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Good morning, Roca Nation. Here are today’s four need-to-know stories:
Nvidia became the first company in history to cross a $5T market valuation
Major employers announced tens of thousands of job cuts this week, citing artificial intelligence (AI) as a key factor
Satellite imagery revealed bloodstains from space following the capture of El Fasher, Sudan, by a paramilitary group (free)
The Federal Reserve reduced interest rates, lowering its benchmark rate to a range of 3.75% to 4% (free)
Today’s newsletter features an exclusive interview with Rep. Thomas Massie (R-KY). In the name of supporting our democracy, we’ve made it free for all readers. If you want a deep-dive like this each morning, please become a member here.
By Rob McGreevy
Last week, we wrote about President Trump’s decision to provide Argentina with a $20B-$40B bailout. That decision appears to have paid off in Buenos Aires, where pro-American President Javier Milei’s libertarian party won a resounding victory in midterm elections this Sunday.
But in the US, it’s a different story.
In an exclusive interview with RocaNews, Rep. Thomas Massie (R-KY), himself a cattle rancher for over two decades, said, “Trump's doing exactly the wrong thing right now.”
That comes after the typically pro-Trump Rep. Marjorie Taylor Greene (R-GA) called the Argentina deal “one of the grossest things I have ever seen.”
“I have no idea who is telling the president that this is a good idea,” she told Tucker Carlson recently. “It's a punch in the gut to all our American cattle ranchers. I don't know how that's America First.”
Last week, we laid out the details of the bailout and Trump’s logic, namely, supporting Milei ahead of midterm elections. As Treasury Secretary Scott Bessent said, “We do not want another failed or China-led state in Latin America.”
But farmers and cattle ranchers aren’t convinced. Is their beef well-founded? Or are they having a cow about nothing?
Today, in an exclusive interview, we discuss this blowback with Rep. Massie.
Part of Trump’s bailout was providing $20B in dollars for Argentina’s currency reserves. But he went further than that, with a proposal on October 20 to import Argentinian beef to alleviate inflation: “The only price we have that's high is beef, and we’ll get that down, and one of the things we’re thinking about doing is beef from Argentina,” he told reporters.
Three days later, Reuters reported that an anonymous Trump White House official told them the administration was planning to quadruple the amount of beef that Argentina could import to the US at a low tax rate. The news sent shockwaves through the agroworld.
“A deal of this magnitude with Argentina would undercut the very foundation of our cattle industry," Justin Tupper, a South Dakota cattle producer and president of the United States Cattlemen's Association, told Reuters.
Senate Majority Leader John Thune (R-SD) also took umbrage with the policy in a rare break with Trump: “This isn’t the way to do it…It’s created a lot of uncertainty in that market. So I’m hoping that the White House has gotten the message.”
Trump responded in an October 22 Truth Social post:
The Cattle Ranchers, who I love, don’t understand that the only reason they are doing so well, for the first time in decades, is because I put Tariffs on cattle coming into the United States, including a 50% Tariff on Brazil. If it weren’t for me, they would be doing just as they’ve done for the past 20 years - Terrible! It would be nice if they would understand that, but they also have to get their prices down, because the consumer is a very big factor in my thinking, also!
Trump is not lying about the prices: The average price for beef in US grocery stores is at an all-time high of $6.32 per lb – nearly double what it was in 2017. However, small farmers say they are not seeing the benefit.
Source: Federal Reserve Economic Data
The causes of this sharp increase range from droughts that are decreasing grazing land space; to New World screwworm, an increasingly prevalent parasite that is limiting cattle imports from Mexico; to market consolidation. Today, 85% of beef comes from just four massive meatpacking conglomerates, giving them significant market power.
Rep. Massie says that these companies – the US’ Tyson Foods and Cargill, and Brazil-owned National Beef and JBS – act together in a way that’s unfavorable for small farmers: “You have to have two buyers in a competitive bidding process to find the fair price. And right now, we have four buyers, but they're acting as one in what I call the industrial meat complex,” Massie told Roca.
This aligns with what Roca heard talking to small farmers on a recent trip to New Mexico: Namely, that high costs and regulations combined with corporate pressure and imports are making it impossible for them to turn a profit.
Massie’s solution is a bill he introduced, the Processing Revival and Intrastate Meat Exemption (PRIME) Act, which would allow small custom slaughter facilities to avoid the major processors by selling cuts of meat directly to consumers. Massie argues that this would open up competition and force the conglomerates to operate more fairly.
“Because of the consolidation of processing, it's kind of like an oligarchy,” he told Roca. “Cattlemen don't feel like they're getting a fair price for their cattle at these auctions.”
In the 1970s, farmers took home around 64% of retail beef profits. By 2024, that was below 50%, according to data from the USDA Economic Research Service (ERS). Some estimates, like a recent Iowa Farm Bureau report, put the share as low as 44%. Much of the difference has gone to the meatpackers, who have been the defendants in numerous lawsuits accusing them of anti-competitive practices.
Massie estimates that his bill would result in 5-10% of meat being sold directly to consumers, rather than the current 1%. This would give farmers leverage.
The difference is, at the auction house, they can walk out of the auction house with their cattle and refuse to sell them and direct market them. If you just give a small percent of the cattlemen that opportunity, it will provide a counterbalance to what some cattlemen feel is price fixing on the meat packer side for cattle, and then the meat packers would have to pay a price for the cattle if the cattlemen have an option. Right now, there's not much of an option.
While farmers feel this pressure in the form of lower profits, consumers feel it as higher costs. That’s what led to Trump’s suggestion of importing Argentinian beef.
