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Tyson Fire Boosting Beef Processor Margins

Tyson Fire Boosting Beef Processor Margins

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.

The fire has closed the facility indefinitely as Tyson makes repairs. Reuters says the fire spiked margins for packers, such as Tyson, Cargill and JBS USA to $344 per head of cattle slaughtered, up from $153 the week before the fire. 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.

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. Department of Agriculture undersecretary Greg Ibach says that “as the cattle industry adjusts, USDA stands ready to assist our customers however we can.”

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