HOLCOMB, Kan. — A fire which indefinitely closed a Tyson meat processing plant in Holcomb could disrupt already strained processing operations, sparking fears from cattle producers who braced for tumbling market prices.
Tyson has said it will reopen the plant but the timeline will depend on the extent of the damage.
Industry experts said the Holcomb plant processes about 6,000 cattle a day _ about 6% of all the cattle processed in the U.S., The Topeka Capital-Journal reports . In the first day of trading since Friday night’s fire, cattle futures on Monday dropped $3 per hundred pounds, the maximum fluctuation allowed for a single day.
“Anybody that had cattle that were not priced, that were waiting in the feedlot to be sold, their inventory already went down in value, so that kind of disruption has already occurred,” said Glynn Tonsor, an agricultural economics professor at Kansas State University.
Finney County commissioner Larry Jones, a partner at J&O Cattle Co., said meat packing plants are already running at capacity because a record number of cattle are going to market.
“It’s always been a concern of everybody,” Jones said. “The packing capacity has not expanded with the cattle numbers. We’ve had this fear for years.”
Tyson said it intends to rebuild, but the extent of damages and timeline for restoring operations is unclear.
“We’ll work to help our valued supplier partners find alternatives for their livestock during this ordeal,” said Worth Sparkman, a spokesman for Tyson.
It is difficult to assess the long-term impact without knowing how long the Holcomb plant will be down, Tonsor said.
“You’re talking more hours, more shifts, pushing those plants harder,” Tonsor said. “The cost to operate those other plants is going to go up because of labor and transportation.”
Cattle producers already were dealing with uncertainty from trade relations and rising corn prices, but the industry is large and diverse enough to withstand short-term disruption, he said.
“We’ll survive,” Tonsor said, “but it’s going to require those adjustments, and there are economic consequences because of it. Some realism is important, but at the same time, it’s not the sky is falling permanently, either.”
Lee Reeve, owner of Reeve Cattle Co., which operates a feed yard in Garden City, said the nearest Tyson plants in Amarillo, Texas, and Lexington, Nebraska, are more than 200 miles away. He expects the loss of Tyson operations in Holcomb to impact the whole industry. He said the industry will adjust, but there’s a lot of anxiety.
“I think the best news at this point that we’ve had is the Tyson officials, even though they said that plant is closed indefinitely, they have said that they plan to rebuild there in the same location,” said Todd Domer, spokesman for the Kansas Livestock Association.
Information from: The Topeka (Kan.) Capital-Journal
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