Packer

DOJ, USDA Ramp Up Antitrust Investigation Into "Big 4" Beef Packers

Fri, 08 May 2026 18:34:40 GMT

The Department of Justice and U.S. Department of Agriculture are intensifying scrutiny of concentration and pricing practices across the meat industry, announcing this week that federal investigators are ramping up a criminal antitrust investigation into the nation’s four largest beef packers.

During a joint press conference Monday at DOJ headquarters, Acting Attorney General Todd Blanche framed the effort as part of a broader push to address competition issues in agriculture and food pricing.

“Today we are here to talk about our progress here at the Justice Department to hold meat packers accountable,” Blanche says.

Federal officials allege price-fixing and collusion may have contributed to higher meat prices for consumers, while also limiting competition within the cattle industry.

“We prioritized investigating potential antitrust violations in U.S. cattle and beef markets,” Blanche says. “In the beef industry, the Big Four processors control over 85% of the beef processing market. Two of the Big Four are primarily foreign-owned.”

The “Big Four” — referenced during the press conference — are JBS, Cargill, Tyson and National Beef. The administration argues the current structure of the meat industry allows competitors to exchange competitively sensitive information across the protein sector — practices DOJ says it is now investigating.

DOJ Encourages Whistleblowers to Come Forward

Blanche also encourages whistleblowers within the meatpacking industry to provide information to federal investigators. DOJ says individuals who provide information leading to antitrust convictions or major enforcement actions could qualify for financial rewards.

“The idea of whistleblowers of people coming forward with information they have is one of the best and most efficient ways that we can solve antitrust violations criminally or otherwise,” he says. “And so we just want to make sure people realize that people in this industry realize that we’re putting money where our mouth is. We’re not asking you to come forward and then see what happens. We’re saying if you come forward and if your information results in a finding, in a conviction, and the amount of money is over a million dollars, which in this industry is not a very high bar, that you stand to recover up to 30%. And so we have to incentivize people to make a very difficult choice and come forward with information if they had it.”

R-CALF USA Applauds Investigation

R-CALF USA CEO Bill Bullard says the biggest takeaway from Monday’s announcement is that DOJ is actively seeking public assistance through its antitrust whistleblower program.

“The biggest takeaway was that the Department of Justice is reaching out to the public seeking help through DOJ’s antitrust whistleblower program, to find out what the public knows
about these anticompetitive practices,” Bullard says.

Bullard says R-CALF USA has spent years warning policymakers about growing concentration in the cattle industry.

“We’ve been calling attention and warning that this is a threat to our national security, our economy, and particularly to our food safety here and food security in the United States,” Bullard says.

Rollins Links Herd Decline to Regulatory Pressure

Agriculture Secretary Brooke Rollins also focused heavily on the shrinking U.S. cattle herd and declining number of ranchers during Monday’s event.

“In the past decade alone, we’ve lost over 17% of our cattle ranchers,” Rollins says. “More than 100,000 ranches across this country are no more.”

“The low herd size inherited by the Trump administration can be attributed to a variety of factors,” she says. “The biggest one, at least from our perspective, is the radical left’s ongoing assault against ranching as a way of life.”

Today, just four companies — JBS, Cargill, Tyson Foods, and National Beef — control roughly 85% of the cattle processing market. That level of concentration has surged from just 25% in 1977 to 71% by 1992, and now to an astonishing 85%.

Together, these companies operate through… pic.twitter.com/s4naYFcjt7
— Secretary Brooke Rollins (@SecRollins) May 4, 2026

Rollins argues drought alone is not responsible for cattle liquidation.

“For years, they used climate alarmism to wage a war on cattle in America,” Rollins says. “And when you pair that with droughts, wildfire, overregulation from previous administrations and volatile markets, this is how we have ended up here today.”

The administration also outlined several policy initiatives it says are designed to support cattle producers, including:

Opening more federal land for grazing
Implementing new “Product of USA” labeling rules
Supporting small processors through a grading pilot program
Updating dietary guidelines to emphasize the role of meat in the American diet

Rollins says additional announcements are expected later this week.

Agri Stats Settlement Targets Information Sharing

The DOJ’s broader push against anticompetitive behavior escalated Thursday when the department announced a proposed settlement with Agri Stats .

Federal officials accuse the company of helping major meat processors share confidential pricing and production data involving chicken, pork and turkey markets for decades.

Under the proposed settlement , Agri Stats would be prohibited from continuing several data-sharing practices DOJ alleges distorted competition and increased prices.

The agreement would also increase market transparency by making more information available to buyers and sellers throughout the supply chain.

Although the Agri Stats case does not involve beef, Senior Counselor for Trade and Manufacturing Peter Navarro referenced the pending settlement during Monday’s press conference.

“This is like the mathematician’s worst nightmare in terms of monopoly behavior,” Navarro says. “Basically, what the companies in this concentrated industry were doing was individually sending in data on everything, consumers, production, everything in between. And what did that computer do? It spit back what the monopoly price should be.”

With the settlement he explains, “Justice Department said no more. That’s not going to happen on our watch and that case I believe is going to be settled well or at trial in a way which not only will take care of that problem but implicate some of the bad actions that we’ve seen by the two American companies Tyson and Cargill and JBS on the Brazilian side along with National Beef.”

1 – The Department of Justice continues to bring affordability to the American people. Today, we announced a historic settlement with Agri Stats, whose business model directly raised the price of chicken, turkey, and pork in local grocery stores across our nation. 🐔🐖⚖️
— Acting AG Todd Blanche (@DAGToddBlanche) May 7, 2026

On X, Blanche says the settlement will create a more level playing field by making Agri Stats reports available to all buyers and sellers and calls it part of the administration’s broader push to fight anticompetitive behavior in the food supply chain.

Rollins also confirms the DOJ antitrust investigation into meatpackers originally announced in November remains ongoing.

“As ranchers face fewer options for selling their animals, the Big Four grow stronger and stronger,” Rollins says. “These companies now have an unprecedented ability to wield market power and influence prices paid for cattle — definitely more so than if we had greater competition.”

Industry Analysts Push Back on Concentration Claims

Not everyone in the cattle industry agrees that concentration itself is evidence of anticompetitive conduct.

John Nalivka, president of Sterling Marketing, says consolidation largely reflects economics and efficiency within the packing sector.

“As a business, you have to continually look to lowering costs,” Nalivka says. “And you can manage costs and you can manage revenue both. But the cost, you can have a direct impact on your cost structure. And one way of doing this, consolidating and gaining greater capacity and economies of scale.”

Nalivka also disputes the administration’s market concentration figures.

(Sterling Marketing Inc.)

“Well, to begin with, it’s not 85% now, it’s something more close to 78%, or even maybe a little bit lower than that when the Greeley strike was on,” he says.
The timing of the investigation is notable as packer profitability remains under pressure.

Nalivka says Sterling Marketing’s profit tracker showed beef packers losing nearly $200 per head at the end of April.

“From 2011 to 2015, we had the same set of circumstances, significant herd liquidation and pulling the numbers down,” Nalivka says. “And with the packing plant, the capacity is driven by — and I generate the numbers based on slaughter capacity — so it’s all about cattle numbers.”

Nalivka says his data shows the market share of the four largest beef packers has declined in 2026, with Tyson Foods’ share decreasing.

(Sterling Marketing Inc.)

According to Nalivka, the four largest beef packers now account for approximately 73% of fed-cattle slaughter capacity, leaving nearly one-quarter of processing capacity outside what the administration refers to as the “Big Four.”

“I have told people who have made these comments about these big bad packers,” Nalivka says. “I’ve said, first of all, I’ll start out with a statement, what would you do if you didn’t have one, a packer? And secondly, if you think it’s easy and you think you know so much about it, go build one.”

Producers Need Packers

Justin Tupper, U.S. Cattlemen’s Association president, says the DOJ action is less a brand-new effort than a continuation of long-running scrutiny. Tupper was a guest on AgriTalk Thursday .

Tupper acknowledges the seriousness of DOJ’s work, saying, “I sure do” believe they’re ramping it up, and called the probe “long-awaited and long-needed.” But he repeatedly warns about unintended consequences for producers if the investigation disrupts slaughter capacity.

“We like to vilify the packers all the time, but there is one truth to it, we need them,” he says, adding that if a major plant closed, it, “would cause more disruption than any good that could come from it.”

His concern is when cattle numbers rebuild, predicting, “When we get back to cattle numbers that they can control us, then they’re going to use that and weaponize that against us.”

Tupper stresses producers are not trying to deny packers a profit. “All we want as cattle producers is a fair shake; we don’t want to be used and abused when the cattle numbers are high.”

He warns the administration must understand “how tight that supply is and how few of places that slaughter them” and avoid “big disruptions.” He calls for thoughtful, balanced solutions developed with “cool heads and a lot of the smart people in the room” so the investigation doesn’t “disrupt the chain.”

Calls for Structural Reform Continue

Bullard says R-CALF USA continues pushing for significant structural reforms in the cattle industry.

“We’re asking them to do one of two things,” Bullard says. “Either break up the packers to provide more competition within the industry, or regulate those packers to ensure that they don’t engage in the antitrust conduct and anti-competitive practices.”

Bullard says the group is also urging the Trump administration to investigate what it describes as a “formula pricing scheme,” where cattle are increasingly sold through contracts instead of negotiated cash markets.

Critics argue those arrangements give major meatpackers greater influence over cattle pricing.

When asked whether the administration is listening to cattle producers’ concerns, Bullard points to Monday’s press conference as evidence of a major shift in Washington.

“Well, clearly it is,” Bullard says. “The press conference that was held talking specifically about the problems associated with beef packer concentration was unprecedented for the past 100 years. We have not seen our policymakers stand up and take a stand against the concentration of the cattle market. And so we’re excited that this administration is focused on this issue, understands that it is a national security issue, understands that as a result of our failure to properly enforce our antitrust laws, we’ve hollowed out rural American communities all across this country.”

Whether the federal investigation ultimately leads to major reforms within the cattle industry remains uncertain. But the debate over market concentration, competition and who controls pricing power in the U.S. cattle market is now squarely at the center of Washington policymaking.

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What Does the JBS Strike Mean to Beef Producers?

Mon, 16 Mar 2026 14:25:47 GMT

Union workers at the JBS packing plant in Greeley, Colo., have gone on strike Monday morning. This is the first walkout at a U.S. beef slaughterhouse since the 1980s.

According to The Colorado Sun and the UFCW Local 7 , union workers were picketing early this morning. The workers are calling for higher wages, safer working conditions and respect on the job .

After months of disrespect and unfair labor practices, the workers at JBS Greeley are done waiting.

The line is drawn. The strike has begun.

UFCW Local 7 members are standing up for dignity, safety, and the contract they deserve. ✊#jbsulpstrike #greeleyco #ufcw7 #unionstrong pic.twitter.com/nBPsazGyF8
— UFCW Local 7 (@UFCW_7) March 16, 2026

According to a union press release , the unfair labor practice (ULP) strike at the JBS-owned Swift Beef plant was set to start at 5:30 a.m. Monday, March 16.

JBS spokesperson Nikki Richardson says, “This morning, many JBS Greeley team members chose to report to work rather than participate in the strike called by UFCW Local 7, and we expect that number to continue increasing in the days ahead. Our team members want stability, they want to support their families, and they deserved the opportunity to vote on the company’s historic offer — an opportunity the union leadership has denied them. We are paying all team members who come to work, and we are operating the facility to the best of our ability this week.”

The union says workers hoped a recent bargaining session would have led to a breakthrough in negotiations with JBS, but instead JBS sent the workers a clear message that the company is putting profits ahead of its people.

“The Union’s member-led bargaining committee has met more than two dozen times with the company in an effort to reach a mutually agreeable contract. JBS is failing to listen to the 99% of its workers who authorized a ULP strike,” the union says in the release. “The Company needs to give them an offer that takes life saving safety equipment seriously, provides wages which meet the rising cost of living in Colorado and ensures rising health care costs do not consume workers’ wages. The Company committed numerous Unfair Labor Practices which are preventing an agreement. The Company continues to threaten to withhold both a proposed bonus and lump-sum pension payment if workers strike. The Company also retaliated against workers who have stood up for their rights and co-workers.”

The union represents 3,800 workers at the plant.

The Greeley plant did not harvest cattle the week of March 9.

“To ensure continuity for our customers and partners, we are temporarily adjusting production across our network as needed,” Richardson explains. “By utilizing available capacity at other JBS facilities, we can maintain supply, protect the long‑term stability of the beef chain and minimize disruption for consumers and retailers. Our priority is to keep product moving while we work toward a resolution in Greeley.”

She summarizes, “We remain focused on supporting our team members, and any employee who reports for their scheduled shift will have work available and will be paid. We will continue scaling operations this week as more team members return.”

Markets Lack Reaction

Live and feeder cattle futures opened higher on Monday morning. Brad Kooima with Kooima Kooima Varilek says there are a couple of reasons why the market ignored the strike and the biggest are the higher equity markets and lower crude oil. However, he says it is also tied to the fact the strike news was already priced into the market.

Don Close, senior animal protein analyst at Terrain Ag, joined Chip Flory on AgriTalk Thursday, summarizing the strike will increase packer leverage and help reduce negative margins.

He says even with Greeley down, the industry still has excess slaughter capacity.

“Even with Greeley, with the limited cattle supply we’re dealing with, we still have excess slaughter capacity,” he stresses. “It’s going to give way more leverage to the packers, but it will help them shore up their negative margins.”

Close adds the biggest headache to the industry will be additional freight and added shrink from the extra haul to a different plant.

Glynn Tonsor, Kansas State University professor of agricultural economics, agrees with Close. “Any disruption in labor availability has largest impacts on producers operating closest to involved plants. In aggregate, I do not expect large fed cattle price impacts as the industry is operating with excess physical capacity, relative to available cattle supplies.”

From an industrywide standpoint, Close downplays the potential disruption to supply.

“From the industry as a whole, the supply of product going out to meet our demand side of the market should be fine,” he says.

