Oregon Public Broadcasting

The Pendleton Round-Up rounded up over the weekend, but visiting ranchers and cattlemen are heading home to rough waters.

A whole series of factors, including the current economic downturn, have left them in a precarious position.

Central Oregon correspondent Ethan Lindsey wrangled this story, from a ranch in Terrebonne.

When you walk down the butcher aisle of the supermarket today, you’ll get a good deal on beef.

During this recession, people are cutting back on items like steak or hamburger.

In turn, cattle ranchers get less for their cows.

When cattle ranchers don’t make enough money, they can't afford gas and fertilizer and hay - all the things they need to stay in business.

So they get out of the business – and sell off all their unneeded supplies – including the cows. They're even selling off their breeding cows.

When that excess beef enters the market, it pushes prices even lower.

Along with her husband Aaron, Rebecca Borrer runs the Nine Peaks Ranch in Terrebonne.

They raise about 400 grass-fed angus bulls on a beautiful piece of land less than a mile from the Deschutes River.

Rebecca Borrer: “And these bulls are hopefully going to go sire some of that tasty angus beef that you hear so much about.”

But the economic troubles of the ranching industry hit them, like anybody else.

Last year about this time, the Borrers sold their bulls.

Aaron Borrer: “A year ago, we were wondering, is this the start of another great depression? And so we had our bull sale, because that’s when we always planned to have it. And nobody knew what they should pay for bulls this year, because they didn’t even know if they would be in business next year. We’re still in business. Prices were down, and I’m sure prices will be down this year too.”

Other cattle operations have seen the same economics: land becomes more valuable as real estate than as ranches.

Glen Hudspeth: “When they start to build seven-figure homes within sight of ya, the handwriting’s on the wall for a cow deal.”

Glen Hudspeth used to run his ranch near Prineville – until the neighborhood changed.

He now raises his cows outside Burns, in Harney County.

Even after the move, low prices make him think about getting out of the business altogether.

Glen Hudspeth: “I understand we’re in a global economy. We eat vegetables from all over the world, we eat fruit from all over the world, anytime of the year. But there’s a whole generation of people out there, I believe, that this stuff just comes through the store.”

Shannon Neibergs is an agricultural economist at Washington State University.

He says Americans spend less on food than any other country.

That can be good for the pocketbook of the average American family.

Shannon Neibergs: “But the farm producers are losing money. And the only way to change that, really, is for consumers to pay a larger percentage of their budget towards food.”

And it's not just beef.

Low milk prices have led hundreds of dairy farmers to take advantage of industry-funded “dairy buyouts” – sending their milk cows to the slaughterhouse.

Like any other economic market, when the supply of beef and dairy products eventually drops, the price will go up.

Neibergs says a few lean years are coming when you’ll get sticker shock.

Shannon Neibergs: “I tell everybody who’ll listen to me, you better fill your freezer with steaks.” 

Back at the Nine Peaks Ranch in Terrebonne, the Borrers say ranchers have one thing on their side. Economics 101: the law of supply and demand.

Rebecca and Aaron Borrer: “The supply for hamburger, is going to go down – and the price for the cows is going to go up. That’s going to be a benefit to our pocketbook./But that will be hard on consumers./Yes, that will be hard on consumers. Both with dairy and beef, I think.”

So, it won't be too long before American consumers spend more of their income in the meat aisle – whether they like it, or not.