More Oversight Wanted For Cattle Trade Following Tyson Fire

The gap between packer profits and producer losses continues to expand.

Ag Web reports buyers are averaging $102 dollars per hundredweight, meaning feeders are losing around $118 dollars per head while packers cash in on a $430 dollar profit. That spread comes in at $548 dollars. Farrow-to-finish pork producers did fare better averaging a $7 dollar loss per head.

Blue Line Futures Vice President, Oliver Sloup says the Tyson fire made matters worse.

We saw the wide gap, we’ve seen it for the past couple months, and then its ballooned out of control after the Tyson fire; we saw the cash beef drop and the boxed beef rally pretty significantly, creating a pretty darn big spread but we are starting to see that come back in a little. But that’s just part of the market, it’s not convenient but its what we have to play with, you have to play the market in front of you, not necessarily the one you want.

Sloup also says there could be something else happening behind the curtains because there was not a sharp rebound in prices after the Tyson fire turned out to have less impact than expected.

The American Farm Bureau Federation calls on the USDA to keep a better eye on cattle trade.

Farm Bureau President Zippy Duvall writes,

The agency should use its authority to monitor the markets to prevent unfair practices, as well as to provide all grading and auditing services necessary at surrounding plans.

As previously reported, The National Cattlemen’s Beef Association has also expressed concern over market manipulation following the beef plant fire. The National Cattlemen’s Beef Association tweeted,

The CFTC has been closely following the situation stemming from an August Ninth fire at a Tyson Foods beef plant in Holcomb, Kansas since the incident the commission has been monitoring trading in the impacted markets under its jurisdiction and will continue to do so.