Modern ranching carries on with help of technology

As prices for cattle continue to trend low and the beef market gets more turbulent between producers and meatpackers, spring yearling bull sales, operating under social distancing guidelines, are turning to technology to meet cattle producers' need to continue operations.

With Gov. Steve Bullock's stay-at-home order extended to April 24 on top of federal social distancing guidelines put in place in March to combat the spread of COVID-19 in the U.S., agriculture producers are having to find more innovative ways to conduct their essential business. This includes relying on online and televised auctions.

"The thing is, in agriculture we know we're in a tough time here in the situation with the coronavirus and, you know, agriculture has to move forward because we've got to feed the country, feed the world," Dave Hinman, a registered black Angus breeder, said. "And we just have to keep doing what we do and do it the best we can."

Hinman, his wife, Yvonne, and their daughter and son-in-law Heidi and Billy Lulloff are partners in Hinman Angus, which supports four generations of their family east of Malta. Their April registered bull sale, like the other bulls sales across the country, was scheduled long before the novel coronavirus outbreak even began. Like all things agricultural, though, certain things have to be done in their season in order for harvests to come later on.

In the spring, Hinman said, that means bull sales need to be conducted in order for cattlemen to breed their cows in early summer, so they made adjustments at their bull sale.

The 33rd annual Hinman Angus auction was held April 7 at the ranch. With buyers across 15 states, Hinman said, they had already planned to have internet, television and telephone access to the auction and bidding process, but this year they also worked to get their customers to rely on these services more.

"Because of the coronavirus situation, we knew that a lot of people are not going to come. A lot of people are going to bid on the internet or on the TV. And then they give us orders also," Hinman said prior to the auction.

"I've contacted everyone of (our regular customers). I've been on the phone with all of them and talked to them. They all understand. Everybody's got the same set of circumstances because of this deal. Obviously, we're trying to sell the bulls, they need to get the bulls so they can get their cows bred and we're trying to work together, and it's working very well," he added. "People are very receptive to do whatever they have to do."

The bulls were run through the sale ring, as usual, but with video cameras set up the buyers not at the sale barn could watch the auction online or on a special Dish TV channel, he said. Bids could be placed online and via phone calls, and they had cattle industry representatives, who are unaffiliated with the ranch, to offer an unbiased assessment of the cattle and assist with bidding. Some buyers knew ahead of time what bulls they wanted and the top amount of what they would pay, and they placed orders ahead of the sale.

Hinman Angus sold 203 bulls at the auction with an average price of $4,836, the sale's website said, and the high-selling bull went for $43,000 to a buyer in Hanford, California.

Kelly McCracken, owner of Kel McC Angus in Turner and founder of the Montana Northern Premier Angus Sale, said prior to that group's April 9 auction at Bear Paw Livestock in Chinook that, unlike most years, he hadn't been to local yearling bull sales this year. He said he had heard, though, that the sales had been going well.

The Northern Premier sale, which also includes bulls from Peterson Grain & Cattle, Top Notch Angus and Whistling Winds Angus, was already set to be broadcast live, on Northern Livestock Video Auction with real-time online bidding and phone bidding with representatives and breeders providing assistance, McCracken said. The online sale catalog also included pre-auction videos of the bulls and a sight-unseen guarantee if the buyer wasn't happy with their purchase when the bull was delivered.

Northern Livestock Video Auction employee Bo Bevis, who runs the on-site video operation, said that in recent years the company, headquartered at Billings LiveStock Auction in Billings, has provided their services as a sort of insurance against bad weather and bad roads, "but this year is completely different."

"This year we're still an insurance policy, but we're an insurance policy that we've never seen before," he said, adding that the year's auctions been booked for a while, but he wouldn't be surprised if they see more bookings next year.

"This will be a push for change," he said.

Since the stay-at-home orders in response to the COVID-19 pandemic, the crowds on-site at the sales in their four-state area of operation have been running at about 25 to 30 percent of normal, Bevis said, and the average sale prices have been at or a little lower than expected based on recent years.

Travis Buck, co-manager at Bear Paw Livestock, said the average sale on all the bulls at the Northern Premier auction ranged between $3,900 and $4,000, with about 80 bidders on-site along with another 60 bidders online and 30 to 40 people bidding through representatives.