John Nalivka, Sterling Marketing Inc. president, says it is hard to predict the impact on the market.

“We have had Tyson’s closure of Lexington [in Nebraska] and a shift taken off the Amarillo plant [in Texas], tariffs, the current Iran situation and oil back to $100/barrel with little to no impact on the market,” he summarizes. “Supplies are tight and demand is strong. These are the overriding factors impacting this beef market. I would not be comfortable with predicting the impact of an impending strike.”

Hyrum Egbert, Riverbend Meats vice president of strategy, sales, accounting, HR, FSQA, logistics, purchasing and warehousing — who authors the biweekly The Big Bad Beef Packer newsletter, which takes a look at packinghouse truths, trends and tough questions — predicts if Greeley goes dark, even temporarily, the immediate reaction is cattle backup fear.

“A potential strike at JBS Greeley is loud ... but it’s not automatically structural,” he says. “Yes, it’s a big plant. But in 2026, cattle availability is the governor, and packers have already been living in ‘under-utilized capacity’ land for a while.”

Egbert summarizes, “This is likely more of a pricing/psychology event than a true supply collapse ... unless it turns into a long, messy, multi-plant labor domino.”

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Tyson's Lexington Beef Plant Shutters Early: No Shifts Scheduled This Week

Mon, 12 Jan 2026 15:19:05 GMT

In November, Tyson Foods announced plans to permanently close its Lexington processing plant on Jan. 20. The announcement shocked the beef industry and specifically the town of Lexington, Neb.

A University of Nebraska-Lincoln (UNL) analysis estimates the annual statewide economic impact of the closure will be $3.28 billion.

The beef plant, which opened in 1990, was one of the largest in the nation. According to UNL the plant employs approximately 3,200 team members and has the capacity to slaughter 5,000 cattle per day, which equates to about 4.8% of total daily U.S. beef slaughter.

Read more:
What Does Tyson’s Announcement Mean to Beef Producers?

Sources told Farm Journal late last week, Tyson has not scheduled any shifts at the Lexington facility the week of Jan. 16.

Expected Economic Impact

The closure of the beef plant will be one of the biggest shocks in history for the small town Lexington, which is home to about 11,000 people. However, the ripple effect will be felt throughout the Nebraska economy.

According to the UNL analysis, total labor income losses from the closure are projected to be $530.43 million per year across 7,003 jobs. Of those, 3,212 are positions directly eliminated at the plant, with the remainder representing additional jobs that support the workers in other sectors

UNL expects a substantial reduction of tax revenues in the aftermath of the closure. Annual losses in state personal income tax revenue are estimated at $23.2 million. State sales tax revenues are projected to decline by $10.16 million per year, and local sales tax revenues accruing to Dawson County are expected to fall by $2.77 million per year.

Conducting the analysis was Eric Thompson, UNL economics professor, and Elliott Dennis, UNL associate professor livestock marketing and risk management.

“These impacts would be larger if a greater share of cattle processed at the plant were purchased from Nebraska feedlots or if cattle accounted for a larger proportion of total plant costs,” they explain. “Conversely, the estimated impact would be smaller if the total value of beef sold were lower. Tax rates are based on historical tax data and may vary from year to year depending on employee deductions and other factors.”

Shrinking Slaughter Capacity: What's Next in 2026?

Wed, 24 Dec 2025 17:33:42 GMT

The long-feared rightsizing of shackle spaces to more closely match the number of cattle has begun.

“The market’s reaction to the November announcement was a good reminder that market volatility still exists even when the supply and demand fundamentals continue to be positive forces into the start of 2026,” says Dave Weaber, Terrain senior animal protein analyst, in his Q1 2026 Outlook .

In late November, Tyson Foods announced its plan to end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift.

“Terrain estimates the changes will eventually reduce U.S. slaughter capacity by about 6.6%,” Weaber explains. “However, slaughter plant capacity utilization is still nearly 6% behind historical norms, as the number of cattle is still well short of filling available slaughter capacity.”

Weaber predicts this positive shift in operational efficiency will likely encourage plants to fill available capacity and better compete for the available cattle.

“I expect utilization to decline by about 2% during 2026 when two new plants in Nebraska and Missouri complete their startups,” he adds.

A proposed plant in the Panhandle of Texas that would handle 6,000 head per day has the potential to lower utilization rates back to early-2025 levels if completed.

“Even without additional future slaughter capacity, utilization rates will remain low; fed cattle numbers are expected to decline during the next two to three years because of cow-calf producers’ beef cow herd expansion efforts,” Weaber summarizes.

The reduction in current fed slaughter capacity will help the remaining plants run more volume, improving efficiency by spreading fixed and semi-variable costs across more head and pounds of beef. This positive shift in operational efficiency will likely encourage plants to fill available capacity and better compete for the available cattle.

“I expect that in the near and intermediate term, this effect will at least partially offset the shift in market leverage, which currently favors the packer,” Weaber says.

Markets and Beef Prices Remain Resilient

Beyond the near-term impacts to futures traders’ sentiment, the market impacts of the announced closures are fading.

“Calf, feeder cattle and fed cattle cash markets are already recovering and have posted significant rallies,” Weaber says. “Fed cattle supplies for the first half of 2026 are not going to change. The number of cattle placed into feed yards is the number placed and will be the number that gets slaughtered. The location the cattle get processed into beef may change, but overall beef production is mostly set.”

(USDA NASS, Terrain)

He adds: “ Consumer beef demand and spending remain strong and supportive of cattle prices. Presidential and executive branch rhetoric about lowering beef prices has had little to no impact on retail and wholesale beef prices. Tariff reductions on imported lean trimmings from South America are driving volumes, but prices for contracted loads delivering in the first quarter of 2026 are record high, up 20% from a year earlier.”

“I expect the choice cutout to average between $375 per cwt and $385 per cwt and fed cattle prices to average between $234 per cwt and $238 per cwt in Q1.”

— Dave Weaber

Q1 2026 Price Outlook

“I expect available fed cattle supplies during the first quarter of 2026 to be 6% to 7% smaller than the year prior,” Weaber says. “Even with a 2% shift in leverage (fed cattle price to comprehensive cutout) to the packers’ favor, I expect the Choice cutout to average between $375 per cwt and $385 per cwt and fed cattle prices to average between $234 per cwt and $238 per cwt in Q1.”

By early December, light feeder cattle and calf auction prices have recovered much of the losses incurred since late October and appear poised to start 2026 at record levels.

“Changes to the U.S.-Mexico border status remain the greatest known risk for cattle prices,” Weaber stresses.

Further rallies in deferred live cattle futures will drive the balance of the recovery in prices for heavy feeder cattle that make up the CME feeder cattle price index. He explains demand for light cattle to be turned out on wheat pasture and California coastal range has been a key driver for the rally in light cattle.

Biggest Risk Is South of the Border

Changes to the U.S.-Mexico border status remain the greatest known risk for cattle prices.

“The Mexican government has implemented broad cattle movement and import restrictions within the country as well as greater fly control measures in partnership with the USDA,” Weaber says. “Meanwhile, U.S. and Mexican officials have begun inspections of only one border crossing into New Mexico. Additional cases of New World screwworm have been found in Mexico, which I expect to further delay the reopening.”

Active risk management to preserve operation equity should remain a priority.

“If the border were to reopen, cash feeder cattle and calf prices and feeder cattle and live cattle futures would be the first to move down,” Weaber explains. “The magnitude of the impact will depend on the rate-limiting and cost impacts of the protocols that are implemented and the number of backlogged cattle south of the border.”

One Lesson From Plant Closures

“If we’ve learned anything from the market reactions to the plant announcements, it’s that price volatility should be a focus for producers in all segments of the cattle industry,” Weaber says. “Active risk management to preserve operation equity should remain a priority.”

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Navigate Market Volatility with Risk Management Strategies

Beef’s Future: Consumer Demand, Risk Management and the Path to Continued Profitability

What Does Tyson's Announcement Mean to Beef Producers?

Mon, 24 Nov 2025 23:32:27 GMT

Chaos in the cattle market continues as Tyson Foods announced on Friday its plan to end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift. The cattle complex was limit down Monday reacting to the announcement.

The Lexington plant employs nearly 3,200 people and can harvest 4,500 cattle a day, but has been running 3,600 to 3,700 according to John Nalivka of Sterling Marketing. It is one of 11 beef facilities in the company and one of the largest. The transition in Amarillo is expected to reduce daily harvest numbers from 5,500 to 2,700 to 2,800 and impact 1,700 workers. Tyson says the changes will go into effect on Jan. 20, 2026.

Jeff Stolle, Nebraska Cattlemen’s Association director of marketing, predicts the Lexington plant closure will reduce Nebraska cattle harvest capacity by 15%.

“The Tyson plant in Lexington has been a very valuable and consistent piece of our packer processor infrastructure in the state for up against 35 years now, and to lose this amount of harvest capacity on a daily basis is definitely going to be a challenge,” Stolle says.

The announcement is a shock as Stolle says there are significant feedyard expansion projects in the works, and he hopes there’s a future opportunity to bring the Lexington facility online with different ownership.

“Given the feeding infrastructure that is located near the Lexington plant, and the availability of high-quality feeder cattle and feedstuffs, we obviously hope there is some sort of path toward the plant continuing to operate as a harvest facility,” Stolle summarizes.

Don Close, Terrain senior animal protein analyst, explains the announcement comes following a rough year for the meatpacking industry and admits a plant closing has been a possibility for the last 18 months.

“Fed beef packers have been losing an average of $200 per head,” he says. “Those margins have certainly improved over the last two or three weeks, but it has been a tough year, and I don’t know that we’re near the end of this yet.”

Tyson’s announcement says it is shifting production to other plants to increase efficiency. But why close Lexington?

Elliott Dennis, University of Nebraska-Lincoln livestock and meat economist, predicts Tyson targeted its least efficient plant for closure to maximize profitability across its operations, highlighting the importance of operational efficiency in the beef industry.

Other analysts speculate competition from the new Sustainable Beef Plant in North Platte might have played a role.

According to Trey Wasserburger, Sustainable Beef is currently harvesting 1,100 head per day but plans to ramp up to 1,500 by Jan. 1.

Overcapacity Issue

Derrell Peel, Extension livestock marketing specialist from Oklahoma State University, says the Tyson announcement reduces capacity in the industry but does not solve the problem of overcapacity.

“This will reduce industry slaughter capacity by roughly 7,000 to 8,000 head per day,” he explains. “The exact impact will depend on forthcoming details, especially how Tyson will manage a one-shift plant. Depending on the details, the reduction represents roughly 7.5 to 9% of total industry slaughter capacity.”

Peel says Monday to Friday daily fed slaughter thus far in 2025 has averaged 90,529 head per day, down 3.6% from the recent peak (93,931 head per day) in 2022. However, Saturday slaughter has averaged 4,878 head this year, just 13.1% of the 37,137 head per day average in 2022.

For the first 45 weeks of the year, total weekly fed slaughter has averaged 457,524 head compared to 506,793 head per week in 2022, a decrease of 9.7%. The Tyson planned reduction in packing capacity might be nearly (but not quite) enough to balance the decrease in cattle slaughter since the peak in 2022. However, fed slaughter is expected to continue decreasing in 2026 and 2027.

“Excess packing capacity will continue to be an issue for beef packers for the foreseeable future,” Peel summarizes.

Short- and Long-Term Impacts of Lexington Plant Closure

Dennis says the Lexington plant closure will have immediate short-term effects on cattle prices. Drawing parallels to the 2019 Holcomb, Kan., plant fire, he predicts prices potentially falling and taking months to recover.

“Back in 2019, it took us about five to six weeks to find a bottom on the live cattle market,” Dennis says. “From the time we had that announcement of the fire, we ended up going about 12% down from where we were at pre-fire, and it took us almost three, three and a half months to get back to pre-fire prices.”

Dennis says the finished cattle will redistribute to other regional plants and the impact will be more about change in value proposition and logistics for producers than the ability to find a buyer.

Hyrum Egbert, meatpacking industry analyst, explains, “Tyson just changed the math on U.S. beef.”

He predicts the short-term impact will be:

Live cattle and feeders. Nearby futures and regional cash should soften, especially around Lexington/Amarillo as cattle lose a local bidder and get pushed farther to other plants. Expect weaker basis in those draw areas.
Beef cutout/wholesale. He says this is a rationing signal to beef buyers. Even if some volume is picked up elsewhere, the headline is tighter kill space which will lead to bullish cutout as buyers front-load coverage.
Packer margins. Less capacity chasing the same tight cattle supply will equate to better gross margins for packers.
Logistics and spreads Longer hauls for cattle will lead to higher freight, wider regional price dispersion and more noise in cash versus formula debates.

Long-term Egbert summarizes: “This isn’t a Saturday kill adjustment; it’s a permanent trim in hooks. Capacity is being pulled closer to the ‘new normal’ cattle supply, which reduces the odds of prolonged negative packer margins in the next phase of the cycle.”

Likewise, Dennis predicts long-term the closure will reduce cattle prices due to lower processing capacity and less competition. Yet despite disruptions, he says the fundamental demand for beef is historically high, driven by consumer preference and quality improvements, which should help support cattle prices in the long run.

“With tighter U.S. kill space on top of a small herd, imports — especially lean for grind — matter even more,” Egbert adds. “Tariffs, quotas and border policy will have an even stronger influence on spreads and retail prices. This is not likely going to be the last of plant closures. Regional plants are still extremely vulnerable and susceptible to closure.”

What’s Next for Producers and Packers

“I don’t think producers necessarily need to do anything different,” Peel says. “I still think there’s excess capacity in the industry, even with this downsizing, so there will be plenty of demand. I don’t think it changes anything. It doesn’t change the supply fundamentals at all.”

Close agrees with Egberts prediction that this might not be the last plant closure. He says Tyson’s announcement clears the path for other packers to follow suit.

“It’s not out of the realm of possibilities that we see another large plant or some of the smaller regional plants closed before we reach bottom in this cattle supply,” Close says.

Peel says with Tyson’s decision to reduce a shift and not close Amarillo is a positive.

