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Report shows ending U.S. beef trade could be catastrophic for industry

published: November 4th 2022
source: Kansas State University

A recent report revealed economic disaster would be the end result if all U.S. beef trade was eliminated. The report was authored by agricultural economists Glynn Tonsor of Kansas State University and Derrell Peel from Oklahoma State University.

      According to the report, if both U.S. beef exports and imports declined by just 10%, prices and quantities of feeder cattle and fed cattle would fall significantly. Cumulatively, a 10% reduction in beef trade over 10 years would create a loss of $12.9 billion to those selling feeder cattle and $6.8 billion to fed cattle sellers. A scenario where 100% of U.S. beef trade was lost would suggest a catastrophic impact, broadly approximated in the report to cost those selling feeder cattle $129 billion and fed cattle $68 billion, leading to a significantly smaller industry.

      The authors also calculated the impact on individual states. In the case of a 10% decrease in U.S. beef trade, Kansans selling feeder cattle would experience a $611 million loss and those selling fed cattle would see a $1.22 billion loss. If completely eliminated, feeder cattle sellers in Kansas could stand to lose $9.1 billion over a 10-year period.

      Additionally, the report outlines why the U.S. exports and imports beef and provides a review of historical beef trade data. The authors highlight that implied trade prices clearly show the U.S. receives a higher dollar per pound value for exports than it pays for imports. From 2016 through 2020, the U.S. average annual unprepared beef exports were 2.05 billion pounds, which had an export value of $6.4 billion and an implied export price of $3.13/lb. Conversely, the average annual unprepared beef imports for that same time were 2.30 billion pounds, with an import value of $5.8 billion and an implied import price of $2.52/lb. The authors state in the report these statistics “clearly indicate participation in the global market provides a net economic gain.”

      To read the full report, click https://www.agmanager.info/livestock-meat/marketing-extension-bulletins/trade-and-demand/assessing-economic-impact-would-follow. The report was commissioned by the Kansas Beef Council, Oklahoma Beef Council and Texas Beef Council.

 

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