Tyson Fire a Boon to other Beef Processors

A recent fire at a large Kansas beef processor has boosted margins for other processors. The Tyson Foods facility in Holcomb, Kansas, represents about five percent of the U.S. daily slaughter, or roughly 6,000 head of cattle, but the fire has closed the facility indefinitely as Tyson makes repairs.

Reuters reports the fire spiked margins for other packers, such as Tyson, Cargill and JBS USA to $344 per head of cattle slaughtered, up from $153 the week before the fire. In order to compensate for the loss of capacity at Holcomb, NCBA says major packing plants in Texas, Kansas, Colorado, Nebraska, and Iowa would need to slaughter 8.2 percent more cattle per week, or run 3.3 more hours per week.

The National Cattlemen’s Beef Association responded last week sending letters to federal watchdogs and agencies urging them to assist the market and closely monitor sales. USDA Undersecretary Greg Ibach said, “As the cattle industry adjusts, USDA stands ready to assist our customers however we can.”