“By only making a one shift adjustment in Amarillo, that tells me that decision was very much just directly a function of availability of cattle, but it also means they have the ability to go right back up to two shifts when the time gets right, as far as cattle availability,” Peel explains. “They just spent a lot of money in Amarillo remodeling and refurbishing that plant, so I don’t think they’re going to walk away from it completely, unless things continue to deteriorate for them in terms of their beef business.”

Dennis reminds producers the importance of managing price risk using available tools (like futures and options) because market volatility is unpredictable. He stresses risk management should be proactive, not reactive.

Close was a guest on AgriTalk Monday discussing the impact of the Tyson announcement as well as other beef industry economic factors today.

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Tyson Foods to Close Lexington, Neb., Beef Plant

Fri, 21 Nov 2025 21:43:35 GMT

Tyson Foods today announced network changes designed to right-size its beef business and position it for long-term success. The company will end operations at its Lexington, Neb., beef facility and convert its Amarillo, Texas, beef facility to a single, full-capacity shift. To meet customer demand, production will be increased at other company beef facilities, optimizing volumes across its network.

The Lexington plant, which operated for 35 years, employs nearly 3,200 people and can slaughter almost 5,000 cattle a day, according to industry estimates. It is one of 11 beef segment facilities in the company and one of the largest. Another 1,700 workers will be impacted in Amarillo.

Tyson Beef Division Faces Losses
In the latest U.S. Security and Exchange Commission report Tyson Foods reported operating loss for the beef division of $1.135 billion for the fiscal year ending September 27, 2025 with adjusted operating losses of $426 million also released by the company. Tyson reported its cattle costs were up $1.575 billion versus a year ago.

For 2026, Tyson projects additional losses in its beef division. In a Nov. 10 news release the company stated that USDA projects domestic beef production will decrease approximately 2% in fiscal 2026 as compared to fiscal 2025. Therefore anticipate adjusted operating loss is estimated between $(600) million to $(400) million in fiscal 2026.

Beef Packing Industry Faces Negative Margins
“As I have commented several times this year, a packer or packers would eventually reduce capacity,” says John Nalivka of Sterling Marketing. “Capacity is critical to the success of any business with the natural economic incentive to increase capacity to gain economies of scale and reduce per unit costs. Sharply reduced cattle numbers became the downside of economies of scale for packers in the face of significant herd liquidation that took the cattle inventory to its lowest numbers since 1951.

Nalivka says the packing industry has been reducing absolute capacity since 2000.

“Fed plants have still been operating at an average of 78% utilization this year compared to the low-to-mid 90% range from 1994-2008,” he adds.

Industry Faces Historically Tight Cattle Supplies
Record fed and feeder cattle prices during 2025 have been a result of a 70 year low in the cattle herd tied to consecutive years of drought in major cattle producing regions of the United States. The supply was recently constricted even further by the closure of the Southern border to Mexican feeder cattle to prevent New World Screwworm (NWS) from entering the U.S. Plus, the 50% increase in tariffs on Brazilian beef in mid-August nearly shut off imports of lean trimmings and grind which are blended into ground beef.

The rebuilding of the U.S. cow herd has also been slower than expected due to a number of factors including the older age of producers, higher interest costs and the desire of cattle producers to pay down debt. That has all attributed to less heifer retention.

Negative Reaction
In a news release from the company, Tyson Foods said it recognizes the impact these decisions have on team members and the communities where we operate. The company said it is committed to supporting its team members through this transition, including helping them apply for open positions at other facilities and providing relocation benefits.

Nebraska Senator Deb Fischer (R), who also serves on the Senate Agriculture Committee, released a statement following the announcement.

“I am extremely disappointed by this news from Tyson today. As the single largest employer in Lexington, Tyson’s announcement will have a devastating impact on a truly wonderful community, the region, and our state. Nebraskans are nothing if not resilient, and Lexington has a robust workforce. I hope their skill and experience will be sought after by other employers.

Senator Deb Fischer (R-NE)

With these changes, Tyson Foods says it is ensuring it will continue to deliver high-quality, affordable and nutritious protein for generations to come.

The plant is scheduled to close on Jan. 20.

What Does Talk of $10 Ground Beef Mean to Producers?

Wed, 19 Nov 2025 20:00:36 GMT

While the core fundamentals of the beef industry remain unchanged, the overall environment has become much more volatile and uncertain in recent weeks.

Omaha Steaks CEO Nate Rempe, in a recent interview on Fox Business’ Mornings with Maria , predicts ground beef prices will reach $10 per pound by the third quarter of 2026.

In response to that prediction, ag economist Glynn Tonsor from Kansas State University reports, according to September Bureau of Labor Statistics (BLS), the national average price for ground beef was $6.32 per pound. He explains while niche markets such as Omaha Steaks could see some products priced at $10, the national average is unlikely to reach that level within the next three years.

Tonsor emphasizes Omaha Steaks serves a distinct customer base, and their prices should not be generalized to represent all U.S. ground beef prices.

Lance Zimmerman, senior animal protein analyst with Rabo AgriFinance, adds: “It’s possible, but that’d be pretty wild. Is it probable? I would say no, based on history.”

He explains his stance also referring to the BLS historic data, although prices spiked radically during the pandemic posting the highest year-over-year increases on record, that event only resulted in a 34% jump, far short of the 54% increase needed to see $10 ground beef by the third quarter of 2026.

What Does All This Beef Chatter Cause?

The beef industry has found itself in national headlines since Sept. 15. The industry has been experiencing chaos in the markets since President Donald Trump made statements regarding the need to lower beef prices as well as his request for the Department of Justice to investigate meatpackers for driving up the price of beef.

“The base fundamentals of the industry have not changed in the last four weeks,” Tonsor says. “The volatility, the noise in the business environment, has definitely elevated.”

Read more about the industry chaos today:
Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

Zimmerman explains while political sound bites and promises to lower food prices draw media attention, they do not directly affect the day-to-day decisions by producers who remain focused on long-term business fundamentals.

“At the end of the day, the average cow-calf producer, stocker operator and feedlot operator, have a business to run, and all of this noise doesn’t change much surrounding their day-to-day business,” Zimmerman summarizes. “The challenge is the president is making this a very regular soundbite, as is the rest of his administration. And, cyclically, there is no quick fix.”

Zimmerman shares his frustration regarding the broader impact of political statements, especially presidential promises to bring down food prices. He explains that, historically, the only way to significantly reduce food costs is to enter a recession. The catch, he argues, is that neither administration nor producers desire such an outcome. This underscores the conflict between policy rhetoric and on-the-ground market drivers.

Tonsor adds media attention and dramatic statements, such as $10 ground beef, often do not accurately represent broad market reality.

“I’m trying to use this as an excuse to educate on why prices are higher; [it’s] not just because cow numbers are down,” Tonsor explains. “When we just jump to the number of cows, we don’t give credit to the demand story that the public wants beef.”

Read more about beef demand:
Consumers Confirm Protein is In: Meat Continues to Have Its Moment on the Plate
How Many Minutes Does a Consumer Have to Work to Buy A Pound of Ground Beef?

One question on the mind of producers and industry stakeholders is if the political and media attention will heighten consumer awareness to beef prices and cause a change in buying behavior.

Tonsor says, so far, there is little impact from these headlines on consumer demand.

“It’s too early to tell if there’s been a consumer demand impact from all the chatter,” he says. “My best guess is little-to-no direct impact.”

Both analysts agree beef prices are fueled by demand. Tonsor notes consumers are willing to pay the retail price of beef today because of their continued demand for taste and protein. He points out if public demand for beef stays strong, prices will remain robust.

“The public still thinks taste is the most important thing when they make a decision,” he summarizes.

Slowing Down Rebuilding

“This uncertainty has wrecked the market potential in Chicago in the short run,” Zimmerman explains. “But the timing of it also couldn’t be worse for the cow-calf producer who’s making those fall retention decisions right now.”

Both analysts agree the heightened uncertainty is making producers more hesitant to invest or expand their herds, which will lead to slower industry investment and herd growth.

Read more about herd rebuilding:
Rebuilding the U.S. Cow Herd: A Calculated Climb

“I think we’re going to slow investment compared to even a month ago, just because those that are anxious or don’t like uncertainty are a little more cautious today than they were a month ago,” Tonsor explains. “Those that are extra uncomfortable with elevated uncertainty, like not knowing what the trade environment might be, it’s going to give them pause. So, they will be less likely to hold back a heifer and expand. They’ll be less likely to modernize the feedyard. They’ll be less likely to do whatever that capital investment was.”

Will Tarriff Reduction Impact Prices?

Late last week, Trump signed an executive order that modifies the scope of the reciprocal tariffs he first announced on April 2. The executive order now exempts several agricultural products from tariffs, including beef.

Zimmerman explains Brazil’s beef processors and beef exporters would have gained the most if the country’s additional tariffs were removed by the U.S. The previous rate was an additional 50% tariff on top of the 26.4% tariff that exists on all imports from countries without a free-trade agreement on beef after the first 65,005 MT each calendar year. However, the Brazil tariffs are structured under two separate practices. Ten percent are reciprocal tariffs, and the additional 40% that came in August are through another process.

“The latest removal of reciprocal tariffs on beef effectively changes Brazil’s country-specific import tax from 50% to 40%,” he explains. “This is not going to significantly change the competitive landscape for global exporters shipping into the U.S. market. It is still incredibly tough for Brazil to compete with Australia, New Zealand and other major lean beef importers in the U.S. market.”

Tonsor adds reducing tariffs could marginally lower beef prices for consumers, but the effect would not be dramatic. He points out the U.S. produces the majority of its own beef (more than 80%), so changes in import tariffs have a limited impact on domestic prices.

He says recent record import months only moved the import share from around 15% to slightly more than 20%. Tonsor expects the net effect of the tariff reduction on beef prices to be fairly small, potentially less than a 5%-to-10% change, and that overall, strong domestic demand will continue to be the main driver of prices.

Challenge to Producers

Tonsor says his advice to producers is to steady the ship.

He encourages a steady approach, suggesting those comfortable with uncertainty should move forward as planned, while others might pause on major decisions. Ultimately, he expects less herd expansion and more caution among producers, even as demand fundamentals continue to provide underlying strength for the industry.

Tonsor says while general industry investment and expansion might slow, producers who move forward despite the uncertainty could be rewarded, especially if fewer others do the same. His overall message is for producers to carefully weigh their risk tolerance and business needs before making significant changes and not to let the current noise distract from their long-term goals.

Despite recent market corrections, Zimmerman says strong demand and cyclical tightness mean profitability remains high for most producers. He shares these six strategies for producers to consider looking forward:

Consider Strategic Heifer Retention. He advises producers to begin or continue retaining heifers, even if only enough to replace natural attrition in the cow herd, as a step toward gradual herd rebuilding in tight supply conditions.
Use Price Protection Tools. He emphasizes the importance of locking in profit floors using risk management tools such as Livestock Risk Protection (LRP) insurance , futures or options contracts, encouraging producers not to wait for the highest prices but to protect profitability when opportunities arise.
Maintain Long-Term Perspective. Despite recent market corrections, he urges producers to keep a long-term view; demand is strong, and rebuilding will be slow, so planning for sustained higher prices is key.
Stay Vigilant and Informed. He recommends producers remain watchful for profit opportunities in the market, be proactive in their strategic decisions and stay informed about both market trends and policy changes.
Be Cautious, Not Reactionary. He suggests not overreacting to political headlines or media narratives, emphasizing that day-to-day operational fundamentals should guide decisions rather than short-term noise.
Prepare for Continued Volatility. He encourages resilience and adaptation strategies as the industry faces persistent uncertainty from trade policy and disease threats such as New World screwworm .

Your Next Read: Did the Administration’s Plan to Lower Beef Prices Wreck the Bull Run in the Cattle Market?

Beef Industry Chaos: Tight Supplies, Strong Consumer Demand and Political Interference

Wed, 12 Nov 2025 20:04:16 GMT

The current state of the cattle market and beef industry has been described as chaotic. “There’s chaos in cattle,” as Chip Flory, AgriTalk host, put it.

The industry turmoil follows recent statements made by President Donald Trump regarding the need to lower beef prices as well as his request for the Department of Justice to immediately begin an investigation into meatpackers for driving up the price of beef.

Derrell Peel, Extension livestock marketing specialist from Oklahoma State University, affirms these are unique times, emphasizing while political factors have always indirectly influenced agriculture, it’s unprecedented for the cattle and beef markets to be at the center of direct political debate.

On a recent AgriTalk segment, Peel points out the inherent biological and production constraints of the cattle industry — particularly the fixed timeline to raise cattle — make quick fixes impossible. Both Flory and Peel stress that no political policy can shorten the cattle production process; any effective supply response requires patience and long-term adjustment.

Packers Under Fire

The concept of industry consolidation and foreign packer ownership has long drawn scrutiny with frequent government investigations. Peel says highly concentrated industries such as beef packing have been targets for skepticism and regulatory attention for over a century, to the point suspicion of packers is almost “a cultural thing” within segments of the industry.

He characterizes the latest call as another attempt to target convenient scapegoats rather than addressing deeper systemic realities of supply and demand.

“The reason we have the industry structure we do is because the economies of size and cost efficiencies are such a powerful economic force,” Peels explains.

He confirms researchers have long studied market power, and while concentration does have a small negative price impact for producers, the efficiency and cost-savings from large-scale firms more than compensate. These benefits, he says, keep cattle prices higher for producers and beef prices lower for consumers than they would be with a less efficient structure.

Dissecting the economics of margin markets Peels explains why price changes in different parts of the beef supply chain — cow-calf, feeders, packers and retailers — don’t move in lockstep. He uses a “bungee cord” analogy to illustrate the complex, dynamic and time-lagged interactions linking cattle prices at the farm with retail beef prices.

“All cattle prices and beef prices are ultimately connected, but they’re not connected with a stick or a chain,” Peel summarizes.” They’re connected with a bungee cord. There’s just an enormous amount of dynamics in this thing.”

