American meat producers need foreigners to eat U.S. meat, but the Trump administration’s higher tariffs could limit demand, according to an agricultural economist who tracks meat consumption and sales.
"The U.S. doesn’t have a long history of agricultural trade,” said Dr. Glynn Tonsor, agricultural economist at Kansas State University since 2010. Tonsor, who grew up on a farrow-to-finish swine farm in Monroe, Missouri, has authored more than 125 peer-reviewed publications over his career.
“There’s over 400 years of global trade history. Trade disputes and changes in international relationships are not new, and it's important to recognize the significant role these play in U.S. agricultural success."
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Foreign Demand for Pork has Increased
One of the most significant developments in recent years is the growing volume of U.S. pork exports. Tonsor told American Farmland Owner, “Over the last several years, the U.S. pork industry has exported more than 20% of the volume it produces."
This percentage highlights the dependency of American pork producers on international markets. Without these exports, producers would be forced to sell more pork domestically, likely at lower prices.
The same is true for other meats, including beef. "The U.S. is exceptionally good at producing meat. The only way that works is by selling into a growing global market," Tonsor noted.
If those markets are disrupted by tariffs or trade barriers, producers face the tough reality of either selling surplus meat at lower prices or cutting back on production, which could reduce the supply of meat in the domestic market over time.
Tariffs and the Impact on Foreign Demand
Higher tariffs, especially in markets where U.S. meat is in high demand, can significantly diminish the profitability of exports. Tonsor explained that tariffs create a ripple effect, ultimately making U.S. meat products less competitive in international markets.
"If tariffs stay in place, we could see a situation where the market becomes saturated with meat that would have been exported, but now has to stay home," he said. "That could lead to lower prices for domestic consumers in the short term, but it's a double-edged sword."
While consumers might enjoy lower prices in the short run, the long-term consequences could be more problematic. If demand for American meat drops significantly in foreign markets, producers will face a market oversupply.
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"You could see a situation where consumers benefit because the meat that would have been exported stays here, and prices may drop to clear that excess supply,” Tonsor said of the short-term."
However, the situation becomes less favorable as the economic signals of lower prices begin to take effect on production.
Short-Term vs. Long-Term Effects on U.S. Consumers
Tonsor emphasized the long-term effects, explaining that lower prices and oversupply would eventually force producers to scale back production. "In three to four years, the reduction in foreign demand will likely lead to fewer animals being raised, which could result in a reduction in the overall supply of meat," he said. "This could lead to higher prices for consumers in the long run, especially if production decreases significantly."
