Local ranchers face stampede of worry as cattle prices plummet

COVID-19 pandemic disrupts beef supply chain, impacting everyone from cattle ranchers to you

SHREVEPORT, La. (KSLA) - On a sunny, warm May morning, a small herd of curious cattle crowd near a fence line, where Lee Faulk stands outside his truck on a narrow gravel road. Standing well above six feet tall, wearing a tan cowboy hat, blue jeans, and long sleeve buttoned-up shirt, Faulk gives every impression of being a lifelong rancher, who understands the cattle industry better than most folks know the layout of their own home.

“Cows are a lot like us people,” Faulk says as a few more start to move slowly towards the fence. “They don’t like being alone much and prefer a bit of company. But if one gets spooked by your camera and can’t figure out what we’re doing here, watch them all take off into the pasture.”

Beef prices are spiking at the grocery store, but cattle prices are plummeting during the Covid-19 pandemic, and Lee’s come up from his home ranch in Claiborne Parish to the Red River Research Station talk to KSLA about the emerging crisis for ranchers in Northwest Louisiana

“We have the cattle, we are prepared to feed the country,” Lee says, “The problem isn’t a beef shortage. The problem is in the processing, and the bottleneck right now.”

KSLA Chief Investigative Reporter Stacey Cameron talking with cattle rancher and Livestock Agent Lee Faulk.
KSLA Chief Investigative Reporter Stacey Cameron talking with cattle rancher and Livestock Agent Lee Faulk. (Source: Bubba Kneipp)

Throughout April and May, several meat processing facilities across the nation shut down or scaled back operations, as the plants dealt with coronavirus outbreaks among their production line workers.

The infections are causing meat packing companies to severely cut back on the amount of livestock purchased for butchering, creating the bottleneck Lee described, which in turn is keeping ranchers in Louisiana from selling their cattle.

“We’re seeing a lot of cattle backup in feedlots,” Faulk said. “In other words, they’re not getting processed on time and so that trickles down to our local ranchers.”

The lack of production means the price of cattle is dropping, so much so, that a recent report out of Oklahoma State University estimates that the industry has lost upwards of $15.6 billion dollars. That pinch is being felt especially hard in Northwest Louisiana, where cattle is by far the largest agricultural product in play.

“We have over 1,900 beef producers in our region, and we have roughly over 121,000 head of cattle,” said Faulk. “And that value is well over $100,000.”

But as Faulk explains, this part of the Red River Valley is not populated with large corporate farms, the type of agricultural operation so often maligned in the media. “We have cattle ranches that have been in the same family for well over a hundred years,” said Faulk. “Our average herd size is 50 to 60 head of grown cows.”

So, most of the ranches taking a beating during the Covid-19 pandemic are small family businesses, many of which Faulk worries could go under if the production slowdown carries into the fall.

“Over ninety percent of our farms in this area and ranches are family-owned,” Lee said. “These ranchers in Northwest Louisiana are not getting rich, they’re not in the business to get rich. This is a way of life for people.”

Ranchers in the Red River Valley play a unique role in the cattle industry, as most do not raise their herds to maturity. Instead, the majority are in the business of keeping a small number of mother cows and steer, which are used to breed calves, that are in turn sold to ranchers in places like Texas, Oklahoma, and Kansas

“Louisiana is a cow-calf state,” says Marty Wooldridge, a Caddo Parish cattle rancher and Chairman of the Louisiana Farm Bureau Livestock Advisory Committee. ‘So, from conception to birth, through about a seven-month-old calf, that’s where our state fits into the cattle industry, which makes us the starting point.”

Put simply, ranchers in Northwest Louisiana birth the red meat link of the nation’s food chain. And right now, according to Wooldridge, that link of the chain is mostly disconnected from the rest of the industry.

“We are dependent on the finished product, Wooldridge said. “the retail product in the store and restaurants, that’s packaged and then going out to sell.”

“And we’ve had a breakdown in the processing,” said Wooldridge. “So, our cow-calf ranchers, they’re not being able to sell they’re calves. And the ones they’re able to sell, they’re taking a bath as we would say, they’ve got a huge loss.”

KSLA Chief Investigative Reporter Stacey Cameron and Photo Journalist Bubba Knepp interview rancher Marty Wooldridge at his cattle ranch in Oil City, LA.
KSLA Chief Investigative Reporter Stacey Cameron and Photo Journalist Bubba Knepp interview rancher Marty Wooldridge at his cattle ranch in Oil City, LA. (Source: Stacey Cameron)

Wooldridge says since the pandemic broke out, and the beef industry came close to completely shutting down last month, the value of some local herds dropped by a third.

But right now, according to Faulk, the total loss facing Northwest Louisiana ranchers is unknown, as many are hedging their bets, and holding on to their young herds. Meaning ranchers are having to invest more money in their cattle, before taking them to an already depressed market, that may not rebound before auction houses reopen in the fall.

“Definitely production costs are much higher than these animals are bringing, Faulk said. “They’re losing quite a bit of money on them right now, around $120 to $150 a head loss.”

“You’re taking it on the chin. There’s $600 to $700 worth of cost to get that calf to seven months of age, before putting it on a truck and sending it somewhere,” said Wooldridge. “Now that cow herd is going down in price.

“It’s tough to stay in this business,” Wooldridge said, “and for the money that’s made, the margins are so thin that’s it’s getting tougher for people. And if the balance sheets not adding up, it’s going to be tougher for the bank to help keep you in this business.”

Faulk agrees, saying the longer meatpacking plants struggle to get back up to full speed, the more he worries about local ranchers filing for bankruptcy.

“Our market was low already going into this,” said Faulk. “It just further exacerbated the situation, and it’s making life tough for ranchers right. So, on a 1 to 10 scale, I would say I’m at an eight as far as concern.”

Copyright 2020 KSLA. All rights reserved.