Regarding the foreign ownership debate, Peel says there is no evidence foreign ownership alters packer behavior within the U.S. marketplace. He emphasizes foreign firms have made large investments in U.S. facilities and continue to operate them by the same market logic that would govern domestic ownership.

He also points out it is unclear who else would be in a position to make such significant investments if these foreign companies were not involved. This pragmatic view suggests the ownership issue might be less important than is commonly believed, at least concerning everyday operations and market outcomes.

A Lot Hinges on Rebuilding the Cow Herd

In his latest article, “ All Bets are Off ,” Peel says: “The latest edition in the torrent of recent political attentions directed at the cattle and beef industry includes allegations of market manipulation against the beef packing industry. Beef packers are the one segment that has been most negatively impacted in the current market, incurring huge losses due to poor margins and limited cattle supplies.”

(Meat Institute)

Peel reports packers have been losing enormous amounts of money for about the past 18 to 24 months. According to the Meat Institute, packer margins slipped into the red in September 2024. Through the week ending Oct. 4, 2025, packer margins were a negative $126.50 per head, up slightly from a year earlier at a negative $125.65 per head, according to Sterling Profit Tracker. The outlook for the year is a negative $165.96 per head packer margin.

“There’s just simply not enough cattle for them to operate at cost efficient capacities,” Peel explains.

This negative trend was anticipated — the reduced supply of cattle has made it difficult for packing plants to function at cost-efficient capacities, leading to the accumulation of operating losses. Peel points out the combination of low unit margins and insufficient cattle supplies challenges the economic viability of packers, further illustrating the complexity of the current environment.

This decline in inventory is not the result of a single factor but is driven by several years of drought and other market pressures. It is clear high beef and cattle prices are a result of these tight supplies and, according to Peel, these high prices are likely to persist for several years. The industry simply cannot turn around production levels quickly, and it will take time — a matter of years, not months — for conditions to normalize.

“Using logic that only works in the office of a politician, packers are supposedly wielding unacceptable market power while paying record high cattle prices and artificially raising beef prices … but not enough to avoid losing a couple hundred dollars on every animal they process — certainly many millions of dollars,” Peel says. “If beef packers had any significant ability to exercise market power, I am certain that we would not have record high cattle prices and packers would not be losing money.”

Peel suggests the federal government attacks on beef packers are aided and supported by a vocal minority of the cattle industry and a few sympathetic politicians who view packers as a perennial villain and always worthy of attack anytime the opportunity is presented.

“The timing of such attacks this time is particularly puzzling as dismantling the packing industry would certainly jeopardize current record high cattle prices and the best economic returns most producers have ever enjoyed,” Peels says. “I guess some cowboys just can’t stand prosperity.”

R-CALF CEO Bill Bullard says the cattle market is fundamentally broken citing years of an inverse relationship between falling cattle prices and increasing retail beef prices when the only ingredient in beef is cattle. Read more about his perspective.

Patience not Politics

Beef and cattle prices, Peel notes, are historically high, a result of industry-wide low cattle inventory. Rebuilding the nation’s cow herd will be a long, slow process, keeping prices elevated for an extended period. And Peel says there is no definitive evidence producers are saving heifers to start the rebuilding process.

“2025 may prove to be technically the cyclical low, but 2026 is going to be barely bigger, if it is, and no growth in 2026 and probably none in 2027 ... it’s 2028 into 2029 before that turns into increased beef production,” Peel predicts.

He summarizes neither regulatory nor political action will can speed up the rebuilding process. It will take years of concerted effort, market healing and stability before the industry can expect a meaningful rebound in herd numbers and production — a reality that requires patience across the industry.

“There is absolutely nothing anybody can do to make beef prices go down, or cattle prices, other than maybe tear up the industry completely,” Peels says. “And if we tear up the industry, it’ll make cattle prices go down, but it won’t make beef prices go down. It’ll make beef prices go even higher for consumers and the only way to fix this is to give the industry time to rebuild, and that’s going to take two to four years if we ever get started.”

He says a majority of cattle producers understand the beef industry is extremely complex and all segments are critical and essential.

“Though the outcome of current political actions is uncertain, the potential for long-term harm to the industry is substantial,” Peel says. “Anytime politics trumps economics, the strong supply and demand fundamentals that have determined the outlook for the industry to this point become irrelevant. Expectations for prices and production going forward are now completely clouded…therefore… all bets are off.”

Your Next Read: You Be The Judge: The Big Bad Beef Packers Are On Trial

Trump Asks DOJ to Investigate Meatpackers over Beef Prices

Fri, 07 Nov 2025 21:41:18 GMT

President Donald Trump says he wants the Department of Justice to immediately begin an investigation into meatpackers for driving up the price of beef. The directive marks a turnabout from previous statements about U.S. ranchers making good profits and their impact on the price of beef at the grocery store, which the administration has said remains too high.

In a statement on his Truth Social site, the president calls for “An investigation into the meat packing companies who are driving up the price of beef through illicit collusion, price fixing and price manipulation.”

He says American ranchers are being blamed for what is being done by majority-foreign-owned meatpackers.

“[The packers] artificially inflate prices and jeopardize the security of our nation’s food supply,” writes Trump. “Action must be taken immediately to protect consumers, combat illegal monopolies and ensure these corporations are not criminally profiting at the expense of the American people.”

Attorney General Pam Bondi responding to the post saying the DOJ investigation is already underway.

”My Antitrust Division, led by [Abigail Slater, Assistant Attorney General at the Department of Justice Antitrust Division], has taken the lead in partnership with our friend [Ag Secretary Brooke Rollins] at USDA,” she says.

Our investigation is underway! My Antitrust Division led by @AAGSlater has taken the lead in partnership with our friend @SecRollins at @USDA. https://t.co/KP0zlO9RQg
— Attorney General Pamela Bondi (@AGPamBondi) November 7, 2025

Rollins, also responded to Trump’s social post, thanking him for standing up for America’s farmers, ranchers and consumers.

“For far too long, hardworking ranching families have been squeezed by massive foreign-owned meatpacking corporations manipulating prices and driving family operations out of business,” Rollins wrote. “These global monopolies profit while everyday Americans pay more at the grocery store and rural communities struggle to survive.”

Rollins, in her post, calls for transparency and accountability that lead to a fair market for beef producers.

THANK YOU, @POTUS for standing up for America’s farmers, ranchers, and consumers! 🇺🇸

For far too long, hardworking ranching families have been squeezed by massive foreign-owned meatpacking corporations manipulating prices and driving family operations out of business. These… https://t.co/qiftHNtA1q
— Secretary Brooke Rollins (@SecRollins) November 7, 2025

“Thank you, President Trump, for fighting for the heartland, for our farmers and ranchers, and for standing up to the corrupt forces that threaten our food security and American independence,” Rollins said.

According to Reuters , “Ranchers have long complained about consolidation in the packing industry, where Tyson, Cargill, JBS and National Beef Packing Co. together control around 80% of the market.”

Industry Reaction

The Meat Institute released a statement following President Trump’s comments:

“Despite high consumer prices for beef, beef packers have been losing money because the price of cattle is at record highs,” said Meat Institute President and CEO Julie Anna Potts. “For more than a year, beef packers have been operating at a loss due to a tight cattle supply and strong demand.

“The beef industry is heavily regulated, and market transactions are transparent. The government’s own data from USDA confirms that the beef packing sector is experiencing catastrophic losses and experts predict this will continue into 2026.

“U.S. beef processors welcome a fact-based discussion about beef affordability and how best to meet the needs of American consumers, who are the industry’s most important stakeholders.

“Beef packers rely on cattle producers and cattle producers rely on beef packers. The entire beef value chain is strongest when supply is balanced by demand. Beef packers remain committed to ensuring safe, delicious, and nutrient dense beef remains affordable to American families who rely on its nourishment. We welcome the President and his team to visit our members’ beef facilities, both large and small, to witness firsthand the pride, skill, and dedication they bring to their work every single day.”

For more on beef and cattle market conditions go here.

United States Cattlemen’s Association shared their thoughts on social media , “Yes, let’s keep American ranchers out of the crosshairs. But, USCA will continue to state that beef prices in the grocery store are not too high. Prices are a direct reflection of consumer demand — consumers want US beef.

“Ranchers continue to show resilience and dedication, battling drought, inflation, and unpredictable pressures daily, yet still deliver top-quality, safe beef for families across the country.”

National Farmer’s Union also shared these thoughts : “We agree— American ranchers aren’t to blame for high beef prices.”

R-CALF USA CEO Bill Bullard issued the following statement in response to the announcement.

“We greatly appreciate President Trump’s announcement that he’s directed the Department of Justice to investigate the beef supply chain to determine if there are any violations of our fair competition laws or antitrust laws.

“There has long been a disconnect between cattle prices and beef prices, and we believe this is evidence of market failure. We welcome this investigation to ensure that cattle producers receive competitive prices for their cattle, and that consumers pay prices set by a competitive market rather than a monopolistic one.”

Previous Retail Price Comments

Trump previously posted : “The Cattle ranchers, who I love, don’t understand that the only reason they are doing so well, for the first time in decades, is because I put Tariffs on cattle coming into the United States, including a 50% tariff on Brazil.”

Donald J. Trump Truth Social 10.22.25 12:42 PM EST

The Cattle Ranchers, who I love, don’t understand that the only reason they are doing so well, for the first time in decades, is because I put Tariffs on cattle coming into the United States, including a 50% Tariff on Brazil. If…
— Commentary Donald J. Trump Posts From Truth Social (@TrumpDailyPosts) October 22, 2025

Following the post, the National Cattlemen’s Beef Association (NCBA) made a post on Facebook in response and also released a statement on the president’s steps to undercut U.S. cattle producers: “In a misguided effort to lower the price of beef in grocery stores, President Trump said he plans to increase the volume of beef being imported from Argentina . Efforts to manipulate markets only risk damaging the livelihoods of American cattlemen and women, while doing little to impact the price consumers are paying at the grocery store.”

“The National Cattlemen’s Beef Association and its members cannot stand behind the President while he undercuts the future of family farmers and ranchers by importing Argentinian beef in an attempt to influence prices,” said NCBA CEO Colin Woodall. “It is imperative that President Trump and Secretary of Agriculture Brooke Rollins let the cattle markets work.

“The U.S. already faces a deep trade imbalance with Argentina, one that is made worse by the President’s plan,” he continued. “During the past five years, Argentina has shipped beef valued at more than $800 million to the U.S., while purchasing only $7 million of U.S. beef. Furthermore, Argentina is a nation with a long history of foot-and-mouth disease (FMD), and USDA has not completed the necessary steps to ensure Argentina can guarantee the safety of the products being shipped here, further endangering America’s cattle herd.

“If President Trump is truly an ally of America’s cattle producers, we call on him to abandon this effort to manipulate markets and focus instead on the promised New World screwworm facilities in Texas; making additional investments that protect the domestic cattle herd from foreign animal diseases such as FMD; and addressing regulatory burdens, such as delisting of the gray wolf and addressing the scourge of black vultures,” Woodall said, concluding the statement.

Your Next Read: Unpacking the Beef: Report Clarifies Cattle Market Realities, Packer Challenges & Trade Tensions

Unpacking the Beef: Report Clarifies Cattle Market Realities, Packer Challenges & Trade Tensions

Fri, 31 Oct 2025 20:17:59 GMT

Since President Donald Trump’s comments last week, a lot has been discussed on social media and at the coffee shop about increasing beef imports from Argentina, beef retail prices, the cattle market and beef processing concentration.

“It is complicated,” the Meat Institute posted on LinkedIn regarding the current state of the beef industry and the dialog about beef prices. In response, the Meat Institute released a nine-page document — The Reality of Beef and Cattle Markets — addressing import trends, market conditions, industry concentration, ground beef production, policy proposals and international trade challenges.

Key discussion points include:

1. Argentine Beef Imports

The report summarizes increasing beef imports from Argentina is unlikely to significantly lower ground beef prices in the U.S. If Argentina fills the proposed 80,000 metric ton quota, it will only increase its share of U.S. beef imports from 2% to 5%, which is unlikely to significantly impact retail or restaurant beef prices.

Argentina primarily exports grass-fed frozen lean trim for ground beef production, with limited impact on overall U.S. beef imports. In 2024, Argentina was the eighth-largest beef supplier to the U.S., exporting 32,798 metric tons, while the U.S. imported 1.56 million metric tons overall.

2. Beef and Cattle Market Conditions

The report summarizes current market conditions with these six statements:

Cattle producers are enjoying record prices, while beef packers are suffering under negative margins.
The shortage of market-ready cattle continues, adding further pressure to packers’ margins, which first dropped to negative values in September 2024.
Packing plant utilization rates have dipped, and some facilities are scaling back operations, including reduced shifts and shortened workweeks. Uncertain immigration policy moving forward can have an impact here as well.
Trade policy uncertainty from proposed tariffs adds to the cost pressures on the cattle market.
Additionally, foreign animal disease import restrictions — particularly on Mexican feeder cattle — are another contributing factor to increasing costs.
Consumer demand has remained resilient with improved beef quality. However, prospects for elevated cattle prices and the beef those cattle yield remain directly tied to the extent end-user consumer demand can remain robust.

“Cattle prices were at record levels for most of 2023, surpassing the 2014-2015 previous record highs as the cattle herd rebuilt from the previous low points of the cattle cycle,” the report says. “Through 2024, prices continued at new record levels and increased further into 2025, exceeding an average of $242 cwt. in August, the highest nominal price on record.

“Cash prices have declined to $232 cwt. in the first two weeks of October, but futures contracts are at record levels, even after adjusted for inflation. The previous highs in October 2015 would be $222 cwt. in today’s dollars, a full $10 cwt. below the current prices as of Oct. 14.”

The report goes on to say: “This has put U.S. beef packers under financial pressure. Packer margins slipped into the red in September 2024. Through the week ending Oct. 4, 2025, packer margins were a negative $126.50 per head, up slightly from a year earlier at a negative $125.65 per head, according to Sterling Profit Tracker. The outlook for the year is a packer margin of negative $165.96 per head.”

