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Part 3: The Gamble

Why would someone create a ghost herd? Behind Cody Easterday’s swindle was an even-bigger gambling habit on the futures market. That vice may have changed the price of American beef slapping down on your kitchen table. We also look at how all farmin’ is a gamble.

It started as an American success story. The Easterday family took a couple hundred acres of farmland in southeast Washington and grew it into a farming and ranching empire worth millions. Then, it all came crashing down.

Ghost Herd tells the story of Cody Easterday, the man at the center of one of the largest cattle swindles in U.S. history. Easterday invented a “ghost herd” of 265,000 cattle that only existed on paper … and swindled companies including an agriculture giant to the tune of $244 million dollars. Correspondent Anna King has spent two years following the fallout of the crime and its impact on a tight-knit rural community.

Ghost Herd is a story of family and fraud, but also a story about the value of dirt and the shifting powers in the American West.

Listen to all episodes of Ghost Herd, and see behind-the-scenes extras at Or search for Ghost Herd in your podcast app.

Ghost Herd is a joint production of KUOW Puget Sound Public Radio and Northwest Public Broadcasting, both members of the NPR Network.

caption: Tyson Fresh Meats is shown on Friday, August 12, 2022, in Wallula.
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Tyson Fresh Meats is shown on Friday, August 12, 2022, in Wallula.
Credit: Megan Farmer

Episode 3: The Gamble


Alan Schreiber: alright, let's go have a little walk.

Anna: Okay.

Alan Schreiber: This is later planted cauliflower. This is fennel.

Anna King narration: I'm out with Alan Schreiber on his Eltopia farm. It's about 10 miles south of Basin City. It's a flat place here, beat on by unrelenting sun. Irrigation sprinklers thwak, thwak in a constant rhythm fighting the rays. It's here, that Alan grows more than 300 different varieties of lush crops. That includes: asparagus, 15 kinds of melons, eggplant, okra ...

Alan Schreiber: broccoli cucumber. And I said, this is in farmer's market. This is all organic. These are peppers here.

Anna King narration: People take a lot of pride in what they grow in the Columbia Basin. And Alan watched as Cody Easterday grew his farm and ranching empire. He's sometimes worked with the Easterday family. And Alan told me that Easterday was a top-rate brandname. Their steer head brand was emblazoned on fleets of semi-trucks, iconic.

Alan Schreiber: You know, you ask if there, you know, if I knew anything about, you know, any, you know, history of, uh, you know, suspicious behavior in their business dealings, it's like, no, not at all.

Anna King narration: Alan told me if there were any negative feelings towards Cody or the Easterdays, it would have been a grudging envy of their success. Jealousy, over what they had built up.

Alan Schreiber: I think they were widely and just widely considered to be exceptional farmers.

Anna King narration: So why risk it all? Why did Cody Easterday risk his exceptional operation and the family reputation? Why make up a ghost cattle scheme? One thing is very clear, Cody racked up hundreds-of-millions-of-dollars of debt.

Alan Schreiber: I think he got, he got into trouble with cattle futures and then had to do things to, you know, cover up his losses.

Anna King narration: They were kind of flying close to the sun, maybe.

Alan Schreiber: Um, no Cody was, Cody was not them. You know, other family members weren't active participants in, in this. Cody was a bit of a Icarus that flew too close to the sun.

Anna King narration: Sun. Water. Earth. Things you can't control. Farmers gamble everyday to make a living off the land. This is the story about the risks they face. And what they do to survive. And how Cody Easterday tried to game the system. It's a yarn about big risks -- and even bigger losses.

This is Ghost Herd. I'm Anna King.

Anna: Yeah. You know, I wouldn't mind a cup of coffee, just a, just a little, just a little, uh, just a little shot.

Anna King narration: I'm sitting at the kitchen table of Olivia Grassl and her husband Stacy Kniveton. A blue-dotted tablecloth with sunflowers spreads out under our elbows.

Stacy Kniveton: Do you like cream in it, sugar?

Anna: Uh, no, just a, just black and hardy would be fine. Good Norwegian farmer.

Anna King narration: Olivia and Stacy live in a well-loved farmhouse. It's more than 100 years old. They bought this spread back in 2006, from an old farmer getting out.

It's 13-hundred acres of dryland and irrigated ranch north of Pasco, in unincorporated Franklin County. Here, they farm corn, wheat and timothy. Some beans, sunflowers, peas and alfalfa hay.

People out here say all farming is risky. Whether it's a family farm like here with Stacy and Olivia. Or a massive operation like on the scale of the Easterdays. They all face the same challenges -- like weather and hungry bugs.

So, everyday is a big gamble.

They have two children - Adrian, 15, who was slow to get going this morning. And Emmett, 12, who gave our photographer a big tour of the big farm outside. Both the boy and girl are expert cloggers. They took a class with their mother, Olivia. And after their mom asks a couple times, they slam on their shoes, right outside the kitchen door.

