MORA, N.M. (AP) - New Mexico’s cattle and sheep industries are being adversely affected as the economic impact of the coronavirus pandemic is causing the wholesale prices of meat and wool to drop sharply.
While the two industries are affected in different ways, cow and sheep ranchers tell the Santa Fe New Mexican that their difficulties may last until next year.
Ranchers said demand for beef and lamb has plummeted partly because restaurants were shut down to slow the spread of the coronavirus.
Cattle ranchers also are selling fewer calves because some large meat processing plants were idled by viral outbreaks among workers.
Young calves and lambs are now stuck at feedlots beyond their prescribed time, incurring more expenses while vendors wait for meat prices to rise so they can at least break even.
The price for cattle in January was $1.20 per pound. It’s now at 99 cents a pound.
Live lamb prices have fallen to $1.35 a pound from $1.90 two months ago.
“Anybody that is trying to market livestock at all is taking a hit,” said Caren Cowan, publisher of New Mexico Stockman and Livestock Market Digest.
The pandemic is just the latest problem for the U.S. beef market. Cowan said prices began declining after a peak of about $1.65 a pound in 2015. That was the last year before “country of origin” labeling was removed, which opened the way for more competition from foreign exports.
In August, a fire at Tyson Foods’ meat-processing plant in Kansas shut down operations there for three months. Many New Mexico beef producers used this the plant to process their meat, so the closure led to a glut of unsold cattle, causing prices to plummet.
Cattle prices began to rebound in January, but the pandemic struck in March and prices fell again, said Randell Major, president of the New Mexico Cattle Growers Association.
Prices have begun to go up again but are still below the break-even mark, he said.
“The supply chain was interrupted big time,” he said.
Some midsize ranches are taking their cattle to New Mexico’s three federally certified meat processors for slaughter, causing these smaller plants to be booked for months.
Smaller ranchers like Carla Gomez, owner of Los Vallecitos Ranch in Mora County, are left in a bind. She’s unable to process any meat because her butcher, Western Way Custom Meat in Moriarty, is booked.
For now, she’s buying and reselling standard wholesale meat at her local ranchers cooperative to help keep that store stocked. But the point of the cooperative is to sell high-quality meat from grass-fed local livestock, she said.
“So we don’t want to sell commercial meat,” Gomez said. “It kind of defeats the purpose.”
Western Way owner Mike Minifie estimates orders at his plant have increased by 35% since March. He believes part of what’s driving up business at his plant is people buying meat at smaller regional store chains because they’re finding less selection at big supermarkets.
Some larger grocers still impose limits on meat purchases to prevent hoarding. Yet stores are still struggling to keep shelves stocked because of the diminished supply.
New Mexico beef producers became dependent on large processors after the state quit doing its own meat inspections in 2007, Major said.
Anyone who processes meat to sell on the open market must be certified through the U.S. Department of Agriculture, which is extremely cumbersome for small ranches, he said. Restoring state inspections would remove hurdles for local ranches to do their own commercial meat processing, he added.
In the meantime, federal certification should be streamlined to help local producers, said Don Martinez, owner of Naturally New Mexico Food Products, an El Rito meat processor and wholesaler.
“USDA has all these rules that the big meat processors wrote for them,” Martinez said, adding that if smaller producers could get into processing, there would be no shortage of meat.
Gomez agreed.
“They need to make it easier for ma and pa places,” she said.
For their part, sheep ranchers were ensnared in the trade war with China, a huge wool buyer that quit importing the product from the U.S. But that dispute was resolved recently, and the market started to rebound, said Bronson Corn, president of New Mexico Wool Growers.
“And then this pandemic hit, and it shut back down again,” Corn said. “It’s just one thing after the next.”
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