It’s been noted that after the recent fire at Tyson Foods facility in Holcomb, Kansas, the beef processor has boosted margins for other processors. The Tyson Foods facility represents about five percent of the U.S. daily slaughter, or roughly 6,000 head of cattle. The fire did cause the facility to close until repairs are made. But according to Reuters, the fire spiked margins for packers like Tyson, Cargill and JBS USA.
So the National Cattlemen’s Beef Association (NCBA) sent letters to federal watchdogs and agencies urging them to assist the market and closely monitor sales. 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.
Today in the wake of this, U.S. Secretary of Agriculture Sonny Perdue issued this statement regarding the beef processing facility in Holcomb, Kan.:
“As part of our continued efforts to monitor the impact of the fire at the beef processing facility in Holcomb, Kan., I have directed USDA’s Packers and Stockyards Division to launch an investigation into recent beef pricing margins to determine if there is any evidence of price manipulation, collusion, restrictions of competition or other unfair practices. If any unfair practices are detected, we will take quick enforcement action. USDA remains in close communication with plant management and other stakeholders to understand the fire’s impact to industry.
I have spent this summer visiting with cattle ranchers across the country, and I know this is a difficult time for the industry as a whole. USDA is committed to ensuring support is available to ranchers who work hard to the feed the United States and the world.”
NCBA President Jennifer Houston issued a statement regarding Secretary Perdue’s call for an investigation into cattle markets:
“Today’s announcement by Secretary of Agriculture Sonny Perdue demonstrates the government’s understanding of the extreme strain placed on the cattle industry by the plant fire in Holcomb, Kansas.
“We encourage USDA to look at all aspects of the beef supply chain and to utilize internal and external expertise in this investigation. We believe it adds transparency that will help build confidence in the markets among cattlemen and women.”