Trump Signs Orders to Boost Meat Processing Competition

President Trump signed two executive orders on Sept. 4 to increase competition in meat processing and support cattle ranchers, according to Reuters.

One order directs the U.S. Department of Agriculture to expand investigations into potential violations of the Packers and Stockyards Act, including unfair or deceptive practices and conduct that could restrain commerce or manipulate prices. The order also directs USDA to establish a guaranteed loan program for small and regional beef processors to help those businesses continue operating and expand their capacity. A second order directs USDA to review whether existing authorities could support mandatory country-of-origin labeling for beef and to develop legislative recommendations if needed. 

The orders follow a separate move in late August to allow an additional 300,000 metric tons of lean beef trimmings into the U.S. at a reduced tariff rate for 90 days. Ranching groups criticized the move, arguing that additional imports could put further pressure on domestic producers while doing little to address the country's shrinking cattle herd. The Sept. 4 orders focus instead on processing capacity, enforcement and market access for domestic producers.

Neither order changes prices immediately. The orders set several 60- and 90-day deadlines for agencies to report on enforcement, market access, labeling and other policy changes.

For restaurant franchisors and franchisees, the immediate effect on beef costs is limited. Any effect on restaurant food costs would depend on whether the measures increase processing capacity or change competition across the beef supply chain. For now, operators should continue managing beef costs based on current market conditions while watching how the new measures are implemented. 

Read the full article here.

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