By Christina Stella
When the pandemic closed restaurants and schools, which account for a little over half of food prepared in the U.S., demand shifted, sending cattle prices tumbling even as shoppers were stocking up. And after COVID-19 closed some of beef’s big-name meatpacking plants, cattle sales slowed and farmers found themselves forced to feed animals for longer than planned.
Congress acted swiftly to prevent a worst case scenario for U.S. farms, pledging the agriculture industry $16 billion in direct aid under the Coronavirus Aid, Relief, and Economic Security Act (CARES). In August, President Trump announced billions more, though
it’s unclear how much of that money will carry over from the first set of payments.
Yet some ranchers and lawmakers want to see more than federal assistance. They hope COVID-19 is a tipping point for long-standing complaints about price transparency and consolidation within the beef industry.
Take Sharon and Keith Portenier, who own a family cow-calf operation raising hundreds of cattle near Elmwood, Neb. Around 400 of the cattle wandering their 3,000 acre property right now will head to feedlots in early 2021, eventually ending up on a dinner plate.
On a recent fall day, the Porteniers were rounding up the animals to vaccinate them for fall. They were joined by daughters Allie and Jessie, their partners, and 3-year-old grandson Curtis. Most of the couple’s extended family works with livestock.
The group prepares to round up cattle. (Photo by Christina Stella, NET News)
“We've always taught our kids that it's a family operation,” Sharon Portenier mused. “That's kind of our motto.”
So far, the Porteniers’ business will emerge from 2020 mostly unscathed by COVID-19. They sold off their cattle early last winter before markets began to contract. But while
beef production has almost completely recovered, cattle prices
haven’t. It’s not clear when ranchers will be out of the woods.
“We can't put a price tag on our calf when we take it to the sale barn, and say, ‘Okay, we have to have $2 a pound for our calf,’” she said. “And we are one of the few industries that can't do that."
Plus, Portenier says, livestock producers rely on meatpacking companies to sell their animals at all. That’s partially why corn belt cattle producers are getting the biggest cuts of the
Coronavirus Food Assistance Program (CFAP) payments: 64% in Missouri, 70% in Kansas, and 93% in Oklahoma.
The Porteniers sell hundreds of calves each year to feedlots and keep about 400 for breeding. (Photo by Christina Stella, NET News)
Without aid,
a recent report found ranchers in Nebraska alone — the country’s top beef producer — might have lost over $970 million.
“I didn’t even want to apply, I hated to apply, but my God, it's there,” said Doug Korth, a lifelong Nebraska rancher. “If you don't take it, you're a blessed fool.”
On a phone call in July, Korth said he was grateful to receive nearly $30,000 from the USDA, but he said it also felt like being handed a bandaid for a gunshot wound. Payments for each wave of aid max out at $250,000. Between longstanding low cattle prices and the impact of the pandemic, he expects to go out of business within the next few years.
“I loaded 117 steers last week, lost $285 a head,” he said. “That's $34,000 on one pen of cattle, and I said I've got 9,000 of ‘em.”
He thinks the country’s biggest meatpackers, including Tyson, JBS, National Beef, and Cargill, drove down spring cattle prices while retail prices soared. The companies, often nicknamed the “Big Four”, amassed control over
80 percent of the national market over the past fifteen years.
Keith Portenier and daughter Allie tend to her new horse. She said watching the pandemic impact Nebraska's agriculture community has been both inspiring and confusing. "As bad as things were, nobody gave up, we all just kept doing what needed to be done," she said. "And being somebody like that's looking at going into the industry, it's kind of scary. What we're going to see coming like going forward from this? And how long the effects will last?"
“We let the big boys buy up all these little plants and shut them down,” he said. “So we let them take the competition away from us.”
That’s a
longtime complaint from ranchers. Many lobbed similar accusations after a Kansas Tyson Foods plant caught fire in 2019, triggering record discrepancies between what processors were paying ranchers and the prices they were selling boxed beef at to grocery stores. As the coronavirus gripped the U.S.,
retail beef prices increased 10.5% while companies saw record profit margins.
Korth says that’s a problem that can only be fixed with more diversity and price transparency within the industry — not another $14 billion in aid.
"When they over double the price of beef to you guys and take $100 to $250 per head away from us, that's corruption,” he said. “Who the hell can afford that?”
Ranchers and beef organizations have made it clear they want action from Washington. The USDA released
a report on how the Tyson fire and COVID-19 impacted cattle markets and is further investigating possible violations of antitrust laws.
Back on the family ranch, Sharon and Keith Portenier support more negotiated trade between companies and producers: she says all ranchers’ fates are tied, regardless of what point on the food chain they operate in.
“It's the trickle-down effect,” she explained. “If it helps the feeders, then it's going to help us as the cow-calf producers.”
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