Current Cattle Market Daily Headlines for Thursday, August 20, 2020

by | Aug 20, 2020 | 0 comments

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Temporary change to imported beef

https://news.mcdonalds.ca/covid-19-temporary-change-imported-beef?fbclid=IwAR2Ebrxz1-ao7Q7YsTu4ayEWonNhQ6vYDdYATOKxFocCjLXCISfcJneU3oQ

  • McDonald’s Canada has has had a long-standing commitment to serve 100 percent Canadian beef. However, the fast-food chain will now source beef from outside of Canada due to supply chain issues caused by Covid-19.
    • Sourcing of global beef will end once the country’s beef supply stabilizes.
    • The company is working closely with Cargill and other McDonald’s suppliers around the globe to meet current beef demand.
  • Canada’s beef industry is currently facing processing capacity issues, including the temporary closure of Cargill’s High River, Alberta processing facility.
  • The company plans to source as much Canadian beef as possible and fill in the gaps with beef from pre-approved global McDonald’s suppliers and facilities.
  • McDonald’s is committed to supporting Canadian ranchers and farmers, and the company looks forward to the day when they can go back to sourcing 100 percent Canadian beef.

 

Maxwell Foods files lawsuit against Smithfield Foods

https://www.nationalhogfarmer.com/business/maxwell-foods-files-lawsuit-against-smithfield-foods

  • Days after announcing the permanent closure of its hog operations in 2021, Maxwell Foods has filed a lawsuit against Smithfield Foods.
    • The company claims that Smithfield failed to provide favored nation pricing as required by the Production Sales Agreement, its refusal to provide Maxwell a fair price and its failure to purchase Maxwell’s output as required by the PSA. These actions were intentional and are unlawfully running Maxell out of the business.
  • Maxwell and Smithfield entered into a PSA on December 5th, 1994. Smithfield agreed to purchase, and Maxwell agreed to sell, all market swine produced by Maxwell in Virginia, North Carolina, and South Carolina.
    • The agreement stated that Smithfield would purchase all of Maxwell’s output at the “most favored” national price, up to 155,000 hogs per month.
  • The agreed to pricing formula was derived from the average daily price of live hogs on the Iowa-southern Minnesota spot market.
    • The PSA stated that Maxwell and Smithfield would substitute a new basis for deriving the average terminal price if their specific spot market “ceased to be a viable market.”
  • After Smithfield acquired Caroll’s and Murphy’s, two other major swine producers, in 1999, Maxwell said the increased consolidation in the industry caused a sharp decline in volume of hogs traded in spot markets.
    • Maxwell began to feel the affects of the consolidation and Smithfield’s aggressive vertical integration in 2016. Prices paid to Maxwell in the following years declined along with the prices in the Iowa-southern Minnesota market.
  • Smithfield responded to the suit by saying the commodity market issues were a response to low livestock prices, which the company has also suffered from.

 

Boxed beef prices

www.nationalbeefwire.com

  • Choice boxed beef: $223.04 (+2.18)
  • Select boxed beef: $205.65 (+1.00)

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  1. Current Cattle Markets Daily Headlines for Friday, August 21, 2020 | Fair Cattle Markets - […] Current Cattle Market Daily Headlines for Thursday, August 20, 2020 […]

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