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Are Record Carcass Weights Pushing the Supply Chain to Its Limit?

Fri, 06 Feb 2026 17:04:00 GMT

Has the beef industry hit the tipping point when the unintended consequences of animal size outweigh the benefits? Industry leaders say rising carcass weights have boosted beef supply and efficiency, but they have also increased bruising, mobility issues, heat stress and economic risk.

Kevin Good, CattleFax vice president of market analysis, says carcass weights the last two years have gone up by 52 lb., with carcasses now averaging 975-990 lb.

“That’s an offset of 2 million head harvested,” he explains.

While the added weight has helped fill the supply gap due to the reduced cow herd and fewer cattle on feed, Jessica Lancaster, NCBA senior director of product quality and safety research, says these huge incremental shifts in carcass weight can certainly cause challenges.

Lancaster was a guest on “AgriTalk” Thursday, discussing carcass size research as well as foreign object research results.

Shown is the “Bigger Cattle, Bigger Decisions: Managing Health and Welfare as Cattle Size Increases” panel including: Lily Edwards-Calloway, Colorado State University associate professor of animal science; Scott Pohlman, Cargill director of beef supply chain sustainability; and AJ Tarpoff, Kansas State University Extension veterinarian.

(Angie Stump Denton)

Today’s Bigger Animals Are Testing Transport and Plant Limits

The Cattlemen’s College session “Bigger Cattle, Bigger Decisions: Managing Health and Welfare as Cattle Size Increases” featured industry experts Scott Pohlman, Cargill director of beef supply chain sustainability; Lily Edwards-Calloway, Colorado State University associate professor of animal science; and AJ Tarpoff, Kansas State University Extension veterinarian.

From longer days on feed to tougher transport and processing, the panelists discussed how a more efficient, heavier animal can strain welfare, infrastructure and profitability. They all agree proactive management and research are critical to dealing with the rising carcass weights.

Here are some key takeaways from their conversation:

1. Structural Shift: Fewer Cows, Bigger Cattle

Pohlman says the U.S. cow herd is at its lowest level since the Roosevelt administration.

Feedlots have compensated by adding days on feed and pushing carcass weights sharply higher — approaching 975-990 lb. — resulting in similar total beef supply with fewer animals but much larger individuals.

2. Efficiency Gains Are Real, and So Are the Risks

According to Tarpoff, the larger, heavier cattle and longer feeding periods have improved overall efficiency: more beef with fewer animals, less total feed and water per pound of beef. This has helped “backfill” lost production from the smaller cow herd.

However, longer time in the system means:

Higher probability of adverse outcomes.
Rising death loss and greater economic risk per head, because each animal is more valuable.

3. Welfare: Tipping Point Concerns Around Size

Welfare is framed around biological functioning: growth, health and reproduction, the ability to express normal behavior and the freedom from discomfort, fear and distress.

Edwards-Calloway says there is a particular concern for animals at the extremes of the size bell curve, whose welfare can be “pretty compromised.”

The industry must proactively address welfare challenges associated with larger cattle to maintain consumer trust. Edwards-Calloway says if consumers think the industry knew about a welfare problem and didn’t act, that’s seen as worse than making an honest mistake and fixing it.

4. Transport and Packing Plants: Systems Not Built for Today’s Cattle

Edwards-Calloway explains transporting from feedlot to packing plant is still one of the most stressful phases, even with best practices.

Research has often controlled for size rather than explicitly asking how large size affects outcomes. She says evidence suggests larger‑frame cattle have more traumatic events and bruising on certain trailer types.

Not all fed cattle are fit for transport; there’s a call for mobility scoring at loading, not just at the plant, she adds.

Pohlman says the frequency of bruising in the 2022 National Beef Quality Audit was the highest on record, with major/critical bruises increasing. He stresses the economic impact is significant at about $110 million from loin bruises alone.

He also says mobility scores at arrival have worsened.

Processing facilities built decades ago are struggling to accommodate today’s larger cattle. Plants are having to modify pen densities, single-file alleyways, restrainer sizes, intervention cabinets and even re-engineer rail systems to handle the increased weight and size of modern cattle carcasses.

5. Heat Stress, Dark Cutting and Seasonal Losses

Heat stress represents a more than $650 million annual loss to the industry, with heavy, near-slaughter cattle at highest risk. Larger animals have increased difficulty with thermoregulation, making heat-stress management increasingly critical as cattle weights continue to rise.

Tarpoff says summer heat correlates with higher dark‑cutting rates, causing additional carcass‑value loss.

6. Call to Action: Upgrade Infrastructure and Management for a ‘Different Animal’

Today’s cattle are heavier, bigger‑framed and take up more space per head than 10 to 20 years ago. Now is the time to reinvest in infrastructure: pens, water systems, shade and heat‑stress mitigation, transport equipment and plant modifications.

Tarpoff says the industry needs to be nimble enough to make individual outcome decisions because every animal is a bigger financial and reputational stake.

He encourages the industry to consider welfare investments — comfort, health, mobility and heat mitigation — as economic investments with real returns in performance and risk reduction.

Tarpoff stresses that now is the time to adapt systems to the realities of larger cattle so the industry can keep delivering high‑quality, efficient beef without eroding welfare or consumer trust.

1,500-lb. Carcasses the New Normal, Not the Exception

Wed, 18 Jun 2025 16:26:38 GMT

Today the entire beef industry — from producers to processors — is economically incentivized to produce heavier animals. Ty Lawrence, West Texas A&M University animal science professor and director of the BCRC, predicts that carcass weights will continue to increase, potentially reaching 1,500 lb. in the near future.

Lawrence was a keynote speaker during the 2025 Beef Improvement Federation (BIF) Symposium in Amarillo last week. He says the industry has already seen harvests of cattle approaching that weight, with some producers currently feeding cattle up to 2,300 lb.

“We can feed cattle today to much bigger weights and be more profitable than you’ve ever considered,” Lawrence says.

BIF attendee and Kansas beef producer Joe Epperly from Wamego, Kan., summarizes, “The most hard-hitting comment at BIF was Lawrence’s 1,500-lb. carcass prediction by the end of his career. The implications of that to genetic selection, cost of production and cow size are far ranging. It will be a challenge for producers in every segment to meet.”

More than 400 beef producers, breed association leaders and industry professionals participated in two and a half days of educational programming focused on beef industry profitability and sustainability.

Tuesday, June 10, the event kicked off with the Young Producer Symposium. Wednesday’s general session focused on “Beef Industry Profitability: Conflicting market signals and profit drivers in the beef value chain.” Thursday’s general session theme was “Sustainability: Improving our product through selection, applications of technology and data integration.”

Wednesday and Thursday afternoon technical breakout sessions focused on a range of beef-production and genetic-improvement topics.

Bradley Wolter, a symposium attendee from Aviston, Ill., says, “Larger carcasses will be a critical part of bridging the supply gap in the near term. Identifying genetic association with late-term mortality and morbidity requires further research and coordination on the part of breeding entities.”

He says the chasm remains between exponentially larger finished carcasses that optimize fixed packer costs verses a target of smaller cows for biological optimum on the ranch.

“More collaborative, holistic data analysis with integrated research is needed to avoid industry sub-optimization and ensure competitiveness on the world stage,” Wolter summarizes.

Scott Greiner, Virginia Tech professor and Extension animal scientist, agrees with Epperly and Walter saying the message that resonated with many in attendance was the continued emphasis on increasing carcass weights by the feedlot and packing sectors, and the impact it will have at the cow-calf sector as it relates to cow size and production costs.

“This trend is not new, but I think the way things were conveyed by several speakers in terms of the economics and market signals, sure seems like bigger is what will continue to be a primary emphasis,” Greiner says.

Ken Odde, 2025/26 BIF vice president from South Dakota, says: “Two of the real questions about feeding cattle this long [to 1500-lb carcass weight] is what happens to the carcass traits as you do that? What happens to feed efficiency?”

One of the sessions that stood out to Odde during the symposium was a presentation on a project at South Dakota State University in the Advancements in End Product Improvement breakout session — “Extended days on feed: Influences on growth performance, efficiency and carcass characteristics of steers and heifers of different proportions of Angus and Limousin genetics.”

Is the U.S. Behind?

