Current Cattle Market Daily Headlines for November 20, 2020

by | Nov 20, 2020 | 0 comments

Tyson suspends Iowa plant managers amid virus betting claim

  • Yesterday, Tyson Foods suspended top officials at its largest pork plant in Waterloo, IA and an investigation was launched into allegations that the top officials were betting on how many workers would get infected with coronavirus.
  • Tyson’s CEO, Dean Banks, said that he was extremely upset about these allegations against the managers and that these actions do not represent the company’s values.
  • Tyson has received criticism over recently amended wrongful death lawsuits in which plaintiffs’ lawyer claim that Waterloo plant manager Tom Hart organized a cash buy-in, winter-take-all betting pool for supervisors and managers to wager on how many employees would test positive for Covid-19.
  • Supposedly, Hart organized the betting pool back in the spring when the virus spread through the Waterloo plant. At that time, more than 1,000 of the plants 2,800 workers tested positive for the virus and six were killed after being infected.
  • Democratic State Representative Ras Smith, whose district includes the Waterloo plant, said that the managers were knowingly allowing the virus to spread like wildfire throughout the plant and the community.
  • During the time of the alleged betting, Tyson was resisting pressure from local officials to shut down the plant as a safety precaution.
    • Tyson claimed that the plant, which can process close to 20,000 hogs per day, was a vital market for farmers and critical to the meat supply.
  • During the outbreak last spring, managers continually told workers that they needed to stay on the job to ensure that Americans didn’t go hungry. At the same time, those same managers were avoiding the plant floor themselves because they were afraid of contracting the virus.
  • John Casey, an upper-level manager, told workers that the virus was a “glorified flu” and “not a big deal.” He also told his subordinates to continue working even if they exhibited signs of the virus.
  • Tyson has asked a federal judge to dismiss the lawsuits, regarding the six individuals that died from the virus, stating that the exclusive remedy for workplace injuries under Iowa law is through the workers’ compensation system.
    • The company’s lawyers also claim that the plaintiffs have not been able to prove that the deceased workers contracted the virus at the plant and not elsewhere.


Panic-buying begins again and Covid-19 cases in rural America increase for the eighth straight week

  • People are starting to panic buy as fear spreads that there may be a second wave of product shortages in the near future.
  • Some retailers are starting to put limits on various paper items like toilet paper and paper towels. Retailers are also putting limits on cleaning supplies.
  • Covid-19 infections in rural America has broken records for eight straight weeks, and for the first time, rural Covid-19 deaths topped 2,000. These deaths set a record for the fourth straight week.
  • The number of cases in rural areas has increased by 36 percent, more than double the number from three weeks ago.


Unfounded rumors fuel fear

  • Yesterday, the cattle futures took a dive as rumors spread about packing plant slowdowns or closures due to Covid-19. None of these rumors are accurate.
  • A few true facts to currently consider:
    • Steer carcass weights have dropped another 2 lbs. week over week to 924 pounds. This is down 7 lbs. from the high two weeks ago, signaling that carcass weights may have finally found a ceiling.
    • As of midday yesterday, choice boxed beef rallied to $238, inches away from the 2019 November high.
    • Packer margins continue to increase into record territory for November with cash cattle prices barely holding steady this week.
  • Even though packing plants are using great caution when it comes to Covid-19, fear mongering has been rippling through the cattle markets all week.


Boxed beef prices

  • Choice boxed beef: $237.70 (+1.86)
  • Select boxed beef: $213.89 (+0.27)


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How did we get here?

From the Holcomb Tyson fire to COVID-19;
Click to see a timeline of events that have brought to light the profit and pricing disparity in cattle markets.


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