R-CALF

Did the Administration's Plan to Lower Beef Prices Wreck the Bull Run in the Cattle Market?

Fri, 14 Nov 2025 20:54:30 GMT

2025 has been a historic year in the cattle market. The tightest cattle numbers in 70 years laid the ground work for cash and futures prices to push to record and all-time highs.

From All-Time High to Crash
The peak in the cattle futures market was hit on Oct. 16. However, by Nov. 6, live cattle saw a $30 correction from the highs and feeder cattle futures set back nearly $70. The cattle market chaos wasn’t tied to fundamentals but liquidation by speculative traders on fear of policy changes by the administration as President Donald Trump announced a plan to lower beef prices for consumers.

Fundamentals Have Not Changed
Don Close, senior animal protein analyst with Terrain, says the market fundamentals that started the bull run in the cattle market are still intact.

“Certainly with domestic supplies, they have not changed in any fashion when you’re looking at the tightest cattle numbers that we’ve had in 70 years,” he says.

With high retail beef prices, there is no evidence of consumer sticker shock or trading down to other lower-priced proteins. Close says the beef industry has not seen any erosion in demand.

So, what changed? Analysts say it was the shift in market psychology in reaction to President Trump’s announced plan to lower beef prices for consumers on Oct. 16.

While the President’s announcement lacked details, the goal seemed to be to mimic the success the administration had in bringing down egg prices. With the prospect of government intervention, the live and feeder cattle futures touched limit down the following day as speculative traders who had been long in the cattle futures market for many weeks took profits and liquidated.

Jeff Hoogendoorn, with Professional Ag Marketing, says the managed money fund traders did not want to bet against the government.

“If you’re a hedge fund manager, you look at this cattle thing and say ‘Yeah it’s gone up an awful lot. We’ve made a lot of money,’” he says. “‘Now the administration’s going to be fighting against me. I think I’ll go find something else to do’, and you move your money elsewhere.”

Trump Administration Quadruples Argentina Beef Imports
Just days later, President Trump made an announcement to quadruple the Tariff Rate Quota for Argentina beef imports . That triggered additional selling in cattle futures despite the insignificant impact it has on U.S. beef supplies.

Patrick Linnell, director of market research with CattleFax, explains: “That change from 20,000 metric tons to 80,000 metric tons would represent around 132 million lb. And really, that comes down to about three-tenths of a lb. per capita to net beef supplies.”

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The move drew immediate fire from the nation’s cattle groups, including the National Cattlemen’s Beef Association (NCBA).

Colin Woodall, NCBA chief executive officer, explains that with the current trade imbalance with Argentina, the administration needed to push for more market access in Argentina instead of importing more of its beef.

“Over the past five years, Argentina has sent over $800 million worth of their beef into the U.S. market, and they’ve only accepted $7 million of our beef into their market,” Woodall explains.

Justin Tupper president of the U.S. Cattlemen’s Association, adds that increasing beef imports was a slap in the face to U.S. cattle producers, and they opposed the move because countries like Brazil and Argentina have lower food safety standards and other practices that put the U.S. at a disadvantage.

“I think we want to be able to play on the same level playing field,” he says. “And I don’t think that happens with Argentina and Brazil. And again, I really don’t think it’s going to lower prices.”

Tupper adds neither producers or consumers stood to gain from increasing beef imports.

For more about Tupper’s thoughts:
South Dakota Producer Speaks Out About Beef Imports and “Product of USA” Push

Cattle Groups Tell Trump to Stay out of the Cattle Business
As a result, cattle groups and outraged producers warned the president to stay out of their business.

Woodall says: “We have worked really hard through the free market to be able to achieve the prices that we’re seeing. We don’t want government intervention coming in and messing with that and taking away these great opportunities we’re seeing.”

Tupper agrees: “It’s an industry that wants to work on competition and merit based, and we can do that if we make sure we don’t get to many outside interests — the government being one.”

Government Policy Pushes Prices Higher
However, two government policies pushed live cattle from $210 to $250 from July through September.

1. Increased Tariffs on Brazil. The U.S. increased tariffs on Brazil an additional 50% in mid-August, which nearly halted imports of beef trim coming into the U.S. Linnell explains, prior to that time, Brazil was a top importer of trim used to blend in ground beef.

