Cattle industry tackles volatility, high prices along with inflation

Beef prices are at record highs this year. However, some South Dakota producers say just because prices are up, that doesn’t mean their pockets are getting filled.

The price of beef has been a national talking point, especially following disagreements between President Donald Trump and the cattle industry. Trump has announced plans to try and bring the markets down, including importing more Argentinian beef and dropping tariffs on the product altogether. Beef markets retracted by about 20% after these comments.

The administration had put a 40% tariff on Brazilian beef, something some have said contributed to recent price increases because Brazil is the largest global beef exporter and fills the lean beef markets in the U.S.

Adam Bode is the CEO of the Demkota Ranch Beef, a beef processing plant based in Aberdeen. He spoke on a panel of people from the state’s cattle industry at a recent Downtown Sioux Falls Rotary meeting. He said lifting those tariffs will show up in grocery store pricing, particularly on ground beef and processed foods.

“Recent announcement on rescinding Brazilian tariffs will have a meaningful impact. It will fill the lean meat. So, most of that meat’s going to end up in your ground beef or your processed food,” Bode said. “So, it’s not going to affect your ribeye pricing or any of those. It will probably drive down ground beef pricing a little bit. Now, it’s going to be drastic in the front part of the year because it’s still a quota-based tariff system that is with Brazil.”

In an interview after the panel, he affirmed the industry is keeping its eye on the consumer.

"Yeah, it’s an important concern because we don’t want our consumers to stop choosing beef and taking a pork or a chicken or down to beans, et cetera,” Bode said.

So, he said the beef and cattle industry must look at the issue economically.

“But every consumer has to manage their budget. So, we’re trying to find economical choices, and the way to do that is potentially providing alternative products that are still beef. Rather than buying a 90% lean hamburger, maybe you go to an 80%,” Bode said. “And that should lower your cost. Everybody still wants a good eating experience so you may not be able to go all the way there. But that is one option that a consumer can do is just make a slight substitute in that versus substituting all the way to an alternative protein source.”