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Nebraska beef processing plant closure raises concerns for cattle market

A livestock economist says the recent closure of a beef processing facility in Nebraska will likely create more volatility in the cattle industry.

Kenny Burdine with the University of Kentucky says the market has been responding negatively to any news recently. “It goes back to the broad statement of lowering beef prices on October 16, then discussion on Argentinian and Brazilian imports, imports of live cattle from Mexico and now this plant closing. It seems like to me that we’ve kind of priced it all in.”  

He says a study done post-COVID-19 showed that cattle prices are affected by a reduction in slaughter capacity. “The impact is clear. As you lose this capacity and shackle space, it negatively impacts fed-cattle prices. There is no way to spin that. It will trickle its way down the system.”

Late last week, Tyson Foods announced it is closing its Lexington plant, which has a capacity of about 5,000 head per day. Burdine tells Brownfield, “There’s no way to positively spin the loss of a packing plant, certainly one of that size. That doesn’t necessarily mean that we’re going to see that big of a drop in slaughter. They reference increasing slaughter in other facilities. I’m sure some of that will occur.”

The company announced that the plant would close in mid-January in an effort to streamline its business plan.

Burdine made his comments on the latest edition of Brownfield’s Weekly Livestock Market Update with Meghan Grebner.