“As of July on a 12-month basis, we’d imported just shy of 1.1 billion lb. from Brazil,” he says.

2. Closing the Mexican Border. The biggest policy change that tightened cattle numbers came from the U.S. closing the border to feeder cattle imports . Linnell says prior to closure, the U.S. imported more than 1.2 million feeder cattle annually. So, dropping the ban would have an immediate supply shock.

“We won’t see all 1.2 million head coming across at once but approaching that 25,000 head a week isn’t out of the question,” he adds.

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While USDA Secretary Brooke Rollins has confirmed there’s no date for resuming trade, speculative traders are headline driven. Every time USDA hosts a news conference on New World screwworm, it tanks the market — especially feeder cattle futures.

The market has also been sensitive to rumors of the border reopening, says Scott Varilek, of Kooima Kooima Varilek.

“There’s this large supply in Mexico. That would be the one thing that would probably affect this market the most,” Varilek says. “So, we’re penciling that in.”

Trump Calls for DOJ Investigation
The latest attempt to curb beef inflation came Nov. 7, as the president announced on his Truth Social site the Department of Justice was launching an investigation of the nation’s meat packers .

The president’s announcement says he vows to “ensure these corporations aren’t criminally profiting at the expense of the American people.”

Packer concentration has long been a hot button issue for cattle producers and is at the root of R-CALF’s six-year lawsuit, explains Bill Bullard, chief executive officer.

“We have alleged that the meat packers had unlawfully colluded in order to artificially depress cattle prices, while at the same time raising or inflating the price of beef to the consumers,” he says.

Currently 85% of the U.S. beef packing industry is owned by four entities, and Bullard says this monopoly violates antitrust law.

“Both the producers on the beginning of the supply chain and consumers at the end of the supply chain were exploited as a result of this monopolistic marketing structure,” he says.

Read more about Bullard’s thoughts regarding the DOJ investigation: Is the Beef Market Broken? One Cattleman Says Yes

But according to Derrell Peel, livestock marketing specialist at Oklahoma State University, past DOJ price fixing probes and research have disputed that.

“While there’s a very small level of negative price impact due to the concentration of market power, if you will, it’s far outweighed by the by the benefits in terms of cost efficiencies that the large firms bring to the industry,” he summarizes.

Read more about Peel’s comments regarding the industry chaos today: Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

Cattle Producers Say Trump’s Beef Plan Topped the Market
Some of the other aspects of the President’s plan to rebuild the cattle herd were met with favor, such as opening more public land to grazing. However, in the end, the president’s beef plan has wreaked havoc in the cattle market and outraged producers, according to Varilek.

“They’re mad,” he summarizes. “That’s all it took was just kind of the government shoving in there and wrecking [the] market. I think the biggest thing was that there were some claims that the tariffs were the reason that we got this high, and that is not at all the case.”

Linnell agrees the negative headlines have hurt the market, adding: “There is no doubt that these policy decisions are making a big impact on the marketplace. They also just increase a lot of uncertainty and volatility in the industry.”

Cattle Market Chaos Further Slows Herd Rebuilding
The loss in value of females just over the last three weeks has also hurt producer confidence, and according to Close, that could further slow heifer retention and herd rebuilding efforts .

“We’re seeing one more round where we’re going to kick that can down the road instead of actually retaining the females needed,” he explains.

Market analysts, including Peel, say the reality is lowering beef prices is like turning the Titanic — and the president’s plan is unlikely to affect much change.

“It took several years of of drought and other impacts to get us here,” Peel explains. “It’s going to take several years for us to grow our way out of this situation.”

Close says once the market refocuses on fundamentals, cattle could retest the highs.

“As crazy as it sounds today, I’m not yet convinced we’ve seen the high of the cash market, and I would readily argue that we get into next spring, next summer to see a cash market back in that $240 to $245 plus level. I think is entirely possible,” he predicts.

Cattle Contract Library Act Passes Ag Committee

Thu, 22 Sep 2022 05:28:40 GMT

By a unanimous vote on Thursday, the U.S. House Agriculture Committee passed the bipartisan Cattle Contract Library Act of 2021 (H.R. 5609). The bill must be approved by the full House and would also need Senate consideration before it could be signed into law.