“From conversations in the hallway, I learned that the U.S. beef industry is behind on methane research, and if we are going to compete in the global marketplace, we need to get a move on,” Epperly says. “Australian Angus will release a methane research EPD in 2025, and we have barely enough data in the U.S. to see differences. That Australian data includes a lot of American bulls, so we will have data whether some American breeders like it or not. The optics for some are unfavorable, but whatever we can do to keep the doors open for our product the better off we will be.”

Likewise, symposium speakers referenced the Brazilian beef industry and how it is poised for continued success and rapid growth given its bountiful resources, not the least of which is its people.

“You see it not only in its scaled adoption of AI, but through the numerous young geneticists who make up the audience,” Walter says. “The U.S. industry needs to continue to invest in its genetic improvement through both public and private partnerships to maintain a position of world leadership.”

Young Producer Focus

“The Young Producer Symposium opened with a message about ‘Standing on the shoulders of giants,’” says Elizabeth Dressler, a graduate student who attended the symposium. “This resonated with me as I thought about all the research and progress the beef industry has made over the years. I thought it was a great way to open the conference by paying respect to the work that has been done in the past, as we look into the future the rest of the conference.”

Wolter adds there’s an excitement among young people in the beef industry.

“These young leaders are creatively engaged with our consumers unlike the previous generation,” he says. “I believe that will only create more demand and opportunities for an industry despite some questions and uncertainties with how cattle interact with their environment.”

Investing in the Future: Cargill Announces $90-Million Investment in Automation and Technology

Mon, 09 Jun 2025 15:33:19 GMT

Cargill plans to invest nearly $90 million in automation and technology at its Fort Morgan, Colo., beef plant over the next several years as part of its broader Factory of the Future initiative aimed at improving operational efficiency, yield and worker safety, the company announced Thursday.

“We’re at an extremely challenging point in the cattle cycle for packers with tight supplies and margins,” says Jarrod Gillig, senior vice president of Cargill’s North American beef business. “But now is the time we need to step up and make investments in our facilities to make sure they are working efficiently.”

The company has already put $24 million into technology upgrades at the plant since 2021. One of the newest tools to be deployed will be CarVe, Cargill’s proprietary, patent-pending computer vision system that measures red meat yield in real time. The technology gives managers instant feedback to help workers refine cutting techniques and reduce waste.

“I grew up on a farm/ranch and am blessed to still be active in our family’s cattle operation today, so I understand the importance of honoring the whole animal and doing right by the hard work of the ranchers and farmers who raise them. With tools like our new CarVe computer vision technology, we’re able to keep more high-quality protein in the food system, cut down on food waste, and make each animal count. That matters more than ever today.”

— Jarrod Gillig, senior vice president of Cargill’s North American beef business

“Before CarVe, yield data was always yesterday’s news,” Gillig says. “Now, we’re making decisions in the moment and saving product that would’ve been lost.”

Even a 1% improvement in yields could save hundreds of millions of pounds of beef annually, a meaningful gain at a time when U.S. cattle supplies are at their lowest levels in years.

“With CarVe, we are not replacing employees, it is empowering them to work more efficiently and effectively and helping us maximize the carcass,” Gillig summarizes.

The company has also invested in the Fort Morgan community, backing a $40 million workforce housing initiative that includes new townhomes and an 81-unit apartment complex scheduled to open this fall. Cargill has provided more than $500,000 in grants to local nonprofits for childcare access and housing-related support.

“Fort Morgan plays an important part in Cargill’s critical role as a food company to the nation and the world,” Gillig adds. “By partnering with local ranchers and farmers in Colorado and the region, we’re working hard to produce more food with less impact there so we can move it to store shelves and ultimately family dinner tables across the country.”

Your Next Read: Four Key Takeaways from the CattleFax Cow-Calf Survey

Roof Collapse Shutters Cargill's Dodge City Beef Plant

Thu, 12 Sep 2024 15:42:12 GMT

Cargill Meat Solutions beef processing facility in Dodge City was shuttered Monday following a partial roof collapse over the weekend. Dodge City received about four inches of rain in a short period of time which caused the collapse. No one was injured.

In a statement, Cargill said it is working with structural engineers to stabilize the roof and resume operations. Cargill spokesman Chuck Miller said the processed beef stored at the facility was undamaged and the company is shipping product to customers this week.

Operations resumed on the plant’s fabrication floor on Tuesday and the company says operations will resume on the harvest floor Friday.

Processed beef stored in the facility’s coolers and distribution center was undamaged, and Cargill is shipping product to customers this week, he noted.

“We are leveraging the broad footprint of our supply chain to minimize disruptions to customers and producers,” Miller said.

The Dodge City facility has a 6,000 head per day capacity.

Roof Collapse Shutters Cargill's Dodge City Beef Plant

Wed, 03 Jul 2024 16:19:21 GMT

Liver Abscesses in Beef-on-Dairy Cattle are Costing Packers Big Money

Mon, 22 Apr 2024 14:54:48 GMT

The beef-on-dairy phenomenon has seen explosive growth, especially as dairy producers look to diversify their operations and capitalize on high beef prices. However, no rose grows without a few thorns. And the thorn in the side of this new sector of the dairy industry has been the prolific amount of liver abscesses found in these crossbred cattle.

For dairy producers, this common health issue amongst beef-on-dairy animals does not necessarily have a big impact on their bottom line. But according to Dr. Blake Foraker, an assistant professor and meat scientist at Washington State University, this growing problem is costing packers two main things – time and money.

Time

“Liver abscesses are a big nuisance for packers because it really slows them down,” Foraker says. “In our beef-on-dairy population, we’re seeing liver abscess prevalence in 50% or more of animals. And this is holding up the production line.”

Carcasses with liver abscesses must have the organ removed manually by workers. Additionally, it must be inspected to see if the abscess has adhered to any other surrounding tissues. In turn, the extra time needed for the removal of tissue and further inspections adds up, slowing down the production line and potentially reducing the number of animals that can be processed through the facility each day.

“Time is of high importance to these packing plants,” Foraker says. “And liver abscesses, especially the severe cases, can cause a lot of rail-outs and cost packers a lot of additional time. So, this issue is something that they would really like to have resolved.”

Money

With the number of native beef animals in limited supply due to ongoing pressure with persistent drought, dairy farmers have been able to help keep meat cases full with the help of these beef-on-dairy cross animals. And while the meat from these cross animals is similar, and in some cases, more valuable than conventional beef, liver abscesses have been tainting one of the most valuable cuts of meat – the skirt steak.

“What will happen is a liver abscess will become so severe that the outside skirt muscle will adhere to the liver. In 2023, that skirt steak muscle was listed as the second most valuable cut of meat on a per-pound basis, coming in behind the tenderloin. So if packers have to cut this portion of meat out, then they are throwing away a high-dollar product,” Foraker says.

According to the beef-on-dairy specialist, dairy producers may only notice a small dock in price on the final hanging weight for their beef-on-dairy animal that had a liver abscess. However, the packers are seeing a much larger loss if additional meat needs to be trimmed.

“The outside skirt muscle, even though it only comprises about five pounds of a carcass, is worth around $12 a pound. If we have to remove that muscle because it’s adhered to the liver because of a liver abscess, then that’s about $60 per animal, which is rather significant,” Foraker says. “Now if you’re paid on a carcass weight basis, that’s only $14 to you for losing five pounds because this trimming has to occur before the pay scale at the packing point. But if you’re a packer, you’ve just lost $45 because there is now no longer an outside skirt steak from that carcass.”

According to Michigan State Extension Beef Specialist, Jerad Jaborek, livers condemned at slaughter represent an annual loss to the U.S. beef industry of more than $60 million. And that does not take into account the approximately 5-15% ding to average daily gain, and the 9.7% reduction in feed efficiency they also actuate.

“Packers are working to identify producers that are doing a good job at minimizing the prevalence of liver abscesses in their beef-on-dairy animals,” Foraker says. “Once those producers are identified, the packers are more likely to want to do business with them over a producer who is known to supply animals with this issue. So this liver abscess problem is something dairy producers certainly need to keep their eye on.”

For more on Beef-on-Dairy, read:

Fire at National Beef Facility in Liberal, Kansas

Thu, 26 Sep 2024 20:02:08 GMT

Firefighters were called to the National Beef Packing Co. facility at 9:52 p.m. Wednesday evening for a reported box trailer fire, according to the Liberal Police department.

