Chicago - Several major U.S. beef companies said they would reduce beef production this week, citing poor operating margins and abundant supplies of beef and other meats.
"Market conditions have caused us to temporarily reduce beef hours (production)," said Gary Mickelson, a spokesman for IBP Inc.
The cutbacks were reflected in Monday's U.S. cattle slaughter, which the U.S. Agriculture Department estimated at 99,000 head versus 132,000 a week ago and 128,000 a year ago.
"They are working in the red," Chris Lehner, a livestock consultant with Brock Associates Inc, said of U.S. meatpackers. "Usually this time of year is good for beef. We are not exporting enough to keep them going."
Lehner said the Asian market is significant for U.S. beef, and the region's economic problems this year had reduced demand.
In late November, South Korea's International Trade Association reported the country's imports of beef for the first 10 months of this year were 134,224 tonnes, down from 138,878 in the same period a year ago.
IBP's Mickelson said several of the company's 12 beef plants will operate 32 hours this week versus the normal 40 hours, with the other plants operating 40 hours or less.
"Product sales have not kept pace with available supplies," he said. He would not say which plants were affected.
Excel Corp and Monfort Inc also reduced beef production this week, company officials said.
"Excel has reduced hours at all of its beef processing plants this week because of poor margins and reduced demand," said spokesman Mark Klein.
Excel, which has five beef plants, is a subsidiary of Cargill Inc.
Monfort Inc spokeswoman K.T. Miller said operations at its four beef plants were reduced to 32 hours this week from 40 last week. No reason was given for the cutback. Monfort is a division of ConAgra Inc.
National Beef, which is 50 percent owned by Farmland Industries, said both of its beef plants were operating at reduced levels this week because of poor margins.
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