Estimated $13.6 billion already lost by early April this year
The U.S. cattle industry lost an estimated $13.6 billion by early April this year due to the COVID-19 pandemic, and more economic damages to agriculture are likely, according to a study commissioned by the National Cattlemen’s Beef Association released this week.
The research conducted by Oklahoma State University 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 news comes as lawmakers in Washington, D.C., struggle with an economic stimulus bill known as Coronavirus Aid, Relief and Economic Security Act, or the CARES Act. The recently enacted $2 trillion legislation has 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. spending authority.
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.”
Thomas Coon, vice president of OSU’s Division of Agricultural Sciences and Natural Resources, agreed that the report confirms more legislative action is needed. 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 Congressman Frank Lucas, made a difference in 2014. It’s inconceivable that the industry can weather this disruption without federal action today.”
Blayne Arthur, secretary of the Oklahoma Department of Agriculture, Food and Forestry, said the value of Peel’s report is obvious, given the struggles of producers to maintain the country’s food supply systems.
“The difficult economic situation our nation currently faces is not entirely new to agriculture, though certainly worsened by the COVID-19 pandemic,” Arthur said. “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.
The full report and executive summary, as well as other coronavirus-related content, can be found here.