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Analyst says plant closing shouldn’t have major impact

 

A beef market analyst says the closing of Tyson’s Denison, Iowa cattle slaughter facility should not have a major impact on the demand for fed cattle in the region.

Cassandra Fish, who authors a daily blog called The Beef, says there is enough slaughter capacity to absorb the twelve-hundred to fifteen-hundred head a day being killed in Denison.

“The good news is there’s plenty of slaughter capacity in the Nebraska/Iowa area, if all the plants were running 40 hours a week, that the closing of Denision—any loss there—could be absorbed by other plants in the region,” Fish says.

According to Fish, most beef plants have been running 36 hours a week or less in recent months because of tight cattle numbers. And she says most packers are interested in running more hours if they can do so profitably.

“Because of that, mathematically, you can see where you could absorb twelve-hundred head a day from Dakota City down to the Omaha area plants, over to Grand Island, or even to Tama, Iowa, for the region,” she says.

But Fish says there is also some concern that beef demand has ratcheted back to the point that demand can’t absorb bigger kills at current price levels.

AUDIO: Cassandra Fish