Global AgriTrends

11.26.25

Trump Takes on Beef Inflation:

The president’s efforts against beef inflation have been swift and severe. His October 23rd comments about expanding Argentina’s Beef import quota from 20,000 tons to 80,000 tons sent live and feeder cattle futures into a tailspin. They have yet to recover. Live cattle futures remain about 17% lower with feeder cattle futures down about 19% from their highs in October. The beef cutout is up 1% since mid-October with 90% lean beef just 1% lower.

The president's comments and actions also included a tariff reduction on imported beef, taking most supplier nations (Australia, New Zealand, Uruguay, Paraguay, etc) back to 0%. He also removed Brazil's 40% tariff imposed due to current president Lula da Silva's action against former president Jair Bolsonaro. Note that Bolsonaro was sentenced to 27 years in prison this week after that tariff was lifted.

This tariff reduction takes Brazil's beef import tariff back to 26.4% through year end. But more significantly it means that that tariff will reset to 0% on January 1st for the 1st 65,005 metric tons imported. The past two years have seen heavy shipments of Brazilian beef into bonded warehouses in the fourth quarter of the year, waiting to clear after January 1st to get the tariff free quota. We expect significant Brazilian beef shipments to begin flowing into ponded warehouses ahead of that tariff reset. We also expect that Brazil will be able to fill that tariff free quota by clearing 65,000 tons of beef for import by the end of February. That will have a negative impact on imported 90s prices as well as competitive pricing and orders for Australia, New Zealand, and other key suppliers.

President Trump's largely misguided efforts to reduce beef prices for consumers will likely have the opposite effect. High prices are needed to spur restocking efforts. The big drop in live and feeder cattle futures have lowered the target price of next year's cattle. That will likely dampen restocking intentions over the winter. This means that we could see an extended cattle cycle with possibly another year of record high cattle and beef prices beyond what was previously expected.

An ironic twist on these policies shows that cattle producers could actually become more profitable by extending the downturn of supplies another year. The president's lack of action on a corn deal with China keeps feedlot profits solid for another year. And his actions that broke down cattle prices have actually increased packer margins as well. It could be argued that these policies have benefited every sector of the cattle industry in misguided ways. But it has yet to help consumers.