Friday markets
The market closed softer today following the official announcement that Tyson Foods plans to end operations at three of its beef plants.
Live cattle futures closed lower, down $2.60 on the August contract to $223.62 and down $1.17 on the October contract to $218.87.
Cash trade for the day totaled about 9,000 head Live steers sold from $223-228, and dressed steers sold from $351-368. Total cash trade for the week through the afternoon was about 45,000 head.
Slaughter through the day is estimated at 100,000 head, compared to 95,000 head a week earlier. With tomorrow’s slaughter projected at just 1,000 head, total slaughter for the week is expected to be about 517,000 head.
Yesterday, Tyson Foods announced it would be closing its Joslin, IL, beef plant and its Eagle Mountain, UT, case-ready plant. The company also shared that it was planning to sell its Pasco, WA, beef plant. Tyson cited supply constraints as the reason for the change in operations.
As part of the changes, Tyson will add back its second shift at its Amarillo, TX, plant as cattle become available. The Amarillo plant, along with Tyson’s Dakota City, NE, and Holcomb, KS, plants, will be the anchors of the company’s business, taking over capacity from the three outgoing plants, Tyson said.
“Collectively, these changes will allow the company to maintain a similar level of cattle harvesting across a more efficient and modern network,” the company said in a statement.
The Cattle Report noted that the announcement has already been priced into the market over the past couple of days, as rumors swirled in the industry. “The downsizing of processing plants continues amid super-sized losses,” the outlet wrote. “The irony is this announcement falls on the heels of USDA announcement of $500 million in grants to beef processors (not to include the Big 4) to make the market more competitive.”
ShayLe Stewart, DTN livestock analyst, said that “from a long-term perspective, Tyson’s announcement becomes a much more difficult topic to table as it’s multifaceted.
“Given the historically low cow herd the U.S. sits with, it’s no secret that ensuring a profit in the packing sector has been a difficult endeavor over the last two years and could remain challenging until domestic supplies increase,” she said. “Secondly, from a grassroots perspective, this is eerie news to stomach as keeping enough shackle space open for however large the U.S. cow herd builds back to remains a pressing issue for cattlemen who are considering growing their herds.”
The National Cattlemen’s Beef Association (NCBA) said it was troubled by Tyson’s announcement.
“These decisions underscore the significant challenges that historically low cattle inventories continue to create across the beef cattle industry,” said NCBA CEO Colin Woodall. “While we are disappointed by these developments, they also reinforce the importance of rebuilding the nation’s cow herd and maintaining adequate processing capacity to support cattle producers, strengthen market opportunities, and ensure a resilient beef supply chain for the future.”
Boxed beef prices were mixed on 76 loads, down 60 cents on the Choice cutout to $375.30 and up $2 on the Select cutout to $351.24.
The lean beef trim contracts closed mostly lower over the day. The 50% lean trim August contract was down $8 to close at $161, and the September contract was also down $8 to close at $151. The 90% lean beef trim August contract was unchanged at $449, and the September contract gained $3 to close at $445.
Feeder cattle
Feeder cattle futures were lower, down $2 on the August contract to $340.82 and down $2.65 on the September contract to $334.55.
The CME Feeder Cattle Index lost $3.44 to close at $351.93.
Corn futures were higher, up 11 cents on the September contract to $4.59 and up 11 cents on the December contract to $4.83. — Anna Miller Fortozo, WLJ managing editor
