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Ranchers face headwinds even as meat prices rise

‘More and more people are getting out of this business, and it’s scary’
Dean Guernsey/The BulletinAuctioneer Chuck Simmerlink, center, conducts the Central Oregon Livestock Auction in Jefferson County June 13.

MADRAS — Inside Jefferson County’s livestock auction house, a crowd of mostly men in work jeans and checkered shirts quietly bid on cattle as an auctioneer asks the crowd to make higher offers. As each cow disappears behind a large wooden door, the auctioneer declares the final winning bid, before another cow is nudged ahead for another sale.

The scene, reminiscent of a bygone era, is becoming increasingly rare in Oregon, where just one auction house remains in the center of the state. Last year, two other livestock auctions in the region closed, one in Shasta County in California and the other in Woodburn in the Willamette Valley.

The shuttering of livestock auctions in Oregon and across the country reflects a change in the rural landscape, as farms are converted into subdivisions and large cattle yards become exclusive private hunting ranches. Meanwhile, U.S. producers now heavily rely on Brazil, Canada, Australia and other nations for beef imports to produce hamburger meat.

“Yards are closing. More and more people are getting out of this business, and it’s scary,” said Trent Stewart, the president and sometime auctioneer of the Central Oregon Livestock Auction. “It’s a food security problem.”

As livestock yards dwindle in number, Central Oregon cow herds have shrunk in recent years, too, which means less business for the auction yard in Jefferson County.

“We are in the commission business. When (a cattle rancher) goes out of business, I hate it,” said Stewart. “They don’t ever bring their calves back. Their cows get harvested, and the offspring numbers never come back.”

Today, Central Oregon Livestock Auction sells around 35,000 head of cattle, down from close to 50,000 head in the early 2000s. That figure is well below the 100,000 head of cattle sold at Central Oregon auctions in the 1970s and 1980s. Some of those auctions were done at an auction yard in Redmond, which shuttered in the 1980s.

The downward trend has leveled off in recent years, but Stewart worries that the industry will be further eroded by new headwinds.

Chief among the challenges are drought and climate change, which have sent hay and grain production into a tailspin. Hay costs around $350 a ton today, said Stewart, double the price from two years ago. Fodder has become so scarce it’s sometimes unavailable at any price. Drought is only part of the problem. Soaring fuel and fertilizer prices are making hay more expensive to grow.

“Raising cattle is brutal. The general American public doesn’t know how hard it is,” said Stewart. “It’s poverty with a view to be in the ranching business.”

The high costs have forced ranchers to cut their herds and are pushing producers toward bankruptcy. Cattle owner Kristina Gomes says she no longer breaks even.

“You ride the highs and survive the lows. Right now, it’s pretty low,” said Gomes, who also works as a clerk at the auction yard. “The price for hay has gone sky high, and we can’t afford it.”

The answer for many ranchers is downsizing. JoHanna Symons is among the Central Oregon cattle ranchers to cut her cattle numbers. She now has a few hundred cattle, down from several thousand a year ago.

“A lot of people liquidated their mother cow herds,” said Symons, co-owner of the Symons Beef Co. “The number of cattle available for slaughter is down because a lot of mother cows went to market and ended up in a meatpacking house.”

The cost of grazing cattle on private land is also rising, said cow-calf producer Bobbi Aldrich. She grazes around 280 head in the Paulina area and says grazing costs have increased from $25 a head per month to nearly $50 a head in recent years.

“Ground is a hot commodity,” said Aldrich. “They charge more because city people will pay more if they just have a few cows. Costs are also rising to keep up the land. The charges are astronomical.”

Aldrich’s best hope is to break even until the cost of doing business comes down, or producers can get paid more for cattle. Until then, raising cows is an expensive hobby.

“The last three years, we have lost money on our calves,” she said. It’s a losing proposition right now. We sometimes ask, why do we keep doing this?”

Aldrich and her husband, Trevor, make up for the losses with side jobs. They haul cattle and hay for others. They also work at the auction yard — Bobbi runs the cafe and Trevor works at the cattle yard. They continue to raise cattle for the lifestyle.

“At the end of the day, you have a love and a passion for it,” she said. “If we don’t do this, what would we do? We diversify our income to make it work, in hopes that it will come back around and the cattle prices will come up.”

Auction sales have gone up recently, just not enough to offset the high cost of doing business. On the hoof prices for beef at the auction this year have climbed around 20% compared to two years ago.

Ranchers say the higher prices paid at livestock yards are not what’s increasing the price for steaks and ground beef at the grocery store. Those costs are blamed on four large conglomerates that control up to 85% of the market for pork, beef and poultry.

In December, the White House called out the so-called “Big Four” meat packers — Cargill, Tyson, JBS, and National Beef Packing — for using their market power to increase prices and underpay farmers while accumulating record profits. Their corporate power has allowed them to eliminate competitors and control prices.

U.S. Sen. Ron Wyden, D-Ore., is part of a group of lawmakers pushing for legislation to level the playing field and shift market advantages back to cattle producers.

“The market is unfairly tilted to benefit a small handful of corporate meat packers, and that’s artificially driving up beef prices at the checkout counter while also putting Oregon’s family ranchers at an unjust disadvantage,” Wyden said in an email.

Wyden said his bipartisan bill will restore market opportunities that will allow Oregon ranchers to compete in a fair marketplace by adjusting the pricing mechanisms to improve transparency and competition.

Stewart, from the auction yard, holds out hope that legislative changes will benefit cattle producers and said cattle ranchers are due for a profitable year.

“We usually see nine years of down or breaking even, and one year of up,” he said. “It’s way out of balance.”

Stewart’s recommendation to the industry is to build more meatpacking facilities to create competition, including smaller, regional packers. Jefferson County farmers could also benefit from changes in regulations. Environmental lawsuits have crippled his industry and water law has always been problematic, he said. Stewart adds that the region needs to focus less on housing and golf course developments, and more on getting water to farmers in need.

“We have to be able to have some water so we can grow our food,” said Stewart. “We all eat. We don’t have to depend on a foreign country to feed us.”

If changes aren’t made, and if ranchers can’t make a profit or even break even to stay in business, Stewart worries his own livestock auction could go the way that the Shasta and Woodburn auctions went.

“We are at a breaking point now. We have to run 35,000 head of cattle just to stay in business,” said Stewart. “With the extreme development we have now, there is no line in the sand. They can just develop, and develop, and develop. We have to moderate and take care of our food supply.”