Meat Market: Sorry State

At a cattle auction under brilliant blue skies in Longview, the ring of wooden seats surrounding the auction floor is nearly empty. The weekly auction takes place here every Thursday starting at noon, although precious few buyers or sellers show up anymore.

Everything at the auction house is the color of rust, that lonely hue of water long evaporated from the land: copper-toned pens and gates blend almost seamlessly with the red clay dust and dirt kicked up by the few cows penned up behind the arena. A hand-written sign near the entrance reads: "No donkeys to sell or buy." People have been dumping starving, thirst-stricken burros out at auctions or nearby ranches by the dozens, no longer able to care for the donkeys over the cattle or horses they have left.

Normally, these auctions last for at least five to six hours. Today's auction is short, with only three bulls and a few pens of scrawny cattle to sell. Auctioneer Byron Ford runs this weekly event with his wife, Danita. It's one of the many East Texas livestock auctions that take place every week, but the prolonged Texas drought has cut both sales and purchases nearly in half. Even Ford — who, like most people around here, keeps cows on his land just to have them — has sold most of his cattle.

Packer buyers are usually the most reliable purchasers here. But these days, they're only purchasing one load of cattle at a time. The slaughterhouses they buy for have been running above capacity for months, and the cattle that do come through these days aren't much good for beef anyway. The old "shelly" cows that come across the auction floor — the ones marked with double-aughts on their bony hindquarters — are good for very little, in fact. They only bring 30 cents a pound at auction today.

"All you can get off them old shelly cows is $180," says rancher Ronnie Bartley. He's sold all of his off, too. "But all that beef is good for is to grind it up or make potted meat." That's not going to help the growing problem of Texas underproducing beef to meet the nation's — and, increasingly, the world's — demand for meat, which is what's currently driving up prices across the board.

As recently as 2008, there were 12 million head of cattle in feedlots alone spread through 150,000 different cattle operations across Texas. And those cattle feed one-fifth of the nation at any given time. But the 2011 drought means that the national percentage is down between 2 and 4 percent, which doesn't sound like a lot until you realize the magnitude of numbers you're dealing with.

"Texas has about one-seventh of all the cattle in the U.S." says Bill Hyman, executive director of the Independent Cattlemen's Association of Texas, an organization located in Lockhart that's devoted to providing a legislative voice for cattle ranchers. "So when we lose 4 percent of the national amount, it's probably 40 percent of what we have in Texas."

Mitchell Harris, CEO of AgTexas Farm Credit Services, agrees. And, he adds, that's not even taking into account the sharp increases in the cost of raw materials in order to get the beef to market, costs that have risen steeply in just a couple of generations.

"In the 1970s," Harris says, "you could buy cubes for $110 a ton. Now we're dealing with $400 or $500. A ranch pickup 40 years ago was $5,000 or $6,000; today, the same heavy-duty truck is between [$30,000] and $50,000. Then you take this drought and you accelerate it in the state that has the most cattle in the U.S., and they're already having 12 to 25 percent declines in numbers."

As for what the consumer can expect, "Any time you take part of the supply out of supply and demand, prices go up," Hyman explains. "You're going to see repercussions starting in the spring — including higher prices for meat."


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