First responders and fire units arrived to find a well-advanced fire involving four box trailers and two container trailers. Also involved was the multi-story boxed beef storage and load out building. Plant representatives confirmed to responders that all employees were safely exited and accounted for.

The fire was officially declared under control at 1:06 a.m. Officials have not released a damage estimate, but the incident was not expected to cause a major disruption to overall beef industry production.

In a statement to media, National Beef said there were no injuries and that production would be suspended on Friday, March 22, with the facility returning to normal operations Monday, March 25.

The area of fire origin has been determined with reasonable certainty, according to Liberal Police. The exact cause of the fire remains under investigation. The plant has a daily fed beef harvest capacity of 6,000 head.

One local news outlet said the company announced a four-hour late start for the fabrication and kill floor departments on Thursday.

Cold Weather Calves

Wed, 24 Jan 2024 15:25:14 GMT

When the weather becomes severe, calving becomes much more challenging. Calves born in extreme cold quickly utilize all body fat reserves and exposure to wind can exacerbate temperatures. Preparing in advance of inclement weather can lead to improved calf survival.

Remember to discuss your calving plan with your veterinarian and communicate well before there is a calving issue. Your veterinarian can also help you develop essentials for a calving kit.

Items to consider in your calving kit may include:

Veterinary emergency number in cell phone
Catch pen and functional chute
Breeding dates and due dates with associated sire
Calving book
Flashlights with batteries
Eartags with marker
Tag applicator
Iodine for navel
5-gallon bucket
Calf puller in working order
Obstetrical chains and handles
Calf sled
Syringes and needles
Exam and obstetrical gloves
Obstetrical lube
Clean towels
Straw or hay for bedding
Thermometer
Esophageal feeder
Colostrum or colostrum replacer (not a colostrum supplement)
Medications prescribed by your veterinarian such as pain medications and antimicrobials
Halter
Lariat
Sorting stick
Large trash bags
Disinfectants

Assess body temperature if a calf appears stressed. The best way to monitor a calf’s temperature is with a rectal thermometer. Inexpensive digital thermometers work well and make it easy to evaluate progress when rewarming a calf.

If a calf’s temperature falls below 100 degrees F, interventions are needed. Bring the calf indoors and out of the elements if needed. Bedding can be provided and should be deep enough to cover the calf’s legs. Empty plastic soda bottles can be filled with hot water and placed near the calf. When used appropriately, warm water baths, blankets, calf jackets, and warming boxes are all options to rewarm a calf.

Be careful not to damage the skin of the calf by either rubbing too vigorously or placing them too close to heaters. Additionally, do not to wash off the odor of amniotic fluid. This helps prevent rejection by the cow. Warm oral or intravenous fluids as advised by a veterinarian can also make a big difference but should be used with caution in calves without a suckle reflex. Once a calf is warm and has been fed colostrum, return it to its mother. Colostrum should be received within the first 6 hours of life.

Dr. Rosslyn Biggs explains what producers can do to rehabilitate cold stressed calves from March 2, 2020 on SUNUPTV. https://www.youtube.com/watch?v=WWeESnc2Nr0

Brazil Supreme Court Suspends $2 billion JBS Fine

Fri, 22 Dec 2023 18:25:12 GMT

The Brazilian Supreme Court suspended a $2.1 billion fine levied against Brazilian meat packer JBS, Reuters reported on Wednesday. The court’s decision was not made public, nor did it respond to requests for comment.

J&F Investments, the parent firm of JBS, had agreed to the fine in 2017 under a leniency agreement regarding its role in corruption scandals. JBS executives Joesley and Wesley Batista had confessed, in a plea bargain deal, to running a political bribery ring.

The company had requested the court to suspend the fine, arguing that prosecutors were biased and had taken “clearly persecutory actions.”

J&F’s request came after the justice overseeing the case, Dias Toffoli, ruled in September to annul all evidence related to a similar leniency agreement with the construction firm formerly called Odebrecht, based on messages that indicated collusion between the judge on that case and prosecutors.

In the ruling on J&F’s case, Toffoli argued that there is “at the very least, reasonable doubt” as to whether the company adhered to the agreement with federal prosecutors voluntarily, “which justifies, for the time being, the suspension of payments.”

According to a source with knowledge of the case, J&F has already paid 593 million of the total fine. However, depending on the evidence, the fine could be reduced to an amount lower than already paid.

Profit Tracker: Feedings Costs 25% Higher YOY

Fri, 07 Jul 2023 19:15:38 GMT

The average cost of feeding a steer to finish weight was 25% higher for cattle marketed last week and is projected to be 31% higher for cattle placed on feed last week at roughly $600 per head, according to the Sterling Beef Profit Tracker .

For the week ending August 27, cattle feeders saw average profits of $138 per head as the 5-area fed steer price averaged $145.61 per cwt. That price was 15% higher than the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Estimated beef packer margins for the week ending August 27 were $126 per head, down $24 per head from the previous week and down 89% from estimated margins a year ago that exceeded $1,100 per head. Last week’s Choice beef cutout averaged $259.45 per cwt., about $1 lower than the previous week and down $83 per cwt. (24%) from the same week a year ago.

Feed costs for the cattle marketed last week averaged $561 per head, down $14 from the previous week but up $121 per head from last year. The estimated total cost for finishing a steer last week was $1,900 per head, up 16% from last year’s estimate of $1,644 per head.

Cattle slaughter totaled an estimated 678,000 up 26,000 head (4%) from the same week last year. Packing plant capacity utilization was estimated at 92.5% compared to 90.2% the previous week and 88.7% last year.

Farrow-to-finish hog producers found profits of $75 per head last week, down $10 per head from the previous week but up $28 per head (58%) from last year. Lean carcass prices averaged $127.15 per cwt., down $3 per cwt. from the previous week but up $26 from last year (26%).

Pork packers saw losses of an estimated $51 per head, which is steady with the previous week but $68 per head less than the $16 profit per head from last year. Hog slaughter was estimated at 2.393 million head, down 2,000 head from the previous week and down 38,000 head (2%) from last year.

Pork packer capacity utilization was estimated at 88.8% compared to 88.9% the previous week and 90.4% last year.

(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

Profit Tracker: Packers Can’t Stop The Bleeding

Fri, 07 Jul 2023 19:15:35 GMT

Beef packers saw per head losses nearly double last week as wholesale beef prices tumbled $7 per cwt. lower. The weekly average price for market-ready cattle was slightly lower as packers secured some early-week trades at lower money. Prices rose throughout the week, however, as cattle feeders dug in their heels.

Average cattle feeding margins were estimated at $180 per head the week ending Dec. 10 as cash prices averaged $156.38 per cwt., or $16.78 per cwt. higher than a year ago. Beef packer margins were estimated at a negative $141, according to the Sterling Beef Profit Tracker . That’s the largest weekly packer loss in seven years. That compares with packer profits of $297 per head the same week a year ago.

Last week’s Choice beef cutout averaged $242.50 per cwt., down $6.85 from the previous week and down $22.42 per cwt. from a year ago.

Costs associated with finishing cattle have increased dramatically since April. The cattle sold last week carried a total feed cost of $552 per head, which is 14% higher than the $472 feed costs for cattle sold the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Cattle marketed last week had a breakeven of $143.49 per cwt., while cattle placed on feed last week have a breakeven of $151.70 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $177.75 per cwt., and feed costs of $566 per head. The feeder steer price is 7% higher than last year.

The estimated total cost for finishing a steer last week was $2,008 per head, up 12% from last year’s estimate of $1,764 per head.

Cattle slaughter totaled an estimated 652,000 head, about 15,000 head less than the same week last year. Packing plant capacity utilization was estimated at 90.0% compared to 89.8% last year.

Farrow-to-finish hog producers saw losses of $1 per head last week, about a 50-cent per head improvement over the previous week, and up $20 per head compared to last year’s $21 per head losses. Lean carcass prices averaged $86.13 per cwt., down $1.93 per cwt. from the previous week and up $19.89 from last year (23%).

Pork packers saw losses of about $6 per head, or $2 per head less than the previous week. Last year pork packers saw profits of $32 per head. Hog slaughter was estimated at 2.572 million head, down 18,000 head from the previous week and down 4,000 head from last year.

