This news comes in shortly after a senior management change in Tyson Foods was announced, as reported by ILM on August 4.
Steve Stouffer, President of Tyson Fresh Meats, stated that “the cattle supply is tight and there’s an excess of beef production capacity in the region” and that this decision will put the rest of their beef business in a better position for future success
The subsidiary of the Arkansas based Tyson Foods, employs 400 people.
Tyson’s beef business sales were up 9% in the first nine months of its 2015 fiscal year, representing US$12.8 billion, compared to the same period in the previous fiscal year. However, the beef business reported an operating loss of US$33 million, compared with an operating profit of US$194 million a year before.
According to Tyson Foods, the loss was due to a lower availability and higher costs of fed cattle, and reduced demand for beef products.
The same argument is put forward by Don Roose, President of U.S. Commodities in West Des Moines, who says that recent years of drought have caused farmers to reduce their herds, therefore, reducing the amount of cattle destined to beef production plants. “What we are seeing is there are too many plants operating for the number of cattle that we have in the United States,” Roose said.
Less cattle also has also resulted in higher beef prices for consumers, who have turned to poultry and pork.
Source: The Des Moines Register
