After a fire partly destroyed the Tyson Foods beef plant in Holcomb, Kan., Aug. 9, officials now say they’ll be back to “business as usual” after Jan. 1.
“We are leveraging our entire supply chain network in order to redirect our cattle supply and meet customer demand for our product,” Liz Croston, public relations manager for Tyson Fresh Meats said by email. “This helps us to limit the magnitude of disruptions.”
Tyson leads the nation in cattle slaughter, and the Holcomb plant processed about 6% of the country’s cattle.
The nearest Tyson plants to Holcomb are in Amarillo, Texas, and Lexington, Neb. The Lexington plant is 241 miles away. These plants will be pushed harder which will cause operations costs to go up. That is due to needing more hours and more shifts at the other plants; plus, the cost of transportation.
“We’ll work to help our valued supplier partners find alternatives for their livestock during this ordeal,” said Worth Sparkman, a spokesman for Tyson, in a press release.
The fire disrupted cattle markets, but consumers were expected to see little price impact immediately, with about just under 400 million pounds of beef in cold storage, primarily in bulk beef.
Still, some have begun sounding alarms.
“We recognize that there are market fundamentals at play,” stated David Trowbridge, Iowa Cattlemen’s Association President in a news release, “But given the extreme effect the current market conditions are having on Iowa’s cattle industry, we believe it is in our members’ best interests to eliminate any doubts regarding the market reaction.”
In August, Nebraska Farm Bureau president Steve Nelson asked USDA Under-Secretary of Agriculture for Marketing and Regulatory Programs Greg Ibach, to address a pair of specific issues related to the incident. The first would help address the considerable shift in cattle slaughter to other plants. Nelson requested the agency transfer additional regulatory staff to those facilities to keep beef processing moving forward. He also urged the USDA to keep a close eye on cattle markets.
“Given the situation in Kansas and the resulting impacts it has had on cattle prices, we hope the USDA Packers and Stockyards Division will actively investigate the recent movements in cattle markets, Nelson stated in his missive. “We also hope any anti-competitive activities will be investigated and prosecuted to the fullest extent of the law.”
The Packers and Stockyards Act makes it unlawful for any packer to engage in or use any unfair, unjustly discriminatory or deceptive practices or devices as they procure livestock.
In a press release, Sen. Deb Fischer, R-Neb., a member of the Senate Agriculture Committee, expressed concern that some in the beef supply chain may prove to be less than trustworthy.
“After this devastating fire occurred, I called for commodity market oversight to help ensure market participants are not taking advantage of our ag producers,” she said.
To assuage such fears, the USDA is set to use the full authorities granted to the agency to monitor and address concerns stemming from the shutdown.
According to a press release from his office, U.S. Secretary of Agriculture Sonny Perdue has directed USDA’s Packers and Stockyards Division to launch an “investigation into recent beef pricing margins to determine if there is any evidence of price manipulation, collusion, restrictions of competition or other unfair practices.”
Through her press representative Matthew Sussis, Fischer stated that she is concerned about anyone in Nebraska agriculture who is affected by this unfortunate incident.
In the statement she said, “It’s going to be up to investigators to determine if and what type of market manipulation took place.” Sussis said Fischer looks forward to reviewing the results of the USDA investigation once it concludes.
Although no one has any evidence of anything untoward going on in the market, no whistle-blower has come forward and there have been no accusations of impropriety – some feel government oversight gives a suggestion of transparency to the process.
“If any unfair practices are detected, we will take quick enforcement action. USDA remains in close communication with plant management and other stakeholders to understand the fire’s impact to industry,” Perdue said.
Perdue’s actions were supported by cattlemen’s groups. National Cattlemen’s Beef Association President Jennifer Houston released a statement that said Perdue’s announcement “demonstrates the government’s understanding of the extreme strain placed on the cattle industry by the plant fire in Holcomb, Kansas.”
The Iowa Cattlemen’s Association also applauded the decision. In a statement, association leaders said over the past two weeks, cattle producers have expressed concern that changes in the live cattle and boxed beef markets since the fire are unjustified.
The fire is expected to impact the fall fed cattle market.
To help compensate for challenges, Sen. Fischer also wrote letters to chairman Heath Tarbert of the Commodity Futures Trading Commission and Administrator Raymond P. Martinez of the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration, calling for commodity market oversight and flexibility for livestock haulers.
Jon Burleson can be reached at email@example.com