Montana ranchers say Trump's beef import plan hits at worst time
BOZEMAN, Mont. — President Donald Trump is planning to import 300,000 metric tons of beef -- tariff free -- over the next 90 days in an effort to bring down beef prices.
The announcement has been met with backlash from Montana's congressional delegation, other Republican lawmakers, and leaders in the ranching community.
NBC Montana asked the second vice president of the Montana Stockgrowers Association what he would say to Trump if given the chance.
"I would thank him for what he's done on tax policy and on those issues, but I would just remind him that it's supply and demand economics, and you can't provide a quick fix to an issue that's going to take several years to rectify itself," Monty Lesh said.
Lesh says the Montana Stockgrowers Association has been in touch with Montana lawmakers and is thankful that they condemned the decision. But Lesh also criticized the timing of the decision.
"Typically through the end of the year, September through December, that's when most of the ranchers in Montana cull cows, and cull cows make up the majority of the hamburger that's made available in the domestic market, so it's having a significant economic impact on live cattle prices," said Lesh.
The U.S. already imports about 10% of its beef. Since 1995, tariff rate quotas have imposed limits on how many pounds of beef can be imported before countries face about a 26% tariff, with the exception of Canada and Mexico.
Trump is slashing that rate.
"If you take a basic economics class, if you increase imports you're going to see a lower price, but I think that's where economists are trying to figure things out. Is what kind of an impact does that mean on prices? What's the magnitude? Is it a 2% reduction in hamburger? What are we looking at? And that's where I think a lot of economists are scrambling right now to figure out," said Dr. Eric Belasco, a professor at Montana State University's agricultural economics department.
Belasco noted that most countries have not exceeded their TRQ yet, with the exception of Brazil. He said Brazil is the foreign producer most capable of meaningfully affecting the market because of the scale of the nation's beef production.
But what meat does the U.S. import?
"We import a lot of that hamburger, the components for a hamburger, because that's a very large portion of the market, and so that's really where you could see some price go down, on some of those hamburgers, I would not expect this to impact, say you go to the restaurant and order that ribeye steak, you're probably not going to see much of an impact on that price," said Balasco.
Belasco says there are three ways to bring down beef prices. One is by increasing domestic herd sizes, which have been declining, according the U.S. Department of Agriculture.
Lesh says the import news adds a new ingredient to a growing list of challenges modern ranchers are facing. With rising costs of fuel, fertilizer, parts, labor, and feed, he says ranchers growing their herd size isn't as appealing of a decision.
"If costs are high to retain a heifer and make a cow out of her, a lot of people will probably make the election not to retain her, which means the cow herd will probably stay static to maybe even shrink a little bit," said Lesh.
The second way for beef prices to go down is for demand to go down, which neither Lesh or Belasco view as likely.
The third way is to increase imports, at the expense of ranchers.