ASK CLARA: Are Tariffs in Canada Good for U.S. Cattle Producers Given High Beef Imports?

Ask CLARA: Are Tariffs in Canada Good for U.S. Cattle Producers Given High Beef Imports?

Tariffs on Canadian beef could help or hurt U.S. cattle producers depending on the market response.

Potential Benefits of Tariffs on Canadian Beef:

1. Reduced Competition from Imports – Canada exports a significant amount of beef to the U.S., contributing to the 4.6 billion pounds of beef imports in 2024, which is already 1.2 billion pounds above the five-year average . Tariffs could discourage Canadian beef from flooding the U.S. market, giving domestic producers better leverage on pricing.

2. Stronger Domestic Demand for U.S. Beef – With tariffs raising the cost of Canadian beef, packers may have to source more from U.S. feedlots, supporting stronger demand and price stability.

3. Long-Term Price Support – By discouraging imports, domestic cattle prices could stabilize or even rise, benefitting U.S. cow-calf producers and feeders.

Potential Drawbacks of Tariffs on Canadian Beef:

1. Retail Beef Prices Could Rise – If tariffs make imported beef too expensive, domestic packers might pass those costs on to consumers. Higher retail prices could reduce overall beef consumption and shift demand toward pork and chicken, which are both projected to hit record production levels in 2025 .

2. Retaliation from Canada – The Canadian government could respond by imposing tariffs on U.S. cattle or beef exports, making it harder for U.S. producers to sell internationally.

3. Packer Backlash – Large U.S. meatpackers rely on imports to meet supply needs. If tariffs limit their ability to source beef affordably, they may respond by offering lower prices to U.S. feeders.

Final Take: Would Tariffs Be Good for U.S. Cattle Producers?

It depends on who you are in the supply chain:

• Feeder cattle producers & cow-calf operators → Likely to benefit in the short term due to increased demand for domestic cattle.

• Beef packers & retailers → Likely to oppose tariffs as they reduce sourcing flexibility.

• Consumers → Could see higher beef prices, leading to weaker demand.

Given that imports already play a major role in supply, the biggest concern is balancing trade policy without hurting overall beef demand. A sudden cut in Canadian beef could cause short-term price gains, but if demand weakens, those gains could be short-lived.