Pork packer capacity utilization was estimated at 96.2% compared to 95.7% last year.

(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

Profit Tracker: Beef Packer Losses Largest since 2017

Fri, 07 Jul 2023 19:15:35 GMT

The pendulum continues swinging toward cattle feeders as cash prices jumped $3 last week and left packers with their largest negative margins in nearly six years. Average cattle feeding margins were estimated at $165 per head the week ending Nov. 26, 2022, according to the Sterling Beef Profit Tracker . Those average margins were up $41 per head from the previous week.

Beef packer margins were estimated at a $28 per head loss, the largest per head loss for packers since Jan. 2017, according to Sterling’s database. That compares with packer profits of $488 per head the same week a year ago.

Last week’s Choice beef cutout averaged $251.23 per cwt., down $1.86 from the previous week and down $18.81 per cwt. from a year ago.

Costs associated with finishing cattle have increased dramatically since April. The cattle sold last week carried a total feed cost of $597 per head, which is 23% higher than the $465 feed costs for cattle sold the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Cattle marketed last week had a breakeven of $144.63 per cwt., while cattle placed on feed last week have a breakeven of $151.69 per cwt. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $174.62 per cwt., and feed costs of $590 per head. The feeder steer price is 13% higher than last year.

The estimated total cost for finishing a steer last week was $2,024 per head, up 15% from last year’s estimate of $1,725 per head.

Cattle slaughter totaled an estimated 581,000 674,000 head, about 14,000 head more than the same week last year. Packing plant capacity utilization was estimated at 78.1% compared to 90.6% the previous week and 77.9% last year.

Farrow-to-finish hog producers found profits of $8 per head last week, up about $6 per head from the previous week, and up $52 per head compared to last year’s $44 per head losses. Lean carcass prices averaged $88.20 per cwt., up $0.47 per cwt. from the previous week and up $30.77 from last year (35%).

Pork packers saw losses of about $3 per head, or $10 per head less than the previous week and $53 lower than the same week a year ago. Hog slaughter was estimated at 2.223 million head, down 376,000 head from the previous week and down 31,000 head from last year.

Pork packer capacity utilization was estimated at 82.7% compared to 96.7% the previous week and 84.3% last year.

(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

Meat Institute Launches Protein PACT Academic Advisory Council

Wed, 24 May 2023 17:26:00 GMT

The North American Meat Institute (Meat Institute) announced the launch of the Protein PACT Academic Advisory Council, formed to advise on research priorities and the latest evidence related to meat production and consumption.

The seven members of the advisory council are renowned independent researchers from the United States’ top universities, with expertise encompassing environmental sustainability, human nutrition and development, combating hunger, and more.

Advisory Council members are:

Dr. Adegbola Adesogan, University of Florida. Dr. Adesogan’s research focuses on sustainably increasing animal-source food production and consumption, particularly with a focus on the role of animal-source foods in childhood development.
Dr. Keith Belk, Colorado State University. Dr. Belk is an expert in red meat quality and safety, animal care, and international standards and trade.
Dr. Mindy Brashears, Texas Tech University. Dr. Brashears specializes in food microbiology and food safety.
Dr. Candace Croney, Purdue University. Dr. Croney’s research on animal behavior and welfare, as well as on bioethical considerations in food and agriculture.
Dr. Craig Gundersen, Baylor University. Dr. Gundersen’s research focuses on identifying the causes and consequences of food insecurity and evaluating the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program).
Dr. Alexa Lamm, University of Georgia. Dr. Lamm’s research focuses on identifying the most effective ways to communicate about agricultural and environmental science with stakeholders and the public.
Dr. Jason Rowntree, Michigan State University. Dr. Rowntree’s research focus is on measuring and managing ecological impacts of livestock grazing systems.

Meat Institute President and CEO Julie Anna Potts thanked the Advisory Council members for volunteering their time and expertise and commented:

“The Meat Institute and our Protein PACT partners are making tangible progress toward ambitious goals for the health of animals, people, communities, and the planet. The Protein PACT Academic Advisory Council will play a critical role in ensuring that our efforts are informed by the latest evidence, as well as helping us to identify and fill research gaps.”

The Advisory Council is expected to convene in person at the October 2023 Protein PACT Summit.

WSJ Challenges The “Big Meat Conspiracy Theory”

Tue, 16 May 2023 13:54:17 GMT

Tyson Foods reported last week that its beef unit generated no operating income during the second quarter ended April 1 and just $8 million on an adjusted operating basis. For the quarter, Tyson’s margin was 0.2% compared to 12.7% during the same period last year. Those numbers are significantly less than the 2% to 4% the company forecast at the beginning of the year.

Tyson President and CEO Donnie King told investors the beef market is cycling out of historically strong margins the industry enjoyed in 2021 and 2022. Beef volume sales and average prices declined 2.9% and 5.4% respectively, compared to the second quarter last year.

Noting Tyson reported its first quarterly loss since 2009, The Wall Street Journal, in an editorial published Monday , May 15, 2023, asked: “Remember when President Biden and progressives last year accused meat packers of colluding to fatten their profits? Are they now conspiring to lose money?”

The WSJ suggests to President Joe Biden the sudden turn-around in Tyson’s balance sheet is a “lesson in market economics.”

“Tyson’s stock plunged after it reported anemic sales and downgraded its forecast,” The WSJ editorial board wrote. “The quarterly loss at the largest U.S. meat supplier marks a stunning reversal from 2021 and early last year when it earned record profits amid a run-up in meat prices. What happened?

“Well, meat supply increased as packers ramped up production and increased wages for employees to meet demand. But producer costs for cattle and chicken have remained elevated. At the same time, consumer demand for pricier cuts of beef and pork has declined as inflation ate into purchasing power. All of this has shrunk Tyson’s margins.”

The WSJ also noted the president claimed rising meat profits reflect “the market being distorted by a lack of competition” and “capitalism without competition isn’t capitalism; it’s exploitation.”

Noting that Tyson’s stock has fallen by “nearly half over the past year and is trading at the lowest levels since 2015,” The WSJ editors wrote, “This doesn’t look like an antitrust conspiracy or market oligopoly.”

In late April, Reuters reported Tyson told employees it would eliminate 10% of its corporate jobs and 15% of its senior leadership positions. The layoffs are an attempt to cut costs as the company expects beef profit margins to return to more normal levels after historic profits in 2021 and 2022.

Tyson Announces Bonuses for U.S. Workers

Thu, 08 Dec 2022 14:53:03 GMT

More than 90,000 U.S. hourly employees of Tyson Foods will receive year-end bonuses that range from $300 to $700.

“We’re extremely grateful for all of our team members in the hundreds of communities where we operate and we want to recognize our success together and say thank you,” said Donnie King, president and chief executive officer of Tyson Foods in a statement announcing the bonuses. “As we progress our efforts to be the most sought-after place to work, we continue to listen to our team members needs and invest in areas like childcare to provide a better quality of life for our team members.”

Tyson said it will also offer flexible work schedules at some facilities, and new expanded benefits, service and resources for all U.S. employees beginning in 2023. The benefits include new parental leave and additional mental health support and other health plan benefits.

Tyson said with average hourly pay of around $19, plus the value of medical, dental and vision insurance, vacation and other benefits, the average total compensation for hourly employees members is approximately $24 an hour, or an annual average value of nearly $50,000. That estimate excludes overtime, an option for many workers.

The company said it also provides opportunities for education and life-skill development through the Tyson Immigration Partnership (TIP), which helps immigrant team members acquire U.S. citizenship. In 2022, Tyson strengthened its commitment to immigrant team members and has now invested more than $2.4 million to support partners like Immigrant Connection, a non-profit organization that provides immigrants with legal services, such as employment authorization renewals and petitions for citizenship.

New $7.2 Million Feedlot Innovation Center Breaks Ground at the University of Nebraska

Mon, 07 Nov 2022 16:15:28 GMT

The $7.2 million facility located at the University of Nebraska’s (UNL) Eastern Nebraska Research, Extension and Education Center near Mead, Neb. has officially broken ground.

The commercial-scale, state-of-the-art feedlot will facilitate world-class research projects, teaching and extension opportunities and serve as a testbed for industry partners to see the new and emerging technologies at work.

