Beef is no longer a grocery staple. It is becoming a luxury commodity, priced out of most consumers' everyday budgets. The average price of ground beef is now $6.30 per pound. Steaks are averaging $12.22 per pound. Ranchers want to keep it that way, but the president begs to differ.
In total, beef prices are hitting record highs as the U.S. cattle herd falls to its smallest size since 1951. From around 140 million head of cattle in the U.S. back in the '70s, the herd has dropped to 94 million head. Recently, even Donald Trump had to admit that beef prices are out of control.
"The only price we have that's high is beef — we'll get that down," the president said recently. No doubt his consumption of Big Macs has kept him focused on the price of ground beef while ignoring skyrocketing prices in other food items. Trump blamed the stubbornly high beef prices on reduced imports from Mexico and domestic drought conditions (but refused to acknowledge climate change).
His solution — quadruple beef purchases from Argentina and apply a lower tariff rate. In his mind, he saw a two-fold opportunity. Prop up his buddy, Argentinian President Javier Milei's election chances and, at the same time, "bring our beef prices down."
As you may surmise, cattle ranchers were beginning to benefit from these nationwide higher prices after years of losses. Some were even considering investing their profits back into rebuilding their herds. So, additional imports were not on their wish list. But not all is as it seems.
American ranchers' response to his efforts surprised him, and the blowback came from across the industry. "Misguided," "an absolute betrayal," "a kick in the nuts," "he is picking winners and losers" — those were just some of the comments from ranchers I have read. The outcry was so extensive that about the only ranchers who did not voice their concerns were the Duttons.
As I have explained to readers in past columns, over the past decade, due to climate-driven droughts, inflation, and surging feed costs, ranchers struggled to survive. At the same time, consolidation among meatpackers and feedlots produced fewer buyers at auction for their cattle. Fewer buyers meant lower prices. Many could not survive, others limped along making few ends meet.
I asked myself why, after years of price increases, it is only now that some ranchers are turning a profit of sorts. Does it require a 14.7 percent increase in prices over the last 10 months, on top of prior years' hikes, for ranchers to turn a profit? And if not ranchers, who is benefiting?
Most ranchers in America are long-term supporters of Donald Trump. However, many see the administration's policies toward cattle production as far too simplistic to solve their real issues. Here once again, state capitalism has reared its misguided head.
The U.S. imports beef from dozens of countries and has done so for years. This year, despite record-high beef prices, Trump levied tariffs on U.S. imports of cattle, thinking this would help his voting bloc in cattle country not only turn a profit but also increase American beef production. Wrong.
Not only did he make an already bad situation for consumers much worse, but at the same time, despite these higher prices, ranchers saw little increase in the price they received for their livestock at the auction block. Why?
Ranchers claim that the meatpacking industry is the sector benefiting from the higher beef prices. You may recall that just four meatpackers control 85 percent of the U.S. beef market. Thanks to the president's tariff policies, continued inflation, and the immigration crackdown, processors face their own problems despite charging more for their products. That leaves individual ranchers as price takers with these huge conglomerates dictating prices at auctions.
As for increasing cattle supply, that takes years. Trump will be long gone before that happens, and so will his Secretary of Agriculture Brooke Rolins. In the meantime, the increase in Argentine beef will have at best a negligible effect on U.S. retail beef prices. Argentina produces about one-quarter of total U.S. beef output, making it the sixth-largest beef producer in the world. Yet, as an exporter to the U.S., Argentina ranks only ninth, supplying no more than 2.1 percent of total U.S. beef imports thus far in 2025.
What Trump's announcement has done, however, is immediately lower the auction prices ranchers are now receiving for their cattle. Still, it was effective in manipulating the Argentine elections in favor of his crony. If you didn't understand state capitalism before, I suspect you do now.
Ranchers say they are looking for market-based solutions, such as making it easier for start-ups to enter the business. They also want mandatory country-of-origin labeling, reduced costs for meat processors (read: immigration and tariff relief), and expansion of federal grazing lands. Some of these policies are already being rolled out. However, none of these actions will likely increase the herd or lower prices for years to come.
