Coronavirus in Oklahoma: Farmers and ranchers carry on as they face added coronavirus-based challenges
Farmers and ranchers deal with catastrophic droughts, floods and fires carrying a life-sustaining optimism they share with us as we consume the crops and livestock they raise to feed the nation and the world.
Their optimism hasn’t wavered in recent years, even facing additional financial stresses caused by market-altering trade disputes taking far longer to unwind than they would prefer.
And you can be sure they are out there working in their fields and in their barns believing better days are ahead, despite facing additional challenges posed by COVID-19 as they work to keep their employees, crops and animals healthy.
Simply put, that is what farmers and ranchers do.
“For our farmers to just continue to get up every day and go put crops in the ground, that takes a special kind of faith,” said Roy Lee Lindsey, executive director of the Oklahoma Pork Council.
“It takes a lot for folks to continue to do that.”
Rodd Moesel, president of the Oklahoma Farm Bureau, agreed.
“We are all trying to figure out ways to work through this.”
Americans have been assaulted since March by a parade of headlines proclaiming bad news.
Early on, coverage focused on coronavirus-caused illnesses and deaths and steps taken by federal, state and local authorities to control the disease’s spread through voluntary and then compulsory social distancing efforts.
Stories detailed how those efforts closed restaurants, bars and various other types of businesses where large numbers of people gathered.
More recently, focus shifted to a growing number of unemployed Americans put out of work by those closures and Congress’ efforts to assist them and their employers.
Many stories have analyzed the programs that state-based unemployment and banking programs have undertaken to provide them with that aid.
Here in Oklahoma, a considerable amount of attention also has been focused on the oil and gas industry, which entered 2020 already anticipating a slowdown because of weakening global demands for what it produces.
COVID-19 turned an iffy situation into a bad one by causing a drastic decline in global consumption.
The virus' impact, along with a global war for market shares waged between Saudi Arabia and Russia, sent the price of oil spiraling downward.
As for the nation’s food and consumer goods markets, mainstream coverage has highlighted specific regional shortages created primarily by supply chain disruptions.
Derrell Peel, an extension livestock marketing specialist at Oklahoma State University, said he expects that periodic shortages will continue until the coronavirus pandemic subsides.
He also noted those same disruptions are impacting farmers’ and ranchers’ livelihoods in a profound way, especially for those who raise livestock.
U.S. ranchers alone lost about $13.6 billion because of the coronavirus pandemic just through early April, he said an OSU study he coordinated shows.
The nation’s hog and poultry industries in particular are geared toward meeting specific customer needs using a “just in time” method that requires programmed animal throughputs that take months to fulfill.
Packing houses supplying commercial customers with protein were idled when those buyers closed their operations because they were not set up to make needed packaging and labeling systems changes that would allow them to divert their product to direct consumer sales.
At the same time, demand for those direct consumer sales soared as whole generations used to eating out were forced to adapt.
Jason Hitch, a rancher and cattle feeder who is the chairman of Hitch Enterprises in Guymon, observed that created problems for an agricultural system that adapted itself decades ago to meet increased commercial demand prompted by consumers' behavioral changes.
“People eat out a lot, and about 20 years ago, agricultural producers really began focusing on what we call the heat and eat market,” he said.
“As we moved into pre-prepared meals, more processing was required. But we don’t fully understand all the different ways that meat moves beyond processing, given that a vast majority is still being sold in an unprepared format.
“It is a complex process.”
More recently, still-operating packing facilities have been slowed or in some cases idled completely as their workers have fallen ill from COVID-19.
These closures and slowdowns have further reduced the industry’s adaptability, creating a surplus of animals that either reduces their value further or, in the case of hogs and poultry, writes some animals’ values off entirely.
Across parts of the nation, animals that are ready for harvesting or to enter the system as piglets or chicks have no place to go.
“Any hold up in processing those animals in a timely fashion basically causes problems through the whole system,” Peel said.
“Sometimes there is no alternative but to euthanize some animals to make room in the production system.”
John Tyson, chairman of Arkansas-based Tyson Foods, recently observed “the food supply chain is breaking.”
A recent open letter he wrote about challenges faced by the packing industry, published in numerous papers across the nation, likely helped convince President Donald Trump to sign an executive order Tuesday that compelled meat processors to remain open as an essential industry.
