OSU estimates $13B-plus in losses to cattle industry

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National Cattlemen’s Beef Association study

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  • Photo provided Texas longhorn cattle in range land on the Oklahoma Panhandle.
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OKLAHOMA CITY – A study conducted by Oklahoma State University estimates that the U.S. cattle industry lost an estimated $13.6 billion by early April because of the COVID-19 pandemic. In addition, more economic damages to agriculture are likely, the study commissioned by the National Cattlemen’s Beef Association contends.

The research conducted by OSU identified revenue losses of $3.7 billion so far this year in the cow-calf sector alone, the equivalent of $112 per head for each breeding animal in the country. If that impact is not offset, long-term damages to producers are projected to rise by another $4.5 billion, or total loss of about $247 per head, according to Derrell S. Peel, Breedlove Professor of Agribusiness and OSU Extension Livestock Marketing Specialist. Similar economic damages will ripple through the stocker and feedlot sectors and across other aspects of the industry.

The recently enacted $2 trillion federal stimulus package earmarked $23 billion in agricultural aid, of which $9.5 billion is intended to provide relief for producers, specialty crops and regional agricultural systems, and $14 billion will go to renew the U.S. Department of Agriculture’s Commodity Credit Corp. (CCC) spending authority.

U.S. Agriculture Secretary Sonny Perdue recently said his department will have to wait until at least summer to distribute an additional $14 billion in aid, although tapping the CCC is also possible.

The National Cattlemen’s Beef Association will share the research conducted by Peel’s committee with the USDA and policymakers to help lay plans for further recovery efforts.

“This study confirms that cattle producers have suffered massive economic damage as a result of the COVID-19 outbreak and those losses will continue to mount for years to come, driving many producers to the brink of collapse and beyond if relief funds aren't made available soon,” NCBA Chief Executive Colin

Woodall said. “This study also clearly illustrates the fact that while the relief funds provided by Congress were a good first step, there remains a massive need for more funding.” National Cattlemen’s Beef Association study $2.3M in rehab contracts 

Thomas Coon, vice president of OSU’s Division of Agricultural Sciences and Natural Resources, said the cattle industry suffered a significant disruption from drought about eight years ago and needed assistance to recover.

“These market disruptions pose a serious threat to the future of our beef and other protein industries and the livelihoods of many farmers and ranchers and the rural communities whose livelihood depends on their success,” Coon said. “Federal intervention, led by Oklahoma Congressman Frank Lucas, made a difference in 2014. It’s inconceivable that the industry can weather this disruption without federal action today.”

“The difficult economic situation our nation currently faces is not entirely new to agriculture, though certainly worsened by the COVID-19 pandemic,” said Blayne Arthur, secretary of the Oklahoma Department of Agriculture, Food and Forestry. “Beef producers have faced a variety of challenging market factors for some time. The most recent hit brought on by the coronavirus further risks the financial health and continued operation of many of our cattle producers.”

Although the report focused only on cattle, Peel said other agricultural sectors are hurting just as much. Of the nation’s 94.4 million head of cattle, more than 80 million are involved in beef production. Cattle are found on nearly 883,000 farms, and within that total about 729,000 farms have beef cows. The U.S. beef cattle industry had $77.2 billion in sales in 2017, data shows.

Since federal, state and municipal governments started enacting virus-control safety measures urging people to stay home, retail spending and food consumption patterns have changed significantly, driving down the economy.