As it is, the population is rapidly changing its diet preferences, and if it continues, there will be little need to grow the cattle population. We are getting to that point quickly. Most people I know reserve meat consumption for special occasions, like graduation dinners, client lunches, or a once-a-week special grilling event.
Given that the USDA retail price per pound of chicken is $2.08 and pork is $4.29, we rarely eat meat at our house. Our meat consumption has dropped from several times a week five years ago to at best twice per month. There are benefits as well: the medical literature indicates that consuming less meat is a healthier choice for living longer.
I often say that the solution to higher prices is higher prices. Our newfound experiment in state capitalism, at least in the ranching industry, may preserve America's myths of cowboys and TV "Yellowstones," but at what cost? What does that say about the cost-effectiveness and efficiency of having a "protected" U.S. industry that requires $12 a pound steak to survive at all?
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
As of Friday, the government's closure is the second longest on record. The country has managed thus far, since much of the government's economic machinery keeps chugging along. As such, there is no reason why it can't continue.
By Nov. 5, if no compromise takes place, Donald Trump will make history once again — this time by beating his own shutdown record of 34 days during his first term. The partisan stand-off is so severe that the House no longer even meets, while the Senate continues its own version of Groundhog Day by voting and failing to pass any legislation.
There is no real urgency either, since Social Security benefits and Medicare payments still go out. The mail continues to be delivered, student loan payments are getting collected, ports are open, so tariffs are still being charged on imports, and the U.S. Treasury is still servicing the nation's burgeoning debt. And the administration has somehow found the money to pay U.S. Immigration and Customs Enforcement agents.
Today, Oct. 24, will mark the first missed paycheck for many federal workers. Service members were paid a week or so ago by moving funds around within the Defense Department. Americans who are dependent on the Supplemental Nutrition Assistance Program (SNAP) to eat have managed thus far, but these SNAP benefits will dwindle to nothing by next month.
Sure, there are disruptions. Clearly, federal workers and contractors are being affected through lost pay, work stoppages, and delayed contracts. Some economists estimate that $800 million in federal contracts is at risk each day. And we have until the Thanksgiving holiday before anyone cares about the air traffic controllers (unless, of course, there are a couple of near misses or a mid-air collision).
The GOP-controlled Congress is taking its direction from the White House, but the man in charge is too busy right now to divert his attention to opening the government. As I mentioned, the government shutdown is accomplishing much of what the administration had hoped it would. Bond yields are down, and spending has slowed considerably. His OMB chief has been able to cut several Democrat-backed billion-dollar projects, and there are fewer federal workers on the payroll.
Whether by intention or happenstance, the administration has successfully distracted investor attention from the shutdown, despite the media's insistence that it does matter. This week alone, Donald Trump has crowded out those concerns by instead focusing investors' attention on his on-again, off-again peace efforts to end the Russian/Ukraine war. His latest move, to add further oil sanctions on Russia, spiked oil prices higher by more than 5 percent.
In addition, Trump's attention was focused on shoring up last week's "done-deal" peace agreement in Gaza, which doesn't appear to be quite done yet. Then there is his escalating naval warfare on alleged drug boats off South America, his upcoming meeting with China's Xi Jinping, and lest we forget, his newest national concern. That would be a $250 million White House ballroom intended to put Europe's longest-reigning absolute monarch, Louis XIV's Palace of Versailles, to shame.
While the shutdown has left a data vacuum in government, the Consumer Price Index for September was released on Friday. It was a necessary use of available government funds, given that the CPI data is a crucial measure used by the Social Security Administration to adjust the dollar value of Social Security benefits. Wall Street forecasts called for an increase to 3.1 percent year over year. It came in at 3 percent.
Historically, shutdowns have not had a significant, lasting impact on the economy. That is because all that government spending will come back as soon as the government reopens. If some of that spending does not come back due to firings, failure to provide back pay, or spending cuts, the economy might slow for a quarter or so.
