U.S. beef prices are rising. Will Trump’s plans reduce them?

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

Even Donald Trump, who has long declared inflation “dead,” is talking about it as the problem threatens to undermine his promises to lower grocery prices for Americans.

This week, he took to social media to call on livestock farmers to lower the prices of their livestock.

But his request — and other proposals his administration has offered to address the problem — have sparked a backlash among ranchers, who worry that some of his decisions will make it harder to make a living while hurting the grocery store a bit.

The number of U.S. cattle and ranchers has declined steadily since the 1980s, reducing domestic supplies and raising prices as demand remains high.

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

Ranchers say they are under pressure from four decades of consolidation among meat processors who buy their cattle, while high costs for key inputs such as fertilizer and equipment have added to the strain.

The industry contraction worsened as several years of drought forced ranchers to cut their herds.

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

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

Retail prices for ground beef rose 12.9 percent in the 12 months through September and beef steaks rose 16.6 percent, according to U.S. inflation data released Friday by the Bureau of Labor Statistics.

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

The increases were well ahead of headline food inflation, which stood at 3.1%.

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

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

The Trump administration’s hands are tied when it comes to interventions to help lower prices, Mr. Peel added.

The Department of Agriculture unveiled this week what it called a “major package” aimed at boosting local beef production by opening up more land for cattle grazing and helping small meat processors.

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

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

Even the National Cattlemen’s Association, which has expressed support for Trump’s policy in the past, said the import plan “only creates chaos at a critical time of year for American cattle producers while doing nothing to lower grocery store prices.”

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

“It would be nice if they understood this, but they also need to lower their prices because the consumer is a very big factor in my thinking as well,” Trump wrote.

But this failed to quell the furore.

Justin Tupper, president of the American Cattlemen’s Association, said he thinks only the big four meatpackers will benefit from Trump’s import plan.

“I don’t see any price reduction here at all,” Mr Tupper said.

Some say the government could make a difference if it focused on the way a handful of companies dominate the meat processing market.

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

“These are consolidated markets that suppress the farmers and consumers in the store,” said Austin Frerick, an agricultural and antitrust policy expert and fellow at Yale University.

The meat processing companies – Tyson, JBS, Cargill and National Beef – have faced several lawsuits, including one filed by McDonald’s, alleging they colluded to inflate the price of beef.

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

Mike Kalicrat runs a cattle ranch in St. Francis, Kansas. He said the only way he was able to stay in the industry was to cut out the middleman and set up his own stores to reach consumers directly.

But Mr Callicrate acknowledged that most farmers don’t have the money to make that change. Many have left the industry – and see no incentive to return to it.

“We’re not going to rebuild this cow herd – not until we tackle market concentration,” Mr Kallikrates said.

He said he supports the Department of Agriculture’s plans to open up more land for cattle grazing to boost production and lower retail prices.

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

Bill Bullard found himself in the first wave of ranchers pushed out when the meat industry began to consolidate in the early 1980s.

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

Mr. Bullard, who is now chief executive of R-CALF USA, a cattle producers’ trade association, said ranchers have only gotten good prices for their cattle in the past year because the supply has dropped to such a low level that prices paid by meat processors “just had to go up.”

Still, dependence on imports and the purchasing power of meatpackers continued, Mr Bullard said, meaning farmers “lacked confidence in the integrity of the market” and remained reluctant to grow their herds.

He said he was not confident the president’s ideas would solve the problems.

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