Are you continuing to look for a break at the meat counter, but realize you aren’t seeing much change in ground beef prices? It’s been several weeks since the federal government expanded the amount of lean beef trimmings that can enter the U.S. at a lower tariff rate.
Economists working with the American Farm Bureau Federation (AFBF) are tracking 80% lean ground beef prices at 41 grocery stores in 22 states following the tariff-rate quota expansion. The survey includes major grocery chains and independent stores in urban, suburban, and rural communities.
Here’s what they are finding: the average price fell from $7.29 per pound on Sept. 2 to $7.13 on Sept. 23. It’s a drop of 16 cents, or about 2%.
That’s far short of the 25% price reduction encouraged by the federal proclamation that expanded the quota.
What changed on September 1?
The Trump Administration temporarily increased the tariff-rate quota for lean beef trimmings by about 661 million pounds in late August. Beef imported under the lower tariff rate began entering the country September 1.
The goal was to increase the supply of beef available to U.S. consumers and help bring down prices. The proclamation encouraged retailers to lower prices by 25% without requiring them to do so or establishing a system to enforce the reduction.
Farm Bureau economists Bernt Nelson and Faith Parum, Ph.D., looked at whether the additional beef supply is translating into lower prices at grocery stores. It hasn’t happened to a significant degree — at least not yet.
Ground beef prices vary widely
The AFBF survey finds a wide gap between stores. Prices range from $4.99 to $10.49 per pound, with a typical price of about $7.23. Nelson and Parum say more than half of the stores surveyed — 22 of the 41 — are charging more than $7 per pound.
And many stores didn’t change the price at all.
- 30 stores are charging the same price as on September 2.
- Seven stores had lower prices.
- Only three stores had lowered prices by the full 25% encouraged in the proclamation.
- Four stores had higher prices.
The higher prices included stores in Des Moines and Davenport, Iowa; East Lansing, Michigan; and Denver, Colorad.
Why isn’t cheaper imported beef showing up at the checkout?
The Farm Bureau analysis points to an important distinction whether you are a consumer or farmer: lowering the tariff on imported beef doesn’t automatically mean lower prices at the grocery store.
The price consumers pay reflects costs at many points along the beef supply chain, including the price of cattle, processing, transportation, labor, and retail margins.
And for cattle producers, the situation also highlights the supply problem facing the U.S. beef industry. The nation’s cattle herd remains historically tight, with the U.S. calf crop projected at a record-low 32.5 million head.
That means imported beef can add supply to the market, but it doesn’t address the underlying shortage of U.S.-raised cattle.
Rebuilding the cattle herd will take time
The survey indicates the tariff-rate quota expansion has not yet produced a major reduction in ground beef prices for you as a consumer.
If you are a cattle farmer, the numbers point to a larger issue, including rebuilding the domestic herd and increasing U.S. beef production. This will be important to the industry’s longer-term supply and price outlook.
The Farm Bureau economists also noted that the impact of the additional imported beef may continue developing as more product enters the U.S. market. And everyone’s watching.
You can read the results of the entire survey, just published, here.
