This is the first in a series of articles focusing on PFC Director Gary Price and his family’s 77 Ranch in Texas.
“We are very fortunate to be on the ranch. Most days, we can wander around without interacting with people.” So begins the tale of how the Covid epidemic is affecting the award-winning 77 Ranch in central Texas, owned and operated by Partners for Conservation Director Gary Price and his wife and son.
“On the other hand, it’s amazing how close you come together loading a cow in a trailer. We have one full-time hand to help us out, and we have to be careful about limiting our interactions.”
Like many cattlemen, Gary’s primary concern right now is where the cattle market is headed. We all know that Americans like to dine out, but did you know that most beef is now consumed away from home in restaurants? How the restaurant business will evolve coming out of this situation is a big question: Will the restaurant demand for beef be destroyed? Will smaller restaurants go away? What will the demand be going forward? Will we go back to the way it was 30 years ago when most people went to the grocery store to select their beef?
Cattle are like a head of lettuce
Gary says that the issue of how Covid has impacted processing just “adds more coal on the fire. I like to say that cattle are like a head of lettuce, they are somewhat perishable, and once they get to a certain condition they have to go.” That’s because keeping cattle past peak market time means that ranchers move into a zone of feeding but with much less weight gain; in other words, it costs way more to add each additional pound of beef so profit begins to go down.
That extra beef just exacerbates the problems already posed by slow downs in the packer pipeline. “There are issues with the virus that the packers have to address in their employees, which raise questions of food safety,” Gary says. The same applies to restaurants: will people avoid dining out because of safety concerns associated with how their food is handled? When will people feel safe going back? What about social distancing in restaurants—it appears most restaurants will be accommodating 1/2 of their total occupancy but with the same fixed costs. How will they make ends meet—by charging more for a steak? The answers to each of these questions will affect future demand for beef.
Same as a severe drought
Ranchers like Gary are spending a lot of time trying to get an idea of where the market is headed. “It’s the biggest part of our income. We get paid once per year when all our calves are loaded up in one day and sent to their next destination, the feed yard. Fortunately, this year we were contracted before this started unwinding, so we’ve already shipped our calves to Nebraska. Even though we won’t do anything major for another year, we’re trying to project what the market will look like and manage costs.”
Gary always stocks conservatively, and he’s going to be managing his ranch through the epidemic the same way he would in a severe drought. “This is a big one,” he says. Will next year’s price be the usual range of $1.50/lb or will it be $.50/pound—“which it very well could”? Gary is balancing that uncertain forecast with his obligations and loans, while working with his bank on issues such as the CARES Act (the government funded relief bill that includes a paycheck protection program for small businesses, which, in the second round of funding, is supposed to include agricultural producers). Although Gary does not like the idea of applying for government funds, he summarizes by saying, “It’s about competition, we can’t compete against other operations if they are subsidized and we are not.”
The 77 Ranch is helping people deal with Covid
The 77 Ranch also receives income from recreational duck hunting and fishing leases. Most of the Prices’ customers come from nearby Dallas-Ft. Worth, where the majority of people recently suffered through a lock down. “They are anxious to get out of the house, so we have a steady stream of daily texting to coordinate our fishing demand, letting people know where to go and what they can do. We have about five times the usual number of people coming out each day. It’s a safe respite from being cooped up because we have a 2500-acre ranch, with lakes scattered throughout.”
Read the rest of the series:
Article 2. From Cotton to Bermuda to Native Grass: the 77 Ranch of North Central Texas
Article 3. From Cow to Consumer, a new focus on Grassland Soil Stewardship
Article 4. The 77 Ranch Ethos: Reverence for the Land and Partnerships with People