Frozen box beef cutout prices continue to creep higher each week at the same rate that live and feeder cattle prices are rapidly falling, meaning Kansas ranchers are taking the hit while beef is continuing to fly off grocery store shelves.
“For some reason there’s a disconnect between frozen meat that's being shipped from the packing houses versus what my cattle producers are making,” said U.S. Rep. Roger Marshall. “There seems to be a large disparity. And we’ve asked the [USDA] secretary of agriculture to look into that and figure out why.”
That’s not the only factor hurting American ranchers.
“The cattle guys and the commodity guys were the first ones affected by this virus when the bottom fell out of the markets from the lack of purchases,” said Marshall. “When Japan and South Korea shut down [due to the coronavirus] we really got hurt.”
One of the ranchers feeling the hurt is Larry Davisson, owner and operator of Rocking LD Angus Ranch in Plevna, Kansas.
“I took some cows into town today and got half of what I should have,” Davisson said. “The market has really come down. We’re not exporting any overseas because every country has shut down due to the virus. That’s the main thing that’s hurting us.”
Ranching has to be planned and operated like clockwork. Cattle are fed and bred at particular times to be sold at certain times to get money out of their investment. If Davisson had waited for the market to come back up for a better price, then that sacrifices more valuable hay and feed than he can afford to provide.
They’re faced with the choice to either take the loss now or gamble that the market will come back up. And many ranchers don’t have the resources to invest in feeding cattle to wait for the market to come back up.
Meanwhile, Kansas farmers continue to receive financial compensation from the government for the tough last two years. Kansas ranchers haven’t been included in those subsidies.
“The Commodity Credit Corporation (CCC) is where the funding came for marketing facilitation markets and we think we can use this same source to help the cattle guys out,” said Congressman Marshall. “They’re losing money right now, literally, on every head of cattle they’ve got.”
Davisson understands the urgency for the U.S. government to prioritize the farmer.
“Cattle were profitable up until the first of the year while farming has been nip and tuck,” he said. “We can’t afford for farmers to go out of business because we have to eat. The world has to eat.”
As American ranchers look ahead to the future, they’re hopeful.
In the trade agreement that took place at the first of the year, China pledged to buy at least $80 billion in U.S. agriculture products over the next two years and changed some of their policies to make more U.S. beef eligible for export. It is being predicted by the Trump administration that $1 billion in beef will be exported to China.
In the meantime, U.S. Representatives such as Marshall are pleading with Speaker of the House Nancy Pelosi and Minority Leader Kevin McCarthy for security for American ranchers in any continuing Phase III stimulus agreement as was written in a letter last week:
“Ranchers are resilient. They can handle the uncertainty of weather, the free market and other challenges that come their way. However, the COVID-19 pandemic is like nothing we've seen before and the cattle market has been in a free fall as a result,” said the Representatives. “Additionally, we’ve seen the box beef- live cattle spread widen, leaving no margin for struggling producers as beef flies off grocery store shelves. We are committed to maintaining the supply chain and doing everything in our power to work towards functioning, competitive markets that allow independent producers to thrive. But in the short term, we need relief immediately. As such we are requesting that any deal provides for an increase in the borrowing authority to $50 billion and fully funds the replenishment of the Commodity Credit Corporation, as well as ensures that livestock are eligible for assistance in this time of need.”
Jasmine Pankratz is a University of Kansas senior from Abbyville, Kan. studying journalism.
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