Farmers, ranchers carry on as they face added 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.

“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.

Disruptions abound

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.

Regulated systems

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.

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.

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 last 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.

Intersecting trails

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 fewer animals as they have slowed.

Ranchers are seeing 900-pound steers sell for about $1.08 per hundred pounds, while their breakeven typically is about $1.20.

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.

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.

Safeguarding assets

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.