President Donald Trump announced on Friday that he has coordinated a new deal to lower beef prices in the U.S.
“Today, I concluded a deal to substantially lower the price of ground beef for working American families,” he said in a Truth Social post. “For the next 90 days, the United States will allow up to 300,000 metric tons of product for ground beef to be imported with no out of quota tariff. We have a commitment that this beef will be sold at 25 percent below current market prices.”
“This deal will reduce prices for Americans while giving space for our Great American Beef Herd to grow again,” he continued.
An “out of quota tariff” is a higher tariff that is triggered if the amount of a product imported into the U.S. exceeds a certain quantity.
Read More: Why Ground Beef Prices Are Hitting Record-Highs in the U.S.
It’s unclear who the deal is with or which countries will be importing the beef into the U.S. A White House official told TIME that Trump secured an agreement with foreign beef exporters to sell beef at a 25% discount, which will be passed on to American consumers, in exchange for Trump lifting the out of quota tariff on lean beef trimmings that will be used for ground beef production. The White House official added that the President plans to sign an Executive Order regarding the deal within the next couple of weeks.
Both Trump and the White House official cited the soaring price of beef as the motivation behind the new deal. Last month, the average price of ground beef for American consumers was about $6.885 per pound—a jump of roughly 57% from just five years earlier, according to data shared by the Federal Reserve Bank of St. Louis. The price of uncooked ground beef went up by 9% in July, compared to the same time last year, according to data released by the U.S. Bureau of Labor Statistics last month.
Beef prices have skyrocketed in large part because of supply shortages: American cattle herd sizes are at a low not seen in years, even as consumer demand for beef remains high in the country.
The American Farm Bureau Federation reported last month that, while the total cattle inventory went up a bit at the start of July for the first in eight years, the beef cow herd dropped to 28.5 million head, decreasing by about 1% compared to the same time last year, making it the “smallest July inventory on record,” with data dating back to 1973. Experts attribute the pressure on herds largely to droughts driven by climate change.
The deal that Trump announced on Friday isn’t the first time his Administration has made efforts to try and address the soaring price of beef for consumers. The President also signed an Executive Order earlier this year aimed at increasing the amount of lean beef trimmings imported from Argentina by 80,000 metric tons per year.
Experts, however, cast doubt on whether boosting beef imports from Argentina will be effective at lowering the cost on Americans, saying that the boost in imports would make up too small a portion of the overall supply in the U.S. to have a significant impact. And the cattle industry has objected to such efforts in the past, expressing concerns that those moves would undermine producers within the U.S.
Colin Woodall—the CEO of the National Cattlemen’s Beef Association, a trade association for cattle farmers and ranchers—said in a statement on Friday that he was “disappointed” by Trump’s announcement.
“While America’s cattle producers share the goal of keeping groceries affordable for consumers, flooding the market with government-subsidized, below-market beef is not the way to rebuild the American cattle herd,” Woodall said. “We are already working to rebuild after years of ongoing drought, high input costs and other challenges that have reduced U.S. cattle numbers. Today’s announcement and other market interventions throw cold water on the prospect of herd expansion and sacrifices long-term stability for short term messaging.”
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