Quarterly earnings have been better than expected thus far. Analysts had expected an average growth rate of 7-8 percent. Out of 141 companies reporting on the S&P 500 Index so far, the gain has been 13.3 percent. Of the 63 companies included in that index, only nine have reported, and the growth rate was 26 percent.
This coming week, the Fed meets and is expected to cut interest rates by another one-quarter point. Trump will also meet Xi in South Korea for trade talks. The hope is that a breakthrough in trade will occur. Don't hold your breath.
If perchance U.S. Treasury Secretary Bessent can cut a deal beforehand with his Chinese counterparts, markets should rally. If so, White House leaks will front-run the news. I will be watching soybean and China stocks as a tell. If his good friend Xi rebuffs his overtures, expect a little "Hell Hath No Fury like a President Scorned" action, and markets will swoon at the wrath of Trump.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
Nonprofit giving has declined by $65 billion since 2021. However, institutions are not the only ones pulling back. Consumers are also less enthusiastic about gift-giving. Are we becoming a nation of Scrooges?
Americans gave a record $592.5 billion to charity in 2024. That sounds like a lot, but surveys find that over the last 20 years, the number of Americans donating to charity dropped from about two-thirds to under half in recent years. As a result, wealthy individuals, corporations, and foundations are making up the difference; however, even they are slowing down in their gift-giving.
The reasons are many. The tax laws changed back in 2017, and the Tax Cuts and Jobs Act doubled the standard deduction. That decreased the number of households that itemize their deductions. Practically overnight, millions of middle-class families lost their tax incentive to donate. As a result, giving to charities became less rewarding for many everyday givers. Those in the middle of the income distribution claiming a deduction for charitable giving fell by two-thirds.
You would think that, with the stock market and real estate gains nearing all-time highs, affluent Americans would be giving more to charities. A Bank of America Study of Philanthropy found the opposite. Last year, only 81 percent of high-net-worth households gave to charities compared to 91 percent in 2015.
Several key factors, in addition to taxes, are contributing to this trend. The economy, a perennially significant factor, is currently casting a shadow of uncertainty over charitable giving. When people feel uncertain of the future, when inflation is high, and volatility is heightened, charitable giving falters. The present divisions within the nation have also contributed to this hesitation.
Many of today's business donors also believe that nonprofits, overall (especially in education), are no longer aligned with their values. The present administration's attack on much of the education system only heightens this belief. Over the last few years of cultural strife, we have seen institutions forced to rename buildings, remove faculty positions funded by endowments, and even distance themselves from past donors who no longer align with the political or ideological landscape.
From a demographic point of view, the trend among America's wealthiest donors is gradually becoming more conservative, more center-right, if you will. This shift is a function of generational wealth transfers as Baby Boomers fade and Millennials rise to wealth and power in their place, significantly altering the landscape of charitable giving.
However, it is not only the wealthy who are adopting a frugal approach. The pervasive impact of inflation is affecting the costs of everything from birthday gifts to the amount you tip at your favorite restaurant. In a recent survey by Empower, a retirement planning firm, 75 percent of respondents reported that gifts are more expensive due to inflation and tariffs, shedding light on the financial pressures faced by donors.
More than half say gifting is over the top, and almost as many complain of gift fatigue. Once again, it is the Millennials who want to institute a no-gifts policy in 2025 among all their acquaintances. Those who still gift say they shop for gifts based on price, with 58 percent of them setting a budget for gifts. Today's range for giving a birthday gift is $56 for adults and $83 for kids, while children's allowances per week are now $37.
Tipping for takeout dinners, food deliveries, beauty services, and rideshares has also declined according to the survey by more than 10 percent. Whether consumers are becoming more miserly or simply adjusting to tighter economic circumstances remains to be seen. As for the wealthy, future charitable contributions will depend on how quickly recipients of philanthropy adjust to their goals and objectives to meet the rising tide of populism.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
"Short-term volatility is greatest at turning points and diminishes as a trend becomes established," wrote George Soros in his book The Alchemy of Finance. Last week, I warned investors to expect volatility. We have had that in spades.
