Anthony Cavazos’ hand, like other ranchers, was forced.
Cavazos, a South Texas boxing promoter and owner of the Cavazos Ranch in San Isidro, believed that the COVID-19 pandemic panic was going to permeate and have an effect on the meat market.
Livestock ranchers across the country, including the hundreds across the Rio Grande Valley, had reason for concern, especially as meat processing plants — beef, pork, chicken and even seafood plants — were quickly shutting down.
“I got really worried when it first started in March and April, so I sold a few head of cattle,” he said. “I thought prices were going to go so low that (the auctions) would’ve paid close to nothing. It went down to half; it’s been crazy.”
Ranchers across the nation have been keeping a steady eye on beef, poultry and other meat prices, especially since April when Tyson Foods chairman took out full-page ads in the Arkansas Democrat, New York Times and Washington Post, writing that “The food supply chain is breaking.”
He added that closed plants would lead to millions of livestock being slaughtered as farmers will be unable to sell to meat processors.
One day later, President Trump issued an executive order to keep meat processing plants open, classifying them as critical infrastructure and that closing those plants would have a devastating effect on the nation’s food supply chain.
“There’s plenty of supply,” Trump said during a meeting at the White House on April 28, but supply chains had hit a roadblock.
Cattle producers continued to get decreased prices while there was a surge in retail prices due to COVID-19 causing large slaughterhouse packers to close or limit their production where they are not processing at 100%.
In late April the U.S. Department of Agriculture announced it planned to buy $3 billion in fresh produce, dairy and meat from farmers and ranchers to help reduce waste and stabilize retail prices, according to meatpoultry.com, which keeps track of the state of plant closures throughout the United States and Canada.
Prices have somewhat rebounded since April, even though plants across the nation continue to close or slow production. On June 9, Pacific Seafood closed five processing plants in Newport, Ore., due to a COVID-19 outbreak where more than 120 employees tested positive.
Others, however, continue to re-open.
The JBS USA beef plant in Hyrum, Utah which began operating with limited capacity in mid-June, increased to full operations June 19.
The meat industry is tightly concentrated where a small number of firms own large facilities. The Economist reported, “The closure of a big pork-processing plant, for example, can wipe out as much as 5% of national pork production.”
Stephanie and Felo Martinez are the owners of Rancho Santa Fe, south of San Isidro. They not only raise cattle, but they also process, pack and distribute it as well, providing the complete supply chain in-house. They are the lone state-inspected processing plant in the Rio Grande Valley, Stephanie Martinez said.
“Due to our vertical integration, we have become insulated from the volatility of the national market,” Martinez said. “Since we have total control of our cattle from start to finish, we can offer our premium beef without national inflated beef prices.”
Consumers can order directly from Rancho Santa Fe at 2FAkaushibeef.com. There are package options or one can customer order.
“Before the corona virus pandemic, we were delivering to local households weekly,” Martinez said. “We have changed our ways of distributing to households by offering a Friday curbside pickup where our customers drive thru and pick up their custom and online orders.”
The curbside pickup are from 4 to 6 p.m. Fridays at 4325 N. 10th St. in McAllen.
One of the biggest questions that ranchers face as prices drop is whether to sell the cattle immediately, and maybe end up with a loss on what they paid for the cattle, or hold onto them longer, racking up more costs to maintain the animals.
For livestock such as chickens, the profitable window is much smaller and many have been euthanized since the production capacity has significantly shrunk.
“The food chain has been running at 75% or lower,” said Vidal Saenz, county extension agent for ag and resources in Hidalgo County. “Prices have come down at auction barns but are higher for retail.”
Saenz added that retail prices are going up, not as much for ground meat, but for more elite meat, like top-end steaks.
“People eat a lot of hamburgers at home and more fast food during times like this,” he said.
He also said that prices for the cattle rancher are slowly increasing.
“If President Trump didn’t sign that order to keep those packing plants open it would have been devastating,” Cavazos said. “Ranchers would’ve lost money. They would’ve been paid nothing for beef and then consumers would be charged three times the price.”
Cavazos, who was born and raised in Chicago, purchased his ranch in 2011. His ancestors, however, were major players in the ranch industry for a long time.
“My grandfather, Filiberto Cavazos, loved ranching. He was born in Weslaco and had a big ranch in Mexico,” Cavazos said. “My dad, Daniel Cavazos, was raised on a ranch but didn’t like it as much. I enjoyed it all the time when I came down to my uncle’s ranch.”
Cavazos said he’s also a descendent of Don Jose Cavazos, who was awarded the largest land grant in South Texas, in 1792 by the King of Spain. The grant included more than a half million acres, according to atlas.thc.state.tx.us . Most of that land — 500,000 acres, according to Anthony Cavazos — was later sold by Cavazos’ heirs to the famous King Ranch.
“You could say it’s a family thing,” Cavazos said. “During this time when this virus is so contagious, we’re blessed to just get away and go to the ranch and be insulated from all that’s happening. Prices are going up but we don’t know what’s going to happen in the future… We don’t know what’s going to happen from one day to the next.