will pick American beef every time. The same is true in Japan, Korea, and other export destinations, where U.S. producers have built premium brands over decades.
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