“The Feedlot Innovation Center presents an incredible opportunity to bring together industry partners, cattle producers and UNL researchers and students to advance sustainable beef production,” says Mike Boehm, Harlan Vice Chancellor for the Institute of Agriculture and Natural Resources (IANR) and the University of Nebraska vice president for agriculture and natural resources.

(Farm Journal)

The center will include a 240-head, commercial-scale open air and covered pen feeding facility, testing new precision feeding technology, expanding research on cattle performance and welfare, while comparing different environments and housing systems, finding solutions to environmental challenges and using innovation in manure collection and management. Additionally, the new cattle handling facility and enclosed classroom will give students hands-on experience and allow for training opportunities for the future workforce of Nebraska’s beef industry.

Approved by the University of Nebraska’s Board of Regents in June of this year, the project will be funded through a combination of private donors, grants and the IANR program funds.

A pledged $700,000 was recently announced, given by the Greater Omaha Packing Co., which also recently received USDA funding to expand their Omaha facilities .

“We all have a stake in the long-term success of the beef industry,” says Henry Davis, CEO of Greater Omaha Packing Co. in a release. “In partnership with the University of Nebraska and other contributors, Greater Omaha Packing is confident that our support of the Feedlot Innovation Center will lead to groundbreaking research, technology and insights that will help advance the industry, strengthen and expand the entire supply chain and ultimately drive value back to family farms.”

Other contributors to the project include John and Beth Klosterman; JBS USA ; Farm Credit Services of America; Dennis and Glenda Boesiger; and the Klopfenstein Fund, which includes gifts from a number of alumni, colleagues and industry partners who knew and worked with Terry Klopfenstein. Daniels Manufacturing, FBI Buildings Rock Solid Concrete and others have made significant in-kind contributions, says a release.

Greater Omaha Packing Will Expand 30%

Wed, 02 Nov 2022 19:43:08 GMT

A $20 million USDA grant will spark expansion at Greater Omaha Packing Co., in South Omaha, Neb. Agriculture Secretary Tom Vilsack traveled to Omaha Wednesday to announce the grant as part of an initiative to increase competition in America’s meat industry.

The Biden administration announced $223 million in grants and loans this week to increase competition and economic opportunities for meat and poultry processors. The administration has said a lack of competition in the industry has both depressed prices for producers and raised prices for consumers.

Greater Omaha will use the grant as part of a planned $100 million investment to upgrade and automate freezers, expand its wastewater system for increased capacity, remodel key areas for value added further processing, and increase its carcass holding coolers. In total, the Greater Omaha team estimates the capacity expansions will help Greater Omaha process an additional 700 head of cattle per day.

“This significant investment will allow the company to remain competitive in the marketplace and continue to support our small family feeder operators while providing incremental value back to the producers,” said Henry Davis, CEO of Greater Omaha. “We believe the production expansions will keep us at the forefront of an ever-changing industry.”

Greater Omaha is the nation’s fifth largest beef packer with daily harvest capacity of 2,400 head and employs 1,500 workers. The company said it will expand its capacity by nearly 30% (700 head per day) by adding another line at the plant and add 275 jobs with the grant. The company ships beef across the nation and to more than 70 different countries.

“I think this is a good day for producers, a good day for those interested in working in the facilities, a good day for the communities who will benefit and a good day for consumers,” Vilsack said of the initial round of grants being released Wednesday.

The Biden administration plans to invest $73 million to fund 21 grant projects in the first round of the Meat and Poultry Processing Expansion Program, or MPPEP; $75 million will go to eight projects through the Meat and Poultry Intermediary Lending Program; and another $75 million will be directed to four meat and poultry-related projects through the Food Supply Chain Guaranteed Loan program.

“Since President Biden laid out a commitment at the start of this year, USDA has worked tirelessly to give farmers and ranchers a fair chance to compete in the marketplace,” Vilsack said in Omaha. “By jumpstarting independent processing projects and increasing processing capacity at facilities like Greater Omaha Packing, these investments create more opportunities for farmers and ranchers to get a fair price, while strengthening supply chains, delivering more food produced closer to home for families, expanding economic opportunity and creating jobs in rural America.”

Greater Omaha is one of only two MPPEP grant recipients in Nebraska, with a total of $73 million funds distributed across 21 grant projects in USDA’s first round of funding announced through Phase I of MPPEP.

Related:

Biden Administration Announces First Round of Investments to Increase Competition and Expand Meat and Poultry Processing Capacity

Much of Brazil’s Beef Defies Zero-Deforestation Agreements

Tue, 18 Oct 2022 19:52:35 GMT

Brazilian meatpackers continue to procure cattle from inside the country’s protected areas more than a decade after zero-deforestation cattle agreements were signed to reform the sector. That’s the conclusion of a new study published in the journal Conservation Letters .

Researchers from the University of Wisconsin–Madison and Vrije University Amsterdam found that from 2013 to 2018, millions of cattle slaughtered for beef spent at least part of their lives grazing in protected areas of the Brazilian Amazon, including on indigenous lands.

The study found nearly 1.1 million cattle were sold directly from private properties inside protected areas to slaughterhouses in Mato Grosso, Pará, and Rondônia states. An additional 2.2 million head were linked via indirect suppliers located in protected areas. Researchers found 72% of that 3.3 million slaughtered head originated from sustainable-use areas, where ranching may be permitted in certain cases. However, the study found 20% of production also occurred in strictly protected areas and 8% on indigenous lands where commercial grazing is illegal and prohibited by the cattle agreements.

Brazil is the world’s largest exporter of beef and officials note that controlling commercial cattle production inside the protected areas is crucial to ensure Brazil’s access to foreign markets and protect biodiversity in the amazon rainforest.

“Protected areas are the cornerstone of Brazil’s conservation efforts and are arguably the most effective way that we have to conserve forests and the biodiversity inside of them,” says Holly Gibbs, a UW–Madison professor of geography and senior author of the study. “That meatpackers are continuing to buy from properties in areas that are under strict protection is alarming.”

Ranchers and slaughterhouses in Brazil are required to share information about where animals are transported, primarily for the purpose of monitoring their health. When coupled with property records, this information is also useful for identifying where cattle have grazed, including if they grazed inside protected areas.

Gibbs and her colleagues were able to track beef supplies by tying animal movement data to property records that they then cross-referenced with maps of protected areas in the Brazilian states of Mato Grosso, Pará and Rondônia. Expansion of agriculture in those three states is accelerating deforestation at an alarming rate, researchers said. Historically, cattle ranching has been linked to about 80% of deforestation in the Amazon basin.

The study’s authors said their analysis ends in 2018 because the Brazilian government ended its previously transparent public recordkeeping. Meanwhile, satellite imagery analyzed by the Brazilian space agency indicates that deforestation rates increased by nearly 50% from 2018 to 2020, with nearly three-quarters of the loss occurring in the states covered in this study.

By ending its transparent accounting of cattle movement data, the Brazilian federal government also hampers meatpackers’ efforts to monitor their indirect suppliers.

“Many slaughterhouses have gotten the message that being associated with deforestation is bad for their business, but they cannot address this issue without increased availability of information about their suppliers,” says Lisa Rausch, a co-author of the paper and scientist at UW–Madison’s Nelson Institute for Environmental Studies.

“There is an appetite among retailers and investors — the parts of the value chain that slaughterhouses are responsive to — for more information about slaughterhouses’ performances, but right now that information is lacking,” Rausch says.

Billion Dollar Beef Plant Searches for Home

Tue, 27 Sep 2022 12:56:01 GMT

Western Legacy Development Corp. continues to search for a site to build its $1.1 billion beef processing facility after being rejected by two cities in the northern plains.

Meatingplace reports that both Rapid City, S.D. and Cheyenne, WY, are no longer considered in the running for the plant. When Western Legacy first announced its intentions to build the 8,000-head per day plant, Rapid City was the proposed site. But the city’s industrial center developer said the proposed space was not large enough to accommodate a plant that large.

Last week rumors began that Cheyenne might be the next choice for the plant, but that city’s mayor said it could not meet the water demand of a meat plant that size.

Meatingplace reported Megan R. Kingsbury, president and CEO of Western Development, confirmed “that her company is the unnamed developer looking for a site in conversations with Cheyenne, and said Wyoming is but one of several states that the project has approached. She declined to name other locations under consideration, however.”

