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A fire at Tyson's Holcomb, Kansas beef plant, which handled about 6,000 head a day, knocked out a significant share of fed cattle packing capacity. Futures traders sold off sharply, with cattle contracts locked limit-down for two sessions.
Tyson said it would keep paying its roughly 3,000 employees while the plant is rebuilt.
Losing roughly 6% of packing capacity during seasonally heavy supplies forces cattle to move to other plants, pressuring cash and futures prices for fed cattle and feeders.
wlj.netPete Crow, WLJ publisher emeritusAug 16, 2019After 29 past bearish logistics events, LCATTLE moved a median -0.3% over 5 sessions (38% higher; middle half -2.0% to +0.5%), and -3.7% over 20.
After 20 past bearish logistics events, FCATTLE moved a median +1.3% over 5 sessions (60% higher; middle half -0.7% to +2.0%), and +2.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Cattle contracts locked limit-down for two sessions after the fire cut packing capacity, but the commentary was published after the window.
