Meat Industry INSIGHTS Newsletter

980308 IBP, Monfort, Excel Plan Reduced Beef Hours

March 6, 1998

Chicago - A number of U.S. beef plants will operate at reduced hours next week due to poor operating margins fueled by soft beef prices and large cattle supplies, company officials said.

Some packers who said they had reduced production this week planned on continuing slower carcass production next week.

"We scaled back hours this week at four of our U.S. beef plants and we plan to reduce next week's carcass production even more and in fact we believe it will be more than ten percent lower than last week," said Gary Mickelson, spokesman for IBP Inc.

Actual hours were not specified, but Mickelson said two of the plants, one at Pasco, Wash. and one at Boise, Idaho have been running 32 hours this week and would remain at that pace next week. Mickelson did not name the other two plants.

IBP operates 11 beef plants in the U.S.

Monfort Beef, a unit of ConAgra Inc also will reduce operations next week, said K.T. Miller, Monfort spokeswoman.

"We will be cutting back to 32 hours at all four beef plants next week," Miller said.

Monfort operates beef plants in Grand Island, Neb., Garden City, Kan., Cactus, Texas and Greeley, Colo.

Excel Corp, a unit of Cargill Inc had reduced hours this week at its beef plants and planned on reducing them again next week, said Mark Klein, Excel spokesman.

Klein did not elaborate how much hours will be reduced or which of Excel's five beef plants would be affected.

"That's about as specific as we'll get," Klein said,

Both of National Beef Packing Co's beef plants in Liberal and Dodge City, Kan will operate regular hours, said Sherlyn Manson, spokeswoman for Farmland Industries, which co-owns National with U.S. Premium Beef.

"We're not cutting back," Manson said.

Liberal operates two shifts at 96 hours per week and Dodge City operates one shift at 48 hours per week, Manson said.

Some High Plains-area cattle feeders were wary of the talk of slaughter cutbacks, given the aggressive way packers bought cattle this week and based on recent slaughter levels.

USDA reported that through Thursday, 131,000 head of cattle sold in the Texas Panhandle/western Oklahoma area and in Kansas, 88,000. Nebraska sales totaled 100,700 head.

U.S. cattle slaughter for the week through Thursday was estimated by USDA at 505,000 head, compared with 508,000 the same period last week. Total cattle slaughter last week was estimated at 675,000 head compared with 667,000 head a year ago.

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