In a concentrated market, choice matters.
If a rancher has only one or two practical processors within a reasonable distance, those processors have greater bargaining power.
If there are several regional facilities competing for cattle, the producer has more options.
Likewise, if ranchers can process and market their own products through compliant inspection programs, they can potentially capture a larger portion of the final retail value.
That does not guarantee higher profits.
Direct marketing comes with its own costs and risks.
The rancher may have to finance processing, packaging, storage, shipping, customer service, marketing and unsold inventory.
But supporters argue that some producers would prefer those challenges to being almost entirely dependent on large processors.
The executive order is therefore best understood as an attempt to broaden the range of business models available to American cattle producers.
Interstate commerce could be especially important
One of the biggest barriers facing small processors has historically been geography.
A state-inspected processor may be able to serve customers within its state but face restrictions when attempting to sell products across state lines.
Trump’s order directs USDA to streamline and expand programs designed to provide greater interstate access for eligible meat products.
That could be significant for small businesses.
A processor that can sell only to customers within one state has a limited potential market.
A processor that can legally reach customers in neighboring states has more room to grow.
That additional scale could make investments in equipment, refrigeration, employees and compliance more financially viable.
The result could be a gradual expansion of regional meat-processing networks.
Consumers may see more than one kind of benefit
The administration is presenting the policy partly as a consumer issue.
More competition could, in theory, create downward pressure on prices.
But consumers should not expect the executive order alone to suddenly make steaks or ground beef dramatically cheaper.
The cattle shortage remains.
And processing capacity takes time to expand.
Reuters reported that record beef prices are closely connected to the historically low cattle supply.
Therefore, even if the policy succeeds, its benefits may appear gradually.
Consumers could eventually see more locally produced beef, more regional brands and more direct-to-consumer options.
They may also gain more information about where their meat originated.
Country-of-origin labeling
Another part of the administration's broader beef strategy involves country-of-origin labeling.
The September 4 executive order directs USDA to review its authority regarding mandatory country-of-origin labeling for beef and to consider regulatory and legislative recommendations.
But this does not mean mandatory country-of-origin labeling has immediately returned.
Reuters noted that the order stops short of restoring mandatory labeling and that congressional action may be necessary for some changes.
That distinction is important.
Consumers may eventually receive clearer information about where beef originated, but the September 4 order itself does not instantly impose a new universal labeling system.
The issue has a complicated history.
Congress repealed mandatory country-of-origin labeling requirements for beef and pork in 2015 following World Trade Organization disputes involving Canada and Mexico.
The Trump administration is now revisiting the issue.
For ranchers who raise cattle entirely in the United States, clearer labeling could provide a marketing advantage.
For consumers, it could make it easier to distinguish domestic products from imported beef.
What the order does not guarantee
Despite the enthusiasm surrounding the announcement, there are several things the executive order does not guarantee.
It does not guarantee that beef prices will fall.
It does not guarantee that every rancher will be able to process cattle on the farm.
It does not eliminate food-safety inspection requirements.
It does not immediately dismantle the Big Four.
And it does not guarantee that small processors will be able to compete successfully with massive companies that have decades of infrastructure and enormous economies of scale.