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Iowa and Nebraska
combined have 500,000 more cattle on feed Jan 1 than the 10-year average from
1996-2005, according to Cattle-Fax.
Kansas and Texas
saw an increase of 400,000 and California
and Arizona
saw an increase of 200,000.
Although the cattle have shifted somewhat northward, the main feeding
and packing capacity remains in the south.
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A new plant in South Dakota is
looking to increase the packing capacity in the Midwest. Northern Beef Packers is building a
$50M plant in Aberdeen
that will kill 3,000 per day.
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While one plant is being built – another is closing. Tyson announced that they will close
their Emporia, KS slaughter facility within a few
weeks. This plant accounts for
approximately 3% of total cattle slaughter capacity. The CME Group Daily Livestock Report
states that this decision should make Tyson more competitive as it will allow
their other plants to be more efficient.
Efficiencies have been a huge problem among packers since early
2007. It is not abnormal to for
packers to be even or below breakevens in the last four months of the
year. However, in 2007 the
packers didn’t have the profits that they depend on from the spring and
summer months.
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The USDA reported that for the week ending Jan 12, for the first
time ever, more pork was produced in the U.S. than beef; 500.8 M lbs
compared to 488.0 M lbs.
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