Verbal threats from both sides before the upcoming China-U.S. trade negotiations led to stocks whipsawing in both directions for most of the week. The continued government shutdown didn't help matters either, but it was two small regional banks that spooked investors most.
Concerns about credit among two regional banks, Zions Bancorp and Western Alliance, triggered an overnight sell-off on Thursday into Friday. Both companies were victims of fraud in the distressed commercial real estate market. This sparked concerns that other banks may also be victims.
In the meantime, China and the U.S. traded accusations, but don't get carried away by threats and counter-threats. It is reminiscent of Trump's first term and is all part of the positioning game ahead of the meeting between Presidents Xi and Trump at the APEC meeting in two weeks. I won't bother to regurgitate a list of the he said, they-said jawboning that had freaked-out traders booking appointments with their therapists.
Suffice it to say, most of the acrimony centered on China's near-monopoly position on strategic metals used in everything from fighter jets to cell phones. As an example, just this week, the Defense Department canceled a tender offer to purchase $500 million worth of cobalt over a five-year period. There were no bidders.
It was the first attempt to acquire this strategic metal since 1990. Cobalt is used in rechargeable batteries, magnets, and military systems. Beijing dominates cobalt processing and has built a significant stockpile. In comparison, threatening to limit our exports of cooking oil to China seems ineffective. In any case, I expect more of the same as we approach the meeting of the minds at the end of October.
The government shutdown, now the third longest in history, is dragging on with both sides digging in their heels and refusing to talk, let alone compromise. This week, we missed the most recent unemployment claims data, the Producer Price Index, and several other key macroeconomic data points. That leaves day traders in charge, with headlines providing the primary trigger for buying and selling.
Headlines like "Thousands of Treasury, HHS employees fired" got the juices flowing on the downside. "Court blocks Trump administration's latest mass layoffs" was also good for a few points on the upside.
Yes, the administration has taken advantage of the federal furloughs. The Office of Management and Budget has fired thousands of government employees. They have also transferred billions in federal funds away from what Donald Trump termed "Democrat programs" and infrastructure projects in blue states.
I had hoped the shutdown would have been over by now, given the need to ensure paychecks for the military, but Trump found funds to cover that Oct.15 deadline. The President's recent moves have bypassed Congress, raising questions about who holds the 'power of the purse' in government.
How much of these actions will survive the jurisdiction of the courts is questionable. A federal judge in San Francisco has already placed a hold on the government's firings, and many of these unilateral actions are likely to be overturned. However, the attempt to do so makes good copy for the President's base and may repair his failed attempt at cutting government headcount through the use of DOGE.
Given the sage advice of Mr. Soros, it has become abundantly clear to me that volatility is increasing at an exponential rate. From a low of 15, risk, as measured by the volatility Index (VIX), has jumped to 23.37 in less than a month. That is a 48 percent increase.
During that time, safe-haven assets like gold gained more than 16 percent, while the yield on the 10-year U.S. Treasury bond fell below 4 percent. On the other hand, Bitcoin, a leading risk asset, fell 8.8 percent. During the same period, the S&P 500 Index appears unable to surpass the 6,750 level. As the month progresses, the risk of a further pullback in the equity averages seems highly probable.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
On Friday, Oct. 10, just ninety minutes before President Trump took to social media threatening 100 percent tariffs on China, two anonymous accounts placed bets that cryptocurrencies would fall in the short term. By the end of the day, the cryptocurrency market had plunged $19 billion, resulting in a $160 million gain for those traders.
The plot thickens. Sunday night, before the futures market opened, the president took to the airways again, this time calming fears over a trade war with China. When markets opened on Monday and cryptocurrencies were skyrocketing higher, the same account placed a fresh short bet, this time for $160 million, that crypto would fall even further. Tuesday, after China upped the ante in its trade spat with the U.S., crypto crashed again.
