Slaughterhouse Fire Strikes Fear Of Beef Storage- Propels Beef Prices To Record High
A Tyson Foods Inc. slaughterhouse went up in flames on August 10 shuttering the plant completely. There have been worries ever since of a hamburger and steak shortage.
Experts believe is the reason for the strong showing beef had on the market on Friday. According to a Tyson representative, the plant closure is indefinite, the date of it reopening remains uncertain.
Buyers for grocery stores and restaurants have been scrambling in the last week, to try to secure other sources for meat. The huge slaughterhouse in Holcomb, Kansas in Finley county, killed over 6000 cows daily.
It was responsible for 5% of all of the beef supply in the U.S. The fire and the supply that evaporated with it, came at a time when beef sales were already surging. There have been far less slaughterhouses in the last decade, as the demand for plant based foods raises.
Beef Prices Have Been On The Rise In Part Due To Pigs Dying From Swine Flu
It was different issues aligning at the same time that plays a part in the demand cycle. In part it’s due to safety fears regarding pork, as the demand rose for beef, there were less slaughterhouses producing beef.
Now the demand is a bit higher, with one powerhouse slaughterhouse completely shuttered, it played a role in the price surge. A slaughter cow brought in $344 on Friday, up from $153 a week ago. That is a$191 rise in one week, the previous record high was $308.
Packers like Tyson and Cargrill are really in a tailspin trying to meet demands, but are drowning in profits at the moment. Prices were way up for certain cuts of beef too. After the fire, prices immediately declined slightly due to a buyer being eliminated.
All was not rosy, prices for cattle traded at $105 per hundredweight in cash. Those prices were in the Kansas and Texas markets, and was a 10% decline from the week prior. That price reflected the lowest prices in the South since 2017.
Beef Expert Cassie Fish Says Seeing These Types Of Price Extremes Is Very Rare
U.S. beef expert Cassie Fish, formerly of Tyson, said, “seeing such price extremes on opposite ends of the spectrum is rare.’ Fish further elaborated that ‘these types of price extremes are unprecedented’.
Fish believes traders caught off guard by the impact of the Tyson fire would have been on the market. She said, “it was a total lack of preparedness that created the prices extremes.’ Food processors are trying to take advantage of a rise in beef demand that occurs right around Labor Day.
The fire that occurred last week in Kansas was massive, it’s cause still remains unclear. Over 3800 employees that worked at the Holcomb plant ‘are out of work’ Tyson assured employees ‘that they would still have some pay.’ Tyson has been dealing with employees needs and questions in the last week. Several are concerned about their futures with the company as the plant remains closed.