(Meat Institute)

For 2025, cow-calf producer margins are estimated to be up 122.3% from 2024 and 180.67% from 2023 to $900 per head. Feedlot margins are estimated to be up 351% from 2024 to $514.33 per head. But packer margins have declined 120% from already negative margins in 2024 and are estimated to be down 269% from 2023.

“With fewer market-ready cattle available, plant utilization rates have dipped and some facilities are scaling back operations, including reduced shifts and shortened workweeks. Packing plants were operating at 77% capacity for the week of Oct. 4, down from 85% a year ago. Uncertain immigration policy moving forward can have an impact here as well,” the report summarizes.

(Meat Institute)

The share of the retail beef dollar also indicates producers have been faring well. The producers’ share of the retail beef dollar was 55% in August 2025 and has averaged 54% so far in 2025. The packers’ share has dropped from 13% to 5%, reflecting the negative packer margins.

Download the Meat Institute’s full Cattle and Beef Market Update .

3. Concentration in the Beef Packing Sector

“The U.S. meat packing sector is a dynamic, resilient and highly competitive industry with a long history of providing an abundant supply of high quality, safe and affordable products to American consumers and serving as a vital economic engine that supports America’s farmers and ranchers,” the report says.

(Meat Institute)

The top four beef packers in the U.S. account for the purchase and slaughter of about 81% of all fed cattle in the U.S., according to the most recent report from the USDA’s Packers and Stockyards Division. But those fed cattle make up only about 78% of the Federally Inspected cattle slaughtered in the U.S. The other 22% is made up of cows, both dairy and beef and some bulls.

“Much of the rhetoric about beef industry concentration implies that consolidation in the beef packing sector is ongoing and that market power is becoming increasingly concentrated. That is not the case,” the report says. “The four-firm concentration ratio in the beef cattle industry has not changed appreciably over the past 30 years. According to USDA, in 1994, for example, that ratio was 82%, compared with 81% today.”

4. Ground Beef

Ground beef accounts for approximately 50% of U.S. beef consumption. Imported lean trim complements U.S. beef production from cull cows, helping maintain affordability without directly competing with domestic beef.

“Without imported lean trim, more highly marbled quality U.S. beef would be used, and ground beef would be more expensive,” the report explains.

5. Policy Issues

Despite record cattle prices and the smallest cattle herd in 75 years, there are increasing calls for mandatory country-of-origin (COOL) labeling for beef.

“The mandatory COOL experiment was implemented and it failed,” the report says. “From 2002 through Congress repealing the law in 2015, we learned that mandatory COOL adds massive compliance costs — the industry incurred implementation costs of approximately $1.5 billion, plus $200 million in additional annual compliance costs thereafter — yet by USDA’s own analysis, it did not increase consumer demand. Mandatory COOL simply adds cost, not value.”

On Jan. 1, 2026, USDA’s Food Safety and Inspection Service will begin implementing its voluntary COOL rule.

“Let the rule and the free market work: if consumers demand ‘Product of the U.S.’ labels on their meat, then processors can and will provide it,” the report says.

For more info, download the Meat Institute’s mCOOL paper .

The reports also explains proposals like the PRIME Act and interstate shipment of state-inspected meat are seen as threats to food safety and international trade relationships.

“The concept in the PRIME Act is even worse,” the report explains. “Under Rep. Thomas Massie’s legislation, custom exempt meat establishments would be allowed to slaughter animals, process the meat and sell it directly to consumers or to restaurants, hotels or grocery stores within the state, without any inspection. It is a recipe for foodborne illnesses, and consumers in restaurants and hotels would have no idea they would be eating uninspected meat (and grocery store consumers would only know if they look for and can’t find the USDA inspection symbol). Food safety should be the top priority, not something legislated away.”

6. China Beef Exports

The Meat Institute urges action as China blocks more than 415 U.S. beef facilities from exporting.

“In 2024, China was the U.S.’s third largest market, by value, for beef, at over $1.5 billion,” the paper summarizes. “The strong beef exports to China were thanks to President Trump’s leadership in securing the U.S.-China Phase One Agreement during his first term. However, since the beginning of 2025 — and in contravention of the terms of the Phase One Agreement — China has failed to renew the registrations for more than 415 U.S. beef establishments, making them ineligible to export to China. This is a massive market loss for the U.S. that Brazil and other countries have been eager to fill.”

Are We Seeing Signs of Herd Rebuilding?

Fri, 12 Sep 2025 19:50:44 GMT

The U.S. beef cow inventory has reached its lowest point since 1962, marking what appears to be the bottom of the current cattle cycle. Tight supply is driving the strong pricing environment beef producers are enjoying today.

“For cow-calf producers right now, things are as good as they’ve probably ever been,” says Troy Rowan, University of Tennessee assistant professor. “Even though things are really good, producers are conscientious and vigilant about potential challenges,” Rowan summarizes.

Agreeing with Rowan, South Dakota cattleman Ken Odde adds while profits are currently strong, inflation quickly erodes economic gains. He stresses the importance of risk management and diversification.

Early Signs of Herd Rebuilding?

This is the million-dollar question: Are there encouraging signs of expansion?

“The beef industry is not currently in herd expansion mode, with producers hesitant to retain heifers due to high costs and economic uncertainties,” says Dave Weaber, Terrain senior animal protein analyst.

In Drovers State of Industry Report to be released the week of Sept. 15, we breakdown the July USDA cattle inventory and cattle on feed reports. While the USDA reports showed the smallest U.S. herd in history and continuing tightening numbers on feed, analysts predict producers have not experienced the highest cattle prices, yet.

“Our national herd size has the industry at an interesting point,” Rowan says. “Prices are at all-time highs, inputs are reasonable and more cow-calf enterprises are profitable than ever. When the industrywide rebuild will happen remains up in the air, but producers are keeping in mind that the high-flying industry right now is not going to stick around forever. They’re starting to adopt new technologies, leveling up their crossbreeding programs and expand opportunities for non-cattle related income on their ranches.”

Weaber adds producers need to be intentional about herd expansion, understanding the financial implications of adding new cattle.

Beef-on-Dairy Fills the Beef Supply Gap

“The current dynamics of supply is going to be a challenge,” says Jarrod Gillig, Cargill senior vice president, managing director for beef.

Gillig summarizes the cattle industry is experiencing a critical period of transition. He doesn’t expect the cow herd to return to previous peak levels of 32 million head. Instead, he predicts the gap in supply will be filled by beef-on-dairy calves.

Nick Hardcastle, Cargill senior director of meat grading and technical specialist, explains how the beef-on-dairy calves are an upgrade to the traditional Holstein steer and the positive impact they are making on beef supply.

“Beef-on-dairy is more desirable because it helped overcome several Holstein difficulties,” he says. “Improvements include red meat yield — more meat to a consumer — as well as improved acceptance in branded programs.”

Hardcastle says the beef-on-dairy cattle are filling the supply gap by filling pens in the Plains states where feeders are needed, and they are widely accepted by feeders and packers.

Defining Future Beef Producer Success

Odde says the beef industry is not just surviving but positioning itself for significant transformation.

“Producers who remain flexible, technologically savvy and strategic in their approach will be best positioned to thrive in this changing environment,” he says.

Weaber agrees saying successful producers will be those who can adapt, manage costs effectively and align themselves with evolving market trends.

“Don’t let cost get away from you,” Weaber warns, emphasizing that “being a low-cost, high-productivity producer means you get to make money seven, eight or nine years of the cycle.”

He stresses the importance of understanding financial implications, particularly during market transitions.

“If we’re not working on the business, we can’t work in the business,” Weaber adds, summarizing his philosophy regarding producers’ need to adopt more strategic, data-driven approaches.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

Your Next Read: 47% of Beef Producers Plan to Increase Herd Numbers

Why Aren't High Beef Prices Causing Sticker Shock With Consumers?

Wed, 23 Jul 2025 17:28:06 GMT

Gound beef prices across the U.S. continue to reach new highs. Retail prices for ground beef hit its highest level in history in June climbing above $6 per pound, while steaks were up 8% at $11.49 per pound.

(Bureau of Labor Statistics )

“The record high retail beef price reported by the most recent Consumer Price Index (CPI) has prompted a lot of calls about why prices are record high and whether there is any relief in sight,” says David Anderson, Texas A&M Extension economist for livestock and food product marketing. “While we often write about the great cattle prices for producers who are selling, there is a flip side, and that is consumers who are buying beef.”

Anderson explains reduced slaughter and beef production, especially in the second quarter of the year, cut supplies just as grilling season heated up for seasonal beef demand. The combination led to a spike in wholesale prices and retail beef prices.

Don Close, Terrain senior animal protein analyst, says: “What we have seen so far is consumers have been incredibly loyal to protein collectively, but they have been especially loyal to beef, and beef is actually continuing to gain market there, even at the current prices at the expense of the other protein.”

Wages Are Keeping Pace With Beef Prices

Close says when he correlates the monthly all fresh beef price to hourly wages he found they are in lock step.

“Yes, beef prices have escalated, but beef prices have not risen any faster than the improvement in overall hourly wage,” he explains. “So from the consumer’s perspective, their share of their paycheck committed to beef is essentially the same as it’s been on a comparative basis for years.”

(Don Close, Terrain )

Other contributing factors to beef demand include consumers’ craze for protein and the impact of GLP-1 diets on protein consumption.

Scott Varilek, Kooima Kooima Varilek, says: “I think beef demand has just proven time and time again — hey, consumers want it. It’s a great healthy protein, and I think it’s got a lot of good traction here over the last year of being a good quality source of food.”

High Quality Attracts Consumer Spending

Plus, with 82% to 84% of the beef produced grading Choice or better, the high quality of beef is pushing demand.

“I don’t see any weakness really in the consumers or their spending habits,” says Mike Minor, professional ag marketing. “We actually are eating more Prime meat today than Choice for the first time ever. So, people like their expensive meat still.”

How Long Will High Cattle and Beef Prices Last?

Last week USDA reported average fed cash cattle prices hit the second-highest level in history at $237.78, up 57¢ from the average the prior week.

The high cattle and beef prices continue to be driven by tight cattle numbers, the Mexican boarder closing due to New World screwworm and looming import challenges.

Yet, Close says the role of strong demand can’t be ignored and is likely to continue.

“I think it’s certainly through 2026 and really more realistic somewhere deep into 2027,” he adds.

Anderson explains normal seasonal production and demand would suggest prices falling from recent highs. Evidence from the wholesale beef market over the last couple of weeks indicates lower prices.

“Seasonal price patterns would suggest that there is a chance for a little bit of relief from record high beef prices,” Anderson says. “But, only if we compare to the peak price this summer. Wholesale beef prices are already declining.”

He adds there is a time lag from lower wholesale prices showing up at retail, but lower wholesale prices combined with normal seasonality of various cut prices should lead to the expectation of falling prices in the coming months.

“But, it’s not likely that prices will decline below year-ago levels,” Anderson emphasizes.

Inventory Reports Release on July 25

Close says more will be known about supply levels after the USDA Cattle on Feed and Cattle Inventory reports on Friday.

“While market analysts expect lower placements, marketings and cattle in feedyards than a year ago, the really interesting number will be the number of heifers on feed on July 1,” Anderson summarizes. “The heifers on feed will provide some insight into heifer retention. Also, look for placements in Texas due to the ban on Mexican feeder cattle. The lack of spayed heifers coming from Mexico is important in evaluating the number of heifers on feed.”

Your Next Read: What Americans Won’t Give Up in 2025: Spending Priorities Revealed

Connecting Cattle Producers and Beef Wholesalers Through Supply Chain Management

Wed, 23 Apr 2025 18:59:55 GMT

For producers or groups of producers wanting to sell directly into wholesale beef channels, three big issues have created challenges to the marketplace: scale, balancing the carcass and logistics.

“If you have a steakhouse that has to buy hundreds of ribeyes every single week, it’s probably pretty hard to find many producers who are going to be able to fulfill that procurement spec weekly,” says Farmshare CEO Henry Arrowood. “No. 2 is balancing of the carcass — you might find a restaurant that wants to buy all your primes, but what are you doing with the rest of that carcass? And No. 3 is the logistics — how do I actually get the animal to the processing facility, secure a slot, secure the cut order, then get that product out into the hands of the buyer? That is exactly what our platform does.”

Arrowood shared on a recent AgriTalk episode about how the system provides a way for wholesale buyers to connect with smaller producers who can offer local, differentiated and value-added products.

“If a set of producers match the parameters of what the bid of the buy side is looking for, we start to show them these opportunities that they can participate in,” Arrowood says. “We show them the price point at which the customer is looking to purchase. We show them the target product and volume that they’re looking for, and then we aggregate that supply into an order and route it to one of our processing facilities for manufacturing.”

Finding a market for the entire carcass has remained a challenge to the smaller, regional producers who want to sell meat. Until now.

“Big packers have become these efficiency machines where they’ve been able to create all these different market opportunities to balance the carcass and create, good returns across the entire animal. That doesn’t exist on a small scale,” Arrowood says. “It’s really hard for any given producer to go out and create similar opportunities for the entirety of their carcass. That is what we’re doing.”

By using artificial intelligence, Arrowood says the company creates pricing models and yield distribution models to price optimize the entire animal for the end producer. If one buyer claims the ribeyes, the system figures out additional buyers for the strips, tenderloins, ground beef, etc., he says.

“It’s our responsibility to create a diversified set of customers on the buy side that we can move this product to, school systems, hospitals, really good targets for us in terms of moving that ground product,” Arrowood explains. “There’s a lot of restaurant groups that are looking for a different product than they might be able to get through the institutional food service companies. So, that’s where we’re moving some of that prime product.”

The idea for Farmshare came to Arrowood when he experienced the challenges in the beef supply chain firsthand.

“During the pandemic, I left San Francisco and moved out to a cattle ranch in Montana, and that’s where I am right now. And it didn’t take me long, when I got to this seventh-generation cow-calf operation, to realize there were some pretty deep inefficiencies in the supply chain and that of every dollar that I or any other city slicker was spending on meat in the grocery store, only 14 cents was making its way back to a producer’s pocket.”

