OPINION:
President Trump’s recent announcement that he might increase imports of Argentine beef to bring down prices for American consumers has triggered outrage from ranchers and their allies in Congress.
They accuse the administration of “selling out” U.S. farmers to bail out Argentina’s economy. That’s flatly wrong. The deal doesn’t open America’s protected beef market; it simply reallocates existing import quotas to Argentina.
The U.S. beef market isn’t being pried open. The administration is reshuffling what is already on the table.
The timing makes sense. The United States faces a structural beef shortage. The American Farm Bureau Federation reports that the cattle herd is at its lowest level since 1951. It’s not a temporary dip; it’s the product of years of drought, high feed costs and cyclical herd declines that take years to reverse.
When supply drops, prices rise. This results in a catch-22: Ranchers are earning record margins, but those margins disincentivize rebuilding herds. Why restock when higher prices guarantee profits on smaller inventories?
Meanwhile, consumers are paying record prices for beef. This problem cannot be fixed overnight. Even with perfect weather and sound policy support, herd expansion is a slow and capital-intensive process.
The problem, as Agriculture Secretary Brooke Rollins said in a recent CNBC interview, is that “right now, in America, we consume about 12 million metric tons of beef, 10 million of that we produce here.” That shortfall, some 2 million tons, has long been filled by imports from countries such as Australia and New Zealand, mostly under quotas.
Here’s the real scandal: The quota system is decades out of date and structurally inefficient. Australia holds nearly five times more U.S. beef import quota than all other countries combined — and rarely fills it.
It gets worse. Australia produces high-quality beef, but at a price that is too high for U.S. consumers looking for affordable food for their table. This results in a distorted market in which an unfulfilled quota drives scarcity, pushes up retail prices and locks out other competitive suppliers.
Mr. Trump’s deal with Argentina wouldn’t increase total import volumes. It will just reallocate more existing quota to a reliable, competitive partner. Indeed, Argentina can supply grass-fed, high-quality beef at lower cost — precisely the kind of supply that, although a small slice of the market, can relieve pressure on prices without displacing American ranchers.
When confronted with these facts, critics of Mr. Trump’s deal resort to a familiar scare tactic: that Argentine beef risks introducing foot-and-mouth disease into domestic livestock production.
That’s a red herring. The U.S. Department of Agriculture routinely inspects and monitors all imports. Argentina has been found free of foot-and-mouth by international health authorities, and any outbreak would immediately trigger an import ban, as has happened in the past with Britain, France, Ireland and others.
The truth slipped out in Politico’s Morning Ag newsletter, when Cooper Little of the Independent Cattlemen’s Association of Texas acknowledged that Argentine imports will “undermine these really healthy prices.” That’s literally the bottom line. As The Wall Street Journal put it in September, “Beef Prices Are at a Record. The Winners: Cattle Ranchers.”
Critics of the deal are wrong to call it a bailout for Argentina. It’s really a tweak of a broken quota system that rewards inefficiency, puts food supply chains at risk and punishes consumers at the grocery store.
• Marc L. Busch is the Karl F. Landegger professor of international business diplomacy at the Walsh School of Foreign Service, Georgetown University.
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