US Beef Sector, Pinched by Costs, Cuts Production
US - Troubles in the U.S. beef industry, notably losses on beef sales, have caused two of the nation's largest producers to cut production from now through at least the end of the year.
13 December 2007
1 minute read
Tight supplies of market-ready cattle and high cattle prices combined with abundant supplies of lower-priced pork and chicken have squeezed U.S. beef companies.
No.3 producer JBS-Swift & Co. and No. 4 producer National Beef Packing Co. said on Wednesday they will cut production.
Tyson Foods Inc., the No. 1 U.S. beef producer, and Cargill Inc., the No. 2 beef producer, said they have been operating at reduced levels, citing poor market conditions.
Consulting firm HedgersEdge.com said U.S. beef companies, on average, are losing about $45 on every head of cattle they slaughter. With daily slaughter ranging from 125,000 to 130,000 head, that equates to losses of $5.6 million to $5.8 million a day for the industry
Production cutbacks "should have been done months ago," said Rich Nelson, livestock analyst at Allendale Inc.
Supplies of market-ready cattle have been tight for some time due to producers reducing herds because of recent drought in the southern Plains and high feed prices.
Source: Guardian Unlimited
