Tyson Foods and JBS Close Plants Amid Cattle Shortages

Major U.S. beef processors are consolidating operations to combat historic cattle shortages and financial losses. Tyson Foods announced the closure of facilities in Joslin, Illinois, and Eagle Mountain, Utah, and is seeking a buyer for its plant in Pasco, Washington. These moves follow a January closure in Lexington, Nebraska, and reduced operations in Amarillo, Texas. Additionally, JBS announced the closure of its Souderton, Pennsylvania plant in August.

These closures shift market leverage from feedlots back to packing plants, which have operated at a loss for 18 months. Packing plants are now disciplining bids on fed cattle to improve margins. In Ontario, Calvin Anstett, president of the Bruce County Beef Farmers, reports that the reduced slaughter capacity is already putting downward pressure on cattle prices, particularly for yearling heifers, ahead of the fall glut.

Despite these pressures, some analysts expect Canadian cow-calf producers to maintain leverage in the current cattle cycle. Fall calf delivery prices are already more than 20 percent higher than last year, with seasonal peaks expected between late September and early October. Meanwhile, the Canadian Cattle Association is lobbying the Canadian government to exclude beef from a potential trade deal with the Mercosur bloc to prevent the import of lower-quality beef.