A fire at a major U.S. beef processing plant earlier this month is upending American livestock markets, slamming cattle prices while benefiting meatpacking companies.
The Tyson Foods Inc. plant in Holcomb, Kansas, had the capacity to slaughter 6,000 head a day of cattle — or about 5% of U.S. beef production capacity — before it was destroyed on Aug. 9. The facility’s shutdown has created a livestock glut, dragging down futures to the lowest in almost three years. That’s giving meatpackers such Cargill Inc., JBS SA and Marfrig Global Foods SA access to cheap supply just as demand from retail shops booms.
With the Labor Day holiday — one of the most-popular days in the U.S. for grilling beef — coming up on Sept. 2, retailers are engaging in bidding wars to secure packaged meat for store promotions they’ve already committed to. Even Tyson Foods could benefit, with bigger profits at other plants offsetting losses from the fire.
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