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Beef processing shutdowns threaten margins in Eastern Corn Belt

A dairy market analyst says recent closures of beef processing plants are pressuring producer profitability.

American Dairy Coalition’s Sherry Bunting tells Brownfield producers are going to have to pay more to transport their animals.

“That’s going to cost roughly $80 to $100 per head, which, depending on how those feeders were bought at very high prices, is going to be a big chunk of their margin,” she says.

Bunting says the JBS Souderton facility in Pennsylvania stopped accepting animals the same week Tyson Foods ended operations at their Joslin, Illinois plant, putting further constraints on where producers in the Eastern Corn Belt can take their livestock to be slaughtered.

“Are we going to be trucking cattle west and trucking beef east to then be further processed?” she questions. “Are we going to be using a lot more imported beef to get that price down and that margin up for packers? There’s just a lot of swirling questions right now.”

The closures eliminate about a third of slaughter processing capacity in the East Corn Belt.

Bunting says she’s also concerned about where JBS will be sourcing for the Pennsylvania plant once it’s converted to a value-added and case-ready facility.

Ohio Cattlemen’s Association President Lindsey Hall says the organization is disappointed in the closures because it decreases market competitiveness. She says for producers to rebuild their herds, they need to have confidence that there will be competitive and accessible markets for them to grow.