McCracken said after the sale his average per head was down about $1,000 from his past sales.

Beef industry issues

This is in a market that has seen near-record low prices for more than a year. And the U.S. Department of Agriculture said in its April 10 report that prices on feeder cattle had dropped again by $3 to $7 per hundred-weight.

But the drop in prices depends on the cattle, the area and even the day, so sources in ag business are reporting up to a $34.60 drop in hundred-weight prices since the first of the year, which producers are saying is in stark contrast to the rise in prices at the grocery store.

"Beef market is in the toilet right now. Last fall was terrible ... and it's worse now. I keep thinking it's going to come up, but I don't know," McCracken said, adding, "I can't believe it's stayed depressed this long. the prices don't seem to be that depressed in the super markets."

Western states leaders in government and the cattle industry are calling for federal investigation of the disparity in prices between what the producers are getting for their cattle and the prices the meat processors are getting in the store.

Sens. Mike Rounds, R-S.D.; Kevin Cramer and John Hoeven, both R-N.D., and Steve Daines, R-Mont., sent a letter in March to the Department of Justice asking for investigation into continued allegations of price fixing in the cattle market.

Also in March, Sen. Tester, D-Mont., secured a commitment from Secretary of Agriculture Sonny Perdue to, as a March 27 press release from the Montana Farmer's Union said, "fight against price-fixing from large-scale meat packers that is hurting ranchers."

The pandemic could cause further problems by cutting into the supply change, McCracken said.

"Like one guy told me, all we need is for the virus to break out in one of the large packing plants and shut one of them down," he said.

And signs of that are showing.

Associated Press reported Monday that JBS USA meatpacking plant in Greeley, Colorado, will be closed until April 24 to arrange for coronavirus testing and to sanitize the plant and adopt other measures after at least two of its workers died.

Sunday, Smithfield Foods announced the indefinite closure of its giant pork-processing plant in Sioux Falls, South Dakota. The press release from the company says the plant supplies nearly 130 million servings of food per week and employs 3,700 people. More than 550 independent family farmers supply the plant.

A Washington Post article reported Monday that more than 300 workers had fallen ill, already making this one of the U.S.'s largest single coronavirus clusters, but the numbers are still rising, in the city of about 200,000 people. The state with 885,000 residents, this morning had a total 868 total cases of COVID-19 reported, though it is unclear if all the Smithfield workers were accounted for in that number. South Dakota Gov. Kristi Noem had still not issued a stay-at-home order as of print deadline.

The Smithfield release said the plant will reopen as soon as government officials give them the go-ahead.

Pre-pandemic response

in the U.S.

As a contrast in times, Teddy Crowley, who owns Clear Creek Angus with his wife, Sara, said that his yearling bull sale at Bear Paw Livestock had a higher-than-normal attendance of 300 and, at $5,033 per head on 69 bulls, his March 2 sale - pre-COVID-19 - was encouraging.

"It was the best sale we've had in probably four or five years - since the cattle market was so high," he said, adding, "I think there was a lot of optimism in the market before this COVID-19 thing. Now I think there's a lot of uncertainty and people aren't sure what it's going to do."

He said he feels bad for the breeders who came later, or who didn't have the good sale-day weather they did because he knows how much work goes into it and then not to be able to show the cattle off the way the breeders normally would is discouraging.

While Crowley credited timing and weather for some of the success of the Clear Creek Angus auction, he did rely on new technology in another form to assist his sale.

"We were very fortunate," he said. "I know a lot of the sales now, a lot of the bidding, is online or on phone orders. The technology is saving people, but on the other hand, when you have people in the seats it just adds to the atmosphere and makes the sale better, I think."

This year the Crowleys hired an ag promotions firm to hit Facebook with targeted advertising and promotions.

"We kind of changed up our marketing this year and did a lot more with social media, and I think that brought in a lot more people from out of the area," he said, adding that they had many more requests for catalogs, including from as far away as Pennsylvania and Iowa.

He said they plan to stick with this tact for a few more years to see if it's paying off.

"You see some good markets and some bad markets," Hinman said, "and it's just part of what we do and you just have to keep going forward and look for the bright days. Now would not be a good time to back up."