The plant “still is on track to break ground in 2023,” she said, and begin operations by 2026. And that plant is just the first of several, according to Western Legacy’s longer-term plans in the meat industry, she said.

“There are a lot of considerations, especially from the point of view of a green development,” Kingsbury said. “We have to negotiate with municipalities, and they move on their own timeline. In some cases, they are waiting on federal funding to be able to work to scale with us.”

Industry Needs Action, Despite ‘No Nothing Burger’ Hearings

Thu, 22 Sep 2022 05:28:31 GMT

After a week filled with congressional hearings on the Cattle Market Price Discovery and Transparency Act including CEOs from “The Big Four,” Don Schiefelbein, president of the National Cattlemen’s Beef Association (NCBA) described it as “kind of a big no nothing burger.”

Despite a “no nothing burger” hearing, in a recent “AgriTalk” segment, Schiefelbein joined host Chip Flory to highlight where he feels the industry needs to see action.

Processing Capacity

Cattle capacity and hook space, as well as lifting regulations and the burden of getting a packing plant up and running are a priority to Schiefelbein. He believes this will be valuable to ranchers in regaining leverage.

Cattle Contract Library

Starting as a pilot project, “How we construct [the library] determines whether or not we’re going to be truly successful,” Schiefelbein said. He appreciates the fact the library can be tweaked or changed as needed in its early stages.

Transparency is also important to Schiefelbein regarding the library. He hopes it will be effective in helping producers and not just be a tool to help the packer.

Packers may be able to decipher their contracts from their competitors, which Schiefelbein describes as a concern. This project, originally designed to help the producer, might end up being more beneficial to the packer.

Livestock Mandatory Reporting

Oversight on Livestock Mandatory Reporting is extremely important to Schiefelbein, ensuring it gets renewed and reauthorized.

Department of Justice (DOJ)

There needs to be some results from the DOJ about where they are on their investigation, Schiefelbein believes. The JBS settlement from earlier this year had Schiefelbein saying, “It’s hard for a rancher to accept that somebody would settle for tens of millions of dollars and not have wrongdoing.”

Alternative Marketing Agreements (AMA) and Cash Trade

The Cattle Market Price Discovery and Transparency Act is not set out to kill AMAs, Flory said. “We just need more transparency. We need more on-the-ground price discovery happening in that southern market in particular.”

“We want more cash trade,” Schiefelbein explained. “We just want it in the hands of producers to control it.”

In addition, he’s concerned about how a mandatory level of trade could affect producers in AMAs. In an area where cash trade needs to be increased to meet the minimum level, will the larger or smaller producers lose their agreements?

The implementation and unintended consequences of government involvement concerns Schiefelbein. “Those of us who lived when the government got into the dairy buy-out in our marketing world … remember quite well it was not intended to be that way, but the impact was absolutely devastating,” Sciefelbein said.

He also brought up the old quote from former president Reagan saying whenever the government comes to your place and says ‘I’m from the government, I’m here to help.’ Maybe you better close the door.

Listen to the full “AgriTalk” interview with NCBA’s Don Schiefelbein here .

Walmart Invests In Proposed Nebraska Packing Plant

Wed, 31 Aug 2022 16:57:51 GMT

Walmart announced Wednesday it will invest in Sustainable Beef LLC, the proposed $325 million beef processing facility in North Platte, Neb. In a statement, Walmart said it has signed an agreement to acquire a minority stake in the rancher-owned start up.

Walmart said its investment is part of a “broader strategic partnership to source top-quality Angus beef from Sustainable Beef.” Indeed, this is not Walmart’s first venture with producers to provide beef for its retail stores. Three years ago, Walmart announced a partnership with 44 Farms to source high-quality Angus beef for about 500 of its stores in the Southeast.

At the time, Walmart’s senior vice president of meat wrote in a blog post that the company is on a mission to make “the beef America eats better.” Neal said customers want freshness and affordability, but they also want to know where their food comes from. By sourcing beef directly from farmers and ranchers, Walmart is aiming to change the dynamics of the beef industry, Neal wrote.

Wednesday’s announcement sends Walmart further down that path. Of Sustainable Beef, Walmart says the partnership helps supplement the current beef industry and provides additional opportunities for ranchers to increase their business. As part of the investment, Walmart will also have representation on Sustainable Beef’s board.

Sustainable Beef’s plans are to process 400,000 head per year (about 1,500 head per day), 100,000 of which will be cows. The plant would employ 875 workers and is expected to generate another 1,000 jobs in supporting businesses. Groundbreaking is scheduled for September, with the facility opening in late 2024.

In March, North Platte’s Community Redevelopment Authority (CRA) unanimously approved a contract with Sustainable Beef, opening the door for tax increment financing for the infrastructure for the new plant.

“At Walmart, we are dedicated to providing high-quality, affordable beef to our customers, and an investment in Sustainable Beef LLC will give us even more access to these products,” said Tyler Lehr, senior vice president of merchandising for deli services, meat and seafood, Walmart U.S. “We know Sustainable Beef LLC has a responsible approach to beef processing, one that includes creating long-term growth for cattle ranchers and family farmers. This investment provides greater visibility into the beef supply chain and complements Walmart’s regeneration commitment to improve grazing management.”

Sustainable Beef LLC will work with cattle feeders and ranchers to understand critical elements of the supply chain cycle, such as grain sourcing and grazing management. Animal care will follow the Five Freedoms, and there will be a consistent approach to antibiotic use and reporting across herds in line with Walmart’s Position on Antibiotics in Animals, which asks suppliers to adopt and implement American Veterinary Medical Association Judicious Use Principles of Antimicrobials. All of these components will help Sustainable Beef LLC to improve and refine the beef supply chain to provide quality beef for our customers.

“We set out on a journey two years ago to create a new beef processing plant to add some capacity to the industry and provide an opportunity for producers to integrate their business of raising quality cattle with the beef processing portion of the industry and do it in a sustainable manner,” said David Briggs, CEO of Sustainable Beef LLC. “During this journey we found that Sustainable Beef and Walmart aligned on continuing to improve how we care for our animals and crops and provide consumers the positive experience of enjoying quality beef.”

Walmart said its investment in Sustainable Beef is the latest step in the retailer’s commitment to increase access to high-quality beef at an affordable price for its customers, while boosting capacity for the beef industry and ensuring long-term economic viability for cattle ranchers.

Producer Owned Beef Packing Plant Coming To Amarillo

Mon, 15 Aug 2022 14:36:03 GMT

Executives for Producer Owned Beef, LLC, said Wednesday, Aug. 10, they expect to break ground next year on a 3,000 head beef packing facility in Amarillo.

During a ceremony in downtown Amarillo, the group announced it has been awarded $12.2 million from the Texas Enterprise Fund for the project. Texas Gov. Greg Abbott appeared at the event through a live telecast confirming the state economic incentives for the $670 million facility. Those incentives are in addition to up to $11.1 million from the Amarillo Economic Development Corporation (ARDC) and the city of Amarillo approved earlier.

During his video, Gov. Abbott emphasized the need to support these types of projects which benefit the expansive cattle industry that Texas leads the nation in, according to a report in the Amarillo Globe News.

“Made in Texas is a powerful global brand and continues to attract investment from companies serving crucial industries,” Abbott said. “Producer Owned Beef’s selection of Amarillo for its new beef processing plant further reinforces the Panhandle as a leader in U.S. beef and beef production.”

CEO of Producer Owned Beef, Casey Cameron, said, “The importance of the Texas Enterprise Fund along with AEDC backing for this project cannot be overstated. Public Private Partnerships are proven to attract additional investors and create a virtuous cycle of commerce, employment and tax revenue for our communities and state.”

Cameron said the groups commitment is to build a facility that stands out in the industry in metrics, such as animal well-being, environmental protections, employee safety and high-quality beef products.

Producer Owned Beef is expected to employ 1,600 workers once operational by late 2025 with a payroll of about $120 million annually. The company is owned by cattle ranchers and feeders.

“Many of our ranchers and feeders are third, fourth or even fifth generation producers who have invested their lives in feeding Americans,” Monte Cluck, a board member of Producer Owned Beef, said, according to the Globe News. “With this model, we are creating economic sustainability for small- and medium-sized producers by ensuring they receive a greater share of the financial upside for the hard work that they do.”

