Effects of Alternative Beef Import Policies on the Beef and Pork Sectors

The effects of alternative beef import policies on price and output responses in the beef and pork sectors of the livestock-meat economy are analyzed for the period 1971-80. A base model, representing the current meat import regulation, was used to project the behavior of these sectors through 1980. Then the base model was modified to simulate alternative import policies and the results were compared with the base projection values. A restrictive import policy which reduced beef imports to zero by 1975 resulted in a smaller supply of meat at somewhat higher hog and steer prices. A liberalized import policy allowing beef imports to double in the 1970's resulted in greater beef supplies at lower prices for Choice steers and hogs. An increased supply of lower grade beef became available to consumers as the supply of fed beef declined. A quarterly quota, somewhat more restrictive than current regulations, stabilized beef imports at slightly lower levels than the current policy and resulted in further growth of the domestic beef industry compared with the base projection values. A policy to stabilize the supply of nonfed beef at 36-40 pounds per person per year showed a lower rate of growth in the domestic cattle industry. A policy to stabilize Choice steer prices through controls of beef imports achieved a gradual upward trend in steer prices with some seasonal variations, no significant effect on hog prices, and limited growth of the domestic cattle industry.