As a tech pro, Arrowood began imagining what could be done to create more streamlined distribution that would give fair financials back to the end producer and help independent processors.

“I think that technology serves a very unique and interesting opportunity to rethink the way in which meat travels throughout the value chain, and the money that ultimately gets back into the hands the people who do the work,” Arrowood says.

Farmshare works with processors in more than 25 states across the country and is ready to expand its reach.

“We like to think of ourselves as bringing modern tooling to the independent processor,” Arrowood says. “For maybe the first time, we’ve built a set of tools for the independent processor that help to increase efficiency and maximize the throughput of their plant and ultimately drive them towards doing greater capacity within their facility.”

By automating and streamlining several manual processes and complexities that exist for processors today, Arrowood says the system can mitigate the amount of phone calls, paper pushing and filing that an independent locker has to go through in order to successfully manage their business.

“Our customers are saving five to seven hours per day on all the administrative sort of burden and complexity of their business,” he says.

He says packers have a lot of efficiencies, technology and staff to help them future proof their businesses.

“What we’re doing is building that as a shared resource and shared set of infrastructures that we can then sort of co-op out into the ecosystem for the independent processor,” Arrowood says.

This management system creates opportunities for efficiency throughout the supply chain while keeping the marketing between the buyer and the seller. Within the Farmshare system, the animal does not change ownership to the processor and the restaurant connects directly with a group of independent processors.

“We’re facilitating the transaction between those two parties,” Arrowood says. “We’ve used this network of independent processors as the manufacturing layer to actually turn that animal into a consumable product.”

Your next read: Considerations for Feeding Cattle Through Drought

Fire at National Beef Facility in Liberal, Kansas

Fri, 22 Mar 2024 13:07:36 GMT

Firefighters were called to the National Beef Packing Co. facility at 9:52 p.m. Wednesday evening for a reported box trailer fire, according to the Liberal Police department.

First responders and fire units arrived to find a well-advanced fire involving four box trailers and two container trailers. Also involved was the multi-story boxed beef storage and load out building. Plant representatives confirmed to responders that all employees were safely exited and accounted for.

The fire was officially declared under control at 1:06 a.m. Officials have not released a damage estimate, but the incident was not expected to cause a major disruption to overall beef industry production.

In a statement to media, National Beef said there were no injuries and that production would be suspended on Friday, March 22, with the facility returning to normal operations Monday, March 25.

The area of fire origin has been determined with reasonable certainty, according to Liberal Police. The exact cause of the fire remains under investigation. The plant has a daily fed beef harvest capacity of 6,000 head.

One local news outlet said the company announced a four-hour late start for the fabrication and kill floor departments on Thursday.

Mackey: Packers Apply the Brakes

Mon, 02 Oct 2023 13:40:39 GMT

As expected, packers put the brakes on the harvest and the market slows. This came as no surprise to cattle feeders as early week expectations for harvest was to land between 610,000 to 615,000 head and right on cue Friday’s harvest prints at 612,000 head. This was down 13,000 head from the previous week.

The industry looks to have another week of slowed production in store as the packer looks to reverse the struggling cutout. Again, no surprise as the cutout appears to be on trend, seeking its seasonal bottom middle of this month.

Working off a big trade from the previous week and slowed production, the industry expected packers to be more reluctant in pushing for cattle, but as the future market took its first dip of the week, buyers stepped in at steady money and gathered inventory. A few hedged feeders in the North, but mostly in the south saw it fitting to take basis and move cattle at mostly $183 cwt live and $290 dressed, steady to $2 softer dressed. Those that didn’t sell would feel pretty good Thursday when futures made a $2.00 reversal to the upside.

Many remaining showlists raised asking prices to $186 cwt, but it was clear most of the needs were met and the market was established from the early week business. National volumes out Friday have packers purchasing 13,000 fewer head than the week previous and most of the deficit found between NE and IA.

Looking ahead, many will breathe a sigh of relief as government will remain open. Packers will look to add to their inventory without burning through their stockpile. Cattle feeders will continue to move profitable cattle.

Packer Capacity

Mon, 25 Sep 2023 19:38:51 GMT

The global COVID-19 pandemic provided historic windfall profits for beef packers, but at its peak, the packing industry was a bottleneck that drove many cattle producers toward financial ruin. Harvest-ready cattle backed up in feedlots as packers were banking obscene profits. That scenario spurred producers to explore building their own packing plants, bypassing the bottlenecks and keeping the profits for themselves.

Fast-forward three years and progress toward increased packing capacity has begun. At least eight projects that have the potential to add 11,700 head to daily harvest capacity are in various stages of completion. The three smallest of those projects, all with a daily harvest of 500 head, are operating now.

BEEF PLANT PROJECTS

TruWest Beef | Jerome, Idaho | 500
InterMountain Packing | Idaho Falls, Idaho | 500

True West Beef, a division of AgriBeef, and Intermountain Packing, both began operations last year.

Sustainable Beef, LLC | North Platte, Neb. | 1,500

Sustainable Beef LLC, broke ground on its $325 million project in October of last year and expects to open in early 2025. A timeline of the project underscores the complexity of such a venture. Sustainable Beef CEO David Briggs told Nebraska Public Media earlier this year that Nebraska ranchers and cattle feeders began organizing in 2020. From that point it took 18 months, 18 public hearings and seven different public agencies for the project to gain government approval.

Producer Owned Beef | Amarillo, Texas | 3,000

In Amarillo, dirt work has begun at an 1,108-acre site east of the city by a group of Texas ranchers and cattle feeders. Producer Owned Beef is touted as a $670 million state-of-the art beef processing facility to “rebalance the scales for producers.” The cattle producer owners will receive a percentage of wholesale beef prices for the cattle they supply and a share of the profits from the plant.

American Food Group | Warren County, Mo. | 2,400

American Foods Group (AFG) broke ground in September 2022 on an $800 million facility, roughly 50 miles from downtown St. Louis. The facility will have daily capacity of 2,400 head and will be capable of processing cows and fed cattle. AFG is currently the nation’s largest cow packer, processing about 21% of U.S. beef and dairy cows with daily capacity of 5,550 head at four locations.

AFG has come under recent scrutiny from local residents voicing concerns to the Missouri Department of Natural Resources about the meatpacker’s plan for processing wastewater from the slaughterhouse. The comments are part of a public record being compiled by regulators as they assess the environmental impact of the project.

Missouri Prime Beef | Polk County, Mo. | 500

Missouri Prime Beef began operating in 2021 and was recently acquired by STX Beef Co., (formerly Sam Kane Packing) Corpus Christi, Texas.

Cattlemen’s Heritage Beef Co. | Mills County, Iowa | 1,500

Cattlemen’s Heritage Beef Company is a planned $520 million project on 132 acres. Ag Secretary Tom Vilsack visited in June to deliver a $25 million grant from USDA as part of an initiative to boost competition in the meatpacking industry.

Iowa Premium | Tama, Iowa | 1,300

Construction on the 1,300 head per day expansion of Iowa Premium is on hold indefinitely. A source familiar with the operation told Drovers rising construction costs and the declining availability of cattle prompted parent company National Beef to pause the project.

POTENTIAL HEADWINDS

Each of the eight new ventures is unique in its own way, though all aim to produce high-quality beef in a sustainable manner. They also aim to be more efficient and more environmentally friendly. Yet none can escape the glaring realities that all beef packers will face the next few years.

Chief among those challenges is the shrinking cattle herd in the U.S. and how well startup packers can compete. That fact becomes even more pronounced as cowherd production efficiency improves, says John Nalivka, president, Sterling Marketing, Inc., Vale, Ore.

“Production efficiency is a key issue driving structural change,” he says. “The U.S. cattle herd peaked at 132 million in 1975 and produced 24 billion pounds of beef. Our herd is now one-third smaller, and we will produce 27 billion pounds, or 15% more than 1975.”

Efficiency gains are even more pronounced in the current cycle. At the beginning of 2023 the herd size was roughly the same as in 2015, which was the smallest cattle inventory since the early 1950s, yet beef production this year will exceed 2015 by three billion pounds.

“We will see a slower herd buildup than in previous cycles,” Nalivka says. “Since the peak inventory of 132 million head in 1975 and subsequent liquidation down to 110 million, every buildup has peaked at a lower number than the previous peak. This time will be no different.”

As a whole, the beef industry does not need additional packing capacity. That’s not an argument against any of the new ventures, Nalivka says, but a reality that must be factored into their business plans.

Sterling Marketing has calculated packer capacity utilization weekly and annually since 1988, and the current data provides a caution flag for the startups.

“Beef packer capacity utilization will be about 87% this year, and I project it will be about 80% next year, without any additional capacity added,” Nalivka says. “The drop at cow plants will be even greater.”

The precipitous drop comes from a projected 7.9% decline in steer and heifer slaughter in 2024, which, if realized, would be one million head fewer than 2023, according to Sterling estimates. Couple that with the fact beef packers need capacity utilization to run from 90% to 94% to capture efficiencies of size and maintain profitability.

“This cycle will produce further structural adjustments in packer capacity,” Nalivka suggests. “The successful packers — either the current ones or the new ones — will develop their margins on value-added further processed product, coordinating that with their slaughter capacity.”

Or, as he calls the strategy, “The right cattle for the right market.”

Profit Tracker: Growing Packer/Feeder Margin Spread

Fri, 07 Jul 2023 19:15:50 GMT

The widening spread between feedlot and packer margins underscores the leverage the large packing companies wield. Beef packer margins jumped $83 per head (20%) last week to $387. The gains were mainly due to rapidly increasing wholesale beef prices, little of which translated into higher fed cattle prices.

Average prices for fed steers was $112.28 per cwt. the week ended Jan. 29, which produced average feeding margins of $47 per head. That resulted in a $340 spread between packer and feedlot profits, according to the Sterling Beef Profit Tracker.

The beef cutout average was $229 per cwt, or $11 per cwt. higher than the previous week. The cutout was also $16 per cwt. higher than the same week a year ago, while fed cattle prices were $10 per cwt. lower than a year ago. A year ago packers saw profits of $73 per head, some $314 less than this year.

The total cost for finishing a steer marketed last week was $1,479, about $5 more than the same week a year ago. Last year cattle feeders saw profits of about $185 per head the final week of January. This year feeder cattle represent 65% of the cost of finishing a steer compared with 72% a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins improve from a $2 per head loss to breakeven last week. Lean carcass prices traded at $58.76 per cwt., $1.63 higher than the previous week, and $2.27 higher than a month ago. A year ago pork producers lost an average of $5 per head. Pork packer margins averaged a profit of $42 per head last week, about $3 per head higher than the previous week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2021 will average $123 per cow. For feedyards, Nalivka projects an average profit of $43 per head in 2021, and packer margins are projected to average $251 per head.

For farrow-to-finish pork producers, Nalivka projects 2021 will produces losses of $13 per head. Pork packers are projected to earn $37 per head in 2021.

Profit Tracker: Cattle, Hog Feeding Margins Advance

Fri, 07 Jul 2023 19:15:38 GMT

Profit margins for both cattle and hog finishing operations saw modest gains last week but also carry significantly higher feed costs than a year ago.

Cattle feeders saw average profits of $222 per head the week ending Nov. 12 as the 5-area direst cash price advanced to $153.35 per cwt., according to the Sterling Beef Profit Tracker . Average cattle profit margins were the highest since the $252 per head profits estimated the week ending April 29 or this year.

Costs associated with finishing cattle, however, have increased dramatically since April. The cattle sold last week carried a total feed cost of $581 per head, which is 21% higher than the $458 feed cost for cattle sold the last week of April. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Cattle marketed last week had a breakeven of $137.50 per cwt., while cattle placed on feed last week have a breakeven of $$151.75 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $175.83 per cwt., and feed costs of $582 per head. The feeder steer price is 10% higher than last year.

Estimated beef packer margins for the week ending Nov. 12 were $66 per head, down $4 per head from the previous week and down 90% from estimated margins a year ago of $633 per head. Last week’s Choice beef cutout averaged $258.96 per cwt., steady with the previous week and down $25 per cwt. (9%) from the same week a year ago.

The estimated total cost for finishing a steer last week was $1,925 per head, up 8% from last year’s estimate of $1,778 per head.

Cattle slaughter totaled an estimated 671,000 head, about 4,000 head more than the same week last year. Packing plant capacity utilization was estimated at 89.9% compared to 89.4% the previous week and 89.0% last year.

Farrow-to-finish hog producers found profits of $5 per head last week, up about $4 per head from the previous week, and up $39 per head compared to last year’s $34 per head losses. Lean carcass prices averaged $88.96 per cwt., down $3.05 per cwt. from the previous week but up $28.38 from last year (32%).

Pork packers saw profits of about $8 per head, or $4 per more than the previous week and $54 lower than the same week a year ago. Hog slaughter was estimated at 2.492 million head, down 85,000 head from the previous week and down 128,000 head from last year.

Pork packer capacity utilization was estimated at 92.7% compared to 95.8% the previous week and 97.4% last year.

(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

Profit Tracker: Beef Packer Losses Largest since 2017

Fri, 07 Jul 2023 19:15:35 GMT

The pendulum continues swinging toward cattle feeders as cash prices jumped $3 last week and left packers with their largest negative margins in nearly six years. Average cattle feeding margins were estimated at $165 per head the week ending Nov. 26, 2022, according to the Sterling Beef Profit Tracker . Those average margins were up $41 per head from the previous week.

Beef packer margins were estimated at a $28 per head loss, the largest per head loss for packers since Jan. 2017, according to Sterling’s database. That compares with packer profits of $488 per head the same week a year ago.

Last week’s Choice beef cutout averaged $251.23 per cwt., down $1.86 from the previous week and down $18.81 per cwt. from a year ago.

