Words That Move Markets: When Policy Talk Becomes Market Shock

It has been an interesting week for those of us in the cattle industry. We were basking in the nice fall weather and record-high cattle prices when news broke that President Trump suggested importing more beef from Argentina to alleviate the high price of beef that consumers are paying in the store. Suddenly, the cattle market trembled, and all the industry associations agreed, that we should not be importing more beef from Argentina. There were a host of reasons brought up why this was a bad idea, such as the already uneven trade balance and cattle health concerns with foot and mouth disease in Argentina.   

Industry associations had their hands full this week, fielding interview requests and communicating members’ positions to congressional staff. Due to their efforts, several senators and representatives raised the Argentina issue with the President and urged him to reconsider his position. While some news releases seemed to indicate a positive result from these communications, President Trump doubled down by sending out a message on Truth Social, saying beef producers need to lower prices in stores, and that we should be grateful to him, claiming high cattle prices are the result of the tariffs he put on beef imports.  

There are many inaccuracies in the President’s statements about the beef industry. Those of us in the business know cattle and beef prices are high right now due to a short supply of cattle brought on by widespread drought which caused many producers to reduce their herd size. At the same time, beef demand is the strongest it’s been in 40 years, thanks to the promotion efforts of the beef checkoff and producer efforts to improve their product.   

I don’t fault the President for not understanding the complexities of the cattle industry. There are many industries in the United States, and it is impossible for one person to completely understand every one of them. I do fault him for demonstrating his ignorance about our industry and failing to work with and listen to producers and industry associations that do understand the industry.   I have been involved with the South Dakota Cattlemen’s Association (SDCA) and the National Cattlemen’s Beef Association (NCBA) for several years, and this week has been challenging for them, too. Both organizations work hard to build and maintain relationships with officials who make decisions affecting our industry and to help them understand its complexities. Despite those efforts, policymakers sometimes make decisions that are contrary to our best interests. In today’s fast-moving media environment, comments or policy announcement from President Trump and other officials can negatively affect our industry as much, or more, than the proposed policies.    We all like to think our fences are always good enough to keep the cows in, our health program is good enough to keep calves from getting sick, and our machinery maintenance is good enough to prevent breakdowns. But despite our best efforts, things still go wrong, and that is when we’re grateful for the relationships we have with our mechanics, veterinarians, and spouses to help put things back together. Similarly, we like to think that our hard work, positive relationships with policymakers, and our reputation as producers and industry experts are good enough to prevent events like we saw this past week. But just like on the ranch, despite our best efforts, things don’t go as expected. When things go awry in Washington, I am grateful I have SDCA and NCBA working to put things back together. The membership dollars I have contributed and the time I have volunteered are a small price to pay for the influence they provide on behalf of producers like me, helping to mitigate the damage the President has inflicted the past week and push for real regulatory reforms that strengthen the beef industry.