Introduced earlier this week by Rep. Dusty Johnson (R-SD) and Rep. Henry Cuellar (D-TX), the Cattle Contract Library Act would establish a library of contracts for the Agricultural Marketing Service to report terms of alternative marketing agreements between packers and producers. Supporters of the bill say it would greatly increase transparency in cattle markets.

Rep. Johnson said the bill is the result of nearly a year of work with producers and industry leaders following the July 2020 Boxed Beef & Fed Cattle Price Spread Investigation Report. The investigation recommended the creation of a cattle contract library.

According to a statement from Rep. Johnson, this is the first cattle market transparency bill to pass out of the Agriculture Committee since the July 2020 report was released. The Cattle Contact Library Act is supported by the American Farm Bureau Federation, National Cattlemen’s Beef Association, U.S. Cattlemen’s Association, National Farmers Union, Livestock Marketing Association, South Dakota Cattlemen’s Association, South Dakota Farm Bureau, and the South Dakota Farmers Union.

“Producers want action – they want more transparency in the cattle market – this bill is a step in the right direction,” Rep. Johnson said. “The Cattle Contract Library Act ushers in greater transparency and competition to an industry that desperately needs it. I’m grateful to the farmers & ranchers for their critical input to come to a consensus and I’m glad the committee answered this request. I’m going to fight like hell to get this bill passed out of the House.”

During an interview with Chip Flory on AgriTalk Thursday, Tanner Beymer, NCBA director of government affairs and government regulatory policy, said the cattle contract library has “broad support from all sectors” and has been a longstanding priority for NCBA.

“Members of Congress recognize this broad support,” Beymer said.

The cattle contract library will give cattlemen valuable information about “what attributes are being incentivized by packers and at what (price) levels,” he said. Such information will help producers gain more marketing leverage.

“Information is power, and this bill allows cattle producers to compare their agreements with other (packer/producer) agreements and allows them the opportunity to negotiate more favorable terms,” Beymer said.

The only cattle producer group that has not endorsed the Cattle Market Transparency Act is R-CALF USA, the group said in a statement. R-CALF directors reviewed the bill and determined it “does not address the competition-disrupting leverage” the beef packers now have.

“The problem with our broken market is not that we don’t know the details of the contracts that confer market leverage to the packers, the problem is there are too many contracts and because of that, our price discovery market is being destroyed,” said Iowa cattle feeder and R-CALF USA Director Eric Nelson. “Putting a contract library ahead of taking action to preserve our price discovery market sends a signal that more contracts are good and more producers should try to access them. This is not what is needed.”

Prior to Thursday’s vote, the North American Meat Institute urged the House Ag Committee to pause.

“Members of the Meat Institute are still analyzing the bill and how it might affect their operations,” said Julie Anna Potts, President and CEO. Due to the limited time allowed to consider the legislation, “we ask the House to pause and include packers in the conversation, since the packers would bear the burden of complying with this new government mandate.”

The bill must be approved by the full House and would also need Senate consideration before it could be signed into law.

“There is already robust price discovery provided by beef packers on a daily basis,” Potts said. “We urge members of Congress to slow down and to first do no harm.”

Related stories:

Beef Contract Library Bill Introduced In House

Cowboys React To Revised Cattle Price Discovery Bill

Thu, 22 Sep 2022 05:28:31 GMT

On Monday four Senators announced they have revised their proposal that would reform the nation’s cattle markets. The updated legislation, called the Cattle Price Discovery and Transparency Act of 2022, drew comments from a wide range of industry stakeholders with varying degrees of support and opposition.

Among the three prominent cattle producer groups, U.S. Cattlemen’s Association supports the bill, the National Cattlemen’s Beef Association (NCBA) opposes, and R-CALF USA is undecided.

The revised bill would establish 5-7 regions in the U.S. where minimum levels of fed cattle purchases must be made through “approved pricing mechanisms.” Violations of the regulation would result in a maximum penalty of $90,000 for packers that have slaughtered 5% or more of the nation’s harvest over the past five years. The bill would also create a publicly available library of marketing contracts.

