Ranchers In The U.S. And Mexico Hope Tariffs Don't Get In The Way Of Beef Market

Jun 6, 2019
Originally published on June 6, 2019 8:28 pm
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MARY LOUISE KELLY, HOST:

Back to these tariffs that President Trump says will kick in on imports from Mexico come Monday. They would have a huge impact on industries that rely on free and easy movement across the border, including beef. NPR's Jason Beaubien did a story about the circular nature of the U.S.-Mexico beef market. This was for our Planet Money team, and it aired last year. But the tariff threat got us thinking again about his reporting, so we have brought him back. He's here in the studio. Hey, Jason.

JASON BEAUBIEN, BYLINE: It's good to be back.

KELLY: Remind us why cattle and beef flow back and forth from the U.S. to Mexico.

BEAUBIEN: That was exactly the question that we had was, why is it that the U.S. imports nearly 500 million pounds of beef from Mexico each year and then export almost exactly the same amount of beef into Mexico? And so for my story, I ended up on the U.S. Mexico border just west of El Paso, Texas.

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WILLIAM WALLACE: This is considered the biggest import-export facility for livestock in North America.

BEAUBIEN: This is William Wallace. He's a fourth-generation cattle rancher. And he's with the group the Chihuahua Cattlemen's Association. They own both the American and the Mexican stockyards here.

WALLACE: What we're seeing right now, you have pens from the east and the west.

BEAUBIEN: The cattle pens push right up against the border fence.

WALLACE: On the east side would be all the cattle coming in from the state of Chihuahua.

BEAUBIEN: Nearly 500,000 cattle each year pass through this one big rusty sliding gate under the watchful eye of a Customs and Border Protection agent. These calves that were born in Mexico get sent to farms and feedlots in America, where it's cheaper to fatten them up on American corn and alfalfa until they're about 1,300 or 1,400 hundred pounds and ready for slaughter. After that, many parts of them may very well get sent back south of the border again to Mexico, particularly parts like heads, stomachs and tails, which have a much higher value south of the border.

ERIKA DE LE O: Oh, this is the best part. Try this.

BEAUBIEN: That's why I'm having lunch with Erika De La O at the El Chaparral restaurant in Juarez. She's telling me about her favorite Mexican delicacies.

DE LE O: The head of the cow - you put it to boil. And you get the cheeks for barbacoa. You get the eyeballs for special gourmet tacos.

BEAUBIEN: She works for the New Mexico Border Authority as a kind of trade representative. She grew up in Chihuahua. She's married to a rancher. And she knows where to find good fried tripe in Juarez. She says in Mexico nothing gets wasted.

DE LE O: The cow is utilized 100%. You get the tongue. There is also a dish with the oxtail.

BEAUBIEN: All of these delicacies that she's raving about, in the U.S., these are all classified by the government as beef byproducts. Here, they're what's for dinner. Derrell Peel, an agricultural economist at Oklahoma State University, says this is the answer to that question of why millions of pounds of beef would be flowing back-and-forth in both directions across the U.S.-Mexico border.

DERRELL PEEL: The thing to keep in mind is that beef is not one thing.

BEAUBIEN: Peel says a single beef carcass gets divided up into hundreds of different products ranging from liver to hamburger to tenderloin. The hide gets sold for leather. The fat gets used in making soap. And Peel says the value of all these various parts of the carcass is different in different markets.

PEEL: There's no reason to assume in any country that consumer preferences are going to exactly match the mix of products that you're going to get every time you process one of these animals.

BEAUBIEN: For instance, in the U.S., beef round is a relatively low-value cut used in pot roast. It's often cut into thin steaks for a dish called milanesa in Mexico.

PEEL: So you add value when you ship that there.

BEAUBIEN: So, Mary Louise, that cross-border beef shuffle, it may seem absurd, but ranchers on both sides of the border say that it's making more money for them. And it's making beef cheaper for everyone. And several of them mentioned that, in this time of escalating tensions around the border and trade, they really hope that nothing gets in the way of this freewheeling cross-border beef market.

KELLY: Fascinating window into just how complex trade is in that relationship with Mexico. Thank you so much, Jason.

BEAUBIEN: You're welcome.

KELLY: Encore reporting there from Jason Beaubien of our Planet Money team. Transcript provided by NPR, Copyright NPR.