U.S. Ground Beef Market: Why Imports Help

Publication Date: August 2003

Publisher: Hudson Institute

Author(s): Tom Elam

Research Area: Agriculture, forestry and fishing

Type: Report

Abstract:

The U.S. ground beef market is a complex supply/demand chain that channels domestic and imported ground beef products in a wide variety of forms to consumers. Ground beef is a mixture of domestic meat categorized as 50’s (50 percent lean timmings/50 percent fat from U.S. grain-fed beef production) and leaner beef from grass-fed imported beef or older domestic cows (90 percent lean trimmings, known as 90’s). By itself, our domestic supply of 50’s is far too high in fat content for ground beef production and thus has little value. Its finished market value is dependent on a supply of 90’s. In fact, most 50’s would go into the waste stream unless mixed with leaner 90’s. Over time, the United States has increased production of 50’s and reduced production of 90’s, largely in response to economic factors. This obviously is counter to the trend of consumer preference for leaner meat products. Thus, a dilemma exists for the U.S. cattle industry. Does this imported beef harm the U.S. industry by causing lower prices and larger competing supplies? That is the question examined in this analysis.