The four Senators introducing the bill are: Deb Fischer (R-Neb.), Chuck Grassley (R-Iowa), Jon Tester (D-Mont.), and Ron Wyden (D-Ore.). The senators first introduced the bill in November.

Statements from stakeholders:

U.S. Cattlemen’s Association (USCA) president Brooke Miller says there is “momentum for industry change.” In a statement, Miller said USCA supports “mandatory cash trade minimums,” a concept he says is supported by a majority of the Senate Agriculture Committee.

National Farmers Union (NFU) president Rob Larew says “rampant consolidation in the cattle industry has made pricing in the cattle market increasingly opaque. Fair and competitive markets rely on price discovery and transparency. For farmers and ranchers to bargain effectively with packers, they need access to reliable, accurate pricing information. This bill would shed light on the market and bring about greater fairness.”

Support for the bill from Senator Fischer’s home state came from both the Nebraska Farm Bureau and the Nebraska Famer Union.

“NEFB remains committed to working with Senator Fischer to provide additional cattle market transparency and price discovery,” said Nebraska Farm Bureau President Mark McHargue.

“Nebraska Farmers Union (NeFU) strongly supports” the revised bill, says NeFU president John Hansen. “This negotiated bipartisan bill represents an historic opportunity to substantially improve and reform beef markets. It will increase beef market competition, transparency, the volume of mandatory price reporting data, cash market sales, penalties for packer violations, and establishes a cattle contract library.” He said the current system “is systematically squeezing multi-generational” ranchers out of business.

From the Nebraska Cattlemen, president Brenda Masek said, “Until price discovery participation is better valued at all points in the supply chain, live cattle market price negotiation will continue to decrease until there is little to no negotiated trade left and outside markets will have to be relied upon for price determination.”

Opposing the legislation, NCBA Vice President of Government Affairs Ethan Lane issued the following:

“Despite overwhelming feedback in opposition to a cash mandate, this latest version of the Fischer/Grassley bill expands the concept to ensure that every single producer in the country selling fat cattle would be subject to a business-altering government edict. This is an indication of just how far the sponsors of this bill have strayed from the wishes of the majority of cattle producers around the country. It is time for the sponsors to finally consider the perspectives of all those who this bill would impact, not just those in their own backyards – and we are ready to have that conversation whenever they are.”

In a statement from R-CALF USA, the group noted it was “strongly opposed to the initial version” of the bill and called for its rejection by the Senate Ag Committee.

Regarding the new revision, R-CALF USA CEO Bill Bullard said his group “remains deeply disappointed that Congress has not yet taken any meaningful action to address the serious crisis in the cattle industry that is now entering its eighth year.”

He said R-CALF fears many more ranchers and cattle feeders will leave the business without market reforms, and that the group has asked Congress to take “decisive action” in the past.

“While we reserve our opinion regarding the modified compromise bill pending our ongoing analysis, we remain concerned that at its heart, the proposal authorizes the USDA to take up to two more years before it even establishes minimum cash volume requirements; to set those minimum requirements at the same inappropriate level that they’ve been at during the past two years; and then to keep them at that inappropriate level following the required review after the first two years of implementation and periodic reviews after each five-year increment,” Bullard said.

“We were hoping Congress would provide a measured response to this serious crisis and we will continue wading through this complicated proposal to determine if it provides any meaningful reform worthy of America’s independent cattle producers’ support,” he concluded.

Related stories:

Cornett: The Mandaters Move On

Senators Revise Cattle Price Discovery and Transparency Act

Potts: Supply, Demand Balance Without Government Intervention

Cornett: A ‘Hard Cull’ On The Facts

Packers and Allies Urge Congress to Do Nothing in Face of Broken Markets

Speer: Policy Makers Should Just Leave Well Enough Alone

Speer: Is Fair What We Really Want?

Uhl: The quest to improve cattle markets

Speer: Business First, Market Second

Cornett: ‘What Does the End of Beef Mean for Our Sense of Self?’

Cornett: Cattle Markets Could See ‘Techtonic Shifts’

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Cornett: Charity Markets

Cornett: Stewardship and Sustainability Will Influence Price Discovery