More than hamburger: Why Trump’s foreign beef plan worries Wyoming ranchers

How can you support your local ranching community? Buy beef

Walk into a Wyoming grocery store this week, and the price of beef is hard to miss. A pound of 85 percent lean hamburger can run $7 or $8, while sirloin steaks often cost well into the teens. For families, the bill at the meat counter is real. For ranchers, however, high prices are the result of years of drought, shrinking herds and difficult economics, not an easy windfall.

That is why President Donald Trump’s plan to temporarily expand imports of lean beef trimmings has landed so uneasily in cattle country.

Trump’s August 26 proclamation opens room for an additional 300,000 metric tons of lean beef trimmings to enter the United States at the lower in-quota tariff rate. That is roughly 661 million pounds over 90 days, in three monthly allotments from September 1 through November 30. The product is not primarily steaks or live cattle. It is lean trim, the meat commonly blended with fattier domestic trim to make the ground beef Americans love to buy for hamburgers, tacos and spaghetti sauce.

The White House says the move is intended to make ground beef more affordable and has called for the imported trim to be sold 25 percent below the market price for lean trimmings. But ranchers and cattle market observers in Wyoming say the number on the announcement is only part of the story. They question whether much of the savings will make it to the grocery store, and they worry the policy has already added uncertainty just as producers finally have a reason to begin rebuilding their herds.

When Big Horn Basin rancher and beef-marketing analyst Brett Crosby of Cowley was asked whether he expected the policy to drive down consumer beef prices, he was blunt: “It won’t. Not appreciably, no.” 

He believes beef has become a politically visible target because shoppers remember the price of hamburger much the way they remember the price of gasoline. “People are paying more for beef because they like beef,” he said, and other proteins remain affordable.

Jim Magagna, executive vice president of the Wyoming Stock Growers Association, sees a distinction that can get lost in the debate. The imported trim is not, by itself, a bad product for the American beef system.

“It’s apparently trimmed meat, which we need in this country to mix with our fatter trim to make hamburger that’s the right consistency,” Magagna said. “So, that part’s not bad.”

His larger worry is what happened the moment the plan was announced.

“The minute he announced it, cattle markets took a significant decline,” Magagna said. “That hits in Wyoming at a time when a lot of people are marketing their cattle, and especially this year, because this is a drought situation, people are marketing up to a month earlier than they normally would.”

The cattle market has recovered some since the announcement, but Magagna said the reaction showed the effect of President Trump’s policy uncertainty can have on cattle and futures markets.

“The psychological impact of the way he did it could be more critical than the impact from the actual beef coming in,” he said.

The market reaction comes while drought is forcing hard decisions about grass, hay and water. Magagna said he knows Wyoming ranchers who have sold as much as half their cattle this year.

Crosby said the roots of the current shortage go back longer than this summer’s drought.

“We just don’t have nearly as many cows as we have had in the past,” he said. “We are at historically low levels in terms of the total beef cattle inventory.”

The causes, he said, are years of thin or negative margins combined with dry conditions. When costs rise and profits disappear, producers eventually cut herd numbers to survive.

“Low profitability for seven years, combined with drought, have forced a lot of people to either liquidate or downsize their herds,” Crosby said. “We started liquidating in the early ’20s, and we’ve been downsizing ever since.”

The reasons hamburger prices are especially high are more complicated than a simple shortage of calves. Most ground beef comes from older cows that are leaving breeding herds, not from young steers and heifers that are more likely to become steaks and roasts. As ranchers began trying to slow the decline in their herds, fewer cows were sent to slaughter. That reduced one of the normal sources of hamburger.

“We just don’t have the meat that normally goes to hamburger,” Crosby said.

“You don’t decide now, ‘I want to sell more beef next year,’ because if you’re going to increase your production, it means you’re going to retain more heifers,” Magagna said.

Heifers held back for breeding need time to mature, be bred and have calves. Magagna said a rancher who retains heifers this year is looking at two years before receiving production from that decision.

“It doesn’t happen in a year,” Crosby said. “The absolute most you can increase your herd is 27 percent” under an ideal set of assumptions, he said, though the realistic number is far lower. Historically, he said, the U.S. herd has rarely increased more than about 3 to 4 percent in a year.

That is where he sees the most serious long-term risk in the import policy. U.S. cattle prices have recently reached a level that gives ranchers a reason to retain heifers and start rebuilding after years of downsizing. But lower returns from cows used for ground beef could take away some of that incentive.

“The only person who’s making money in the cattle business right now is the rancher,” Crosby said. “And he’s making money because he’s been losing his shirt for the last 10 years.”

Processors and feedlots are not necessarily making windfall profits, Crosby said. With fewer cattle moving through packing plants, fixed costs are spread over fewer animals.

“The only person left to pay the bill on this is the rancher,” he said.

The direct effect may show up most clearly in the value of cull cows, the older animals sold out of a breeding herd and commonly turned into ground beef. Crosby estimated they represent 10 to 12 percent of a ranch’s gross revenue.

“It’s going to delay the herd rebuilding,” Crosby said. “The long-term result will be prolonging the pain.”

Magagna is equally doubtful that the promised discount will neatly appear at the checkout counter. Imported trim still must be processed and mixed with domestic beef. A processor able to buy it at a lower price may capture part of the difference rather than passing all of it on to a shopper buying a one-pound package of hamburger.

“We tend to think that this latest move isn’t going to significantly impact prices for consumers,” Magagna said. “It’s just had a negative impact on cattle producers.”

The two men also point to the challenge of replacing a ranching operation that disappears. Magagna said years of high expenses and poor returns have caused some Wyoming families to decide there is not a strong enough future in cattle for the next generation. Ranch land can be subdivided or sold to buyers whose primary goal is recreation rather than livestock production.

Crosby said the land will continue to have a use, often still in cattle production, but the irreplaceable loss can be the experience built across generations.

“The bigger danger is losing that multi-generational level of knowledge that has made us so productive and efficient,” he said. “The most important thing that we have inherited is the generations of knowledge that have been passed down because it’s come from generations of experiences. You can’t replace that.”

For consumers who want to support Wyoming producers, both men said there is no simple label that guarantees a steak or package of hamburger came from a ranch in the Big Horn Basin. A voluntary “Product of USA” label may help identify beef born, raised and processed in the United States, although it is not yet common on every package.

Magagna encouraged shoppers to seek out Wyoming-processed beef when they can. The state had only two federally inspected meat plants in 2020, he said, but now has about 10. Buying directly from a local rancher or local processor gives consumers the clearest connection to the animal, the producer and the place where their food came from.

Crosby offered a more basic answer, as well: Keep buying beef. “The way we help Wyoming ranchers is by continuing to buy beef,” he said. For those who can make the larger up-front purchase and have freezer space, he said, talking with a local producer about buying a quarter or half of a finished animal can be another option.

The debate over the new import quota may begin with the price of a hamburger, but Wyoming ranchers see it as a question about what comes next. The country wants more domestic beef, they say, but rebuilding the herd will take time, capital and confidence that the market will reward the people willing to make that investment.

It is too soon to tell, but while President Trump hopes to lower beef prices by bringing in large amounts of foreign beef, the long-term effect could be more serious. If it drives down the prices ranchers receive for their cattle, it may make it even harder for local ranchers to stay in business and rebuild their herds.