The US Department of Agriculture (USDA) has launched a new initiative worth up to US$500 million to help small and medium-sized beef processors maintain slaughter capacity, as the U.S. cattle herd remains at its lowest level in more than 70 years which has driven record cattle prices and squeezing processor margins.
According to The Wall Street Journal, the programme will provide payments to eligible U.S.-owned beef processors that maintain or increase cattle slaughter volumes above USDA-established benchmarks. The four largest meatpackers – Tyson Foods, JBS, Cargill and National Beef – are excluded from the scheme, which is aimed at supporting independent processors and preserving competition in the sector.
This latest announcement follows months of concern over shrinking U.S. cattle supplies. The national herd has fallen to its lowest level since the early 1950s after years of drought, high feed costs and widespread herd liquidation. While cattle producers have benefited from historically high cattle prices, processors have faced mounting losses due to the high cost of livestock and limited availability. Reuters has previously reported that rebuilding the national herd is expected to take several years, meaning tight supplies and elevated beef prices are likely to persist in the near term.
The USDA’s intervention builds on earlier federal efforts to strengthen competition in meat processing. Under the Biden administration, the department invested hundreds of millions of dollars through programmes such as the Meat and Poultry Processing Expansion Program and the Local Meat Capacity Grant Program to help independent processors expand capacity and reduce the dominance of the largest firms. The new payments form part of the Trump administration’s broader strategy to address rising beef prices.
Alongside the processor support package, according to The Wall Street Journal, the Trump administration has increased pressure on major grocery retailers to lower beef prices for consumers while also examining competition within the meatpacking industry.
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