Costs associated with finishing cattle have increased dramatically since April. The cattle sold last week carried a total feed cost of $597 per head, which is 23% higher than the $465 feed costs for cattle sold the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Cattle marketed last week had a breakeven of $144.63 per cwt., while cattle placed on feed last week have a breakeven of $151.69 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $174.62 per cwt., and feed costs of $590 per head. The feeder steer price is 13% higher than last year.

The estimated total cost for finishing a steer last week was $2,024 per head, up 15% from last year’s estimate of $1,725 per head.

Cattle slaughter totaled an estimated 581,000 674,000 head, about 14,000 head more than the same week last year. Packing plant capacity utilization was estimated at 78.1% compared to 90.6% the previous week and 77.9% last year.

Farrow-to-finish hog producers found profits of $8 per head last week, up about $6 per head from the previous week, and up $52 per head compared to last year’s $44 per head losses. Lean carcass prices averaged $88.20 per cwt., up $0.47 per cwt. from the previous week and up $30.77 from last year (35%).

Pork packers saw losses of about $3 per head, or $10 per head less than the previous week and $53 lower than the same week a year ago. Hog slaughter was estimated at 2.223 million head, down 376,000 head from the previous week and down 31,000 head from last year.

Pork packer capacity utilization was estimated at 82.7% compared to 96.7% the previous week and 84.3% last year.

(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

Profit Tracker: Futures Drag on Cash Cattle

Fri, 07 Jul 2023 19:15:32 GMT

Analysts have noted the exodus of longs from the live cattle futures market over the past week. It’s a seasonal pattern that was accelerated by volatility in the equity markets. The result was a cash cattle market trading $1.30 per cwt. lower the week ending March 18 to $164.25. Average cattle feeding margins declined by $21 per head to $194, according to the Sterling Beef Profit Tracker . Packer margins fell $20 to an average of $77 per head. Wholesale beef prices declined $2.11 per cwt. to $283.13 per cwt.

Cattle feeders in the North have experienced dismal winter feeding conditions which slowed cattle performance and eroded margins. The South experienced much more favorable conditions.

Cattle sold last week carried a total feed cost of $599 per head, which is 25% higher than the $441 feed costs for cattle sold the same week a year ago.

Cattle marketed last week had a breakeven of $150.39 per cwt., while cattle placed on feed last week have a breakeven of $156 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $186.97 per cwt., and feed costs of $543 per head. The feeder steer price is 19% higher than last year.

The estimated total cost for finishing a steer last week was $2,106 per head, up 16% from last year’s estimate of $1,763 per head.

Fed cattle slaughter totaled an estimated 490,918 head, about 2,000 head fewer than the previous week and 4,000 head fewer than the same week last year. Packing plant capacity utilization was estimated at 85.7% compared to 84.9% last year.

Farrow-to-finish hog producers saw losses of $8 per head last week, about $3 less than the previous week. Pork producers saw profits of $84 per head the same week a year ago. Lean carcass prices averaged $80.81 per cwt., steady with the previous week.

Pork packers saw profits of about $2 per head, about $4 lower than the previous week. Last year pork packers saw losses of about $24 per head. Hog slaughter was estimated at 2.492 million head, down 3,000 head from the previous week but up 67,000 head from last year.

Pork packer capacity utilization was estimated at 92.6% compared to 90.0% last year.

(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

Slaughterhouse Kings: Recalling the Creepy Reign of Judas Goats

Tue, 16 May 2023 12:58:04 GMT

Judas goats? Did nicotine-addicted goats once lead 1,000 lambs per day up giant ramps to the killing floor of slaughterhouses in exchange for a plug of tobacco or a single cigarette?

“It’s all true no matter how bizarre it seems today,” says Pat Padgett, a 40-year veteran of the meatpacking industry and firsthand witness to the unforgettable Judas goat spectacle.

“Judas goats were about ingenuity, betrayal, instinct, symbolism, and so much more, but the public today, even people in agriculture or farming, have never heard about them,” he adds. “I’m one of the last people to have seen them in action and the Judas goat story still fascinates me.”

Killing Pits

In 1947, Padgett was born in southeastern Illinois’ Clay City, in the shadow of a father at the helm of two funeral homes, and a grandfather behind the reins of a country doctor’s horse-and-buggy. However, when young Padgett began tending livestock on a county farm during high school, he found a career call away from the mortuary or medical field—animal science.

After earning a bachelor’s and master’s at Southern Illinois University, Padgett obtained a state job, learning the ropes of meat inspection at the Du Quoin Packing Co. in Perry County. “I thrived in the job with cows and pigs, but as much as I learned about packing and meat, I still never heard a thing about Judas goats . In fact, I’d never heard the terms ‘Judas’ and ‘goats’ in combination in my life to that point.”

Excelling in performance and reputation, Padgett was leased to USDA as a combination grader/inspector and shipped around the country, including a stint starting in 1971 at the Wilson Packing Plant in Omaha, Neb.—the realm of Judas goats.

Talking shop with Wilson’s butchers on the killing floor, Padgett heard details of the double-cross parade to come. “I was a grader, and in my day, unfortunately, many graders carried a superior attitude to the workers inside a meatpacking plant. Not me. I believed you could learn something new from every single person inside a plant, and I’d go spend time in the killing pits, trying to educate myself in anyway possible. And that’s when the butchers told me about Judas goats. I’d never imagined or seen anything like it.”

Treachery

The meatpacking facilities of old were multi-level structures, often four, five, or six stories in height, with each floor assigned a specific facet of animal processing. The killing floor usually occupied the top level and served as a conduit to further processing on the floors below via a network of chutes, pipes, and drains. Livestock were delivered up to the killing floor via walled, ramps that buttressed the plants in a staggered, zigzag pattern, or by straight-shot ramps that rose to the uppermost levels.

Cattle and pigs could be pushed or herded up the ramps and onto a given floor, but sheep were an entirely unique challenge.

“Wilson Plant in Omaha had five Judas goats, all with bells around their necks,” Padgett describes. “I’d say three were full-time and usually two were in training, because you always had to have steady backups in case something went wrong. We were moving about 1,100 to 1,300 lambs per day through the plant and that meant the Judas goats had to deliver every single sheep up to the killing floor. They were easy to train and did their job perfect every time.”

“Let me be clear: Without the Judas goats, there were not enough men in south Omaha to move 1,000-plus sheep up a ramp because the sheep would bunch up or balk. In other words, the plant was truly dependent on the Judas goats to betray the sheep.”

The Death Climb

Sheep usually arrived at Wilson Packing via railcars—weighed, registered, and placed in one of 10 main holding pens. A Judas goat was released into a given pen to mingle and acclimate the sheep.

The Judas goats were charged with a single duplicitous task: Lead the sheep from the ground level pens up the ramps to the fourth floor and into the kill pits, despite the overwhelming smell of blood and death. Upon delivery, the goats were rewarded with a tobacco prize.

The procedure, according to Padgett: “It started early each morning. The Judas goats knew exactly what they were doing. The gate on one of the main pens was opened and the Judas goat went out first, his bell ringing. The sheep trusted and followed right behind. They funneled to the ramps and started going up. The ramps had cleats for grips so the livestock wouldn’t slip. Sometimes it might be 100 or more sheep at one time, sometimes less. If the sheep paused, the goat would turn around and bleat, assuring the flock that everything was fine and to keep going. The Judas goat knew he had to get those sheep to the top to get his tobacco.”

“At Wilson’s, the kill pits were on the fourth floor. The Judas goat came off the ramp and marched into a large indoor pen, with all the sheep coming behind. The pen had a side-gate where the goat was let out, and that’s when the kill pit guys would break off a piece of plug tobacco and feed the Judas goat. Then the men would start slaughtering and the goat would go right back down the ramp to get another load so he could get more tobacco. No question, the goats were serious nicotine addicts.”

Solid Mass

Padgett also spent part of his career at the immense Armour and Co. meatpacking plant in St. Paul, Minn., and observed the same Judas goat system. “I remember that plant being about six stories and the sheep were killed high up, but I can’t be certain what floor. But just like in Omaha, they were using Judas goats at Armour into the 1970s.”

How far back in history were Judas goats used to control sheep? Likely for centuries; certainly back to the 1800s. The Nov. 30, 1912 edition of the Pacific Rural Press describes the Judas goat system and cites details which closely align with Padgett’s recollection at Wilson in Omaha and Greg Dunn’s account at Swift in Sioux City:

At all the large stockyards of the country the packing firms have bell goats for leading sheep from the sales pens to the chutes at their slaughtering houses … when sheep are purchased they are led instead of being driven, and the leader of the sheep is not a man, but a trained goat. Each firm has a trained goat of its own, and frequently several of them. From the sheep sales pens to the chutes the way is devious, often through many gates, across streets and tracks, under sheds and elevated structures and full of so many crooks and turns that only a wise man or a trained goat could ever find the way. So when a bunch of sheep has been purchased the bell goat is placed at their head and he leads the procession. An attendant follows to open and close gates. The sheep follow the goat in one solid mass without deviation. When the slaughtering pen is reached a gate is opened and the goat goes in with all the sheep following. At one side a small gate is opened for the goat to go out, but the sheep which have been led to the shambles and their last pen are closed in. The bell goat takes his own course over the city streets, or wherever he will, on his way back to the stockyard’s sheep house.

Royalty

Padgett was one of the last observers of Judas goat utilization at an industrial level in the United States. “By the late 1970s, the multilevel meatpacking plants were gone and Judas goats weren’t needed to move thousands of sheep,” he says. “I saw that window close in agriculture history.”

Judas goats, Padgett emphasizes, were the princes of packing plants and placed on a pedestal. “They were royalty. Nobody mistreated the Judas goats and they were very well looked after. In a sense, they ran part of the meatpacking plant. If there were no goats, there was no sheep processing and no income from that part of the business.”

“Meatpacking became a part of my life,” Padgett adds, “and I lived out my hobby of animal science through my occupation for 40 years. Judas goats were once a completely normal part of agriculture, but it’s a fascinating history that got lost. It’s kind a lesson for our modern time: Don’t blindly go the way popular culture moves, or where the in-crowd goes, or what the mainstream tells you to think. Look out for the Judas goats.”

(For more on Judas goats, see: Agriculture’s Bizarre, Drug-Addicted Masters of Deceit Once Ruled the Killing Floor )

For more from Chris Bennett (cbennett@farmjournal.com 662-592-1106) see:

Priceless Pistol Found After Decades Lost in Farmhouse Attic

Cottonmouth Farmer: The Insane Tale of a Buck-Wild Scheme to Corner the Snake Venom Market

Tractorcade: How an Epic Convoy and Legendary Farmer Army Shook Washington, D.C.

Bagging the Tomato King: The Insane Hunt for Agriculture’s Wildest Con Man

Young Farmer uses YouTube and Video Games to Buy $1.8M Land

While America Slept, China Stole the Farm

Bizarre Mystery of Mummified Coon Dog Solved After 40 Years

The Arrowhead whisperer: Stunning Indian Artifact Collection Found on Farmland

Fleecing the Farm: How a Fake Crop Fueled a Bizarre $25 Million Ag Scam

Skeleton In the Walls: Mysterious Arkansas Farmhouse Hides Civil War History

US Farming Loses the King of Combines

Ghost in the House: A Forgotten American Farming Tragedy

Rat Hunting with the Dogs of War, Farming’s Greatest Show on Legs

Evil Grain: The Wild Tale of History’s Biggest Crop Insurance Scam

Tyson Foods Plant Closure Raises Antitrust Concerns Among U.S. Farmers and Experts

Fri, 24 Mar 2023 15:10:08 GMT

Tyson Foods Inc gave its chicken suppliers two months’ notice of its plan to shut a Virginia processing plant in May, raising concerns among farmers and legal experts about the company’s compliance with antitrust regulations requiring it to give 90 days’ notice before ending a contract.

The planned closure of the plant has left dozens of Virginia chicken growers scrambling to find new buyers in a region with few other options. It could also expose Tyson to fines under the century-old Packers and Stockyards Act (PSA), the U.S. antitrust law requiring the minimum advance warning, according to Peter Carstensen, a professor of law emeritus at the University of Wisconsin-Madison Law School who previously served in the antitrust division at the U.S. Department of Justice.

Tyson told Reuters the company is not canceling any farmers’ contracts and instead has committed to paying the growers for the full-term of their remaining contracts, keeping in compliance with federal regulations.

Antitrust issues, particularly in meatpacking, have been a priority for the U.S. Department of Agriculture (USDA) under President Joe Biden, who in 2021 directed federal agencies to tackle consolidation. Four companies, including Tyson, control 55% to 85% of the beef, pork, and chicken markets.

Tyson alerted Virginia farmers by phone on March 13 and later by mail that it will shut its Glen Allen plant on May 12, according to three poultry farmers who supply the plant. The company said there are 55 farmers with 73 contracts who supply the plant with chickens raised for meat.

Tyson owns chickens it slaughters and pays the farmers to raise them. The company hatches baby birds and trucks them to farmers. The farmers then raise the birds for about six weeks, until they reach the size to be slaughtered and are trucked to the processing plant.

Tyson spokesperson Alicia Buffer confirmed farmers received notice last week of the May 12 closing, and said Tyson intends to stop supplying them with chicks after March 28.

She said that instead of canceling their contracts, Tyson is offering farmers a voluntary buyout package, or the option to retain them and be paid through their duration.

The three farmers interviewed by Reuters have between three and 10 years left on their contracts.

Farmers told Reuters they felt pressure to accept the buyout option because they were not sure how the contract could remain in force after the plant is shut and the chicks stop coming.

Roger Reynolds, a farmer in Crewe, Virginia, said retaining his July 2012 contract with Tyson is not a viable option, in part because it would prevent him from selling to another poultry company if one entered the region.

Another farmer with a contract to supply the plant, who asked not to be named, said they may eventually have to sell their third-generation farm as the buyout offer would not cover long-term expenses like property taxes.

Carstensen, of the University of Wisconsin-Madison Law School, said it was unclear if Tyson’s approach would absolve it of its requirement to provide farmers 90 days’ notice before ending a purchase contract, because closing the plant means it won’t be processing chickens there anymore.