So with a young family, Olivia and Stacy have a lot riding on a profitable season.

And timing is everything when it comes to farming. When to plant, when to harvest ... getting fresh produce to a buyer on time can be a tricky balance.

Olivia Grassl: Their shelf life of, of it is you've gotta move it. That's when they need it.

And if you don't, they're gonna find somewhere else to get it, which means you've gotta figure out what to do with what they said they can't take anymore. So, you talk about risk. That's always, that's always the risk.

Stacy Kniveton: There's so many things outta your hand,

Anna King narration: so in order to reduce the chances of failing they become excellent planners. They look at the fertilizer they use, how they work the ground, even hiring on consultants for stuff like pests.

Stacy Kniveton: But all these cogs gotta fit and and the wheels gotta go through it. And one cog gets broken it messes up the plans.

Anna King narration: One time in 2014, they had a really great crop of potatoes. They sold them to an overseas buyers.

But at ports all along the entire West Coast the longshoreman were threatening to strike. The work slowdown lasted about a year. Ships were backed up. There was nothing Olivia or Stacy could do about it.

Stacy Kniveton: we couldn't get 'em shipped and had had some ro rot in the ocean cuz of the extra time in transport.

Anna King narration: Their special variety of fresh potatoes -- that were supposed to be made into potato chips -- just sat in a shipping container for too long. The load rotted. Just a nasty pile of bad potatoes. Olivia and Stacy lost the majority of their top-money crop.

Stacy Kniveton: just felt responsible. Cuz what, what did we have five employees at the time?

Olivia Grassl: Mm-hmm

Stacy Kniveton: um, you just feel like you're letting so many people down. It's not it's. The money part's a big deal too, but then you just feel like you're letting

Olivia Grassl: yeah. Everybody else down telling them we can't, we can't pay you.

That makes you just feel, wow, we failed, we failed a lot of people and we went back on our word and, and I'm very honest person and that God, that just rubbed me but bad. That just, oh,

Anna: what, why did it, I mean, like, I, I hate to belabor the point but like, why was that so hard?

Olivia Grassl: Um, it's it's about trust and it's about this. Your integrity is at stake, and yeah, I can't. Yeah. Anyway.


I didn't like that year.

I didn't like that year.

Anna King narration: So when things went sideways, Olivia needed to scramble and find some more stable ways to support their family.

Olivia Grassl: that's when I went and got a job for the school district. Um, just to, to feel like I was helping work through this somehow, whether it be just getting, uh, having another source of income to start coming in, to keep myself busy

Anna King narration: This one bad-potato deal nearly took them down.There is one way that farmers and ranchers try to hedge against these farm-ending kinds of losses. It's known as the futures market. It's a bit tricky, but stick with me here. It's important to understand how the futures market works to understand how Cody Easterday got himself into so much trouble.

So let's say you are a farmer, and you're about to plant a field of corn. The price for corn when you drop your seeds in the ground is four-dollars-and-50-cents a pound. And you've got to buy fertilizer, diesel to plow up the ground and hire on labor. But you are worried that when you go to sell that corn in 5 months, the price will drop lower. Meaning you'd miss out on a bunch of money.

So to protect yourself from that, you'd buy what's called a "contract" on the futures market. The futures market is sort of like the stock market -- only with food.

Eric Belasco: They would, they would enter into those contracts cuz they worried about prices going down.

Anna King narration: That's Eric Belasco. He's a professor of agricultural economics at Montana State University.

So you are now ready to sell your grain. You've got tall stands of beautiful yellow corn, all ready to harvest ... but the price for corn is now only four-dollars-and-twenty-cents a pound, meaning you won't get four-dollars-and-fifty-cents for it like you expected.

Eric Belasco: They take the hit when they go to sell, right. They're selling for 30 cents less.

Anna King narration: But you have that original futures contract at four-dollars and-fifty-cents a pound so you still get that higher market price.

Eric Belasco: And so, you know, that futures contract gain can then offset the losses when the, when the rancher goes to sell on the open market.

Anna King narration: It's a basic risk management tool. You can use it for beef, corn, wheat, soybeans, pork belly, coffee -- even orange juice concentrate.

If used properly, farmers don't really win big, but you don't lose big either. The futures market is sort of like another way they have to insure their operations harvest-to-harvest.

Cody's wife Debby wrote in court documents that feeding cattle is an art. Sometimes you do everything right but you can still end up short.

Cattle producers don't have the luxury of setting their own prices. Tyson and a few other mega corporations that control the flow of meat to the world market make the prices. So ranchers are price takers, not makers.

So ranchers have to take the price at the moment the cattle are fat -- even if they're losing money. What can help? The futures market: It's a way to protect their investment from the time a calf is small 'til it's ready for slaughter.

