How ‘broken’ supply chain is impacting Oregon cattle ranchers

Special Reports

Producers and processors already had a tense relationship, now COVID is making it worse

CLACKAMAS COUNTY, Ore. (KOIN) — The temporary closures of meatpacking facilities due to coronavirus is the latest strain on an already tense relationship between ranchers and processors. On Monday, the chairman of Tyson Foods took out a full-page ad in the Washington Post claiming the nation’s “food supply chain is breaking.” The next day, President Donald Trump announced intentions to sign an executive order to keep those large plants open.

However, the American Farm Bureau Federation and other organizations have long called for an investigation into plants to “determine if there is any evidence of price manipulations, collusion, or other unfair practices.”

Jerome Rosa, the executive director of the Oregon Cattlemen’s Association, said the price consumer’s pay for beef recently hit an all-time high. “At the same time, our rancher’s prices have just plummeted,” Rosa said.

Greedy packers are the problem in his opinion. Four packers, including Tyson Foods and JBS USA, control about 83% of all beef in the United States, he said, and their profit margins have skyrocketed.

“Instead of buying cattle at a fair price … they’re building on the public’s fear and they’re just really being able to gouge and take advantage of it and it’s really wrong,” he said.

KOIN 6 News reached out to JBS USA and Tyson Foods for comment and has not yet heard back.

Oregon’s cattle industry

Cattle and calves were Oregon’s second-biggest agricultural commodity in 2018, with a production value around $652 million and approximately 545,000 beef cows, according to government estimates. However, the Oregon Department of Agriculture (ODA) told KOIN 6 News there are no USDA-licensed beef processing facilities in the state. So large-scale ranchers here have to send their cattle to processing facilities in Washington, Idaho or California, Rosa said.

Many of those facilities have closed at least temporarily due to workers being sickened by coronavirus. Others, like Tyson Foods, have said they’re slowing down production lines and adding other safety features like plastic barriers.

In this April 2020, photo provided by Tyson Foods, workers wear protective masks and stand between plastic dividers at the company’s Camilla, Georgia poultry processing plant. Tyson has added the plastic dividers to create separation between workers because of the coronavirus outbreak. (Tyson Foods via AP)

“The plants can control the work environment, but they can’t control the personal environment,” Rosa said, meaning at night and on weekends employees may be out socializing and contracting illness that way.

Another supply chain issue is the lack of people wanting to work in plants, at least for the wages they’re currently receiving. Rosa claims the industry is hearing reports of employees “just walking off of work, hoping to get fired so that they can collect unemployment benefits.”

“There’s plenty of meat .. and there’s cattle that should have been processed already,” he said. “Unless we get these workers back in the plant … and they’re motivated to get back in there, then we’re likely to see some product shortages.”

“I sure think there’s gonna be a short supply of beef”

While the bulk of Oregon’s cattle ranching happens east of the Cascades, Coleman Ranch in Molalla is one of the larger ranches in the Willamette Valley. Owner Steve Coleman estimates they produce about 300 butcher cows a year. He said they had a load of cows ready to go up to Washington for slaughter a month ago, but the processor was overwhelmed. So the folks at Coleman turned to advertising directly to customers through word of mouth and social media.

Coleman said they can process some of their cows through a company in Mt. Angel. However, it is “just a little outfit,” he said. The processing plants in other states dealing with closures butcher tens of thousands of animals daily.

“I sure think there’s gonna be a short supply of beef,” Coleman said.

Depopulation and disposal

Supply chain backups are already being felt. It’s most dramatic in the pork and poultry industries, where livestock are already being “disposed of,” according to Rosa. He hasn’t heard of that happening with cattle yet.

“Our ranchers, they do not want to go there,” he said.

The U.S. government, though, is preparing for that possibility.

The Substation Fire burned grass that cattle graze on. (GoFundMe)

The USDA’s Animal and Plant Health Inspection Service (APHIS) established a National Incident Coordination Center (NICC) on April 24 to “provide direct support to producers whose animals cannot move to market as a result of processing plant closures due to COVID-19.”

“It is not possible to continue to hold animals on ranches and farms and other pre-processing sites indefinitely for humane and economic reasons,” an ODA spokesperson told KOIN 6 News in an email. So the national coordination center will assist state veterinarians and producers in trying to find “alternative markets if a producer is unable to move animals.” If necessary, they will also “advise and assist on depopulation and disposal methods.”

As part of the support, APHIS will share assets like captive bolt guns and cartridges, chutes and trailers, and personal protective equipment.

APHIS asks producers to first contact their state veterinarian for help.

Rosa said those in the ranching industry are “extremely disappointed and unhappy” with this solution.

“We were hoping from the government to be able to provide help to be able to get this product out to people that are unemployed, that are hungry, that really need food right now because we’re seeing the demand the product is there,” he said. “Not to be disposing of cattle like we’re seeing occurring with chickens and occurring with hogs.”

Some of the cattle on Coleman Ranch near Molalla (photo courtesy Coleman Ranch)

“We have plenty of product,” he added. “We just need help getting it to the people.

Meanwhile, Coleman may be immune from some of the problems faced by large-scale producers. He has a small enough herd that, instead of disposing of cattle, he thinks they’ll just keep them out in the fields for an extra year.

“There’ll be a demand for them down the road,” he said. “I think two years down the road this beef cattle industry is going to be pretty viable.”

Continuing Coverage: Coronavirus

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