PSA violations can carry a $29,270 fine, according to the USDA website, and Carstensen said fines could apply for each contract.

The USDA, which enforces the PSA, told Reuters it is “closely monitoring” Tyson’s planned plant closure.

‘WE’RE DONE’

Under normal circumstances, Tyson supplies farmers with chicks, while farmers assume the costs of land and chicken houses.

Documents reviewed by Reuters show the company’s proposed buyout package offers payment to farmers based on their average payment per flock in 2022.

They also show that farmers opting to retain existing contracts instead of accepting the buyout would have to meet Tyson’s contractual requirements for their facilities even after the company stops providing chicks.

Tyson said those growers would have to perform “routine and preventive maintenance” to meet contract requirements and called the options generous.

Farmers must choose between the options by the end of March, according to the document.

On Monday, about 20 Tyson farmers and local government officials gathered in a fire station in Burkeville, Virginia, and raised concerns about Tyson’s short timeline for closure of the plant, attendees said.

Taylor Lee, a farmer in DeWitt, Virginia, who attended the meeting, said he built two new chicken houses in 2017 and raised about 400,000 birds annually for Tyson, and is unclear what will happen to his investment.

“When we’re done growing chickens (for Tyson), we’re done, unless somebody else steps in,” Lee said.

The nearest chicken plants to Glen Allen are 100 to 150 miles away, outside the ideal radius of 60 miles, said Hobey Bauhan, Virginia Poultry Federation president. Longer distances hike transportation costs and health risks to chickens.

(Reporting by Leah Douglas in Washington and Tom Polansek in Chicago; editing by Richard Valdmanis and Nick Zieminski)

USDA Seeks to Limit Use of ‘Product of USA’ Label By Packers

Mon, 06 Mar 2023 23:33:41 GMT

The Agriculture Department on Monday issued a proposed new regulation restricting “Product of the USA” labels on meat, poultry and eggs to animals born and raised in the U.S. The proposal would effectively close a labeling loophole that allows products to use such a label for beef and pork that is simply repackaged in the U.S.

President Joe Biden called for a reassessment of the labeling regulations as part of a 2021 executive order on Promoting Competition in the American Economy, and a commitment made in the Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.

The White House says the increased clarity and transparency provided by this proposed change will prevent consumer confusion and help ensure that consumers understand where their food comes from.

“American consumers expect that when they buy a meat product at the grocery store, the claims they see on the label mean what they say,” said Agriculture Secretary Tom Vilsack. “These proposed changes are intended to provide consumers with accurate information to make informed purchasing decisions. Our action today affirms USDA’s commitment to ensuring accurate and truthful product labeling.”

The present labeling standard has been in effect since congress voted in December 2015 to repeal mandatory country-of-origin labeling laws for beef and pork. That action was forced by Canada and Mexico when the two countries challenged the COOL laws as a trade restriction before the World Trade Organization.

As part of its review, USDA commissioned a nationwide consumer survey . The survey revealed that the current “Product of USA” labeling claim is misleading to a majority of consumers surveyed, with a significant portion believing the claim means that the product was made from animals born, raised, slaughtered and processed in the United States.

Regarding the new proposal, Vilsack does not think it would run afoul of trade rules because the labels are voluntary, nor will it impose undue burdens on meatpackers.

“They don’t have to put the label on there,” Vilsack told Bloomberg. “But if they choose to put it on there, then they better be able establish that the animals were born, raised, slaughtered, processed in the US.”

About 12% of all meat, poultry and egg products sold in the US currently claim US origin on their labels, the agriculture department estimates.

U.S. Cattlemen’s Association president Justin Tupper said in a statement his group is “thrilled that the proposed rule finally closes this loophole by accurately defining what these voluntary origin claims mean. If it says, ‘Made in the USA,’ then it should be from cattle that have only known USA soil.”

However, the North American Meat Institute said the new regulations for meat products are again likely to result in trade retaliation from Canada and Mexico costing American consumers and businesses billions of dollars.

National Cattlemen’s Beef Association NCBA Executive Director of Government Affairs Kent Bacus released the following statement:

“There is no question that the current “Product of USA” label for beef is flawed, and it undercuts the ability of U.S. cattle producers to differentiate U.S. beef in the marketplace. For the past few years, NCBA’s grassroots-driven efforts have focused on addressing problems with the existing label, and we will continue working to find a voluntary, trade-compliant solution that promotes product differentiation and delivers profitable solutions and for U.S. cattle producers. Simply adding born, raised, and harvested requirements to an already broken label will fail to deliver additional value to cattle producers and it will undercut true voluntary, market-driven labels that benefit cattle producers. We cannot afford to replace one flawed government label with another flawed government label.”

A statement from R-CALF USA said the organization supports the proposed reforms to the “Product of USA” label, but “it stands firm that only Congress can create labeling reforms that will restore the entire truth to beef consumers and create the market reforms deserved for domestic cattle producers.”

Cash Cattle Steady to Weaker, Feeders Mixed

Fri, 27 Jan 2023 22:17:23 GMT

Cattle feeders and packers were in a standoff most of the week, with beef packers able to push the Monday-Thursday average lower for the five direct-market areas falling $1.23 to $153.84. Cash trading was described as moderate in both the North and the South. Cattle in the North traded at $248 dressed, which was steady with the previous week. Cattle in the South traded at $156 per cwt., called $1 higher.

This week’s estimated cattle slaughter total reached 659,000 head, up 4,000 or 0.6% from the comparable year-ago figure, despite the feedlot population running about 3% under last year. Packers may be persuading producers to take less by pointing to sustained wholesale weakness; choice cutout has recently been stuck around $270.00, whereas it started the year around $285.00. Most analysts are calling for cash prices to increase in the coming weeks as supplies decline.

Feeder cattle were mixed from $2 lower to $2 higher. Calves traded in a wide range from $4 higher to $3 lower.

At the CME, nearby February live cattle ended Friday unchanged at $156.725; that marked a weekly rise of 10 cents. With the January futures expiring at $179.575 Thursday, nearby March feeder futures advanced 62.5 cents to $183.475, which represented a $2.50 weekly advance.

Wholesale beef prices declined again, with Friday’s Choice boxed beef closing at $267.76 per cwt., down $3.96 for the week. Select boxed beef closed Friday at $250.54 per cwt., down $5.89 for the week.

Cattle feeders anticipate stronger prices in the weeks ahead. One positive note is the fact steer dressed weights, a strong indicator of currentness of marketings, fell to 914 pounds per head the week ended Jan. 14, an 8-pound year-to-year decline. Analysts expect weights to continue sliding in the weeks just ahead, with the potential for an exaggerated drop to the usual May low. History shows years in which marketings remain current, as signified by reduced steer weights, are routinely marked by stronger late-winter and early-spring price advances.

NAMI, Other Groups Seek COVID-19 Vaccine Priority

Thu, 22 Sep 2022 00:57:18 GMT

The North American Meat Institute (NAMI), along with 14 other food and beverage associations, sent a letter to President Donald Trump requesting priority access to COVID-19 vaccines to protect workers and keep the food supply chain running.

The letter , dated Nov. 11, was similar to a letter sent to Trump in June.

“Our members have been on the front lines of the response to the pandemic by continuing operations and ensuring Americans have access to safe, nutritious, and affordable food,” the letter stated. “Challenges have taxed the food supply chain over the past eight months, but the food, agriculture, manufacturing, and retail industries are resilient, and the supply chains have not broken.

“Once a vaccine for COVID-19 is developed, it is imperative that we have a federally orchestrated vaccine distribution program and prioritization of vaccination among population groups.”

In addition to NAMI, the letter was signed by FMI – The Food Industry Institute, American Bakers Association, American Frozen Food Institute, Consumer Brands Association, Global Cold Chain Alliance, International Dairy Foods Association, National Automatic Merchandising Association, National Confectioners Association, National Grocers Association, National Restaurant Association, North American Millers Association, Peanut and Tree Nut Processors Association, SNAC International and United Fresh.

The administration currently considers four groups for prioritizing COVID-19 vaccinations if the initial supply is limited. The four groups include: health care personnel (paid and unpaid persons serving in health care settings who have the potential for direct or indirect exposure to patients or infectious materials); non-health care essential workers; adults with high-risk medical conditions who possess risk factors for severe COVID-19 illness; and people 65 years of age and older (including those living in long-term care facilities).

The groups said they “strongly support” prioritizing essential workers in critical infrastructure industries, including those responsible for ensuring the continuity of the nation’s food supply.

“Prioritizing vaccinations for food, agriculture, retail and CPG workers will be a key intervention to help keep workers healthy and to ensure that agricultural and food supply chains remain operating,” the groups said. “To ensure a successful vaccination campaign, a strong, coordinated, public education campaign will be required to ensure widespread and sustained acceptance of vaccinations. The playbook provides a roadmap for doing so. We encourage the administration to begin activating this as soon as possible.

“The agricultural, food manufacturing, distribution and retail industries will continue to fulfill the ‘special responsibility’ critical infrastructure industries carry, and we are proud that our industry’s workforce has selflessly persevered to feed America,” the groups said. “We also look forward to partnering with the administration to reinforce the importance and safety of vaccinations and ensuring our essential workers can access and receive vaccinations when available.”

JBS Offers $100 to Employees Who Get COVID-19 Vaccine

Thu, 22 Sep 2022 00:56:47 GMT

CHICAGO, Jan 21 (Reuters) - Meatpacker JBS USA and chicken company Pilgrim’s Pride Corp said on Thursday they will pay $100 to U.S. employees who voluntarily receive a COVID-19 vaccine.

The bonus is intended to encourage employees to get inoculations, after thousands of U.S. meatpacking workers became infected with the coronavirus last year. Outbreaks of the disease temporarily shut slaughterhouses in the spring, pushing up meat prices and tightening supplies for consumers.

JBS USA and Pilgrim’s Pride said internal surveys showed 60% to 90% of employees at individual facilities were willing to be vaccinated. The companies have launched educational campaigns to promote the vaccine to their workforce, which includes immigrants from around the world.

According to federal guidance by the U.S. Centers for Disease Control and Prevention, food and agricultural workers are scheduled to receive the vaccine in a later phase, after healthcare workers and people over the age of 75.

“We recognize that some team members in our diverse workforce may have concerns or be less inclined to get vaccinated,” said Chris Gaddis, JBS USA’s head of human resources.

JBS USA processes beef and pork and is the U.S. arm of Brazilian meatpacker JBS SA, which mostly owns Pilgrim’s Pride.

The companies are working with state and local health departments and healthcare providers to determine the best way to deliver the vaccine at each plant location, according to a statement.

Rival meatpacker Tyson Foods Inc said on Thursday it will offer vaccines on site at its facilities while employees are on the job.

(Reporting by Tom Polansek Editing by Chizu Nomiyama and Rosalba O’Brien)

Tyson Foods Mandating COVID-19 Vaccinations for U.S. Employees

Thu, 22 Sep 2022 00:55:28 GMT

Tyson Foods announced Tuesday that it is requiring its team members in the U.S. to be fully vaccinated against COVID-19 by Oct. 1, 2021, and all other team members are required to be fully vaccinated by Nov. 1, 2021, subject to continued discussions with locations represented by unions, a company release says.

“Getting vaccinated against COVID-19 is the single most effective thing we can do to protect our team members, their families and their communities,” said Dr. Claudia Coplein, chief medical officer, Tyson Foods, in the release. “With rapidly rising COVID-19 case counts of contagious, dangerous variants leading to increasing rates of severe illness and hospitalization among the U.S. unvaccinated population, this is the right time to take the next step to ensure a fully vaccinated workforce.”

This requirement makes the company the largest U.S. food company to require vaccinations against the coronavirus for its entire workforce. It says that almost 50% of its U.S. workforce has been vaccinated and infection rates among its team members remain low.

The company has hosted more than 100 vaccination events for its workers since February and more than 56,000 U.S. team members have been vaccinated so far, the release says. Additional onsite vaccination events will be scheduled, and the company will continue to collaborate with local health departments and healthcare providers to make the vaccine more accessible.

Tyson Foods also notes in the release that it will provide $200 to its frontline team members, subject to ongoing discussions with locations represented by unions, which it says is an expansion of Tyson Foods’ existing policy to compensate workers for up to four hours of regular pay if they are vaccinated outside of their normal shift or through an external source.

Exceptions to the mandate will be available for workers who seek medical or religious accommodation, it says.

Union Pushback

The United Food and Commercial Workers (UFCW), which is the union for 250,000 meatpacking and food processing workers and includes 24,000 Tyson meatpacking workers across the country, says it has “serious concerns” about the vaccination mandate.

“UFCW is proud to say that we have high vaccination rates among our unionized food workers across the country, and as a result, we have helped reduce COVID-19 infection rates in many of our industries, including meatpacking. While we support and encourage workers getting vaccinated against the COVID-19 virus, and have actively encouraged our members to do so, it is concerning that Tyson is implementing this mandate before the FDA has fully approved the vaccine,” says UFCW international president Marc Perrone.

“As the union for Tyson meatpacking workers, UFCW has made clear that this vaccine mandate must be negotiated so that these workers have a voice in the new policy. UFCW will be meeting with Tyson in the coming weeks to discuss this vaccine mandate and to ensure that the rights of these workers are protected, and this policy is fairly implemented. We believe the FDA must provide full approval of the vaccines and help address some of the questions and concerns that workers have. Additionally, employers should provide paid time off so that their essential workers can receive the vaccine without having to sacrifice their pay and can rest as needed while their body adjusts to the vaccine and strengthens their immune system to fight off the virus,” Perrone’s statement continues.

A memo from Tyson Foods president and CEO Donnie King to team members can be read here .

To date, Tyson Foods says it has spent more than $700 million related to COVID-19 mitigation, including buying personal protective equipment and temperature scanners, installing protective barriers and providing onsite testing and vaccinations. It also partnered with an independent medical provider to bring medical services onsite, hired an additional 200 nurses and its first chief medical officer, the release says. It has also spent time educating team members, in many languages, about the benefits of the COVID-19 vaccination.