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Tyson beef plant fire impacts cattle markets nation-wide, hits communities hard

News Staff - August 19, 2019

HOLCOMB, KS – There are so few packing plants left in the United States that when one of the largest beef plants is on fire, people (and the markets) notice.

Following a fire August 9 at Tyson’s sprawling facility in Holcomb in the heart of cattle feedlot territory, profit margins for packers such as Tyson, Cargill Inc., and JBS USA soared to record highs on Friday - $344 per head of cattle slaughtered, up from $153 a week ago before the fire and above the previous record of $308, according to Denver-based livestock marketing advisory service HedgersEdge.com.

The Holcomb plant processed about 6,000 head of fed cattle per day (30,000 head in a five-day work week), which amounts to 6% of total U.S. fed cattle capacity, according to the Kansas Livestock Association.

Cattle producers, meanwhile, saw prices decline because the fire temporarily eliminated a key buyer of their livestock. The fire could not have come at a worse time for ranchers. The number of cattle being fed for slaughter reached 11.5 million head on July 1, a record high for that date since the USDA began tracking data in 1996.

“Potential market impacts are predicted by CattleFax and includes a possible loss of currentness in the cattle-feeding segment, cattle feeders could lose some market leverage, and all classes of cattle could see more price risk. Some of the pressure could be alleviated if existing harvest capacity dedicated to cows and bulls is incentivized to process fed cattle and if plants have the cooler, boxed beef capacity and labor to process cattle on weekends."

The August 9 fire caused major damage at the plant, which employs 3,500 workers. The square footage of the damaged area is small compared to the entire plant, but Tyson says the fire impacted critical operating systems.  The president of Tyson's Fresh Meats Division says a spark from welding during maintenance likely caused the fire. In a news release dated August 12, Tyson Foods said it will rebuild on the Holcomb site. Until the plant comes back online, full-time workers will receive full pay, the company said.

The plant was opened in 1980 by IBP, Inc., which was acquired by Tyson Foods in 2001. It is the sixth largest employer in the state of Kansas. The community of nearby Garden City is bracing for an economic fall out from lost jobs and lost services the plant generated. As the biggest employer in Finney County, more people than just the Tyson employees rely on the plant for a source of income in Garden City.

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