Tri-County ranchers have a beef with market closures

As seen in Pacific Coast Business Times

By Betsy Crowfoot 

Domestic sales of beef and cattle have withstood the aftermath of the December 2003 discovery of Mad Cow Disease within the U.S. border, but area cattle ranchers are still awaiting the re-opening of lucrative overseas markets – a closure which has driven prices down nearly 15 percent.

All told, recovery from the detection of Bovine Spongiform Encephalopathy (BSE) in a Washington state cow has been slow but, “not nearly as bad as what we might have anticipated,” said Roger Miller, a north San Luis Obispo County rancher who runs about 600 beef cows out of his Parkfield ranch.

Evidence of BSE was discovered in a cow harvested December 9, 2003, via government testing programs enacted in 1990. The U.S. has had a “triple firewall strategy” to prevent the spread of BSE according to Ben Higgins, Executive Director of the California Cattlemen’s Association, since the consumption of beef with BSE was linked to cases of Creutzfeldt-Jacob disease in Great Britain – a finding which turned British ranchers into paupers and outcasts.

Domestic restrictions began in 1989 and within a year the U.S. had begun a strict testing policy of any animal showing symptoms of neurological disorder. “We were the first country to have this in place, without actually having the disease within our borders,” Higgins said, noting that, “hundreds of thousands of samples have been taken and there has been just this one positive case.”

Higgins was quick to reveal the diseased cow had been born in Canada, and prior to 1997 restrictions prohibiting the feeding of ruminant animals (those with a four-chambered stomach: cattle, sheep, goats, buffalo, deer and elk) with proteins derived from other mammals (i.e. meat byproducts and bone meal). BSE is spread through contaminated feed, particularly that made with brain, spinal cord and other neural tissue.

Despite these measures, in December 2003, “we saw countries representing 95 to 100 percent of our beef export market shut down overnight. It had significant impact,” said Higgins. The U.S. exports $3-billion in beef and cattle annually; $170-million from California. Beef is one of State’s top ten agricultural exports and within the Tri-County area, nearly 4.4-million acres are grazed by roughly 165,000 head of cattle annually.

“There was some effect, right after it was discovered,” said Miller, who also serves as president of the San Luis Obispo chapter of the California Cattlemen’s Association. The discovery of BSE chopped 20 to 25 cents a pound off the price of cattle ready for harvest. Still, Miller credited industry-wide education programs with keeping consumer confidence high, saying, “It’s not nearly as bad as the European or Canadian market.” 

And he noted that prior to December’s Mad Cow Disease scare, the price of beef had been at record levels. “It was higher than it had been in a long time,” said Miller. The discovery of BSE, “knocked the market down some, but it’s still better than what we were used to for quite a few years.”

But Higgins pointed out that cattle ranching is a business where profit margins are typically, “slim to none.”

“This is just one more issue causing strain on the rancher’s bottom line,” said Higgins, adding that the lack of available grazing land is one of the primary issues affecting ranchers. “Competition for grazing leases can be cut-throat.

“The large tracts of land necessary to run a viable cattle operation are being bought up by private individuals or environmental groups that limit their viability for use for cattle.”

Recently California Department of Fish and Game acquired 13,000 acres of San Luis Obispo County property, Miller said, and is eyeing 13,000 more. “This limits the amount of grazing land … and whenever a State Agency purchases land it takes that property off the tax rolls and the county loses revenue. It is one of the worse things that hurts us, county-wide.”

“These are much greater issues for most of these guys, than BSE,” noted Higgins – issues which may drive ranchers out of the region.

Compounding these factors is the anticipation of a dry season, according to Richard Nock, another Tri-County rancher, who said, “We are looking into the barrel of a drought.”  Many regional ranchers are cow-calf operators, he noted, selling the calves to farms in the Midwest and elsewhere. If drought conditions persist, local ranches will be forced to move the cows sooner – reaping a much lower per-pound price for the younger, smaller cattle.

Although rainfall is out of anyone’s hands, some relief is in sight.

On March 3 the U.S. Meat Export Federation (USMEF) announced Mexico would start to allow imports of  boneless beef products from animals of less than 30 months of age, as a first step in new agreements with the U.S. 

Philip Seng, USMEF president and CEO, said, “The initial agreement allowing boneless beef covers an estimated 75 to 80 percent of what the U.S. exports to Mexico.”  While this represented a small margin for area ranchers, it offered a promise of things to come.

“The bulk of our exports go to Japan, South Korea and the Pacific Rim,” – roughly 10 to 15 percent of California’s beef production, according to Higgins. The reopening of the Mexican border has provided “optimism about the critically important Asian market.”

For Tri-county ranchers, those borders cannot open too soon. 

“We want to be selling our calves in May, June and July,” said Miller, “and I hope it will all have blown over by then.”