Fire at Kansas packing plant lowers prices on feeder calves

By: 
Duane Dailey

Cattle markets fascinate me. I don’t have a dime invested in cattle, with no calves on pasture nor going to packing plants.

I look forward each Friday to a weekly market report from Irsik & Doll Feedlot, Garden City, Kan. They report cattle and grain trades which come together for feeders.

I started reading this letter years ago when steers from MU Thompson Farm were fed there. That’s how I learned the value of Prime-grade beef. Our calves going to the packing plant are sold on grid pricing. Those include grade premiums, not just market prices.

Prime calves bring more money than Select grade. Too many Missouri calves still sell for Select, a loss to Missouri. Using the Show-Me-Select protocols from research at Thompson Farm, farmers get more dollars for their calves.

On Aug. 9, beef markets went crazy when the Tyson beef packing plant at Holcombe, Kan., burned.

That got personal. On a bus, MU took Missouri farmers to the Garden City feedlot and we toured that Tyson plant. I was wowed.

Years ago, Prof. Charlie Cramer, MU marketing professor, took a load of us students to St. Joe to tour packing plants. I was appalled. I came back ready to throw up when smelling meat cooking. I knew I’d never eat meat again. Back then, packing plants were awful.

In contrast, the Tyson plant was tidy. No bad odors at all. Workers in clean white clothes and hairnets cut up beef carcasses at incredible speed.

After the fire, I learned that plant killed 6,000 head a day. That ran 30,000 to 35,000 a week. Turns out that’s over 6 percent of Kansas slaughter capacity. All plants already ran at capacity, but they took up the slack.

For years, I thought 600,000 head a week was big. Now they’re running more. Farmers now raise beef for export as they build trade with foreign countries. I’ve read those exports bring $300 per head more for all Missouri calves.

There’s trouble lately as our President messes with tariffs. He pulls out of deals without checking with farmers who developed free trade. His Secretary of Agriculture dares not tell the truth without risking his job.

Last Friday, the feedlot newsletter showed weekly U.S slaughter at 654,000 head. That’s up from what they called “last week’s surprisingly large kill of 651,000 head.”

Tyson’s closing led to fear of boxed-beef shortage. Boxed Choice went up to $239 per Cwt (hundred weight). That’s $25 above year ago.

Here’s where Missouri farmers need to rethink cow breeding. We’ve learned genomics allow producers to boost quality through artificial insemination (AI). Now MU steers grade 98 percent Choice or better.

This week Select boxed beef settled at $216 per Cwt. Here’s the kicker. The Choice/Select spread hit $25. On 800-pound carcasses that adds up.

A year ago that spread was $12.

There are more than USDA Grade premiums. MU steers bring Certified Angus Beef (CAB) premiums also.

The MU steers have run up to 60 percent Prime. Those premiums always bring more than Choice. The newsletter doesn’t bother giving Prime figures they’re so rare.

Prices grow as consumers pay more for premium quality beef. We can use more Prime beef and Missouri is primed for that.

This week, I read a great magazine story in Angus Beef Bulletin. MU Show-Me-Select producer Bill Masters, Cape Girardeau, told that his extra $500 per calf makes beef farming more profitable. He uses MU protocols.

Now calf prices have fallen at sale barns as feeder buyers remain uncertain where they’ll get calves processed.

Owners of the Tyson plant are rebuilding to bring capacity back. BEEF magazine reported cattle prices continue “to claw their way back from the stiff decline borne by the Aug. 9 fire.”

Beef producers must be optimists and stay updated on MU protocols.

There will be more news at the MU Thompson Farm Field day Sept. 24, 3:30 p.m.       

Send beef market ideas to duanedailey7@gmail.com

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