Either someone is extraordinarily lucky or prescient. Traders were quick to accuse this anonymous account of insider trading. Is this just a case of bad feelings, envy, or is there something fishy going on in the markets? Obviously, there is no conclusive evidence of insider trading, and even if there were, it is harder to prove and prosecute in the lightly regulated cryptocurrency market.
This is not the first time this has happened. Front-running important news has become a lucrative pastime this year. A week before Liberation Day on April 2, a key official who shapes the Trump administration's trade policy sold off $30,000 worth of stock. Two days before that ill-fated day, a state department official sold $50,000 in stock. Readers may recall that the stock market plunged dramatically after President Trump's reciprocal tariff announcements. More than a dozen U.S. officials in total sold stocks before the announcement that sent stocks plunging that day.
Democrats were quick to accuse the White House of insider trading, demanding an investigation into all the transactions by staffers leading up to April 2. Kush Desai, a spokesperson for the administration, argued that they should instead investigate their own Nanci Pelosi if they were interested in an insider trading probe.
The Democrats' accusations are a proverbial case of the pot calling the kettle black. Members of Congress of both parties are permitted to trade stocks, and almost all of them own shares in publicly traded companies. Congressional lawmakers have access to nonpublic information that has been shown to move markets, individual stocks, and sectors. A New York Times investigation found that 18% of congressional members trade stocks in industries related to the work of the congressional committees on which they serve. Talk about a conflict of interest!
There are laws in place that prevent front-running and insider trading. The Securities Exchange Act of 1934 aimed to prevent insider trading on the stock market by mandating disclosures; however, this requirement did not apply to members of Congress. The STOCK Act, passed in 2012, partially closed that loophole. It requires Congress to disclose stock trades of more than $1,000 within 30 days. Penalties for failing to do so are a mere $200 for a first-time violation.
And guess who investigates legislators' violations—Congress. The proceedings are private, and enforcement is inconsistent at best. Insider abuse is so well-known that there are at least six internet services that track congressional stock trading, and at least one that tracks Nanci Pelosi's stock picks daily. If you ever wondered how elected officials manage to acquire vast fortunes on their congressional salary, now you know.
Regarding the accusations against the Trump administration, a research paper by Paul Odin, Assistant Professor of Law, published in the Oxford Business Law Blog, argues that, under the definition of market manipulation as outlined in the 1934 Act, neither Trump nor his team violated the law. As for insider trading under the Stock Act, "theoretically," Trump may have been in breach of its provisions. That would be difficult to prove, and in any case, he is protected by presidential immunity.
The facts are that no sanction for insider trading has ever been imposed under the Stock Act, and given Congress's track record, it is unlikely that it ever will. The president has stated publicly that he has not engaged in insider trading, but he admitted that he cannot definitively claim that members of his administration have not.
A recent poll found that 7 in 10 Americans hold unfavorable views of Congress, and a majority of both Republican and Democratic voters support a ban on congressional stock trading. Leaders from both parties, including President Trump and President Biden, House Speaker Mike Johnson, Minority Leader Hakeem Jeffries, Congresswoman Nanci Pelosi, and Treasury Secretary Scott Bessent, support some form of a ban on congressional stock trading. So far, no legislation has crossed the finish line.
As for the mysterious whale that cleaned up in the crypto market, it is doubtful any action will be pursued. The truth is that leaking information to players in the financial markets and other insider trading schemes have been in existence for longer than anyone can remember. Have you ever noticed that markets sometimes rise or fall substantially in the hours leading up to the announcement of a significant economic data point? The same can be said for stocks, and lately, even sectors, more often than I would like to see. It is hard to imagine, given this golden age of grift, that curbs on these illegal practices will be forthcoming anytime soon.
Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.
Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of OPI, Inc. or a solicitation to become a client of OPI. The reader should not assume that any strategies or specific investments discussed are employed, bought, sold, or held by OPI. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct. Investments in securities are not insured, protected, or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements, and we can give no assurance that such beliefs and expectations will prove to be correct.
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