Yet on top of undercutting American cattle farmers, Argentine imports are likely just a band-aid. That’s because, in addition to the lack of competition, the US faces a major cattle shortage.
Cattle prices are cyclical: Unlike chickens or hogs, a single cow can only birth another single cow, and the gestation period is nearly a year long. That means it takes long-term planning to successfully produce a beef cow and, therefore, much longer to alleviate a cattle shortage.
Furthermore, Massie pointed out, “The capacity to produce beef goes down when the price of cattle goes up.”
“So, let's say a farmer can get $1,000 typically in a year for a heifer,” Massie explained. “He might say, ‘Well, I'm just going to keep that heifer and make her into a brood cow.’ But if that price goes to $2,000 or even $3,000, the farmer would almost have to be insane to keep that and try for another couple years and try to turn it into a brood cow. So it is cyclical. What happens is when the price that the farmer sees of cattle goes up, the farmer sells more of his inventory.”
In other words: In the short term, high prices incentivize farmers to sell their cattle, not breed more. It takes longer-term high prices to incentivize farmers to breed enough and push the price down. That makes a shortage hard to fix. While imports could address short-term high prices, they don’t address this fundamental problem.
This, Massie says, is why Trump’s Argentina gambit is pissing off the ranchers: “The last thing in the world you want to do is artificially bring down the price of cattle in the United States, because that’s what should eventually get more people to raise cattle.”
“The prices that cattlemen are seeing are fairly high right now. So if you're just looking at it in a brief snapshot, things look good [to a farmer], but this is the signal that prospective cattlemen need to get into the business, and the cattlemen need in order to expand their operations and increase supply,” Massie told Roca.
It’s not only cattle farmers who have beef with Trump right now.
The US’ top agricultural export to China is soy, and China buys 60% of US soybeans. China cut off all imports of US soybeans earlier this year in retaliation for Trump’s trade war, sending purchases into freefall. While China did agree to restart purchases of US soybeans this week as part of a deal with Trump, it may have stuck one last knife in the back of American soy farmers.
Just after the US announced the Argentina relief package, Argentina suspended a number of taxes on exports, including a 26% tax on soybeans. China jumped at the opportunity, doubling purchases of Argentinian soybean overnight – and angering American soy farmers.
“It is very unfortunate that as the US is helping Argentina stabilize its economy they would undermine American farmers and weaken President Trump's negotiations with China," Rep. Julie Fedorchak (R-ND) told Axios this month.
Trump has taken some steps intended to help farmers: Beyond tariffs, his administration announced a suite of actions to try to boost cattle supply, including opening up public lands for grazing, strengthening enforcement of “Made in the USA” labeling, and authorizing emergency use of new medications to fight the New World screwworm.
But Massie is skeptical that any of those reforms will benefit the American cattle industry: “They're not going to do anything that upsets the meat packers at the USDA. They are a fully captured regulatory agency.”
Massie offered one more solution to help revitalize the American beef industry: Country of origin labeling. The USDA used to require all beef sold in the US to have a label indicating what country the cow came from. It scrapped that in 2015 amid pressure from the World Trade Organization (WTO).
“I would say now all of those arguments are out the window,” Massie said. “Trump is applying tariffs when and wherever he wants, right, without regard for the World Trade Organization opinions…If Trump can tariff beef at will, then surely to God, we can put labels back on our beef.”
In 2024, only 11 of the US’ 444 farming-dependent counties voted against Trump. Yet now, they’re facing difficulties: Chapter 12 filings, a type of bankruptcy used by farmers and fishermen, are up 70% so far this year compared to last. Between the Argentina deals and the China boycott, does the president risk losing some of his most loyal backers?
Editor’s Note
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We’re curious to hear from the farmers in our audience: What do you think? What obstacles and opportunities are you seeing? How are new policies affecting you? Let us know by replying to this email.
The large majority of you supported the idea of a debate series. Once we pick a topic, we’ll solicit arguments from you all. And thanks to those of you who replied to yesterday’s article on the decline of debates. Here are a few of those emails:
Jewel wrote:
Thank you so much for meeting the common person. It is the actual 'boots on the ground' talking to the people that keeps me reading. On this issue of debate, I agree with you that debate is good and we need more of it. But the purpose of debate is not to make people change their minds but rather to encourage thinking and reason. A good debate isn't about winning, but rather it is about exploring a difference. A person's thinking changes more based on real life connections. When you have actually helped someone gain legal status in the US and then that person gets picked up by ICE and mistreated, it influences you. If you know the power of prayer, and then you see Trump gather the leaders to pray for him, it seems right and good to you. These real connections to our personal life is what sways a person's loyalties. What you are doing by going out and talking to the people is awesome and has incredible value in making connections, but beyond that, we also need to encourage rational thinking. We also need debate - debate that allows for different views and helps us understand other perspectives.
Barzeen from Illinois wrote:
Would I be interested in writing or reading- yes to both, please.
This is a really dangerous turning point that I think Roca readers can agree on. The fact that not debating is even being proposed is a symptom of the political dysfunction we’ve created by voting along party lines and adopting a “my team versus THEM” mentality. I get that there’s always bias, and not every debate is productive, but this is us really saying that we don’t even want to hear about the other candidates’ policies because they’re wearing the wrong jersey. That doesn’t help American people at all.
And Julia wrote:
Enjoyed this article but does Kirk (and the other social influencers going to debate college campuses) and his death prove them both wrong? He went and debated college students and moved so many of them to the right.
And if you haven’t read our most recent articles, find them here:
See you tomorrow,
Max and Max
