In the wake of President Trump’s punitive tariffs on cattle and beef from neighbours Canada and Mexico this week, US analyst Nevil Speer provides this alternate view on the value of beef imports to US consumers and producers     

I RECENTLY caught a headline: “Beef Imports Rise Threatening US Producers.”

The article explained, “Beef imports in 2024 increased by 24pc compared to the same period in 2023, posing significant challenges to the US cattle industry.”

The story also included a statement from (US producer advocacy group) R-CALF: “If importers are allowed to capture more of our domestic beef market with lower-cost imports, those imports will displace domestic beef production.”

Meanwhile, the US beef industry just experienced its best year in history, record prices on a larger volume. That’s because the industry is winning on the consumer front. So, how do we reconcile those two things?

Context

In 2024, US beef imports totaled 2.1 million tonnes – up 409,000t (or about 24pc) versus 2023.

But why did that occur? Is it some nefarious scheme, or is there a logical explanation?

To answer that question, we need to understand the purpose beef imports serve in the US marketplace.

The majority of imports are lean trimmings intended for blending with 50/50 (lean-to-fat) domestic fed steer/heifer trim to make hamburger. Accordingly, import tonnage ebbs-and-flows depending on the relative availability of domestic lean trimmings (sourced primarily from domestic US cow/bull slaughter).

Data

Now, let’s look at the data. The chart below details the relationship between US domestic trim availability and the subsequent need for imports. As non-fed beef production (cows/bulls) declines, the market responds by importing additional trimmings to fill the deficit.

During the past 25 years, the overall trend/relationship has been remarkably predictable and consistent. The two sources of lean trimmings largely move in tandem in opposite directions.

Added Value

But let’s go one step further. What if those imports hadn’t been facilitated in 2024? The answer: both US producers and consumers get penalised.

Cattle producers:

Roughly 155lb (70kg) of 50/50 trim is produced from every fed steer or heifer. And in 2024 the value of that trim averaged about US$95/cwt – the equivalent of about US$150/head.

If those trimmings aren’t available, that 50/50 trim effectively becomes worthless. Imports represented about 54pc of all available lean trim in 2024, now only about half of the 50/50 trim would be utility. So, instead of 50/50 trim worth US$150/head, it’s now US$75/head.

Nothing happens in a vacuum; the value loss ultimately gets passed back upstream to cow/calf producers.

Consumers:

An absence of imported lean trimmings translates to a sharp supply shock. That translates to fewer options and higher prices. (This is especially important given the increasing and growing importance of ground beef in the marketplace, as seen in January retail meat sales.

Win-Win

Based on the data, and the realities of the business, there are a couple of clear take-aways from all this discussion.

There’s no nefarious conspiracy occurring; imports are not displacing domestic US beef product. Rather, the ebb-and-flow of imports is highly predictable, and subsequently predicated on the relative availability of lean trimmings sourced from cow/bull slaughter.

Imports don’t introduce competition for the US beef industry. On the contrary, they establish complementarity and the ensuing value creation benefits both consumers and producers.

That being said, there’s simply no evidence to suggest that imports are “posing significant challenges to the beef industry.”

Rather, the bigger risk is impedance of international trade because without imports the industry would be posed with significant challenges.

About the author:

Dr Nevil Speer works as an industry consultant based in Bowling Green, Kentucky. He has experience in both academia and private industry. His career includes working with several start-ups along with various service and consultation projects spanning a wide variety of topics. Dr Speer holds a PhD in Animal Sciences from Colorado State University and an MBA from Western Kentucky University.

First published in the US Beef magazine website. Republished with author’s permission.