NCBA Member Update: September
The volunteer leadership and staff members at the National Cattlemen’s Beef Association (NCBA) know the fire at Tyson’s Holcomb, Kan., processing facility, and the ensuing market turmoil, has had a major impact on the cattle industry and the members we represent. We are working closely with state cattlemen’s associations, government agencies and Tyson Foods, to ensure we’re doing everything we can to help get markets back on track as quickly as possible.
To that end, NCBA staff and officers hosted a conference call recently with officials from Tyson Foods and state cattlemen’s affiliates to provide updates about the status of the plant and the current plan to return the plant to full operation.
Tyson Foods Update
Tyson management stated that construction crews have enclosed about one-third of the roof on the south end of the plant that had been damaged by the fire. Initial damage assessments indicated that between 25 and 30 concrete I-beams were damaged by the fire. However, upon closer inspection approximately 55 concrete and steel beams were damaged and in need of replacement.
In addition to the structural damage, the electrical system in the plant requires significant repair. Tyson management stated that the electrical system which provides power to the harvest floor had several electrical rooms damaged. Late last week, one of those electrical rooms was repaired and two more are expected to be repaired in the week ahead.
Tyson officials stated that the initial timeline for the plant to return to operation remains the same, with operations expected to resume around the first of the year. They did state that some fabrication and ground beef operational capabilities have been resumed in the plant while the harvest facility remains offline.
Company officials said that they have not been able to absorb the entire capacity of approximately 30,000 head per week in their facilities. However, they have absorbed some capacity in other plants through added hours and additional Saturday shifts. They stated that there has been no incremental increase in cattle imports and the slaughter mix between beef and dairy cattle being processed in the company’s plants remains the same as prior to the fire.
Following the update by Tyson Foods, NCBA Senior Vice President for Government Affairs, Colin Woodall provided an update related to the investigation being conducted by USDA, into market response following the fire.
Woodall stated that he is in regular contact with USDA Under Secretary Greg Ibach, who said earlier today that the government initially intended to conduct an audit of information from the agency’s market news service. However, upon further consideration, USDA is pursuing a full investigation of cattle and beef markets, to include retail data. Under Secretary Ibach indicated that the data collection process could take a month or more, with the results of the investigation near the end of the year, or perhaps in early 2020. It was stated during the call that USDA’s investigation is a pre-emptive step and at present, there is no indication of wrongdoing.
However, both NCBA and USDA believe it’s important for all market participants to understand what has transpired in the markets and ensure full transparency.
NCBA will continue to work closely with USDA and the Commodity Futures Trading Commission to identify any market participant who may try to illegally capitalize from the market situation.
NCBA also called upon the United States Department of Transportation (USDOT) to issue a Hours of Service waiver to allow trucks to transport live cattle to other plants for processing. Currently, that petition is still pending and NCBA will continue to work with USDOT to find a solution which helps alleviate transportation issues for cattle that are being moved a greater distance to harvest points.
Matt Teagarden, Kansas Livestock Association Executive Vice President told the group that he has exchanged emails with officials at Cargill, who stated that the fire at the Cargill facility last Friday caused only minimal damage and the plant is operating with no impact to its processing abilities.
In an emailed statement, provided today by Cargill, the company stated:
“Our protein facility in Dodge City, KS experienced a small fire on Friday. The fire was quickly contained. One person was sent to the hospital and has since been released. We are focused on safety and are operating normally with no interruption or impact to customers.”
NCBA will continue to work with these agencies to ensure we are doing everything we can to alleviate market disruptions. Next week, the Senate Agriculture Committee will hold a hearing to examine the state of the livestock industry. NCBA President Jennifer Houston will testify at the hearing on behalf of NCBA members and her testimony will include information about the current issues in the marketplace and the turmoil experienced after the fire.