US beef prices are rising. Will Trump’s plans undermine them?

Beef prices have soared in the US that it has become a political issue.

Even Donald Trump, who previously declared inflation “dead,” is talking about it, as it threatens to undercut his promises to lower grocery prices for Americans.

This week, he took to social media, urging ranchers to cut prices for their cattle.

But his demand — and other proposals his administration has floated to address the issue — have sparked a backlash among ranchers, who worry that some of his measures will make their lives harder and hurt the grocery store.

The number of beef cattlemen and ranchers in the U.S. has declined steadily since the 1980s, as demand remained high, reducing domestic supply and driving up prices.

The nation’s cattle inventory has fallen to its lowest level in nearly 75 years, while the U.S. has lost more than 150,000 head of cattle since 2017 — a 17% decline, according to the Department of Agriculture.

Meat processors who buy livestock are under pressure from four decades of consolidation, while higher costs for key inputs such as fertilizers and equipment add to the stress.

The contraction in the industry has worsened as years of drought have forced ranchers to cull their herds.

Christian Lovell, a cattle rancher in Illinois, said parts of his farm that were green and grassy when he was young are now dry, limiting where his cows can graze.

“You put all these things together and you have a recipe for a really broken market,” said Mr. Lovell, who works for the advocacy group Farm Action.

Retail prices for ground beef rose 12.9% in the 12 months to September and beef stakes rose 16.6%, according to US inflation data published by the Bureau of Labor Statistics on Friday.

A pound of ground chuck now costs an average of $6.33 (£4.75), compared with $5.58 a year ago.

The increase is a significant increase compared to general food inflation, which was 3.1%.

“The cattle herd has been declining over the years, yet people still want that American beef — hence the high prices,” said Brenda Boetel, professor of agricultural economics at the University of Wisconsin, River Falls.

Darrell Peel, a professor of agricultural economics at Oklahoma State University, said he expects prices to remain elevated at least through the end of the decade, noting that it takes several years to replenish herds.

Mr Peel added that the Trump administration’s “hands are tied” when it comes to interventions that would help lower prices.

The Agriculture Department this week unveiled a “major package” aimed at boosting domestic beef production, opening up more land for cattle grazing and supporting small meat processors.

The proposal comes after Trump drew the ire of ranchers when he proposed importing more beef from Argentina, potentially quadrupling purchases.

Eight House Republicans sent a letter to the White House expressing concern about Trump’s import plans.

The National Cattlemen’s Beef Association, which has supported Trump’s policies in the past, said the import plan “does nothing to lower grocery prices, but creates chaos at a critical time of year for American cattle producers”.

Trump responded by assuring farmers that he was helping them in other ways, noting tariffs that limit imports from Brazil.

“It would be great if they understood that, but they also have to lower their prices, because I think the consumer is a very big factor,” Trump wrote.

But this confusion has failed to be resolved.

Justin Tupper, president of the US Cattlemen’s Association, said Trump’s import plan would only benefit the four largest meat packers.

“I don’t see prices going down here at all,” Mr. Tupper said.

Some say the government’s focus on the way the meat processing market is dominated by a handful of companies could have an impact.

Today, just four companies control more than 80% of the beef slaughter and packing market.

“It’s the combined markets that attract the ranchers and the customers to the stores,” said Austin Fririck, an agricultural and antitrust policy expert and fellow at Yale University.

Meat processing companies – Tyson, JBS, Cargill and National Beef – have faced several lawsuits, accusing McDonald’s of colluding to drive up beef prices.

Trump earlier this year rescinded a Biden-era order that directed agencies to deal with corporate consolidation in the food system, but his administration has taken other steps to investigate competition issues in the agriculture industry.

Mike Callicrate runs a cattle ranch in St. Francis, Kansas. He said the only way to survive in the industry is to cut out middlemen and start own stores to reach out directly to consumers.

But Mr Callicrate admitted most ranchers did not have the money to make that shift. Many have left the industry – and there appears to be no incentive to return.

“We’re not going to rebuild this cow herd – unless we address market concentration,” Mr Callikret said.

He said he supported the Agriculture Department’s plans to open up more cattle grazing land to boost production and bring down retail prices.

“But unless we have a market,” he added, “you’re a fool to get into the cattle business.”

As the meat processing industry began to consolidate in the early 1980s, Bill Bullard found himself among the first wave of ranchers.

He closed a 300-cow operation in South Dakota in 1985.

Mr. Bullard, who is now chief executive of R-CALF USA, the cattle producers’ trade association, said ranchers had received good prices for their livestock in the past year, as supplies got so low that meat processors “just had to raise” prices.

Still, reliance on imports and the purchasing power of meat packers remains, Mr. Bullard said, meaning ranchers “don’t trust the integrity of the market” and remain reluctant to expand their herds.

He said that he did not believe that the president’s thoughts would solve the problem.

“It focuses on the symptoms and not the problems,” he said.