Current Cattle Market Daily Headlines : Friday Morning May 1, 2020
Mackenzie Johnston
Newspapers and Laptop. Different Concepts for News - Network or Traditional Tabloid Journals. Data Sources - Electronic Screen of Computer or Paper Pages of Magazines, Internet or Papers
Tyson Foods helped create the meat crisis it warns against
John Tyson, whose family reigns as the largest meat processor in the US, took out an ad in the Sunday edition of the New York Times this past Sunday, warning that the food supply chain is breaking.
A few days later, President Donald Trump invoked the Defense Production Act to keep processing facilities open.
In all actuality, the real problem goes back to decades of consolidation in the processing sector.
Tyson, JBS, and Cargill control 2/3 of America’s beef processing.
The bulk of this beef is processed in a few dozen giant plants.
Twelve closures of US slaughter plants in the last month have led to a 25% reduction in pork processing and a 10% reduction in beef processing. At the same time, beef prices at the retail level have surged.
Theses issues stem from consolidation.
The number of slaughter plants has plummeted by 70% since 1967.
Tyson clocks in an annual income of about $2 billion and its shares have surged 60% in the last 5 years, bringing its value to $23 billion.
Interviews with Bryan Reed and Shane Kaczor
Both of these gentlemen are concerned about the consolidation of the packing industry.
Both feel that an increased level of negotiated trade would greatly benefit the industry.
Kaczor said that rural America is in deep trouble if we don’t somehow find a way to solve our issues in the cattle industry.
Kaczor feels that the CME is broken and not a viable tool for risk protection.
Both gentlemen don’t quite understand why it is so difficult to reinstate MCOOL
