Trump tariffs may steer Mexican cows away from U.S. beef supply

 

By Tom Polansek, Reuters

via Yahoo Finance - June 5, 2019

 

CHICAGO, June 5 (Reuters) - U.S. President Donald Trump's plan to slap tariffs on imports of Mexican goods could slow another, often overlooked migration: the more than 1 million cows exported by Mexico across the border each year which become part of the U.S. beef supply.

 

Tariffs on cattle crossing the border could raise costs for U.S. meat producers and processors, ranchers and economists said, particularly in border states like New Mexico and Texas that supplement more of their herds with Mexican cattle. Those fees could also contribute to more expensive barbecues for U.S. consumers.

 

Nationwide, the imported livestock account for about 4% of the U.S. supply of young cows, known as feeder cattle. But in parts of the U.S. South and Southwest, more than a quarter of the cattle in feed yards at any given time can originate in Mexico, making those regions among the most vulnerable to Trump's unilateral tariff plan.

 

If the duties are imposed, U.S. cattle feeders will import fewer cows due to the increased cost, said Derrell Peel, agricultural economist at Oklahoma State University, a situation that may leave them with empty space in their feed yards or paying more for U.S.-born cattle.

 

Texas-based Cactus Feeders, one of the largest U.S. cattle feeding companies, has fed up to 150,000 Mexican cattle in its feed lots at once, said Surcy Peoples, a Cactus cattle buyer and director of customer service. The lots have a capacity for 525,000 cattle.

 

"We would not have the number of cattle that we typically have available to place into feed lots" if the tariffs are imposed, Peoples said.

 

Trump last week said he will implement a blanket tariff on all Mexican goods from June 10 as he attempts to pressure Mexico into stopping U.S.-bound migrants, mostly from Central America. Levies would start at 5%, but could reach as high as 25% if Mexico does not comply with Trump's demands.

 

BILATERAL RISKS ...

 

TRADE DISPUTES WEIGH ...

 

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