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Tyson plant closures raise concerns over cattle market competition
The cattle industry continues to digest the news that Tyson has shuttered additional beef processing plants.
Illinois Beef Association Executive Vice President Josh St. Peters says the abrupt closure of Tyson’s Joslin, Illinois facility is problematic. “When they closed facilities in Nebraska, they were given a couple months notice. When they closed facilities in Texas, they were given a couple months notice so the market could absorb that news and so that farmers had an opportunity to work with other processors and packers in the supply chain to find a place to move those finished animals.”
He tells Brownfield the longer the animals remain on feed without an end destination for processing, the greater the impact on producer profitability. “We’re seeing the cash market erode in the countryside. And so every day that we still have these animals on feed is one more day that they’re worth less money than what they were yesterday, and so it’s a compounding effect for our family farmers.”
In our latest Weekly Livestock Market Update, ag economist Charley Martinez, director of the King Ranch Institute for Ranch Management, said this could result in decreased competition for cattle. “If we have less packer competition that could equate to lower demand and lower pricing. We got to remember pricing is a function of supply and demand, right? So if we have lower demand, how much, you know, what happens on the supply side that will impact what we ultimately see in those pricing.”
And, he says, “If we think about this just from a holistic standpoint, the announcement is another sign that packers expect the cattle cycle to remain tight and not only the rest of this year, but probably next year. The USDA report, the WASDE report indicating lower production.”
Cash cattle business was under significant pressure last week following the announcement that Tyson was closing its Joslin, Illinois and Eagle Mountain, Utah plants, and intends to sell its plant in Pasco, Washington.
How will this affect cattle Farmers in the east of Illinois. I have friends who are cattle farmers in Iroquois and Kankakee County. I know of half a dozen butchers/Lockers In the area but they wont be able to handle 1000’s of head of cattle. maybe hundreds but not thousands