Possible mad cow finding threatens Oklahoma ranchers
Thursday, December 25th 2003, 12:00 am
News On 6
Rancher John Bulling signed contracts Tuesday morning to store 15,000 head of cattle on his 6,000-acre ranch near Orlando in northern Oklahoma.
Just hours later, news broke that the United States' first suspected case of mad cow disease was discovered in Washington state.
``We got those taken care of just in the nick of time,'' Bulling said. ``Those contracts are already signed so we're in good shape.''
Other Oklahoma ranchers, especially those who had hopes of marketing their cattle soon to take advantage of the recent high prices, won't be so lucky.
With mad cow, the strong market in U.S. beef that finally brought some prosperity to Oklahoma cattlemen after seven years of depressed prices now appears vulnerable.
February live cattle dropped the limit, $1.50 cents, to 89.17 cents per pound at the Chicago Board of Trade Wednesday, the first day of beef futures trading since the potential mad cow discovery was made public.
``We were enjoying higher than usual prices,'' said Scott Dewald, executive vice president of the Oklahoma Cattlemen's Association. ``This is going to impede that. We'd be fooling ourselves to say anything else.''
Eleven countries, including key importers Japan, South Korea and Mexico, have banned importation of U.S. beef. U.S. producers export about 9 percent of their production.
Losing the import market will probably decrease prices by about 12 percent to 13 percent, from the low 90 cents per pound to about 80 cents, said Derrel Peel, an agricultural economist at Oklahoma State University.
``The other 91 percent of the market is the U.S. market,'' Peel said. ``The bigger concern and unknown at this time is to what extent do we see significant reaction in the U.S. There's no way to predict it.''
Agricultural officials sought Wednesday to reassure a wary public that beef remains safe. Cattlemen feared that a public warming up to beef as part of popular high-protein diets would return to eating mostly chicken.
``Don't panic,'' advised Earl Cinnamon, a beef producer and buyer in Hunter in Garfield County. ``We've still got the safest and cheapest meat in the world ... Go eat a steak.''
Cinnamon had been considering taking some of his cattle to market to take advantage of the boom. Now, he'll likely keep those with the rest of his heard on the wheat pasture.
``It's hard telling,'' he said. ``We didn't have our market plans ready, but we've got some cattle in the feed yard that were getting close.''
The timing, however, could serve to lessen the expected market shock.
Most ranchers have their herds on wheat pasture and will have them there for another six or eight months, officials said. If the potential mad cow discovery proves to be isolated, the effects should be long over by the time that beef is taken to market.
Also, the holidays will limit short-term trading in the commodities markets and reduce public fear, Peel said. The Board of Trade, closed Thursday for Christmas, had a short day Wednesday and will again Friday. Most people are traveling and likely won't fully digest the mad cow news for days, Peel said.
``It will really be next Monday before financial markets, both the commodities and the general equity markets, react to this,'' he said. ``It gives people more time to get past the initial emotional reaction and for more facts to be made public.''
Still, the news comes just as many Oklahoma ranchers, many of whom had to shut down or sell out during the industry recession, were beginning to make real headway.
``We had some guys making some good money and catching up on some bills,'' said Justin Barr, a rancher and extension educator at the cattlemen's association Ellis County office in Arnett.