Producer Owned Beef, LLC Executive team:

Casey Cameron, CEO –– is a lifelong cattle producer, active in multiple ranching states and communities.
Monte Cluck is a lifelong feeder, cow-calf and stocker producer and along with numerous other business interests, is CEO of Dean Cluck Feedyard and general partner of Dean Cluck Cattle Company and lives in Boerne, Texas. Monte has been recognized for his leadership and service for several organizations including the 2020 National Golden Spur Award.
Cassie Fish, Executive Vice President –– has been a consultant in the cattle feeding and meat packing industry since 2006. She was Senior Director of Risk Management at Tyson responsible for corporate cattle feeding and is a leading expert on packing plant capacity and utilization.
Dean Hanish, CFO –– has invested his career in accounting, finance, and investor relations for the meat packing industry at IBP, Tyson Fresh Meats and as a consultant.

Billion-Dollar Beef Plant Has S.D. Residents, Ranchers Seeking Details

Tue, 28 Jun 2022 03:14:51 GMT

Update: Late Monday Western Development Corporation announced a meeting for 7 p.m. MST, Thursday, June 30, at the Wall Community Center, Wall, S.D. The event will provide an opportunity for a Q&A forum between the the agricultural community and Western Legacy Development’s Advisory Board Members and owners.

Speculation has swirled in cattle country since last month’s announcement of a proposed 8,000 head per day beef processing plant in Rapid City, S.D. Many question the availability of such large numbers of cattle and/or bison in the region, the availability of sufficient labor and housing for the incoming workforce.

Many of those same questions are now being asked by Rapid City residents and officials who want more details about the proposed $1.1 billion project.

“The principals that are involved still have a lot of homework to do,” City Councilman Ritchie Nordstrom told South Dakota Public Radio . “Where do we get those employees? If the number that is being recited is close to being accurate, we don’t know where’re they’re going to come from and where we’re going to house them.”

Those questions were echoed by City Councilman Pat Jones. He represents a ward in the southeast part of the town.

“We have an affordable housing shortage in Rapid City,” Jones said. “The population continues to grow faster than the market can replace housing.”

Megan Kingsbury, whose family ranches near Kadoka, S.D., announced plans for the project called Western Legacy Development Corporation. Kingsbury and Associates, — which is Megan Kingsbury’s consulting business — and Sirius Realty, where Kingsbury is a managing partner are both based in South Carolina. If realized, the plant would become the largest i North America and one of the largest beef plants in the world.

Western Legacy’s proposal would create 2,400 jobs and Kingsbury said the plant would utilize the latest technology available.

In an interview with SDPB’s Lori Walsh on “In the Moment,” Kingsbury said her company is “holding this project privately and funding it in-house.”

City councilman Nordstrom questioned if the industrial park could fit the 1-million-square-foot facility into the park or build the infrastructure needed for the plant without extra financing from the city.

“I would like to see a meat processing plant, but right now the conditions for the current proposed location don’t fit the parameters,” Nordstrom said.

Transportation, water use and odor are also concerns. Jones has heard from constituents who worry about heavy rail and truck traffic near their neighborhoods. He’s also worried about the potential for unpleasant smells like those caused by the Federal Beef plant, which closed after a 2002 fire at its central Rapid City location.

Kingsbury, however, says the proposed plant’s environmental impact would be limited: cattle would not be held outside, water would be recycled on-site and the plant would emit no odor thanks to methane-capture technology. She said the technology will reduce the plant’s environmental impact and allow it to run at a larger scale, with fewer workers in better conditions.

Kingsbury said she hopes construction will begin in 2023 with a targeted completion date of 2026.

$1.1 Billion Next-Generation Beef Plant Proposed for Rapid City, SD

New Antitrust Suit Targets Big 4 Packers

Thu, 09 Jun 2022 17:17:13 GMT

Grocery retailer Giant Eagle filed an antitrust complaint against the Big 4 beef packing companies in Chicago’s U.S. District Court on Wednesday, June 8, 2022.

Giant Eagle, operating about 470 stores in western Pennsylvania, Ohio, northern West Virginia, Maryland and Indiana, alleges the large packing companies exploited their market power by conspiring to limit the supply of beef sold to purchasers beginning as early as January 2015 and continuing through the end of 2021. Giant Eagle contends those actions resulted in higher prices paid for beef by the retailer and higher profits for the packers.

Specifically, Cargill, JBS, National Beef Packing and Tyson Foods are named as defendants along with several subsidiaries. The suit contends the defendants colluded to cut production and artificially constrain the supply of boxed and case-ready beef entering the supply chain to artificially inflate beef prices.

The antitrust complaint notes that the Department of Justice and USDA have launched investigations into whether Defendants fixed beef prices and that the DOJ sent civil investigative demands to the Big 4 seeking information about their pricing practices dating back to January 2015.

The suit also referenced a letter from 26 U.S. Senators to the DOJ that stated: “From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists.” The letter also alleged the Big 4’s “collective power over the beef processing industry allows them to seemingly control prices at their will.”

Giant Eagle alleges antitrust practices by the Big 4 “led to shortages in the beef market. These artificial conditions, in turn, boosted the prices Defendants charged, and which Giant Eagle had no choice but to pay, for beef. The results intended and achieved by Defendants were higher profit margins (e.g., meat margins) than would have otherwise existed in a competitive market, and injury and damage to Giant Eagle’s businesses and property.”

Giant Eagle is a privately held grocery retailer with more than $9.7 billion in annual sales. The company seeks treble damages with the lawsuit.

Nalivka: Packers, Politicians and Misunderstood Meat Industry Economics

Fri, 29 Apr 2022 18:13:19 GMT

For lack of a better word, I would say that I get concerned when there are Congressional hearings to assess if an industry or markets are working. There always seems to be a scapegoat and new regulations and greater oversight. Then down the road, there will be a replay and the entire process is repeated, perhaps just to once again “fix” the last “fix.”

This is politics at work. The problem is that the private sector has to deal with those new regulations and their associated costs which more often than not will be passed along to consumers and voters. So, we have the U.S. livestock and meat industry in hearings to assess if and why the market is not working.

Rather than running to the politicians to solve a problem, perhaps the better strategy might be to gather a plan to create a better understanding of the economics of the industry. The beef supply chain begins at the ranch and ends at the retail supermarket or restaurant, both here in the U.S. and in U.S. export markets, where the consumer makes the final purchase. Needless to say, there are many negotiated bids and offers, forward contracts, and formula prices that occur prior to the final point of sale. It’s a complex market system and perhaps, not easily understood, yet, one that needs to be understood if you are to affect your bottom line.

As product moves up the beef supply chain value is continually added beginning with a newborn calf, to a weaned calf, to a feedlot, to the packing plant, to a box of fabricated beef cuts or a package of ground beef, and finally to a package of meat in the supermarket, a steak at a sit-down restaurant or a burger at a fast-food restaurant. It requireds each of the activities along the entire supply to create and/or produce that final value-added beef product.

Understanding the workings of the supply chain can go a long way toward knowing what it takes to more than just participate in the value-added equation not just as a supplier of cattle, but as a recipient of some share of value-added product. I have said for years, owning that calf’s mother and creating value is only the beginning to the value-added process. Participation in a program that captures the value of that calf beyond the ranch is the goal.

Achieving the goal of capturing value beyond the ranch begins with understanding the market mechanics of the supply chain and acting on opportunity rather having hearings to “make the market work better.”

And, just as a final question – are beef prices too high or are consumers too accustomed to low-priced beef? I would submit that high-quality, safe beef should be worth more and current demand analysis indicates the consumer doesn’t seem to mind paying!

The opinions expressed here are those of John Nalivka is president of Sterling Marketing, Inc., Vale, Oregon.

Tyson CEO Provides Statement Ahead of House Agriculture Committee Hearing

Wed, 27 Apr 2022 13:50:24 GMT

Tyson Foods Inc. President and CEO Donnie King is set to testify before the full House Agriculture Committee on Wednesday to give his perspective about cattle and beef market practices. Ahead of his testimony, Tyson issued the following statement from King:

“A combination of market forces, including consistently strong demand for finished beef, constrained production due to labor shortages caused by the global pandemic, and record inflation, have been driving current beef prices,” King said.

