Don Dawson
4 min read
Increased Argentinian beef imports under a new lower-tariff quota will add at most 2–2.5% to U.S. supply, offering consumers little immediate grocery-price relief (with any softening likely delayed up to two years), while striking domestic ranchers with tighter margins and slower herd rebuilding as the already decades-low U.S. cattle inventory remains the primary driver of record prices—despite government promises of long-term support that will take years to matter.
Details of key points impacting the cattle market:
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Arabica Coffee Rallies Due to Below Normal Precipitation in Brazil
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China’s Not Buying Enough U.S. Pork. Make This 1 Trade Now as Hog Prices Fall.
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Cattle and Lean Hog Bears Rule the Roost. What to Watch Next on the Farm.
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Modest Consumer Price Relief: Experts agree that increased Argentinian beef imports are unlikely to cause sharp drops in U.S. grocery store prices because Argentina’s total export volume is a minimal share of the U.S. market (around 2-2.5% of the total U.S. beef supply, even if all its global exports came here). Any relief would likely be modest and potentially delayed for consumers, with a possible lag of up to two years for noticeable effects at the retail level.
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Pressure on U.S. Producers: Imports are expected to have a more significant negative impact on U.S. cattle producers, particularly smaller operations, by eroding profit margins and creating market instability. This added competition could signal downward pressure on live cattle futures and discourage the rebuilding of the domestic herd.
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Tight Domestic Supplies: The U.S. cattle market is currently facing its smallest herd size in decades due to drought and high feed costs, which is the primary driver of record-high domestic beef prices. This tight domestic supply caps how far prices can fall from imports alone.
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Government Action and Timeline: The U.S. government is implementing new trade frameworks to increase the import quota for Argentinian beef at a lower tariff rate, alongside plans to support domestic producers through herd expansion initiatives. However, these domestic expansion measures will take significant time (years) to have a material effect on supply and prices.
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Limited Market Overhaul: The volume of Argentinian beef is too small to overhaul the entire U.S. market overnight, but the governmental intervention is a source of concern and potential instability for the industry.
Source: Barchart
