Oklahoma cattle ranchers had been hoping this would be a banner year.
COVID-19 took care of that.
Now many of the ranchers and farmers across Oklahoma and the Midwest are praying they can just hang on until the economy rebounds.
While cattlemen may sow the seeds and harvest the crop, packers and processors are the only ones now reaping the profits.
Raising cattle has always been difficult. But prices plunged last August following a fire that shuttered one of the nation’s largest packing plants in Holcomb, Kansas, and they were just starting to rebound when the pandemic came calling.
“[The fire] caused a lot of price drops on the live animal side,” said Cody Beach, owner of Beach Family Farms. “With the whole economy slowing down and COVID-19 showing up, it’s just sent it even lower than it was before.”
Ranchers and farmers are now being forced to sell at an even lower rate than they would have in the fall.
Beach recalled the price of a cow fed out in a feed yard just a year ago at around $1.30 per pound. In August, the fire caused that to drop to $1.10 or $1.15. Today, it has fallen to approximately $0.90 per pound for a calf weighing 1,300 to 1,500 lbs.
Cattlemen are losing as much as $300 to $400 per head, said Beach.
Rep. Frank Lucas (R-OK3) and his wife Linda have long been in the cattle business themselves.
“I assure [Oklahoma cattlemen] — as I do at home when this topic comes up — I am very sensitive about what they are going through,” Lucas said. “Linda and I are cattle producers. We do take our product to the public sale barn. We don’t future contract. (…) We are price takers just like most of my neighbors, so I am very sensitive about that.”
‘The entirety of their Christmas money’
Melody Varner, president and secretary for Varner and Varner Inc., said the struggling cattle industry represents people’s livelihoods. She spoke to the reality of the small farmer.
“For some, selling a cow at the beginning of December is the entirety of their Christmas money,” Melody Varner said.
This huge price drop hasn’t been echoed on the consumer side. In fact, consumer prices for beef have risen exponentially.
Pokey Varner, livestock buyer for Varner and Varner Inc., discussed the situation.
“The real story is the gap between what we, as consumers, pay in grocery stores, in retail markets, in restaurants (…) and what the beef producers are being paid is a tragedy really,” Varner said.
There are four major packing companies most cattlemen can sell to: Minneapolis-based Cargill Inc., JBS USA Holdings Inc., Tyson Foods Inc. and National Beef Packing. Because of that, those organizations have the ability to control the market.
“Those of us out here producing the product seem to be losing quite significantly and seem to be solely working for [packers and producers],” Pokey Varner said. “At the end of year, (we) are just thankful to have just gotten by all while the processing industries have made multiple millions of dollars.”
Lucas has recently filed the Agricultural Security Risk Review Act to address the foreign ownership of meat packing facilities in major agricultural industries. He believes this will benefit the livestock industry and is even planning on filing more legislation in support of the agriculture community.
The United States Department of Agriculture also announced another plan of action to help relieve some of the struggles farmers and ranchers are facing with the Coronavirus Food Assistance Program, a $19 billion relief effort.
While the details have not all been released, Lucas said he was confident with what was put into the CARES Act and the food assistance program, it will help the producers in the cattle, dairy, hog and crop industries. Lucas said he has faith the “USDA will move heaven and earth” to get this relief money out in the next four to five weeks.
“The single greatest thing we can do is get the economy going again,” Lucas said. “We must get COVID-19 under control, we need to get the restaurants open and we need to get people back to where they are all working and can afford the food they need everyday. That demand will address and stabilize.”