Winter Storm Disrupts US Meatpacking, Slashes Beef Production

Summary

  • Intense blizzard conditions caused issues for meatpacking workers, leaving some stranded while others sheltered at their place of work.
  • Such disruptions led to a steep drop in beef production, a bad time due to the already high prices following a cut in U.S. herds by ranchers.
  • Significant beef producer, Cargill, had to halt a plant’s operations in Kansas owing to serious weather conditions and a power outage.
  • Winter weather led to power outages impacting over 418,000 homes and businesses across 12 states in the U.S
  • Tyson Foods also paused operations at its beef plant in Holcomb, Kansas, offering on-site accommodation and meal options for workers.

Weather Impact on Meatpacking Industry

Severe weather resembling a blizzard had meatpacking workers cut off on highways on Monday, while others stayed the night at their respective workplaces, according to companies and state officials.

Disruptions at facilities led to a sharp decline in beef production at a time when prices are still high owing to U.S. ranchers shrinking their herds. As per the U.S. Department of Agriculture, meatpackers across the nation slaughtered an approximate 94,000 cattle on Tuesday, a 25% decrease compared to the previous week.

Shut Down of Major Production Facilities

Major ground beef provider Cargill, reported shutting down a plant in Dodge City, Kansas, due to heavy snow, cold temperatures and a power cut. The plan is to resume operations as soon as power is restored and conditions are deemed safe, potentially as early as Wednesday, the firm announced.

Spokesperson for Cargill, Chuck Miller, reassured that the firm was “committed to minimizing any disruption” for their customers. He confirmed reports of employees stuck on roads near the plant, revealing that the company had arranged for tow truck drivers to help them.

Power Outage and Employee Safety

Approximately 50 employees out of the total 2,850 at the Cargill plant remained due to road closures, however, the majority of staff managed to reach home, as relayed by Miller.

In contrast, the eastern half of America saw a winter storm leading to power failures for more than 418,000 homes and businesses across 12 states.

Weather Impact on Tyson Foods Plant

Tyson Foods (NYSE:) reported the cancellation of both shifts at its extensive beef plant in Holcomb, Kansas. They offered certain workers the option to “shelter in place” at the plant, providing a hot meal and beverages on Monday night. Employees were able to depart by Tuesday morning, as stated by the company.

Impact on Nearby Roads and Highways

The winter storm left around 60 to 100 vehicles stuck on roads near Cargill’s plant on Monday, additionally with others trapped near Tyson’s facility, as per reports by Steve Hale, spokesperson for the Kansas Department of Transportation.

The conditions of the roads have been described as dangerous with Trooper Anthony Calderon of the Kansas Highway Patrol comparing the situation outside Tyson’s plant to a mall parking lot due to vehicles stranded in the middle of the road and along the shoulder.

These weather-induced disruptions in the meatpacking industry can impact commodity trading, especially for agricultural assets like Live Cattle. Traders should monitor the situation closely for potential impacts on the market prices.

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