From the President
Buck Wehrbein
LET THE MARKET WORK
Over the past few weeks, I have watched with growing concern as rhetoric about beef prices increased in Washington, D. C., and across the nation. By now you’ re aware that numerous economists have weighed in and put current beef prices in context. Beef prices aren’ t overly inflated, they have responded to the reality that we are experiencing historically low cattle numbers and high demand for our product. As cattle producers, we have worked for generations to produce the safest, highest quality product in the world, and we are receiving fair prices for our animals. That’ s the free market working and history tells us government interference in the markets will only end badly.
I often say history teaches us some of our most valuable lessons. I remember the early 1970s, when President Richard Nixon believed prices were too high. Under the Economic Stabilization Act of 1970, he imposed wage and price controls, including a cap on beef prices. At the time, inflation hovered around 5 – 6 %, and unemployment was moderate— conditions not unlike today.
This intervention disrupted the market. Producers held back market-ready cattle, creating supply chain bottlenecks. Fewer cattle were processed, grocery store shelves emptied, and chaos followed. Despite the disruption, the broader economy saw little improvement. Eventually, Nixon was forced to lift the price caps, acknowledging the policy’ s failure. Livestock producers and the agricultural sector suffered significant economic harm. This was the market wreck of all market wrecks. As I broke into this business, for the first 20 years of my career, everyone went back to that, citing Nixon’ s actions as a cautionary tale. When governments manipulate prices, they distort supply and demand, leading to shortages, supply chain issues, reduced investment, and broader market instability.
Fast forward to this most recent episode and two very critical lessons are worth remembering as our president, once again, considers cattle and beef market manipulation.
The first lesson is that market signals matter. When prices aren’ t allowed to rise, to reflect higher input prices, cattle producers will cut back. This inevitably leads to a reduced future supply of beef, which in turn drives prices higher down the line.
The second lesson is that even short-term manipulations, like increasing imports from Argentina, can echo for years to come. An attempt to lower beef prices for consumers ignores the fact that the cattle business will respond to the disruption. A problem will be created somewhere in the form of cattle
producers holding back, and another shortage of cattle or beef will ripple across the industry. We all know these ripples can take years to work themselves out, simply because of our long production cycle. Recovery takes time, but recovery will ultimately occur, absent government interference.
Patience is thin when recovery timelines are capped by events such as elections. President Trump is sharply focused on mid-term elections. He needs beef prices to come down now to avoid voters thinking about grocery prices when they head to the ballot box, hence his recent efforts to increase shipments of beef from Argentina.
Now, it’ s also important to note that this isn’ t a shift in policy. NCBA has and continues to believe in the importance of trade. We have been importing beef from Argentina and elsewhere and, if the market continues without interference, we will continue to do so. We need lean beef trim to mix with the fat trim from our highquality beef. An absence of imported lean trimming would cause a harmful devaluation of the price of products like the fat that is put into ground beef. So, in no way am I advocating against imports. However, market participants must be allowed to decide where those imports are sourced— as long as those nations first meet U. S. safety standards— and at what price. Those decisions should not be made or tampered with by the government.
The effort to“ lower consumer prices” misunderstands how our supply chain functions. The domestic cattle herd is down; drought and input pressures are real; and two-plus year biological lead times required to deliver market-ready cattle remain inflexible. Imports may offer a short-term easing of retail costs, but they do not rebuild domestic capacity, ensure herd health or honor the investment timelines of American ranchers. Any attempt to do so causes chaos for us now and, ultimately, failure for the administration later. Simply put, this kind of action ends up being a kick to producers and does virtually nothing to help the consumer.
The message from beef producers to President Trump and other policymakers who consider this a path to success is simple: history has already demonstrated that you cannot simply press a button and lower prices without consequences. Let’ s work together, cattle and beef producers, policymakers and consumers— to support a free and healthy beef market, rather than one manipulated by the government.
When governments manipulate prices, they distort supply and demand, leading to shortages, supply chain issues, reduced investment, and broader market instability. www. NCBA. org NATIONAL CATTLEMEN 5