Cody regularly traded commodities on the market to hedge the corn and other crops he was growing. Federal prosecutors described his commodity trading in the early days as "disciplined."

A few years after building up his feed lot business, the cattle market took a downturn. Cody was facing big loses. And Debby says he turned to the futures market to stop the bleed.

Cody started making these trades with a broker over the phone. He also had his father Gale to help guide him. He would study the market and talk with industry professionals to make informed decisions on the trades.

But there is also another way to use the futures market. And slowly, Cody started to take bigger and bigger risks.

Eric Belasco: There is a gray area between risk management and, um, and speculation

Anna King narration: Coming up after the break, Cody puts it all on the line and gambles with his farming empire.


Anna King narration: As Cody was making these bigger and bigger bets on the futures market, he found an easier way to do that during all hours of the day. Cody got a smartphone app. He could do trades with just the touch of his screen. He didn't need a broker. And being out on his own, he started speculating more heavily.

Speculation means a person invests money hoping for a big positive outcome, but there's a real risk of loss.

People who speculate on the futures market aren't necessarily farmers themselves. They may not even want to own any actual grain or beef. But they are people just looking to make money off the contracts. They try to buy futures contracts low and then sell them when they are high and cash out the difference.

Pete Smith: It's pretty obvious that this guy he did do speculation..

Anna King narration: This is Pete Smith. And that guy he is talking about is, of course, Cody. Pete is a long time investment broker specializing in the futures market.

Pete Smith: I've been a licensed futures broker since 1979. So I've been around the block.

Anna King narration: We know Cody would make big speculative moves on the futures market. I mean really big moves. But his actions went beyond just speculation. He was trying to manipulate the entire U.S. beef market -- all in his favor.

In 2013, Cody started placing large orders in the beef futures market before the opening bell for trading that day. These orders were well above what the market rate for beef was at the time.

Pete Smith: And when you do that, it shows up on these electronic screens all over the world. So anybody who's watching cattle prices would see that a bid well above what any previous bid had been in the marketplace

Anna King narration: The beef futures market is very thin -- meaning it doesn't take much to manipulate the price. So placing an order like this would skyrocket the price of beef.

But then 30 seconds or so before the opening bell, Cody would cancel that order. So, he didn't have to pay. And that's when Cody would sell his cattle. And he would take advantage of that higher price.

Pete Smith: Well, that's obviously being deceptive because he apparently really had no intention of having those orders filled in the first place. And that's strictly against the rules

Anna King narration: In fact, Cody was fined by the Chicago Mercantile Exchange Business Conduct Committee for this move in 2015. And another couple years later, in 2019. He was fined a total of 50-thousand-dollars. A little sting for Cody.

Pete Smith: just the fact that he would do that kind of thing implies to me, there's no proof here, but implies to me that that kind of a person is likely to be doing other hanky panky too.

Anna King narration: Court docs from the prosecution say Cody 'grew obsessed with' placing bets on his app.

His wife describes finding Cody at all times of the day on his phone trading. She says she would wake up in the middle of the night. Sometimes his phone would make a slot machine sound -- or a crashing glass sound – indicating he’d made a gain or loss.

But he started racking up big losses with all this speculation.

The first year he recorded losses was 2011. By his own account he lost 14 million that year. In 2014, he lost $20 million.

Once Cody Easterday kept losing more and more, he appeared to up the ante.

In 2018, Cody lost nearly 59-million-dollars. But he kept doubling down.

In 2019, he lost $30 million. In 2020, he lost another $34 million.

Pete Smith: my guess is that a lot of these losses were indeed speculative losses where they had nothing to do with actually hedging actual cattle,

Anna King narration: In other words ... Cody wasn't betting on real cattle but the losses were real. But still, when it came to speculating ... Cody wasn't that successful. He kept on losing year after year. Eric Belasco says this isn't what you generally see in these markets.

Eric Belasco: It's not that easy to win and it's really not that easy to like, lose that, that frequently either.

Anna King narration: Eric told me that if Cody had just flipped a coin, he would have done it better.

Eric Belasco: You know, there are years where you're gonna see big, positive gains, years where you're gonna see big negative gains. Um, but really you wouldn't expect to see kind of a consistent losing or a consistent winning of the market. Um, at least that's not what I've observed.

Anna King narration: In fact, Eric even has his college students practice by placing real money on the futures market. And he says, they even do better than Cody.

Eric Belasco: students who come up with ideas of how to speculate and usually they're right about half the time.

Anna King narration: In this case, Cody was right nearly none of the time. We can't say why Cody lost so big for so many years in a row. Bad luck?

His wife says Cody's problem with trading started to cause problems in their marriage.

Cody's wife says his behavior around trading went on for some time. Cody grew more irritable. He wouldn't go anywhere with the family.