While labor advocates continue to argue that plants can’t possibly protect their employees’ health under normal operational parameters, the president’s executive order provided some comfort to Wathina Luthi, who operates a northwestern Oklahoma farm near Fargo started by her husband’s family more than 100 years ago.
Her operation, which births and raises young piglets from sows before they are sent to other farms to mature, could lose its contract with The Maschhoffs if too much processing production falls offline. The Maschhoffs, based in Carlyle, Illinois, works with contract growers to develop and manage a herd of more than 200,000 sows across a nine-state area.
“With the way our food supply is set up, it is hard to stop production because of the way our animals move in a continual flow. When our restaurants come back, that will have a positive effect for us,” Luthi said.
The Pork Council’s Lindsey noted that the nation’s pork industry has seen a demand reduction of 25% since the coronavirus pandemic emerged.
While about 8.5 million pigs are born in Oklahoma annually, he noted that no pigs have been euthanized in Oklahoma, so far.
“Right now, all of our growers are still getting paid, still picking up pigs every week and delivering pigs to processors.
“My heart breaks for growers who have had to euthanize their animals. Whether they are here in Oklahoma or in other parts of the country, that toll is tremendous.
“If we can get our plants open and keep them running, we will be able to navigate these challenges,” Lindsey said.
Cattle operations have somewhat more flexibility than other livestock growers, given ranchers have room to hold extra animals at least for a time as they wait for prices to improve.
Hitch, who along with his brother Chris are fifth-generation ranchers who employ about 300 workers, said the populations of its feedlots are down because packers are acquiring less animals as they have slowed.
Hitch said now is the time of year when cattle are coming off pastures to head to market.
Ranchers are seeing 900 lb. steers sell for about $1.08 per hundred pounds, while their breakeven typically is about $1.20.
“You know those guys are going to get their heads torn off,” Hitch said.
Scott Blubaugh, president of the American Farmers & Ranchers/Oklahoma Farmers Union, said cattle producers worry that a gradual consolidation of packers in that industry over the past four decades has squeezed profit margins for ranchers down to where they are running out of options to pursue.
“I think that those of us who are in the cattle business are at a crossroads when it comes to whether we will stay independent or become vertically integrated like growers in the poultry and hog industries,” said Blubaugh, a fifth-generation farmer and rancher in Kay County whose 5,000-acre operation raises cattle, soybeans, wheat and sorghum grain.
Blubaugh said the current crisis is just a further demonstration on how industry changes have failed both ranchers and meat consumers.
He said about 50 cents of every retail dollar spent on beef made its way back to ranchers in the 1970s, noting that return has been on a gradual decline ever since.
In February of this year, he said estimates indicate that had fallen to 14 cents, and added he estimates it will have fallen further to 9 cents in April.
He said prices for live cattle headed to slaughter have fallen 38% just since March, while retail prices have climbed 5%.
“The packers are trying to pick up the slack in this deal, but there are just not nearly enough of them to get it done.”
The issue has caught the attention of both state and federal lawmakers, who have asked for antitrust investigations into the beef processing industry’s consolidation.
“Who knows how low cattle can go?” asked Blubaugh.
No matter the crop or product, farmers and ranchers remain focused on both animal and crop health issues as well as those of their employees.
Hitch, whose 11,000-acre cattle growing and feed yard operation was founded in 1884, said his operation has suffered a couple of minor coronavirus outbreaks so far.
He said the company’s management team is reminding its workers they need to avoid gathering in large groups after work to meet social distancing requirements.
Luthi, who runs an operation where employees shower in and out to protect its animals from disease, said her team also is focused on making sure its workers protect themselves.
“The last eight weeks or so now really have been just an enormous challenge,” OSU’s Peel observed.
“Most every agricultural producer by his or her nature is inherently an optimist who thrives in situations of adversity,” Peel said. “This is one of the biggest challenges they have faced in a long, long time."
Peel said getting the virus under control is one thing.
“But a broader issue is that we have an economy that is in a recession,” he said, adding that he expects it will take time to reopen the nation’s commercial food businesses.
“I think, it is going to be a lengthy process and it will be a long time before things will return to what we would call normal. We have never seen anything like this before.”