The testimony, which can be found here , was presented in advance of the hearing.

King said as with nearly every other product, basic market forces drive beef prices.

“Tyson does not set the prices for either the cattle we buy or the beef our customers purchase. These prices are set by straightforward market forces, namely available supply and demand.”

An ongoing labor shortage – largely the result of the pandemic – has constrained beef production while consumer demand for beef continues to skyrocket, King noted.

“We just didn’t have enough people to fully staff our plants,” which resulted in a “sudden and swift rise” in the oversupply of cattle and a corresponding drop in cattle prices. At the same time, “the price for finished beef—the beef that consumers buy at grocery stores—was rising, driven by skyrocketing consumer demand” and “basic economics holds that when demand is high and supply is low, prices will rise, which is precisely what they did.”

The situation has been deepened by geopolitical issues, which are resulting in higher costs: “The dramatic rise in input costs is reflected in the prices American families pay at the grocery store.”

For example, King said, since March 2020, the cost of corn is up 127% and cost of soybeans are up 90%. Both are used in livestock feed, which comprise 65% of the cost of chicken and approximately 30% of the cost of finished beef. Freight transportation costs are also rising, with international shipping container rates up 68% and diesel fuel up 104% year over year.

Economists agree that American businesses are not to blame for inflation, King said.

“Experts, policymakers, and government regulators understand that the cause of the current inflationary environment is some combination of constrained supply, high consumer demand, and continued unforeseen disruptions to the global supply chains caused by COVID-19 and exacerbated by geopolitical unrest.” Lawrence Summers, the former Treasury Secretary, observed that “Rising demand, with capacity and labor constraints, are fully sufficient to account for what we observe in meatpacking.”

Further, King said high prices have nothing to do with industry consolidation: Concentration in the beef processing industry has remained virtually unchanged over the last 30 years. During that time, data shows that ranchers more-often-than-not achieve higher profit margins than beef processors. “In fact, in several years, ranchers made historic profits on live cattle while beef processors either lost money or barely broke even,” he said.

Tyson Foods produces quality food at market prices: “With advancements in how we source cattle and improvements in modern cattle production, the beef we produce today is consistently higher quality. For example, choice and prime beef grades have increased from 60 percent in 2000 to 85 percent in 2020.” Tyson Foods’ returns “are also strengthened by our efforts to become a more agile and efficient company through innovation and automation” helping the company to “keep costs to consumers lower, enable us to pay our team members more and allow us to further reinvest in our business,” he said.

Tyson Foods continues to invest in America, and the people who call it home: In America, the company invests more than $15 billion a year with more than 11,000 independent farmers and feedlot operators who supply cattle, pigs, chickens and turkeys. The company has facilities in 30 states and last year implemented $500 million in wage increases and bonuses for hourly team members. Tyson Foods is also piloting childcare programs and health clinics and recently announced the expansion of educational opportunities that will be offered to team members for free.

King is the second Tyson Foods executive to recently testify before Congress on beef industry matters. Shane Miller, who leads the beef and pork unit of Tyson Foods, testified before the Senate Judiciary Committee in July 2021.

Who Wants to Watch the Packers Squirm?

Tue, 19 Apr 2022 18:18:15 GMT

Next week will be a good one for folks with good internet access and a few free hours who want to see some rhetorical fireworks about cattle price discovery.

Me! Me!

The Senate will enjoy a hearing on the Cattle Price Discovery Ac t.*

And the House ag committee will have “a panel of ranchers to hear what consolidation in the beef industry has done to their bottom lines and viability” and then get a chance to berate the CEOs of the four big packing companies about their culpability in the morass described by the “ranchers.”

Neither committee has yet told us who, besides the processor honchos, will testify. But it’s not too early to think of a few questions.

Chuck Grassley when asked what he would ask the packer CEOs, said, in that punctuation-free way of talking he has, “I would ask them to comment on what they think about our legislation.**I know what they think about it. What they think about it is everything’s alright. Nothing needs to be changed. The cozy relationship they have with the big feedlots of Texas, Oklahoma, Kansas and Colorado filling up about 85% of the chain kill every day is a cozy relationship for them and they don’t want to mess around with the family farmers of Iowa and how come they don’t think our bill is a legitimate answer to the problems that Iowans don’t get a fair price and they sometimes have to wait 30 days to deliver their cattle.”

Which is more statement than question, but that is the way of congressional hearings, isn’t it?

My biggest question for those guys involves the fire behind the smoke raised by that JBS settlement for price fixing. As I said earlier, it makes me very suspicious.*** I want those CEOs, while swearing (under oath this time), to tell us what they know about why the plaintiff lawyer in that case called it an ice breaker that could lead to more information later.

Describe how the price spread exploded so quickly after the pandemic started? Isn’t it unusual for the spread to react so quickly? How did you, Mr. CEO, first learn that cattle feeders were puking like prom dates? How did you first hear that there was a buying frenzy at the beef counter?

Did anybody in your office suggest you and your competitors were creating a public relations nightmare? While discussing the buy-sale equation, did anybody in your company suggest you could take a smaller profit, either by paying more to charging less, given the public panic at the time? Oh, and would you mind telling us how your annual bonus went the last couple of years?

Then, after I made sure the reporters heard that, I’d dig into what we should do as a government.

Tell us about how your production costs have been affected by the pandemic. Wages? Transportation? How much of these wider spreads are due to such costs? How permanent do you expect those added costs to become?

How do you determine which feedlots are offered Alternative Marketing Agreements (AMA)? How do those agreements differ from your arrangements with contract fowl and swine producers?

Would it be wise for Congress to forbid further concentration or even break up the big four? What sort of added efficiency does such concentration bring?

Do you oppose Sen. Grassley’s Cattle Price Discovery and Transparency Act? How would it impact your business? How would it impact cattle feeders? How would it impact beef prices at retail?

Do you offer any feedlots or feeders contracts based on cutouts? How feasible is that idea?

Oh, yeah. I almost forgot. What do you know about the plaintiff allegations in the JBS case? Why do you think the plaintiff’s lawyers called the settlement an “ice breaker?” Do you know of any evidence that anybody in your company conspired with other companies to coordinate pricing?

For the “panel of ranchers,” which I presume will include cattle feeders large and small, I’d have a different set of questions.

I’m guessing—just guessing—that most of that group will have troubles to report and packers to blame. So I’d have to start with, “There is overwhelming agreement among academicians who have studied the matter, that there is no need for mandating cash trades. And that imposing them would have no or minimal or even negative effect on cattle prices or beef prices. What evidence do you have that such mandates will influence prices? No ‘well, once upon a time’ cause/effect inferences. I want some stochastic stuff.”

Do you think cash trade is the only way to get fair price discovery for cattle? Can you name other industries that still rely on “just in time” cash bids for raw product? Can you name any in which the government requires such arrangements?

You’ve mentioned, several times,**** that many cattle producers have gone out of business in recent years. As have many farmers and local store owners and filling station owners and house builders and plumbers. How strong is the correlation between cattle prices and that exodus? Is it stronger than the correlation with drought and rangeland conversion?

Do you think processors should have the right to reward suppliers for quality and reliability of supply? Do you think a packer should be required to pay small producers the same price as large producers or should they be allowed to offer volume discounts?

I see. So if that is unfair, do you think it is fair that auction buyers and order buyers about always pay more per-head for large lots of uniform cattle than they pay for small lots?

And, Oh, yeah! Have you heard anything about the evidence in that JBS price fixing deal? Got any ideas why it’s a state secret? We’ll accept unconfirmed rumors, by the way. We might ask the packers about them later.

Given time, I believe I’d come up with more questions. But that’s where I’d start. Having watched too many congressional hearings, I’m guessing we’ll hear more platitudes about family farmers and greed from the dais than genuine questions or helpful answers. But that’s just the cynic I’ve learned to be through my years and years of watching congressional hearings.

*The one with the mandated cash trades. It’s quite controversial with the beef industry, you know.

**The Cattle Price Discovery Act, that is. It’s quite controversial.

***Another look at me considering that JBS settlement.

(Farm Journal)

****Just guessing there will be some of that expressed.

**Most of the members the ag committees are not from cattle country. We should offer them questions I haven’t thought of. Send me your thoughts to Scornett9163@yahoo.com

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Who Wants to Watch the Packers Squirm?