In a letter to the court she wrote: "I became concerned our marriage was failing he didn't want to be around me or the kids. I would drag him to things, and he would complain that no one cared if he was there. It was a confusing time, asking questions ended in a fight or a calm explanation of how he was managing it, and everything was fine. I complained to friends and confidants and was usually told Cody knows what he is doing, he's fine."

But defense documents say Cody was spiraling 'out of control.' He seemed to be determined to keep on making those big moves.

Anna: when you think about Cody, do you feel like he had a gambling problem?

Eric Belasco: You know, I, I don't know. It's hard for me to tell, um, maybe, um, you know, had, had perceived losses and is trying to win all those losses back with maybe one big bet. Maybe the bets get bigger and bigger over time. Um, I mean that, that's definitely a, a psychological feature.

Anna King narration: Well in fact, we know that he did. In court documents we learned that Cody claims he has a 'severe gambling disorder'. His therapist wrote that Cody's personality is: intense, with ambition and a willingness to take risks. And that he has a propensity for boredom when not stimulated.

In total, Cody lost more than 200-million-dollars on the futures market.

Cody's defense says he started his ghost herd scheme slowly. He needed a way to pay for all these losses on the futures market.

Alan Schreiber says Cody's farming operation paid for itself ...

Alan Schreiber: you know, the amount of money he got, um, the amount of money he stole, I don't think really, uh, supported the farm. It paid off these debts that he had.

Anna King narration: His therapist said that, "he found himself chasing the losses, and lying to himself that it would be okay to borrow from Tyson Foods."

Borrowing, or ya know, stealing from Tyson -- as the prosecution puts it.

We reached out to Cody many times. We tried to talk to him. Over several months: We sent letters. Texted. Emailed. I even took my producer Matt, and our photographer, along for a letter drop on Cody's front porch. But we never heard back from him.

Back on the farm with Stacy and Olivia, their palomino-coated dog named D-O-G seems a bit suspicious of my microphone.

Stacy Kniveton: She just showed up one day and, and I don't know, we're suckers for puppies so she stayed

Anna King narration: Stacy and Olivia don't use the futures market to manage their risk. Not all farmers do. They prefer to manage things by not taking too many risks. And Stacy carefully manages the mix of crops they grow -- so if one crop doesn't do well, then hopefully, another one will be profitable. Farming is still a gamble. They're just hoping they'll come out on top for their family.

Stacy Kniveton: I was reading an article about Warren Buffet and he just says, do what you're good at and may, maybe I'm not gonna make as much money as Warren Buffet, but that this is what I'm good at.

So I, I I stick with it. So, um,

Anna: Why do you stick with it, Olivia?

Olivia Grassl: Cause I married a farmer.

Anna King narration: On that bad potato year, Olivia and Stacy had to put a second mortgage on the farm to pay the debt. But they're working toward wiping it clean for their kids, Adrian and Emmett. They're trying to pay it back.

Olivia says so many people want the easy solution. They're looking to make money fast. They want it now.

Olivia Grassl: They wanted it yesterday. Um, and that impatience, it's, you can feel it everywhere you're with people. It's I'm me first. I want it now, but out here, you're kind of, um, at the mercy of the weather and nature and time, because growing stuff just takes time. And I think it feels like you have a lot more time when you're out here.

Anna King narration: She says life goes by fast, but at least out here you feel like you get a bit more of it than everyone else rushing around. And in a way, Olivia and Stacy are a bit of a rural allegory. They're good farmers. Just doin' what they can to stay afloat. Earning a good reputation through sweat. Smarts. And honesty. They didn't steal to balance the books.

The books, that's the only place Cody's ghost cattle lived. Penned in with fake invoices, and paperwork. Now, those mythic beasts are about to be discovered. He might have gotten away with it for longer -- if it weren't for something that none of us could avoid ... COVID.

Andrea Coles-Bjerre: it, it really, it really does seem like a Greek tragedy or a Shakespearean tragedy.

Anna King narration: The Easterday empire is about to crash.

This is Ghost Herd. I'm Anna King.


Anna King narration: Ghost Herd is a joint production of KUOW Puget Sound Public Radio and Northwest Public Broadcasting, both members of the NPR Network, a coalition of public media podcast makers. To support our work, contribute to KUOW, NWPB or your local NPR station … and tell a friend or two about this podcast. It helps.

Ghost Herd is produced by Matt Martin, and me, Anna King. Whitney Henry-Lester is our project manager.

Jim Gates is our editor.

Fact Checking by Lauren Vespoli

Cultural edit by Jiselle Halfmoon

Our logo artwork is designed by Heather Willoughby.

Original music written and performed by James Dean Kindle

Recorded by Addison Schulberg

With additional musicians Roger Conley, Andy Steel and Adam Lange

I'm your host Anna King.

If you have thoughts or questions about Ghost Herd, we’re listening. Get in touch at

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