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Ranchers Seek Local Markets As Pandemic Severs Meat Processing Chains

A cow looks up on a farm near Bridger, Montana.
Kayla Desroches
Yellowstone Public Radio
A cow looks up on a farm near Bridger, Montana.

While economists warn of potential meat shortages in grocery stores this month, livestock producers are struggling to find ways of getting their animals to market for a fair price. Many ranchers in Montana are seeking out more local options and hoping for reforms in the industry. Yellowstone Public Radio’s Rachel Cramer shared her reporting with Nicky Ouellet.

Nicky Ouellet: Last month you reported that people stocking up on meat led to shortages on grocery store shelves. Now you’re learning that might happen again but for different reasons.

Rachel Cramer: Over the last few weeks, more than 20 large meatpacking plants shut down across the country due to COVID-19 outbreaks. Others have been operating at reduced capacity with fewer workers.

This has caused the supply chain bottleneck to tighten even more, and now a lot of producers are dealing with a backlog of animals that are ready for slaughter. Some swine and poultry producers in the U.S. have even euthanized their animals, meaning they’re not being used to feed anyone.

NO: Has that happened in Montana?

RC: Mike Honeycutt, executive officer with the Montana Department of Livestock, says not yet but the state is preparing for that possibility by developing a carcass disposal plan.

“These are plans that we have typically to deal with a foreign animal disease outbreak, did not realize we might have to be executing those plans for this type of a crisis,” Honeycutt said.

He said ranchers who have found a meat packer to sell their cattle to, are reporting losses ranging from $200 to $400 per head.

A lot of producers expressed frustration last month as their thin profit margins dropped while prices in grocery stores shot up. Part of this is due to the way futures markets work but attorneys general from several ranching states, including Montana, this week asked the U.S. Department of Justice to launch an antitrust investigation into the four big meatpackers that control 80 percent of the beef market.

NO: So maybe some crack-downs are on the horizon. But what are Montana ranchers doing to make ends meet now?

RC: Steve Charter, a rancher north of Billings, says he has struggled to find a place that would take his last batch of 42 cattle. He says COVID-19 puts a spotlight on the large-scale meatpacking industry, revealing a broken system that hurts livestock producers and consumers.

He says he’s going to take a risk and try selling the meat directly to consumers in Montana.

“It’s kind of like forcing us into doing what we’ve wanted to do and trying to do for the last 30 years. We’re really sticking our necks out there, and it’s a very risky thing. But at this point, if we just have to sell into this dysfunctional system with these big packers, we don’t really have any future," Charter said.

Producer members in the Yellowstone Valley Food Hub, an agricultural co-op, put together orders for customers in Billings, Montana May 07, 2020.
Credit Annika Charter-Williams
Producer members in the Yellowstone Valley Food Hub, an agricultural co-op, put together orders for customers in Billings, Montana May 07, 2020.

His daughter Annika Charter-Williams found a small, independent meat packer in Columbus that could take some of the cattle. The rest were hauled to a processor in Wyoming. In a few weeks the family will pick up the packaged meat and sell it through the Yellowstone Valley Food Hub, an agricultural co-op that became incorporated about a year ago.

Customers buy meat, veggies and cheese online. Each Thursday, the participating farmers and ranchers aggregate the orders for delivery or for people to pick up at several locations in Billings. The Food Hub’s sales increased by about 200 percent in March as families stocked their freezers in response to the pandemic.

Jenny Carl, a rancher in Gallatin County, says there are a lot of benefits from selling directly to customers.

“I am not as affected by the ups and downs of the wholesale live animal meat market because I’m able to sell directly to consumers. It takes more marketing on my part. I’ve had to build up good local relationships. I’ve had to be very dependable in continuing to supply animals," Carl said.

NO: So why haven’t more ranchers in Montana switched to marketing their meat locally?

RC: It’s pretty common for ranchers to take a few cattle each year to ‘custom exempt processors’ in the state, which is also where a lot of hunters take their game. But it’s not like they can then sell a couple steaks or ground beef to consumers.

To do that legally, they’d have to take the animal to a state or federally inspected facility, and those have been disappearing in Montana for decades.

NO: Why have they been disappearing?

RC: Independent processors, especially medium-sized ones, have struggled to compete with larger meat packers. There’s been rapid consolidation. There’s also competition with other labor-intensive jobs.

Jenny Carl, the rancher in Gallatin County, bought the Amsterdam Meat Shop several years ago.

She says customers have come as far as Great Falls. That’s a six-hour round trip to drop off the animals, and then another six-hour round trip to pick up the packaged meat.

“That is not sustainable for that producer, that rancher because the margins are too small. People just don’t pay enough for meat for that to work. So we need a lot of small processors all over the state,” Carl said.

Half a dozen people work at the Amsterdam Meat Shop, which can process up to ten animals a day. In comparison, some of the largest meat packing plants have thousands of employees who see 5,000 cattle per day.

Carl says the pandemic shows how small-scale, localized food systems can be more resilient.

“If we go down for a couple weeks because of COVID infections, someone else can pick up the ball generally, and there’s just a few people. It’s easy to do contact tracing for our staff," Carl said.

Bill Jones, the manager at the meat shop, says small processing facilities provide good paying jobs, and the demand for local, high-quality meat has been growing. Sales increased 300 percent this spring.

“I've always felt very strongly that to keep it local is far superior than shipping the beef all the way to Nebraska or wherever they're going to be fed in a feedlot and then harvested and sent back to Bozeman doesn't make a lot of sense to me, and times like this prove that," Jones said.

RC: Montana politicians are pushing the U.S. Department of Agriculture to temporarily relax regulations on meat that can be donated to food banks, and some ranchers are asking the governor to use part of the federal coronavirus relief funding to support a new medium-sized processing facility.