At auction, cattle sales still brisk
Producers are relieved by the low impact from the mad-cow crisis, although some prices are lower.
SEALY, TEXAS — W.F. Baker leans against a railing inside Port City Stockyards as a crossbreed steer calf is led into the ring.
He listens intently to what sounds like gibberish coming from the auctioneer's mouth and is relieved when the brisk bidding ends. "Ninety-three. That's a good price for that animal," says Mr. Baker, as the unruly calf is prodded out of the ring. (That's 93 cents a pound.)
For cattle producers like Baker, the reopening of cattle auctions after the Christmas break has been a nervous time. Since bovine spongiform encephalopathy or BSE - the scientific name for mad-cow disease - was discovered in a heifer in Washington State on Dec. 23, the US beef industry has watched foreign markets pull its meat from stores and ban future imports.
But while prices for fed cattle - those about to be slaughtered - are still lower than normal, feeder cattle - those who need several months to mature - are bringing in roughly the same amount they were prior to the mad-cow discovery.
"Buyers are betting that fed cattle will be profitable in the future," says Stephen Hammack, a beef cattle specialist at Texas A&M University's research and extension center in Stephenville. "And that's significant. It shows that consumer confidence has not been greatly affected by this."
Indeed, the industry's worst fears have not been realized. In a survey taken in late December by the National Cattlemen's Beef Association, 89 percent of respondents said they were confident US beef was safe from mad-cow disease, and 75 percent said they were eating as much beef as they were a month earlier.
That the mad-cow discovery has not developed into a full-blown scare suggests to some that the beef industry has been effective in educating the public about the risks. Others point to the immediate response by US agriculture officials to the situation.
"Our industry didn't panic or try to hide it," says J.D. Sartwelle Jr., president of Port City Stockyards Co. "We simply explained the facts and put additional safeguards in place. Our beef supply is still the safest in the world."
While eating today's stockyard special, hamburger patty with gravy and mashed potatoes, Mr. Sartwelle explains that many cattle producers were concerned about what prices would look like when auctions opened earlier this month.
"Everybody was kind of apprehensive," he says. "But the sky did not fall down as Chicken Little suspected."
Granted, the fed-cattle market is still down about 15 cents per pound since Dec. 23 - mainly because markets such as Japan and Mexico haven't lifted restrictions on US beef imports, which is causing a glut in supply. But feeder prices remain strong. "This mad-cow thing has been blown plum out of proportion," says Leroy Keaton, a cattle buyer at today's auction. He is purchasing eight cattle for several clients.
Occasionally twitching a finger or raising a hand, he buys the needed amount - and a few extras for his own ranch - all the while explaining what to look for in a good meat-producing cow: wide and thick across the back, broad and smooth on the sides, and as fat as possible.
One by one, the animals are brought in - today, just over 200. That's a light run, but this is the light time of year for cattle sales in Texas, explains Sartwelle: Because of the warmer climate, most heifers birth calves in January, and those won't be ready for auction for several months.
But what some see as common sense and good science overruling hysteria, others see as a missed opportunity to make real changes in the beef industry. "The discovery of this mad-cow case does show that we have some serious problems in our industry, especially in the large feed lots and processing plants," says Wylie Harris, a Food & Society fellow at Texas A&M University in College Station. "We [the beef industry] have a lot of political clout, and we are using it to keep costs down. And as costs come down, safety comes down, too."
But Mr. Harris, a cattle rancher himself, says industry officials won't be able to ignore the issue for long. In the 23 countries that have recorded cases of mad-cow disease, only four have been single episodes. That means it's likely that the US will eventually have another case - and what that will do to consumer confidence is anyone's guess.
"The industry has done a good job of minimizing the perception of risk," says Harris. "And while I don't think there should be panic, buyers may be surfing some false confidence that's not going to last forever."
While feeder-cattle prices are roughly back to what they were in mid-December, national cattle organizations are not resting easy. An additional $1.3 million is being pumped into advertising and other efforts to help sell US beef that was bound for overseas markets. "This is still a touchy time period we're in," says Shane Sklar, executive director of the Independent Cattlemen's Association of Texas.
Sitting in the Port City Stockyard stands is rancher Joe Gajewski, who can't recall a time when the industry wasn't in a state of instability. He says he expected prices to fall after the mad-cow case, but says that is part of the business.
"It's always something. I remember 20 years ago when I had to sell off my whole herd because of brucellosis," says the octogenarian, tipping back his cowboy hat and watching as the seven calves he's brought to auction bring in "a fair price." "But what's hurting us the most right now is this dang awful drought."