Why America's Cattle Ranchers Keep Getting Squeezed

SPEAKER_2 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:24)

Joe, what do you eat more of, eggs or beef?

Joe Weisenthal (0:28)

You know, I was just thinking, I want to eat more beef in my life. I probably do eat more eggs, ultimately, but beef is just so good. Beef is the best food there is in the entire world. I truly believe that. And every time I eat beef, I think about, why don't I eat this all the time? It's so good, it's so satisfying, and all these nutrients. I don't have this impulse to snack and eat garbage afterwards. I want to eat more beef.

Tracy Alloway (0:53)

I'm pretty sure I eat more beef than eggs at this point. I will have the occasional omelet, and I mix a lot of eggs into Asian noodle dishes and things like that, but not that many.

Joe Weisenthal (1:03)

Well, I aspire to have the Tracy Alloway diet.

Tracy Alloway (1:06)

Okay, well, speaking of beef.

Joe Weisenthal (1:08)

Except it's really expensive these days.

Tracy Alloway (1:10)

Yes, this is exactly it. So I'm sure everyone listening to this podcast at this point has heard about rising beef prices in the US. There are a lot of headlines flying around constantly in recent days about this. So for instance, we're recording this on October 30th. And earlier this week, President Trump was tweeting about how he wants beef prices to be lower. He's also been talking about buying beef from Argentina. It is very much in the news. There's also the whole soybean drama with China.

Joe Weisenthal (1:43)

Yeah, I think it's funny because in that Trump post, he said cattle ranchers should appreciate how good things are going because high beef prices, but bring them down. There's just a lot. And I've said this before on the show, which is that I think the ultimate marker of civilization is the amount of beef or protein that you can buy with an hour's work, that the median person or the average person can buy with an hour's work. And I think when it's going backwards, we should be very disturbed. So setting aside, I'm very fortunate. I could probably afford to eat as much beef as I want. But the price of ground beef, I'm looking it up on the terminal now. It's like tripled since 2010 It was like $4 around the pandemic. Now it's over $6. I think these are extremely serious issues.

Tracy Alloway (2:27)

I will say, I don't think we need to be quite as obsessed with protein. Americans especially, we already eat a lot of protein. Okay, eat more fiber.

Joe Weisenthal (2:35)

I'm not saying we need to be obsessed. Actually, I do think the protein craze may be a little out of hand. I just think this is like a very good measure of the advance of sort of a wealthy society that protein gets more affordable.

Tracy Alloway (2:47)

I'm going to get you a cow share for Christmas.

Joe Weisenthal (2:49)

Thank you.

Tracy Alloway (2:50)

All right. Well, I am happy to say we do in fact have the perfect guest. We're going to be speaking with Bill Bullard. He is the CEO of R-Calf USA. So Bill, thank you so much for coming on Odd Lots.

Bill Bullard (3:01)

Glad to be here. Thank you.

Tracy Alloway (3:03)

Thank you also for actually looking the part of a cattle rancher. We really appreciate that.

Joe Weisenthal (3:07)

No one can deny that we're talking to the perfect guest.

Tracy Alloway (3:10)

All right. So why don't we start really simple? What have you observed about beef prices just in the past few months or so?

Bill Bullard (3:19)

Well, we've seen beef prices increasing as you've indicated, and we see cattle pricing also increasing as you indicated. So we now have a positive relationship between the price of beef and the price of cattle, and we are a competitive industry. We do not rely on government price supports. We're the single largest segment of American agriculture. The cattle industry generates about $100 billion a year in cash receipts. So it's larger than any other commodity, corn, wheat, cotton, dairy. And we rely on competitive market forces, but we have not had competitive market forces until very recently. And that's where we need to get into the history of why beef prices are high.

Tracy Alloway (4:03)

And can I ask very quickly, you said there's now a positive relationship between cattle prices and beef prices. Is that not always the case?