The potential impact of tariffs was shown in the livestock sectors with a less descriptive price projection by the April 11 World Agricultural Supplies and Demand Estimates livestock report.
Whether that is a short-term aberration, or a longer-term script is unknown.
“It is hard to project what duration, and depth may characterize future reports,” said Glynn Tonsor, a Kansas State University professor and Extension specialist for livestock and meat marketing. “We increasingly see examples and concerns where less market guidance is provided, reflecting the astronomical increase in uncertainty in our economy.”
In a recent Yahoo Finance story, he noted that publicly traded companies may cease giving guidance particularly in forecasts of earnings. If or when less market guidance becomes available, those with more sophisticated market intelligence in-house are more likely to benefit while leaving others in comparatively less informed, decision-making situations, he said.
“For decades the U.S. has been characterized, comparatively around the world at least, as a country of stable laws and a stable business operating environment,” Tonsor said. “As we speak that is being challenged and many things adjust thereafter including existence, depth, and detail of efforts to speak to markets including agricultural markets.”
The report notes that beef exports were lowered for 2025 based on recent trade data, as well as newly imposed tariffs and non-tariff barriers faced by United States beef exports to China. Beef imports were also lowered based on higher tariff rates for foreign suppliers for the remainder of the year. Pork exports were lowered from the previous month due to the latest trade data with increased tariff rates for U.S. pork shipments to China and price competition from other major exporting countries.
Cattle prices remain high
One silver lining was cattle prices were expected to remain robust for the rest of 2025, but hog prices were lowered as eyes remain on China.
The average simple average of five area direct sales on steers was projected at $206 per hundredweight, which is nearly $19 per hundredweight higher than in April 2024 and about $6 higher than a month ago. The level above $200 per hundredweight is expected to stay hold throughout the year.
Hog prices were projected at $61 per CWT in April, a decline of $2 from a month ago. A year ago, the price was $61.56 per CWT. The price is expected to hold in that range, but fall to $54 per CWT in the fourth quarter.
International trade integral
In short, international trade is of elevated uncertainty with the most likely outcome being less trade (perhaps less exports and less imports) relative to expectations just six months ago, Tonsor said. If realized that is particularly bearish for U.S. beef and pork industries and would ultimately lead to smaller domestic industries.
In February and March, many U.S. pork, beef and poultry plants and cold storage facilities were due for a five-year eligibility renewal by China’s General Administration of Customs, according to the U.S. Meat Export Federation. Pork and poultry plants were renewed in mid-March, but GACC still has not renewed the eligibility of any U.S. beef establishments and the majority of U.S. beef production is now ineligible for China.
The USMEF noted that China’s additional retaliatory duties will create further obstacles for U.S. pork and beef exports to China. Effective April 10, China’s total tariff rate on U.S. pork and pork variety meat is set to increase to 81%. The additional tariffs pushed China’s effective duty rate on U.S. pork and pork variety meat to 172% and beef and beef variety meat are now tariffed at 147%.
U.S. consumers not as bullish
The U.S. consumer is also feeling the impact.
“Indeed, nearly all macroeconomic forecasts are being revised here in April 2025 to suggest slower economic growth (perhaps retraction) both domestically and abroad,” Tonsor said. “Further, the same forecasts have elevated inflation expectations combining to “stagflation” concerns developing to levels not seen since the 1970s.”
The most likely outcome is less international trade as the U.S. leads a movement toward more isolation, Tonsor said. Specifics on China, Mexico, and other countries remain fluid with rapidly evolving and unpredictable tariff, non-tariff trade barrier, quota volume, domestic production changes, and other details ultimately leading to different effects across countries.
Moreover, historically countries have differed in the products/cuts they imported reflecting different relative valuations of those items (for example, more ham to Mexico than China), but those market outcomes become harder to achieve when either fewer countries are trading and/or differential terms of trade (tariffs and otherwise) further adjust relative prices and ultimately product values across countries.
More bears than bulls
Less global trade is bearish for U.S. beef and pork industries, he said. The U.S. beef and pork industries have historically benefited from global comparative advantages that have enabled them to grow in export presence (leading to improved U.S. meat and livestock producer economic well-being) while also support larger aggregate consumption (per capita consumption patterns and growing population must both be noted) domestically that has benefited U.S. meat consumers.
“Those trends are in part reversing with recent global trade developments and, in my opinion, ultimately lead to economic harm for U.S. meat and livestock industries as well as U.S. meat consumers,” he said.
Advice to livestock operations
Regardless of the business and economic climate, astute producers “know their numbers,” he said. They know their production costs and implied break-even output prices; they know their risk exposure both on price and non-price factors; and they have active and transparent discussions with their financial-lending partners, Tonsor added.
“My best advice with such elevated macroeconomic uncertainty is to assure one still knows-your-numbers and reads multiple sources of information to cross-check and think about how moving to a less globalized economy impacts your operation,” he said.
Further, many producers think about supply-side factors (i.e. cow herd size, final market weights etc.) and they should remain informed on them, he said. Equally important are demand-side factors.
Developments in April 2025 raise notable concern around the ability and willingness of consumers to sustain stable, much less growing demand for meat,” he said.
“If and when end-user demand for meat declines, the derived demand for livestock is reduced leading to lower prices and ultimately a smaller livestock industry,” Tonsor said.
Dave Bergmeier can be reached at 620-227-1822 or [email protected].
